EXHIBIT 99.1
TESORO PETROLEUM CORPORATION
SUPPLEMENTAL FINANCIAL AND OPERATIONAL INFORMATION
INTRODUCTION
Tesoro Petroleum Corporation ("Tesoro" or the "Company") is providing certain
unaudited supplemental financial and operational information through this
website. This information should be used in conjunction with Tesoro's filings
with the Securities and Exchange Commission ("SEC"), as well as with other
publicly-disclosed information, such as media releases and conference calls.
This information also contains forward-looking information. The Company expects
that updates to this information will be made through its periodic reports filed
with the SEC and public releases; however, the Company undertakes no obligation
to update any such information contained herein (see Forward-Looking Statements
disclaimer at www.tesoropetroleum.com/forwardlooking.html).
The information is organized into a number of sections. To proceed directly to a
particular section, you may click on one of the hot links below.
REFINERIES BY REGION TOTAL REFINERY SYSTEM
RETAIL SYSTEM MARINE SERVICES
CONSOLIDATED SUMMARY OF OPERATIONS CAPITAL EXPENDITURES
MID-CONTINENT REFINERIES - HISTORICAL GLOSSARY OF TERMS
CLEAN FUELS AND CLEAN AIR CAPITAL
1
TESORO PETROLEUM CORPORATION
SUPPLEMENTAL FINANCIAL AND OPERATIONAL INFORMATION
GLOSSARY OF TERMS
Branded Jobber/Dealer Stations - Retail stations owned by third parties that
sell products purchased from or through the Company and carry one of the
Company's brands (Tesoro, Tesoro Alaska or Amoco).
Clean Fuels Capital - Capital expenditures required to meet Clean Air Act
regulations related to reductions in emissions and new manufacturing standards
required to reduce the sulfur content in gasoline starting January 1, 2004 and
highway diesel fuels starting June 1, 2006.
Company-Owned Stations - Retail stations owned by the Company.
Discretionary Capital - Capital expenditures undertaken primarily for increased
economic return on investment.
EBITDA - Earnings before interest and financing costs, income taxes and
depreciation and amortization. The Company uses EBITDA as a measure for internal
analysis and in presentations to analysts, investors and lenders. The
calculation of EBITDA is not based on accounting principles generally accepted
in the United States ("U.S. GAAP") and should not be considered as an
alternative to net earnings or cash flows from operating activities (which are
determined in accordance with U.S. GAAP), as an indicator of operating
performance or as a measure of liquidity. EBITDA may not be comparable to
similarly titled measures used by other entities. EBITDA has been restated from
the Company's other public documents to exclude interest income from EBITDA.
Gross Refining Margin - Margin on products manufactured and purchased, including
those sold to the Company's Retail System. Sales to the Retail System have been
based on average bulk market prices adjusted for transportation and other
differentials.
Heavy Oils, Residual Products & Other - Product yields other than gasoline, jet
fuel and diesel produced in the refining process. These include products such as
residual fuels, gas oils, propane, and internally-produced fuel.
Manufacturing Costs - Costs associated directly with the manufacturing process
including cash operating expenses and non-cash amortization of maintenance
turnaround costs, but excluding depreciation. Manufacturing costs also include
costs of internally-produced fuel.
Mbpd - Thousand barrels per day.
Net Refining Margin - Gross Refining Margin minus Manufacturing Costs.
Non-Discretionary Capital - Capital expenditures required for continuing
operations.
2
TESORO PETROLEUM CORPORATION
SUPPLEMENTAL FINANCIAL AND OPERATIONAL INFORMATION
Refining and Marketing - Includes the Refinery System and the Retail System
described below.
Refinery System - The Company's operations of refining crude oil and other
feedstocks and wholesale marketing of refined products. It includes refinery
operations, wholesale operations, product supply and distribution, and
transportation operations.
Retail System - The Company's system of selling gasoline to retail customers
through an arrangement with Wal-Mart, through Company-Owned and operated sites,
and through agreements with third-party Branded Jobbers/Dealers. It also
includes merchandise sales through the Company's locations with convenience
stores.
Retail Fuel Margin - The margin on fuel products sold through the Company's
Retail System. Costs of sales in fuel margin have been based on purchases from
the Company's Refinery System, using average bulk market prices adjusted for
transportation and other differentials.
