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News Release

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Tesoro to Outline Strategic Initiatives and Growth Strategies at Analyst and Investor Day

NEW YORK, December 9, 2015, Tesoro Corporation (NYSE:TSO) ("Tesoro") will host its annual Analyst and Investor Day today to outline its strategic initiatives, growth plans and detailed financial objectives.

"Tesoro has a proven track record of delivering on our commitments. We are on track to report record results for 2015. Further, we expect $400 million to $500 million of business improvements in 2016," said Greg Goff, Tesoro Chairman, President and CEO. "By focusing on our strategic priorities, business improvements and growth in our logistics and marketing businesses, we expect to deliver $3.5 billion to $4.0 billion of EBITDA in 2018."

Driving Refining Excellence and New Business Investments
Keith Casey, Executive Vice President of Operations, will outline Tesoro's competitive refining system which has a track record of capturing gross margins through strong operational excellence and strategic business improvements. "Our refining portfolio has a 97 percent availability rate, which is world-class performance," said Casey. "Through our operational excellence, disciplined capital investments and improved yield flexibility, we expect to deliver approximately $200 million of business improvements annually through 2018."

In addition, Casey will review Tesoro's progress on the execution of four strategic business investments. These projects include the Los Angeles Refinery Integration and Compliance Project, Vancouver Energy, West Coast Mixed Xylenes and the Anacortes Isomerization Project. These projects are expected to contribute approximately $50 million to $100 million of EBITDA in 2016-2018 and $350 million of annualized EBITDA by the end of 2018.

Driving Growth in Logistics
Phil Anderson, President of Tesoro Logistics, will provide an overview of Tesoro's distinctive strategy to continue to grow the logistics business. "Tesoro Logistics has become a leading provider of logistics services to oil and gas producers and refining and marketing companies in our strategic footprint," said Anderson. "We have a clear path to deliver $1 billion in EBITDA in 2017."

Anderson will outline Tesoro's growth plans for 2016-2018 to drive value creation through organic investments, drop downs and strategic acquisitions.

Creating Value through Marketing
CJ Warner, Tesoro's Executive Vice President of Strategy and Business Development, will review the progress made in growing Tesoro's marketing business and outline the forward strategy for growth. "We expect to grow marketing into a $1 billion EBITDA business by 2018," said Warner. "We will achieve this by delivering $150 million to $200 million of organic growth and business improvements, and through acquisitions which should contribute an additional $200 million to $300 million of EBITDA."

Commitment to Generating Value for Shareholders
Steven Sterin, Executive Vice President and CFO, will outline Tesoro's financial priorities and commitment to delivering shareholder value. "The business plan we are outlining today is expected to deliver $3.5 billion to $4.0 billion of EBITDA in 2018 and cumulative free cash flow of approximately $4.0 billion. We remain committed to deploying this cash in a balanced and disciplined manner that creates substantial shareholder value," said Sterin.

The full Analyst and Investor Day presentation will be available today at 9:00 a.m. (Eastern Time) on the Investor Relations section of www.tsocorp.com.

About Tesoro
Tesoro Corporation, a Fortune 100 company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates six refineries in the western United States with a combined capacity of 875,000 barrels per day and ownership in a logistics business which includes an interest in Tesoro Logistics LP (NYSE: TLLP) and ownership of its general partner. Tesoro's retail-marketing system includes over 2,300 retail stations under the ARCO®, Shell®, Exxon®, Mobil®, USA Gasoline(TM) and Tesoro® brands.

This 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 expectation for delivery of record results for 2015; expectations regarding continued delivery of shareholder value; the benefits and competitive position of Tesoro's refining system, including the impact of capital investments, additional yield flexibility and business improvements, as well as related EBITDA contributions; expectations regarding EBITDA for Tesoro Logistics LP, potential EBITDA from drop down opportunities, and organic growth; expectations regarding the benefits of our focus on strengthening and growth our marketing business, including expected EBITDA, organic growth and business improvements, and strategic acquisitions; our ability to drive earnings improvements and create substantial shareholder value, including target EBITDA, cash flow, annual improvements and capital spending. For more information concerning factors that could affect these statements see Tesoro's and TLLP's annual reports 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.

