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): November 9, 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 November 9, 2009 issued a press release announcing financial results for its third quarter ended September 30, 2009 and 2010 Capital Budget.  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 third quarter financial results issued on November 9, 2009 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:	November 9, 2009
		TESORO CORPORATION
		By:	/s/ GREGORY A. WRIGHT
			Gregory A. Wright
			Executive Vice President and Chief Financial Officer

Index to Exhibits

Exhibit Number	Description
99.1	Press release announcing third quarter financial results issued on November 9, 2009 by Tesoro Corporation.

EX-99.1

Exhibit 99.1

Tesoro Corporation Announces Third Quarter 2009 Results and 2010 Capital Budget

SAN ANTONIO--(BUSINESS WIRE)--November 9, 2009--Tesoro Corporation (NYSE:TSO) today reported third quarter 2009 net earnings of $33 million, or $0.24 per diluted share compared to net earnings of $259 million, or $1.86 per diluted share for the third quarter of 2008. For the nine months ended September 30, 2009, net income was $39 million, or $0.28 per diluted share, versus $181 million, or $1.30 per diluted share for the nine months ended September 30, 2008.

Third quarter segment operating income was $137 million compared to $510 million in the third quarter of 2008 as a result of lower gross margins.

The Company’s realized gross margin of $9.59 per barrel (/bbl) decreased by $7.10/bbl from a year ago, primarily as a result of lower margins for distillates and narrowing differentials for heavy crudes. West Coast diesel margins averaged less than $10/bbl, down from over $24/bbl in the third quarter a year ago. Discounts for heavy crudes weakened in the third quarter as spot prices for Oriente crude traded at less than $7/bbl below Alaska North Slope crude (ANS) versus more than $13/bbl a year ago. West Coast spot gasoline prices, which traded $12/bbl above ANS in the third quarter last year, increased to over $17/bbl during the quarter. In light of the relative strength in gasoline margins, the Company shifted 6% production into the gasoline pool versus a year ago.

Total system throughput for the third quarter was 564 thousand barrels per day (mbpd), down 9% from the 2008 third quarter. The Company continues to target throughput and inventory levels to meet product demand in our markets.

The retail marketing business recorded $53 million in operating income, versus $34 million a year ago. The 2008 results included a write down and other expenses associated with the closing of certain retail sites. The Company’s fuel gross margins in the quarter averaged $0.28 cents per gallon (cpg), slightly down from $0.30cpg a year ago. Operating costs in the retail segment were lower by $7 million versus the third quarter last year due to lower credit card fees associated with lower fuel prices, as well as lower employee costs.

Refining direct manufacturing costs before depreciation and amortization were $248 million in the third quarter versus $238 million in the second quarter 2009. The difference is primarily attributable to higher repair and maintenance costs and increased purchased energy usage.

“We were pleased to report a quarterly profit in this difficult economic environment,” said Bruce Smith, Chairman, President and CEO. “Although economic concerns persist in light of high unemployment rates and weak industrial activity, the West Coast region has remained in better balance to current demand as gasoline and diesel inventories remain near their 5-year average. We continue to view the West Coast as an attractive market in which to do business, especially with the increasing stability in gasoline demand we are experiencing through our retail channels.”

Capital Program Update

For the third quarter 2009, capital expenditures were $109 million, including turnaround spending. We expect to spend less than our announced capital budget of $600 million for the full year which includes $40 million for income improvement projects.

The Company’s initial 2010 capital budget estimate is $675 million, including approximately $50 million for income improvement projects.

“When we rolled out our 2009 business plan at the end of last year, we said that we intended to improve our cash position and cost structure. We are pleased with the progress we have made on expenses and our cash position has improved. We also stated that it was essential that we see improvement in the marketplace prior to allocating discretionary capital to our asset base. With cost improvements and a good cash balance, we now have an opportunity to begin modest funding of a portion of this program,” said Smith. “These organic growth projects have small capital requirements and average one to two year simple paybacks. We believe this is the appropriate time to selectively fund projects that will create value for the shareholders.”

Quarterly Dividend Update

Tesoro announced today that its Board of Directors has revised the quarterly cash dividend to $0.05 per share. The dividend is payable December 15^th, 2009 to shareholders of record as of December 1^st, 2009.

