8-K

UNITED STATESSECURITIES 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): January 31, 2008


Tesoro Corporation
(Exact name of registrant as specified in its charter)

Delaware	1-3473	95-0862768
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

300 Concord Plaza Drive San Antonio, Texas	78216-6999
(Address of principal executive offices)	(Zip Code)

(210) 828-8484
(Registrant’s telephone number,
including area code)


Not Applicable
(Former name or former address, if
changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02     Results of Operations and Financial Condition.

Tesoro Corporation ("Tesoro" or the "Company") on January 31, 2008 issued a press release announcing financial results for its fourth quarter ended December 31, 2007. 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 above is being furnished, not filed, pursuant to Item 2.02 of Form 8-K. Accordingly, the information in Item 2.02 of this Current Report, including the Press Release, 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 by reference.

Item 9.01     Financial Statements and Exhibits.

(c)	Exhibits.
	99.1	Press release announcing fourth quarter financial results issued on January 31, 2008 by Tesoro Corporation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	January 31, 2008
		TESORO CORPORATION
		By:	/s/ OTTO C. SCHWETHELM
			Otto C. Schwethelm
			Vice President, Chief Financial Officer

Index to Exhibits

Exhibit Number	Description
99.1	Press release announcing fourth quarter financial results issued on January 31, 2008 by Tesoro Corporation

EX-99.1

Exhibit 99.1

Tesoro Corporation Announces Fourth Quarter and Year-End Results

SAN ANTONIO--(BUSINESS WIRE)--Tesoro Corporation (NYSE:TSO) today reported a net loss of $40 million, or $0.29 per share, for the fourth quarter of 2007 compared to net income of $158 million, or $1.14 per share, for the fourth quarter of 2006.

In comparison to last year, weak crack spreads, higher operating expenses and poor marketing margins negatively impacted earnings at the company’s West Coast refineries. The Hawaii refinery posted an $86 million pre-tax operating loss for the quarter compared to a $19 million pre-tax operating profit for the same period a year ago. In Hawaii, finished product prices did not reflect the rapidly rising cost and premiums paid for crude which accounted for most of the quarter to quarter difference. Additionally, an unplanned outage on the refinery’s reformer unit during the period negatively impacted results by an estimated $30 million, including $10 million of higher repairs and maintenance expenses.

In total, quarterly refining operating earnings were $9 million compared to fourth quarter earnings of $284 million a year ago. “The Company has made significant improvements in crude purchasing and product sales at all of our refineries with the exception of Hawaii but lower benchmark margins in the Western United States overwhelmed these improvements and account for most of the quarter to quarter change. In Hawaii, the disappointing financial results are due to a combination of factors and the company has developed an action plan to address the myriad issues there. Improved reliability, changes to our crude slate to reduce the amount of Asian light sweet crude oil used which has been selling at lofty premiums and a greater focus on achieving better value for commercial products marketed in Hawaii are among the key initiatives we have undertaken,” said Bruce Smith, Chairman, President and CEO of Tesoro.

Benchmark margins versus last year were lower by 23% on the West Coast, 36% in the Pacific Northwest, and 7% in the Group 3 (Midwest) region. “In the fourth quarter of 2006, we experienced record crack spreads on the West Coast. In contrast, during the 2007 fourth quarter, West Coast product inventories rose due to higher refinery utilization rates at a time of weakened demand in part due to both economic slowdown and inclement weather in California during the end of December. Three factors should have a positive impact on the outlook for spring margins – lower planned production runs combined with the impact of planned turnarounds, the seasonal reduction of gasoline inventories due to the transition into summer-grade gasoline and increased seasonal demand,” added Smith.

“Excluding Hawaii, for the fourth quarter, all regions achieved at or near record capture rates for the year due to our capital improvement and optimization efforts. The two sulfur handling projects at our Anacortes refinery, which were completed in the third quarter, give us the flexibility to increase the use of discounted Canadian sour crude. Optimization efforts throughout the system, especially in California, continue to add new crude flexibility and product upgrade opportunities. In the Mid-Continent region, we were able to shift our crude slate to take advantage of more deeply discounted local light sweet crudes. Our capital and optimization focus is on lowering our operating and raw material costs at all our refineries,” said Smith.

