8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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): July 29, 2009

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.)

19100 Ridgewood Pkwy San Antonio, Texas	78259-1828
(Address of principal executive offices)	(Zip Code)

(210) 626-6000
(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 (or the “Company”) on July 29, 2009 issued a press release announcing financial results for its second quarter ended June 30, 2009.  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.

 (d)   Exhibits.

99.1 Press release announcing second quarter financial results issued on July 29, 2009 by Tesoro Corporation.

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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:	July 29, 2009
		TESORO CORPORATION
		By:	/s/ GREGORY A. WRIGHT
			Gregory A. Wright
			Executive Vice President, Chief Financial Officer

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Index to Exhibits

Exhibit Number	Description
99.1	Press release announcing second quarter financial results issued on July 29, 2009 by Tesoro Corporation.

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EX-99.1

Exhibit 99.1

Tesoro Corporation Announces Second Quarter 2009 Results

SAN ANTONIO--(BUSINESS WIRE)--July 29, 2009--Tesoro Corporation (NYSE:TSO) today reported a second quarter 2009 net loss of $45 million, or $0.33 per diluted share compared to net earnings of $4 million, or $0.03 per diluted share for the second quarter of 2008. Second quarter segment operating income was $11 million versus $74 million in the second quarter of 2008. The variance was primarily due to lower gross margins and decreased throughput, partially offset by lower operating costs.

The Company’s realized gross margin of $8.52 per barrel (/bbl) decreased by $1.58/bbl from a year ago, although the Tesoro Index was $3/bbl lower. The Company reduced the amount of distillate it produced as West Coast distillate margins decreased by more than $22/bbl from a year ago, while gasoline margins increased more than $2/bbl from the 2008 second quarter. Narrowing price spreads between heavy and light crudes also reduced gross margins. During the second quarter, discounts for spot California heavy crudes were down 45%, as San Joaquin Valley Heavy traded $8/bbl below Alaska North Slope (ANS) versus a discount of $15/bbl a year ago. Discounts for South American heavy crudes also weakened as Oriente crude traded $7/bbl below ANS versus $13/bbl a year ago. Heavy crudes such as these represent almost 70% of our crude slate in the California region.

Total system throughput for the second quarter was 565 thousand barrels per day (mbpd), down 7% from the 2008 second quarter as a result of a full plant turnaround at Alaska, and planned maintenance at Golden Eagle. Additionally, in this economic environment, the Company continues to monitor throughput and inventory levels to meet lower product demand.

Direct manufacturing costs before depreciation and amortization were $238 million in the second quarter versus $257 million in the first quarter 2009. The difference is primarily attributable to lower energy costs. During the quarter, spot natural gas prices averaged $4 per million British thermal units (mmbtu), a decrease of 15% from a quarter ago.

For the second quarter 2009, capital expenditures were $173 million, including turnaround spending. We expect to spend less than our announced capital budget of $600 million dollars for the full year.

“As we began 2009, we were prepared for a very difficult year, and in the second quarter it arrived,” said Bruce Smith, Chairman, President and CEO. “Declining industrial production, weak distillate demand and excess inventories have crushed distillate margins. Gasoline margins, which were strong in April, weakened in the quarter and dropped to half the April levels in July. Like other refiners, the most significant impact to our second quarter results was the narrowing of the heavy crude discount which has severely reduced overall coking capacity economics. The marginal economics of these units at our California refineries materially impacted the quarter.

“The outlook for the third quarter is that we expect to continue to see difficult market conditions. In July, record product inventories and narrow heavy-light crude oil differentials continued to hamper margins. We are prepared for this environment to persist. Already, we are seeing temporary closures and units running at less than full rates at a number of refineries. We remain committed to our 2009 goals of lowering our cash break-even costs, gaining sustainable improvements in our capture of available margins and funding our capital program through operating cash flow. We believe that our markets and assets continue to hold competitive advantages, and our management team is prepared for both the political and consumer-related challenges that may lie ahead,” 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 September 15, 2009 to shareholders of record as of September 1, 2009.

Public Invited to Listen to Analyst Conference Call

At 7:30 a.m., CDT, Thursday, July 30^th, 2009 Tesoro will broadcast, live, its conference call with analysts regarding second quarter 2009 results and other business matters. Interested parties may listen to the live conference call over the Internet by logging on to http://www.tsocorp.com, or via phone by dialing 888-241-0558 (international dial-in: 647-427-3417), event ID 18009088. A telephone replay of the call will be available for one week, and may be accessed via phone by dialing 800-839-9871 (international replay: 402-220-4284 and entering passcode 18009088).

