-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sc+54wcVkaeFbG0vsEkLZMnwdXMgHZHXrcAZ5edNatBwJfKj+6GUbZJPwnLU2zA1 g9HUaTIgzmUYw48qjZ/5kg== 0001157523-03-006292.txt : 20031105 0001157523-03-006292.hdr.sgml : 20031105 20031105111039 ACCESSION NUMBER: 0001157523-03-006292 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031105 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TESORO PETROLEUM CORP /NEW/ CENTRAL INDEX KEY: 0000050104 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 950862768 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03473 FILM NUMBER: 03978201 BUSINESS ADDRESS: STREET 1: 300 CONCORD PLAZA DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78216-6999 BUSINESS PHONE: 2108288484 MAIL ADDRESS: STREET 1: 300 CONCORD PLAZA DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78216-6999 8-K 1 a4509286.txt TESORO PETROLEUM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 5, 2003 Tesoro Petroleum Corporation (Exact name of registrant as specified in its charter) Delaware 1-3473 95-0862768 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 300 Concord Plaza Drive 78216-6999 San Antonio, Texas (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (210) 828-8484 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. 99.1 Press Release issued on November 5, 2003 by Tesoro Petroleum Corporation Item 12. Results of Operations and Financial Condition On November 5, 2003 Tesoro issued a press release (the "Press Release") announcing financial results for its third quarter ended September 30, 2003. The Press Release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in this report is being furnished, not filed, pursuant to Item 12 of Form 8-K. Accordingly, the information in Item 12 of this report will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: November 5, 2003 TESORO PETROLEUM CORPORATION By: /s/ Gregory A. Wright ------------------------------ Gregory A. Wright Senior Vice President and Chief Financial Officer Index to Exhibits Exhibit Number Description 99.1 Press Release issued on November 5, 2003 by Tesoro Petroleum Corporation EX-99 3 a4509286ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Tesoro Reports Third Quarter Earnings SAN ANTONIO--(BUSINESS WIRE)--xx--Tesoro Petroleum Corporation (NYSE:TSO) today reported net earnings of $70.6 million, or $1.09 per share, for the third quarter of 2003 versus a net loss of $15.8 million, or $0.24 per share, for the third quarter of 2002. Results for the third quarter include after-tax charges of $4.7 million, or $0.07 per share, for the loss on the pending sale of the Marine Service assets and $1.8 million, or $0.03 per share for the accelerated amortization of debt issuance costs due to the company prepaying $125 million of debt during the quarter. Excluding these special items, net earnings for the quarter were $77.1 million, or $1.19 per share, compared to a net loss excluding special items for the third quarter of 2002 of $18.8 million, or $0.29 per share. For the first nine months of 2003, Tesoro reported net earnings of $84 million, or $1.30 per share, versus a net loss for the first nine months of 2002 of $89.3 million, or $1.51 per share. Results for the first nine months of 2003 include after-tax charges of $33.2 million, or $0.51 per share, for the write-off of the unamortized debt issuance costs related to the company's previous credit facility and other debt prepayments, charges for the company's early retirement and severance program costs in the first quarter of 2003, along with the loss on the pending sale of the Marine Service assets. Excluding special items, net earnings were $117.2 million, or $1.81 per share, compared to a net loss before special items of $81.9 million, or $1.38 per share, for the first nine months of 2002. "The reliability of our operations enabled us to benefit from the seasonally strong gasoline demand and higher margin environment due to industry supply problems on the West Coast," said Bruce A. Smith, Chairman, President and CEO of Tesoro. "We did not, however, see the full benefit of the improved margin environment in the mid-continent region since our Mandan refinery had a planned maintenance turnaround for almost the entire month of September." As previously announced, the company prepaid the remaining balance of its current asset term loan of approximately $125 million during the quarter. "Although