For the full year of 2007, the company reported net earnings of $566 million, or $4.06 per diluted share, versus earnings for the full year of 2006 of $801 million, or $5.73 per share.

“In 2007, Tesoro had many notable successes and fulfilled several goals. We acquired and fully integrated the Los Angeles refinery and California retail assets and subsequently reduced debt to achieve a year-end debt-to-capitalization ratio of 35%. The addition of these assets permitted us to achieve $45 million in synergies for the year, mainly through shared crude cargo benefits, and we are confident that we will meet our total goal of $100 million in the first twelve months of ownership. In May we doubled the dividend. The Shell and USA Gasoline acquisitions nearly doubled our retail network. Finally, we managed the largest capital program in Company history while achieving record safety performance.

“In 2008, we look forward to completing several income producing projects, realizing additional synergies associated with the addition of Los Angeles and improving profitability in Hawaii,” said Smith.

Board Declares Quarterly Dividend

Tesoro announced today that its Board of Directors has approved a regular quarterly cash dividend of $0.10 per share. The dividend is payable March 17^th, 2008 to shareholders of record as of March 3^rd, 2008.

Public Invited to Listen to Analyst Conference Call via Internet

At 10:30 a.m., CST, Thursday, January 31^st, 2008 Tesoro will broadcast, live, its conference call with analysts regarding fourth quarter 2007 results and other business matters. Interested parties may listen to the live conference call over the Internet by logging on to Tesoro’s Internet site at http://www.tsocorp.com.

Tesoro Corporation, a Fortune 150 Company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of approximately 660,000 barrels per day. Tesoro's retail-marketing system includes over 900 branded retail stations, of which over 445 are company operated under the Tesoro®, Shell®, Mirastar® and USA Gasoline^TM brands.

This earnings 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 concerning the market environment, and our expectations about operating enhancements. For more information concerning factors that could affect these statements see our annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission. We undertake 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 we become aware of, after the date hereof."

TESORO CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions except per share amounts)
				Three Months Ended				Years Ended
				December 31,				December 31,
				2007		2006		2007		2006
Revenues			$	6,533	$	4,020	$	21,915	$	18,104
Costs and Expenses:
	Costs of sales and operating expenses			6,399		3,652		20,308		16,314
	Selling, general and administrative expenses			74		50		263		176
	Depreciation and amortization			102		64		357		247
	Loss on asset disposals and impairments			7		7		20		50
Operating Income (Loss)				(49)		247		967		1,317
Interest and Financing Costs				(20)		(17)		(95)		(77)
Interest Income and Other				4		14		33		46
		Earnings (Loss) Before Income Taxes		(65)		244		905		1,286
Income Tax Provision (Benefit)				(25)		86		339		485
Net Earnings (Loss)			$	(40)	$	158	$	566	$	801
Net Earnings (Loss) Per Share:
	Basic		$	(0.29)	$	1.17	$	4.17	$	5.89
	Diluted		$	(0.29)	$	1.14	$	4.06	$	5.73
Weighted Average Common Shares:
	Basic			136.0		134.6		135.7		136.0
	Diluted			136.0		138.4		139.5		139.8
Note: Amounts include the results of operations of our Shell and USA Petroleum acquisitions since their acquisition dates in May 2007. Share and per share data for the periods presented reflect the effect of a two-for-one stock split effected in the form of a stock dividend which was distributed on May 29, 2007.