Retail Merchandise Margin - The margin on products and services, other than
fuel, sold through the Company's Retail System.
3
REFINERIES BY REGION
Exhibits 1 through 4 provide Tesoro's throughput, yields and gross refining
margin by region as well as for Tesoro's total refinery system. Tesoro's regions
are presented as follows: (1) Pacific Northwest (Tesoro's Alaska and Washington
refineries combined); (2) Mid-Pacific (Tesoro's Hawaii refinery); and (3)
Mid-Continent (Tesoro's North Dakota and Utah refineries combined).
EXHIBIT 1
PACIFIC NORTHWEST REFINERIES (ALASKA & WASHINGTON)
<Table>
<Caption>
2000 2001
1999 -------------------------------------- --------------------------------------
YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
THROUGHPUT (MBPD)
Heavy Crude 35.9 57.0 60.2 60.7 59.3 59.3 77.9 71.0 76.8 85.9 77.9
Light Crude 106.0 78.3 103.7 104.0 97.0 95.8 73.7 91.0 94.7 74.7 83.6
Other Feedstocks 4.9 9.3 8.3 12.5 9.9 10.0 8.2 8.0 8.8 6.6 7.9
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL THROUGHPUT (MBPD) 146.8 144.6 172.2 177.2 166.2 165.1 159.8 170.0 180.3 167.2 169.4
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
YIELD (MBPD)
Gasoline & Gasoline Blendstocks 71.4 67.7 78.1 78.6 72.6 74.2 70.1 73.1 75.5 73.8 73.1
Jet Fuel 29.7 27.1 33.4 32.9 32.3 31.4 29.0 27.0 30.4 27.0 28.4
Diesel Fuel 21.3 19.8 29.8 31.9 28.3 27.5 22.3 30.8 35.2 29.5 29.5
Heavy Oils, Residual Products & Other 29.7 36.1 37.0 39.3 39.2 38.0 44.5 44.2 45.2 43.6 44.3
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL YIELD (MBPD) 152.1 150.7 178.3 182.7 172.4 171.1 165.9 175.1 186.3 173.9 175.3
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
GROSS REFINING MARGIN ($/THROUGHPUT BBL) $ 6.55 $ 8.02 $ 6.41 $ 9.00 $ 8.11 $ 7.89 $ 8.04 $ 8.16 $ 7.69 $ 5.82 $ 7.42
</Table>
NOTES:
Scheduled maintenance turnarounds were as follows:
*Alaska in 2Q 1999 and 2Q 2001
*Washington in 4Q 1999
Next turnarounds are scheduled as follows:
*Washington in 1Q 2002 and 3Q 2003
*Alaska in 2Q 2003
The distillate treater at the Company's Washington refinery was placed in
service during December 1999.
The Company commenced a heavy oil conversion project at its Washington refinery
in 2000, which will enable the Company to manufacture a larger proportion of
higher-value gasoline and to reduce production of lower-value heavy products.
The Company expects to spend approximately $109 million (including capitalized
interest) for this project, of which $97 million had been spent through December
31, 2001. The first stage of the project, the installation of a de-asphalting
unit, was completed in late September 2001. Management expects the upgrade of
the fluid catalytic cracking unit, the final major component of the heavy oil
conversion project, to be operational in March 2002.
Updated on 2/4/02
(Unaudited)
EXHIBIT 2
MID-PACIFIC REFINERY (HAWAII)
<Table>
<Caption>
2000 2001
1999 -------------------------------------- --------------------------------------
YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
THROUGHPUT (MBPD)
Heavy Crude 45.7 49.1 47.1 45.9 44.9 46.7 61.1 47.0 47.2 56.8 53.0
Light Crude 41.2 36.7 33.6 33.3 47.1 37.7 25.6 42.5 40.3 28.0 34.1
Other Feedstocks -- -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL THROUGHPUT (MBPD) 86.9 85.8 80.7 79.2 92.0 84.4 86.7 89.5 87.5 84.8 87.1
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
YIELD (MBPD)
Gasoline & Gasoline Blendstocks 21.5 23.2 21.9 20.2 17.6 20.8 18.4 18.6 20.3 22.0 19.8
Jet Fuel 28.6 26.9 24.1 23.7 30.0 26.2 29.0 31.1 25.8 24.2 27.5
Diesel Fuel 11.4 10.2 12.0 9.7 15.2 11.7 11.9 14.1 15.4 14.7 14.0
Heavy Oils, Residual Products & Other 30.2 27.0 23.5 26.9 29.9 26.8 28.4 27.0 26.9 24.8 26.8
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL YIELD (MBPD) 91.7 87.3 81.5 80.5 92.7 85.5 87.7 90.8 88.4 85.7 88.1
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
GROSS REFINING MARGIN ($/THROUGHPUT BBL) $ 4.46 $ 4.03 $ 5.15 $ 3.07 $ 6.70 $ 4.80 $ 5.94 $ 4.84 $ 5.72 $ 6.95 $ 5.85
</Table>
NOTES:
Scheduled maintenance turnaround was held in 3Q 2000.