Tesoro Corporation, a Fortune 100 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 665,000 barrels per day. Tesoro's retail-marketing system includes over 870 branded retail stations, of which over 380 are company operated under the Tesoro®, Shell®, Mirastar® and USA Gasoline™ 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 our expectations of the market environment, and our expectations about our cash flow, our capital spending and our margin capture. 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				Six Months Ended
				June 30,				June 30,
				2009		2008		2009		2008
Revenues (a)			$	4,181	$	8,887	$	7,461	$	15,493
Costs and Expenses:
	Costs of sales and operating expenses (a) (b)			4,036		8,694		7,044		15,302
	Selling, general and administrative expenses			53		58		107		110
	Depreciation and amortization			108		99		213		189
	Loss on asset disposals and impairments			20		9		21		23
Operating Income (Loss)				(36)		27		76		(131)
Interest and Financing Costs				(31)		(29)		(59)		(53)
Interest Income				2		1		3		3
Foreign Currency Exchange Loss				(10)		(5)		(10)		(8)
Other Income (c)				-		4		-		49
		Earnings (Loss) Before Income Taxes		(75)		(2)		10		(140)
Income Tax Provision (Benefit)				(30)		(6)		4		(62)
Net Earnings (Loss)			$	(45)	$	4	$	6	$	(78)
Net Earnings (Loss) Per Share:
	Basic		$	(0.33)	$	0.03	$	0.04	$	(0.57)
	Diluted (d)		$	(0.33)	$	0.03	$	0.04	$	(0.57)
Weighted Average Common Shares:
	Basic			138.0		136.5		137.9		136.3
	Diluted (d)			138.0		138.9		139.6		136.3
(a)	We have reclassified our losses associated with our derivative instruments for the 2008 periods from “Revenues” to “Costs of sales and operating expenses” to conform to the 2009 presentation. Our derivative losses totaled $52 million and $133 million during the three months ended June 30, 2009 and 2008, respectively, and $55 million and $208 million during the six months ended June 30, 2009 and 2008, respectively.
(b)	During the 2008 second quarter, a reduction in inventory quantities resulted in a liquidation of applicable LIFO inventory quantities carried at lower costs in the prior year. This LIFO liquidation resulted in a decrease of costs of sales of $78 million for the three and six months ended June 30, 2008.
(c)	Other income for the three and six months ended June 30, 2008 represents refunds received from the Trans Alaska Pipeline System in connection with rulings by the Regulatory Commission of Alaska concerning our protest of intrastate pipeline tariffs set between 1997 and 2003.
(d)	The assumed conversion of common stock equivalents produced anti-dilutive results for the three months ended June 30, 2009 and six months ended June 30, 2008, and was not included in the dilutive calculation.

TESORO CORPORATION
SELECTED OPERATING SEGMENT DATA
(Unaudited)
(In millions)
				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2009		2008		2009		2008
Operating Income (Loss)
	Refining		$	7	$	85	$	184	$	(2)
	Retail			4		(11)		(11)		(39)
	Total Segment Operating Income (Loss)			11		74		173		(41)
	Corporate and Unallocated Costs			(47)		(47)		(97)		(90)
		Operating Income (Loss)		(36)		27		76		(131)
	Interest and Financing Costs			(31)		(29)		(59)		(53)
	Interest Income			2		1		3		3
	Foreign Currency Exchange Loss			(10)		(5)		(10)		(8)
	Other Income (c)			-		4		-		49
		Earnings (Loss) Before Income Taxes	$	(75)	$	(2)	$	10	$	(140)
Depreciation and Amortization
	Refining		$	90	$	83	$	177	$	156
	Retail			10		10		19		22
	Corporate			8		6		17		11
	Depreciation and Amortization		$	108	$	99	$	213	$	189
Capital Expenditures
	Refining		$	88	$	123	$	159	$	288
	Retail			4		5		9		6
	Corporate			15		8		27		17
	Capital Expenditures		$	107	$	136	$	195	$	311

BALANCE SHEET DATA
(Unaudited)
(Dollars in millions)
		June 30,		December 31,
		2009		2008
Cash and Cash Equivalents	$	279	$	20
Total Assets	$	8,322	$	7,433
Total Debt	$	1,837	$	1,611
Total Stockholders' Equity	$	3,209	$	3,218
Total Debt to Capitalization Ratio		36%		33%