TESORO CORPORATION
SELECTED OPERATING SEGMENT DATA
(Unaudited)
(In millions)
				Three Months Ended				Years Ended
				December 31,				December 31,
				2007		2006		2007		2006
Operating Income (Loss)
	Refining		$	9	$	284	$	1,188	$	1,476
	Retail			(1)		-		(8)		(21)
	Total Segment Operating Income			8		284		1,180		1,455
	Corporate and Unallocated Costs			(57)		(37)		(213)		(138)
		Operating Income (Loss)		(49)		247		967		1,317
	Interest and Financing Costs			(20)		(17)		(95)		(77)
	Interest Income and Other			4		14		33		46
		Earnings (Loss) Before Income Taxes	$	(65)	$	244	$	905	$	1,286
Depreciation and Amortization
	Refining		$	87	$	57	$	314	$	221
	Retail			9		4		28		16
	Corporate			6		3		15		10
	Depreciation and Amortization		$	102	$	64	$	357	$	247
				-
Capital Expenditures
	Refining		$	231	$	159	$	720	$	401
	Retail			7		1		10		5
	Corporate			27		7		59		47
	Capital Expenditures		$	265	$	167	$	789	$	453
BALANCE SHEET DATA
(Unaudited)
(Dollars in millions)
				December 31,		December 31,
				2007 (a)		2006
Cash and Cash Equivalents			$	23	$	986
Total Assets			$	8,128	$	5,904
Total Debt			$	1,659	$	1,046
Total Stockholders' Equity			$	3,052	$	2,502
Total Debt to Capitalization Ratio				35%		29%
(a)	The purchase price of the Shell and USA assets, both acquired in May 2007, have been preliminarily allocated to the assets and liabilities acquired based upon their fair market values at the date of acquisition. The allocations remain subject to change.

TESORO CORPORATION
OPERATING DATA
(Unaudited)
						Three Months Ended				Years Ended
						December 31,				December 31,
						2007		2006		2007		2006
REFINING SEGMENT
	Total Refining Segment
		Throughput (thousand barrels per day) (b)
			Heavy crude			175		97		137		96
			Light crude			436		391		429		415
			Other feedstocks			28		13		29		18
		Total Throughput				639		501		595		529
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks			313		225		280		245
			Jet fuel			82		61		77		68
			Diesel fuel			137		118		129		121
			Heavy oils, residual products, internally produced fuel and other
						135		115		133		115
		Total Yield				667		519		619		549
			Gross refining margin ($/throughput bbl) (c)		$	8.28	$	12.83	$	12.73	$	13.62
			Manufacturing cost before depreciation and amortization ($/throughput bbl) (c)
					$	5.22	$	3.88	$	4.47	$	3.57
		Segment Operating Income ($ millions)
			Gross refining margin (d)		$	486	$	592	$	2,762	$	2,631
			Expenses
				Manufacturing costs		307		179		971		689
				Other operating expenses		61		56		236		178
				Selling, general and administrative		18		10		43		26
				Depreciation and amortization (e)		87		57		314		221
				Loss on asset disposals and impairments		4		6		10		41
				Segment Operating Income	$	9	$	284	$	1,188	$	1,476
		Refined Product Sales (thousand barrels per day) (f)
			Gasoline and gasoline blendstocks			349		268		319		280
			Jet fuel			102		88		96		91
			Diesel fuel			127		120		131		128
			Heavy oils, residual products and other			106		88		97		87
		Total Refined Product Sales				684		564		643		586
		Refined Product Sales Margin ($/barrel) (f)
			Average sales price		$	99.47	$	72.93	$	89.47	$	81.26
			Average costs of sales			92.20		61.95		78.14		69.42
				Refined Product Sales Margin	$	7.27	$	10.98	$	11.33	$	11.84
(b)	In 2007, we redefined heavy crude oil as crude oil with an American Petroleum Institute gravity of 24 degrees or less. Previously, heavy crude oils were defined as crude oils with a gravity of 32 degrees or less. Heavy and light throughput volumes for the three months and year ended December 31, 2006 have been adjusted to conform to the 2007 presentation.
(c)	In 2007, we revised the calculation of gross refining margin per throughput barrel to include the effect of inventory changes. Inventory changes are the result of selling a volume and mix of product that is different than actual volumes manufactured. The amounts for the three months and year ended December 31, 2006 have been recalculated to conform to the 2007 calculation. Previously, gross refining margin per barrel was calculated based upon manufactured product volumes. Management uses gross refining margin per barrel to evaluate performance and 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. Gross refining margin is calculated as revenues less costs of feedstocks, purchased refined products, transportation and distribution. Management uses manufacturing costs per barrel to evaluate the efficiency of refinery operations. Manufacturing costs per barrel is calculated by dividing manufacturing costs by total refining throughput and may not be comparable to similarly titled measures used by other companies. Investors and analysts use these financial measures to help analyze and compare companies in the industry on the basis of operating performance. These financial measures should not be considered as alternatives to segment operating income, revenues, costs of sales and operating expenses or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America.
(d)	Gross refining margin totals gross refining margin for each of our regions adjusted for other costs not directly attributable to a specific region. Other costs resulted in a decrease of $2 million and $21 million for the three months and year ended December 31, 2007, respectively, and an increase of $5 million and $1 million for the three months and year ended December 31, 2006, respectively. Gross refining margin includes the effect of intersegment sales to the retail segment at prices which approximate market. Gross refining margin approximates total refining throughput times gross refining margin per barrel.
(e)	Includes manufacturing depreciation and amortization per throughput barrel of approximately $1.41 and $1.17 for the three months ended December 31, 2007 and 2006, respectively, and $1.37 and $1.06 for the years ended December 31, 2007 and 2006, respectively.
(f)	Sources of total refined product sales include products manufactured at the refineries and products purchased from third parties. Total refined product sales margin includes margins on sales of manufactured and purchased refined products.