Next turnaround is planned for 3Q 2003.
Updated on 2/4/02
(Unaudited)
EXHIBIT 3
MID-CONTINENT REFINERIES (NORTH DAKOTA & UTAH)
<Table>
<Caption>
2001
------------------------------
MONTH
SEPT. 4Q YEAR
-------- -------- --------
THROUGHPUT (MBPD)(a)
Heavy Crude -- -- --
Light Crude 105.6 103.6 104.0
Other Feedstocks 0.2 1.2 1.0
-------- -------- --------
TOTAL THROUGHPUT (MBPD) 105.8 104.8 105.0
======== ======== ========
YIELD (MBPD)(a)
Gasoline & Gasoline Blendstocks 55.7 54.5 54.7
Jet Fuel 9.5 11.3 10.9
Diesel Fuel 30.3 28.8 29.1
Heavy Oils, Residual Products & Other 13.2 14.1 14.0
-------- -------- --------
TOTAL YIELD(MBPD) 108.7 108.7 108.7
======== ======== ========
GROSS REFINING MARGIN ($/THROUGHPUT BBL)(b) $ 12.91 $ 6.90 $ 8.19
</Table>
NOTES:
(a) The Mid-Continent refineries were acquired from BP p.l.c. on September 6,
2001. The volumes and margins for 2001 include amounts since the date of
acquisition.
(b) The Mid-Continent refineries contributed $13 million and $19 million to
Tesoro's operating profit in the 3Q and 4Q of 2001, respectively.
Next maintenance turnarounds are scheduled as follows:
*North Dakota in 3Q 2003
*Utah in 1Q 2003
See Exhibit 9 for historical and pro forma information related to the acquired
assets.
Updated on 2/4/02
(Unaudited)
EXHIBIT 4
TOTAL REFINERY SYSTEM
<Table>
<Caption>
2000 2001
1999 -------------------------------------- --------------------------------------
YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
THROUGHPUT (MBPD)(a)
Heavy Crude 81.6 106.1 107.3 106.6 104.2 106.0 139.0 118.0 124.0 142.7 130.9
Light Crude 147.2 115.0 137.3 137.3 144.1 133.5 99.3 133.5 163.7 206.3 151.0
Other Feedstocks 4.9 9.3 8.3 12.5 9.9 10.0 8.2 8.0 8.8 7.8 8.2
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL THROUGHPUT (MBPD) 233.7 230.4 252.9 256.4 258.2 249.5 246.5 259.5 296.5 356.8 290.1
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
YIELD (MBPD)(a)
Gasoline & Gasoline Blendstocks 92.9 90.9 100.0 98.8 90.2 95.0 88.5 91.7 110.9 150.3 110.5
Jet Fuel 58.3 54.0 57.5 56.6 62.3 57.6 58.0 58.1 58.8 62.5 59.4
Diesel Fuel 32.7 30.0 41.8 41.6 43.5 39.2 34.2 44.9 58.8 73.0 52.9
Heavy Oils, Residual Products & Other 59.9 63.1 60.5 66.2 69.1 64.8 72.9 71.2 75.7 82.5 75.5
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL YIELD (MBPD) 243.8 238.0 259.8 263.2 265.1 256.6 253.6 265.9 304.2 368.3 298.3
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
REFINING MARGIN ($/THROUGHPUT BBL)
Gross $ 5.89 $ 6.54 $ 6.01 $ 7.16 $ 7.60 $ 6.84 $ 7.30 $ 7.01 $ 7.61 $ 6.40 $ 7.04
Other Manufacturing Costs(b) 2.98 2.90 2.76 2.82 2.93 2.85 3.44 2.94 2.87 3.17 3.10
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net $ 2.91 $ 3.64 $ 3.25 $ 4.34 $ 4.67 $ 3.99 $ 3.86 $ 4.07 $ 4.74 $ 3.23 $ 3.94
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</Table>
NOTES:
(a) Volumes for 2001 include amounts for North Dakota and Utah operations since
their acquisition on September 6, 2001 averaged over the periods presented (28.7
Mbpd in throughput and 29.5 Mbpd in yield in 3Q01; 104.8 Mbpd in throughput and
108.7 Mbpd in yield in 4Q01; 33.7 Mbpd in throughput and 34.8 Mbpd in yield for
the year 2001). For the first 25 days of operations in 3Q01, refinery throughput
and yield averaged 105.8 Mbpd and 108.7 Mbpd, respectively. For the 117 days in
operations during the year 2001, refinery throughput and yield averaged 105.0
Mbpd and 108.7 Mbpd, respectively.