TESORO CORPORATION
OPERATING DATA
(Unaudited)
					Three Months Ended				Six Months Ended
					June 30,				June 30,
					2009		2008		2009		2008
REFINING SEGMENT
	Total Refining Segment
		Throughput (thousand barrels per day)
			Heavy crude (e)		186		184		184		180
			Light crude		343		388		332		389
			Other feedstocks		36		38		35		33
		Total Throughput			565		610		551		602
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		286		280		272		282
			Jet fuel		67		82		66		79
			Diesel fuel		111		145		116		136
			Heavy oils, residual products, internally produced fuel and other		133		135		128		134
		Total Yield			597		642		582		631
			Gross refining margin ($/throughput bbl) (f)	$	8.52	$	10.10	$	10.27	$	8.34
			Manufacturing cost before depreciation and amortization ($/throughput bbl) (f)	$	4.63	$	5.35	$	4.96	$	5.32
		Segment Operating Income ($ millions)
			Gross refining margin (g)	$	438	$	561	$	1,023	$	914
			Expenses
			Manufacturing costs		238		297		495		583
			Other operating expenses		77		76		136		146
			Selling, general and administrative		8		12		12		21
			Depreciation and amortization (h)		90		83		177		156
			Loss on asset disposals and impairments (i)		18		8		19		10
			Segment Operating Income (Loss)	$	7	$	85	$	184	$	(2)
		Refined Product Sales (thousand barrels per day) (j)
			Gasoline and gasoline blendstocks		317		334		312		332
			Jet fuel		79		92		78		95
			Diesel fuel		123		151		121		137
			Heavy oils, residual products and other		88		104		87		98
		Total Refined Product Sales			607		681		598		662
		Refined Product Sales Margin ($/barrel) (j)
			Average sales price	$	69.63	$	135.73	$	63.15	$	121.29
			Average costs of sales		61.80		125.19		54.06		112.66
			Refined Product Sales Margin	$	7.83	$	10.54	$	9.09	$	8.63
(e)	We define heavy crude oil as crude oil with an American Petroleum Institute gravity of 24 degrees or less.
(f)	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.
(g)	Consolidated gross refining margin totals gross refining margin for each of our regions adjusted for other costs not directly attributable to a specific region. 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.
(h)	Includes manufacturing depreciation and amortization per throughput barrel of approximately $1.62 and $1.41 for the three months ended June 30, 2009 and 2008, respectively, and $1.66 and $1.33 for the six months ended June 30, 2009 and 2008, respectively.
(i)	Includes a termination charge of $12 million during the three and six months ended June 30, 2009, related to cancelling the purchase of equipment associated with a capital project at our Los Angeles refinery.
(j)	Sources of total refined product sales included refined products manufactured at the refineries and refined products purchased from third parties. Total refined product sales margin includes margins on sales of manufactured and purchased refined products and the effects of inventory changes.

TESORO CORPORATION
OPERATING DATA
(Unaudited)
					Three Months Ended				Six Months Ended
					June 30,				June 30,
					2009		2008		2009		2008
Refining By Region
	California (Golden Eagle and Los Angeles)
		Throughput (thousand barrels per day) (k)
			Heavy crude (e)		173		144		169		151
			Light crude		57		82		59		82
			Other feedstocks		21		24		22		22
		Total Throughput			251		250		250		255
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		140		129		136		136
			Jet fuel		20		20		18		19
			Diesel fuel		50		68		56		64
			Heavy oils, residual products, internally produced fuel and other		65		53		62		53
		Total Yield			275		270		272		272
			Gross refining margin	$	185	$	318	$	521	$	558
			Gross refining margin ($/throughput bbl) (f)	$	8.09	$	13.98	$	11.54	$	12.04
			Manufacturing cost before depreciation and amortization ($/throughput bbl) (f)	$	6.12	$	7.87	$	6.57	$	7.54
	Pacific Northwest (Alaska & Washington)
		Throughput (thousand barrels per day) (k)
			Heavy crude (e)		-		13		-		12
			Light crude		129		153		117		149
			Other feedstocks		10		9		9		7
		Total Throughput			139		175		126		168
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		64		69		57		65
			Jet fuel		22		31		22		31
			Diesel fuel		23		36		22		32
			Heavy oils, residual products, internally produced fuel and other		34		45		29		45
		Total Yield			143		181		130		173
			Gross refining margin	$	123	$	138	$	206	$	167
			Gross refining margin ($/throughput bbl) (f)	$	9.70	$	8.63	$	9.01	$	5.47
			Manufacturing cost before depreciation and amortization ($/throughput bbl) (f)	$	3.72	$	3.79	$	4.18	$	4.01
	Mid-Pacific (Hawaii)
		Throughput (thousand barrels per day)
			Heavy crude (e)		13		27		15		17
			Light crude		53		44		55		52
		Total Throughput			66		71		70		69
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		16		16		17		17
			Jet fuel		17		19		17		19
			Diesel fuel		10		11		10		10
			Heavy oils, residual products, internally produced fuel and other		24		27		27		25
		Total Yield			67		73		71		71
			Gross refining margin	$	15	$	(41)	$	71	$	(50)
			Gross refining margin ($/throughput bbl) (f)	$	2.52	$	(6.33)	$	5.67	$	(3.97)
			Manufacturing cost before depreciation and amortization ($/throughput bbl) (f)	$	3.21	$	3.15	$	2.98	$	3.11
(k)	We experienced reduced throughput due to turnarounds at the Alaska and Golden Eagle refineries during the 2009 second quarter, scheduled maintenance at the Washington refinery during the 2009 first quarter, and scheduled turnarounds at the Golden Eagle refinery during the 2008 first and second quarters and at the Washington refinery during the 2008 first quarter.