“While we ended the third quarter with adequate cash to fund our expected 2010 capital budget, the 40% reduction in West Coast margins from September to October has proven that even in times of stability, margins can be volatile. The reduction in our dividend puts us more in line with our historical yield, while allowing this capital to be re-deployed in support of our 2010 business plan, if necessary,“ said Smith.

Analyst and Investor Presentation

The Company will be holding an Analyst and Investor Presentation in New York City tomorrow, November 10, 2009 at 4:30 p.m. ET. Analysts and investors are invited to the Down Town Association in Lower Manhattan to attend the presentation, which will include an update on the 2009 improvement initiatives, the 2010 business plan and capital program. The presentation will be followed by a question and answer session and a cocktail reception with members of senior management. Because space is limited, reservations will be required to attend and accepted on a first-come, first-serve basis. Interested parties should contact Brad McMurray in the Investor Relations department via email at bradford.c.mcmurray@tsocorp.com or phone by calling 210-626-4676.

Public Invited to Listen to Analyst Conference Call

At 1:30 p.m. CT this afternoon, 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 (877) 485-3104 (international dial-in: (201) 689-8579), event ID 00334395. A telephone replay of the call will be available for one week, and may be accessed via phone by dialing (877) 660-6853 (international replay: (201) 612-7415 and entering passcode 334395.

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 860 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 the market environment, and our expectations about 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						Nine Months Ended
				September 30,						September 30,
				2009			2008			2009			2008
Revenues (a)			$	4,742		$	8,682		$	12,203		$	24,175
Costs and Expenses:
	Costs of sales and operating expenses (a) (b)			4,492			8,049			11,536			23,351
	Selling, general and administrative expenses			55			68			162			178
	Depreciation and amortization			102			99			315			288
	Loss on asset disposals and impairments			4			14			25			37
Operating Income				89			452			165			321
Interest and Financing Costs				(35	)		(30	)		(94	)		(83	)
Interest Income				-			2			3			5
Foreign Currency Exchange Loss				(3	)		-			(13	)		(8	)
Other Income (c)				-			1			-			50
		Earnings Before Income Taxes		51			425			61			285
Income Tax Provision				18			166			22			104
Net Earnings			$	33		$	259		$	39		$	181
Net Earnings Per Share:
	Basic		$	0.24		$	1.89		$	0.28		$	1.33
	Diluted		$	0.24		$	1.86		$	0.28		$	1.30
Weighted Average Common Shares:
	Basic			138.2			137.1			138.0			136.6
	Diluted			139.7			139.4			139.6			139.3

(a)	We have reclassified our gains and 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. The reclassifications totaled a $6 million loss and a $16 million gain during the three months ended September 30, 2009 and 2008, respectively, and losses of $61 million and $192 million during the nine months ended September 30, 2009 and 2008, respectively.
(b)	At both September 30, 2009 and 2008, reductions in petroleum inventories resulted in decreases of last-in-first-out ("LIFO") layers acquired at lower per-barrel costs. These inventory reductions resulted in decreases to costs of sales of $12 million during the three and nine months ended September 30, 2009 and $68 million and $146 million during the three months and nine months ended September 30, 2008, respectively.
(c)	Other income for the three and nine months ended September 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.

TESORO CORPORATION
SELECTED OPERATING SEGMENT DATA
(Unaudited)
(In millions)
				Three Months Ended						Nine Months Ended
				September 30,						September 30,
				2009			2008			2009			2008
Operating Income (Loss)
	Refining		$	84		$	476		$	268		$	474
	Retail			53			34			42			(5	)
	Total Segment Operating Income			137			510			310			469
	Corporate and Unallocated Costs			(48	)		(58	)		(145	)		(148	)
		Operating Income		89			452			165			321
	Interest and Financing Costs			(35	)		(30	)		(94	)		(83	)
	Interest Income			-			2			3			5
	Foreign Currency Exchange Loss			(3	)		-			(13	)		(8	)
	Other Income (c)			-			1			-			50
		Earnings Before Income Taxes	$	51		$	425		$	61		$	285
Depreciation and Amortization
	Refining		$	86		$	83		$	263		$	239
	Retail			10			10			29			32
	Corporate			6			6			23			17
	Depreciation and Amortization		$	102		$	99		$	315		$	288
Capital Expenditures
	Refining		$	91		$	119		$	250		$	407
	Retail			1			4			10			10
	Corporate			4			7			31			24
	Capital Expenditures		$	96		$	130		$	291		$	441
BALANCE SHEET DATA
(Unaudited)
(Dollars in millions)
				September 30,			December 31,
				2009			2008
Cash and Cash Equivalents			$	534		$	20
Total Assets			$	8,244		$	7,433
Total Debt			$	1,839		$	1,611
Total Stockholders' Equity			$	3,238		$	3,218
Total Debt to Capitalization Ratio				36	%		33	%