The classification of crude oil between heavy crude and light crude has been
revised for Mid-Continent refineries resulting in heavy crude throughput
percentages for the total refinery system in 2001 to 42% for 3Q, 40% for 4Q and
45% for the year.
(b) Excludes depreciation, but includes non-cash amortization of major
maintenance costs. Also includes costs of internally-produced fuel.
Updated on 2/4/02
(Unaudited)
EXHIBIT 5
RETAIL SYSTEM
<Table>
<Caption>
2000 2001
1999 ------------------------------------------- -------------------------------------------
YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NUMBER OF STATIONS (END OF
PERIOD)
Company-Owned 62 63 63 69 83 83 94 116 163 213 213
Branded Jobber/Dealer 182 183 200 201 193 193 183 184 487 464 464
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Stations 244 246 263 270 276 276 277 300 650 677 677
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
AVERAGE STATIONS (DURING PERIOD)
Company-Owned 61 62 63 66 76 68 90 106 128 196 132
Branded Jobber/Dealer 177 183 192 201 197 192 187 183 260 475 274
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Average Retail Stations 238 245 255 267 273 260 277 289 388 671 406
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
FUEL VOLUME (THOUSANDS OF
GALLONS)
Company-Owned Stations 93,513 22,932 23,696 25,889 26,662 99,179 34,776 44,717 57,574 72,643 209,710
Branded Jobber/Dealer
Stations 105,777 25,990 30,576 34,776 24,343 115,685 26,460 29,429 48,686 81,530 186,106
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Volume - Total Stations 199,290 48,922 54,272 60,665 51,005 214,864 61,236 74,146 106,260 154,173 395,816
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
FUEL VOLUME
(THOUSANDS OF GALLONS/MONTH/AVERAGE
STATION)
Company-Owned Stations 126.7 123.3 125.4 130.8 116.9 121.5 128.2 140.6 149.4 123.5 132.8
Branded Jobber/Dealer Stations 49.9 47.5 53.2 57.8 41.2 50.3 47.3 53.6 62.5 57.2 56.6
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Average Volume - Total
Stations 69.8 66.7 71.1 75.9 62.3 68.9 73.7 85.5 91.2 76.6 81.3
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
RETAIL FUEL MARGIN ($/GALLON) $ 0.18 $ 0.09 $ 0.22 $ 0.10 $ 0.27 $ 0.17 $ 0.24 $ 0.25 $ 0.18 $ 0.22 $ 0.22
RETAIL MERCHANDISE MARGIN
(IN MILLIONS) $ 15.7 $ 3.9 $ 4.4 $ 4.6 $ 4.0 $ 16.9 $ 4.0 $ 4.8 $ 6.0 $ 5.4 $ 20.2
RETAIL MERCHANDISE MARGIN % 31% 32% 32% 32% 30% 32% 31% 31% 32% 26% 30%
OTHER NON-FUEL MARGIN
(IN MILLIONS) $ 1.3 $ 0.4 $ 0.3 $ 0.6 $ 0.7 $ 2.0 $ 0.5 $ 0.6 $ 0.6 $ 0.6 $ 2.3
</Table>
NOTES:
On September 6, 2001, Tesoro acquired 42 company-owned stations from BP p.l.c.
and agreements to supply over 280 jobber/dealer sites. The above information
includes those sites from the acquisition date.