we have made significant strides this year in reducing our overall debt, continued debt reduction remains our top financial priority," stated Smith. Public Invited to Listen to Analyst Conference Call via Internet At 2 p.m. CST today, Tesoro will broadcast, live, its conference call with analysts regarding third quarter 2003 results. Interested parties may listen to the live conference call over the Internet by logging on to Tesoro's Internet site at http://www.tesoropetroleum.com and clicking on the "What's New" section. Tesoro Petroleum Corporation, a Fortune 500 Company, is an independent refiner and marketer of petroleum products and provider of marine logistics services. Tesoro operates six refineries in the western United States with a combined capacity of nearly 560,000 barrels per day. Tesoro's retail-marketing system includes over 560 branded retail stations; of which over 225 are company operated under the Tesoro(R) and Mirastar(R) brands. This news release contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements contain expectations with respect to the company's debt reduction initiatives. Factors which may cause actual results to differ from those forward-looking statements are described in the company's annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which the Company becomes aware of, after the date hereof. TESORO PETROLEUM CORPORATION STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) (In millions except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2003 2002 (a) 2003 2002 (a) -------- -------- -------- -------- Revenues $ 2,330.0 $ 2,148.5 $ 6,732.5 $ 5,117.9 Costs and Expenses Costs of sales and operating expenses 2,096.2 2,059.2 6,206.9 4,954.8 Selling, general and administrative expenses 28.3 31.5 98.7 103.8 Depreciation and amortization 36.7 38.2 110.4 92.9 Loss on asset sales (b) 9.2 0.2 10.3 0.5 -------- -------- -------- -------- Operating Income (Loss) 159.6 19.4 306.2 (34.1) Interest and Financing Costs, Net (c) (45.9) (43.2) (171.1) (112.3) -------- -------- -------- -------- Earnings (Loss) Before Income Taxes 113.7 (23.8) 135.1 (146.4) Income Tax Provision (Benefit) 43.1 (8.0) 51.1 (57.1) -------- -------- -------- -------- Net Earnings (Loss) $ 70.6 $ (15.8) $ 84.0 $ (89.3) ======== ======== ======== ======== Net Earnings (Loss) Per Share Basic $ 1.09 $ (0.24) $ 1.30 $ (1.51) ======== ======== ======== ======== Diluted $ 1.09 $ (0.24) $ 1.30 $ (1.51) ======== ======== ======== ======== Weighted Average Common Shares Basic 64.6 64.6 64.6 59.2 ======== ======== ======== ======== Diluted (d) 64.9 64.6 64.8 59.2 ======== ======== ======== ======== Note: Results include the California refinery operations acquired in May 2002 and interest expense for the related financing. (a) Certain reclassifications were made to prior period amounts to conform to current presentation, principally to reclassify amortization of major maintenance turnaround costs from operating expenses to depreciation and amortization and to net purchases and sales considered to be energy trading contracts. (b) On October 27, 2003, the Company agreed to sell substantially all of the physical assets of Marine Services for approximately $32 million including inventories, which are estimated to be valued at $5 million. The Company recorded a pretax estimated loss of $7.6 million, or $0.07 per share, in September 2003, reflecting the sales value of the assets and estimated selling costs. (c) The Company wrote-off approximately $2.9 million and $36.2 million during the three months and nine months ended September 30, 2003, respectively, of unamortized debt issue costs related to voluntary prepayments of debt and the replacement of the Company's previous credit facility with a new credit agreement and term debt during the 2003 second quarter. The Company also recorded charges of $12.6 million during the nine months ended September 30, 2002 for financing costs related to the acquisition of the California refinery. (d) The assumed conversion of common stock equivalents produced anti-dilutive results for the three months and nine months ended September 30, 2002 and therefore was not included in the dilutive calculations. NET EARNINGS (LOSS) ADJUSTED FOR SPECIAL ITEMS (Unaudited) (In millions except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2003 2002 2003 2002 -------- -------- -------- ------- Net Earnings (Loss) - U.S. GAAP $ 70.6 $ (15.8) $ 84.0 $ (89.3) Special Items, Aftertax: Loss on sale of Marine Services (b) 4.7 - 4.7 - Write-off of unamortized debt issuance cost (c) 1.8 - 22.8 7.6 Early retirement, severance and integration costs - - 5.7 2.8 LIFO liquidation - (3.0) - (3.0) -------- -------- -------- ------- Net Earnings (Loss) Adjusted for Special Items $ 77.1 $ (18.8) $ 117.2 $ (81.9) ======== ======== ======== ======= Net Earnings (Loss) Per Share - U.S. GAAP $ 1.09 $ (0.24) $ 1.30 $ (1.51) Special Items Per Share, Aftertax: Loss on sale of Marine Services (b) 0.07 - 0.07 - Write-off of unamortized debt issuance cost (c) 0.03 - 0.35 0.13 Early retirement, severance and integration costs - - 0.09 0.05 LIFO liquidation - (0.05) - (0.05) -------- -------- -------- ------- Net Earnings (Loss) Per Share Adjusted for Special Items $ 1.19 $ (0.29) $ 1.81 $ (1.38) ======== ======== ======== ======= Note: The special items present information that the Company believes is useful to investors, relating to the pending sale of Marine Services assets, refinancing and prepayments of debt, and severance and other restructuring costs. Comparable information is provided, relating to acquisition financing and integration costs and a LIFO liquidation in 2002. The Company believes that the special items described above are not indicative of its core operations. TESORO PETROLEUM CORPORATION SELECTED OPERATING SEGMENT DATA (Unaudited) (In millions) Three Months Nine Months Ended Ended September 30, September 30, ------------------- ---------------- 2003 2002 2003 2002 --------- --------- -------- ------- Operating Income (Loss) Refining $ 175.4 $ 33.4 $ 356.9 $ 34.5 Retail 6.6 3.5 8.8 (13.5) Marine Services 2.1 0.6 4.9 1.2 --------- --------- -------- ------- Total Segment Operating Income 184.1 37.5 370.6 22.2 Corporate and Unallocated Costs (e) (15.3) (17.9) (54.1) (55.8) Loss on asset sales (9.2) (0.2) (10.3) (0.5) --------- --------- -------- ------- Operating Income (Loss) 159.6 19.4 306.2 (34.1) Interest and Financing Costs, Net (c) (45.9) (43.2) (171.1) (112.3) --------- --------- -------- ------- Earnings (Loss) Before Income Taxes $ 113.7 $ (23.8)$ 135.1 $(146.4) ========= ========= ======== ======= Depreciation and Amortization Refining $ 29.5 $ 30.5 $ 88.9 $ 74.3 Retail 4.7 4.5 14.7 11.8 Marine Services 0.6 0.8 2.0 2.3 Corporate 1.9 2.4 4.8 4.5 --------- --------- -------- ------- Depreciation and Amortization $ 36.7 $ 38.2 $ 110.4 $ 92.9 ========= ========= ======== ======= Capital Expenditures Refining $ 22.4 $ 42.3 $ 64.8 $ 105.6 Retail 0.3 10.1 0.6 35.5 Marine Services 0.2 0.1 0.6 2.2 Corporate 0.4 1.5 0.9 7.1 --------- --------- -------- ------- Capital Expenditures $ 23.3 $ 54.0 $ 66.9 $ 150.4 ========= ========= ======== ======= (e) Corporate and unallocated costs for the nine months ended September 30, 2003 include $4.7 million in reorganization costs, primarily a non-cash charge for voluntary early retirement benefits and severance payments. An additional $4.3 million of reorganization costs were charged to the operating segments, including $2.6 million in Refining, $1.3 million in Retail and $0.4 million in Marine Services. BALANCE SHEET DATA (Unaudited) (Dollars in millions) September 30, December 31, 2003 2002 --------------- -------------- Total Assets $ 3,675.0 $ 3,758.8 Total Debt $ 1,611.1 $ 1,976.7 Total Stockholders' Equity $ 971.6 $ 887.6 Total Debt to Capitalization Ratio 62% 69% TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2003 2002 2003 2002 ------- ------- ------- ------- REFINING SEGMENT Total Refining Segment Throughput (thousand barrels per day) Heavy crude 278.9 277.5 284.2 195.5 Light crude 209.0 221.3 188.7 210.9 Other feedstocks 17.5 18.5 16.2 15.6 ------- -------- ------- ------- Total Throughput 505.4 517.3 489.1 422.0 ======= ======== ======= ======= Yield (thousand barrels per day) Gasoline and gasoline blendstocks 246.6 259.1 241.4 194.2 Jet fuel 58.5 66.0 56.8 65.7 Diesel fuel 111.0 110.8 105.4 80.4 Heavy oils, residual products, internally produced fuel and other 107.8 101.4 104.1 95.0 ------- -------- ------- ------- Total Yield 523.9 537.3 507.7 435.3 ======= ======== ======= ======= Refining Margin ($/throughput bbl) (f) Gross $ 8.24 $ 4.56 $ 7.04 $ 4.07 Manufacturing cost before depreciation and amortization (g) $ 2.80 $ 2.44 $ 2.83 $ 2.29 Segment Operating Income ($ millions) Gross refining