Tesoro Reports Record Third Quarter Earnings

Tesoro Corporation (NYSE: TSO) has record throughput of 559,000 barrels per day for the third quarter. "Our employees and shareholders should be very proud of this accomplishment since it enabled us to take advantage of a strong margin environment," said Bruce A. Smith, Chairman, President and CEO of Tesoro.

For third quarter 2005, the company reported net earnings of $226 million, or $3.20 per share, compared to net earnings of $65 million, or $0.93 per share, for the third quarter of 2004.

Results for the third quarter include an after-tax charge of $5.6 million, or $0.08 per share, for insurance premium surcharges primarily related to the impact of hurricanes Katrina and Rita.

Third quarter 2004 results included after-tax charges of $12 million, or $0.18 per share, for the prepayment of almost $400 million of debt. Excluding these special items, net income was $77 million, or $1.11 per share, in the third quarter of 2004. In addition, the 2004 quarter was significantly impacted by a scheduled turnaround at Golden Eagle which reduced total system throughput to 535,000 barrels per day.

For the first nine months of 2005, the company reported net earnings of $438 million, or $6.23 per share, compared to net earnings of $328 million, or $4.79 per share, for the first nine months of 2004.

Results for the first nine months of 2005 include after-tax charges of $8 million, or $0.11 per share, for the prepayment of debt as well as expenses related to the termination and retirement of certain executive officers. This compares to after-tax charges of $14 million, or $0.20 per share, for debt prepayment and financing costs incurred in the first nine months of 2004. Excluding special items, net earnings for the first nine months of 2005 were $446 million, or $6.34 per share, compared to net earnings excluding special items of $342 million, or $4.99 per share, for the first nine months of 2004.

For the quarter, total operating income more than doubled to almost $400 million compared to approximately $160 million a year ago. Cash and cash equivalents at the end of third quarter 2005 were $657 million, and total debt to capitalization declined to 38% compared with 48% at year-end 2004.

"Our solid operating performance this year has put us on track to exceed $1 billion of operating income for 2005. We expect strong industry fundamentals to continue, so the near term outlook remains very promising," said Smith.

Board Approves 2006 Capital Spending Program

The Company announced that its Board of Directors has approved the 2006 capital spending plan which includes a number of quick-return, high-payback projects. "Next year's budget of about $670 million includes capital for several multi-year projects which we announced earlier this year and other new projects, some of which we will review during our conference call. We continue to focus on projects that improve crude flexibility, product yields and cost structure and continue our commitment to environmental responsibility," concluded Smith.

Board Declares, Raises Dividend; Approves Stock Repurchase Program

Tesoro announced that its Board of Directors has approved an increase in the regular quarterly dividend to $0.10 per share, double the previous $0.05 per share. The new dividend is payable on December 15, 2005 to shareholders of record as of December 1, 2005. The Board has also authorized a $200 million share repurchase program. Tesoro currently has 69 million shares outstanding. "Both of these actions reflect our confidence in the outlook for the company and the strength of our financial position," said Smith. "This is a continuation of our balanced approach to reinvesting excess cash flows and returning value to the shareholders."

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 Company: Tesoro Petroleum Corporationmore info
 - Tesoro Reports Record Third Quarter Earnings (Nov 3)
 - Tesoro Provides First Quarter Earnings Guidance (Apr 14)
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