TESORO CORPORATION
OPERATING DATA
(Unaudited)
					Three Months Ended				Six Months Ended
					June 30,				June 30,
					2009		2008		2009		2008
	Mid-Continent (North Dakota & Utah)
		Throughput (thousand barrels per day)
			Light crude		104		109		101		106
			Other feedstocks		5		5		4		4
		Total Throughput			109		114		105		110
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks		66		66		62		64
			Jet fuel		8		12		9		10
			Diesel fuel		28		30		28		30
			Heavy oils, residual products, internally produced fuel and other		10		10		10		11
		Total Yield			112		118		109		115
			Gross refining margin	$	111	$	143	$	222	$	235
			Gross refining margin ($/throughput bbl) (f)	$	11.29	$	13.86	$	11.71	$	11.72
			Manufacturing cost before depreciation and amortization ($/throughput bbl) (f)	$	3.20	$	3.59	$	3.40	$	3.58

TESORO CORPORATION
OPERATING DATA
(Unaudited)
						Three Months Ended				Six Months Ended
						June 30,				June 30,
						2009		2008		2009		2008
RETAIL SEGMENT
	Number of Stations (end of period)
		Company-operated				388		437		388		437
		Branded jobber/dealer				490		496		490		496
			Total Stations			878		933		878		933
	Average Stations (during period)
		Company-operated				388		440		389		443
		Branded jobber/dealer				490		497		489		485
			Total Average Retail Stations			878		937		878		928
	Fuel Sales (millions of gallons)
		Company-operated				263		270		513		557
		Branded jobber/dealer				80		73		146		135
	Total Fuel Sales					343		343		659		692
	Fuel Margin ($/gallon) (l) (m)				$	0.16	$	0.12	$	0.14	$	0.12
	Merchandise Sales ($ millions)				$	56	$	58	$	102	$	111
	Merchandise Margin ($ millions)				$	14	$	15	$	25	$	28
	Merchandise Margin %					25%		26%		25%		25%
	Segment Operating Income (Loss) ($ millions)
		Gross Margins
			Fuel (m)		$	55	$	41	$	91	$	82
			Merchandise and other non-fuel margin			20		20		37		38
				Total Gross Margins		75		61		128		120
		Expenses
			Operating expenses			52		56		102		114
			Selling, general and administrative			7		6		16		12
			Depreciation and amortization			10		10		19		22
			Loss on asset disposals and impairments (n)			2		-		2		11
				Segment Operating Income (Loss)	$	4	$	(11)	$	(11)	$	(39)
(l)	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 volumes 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 U.S. GAAP.
(m)	Includes the effect of intersegment purchases from the refining segment at prices which approximate market.
(n)	Represents impairment charges during the three months ended March 31, 2008 primarily related to a potential sale of 20 retail stations.

CONTACT:
Tesoro Corporation
Investors:
Scott Phipps, 210-626-4882
Managing Director, Finance & Investor Relations
or
Media:
Lynn Westfall, 210-626-4697
SVP of External Affairs and Chief Economist