margin (after inventory changes) (h) $ 376.3 $ 216.2 $ 938.8 $ 473.0 Expenses Manufacturing costs 130.0 116.2 377.8 263.9 Other operating expenses 34.9 27.7 93.8 75.7 Selling, general and administrative 6.5 8.4 21.4 24.6 Depreciation and amortization (i) 29.5 30.5 88.9 74.3 ------- -------- ------- ------- Segment Operating Income $ 175.4 $ 33.4 $ 356.9 $ 34.5 ======= ======== ======= ======= Product Sales (thousand barrels per day) (j) Gasoline and gasoline blendstocks 288.3 308.2 283.4 257.5 Jet fuel 86.2 104.9 84.2 95.4 Diesel fuel 132.2 128.6 129.1 108.4 Heavy oils, residual products and other 70.8 81.5 70.2 73.2 ------- -------- ------- ------- Total Product Sales 577.5 623.2 566.9 534.5 ======= ======== ======= ======= Product Sales Margin ($/barrel) (j) Average sales price $ 40.45 $ 34.57 $ 39.95 $ 31.51 Average costs of sales 33.47 30.80 33.96 28.28 ------- -------- ------- ------- Product Sales Margin $ 6.98 $ 3.77 $ 5.99 $ 3.23 ======= ======== ======= ======= (f) Management uses gross refining margin per barrel to compare profitability to other companies in the industry. Gross refining margin per barrel is calculated by dividing gross refining margin by total refining throughput and may not be calculated similarly by other companies. (g) Management uses manufacturing costs per barrel to evaluate the efficiency of refinery operations. Manufacturing costs per barrel may not be comparable to similarly titled measures used by other companies. (h) Gross refining margin is revenues less cost of refining feedstock, which approximates total Refining segment throughput times gross refining margin per barrel, adjusted for changes in refined product inventory due to selling a volume and mix of product that is different than actual volumes manufactured. Also includes the effect of intersegment sales to the Retail segment at prices which approximate market. In addition, during the three months ended September 30, 2002, certain inventory quantities were reduced, resulting in the liquidation of applicable LIFO inventory quantities carried at lower costs. This reduction in LIFO inventory resulted in a decrease in cost of sales of approximately $5 million and a decrease in net loss of $3 million for the three months and nine months ended September 30, 2002. (i) Includes manufacturing depreciation and amortization per throughput barrel of approximately $0.55 and $0.51 for the three months ended September 30, 2003 and 2002, respectively, and $0.58 and $0.54 for the nine months ended September 30, 2003 and 2002, respectively. (j) Sources of total product sales include products manufactured at the refineries, products drawn from inventory balances and products purchased from third parties. Total product sales margin included margins on sales of manufactured and purchased products and the effects of inventory changes. TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2003 2002 2003 2002 -------- -------- -------- ------- Refining By Region California (k) Throughput (thousand barrels per day) Heavy crude 147.4 153.1 149.3 68.4 Light crude 4.2 - 2.7 - Other feedstocks 6.3 4.6 6.2 4.8 -------- -------- -------- ------- Total Throughput 157.9 157.7 158.2 73.2 ======== ======== ======== ======= Yield (thousand barrels per day) Gasoline and gasoline blendstocks 97.2 105.0 99.6 49.8 Diesel fuel 40.5 37.1 39.8 15.1 Heavy oils, residual products, internally produced fuel and other 29.5 25.2 28.2 13.0 -------- -------- -------- ------- Total Yield 167.2 167.3 167.6 77.9 ======== ======== ======== ======= Refining Margin ($/throughput bbl) Gross $ 11.19 $ 6.38 $ 10.28 $ 6.76 Manufacturing cost before depreciation and amortization $ 4.39 $ 3.91 $ 4.42 $ 4.11 Pacific Northwest (Alaska & Washington) Throughput (thousand barrels per day) Heavy crude 85.6 80.3 84.3 73.5 Light crude 84.2 81.3 72.9 81.0 Other feedstocks 6.6 9.4 6.3 6.5 -------- -------- -------- ------- Total Throughput 176.4 171.0 163.5 161.0 ======== ======== ======== ======= Yield (thousand barrels per day) Gasoline and gasoline blendstocks 80.3 77.4 74.0 68.1 Jet fuel 26.8 30.3 25.4 29.2 Diesel fuel 32.0 28.8 27.2 24.4 Heavy oils, residual products, internally produced fuel and other 42.5 40.6 42.1 43.8 -------- -------- -------- ------- Total Yield 181.6 177.1 168.7 165.5 ======== ======== ======== ======= Refining Margin ($/throughput bbl) Gross $ 8.04 $ 4.44 $ 6.44 $ 3.98 Manufacturing cost