Tesoro ends ‘challenging’ Q1 with $500 million cash, $4.2 billion debt

By Lisa Kerner

Charlotte, N.C., May 8 – Tesoro Corp. managed through a challenging first quarter that included a strike at three refineries as well as planned maintenance, according to chairman and chief executive officer Greg Goff.

The company held its first-quarter earnings call on Friday.

“With the current strong margin environment and our goal of delivering $550 million to $670 million of business improvements, we expect to deliver significant growth in EBITDA in 2015,” Goff said.

Liquidity, share repurchases

Tesoro ended the quarter on March 31 with about $500 million of cash. Additionally, the company has no borrowings and $1.9 billion of availability under its revolving credit facility.

Consolidated total outstanding debt was $4.2 billion.

During the first quarter, Tesoro returned $73 million to shareholders through the regular quarterly dividend of $54 million and made modest share repurchases, according to the earnings news release.

There is $981 million remaining under Tesoro’s $1 billion share repurchase program. The company said it plans to continue repurchasing shares in 2015.

Financial highlights

First-quarter capital spending was $194 million, and Tesoro estimates full-year cap ex to total $600 million.

Net earnings for the quarter were $145 million, or $1.15 per diluted share. This compares to net earnings of $78 million, or $0.58 per diluted share, for the first quarter of 2014, according to the earnings news release.

Adjusted EBITDA for the first quarter, excluding special items, was $489 million compared to $362 million for the prior-year period.

Tesoro is a San Antonio-based owner, operator, developer and acquirer of crude oil and refined products logistics assets.

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