Contacts:
Investors:
Sam Ramraj, Vice President, Investor Relations, (210) 626-4757

Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702

Selected Financial Metrics (unaudited)  
($ in millions)  
   
2016E Annual Improvements $400-500
2016E Higher Utilization and Capture $500-600
2016E Total Improvements $900-1,100
   
2017E-2018E Annual Improvements $725-1,025
   
2017E TLLP Total EBITDA $970-1,050
2018E Marketing EBITDA >$1,000
   
2016E Total TSO Capital $900-1,100
2017E-2018E Total TSO Capital $1,700-2,100
   
2016E Total TLLP Capital $450-550
2017E-2018E Total TLLP Capital $900-1,100

Capital Expenditures (unaudited)          
($ in millions)          
  Projected TSO Capital Expenditures
  2016E   2017E   2018E
Maintenance $ 360     $ 410     $ 275  
Regulatory 200     290     290  
Income 430     530     130  
Total TSO Capital $ 990     $ 1,230     $ 695  

  Projected TLLP Capital Expenditures
  2016E   2017E   2018E
Maintenance (net of reimbursements) $ 73     $ 78     $ 78  
Growth 420     400     425  
Total TLLP Capital $ 493     $ 478     $ 503  

Reconciliation of Projected Net Earnings to Projected EBITDA Projected Annual EBITDA
  LA Refinery Integration and Compliance Project   Vancouver Energy   Mixed Xylene   Isomerization   Other Projects   Total
Projected net earnings $ 52     $ 59     $ 56     $ 22     $ 5     $ 195  
Add: income tax expense 32     36     34     14     3     119  
Add: depreciation and amortization expense 16     5     10     4     2     36  
Projected EBITDA $ 100     $ 100     $ 100     $ 40     $ 10     $ 350  

Reconciliation of TLLP Projected Net Earnings to
  TLLP Annual Projected EBITDA
TLLP Annual Projected EBITDA
  2015E   2017E
Projected net earnings $ 302     $ 547  
Add: interest and financing costs, net 150     226  
Add: depreciation and amortization expense 203     237  
Annual Projected EBITDA $ 655     $ 1,010  

Reconciliation of Projected Marketing Segment Operating Income to Projected
  Marketing Segment EBITDA
Projected Marketing Segment EBITDA
  2018E
Projected Marketing segment operating income $ 959  
Add: depreciation and amortization expense 41  
Projected Marketing segment EBITDA $ 1,000  

Reconciliation of Projected Marketing Segment Acquisitions Operating Income to
  Projected Marketing Segment Acquisitions EBITDA
Projected Marketing Segment Acquisitions EBITDA
  2015E-2018E
Projected Marketing segment acquisitions
  operating income
$ 233  
Add: depreciation and amortization expense 17  
Projected Marketing segment acquisitions EBITDA $ 250  

Reconciliation of Projected Net Earnings to Projected EBITDA Projected EBITDA
  2018E
Projected net earnings attributable to Tesoro Corp $ 2,040  
Add: income tax expense 584  
Add: interest and financing costs, net 250  
Add: depreciation and amortization expense 876  
Projected EBITDA $ 3,750  

Reconciliation of Projected Net Cash Flow from
  Operating Activities to Projected Free Cash
  Flow Before Dividends and Distributions
Projected Free Cash Flow
  2016E   2017E   2018E   Total
Projected net cash flow from operating activities $ 1,829     $ 1,924     $ 2,246     $ 5,999  
Less: sustaining (maintenance and regulatory)
  capital
(649 )   (789 )   (661 )   (2,099 )
Projected Free Cash Flow before dividends
  and distributions
$ 1,180     $ 1,135     $ 1,585     $ 3,900  

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