before depreciation and amortization $ 2.11 $ 1.79 $ 2.17 $ 2.03 Mid-Pacific (Hawaii) Throughput (thousand barrels per day) Heavy crude 45.9 44.1 50.6 53.6 Light crude 34.5 38.9 26.6 30.9 -------- -------- -------- ------- Total Throughput 80.4 83.0 77.2 84.5 ======== ======== ======== ======= Yield (thousand barrels per day) Gasoline and gasoline blendstocks 20.2 20.3 18.5 20.5 Jet fuel 23.0 26.7 22.9 27.0 Diesel fuel 13.5 13.5 13.5 12.3 Heavy oils, residual products, internally produced fuel and other 25.0 23.7 23.4 25.8 -------- -------- -------- ------- Total Yield 81.7 84.2 78.3 85.6 ======== ======== ======== ======= Refining Margin ($/throughput bbl) Gross $ 4.07 $ 1.76 $ 3.16 $ 2.27 Manufacturing cost before depreciation and amortization $ 1.40 $ 1.30 $ 1.40 $ 1.36 (k) Volumes include amounts for the California operations since acquisition on May 17, 2002 averaged over the periods presented. Throughput and yield averaged over the 137 days of operation in 2002 were 145,900 bpd and 155,200 bpd, respectively. The California refinery's throughput and yield levels were reduced during a scheduled maintenance turnaround in the 2002 second quarter. TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2003 2002 2003 2002 -------- ------- ------- ------- Mid-Continent (North Dakota & Utah) (l) Throughput (thousand barrels per day) Light crude 86.1 101.1 86.5 99.0 Other feedstocks 4.6 4.5 3.7 4.3 -------- ------- ------- ------- Total Throughput 90.7 105.6 90.2 103.3 ======== ======= ======= ======= Yield (thousand barrels per day) Gasoline and gasoline blendstocks 48.9 56.4 49.3 55.8 Jet fuel 8.7 9.0 8.5 9.5 Diesel fuel 25.0 31.4 24.9 28.6 Heavy oils, residual products, internally produced fuel and other 10.8 11.9 10.4 12.4 -------- ------- ------- ------- Total Yield 93.4 108.7 93.1 106.3 ======== ======= ======= ======= Refining Margin ($/throughput bbl) Gross $ 7.16 $ 4.25 $ 5.75 $ 3.79 Manufacturing cost before depreciation and amortization $ 2.59 $ 2.21 $ 2.45 $ 2.17 (l) Throughput and yield levels were reduced during scheduled maintenance turnarounds at the North Dakota refinery in the 2003 third quarter and at the Utah refinery in the 2003 first quarter. TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2003 2002 2003 2002 -------- ------- ------- ------- RETAIL SEGMENT Number of Stations (end of period) Company-operated (m) 228 303 228 303 Branded jobber/dealer 336 359 336 359 -------- ------- ------- ------- Total Stations 564 662 564 662 ======== ======= ======= ======= Average Stations (during period) Company-operated (m) 228 298 229 254 Branded jobber/dealer 342 401 350 439 -------- ------- ------- ------- Total Average Retail Stations 570 699 579 693 ======== ======= ======= ======= Fuel Sales (millions of gallons) Company-operated (m) 79.1 126.1 235.8 308.3 Branded jobber/dealer 65.8 96.1 203.0 288.7 -------- ------- ------- ------- Total Fuel Sales 144.9 222.2 438.8 597.0 ======== ======= ======= ======= Fuel Margin ($/gallon) (n) $ 0.18 $ 0.14 $ 0.17 $ 0.11 Merchandise Sales ($ millions) $ 32.8 $ 39.1 $ 87.3 $ 93.0 Merchandise Margin ($ millions) $ 9.4 $ 11.3 $ 23.6 $ 25.3 Merchandise Margin % 29% 29% 27% 27% Segment Operating Income (Loss) ($ millions) Gross Margins Fuel (o) $ 26.7 $ 31.1 $ 74.9 $ 66.7 Merchandise and other non- fuel margin 10.3 12.4 26.7 29.3 -------- ------- ------- ------- Total gross margins 37.0 43.5 101.6 96.0 Expenses Operating expenses 18.3 28.7 53.7 72.1 Selling, general and administrative 7.4 6.8 24.4 25.6 Depreciation and amortization 4.7 4.5 14.7 11.8 -------- ------- ------- ------- Segment Operating Income (Loss) $ 6.6 $ 3.5 $ 8.8 $ (13.5) ======== ======= ======= ======= (m) In December 2002, the Company sold 70 company-operated stations that were acquired with the California refinery. (n) Fuel margin per gallon is calculated by dividing fuel gross margin by fuel sales volumes. Fuel margin per gallon may not be calculated similarly by other companies. Management uses fuel margin per gallon calculations to compare profitability to other companies in the industry. (o) Includes the effect of intersegment purchases from the Refining segment at prices which approximate market. CONTACT: Tesoro Petroleum Corp., San Antonio Investors: John Robertson, Director, Investor Relations 210-283-2687 or Media: Tara Ford, Director, Public Relations, 210-283-2676 -----END PRIVACY-ENHANCED MESSAGE-----