In addition, the Company purchased 46 retail fueling facilities, including 37
retail stations with convenience stores and nine commercial cardlock facilities,
located in Washington, Oregon and Idaho in the 4Q of 2001.
Updated on 2/4/02
(Unaudited)
EXHIBIT 6
MARINE SERVICES
($ in millions)
<Table>
<Caption>
2000 2001
1999 -------------------------------------- --------------------------------------
YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
FUEL SALES (MILLIONS OF GALLONS) 148.3 41.5 42.5 41.1 44.9 170.0 42.3 45.1 44.6 38.8 170.8
SERVICE REVENUES $ 11.7 $ 3.2 $ 3.1 $ 3.5 $ 3.5 $ 13.3 $ 3.5 $ 4.4 $ 3.9 $ 3.1 $ 14.9
EBITDA $ 8.5 $ 4.4 $ 2.6 $ 3.6 $ 2.5 $ 13.1 $ 3.4 $ 4.0 $ 3.9 $ 1.4 $ 12.7
</Table>
NOTES:
1Q 2000 EBITDA included other income of $1.2 million from settlement of a
service contract.
Updated on 2/4/02
(Unaudited)
EXHIBIT 7
CONSOLIDATED SUMMARY OF OPERATIONS
($ millions except per unit amounts)
<Table>
<Caption>
2000 2001
1999 ---------------------------------------- -------------------------------------------
YEAR(a) 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
REFINING AND MARKETING
Refinery System
Gross refining margin ($/bbl) $ 5.89 $ 6.54 $ 6.01 $ 7.16 $ 7.60 $ 6.84 $ 7.30 $ 7.01 $ 7.61 $ 6.40 $ 7.04
Throughput (Mbpd) 233.7 230.4 252.9 256.4 258.2 249.5 246.5 259.5 296.5 356.8 290.1
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total gross refining
margin before
inventory changes 502.3 137.0 138.2 169.1 180.5 624.8 161.8 165.5 207.6 210.1 745.0
Impact of inventory changes(b) 6.5 (2.5) 4.5 2.2 (17.7) (13.5) 1.6 (0.8) (7.6) (17.0) (23.8)
Expenses 363.7 92.7 96.4 99.7 97.9 386.7 104.7 99.7 109.1 142.5 456.0
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
REFINERY SYSTEM
OPERATING EBITDA 145.1 41.8 46.3 71.6 64.9 224.6 58.7 65.0 90.9 50.6 265.2
RETAIL SYSTEM
Gross fuel margin ($/gallon) $ 0.18 $ 0.09 $ 0.22 $ 0.10 $ 0.27 $ 0.17 $ 0.24 $ 0.25 $ 0.18 $ 0.22 $ 0.22
Total gallons of fuel sold
(millions) 199.3 48.9 54.3 60.7 51.0 214.9 61.2 74.1 106.3 154.2 395.8
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total gross fuel margin 36.5 4.6 11.8 6.2 14.0 36.6 14.5 18.9 18.8 34.5 86.7
Merchandise and other non-fuel
margin 17.0 4.3 4.7 5.2 4.7 18.9 4.5 5.4 6.6 6.0 22.5
Expenses 35.6 11.2 13.0 11.5 14.9 50.6 14.2 15.1 18.2 25.7 73.2
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
RETAIL SYSTEM OPERATING
EBITDA 17.9 (2.3) 3.5 (0.1) 3.8 4.9 4.8 9.2 7.2 14.8 36.0
TOTAL REFINING AND MARKETING EBITDA 163.0 39.5 49.8 71.5 68.7 229.5 63.5 74.2 98.1 65.4 301.2
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
MARINE SERVICES EBITDA 8.5 4.4 2.6 3.6 2.5 13.1 3.4 4.0 3.9 1.4 12.7
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