TESORO CORPORATION
OPERATING DATA
(Unaudited)
					Three Months Ended				Years Ended
					December 31,				December 31,
					2007		2006		2007		2006
Refining By Region
	California (Golden Eagle and Los Angeles) (g)(h)
		Throughput (thousand barrels per day) (b)
			Heavy crude		148		76		115		75
			Light crude		108		82		90		81
			Other feedstocks		18		8		17		9
		Total Throughput			274		166		222		165
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		157		95		121		96
			Jet fuel		17		-		11		-
			Diesel fuel		65		55		53		49
			Heavy oils, residual products, internally produced fuel and other
					51		26		49		30
		Total Yield			290		176		234		175
			Gross refining margin	$	317	$	258	$	1,317	$	1,148
			Gross refining margin ($/throughput bbl)	$	12.60	$	16.86	$	16.33	$	19.08
			Manufacturing cost before depreciation and amortization ($/throughput bbl)	$	7.72	$	5.50	$	7.22	$	5.57
	Pacific Northwest (Alaska & Washington) (g)
		Throughput (thousand barrels per day) (b)
			Heavy crude		14		10		11		8
			Light crude		160		132		163		154
			Other feedstocks		6		2		8		5
		Total Throughput			180		144		182		167
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		74		49		77		67
			Jet fuel		33		31		33		31
			Diesel fuel		35		19		33		27
			Heavy oils, residual products, internally produced fuel and other
					45		48		46		47
		Total Yield			187		147		189		172
			Gross refining margin	$	107	$	150	$	730	$	706
			Gross refining margin ($/throughput bbl)	$	6.42	$	11.27	$	10.94	$	11.57
			Manufacturing cost before depreciation and amortization ($/throughput bbl)	$	3.55	$	3.57	$	3.00	$	2.88
	Mid-Pacific (Hawaii)
		Throughput (thousand barrels per day) (b)
			Heavy crude		13		11		11		13
			Light crude		61		66		70		72
		Total Throughput			74		77		81		85
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		16		17		19		20
			Jet fuel		20		19		23		26
			Diesel fuel		11		12		14		13
			Heavy oils, residual products, internally produced fuel and other
					28		30		27		27
		Total Yield			75		78		83		86
			Gross refining margin	$	(51)	$	50	$	35	$	199
			Gross refining margin ($/throughput bbl)	$	(7.42)	$	7.01	$	1.18	$	6.44
			Manufacturing cost before depreciation and amortization ($/throughput bbl)	$	2.91	$	2.23	$	2.22	$	1.84
(g)	The Company experienced reduced throughput and yield levels during scheduled maintenance turnarounds for the Los Angeles refinery during the 2007 second quarter, the Golden Eagle refinery during the 2007 and 2006 first quarters, the Utah refinery during the 2007 first quarter, and the Alaska refinery during the 2006 second quarter.
(h)	Volumes and margins for 2007 include amounts for the Los Angeles refinery since acquisition on May 10, 2007, averaged over the periods presented. Throughput and yield averaged over the 235 days of operation were 106,000 bpd and 114,000 bpd, respectively.