TESORO CORPORATION
OPERATING DATA
(Unaudited)
						Three Months Ended				Nine Months Ended
						September 30,				September 30,
						2009		2008		2009		2008
REFINING SEGMENT
	Total Refining Segment
		Throughput (thousand barrels per day)
			Heavy crude (d)			162		221		176		194
			Light crude			361		364		342		380
			Other feedstocks			41		37		37		35
		Total Throughput				564		622		555		609
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks			289		283		278		282
			Jet fuel			79		82		70		80
			Diesel fuel			113		158		115		144
			Heavy oils, residual products, internally produced fuel
			and other			115		132		124		133
		Total Yield				596		655		587		639
			Gross refining margin ($/throughput bbl) (e)		$	9.59	$	16.69	$	10.04	$	11.21
			Manufacturing cost before depreciation
			and amortization ($/throughput bbl) (e)		$	4.79	$	5.24	$	4.90	$	5.29
		Segment Operating Income ($ millions)
			Gross refining margin (f)		$	498	$	955	$	1,521	$	1,869
			Expenses
				Manufacturing costs		248		300		743		883
				Other operating expenses		69		88		205		234
				Selling, general and administrative		7		8		19		29
				Depreciation and amortization (g)		86		83		263		239
				Loss on asset disposals and impairments (h)		4		-		23		10
				Segment Operating Income	$	84	$	476	$	268	$	474
		Refined Product Sales (thousand barrels per day) (i)
			Gasoline and gasoline blendstocks			309		327		311		330
			Jet fuel			92		94		83		95
			Diesel fuel			129		164		123		146
			Heavy oils, residual products and other			81		97		85		98
		Total Refined Product Sales				611		682		602		669
		Refined Product Sales Margin ($/barrel) (i)
			Average sales price		$	83.71	$	131.21	$	70.17	$	124.68
			Average costs of sales			76.47		117.83		61.72		114.43
				Refined Product Sales Margin	$	7.24	$	13.38	$	8.45	$	10.25

(d)	We define heavy crude oil as crude oil with an American Petroleum Institute gravity of 24 degrees or less.
(e)	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.
(f)	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.
(g)	Includes manufacturing depreciation and amortization per throughput barrel of approximately $1.57 and $1.39 for the three months ended September 30, 2009 and 2008, respectively, and $1.63 and $1.35 for the nine months ended September 30, 2009 and 2008, respectively.
(h)	Includes a termination charge of $12 million during the nine months ended September 30, 2009, related to cancelling the purchase of equipment associated with a capital project at our Los Angeles refinery.
(i)	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				Nine Months Ended
						September 30,				September 30,
						2009		2008		2009		2008
Refining By Region
	California (Golden Eagle and Los Angeles)
		Throughput (thousand barrels per day) (j)
			Heavy crude (d)			147		188		161		163
			Light crude			63		66		61		77
			Other feedstocks			25		19		23		21
		Total Throughput				235		273		245		261
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks			140		135		138		136
			Jet fuel			17		19		17		19
			Diesel fuel			47		83		53		70
			Heavy oils, residual products, internally produced fuel
			and other			53		59		59		55
		Total Yield				257		296		267		280
			Gross refining margin		$	250	$	458	$	771	$	1,016
			Gross refining margin ($/throughput bbl) (e)		$	11.54	$	18.22	$	11.54	$	14.22
			Manufacturing cost before depreciation
				and amortization ($/throughput bbl) (e)	$	7.02	$	7.47	$	6.72	$	7.51
	Pacific Northwest (Alaska & Washington)
		Throughput (thousand barrels per day) (j)
			Heavy crude (d)			-		1		-		9
			Light crude			145		148		127		148
			Other feedstocks			10		13		9		9
		Total Throughput				155		162		136		166
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks			69		67		61		66
			Jet fuel			33		35		26		32
			Diesel fuel			26		32		23		32
			Heavy oils, residual products, internally produced fuel
			and other			32		34		30		41
		Total Yield				160		168		140		171
			Gross refining margin		$	129	$	205	$	335	$	372
			Gross refining margin ($/throughput bbl) (e)		$	9.08	$	13.76	$	9.04	$	8.19
			Manufacturing cost before depreciation
				and amortization ($/throughput bbl) (e)	$	3.04	$	3.79	$	3.74	$	3.94
	Mid-Pacific (Hawaii)
		Throughput (thousand barrels per day)
			Heavy crude (d)			15		32		15		22
			Light crude			51		40		53		48
		Total Throughput				66		72		68		70
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks			16		16		17		16
			Jet fuel			19		18		18		19
			Diesel fuel			12		11		11		11
			Heavy oils, residual products, internally produced fuel
			and other			20		28		24		26
		Total Yield				67		73		70		72
			Gross refining margin		$	7	$	80	$	78	$	30
			Gross refining margin ($/throughput bbl) (e)		$	1.05	$	12.15	$	4.17	$	1.55
			Manufacturing cost before depreciation
				and amortization ($/throughput bbl) (e)	$	3.26	$	3.45	$	3.07	$	3.23