CORPORATE EBITDA(c) (41.0) (10.0) (9.8) (12.8) (11.1) (43.7) (11.4) (11.7) (17.4) (17.3) (57.8)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
CONSOLIDATED EBITDA(d) 130.5 33.9 42.6 62.3 60.1 198.9 55.5 66.5 84.6 49.5 256.1
DEPRECIATION EXPENSE
Refinery System (29.3) (7.8) (7.8) (8.7) (9.5) (33.8) (7.9) (7.6) (9.1) (16.1) (40.7)
Retail System (8.6) (1.5) (1.5) (1.6) (2.0) (6.6) (2.8) (1.9) (2.2) (4.2) (11.1)
Marine Services (2.6) (0.6) (0.6) (0.7) (0.8) (2.7) (0.7) (0.7) (0.7) (0.7) (2.8)
Corporate (2.4) (0.6) (0.6) (0.6) (0.6) (2.4) (0.6) (0.7) (0.7) (0.8) (2.8)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL DEPRECIATION
EXPENSE (42.9) (10.5) (10.5) (11.6) (12.9) (45.5) (12.0) (10.9) (12.7) (21.8) (57.4)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
OPERATING INCOME 87.6 23.4 32.1 50.7 47.2 153.4 43.5 55.6 71.9 27.7 198.7
Interest & Financing Costs Before
Capitalized Interest (38.2) (9.6) (8.4) (7.8) (7.6) (33.4) (8.4) (8.2) (19.1) (22.2) (57.9)
Less: Capitalized Interest on Major
Projects 0.6 -- 0.1 0.1 0.5 0.7 0.9 1.6 1.8 0.8 5.1
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Interest & Financing
Costs (37.6) (9.6) (8.3) (7.7) (7.1) (32.7) (7.5) (6.6) (17.3) (21.4) (52.8)
Interest Income 1.2 1.5 0.3 0.4 0.6 2.8 0.3 0.2 0.1 0.4 1.0
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES 51.2 15.3 24.1 43.4 40.7 123.5 36.3 49.2 54.7 6.7 146.9
Income Tax Provision (19.0) (6.0) (9.5) (18.4) (16.3) (50.2) (14.6) (19.7) (21.9) (2.7) (58.9)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET EARNINGS 32.2 9.3 14.6 25.0 24.4 73.3 21.7 29.5 32.8 4.0 88.0
Preferred Dividends (12.0) (3.0) (3.0) (3.0) (3.0) (12.0) (3.0) (3.0) -- -- (6.0)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET EARNINGS TO COMMON $ 20.2 $ 6.3 $ 11.6 $ 22.0 $ 21.4 $ 61.3 $ 18.7 $ 26.5 $ 32.8 $ 4.0 $ 82.0
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
AVERAGE DILUTED SHARES
(IN MILLIONS) 32.8 32.3 41.7 41.4 41.4 41.8 41.8 42.3 41.7 41.9 41.9
DILUTED EPS $ 0.62 $ 0.20 $ 0.35 $ 0.60 $ 0.59 $ 1.75 $ 0.52 $ 0.70 $ 0.79 $ 0.10 $ 2.10
</Table>
NOTES:
(a) Excludes discontinued E&P operations that were sold in 1999.
(b) Represents adjustments due to selling a volume and mix of product that is
different than actual products manufactured. Refined product inventories totaled
5.8 million barrels, 7.0 million barrels and 10.3 million barrels at 12/31/99,
12/31/00 and 12/31/01, respectively. In 2001, the Washington refinery increased
product inventory to meet demand during the 1Q 2002 turnaround, and inventories
were rebuilt at refineries and terminals acquired from BP p.l.c. in September
2001.
(c) Includes corporate general and administrative expenses and other expense.
(d) Consolidated EBITDA has been restated from the Company's other public
documents to exclude interest income from EBITDA.