TESORO CORPORATION
OPERATING DATA
(Unaudited)
					Three Months Ended				Years Ended
					December 31,				December 31,
					2007		2006		2007		2006
	Mid-Continent (North Dakota & Utah) (g)
		Throughput (thousand barrels per day) (b)
			Light crude		107		111		106		108
			Other feedstocks		4		3		4		4
		Total Throughput			111		114		110		112
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		66		64		63		62
			Jet fuel		12		11		10		11
			Diesel fuel		26		32		29		32
			Heavy oils, residual products, internally produced fuel and other
					11		11		11		11
		Total Yield			115		118		113		116
			Gross refining margin	$	115	$	129	$	701	$	577
			Gross refining margin ($/throughput bbl)	$	11.27	$	12.36	$	17.51	$	14.06
			Manufacturing cost before depreciation and amortization ($/throughput bbl)	$	3.33	$	3.02	$	3.07	$	2.96

TESORO CORPORATION
OPERATING DATA
(Unaudited)
						Three Months Ended				Years Ended
						December 31,				December 31,
						2007		2006		2007		2006
RETAIL SEGMENT
	Number of Stations (end of period)
		Company-operated				449		194		449		194
		Branded jobber/dealer				462		266		462		266
			Total Stations			911		460		911		460
	Average Stations (during period)
		Company-operated				449		194		362		204
		Branded jobber/dealer				457		264		384		261
			Total Average Retail Stations			906		458		746		465
	Fuel Sales (millions of gallons)
		Company-operated				301		59		856		248
		Branded jobber/dealer				67		48		242		186
	Total Fuel Sales					368		107		1,098		434
												-
	Fuel Margin ($/gallon) (i)				$	0.15	$	0.19	$	0.15	$	0.17
	Merchandise Sales ($ millions)				$	56	$	33	$	202	$	141
	Merchandise Margin ($ millions)				$	14	$	9	$	52	$	38
	Merchandise Margin %					25%		27%		26%		27%
	Segment Operating Income (Loss) ($ millions)
		Gross Margins
			Fuel (j)		$	54	$	20	$	164	$	72
			Merchandise and other non-fuel margin			21		10		69		41
				Total Gross Margins		75		30		233		113
		Expenses
			Operating expenses			60		20		182		87
			Selling, general and administrative			7		6		24		25
			Depreciation and amortization			9		4		28		16
			Loss on asset disposals and impairments			-		-		7		6
				Segment Operating Income (Loss)	$	(1)	$	-	$	(8)	$	(21)
(i)	Management uses fuel margin per gallon to compare profitability to other companies in the industry. Fuel margin per gallon is calculated by dividing fuel gross margin by fuel sales volume and may not be calculated similarly by other companies. Investors and analysts use fuel margin per gallon to help analyze and compare companies in the industry on the basis of operating performance. This financial measure should not be considered as an alternative to segment operating income and revenues or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America.
(j)	Includes the effect of intersegment purchases from the refining segment at prices which approximate market.

CONTACT:
Tesoro Corporation, San Antonio
Investors:
Scott Phipps, Director, Investor Relations, 210-283-2882
or
Media:
Natalie Silva, Director, Media Relations, 210-283-2729