(j) 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				Nine Months Ended
						September 30,				September 30,
						2009		2008		2009		2008
	Mid-Continent (North Dakota & Utah)
		Throughput (thousand barrels per day)
			Light crude			102		110		101		107
			Other feedstocks			6		5		5		5
		Total Throughput				108		115		106		112
		Yield (thousand barrels per day)
			Gasoline and gasoline blendstocks			64		65		62		64
			Jet fuel			10		10		9		10
			Diesel fuel			28		32		28		31
			Heavy oils, residual products, internally produced fuel
			and other			10		11		11		11
		Total Yield				112		118		110		116
			Gross refining margin		$	115	$	213	$	337	$	448
			Gross refining margin ($/throughput bbl) (e)		$	11.50	$	20.10	$	11.64	$	14.61
			Manufacturing cost before depreciation
				and amortization ($/throughput bbl) (e)	$	3.37	$	3.12	$	3.39	$	3.42

TESORO CORPORATION
OPERATING DATA
(Unaudited)
						Three Months Ended						Nine Months Ended
						September 30,						September 30,
						2009			2008			2009			2008
RETAIL SEGMENT
	Number of Stations (end of period)
		Company-operated				387			391			387			391
		Branded jobber/dealer				479			492			479			492
			Total Stations			866			883			866			883
	Average Stations (during period)
		Company-operated				388			414			388			432
		Branded jobber/dealer				483			495			487			488
			Total Average Retail Stations			871			909			875			920
	Fuel Sales (millions of gallons)
		Company-operated				262			258			775			815
		Branded jobber/dealer				83			76			229			211
	Total Fuel Sales					345			334			1,004			1,026
	Fuel Margin ($/gallon) (k) (l)				$	0.28		$	0.30		$	0.19		$	0.18
	Merchandise Sales ($ millions)				$	57		$	60		$	159		$	171
	Merchandise Margin ($ millions)				$	14		$	16		$	39		$	44
	Merchandise Margin %					25	%		27	%		25	%		26	%
	Segment Operating Income (Loss) ($ millions)
		Gross Margins
			Fuel (l)		$	98		$	99		$	189		$	181
			Merchandise and other non-fuel margin			21			22			58			60
				Total Gross Margins		119			121			247			241
		Expenses
			Operating expenses			51			56			153			170
			Selling, general and administrative			5			7			21			19
			Depreciation and amortization			10			10			29			32
			Loss on asset disposals and impairments (m)			-			14			2			25
				Segment Operating Income (Loss)	$	53		$	34		$	42		$	(5	)

(k)	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.
(l)	Includes the effect of intersegment purchases from the refining segment at prices which approximate market.
(m)	Includes impairment charges related to a potential sale of 20 retail stations during the 2008 first quarter and the closure of 42 Mirastar stations during the 2008 third quarter.

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