Updated on 2/4/02
(Unaudited)
EXHIBIT 8
CAPITAL EXPENDITURES
($ millions)
<Table>
<Caption>
2000 2001
1999 -------------------------------------- --------------------------------------
YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 3Q 4Q YEAR
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
REFINING AND MARKETING
REFINERY SYSTEM(a)
Pacific Northwest
Discretionary $ 23.9 $ 2.0 $ 3.2 $ 6.7 $ 16.0 $ 27.9 $ 22.4 $ 31.4 $ 30.9 $ 14.8 $ 99.5
Non-Discretionary 19.2 2.2 3.4 4.4 8.2 18.2 3.4 5.5 9.5 10.7 29.1
Mid-Pacific
Discretionary 7.7 1.2 1.2 1.5 2.3 6.2 0.2 0.7 0.7 1.8 3.4
Non-Discretionary 3.9 1.1 0.7 0.8 1.6 4.2 0.5 1.2 0.6 0.7 3.0
Mid-Continent
Discretionary -- -- -- -- -- -- -- -- -- 1.7 1.7
Non-Discretionary -- -- -- -- -- -- -- -- 0.4 2.9 3.3
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL REFINERY SYSTEM 54.7 6.5 8.5 13.4 28.1 56.5 26.5 38.8 42.1 32.6 140.0
RETAIL SYSTEM(a)(b)
Discretionary 13.8 0.9 4.6 3.9 20.2 29.6 4.1 6.3 8.1 15.2 33.7
Non-Discretionary 3.9 -- 0.5 0.1 0.8 1.4 1.5 1.1 1.9 5.0 9.5
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETAIL SYSTEM 17.7 0.9 5.1 4.0 21.0 31.0 5.6 7.4 10.0 20.2 43.2
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL REFINING AND MARKETING 72.4 7.4 13.6 17.4 49.1 87.5 32.1 46.2 52.1 52.8 183.2
MARINE SERVICES 1.5 1.4 0.5 0.3 1.0 3.2 0.2 0.8 1.3 0.8 3.1
CORPORATE(b) 10.8 0.5 0.1 1.5 1.2 3.3 1.2 1.4 16.4 4.2 23.2
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL CAPITAL EXPENDITURES $ 84.7 $ 9.3 $ 14.2 $ 19.2 $ 51.3 $ 94.0 $ 33.5 $ 48.4 $ 69.8 $ 57.8 $209.5
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL NON-DISCRETIONARY
CAPITAL (PRESENTED ABOVE) $ 27.0 $ 3.3 $ 4.6 $ 5.3 $ 10.6 $ 23.8 $ 5.4 $ 7.8 $ 12.4 $ 19.3 $ 44.9
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</Table>
NOTES:
(a) Capital expenditures exclude amounts for the acquisition of refining,
marketing and pipeline assets from BP in 2001 and certain retail assets
acquired in the fourth quarter of 2001.
(b) Certain costs have been reclassified between Corporate and Retail.
Updated on 2/4/02
(Unaudited)
MID-CONTINENT REFINERIES - HISTORICAL
On September 6, 2001, Tesoro acquired two refineries in North Dakota and Utah
and related storage, distribution and retail assets from certain affiliates of
BP p.l.c. The acquisitions increased the Company's number of refineries from
three to five, with aggregate refining capacity rising from 275,000 barrels per
day ("bpd") to 390,000 bpd, and increased the Company's retail gas station
network from approximately 300 stations to 650 stations. In addition, on
November 1, 2001, the Company acquired a crude oil gathering and transmission
system located in Montana and North Dakota, which provides crude oil to the
North Dakota refinery.
EXHIBIT 9
MID-CONTINENT REFINERIES (NORTH DAKOTA & UTAH) - HISTORICAL
<Table>
<Caption>
2000 2001
1999 -------------------------------------- ----------------------
HISTORICAL DATA OF NEWLY-ACQUIRED ASSETS(a) YEAR 1Q 2Q 3Q 4Q YEAR 1Q 2Q 1H
------ ------ ------ ------ ------ ------ ------ ------ ------
THROUGHPUT (MBPD)
Crude Oil 100.5 89.7 92.0 104.2 101.6 96.9 95.8 104.5 100.2
Other 4.7 5.3 4.1 4.8 5.3 4.8 5.8 4.2 5.0
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL THROUGHPUT (MBPD) 105.2 95.0 96.1 109.0 106.9 101.7 101.6 108.7 105.2
====== ====== ====== ====== ====== ====== ====== ====== ======
YIELD (MBPD)
Gasoline & Gasoline Blendstocks 60.6 56.8 54.2 60.7 60.5 58.2 56.2 58.0 57.1
Jet Fuel 12.0 9.4 10.0 11.5 9.3 10.0 8.5 8.8 8.7
Diesel Fuel 27.8 24.8 25.9 30.3 31.8 28.2 29.3 34.4 31.9
Heavy Oils, Residual Products & Other 4.8 3.7 5.1 5.3 5.9 5.0 6.1 5.4 5.8
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL YIELD (MBPD) 105.2 94.7 95.2 107.8 107.5 101.4 100.1 106.6 103.5
====== ====== ====== ====== ====== ====== ====== ====== ======
</Table>
<Table>
<Caption>
YEAR 1H
TESORO PRO FORMA FOR THE ACQUIRED ASSETS(b) 2000 2001
------ ------
TOTAL REFINERY SYSTEM THROUGHPUT (MBPD) 352 358
TOTAL REFINERY SYSTEM YIELD (MBPD) 358 363
CONSOLIDATED REVENUES (IN MILLIONS) $6,588 $3,253
CONSOLIDATED EBITDA (IN MILLIONS) $ 318 $ 217
</Table>
NOTES:
(a) The historical data above represents information prior to Tesoro's
acquisition of these assets from BP. Results from these acquired assets are
included in Tesoro's consolidated financials since the date of acquisition, or
September 6, 2001. Results from the crude gathering and pipeline system are
included in Tesoro's results from the date of acquisition on November 1, 2001.
Gross refining margins per barrel for this region were approximately $5.23 for
the year 1999, $6.36 for the year 2000, and $8.28 for the first half of 2001.
Margins were derived from historical BP financial statements and were not
calculated in the same manner as Tesoro's other refineries.
(b) The unaudited pro forma information gives effect to the acquisitions of the
BP assets (including the crude gathering and pipeline system) and the effect of
the Company's recent financings and notes offering, as if these transactions had
occurred on January 1, 2000. The unaudited pro forma information is not
necessarily indicative of the results that actually would have been achieved had
these transactions been consummated on January 1, 2000, or that may be achieved
in the future.
Prepared on 11/26/01
(Unaudited)
CLEAN FUELS AND CLEAN AIR CAPITAL
Exhibit 10 contains the Company's preliminary estimates of its capital
requirements to meet new Clean Fuels and Clean Air standards. Actual
expenditures, and the timing of these expenditures, will likely differ from
these estimates due to a number of factors, including, among others, the final
selections of technology, equipment design changes, regional variations in
requirements, implementation of other refinery improvements, and other factors
which are beyond the Company's control (see Forward-Looking Statements
disclaimer at www.tesoropetroleum.com/forwardlooking.html).
EXHIBIT 10
CLEAN FUELS AND CLEAN AIR CAPITAL
($ in millions)
<Table>
<Caption>
YEAR YEAR YEAR YEAR YEAR BEYOND
2002 2003 2004 2005 2006 2006
------ ------ ------ ------ ------ ------
ESTIMATED CLEAN FUELS CAPITAL
LOW SULPHUR GASOLINE
Alaska $ -- $ -- $ -- $ -- $ -- $ --
Hawaii -- -- -- -- -- --
Washington 1.5 12.5 12.0 20.0 6.0 --
North Dakota -- 1.0 1.0 6.0 5.0 --
Utah -- -- -- -- -- 15.0
------ ------ ------ ------ ------ ------
TOTAL FOR GASOLINE 1.5 13.5 13.0 26.0 11.0 15.0
------ ------ ------ ------ ------ ------
LOW SULPHUR DIESEL
Alaska -- -- -- -- -- --
Hawaii -- -- -- -- -- --
Washington -- -- -- -- -- 30.0
North Dakota -- -- -- 4.0 -- --
Utah* 2.0 15.0 14.0 -- -- --
------ ------ ------ ------ ------ ------
TOTAL FOR DIESEL 2.0 15.0 14.0 4.0 -- 30.0
------ ------ ------ ------ ------ ------
TOTAL ESTIMATED CLEAN FUELS CAPITAL 3.5 28.5 27.0 30.0 11.0 45.0
TOTAL ESTIMATED CLEAN AIR CAPITAL (MACT II) -- 2.0 7.5 18.0 7.5 --
------ ------ ------ ------ ------ ------
TOTAL $ 3.5 $ 30.5 $ 34.5 $ 48.0 $ 18.5 $ 45.0
====== ====== ====== ====== ====== ======
</Table>
* Contains capital in 2003 and 2004 required to meet Clean Fuels standards, but
which the Company believes will provide economic benefits.
This exhibit contains forward-looking information (see Forward-Looking
Statements disclaimer at www.tesoropetroleum.com/forwardlooking.html).
Updated on 2/4/02
(Unaudited)