• future retail margins, including gasoline, diesel, home heating oil, and convenience store merchandise margins;

• future ethanol margins and the effect of the acquisition from VeraSun Energy Corporation (VeraSun) of certain ethanol plants (the VeraSun Acquisition) on our results of operations;

• expectations regarding feedstock costs, including crude oil differentials, and operating expenses;

• anticipated levels of crude oil and refined product inventories;

• our anticipated level of capital investments, including deferred refinery turnaround and catalyst costs and capital expenditures for environmental and other purposes, and the effect of those capital investments on our results of operations;

• anticipated trends in the supply of and demand for crude oil and other feedstocks and refined products in the United States, Canada, and elsewhere;

• expectations regarding environmental, tax, and other regulatory initiatives; and

• the effect of general economic and other conditions on refining and retail industry fundamentals.

We based our forward-looking statements on our current expectations, estimates, and projections about ourselves and our industry. We caution that these statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in the forward-looking statements. Differences between actual results and any future performance suggested in these forward-looking statements could result from a variety of factors, including the following:
• acts of terrorism aimed at either our facilities or other facilities that could impair our ability to produce or transport refined products or receive feedstocks;

• political and economic conditions in nations that consume refined products, including the United States, and in crude oil producing regions, including the Middle East and South America;

• the domestic and foreign supplies of refined products such as gasoline, diesel fuel, jet fuel, home heating oil, and petrochemicals;

• the domestic and foreign supplies of crude oil and other feedstocks;

• the ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to agree on and to maintain crude oil price and production controls;

• the level of consumer demand, including seasonal fluctuations;

• refinery overcapacity or undercapacity;

• the actions taken by competitors, including both pricing and adjustments to refining capacity in response to market conditions;

• environmental, tax, and other regulations at the municipal, state, and federal levels and in foreign countries;

• the level of foreign imports of refined products;

• accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, or equipment, or those of our suppliers or customers;

• changes in the cost or availability of transportation for feedstocks and refined products;

• the price, availability, and acceptance of alternative fuels and alternative-fuel vehicles;

• delay of, cancellation of, or failure to implement planned capital projects and realize the various assumptions and benefits projected for such projects or cost overruns in constructing such planned capital projects;

• ethanol margins following the VeraSun Acquisition may be lower than expected;

• earthquakes, hurricanes, tornadoes, and irregular weather, which can unforeseeably affect the price or availability of natural gas, crude oil and other feedstocks, and refined products;

• rulings, judgments, or settlements in litigation or other legal or regulatory matters, including unexpected environmental remediation costs, in excess of any reserves or insurance coverage;

• legislative or regulatory action, including the introduction or enactment of federal, state, municipal, or foreign legislation or rulemakings, which may adversely affect our business or operations;

• changes in the credit ratings assigned to our debt securities and trade credit;

• changes in currency exchange rates, including the value of the Canadian dollar relative to the U.S. dollar; and

• overall economic conditions, including the stability and liquidity of financial markets.

Any one of these factors, or a combination of these factors, could materially affect our future results of operations and whether any forward-looking statements ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and actual results and future performance may differ materially from those suggested in any forward-looking statements. We do not intend to update these statements unless we are required by the securities laws to do so.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to publicly release the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

OVERVIEW
In this overview, we describe some of the primary factors that we believe affected our results of operations in the third quarter and first nine months of 2009. We reported a net loss of $629 million, or $1.12 per share, for the third quarter of 2009, compared to net income of $1.2 billion, or $2.18 per share, for the third quarter of 2008. We reported a net loss of $574 million, or $1.08 per share, for the first nine months of 2009, compared to net income of $2.1 billion, or $4.02 per share, for the first nine months of 2008. The results of operations for the third quarter and first nine months of 2009 were unfavorably impacted by asset impairment losses of $417 million ($0.48 per share) and $575 million ($0.70 per share), respectively, which are discussed further below, as well as a $140 million ($0.25 per share and $0.26 per share, respectively, for the third quarter and first nine months of 2009) loss contingency accrual (including interest) recorded in the third quarter of 2009 related to our dispute of a turnover tax on export sales and other tax matters involving the Government of Aruba. The results of operations for the third quarter and first nine months of 2008 included a $0.32 per share benefit from the gain on the sale of our Krotz Springs Refinery. In addition, results of operations for the first nine months of 2008 included a pre-tax benefit of approximately $100 million, or $0.12 per share, resulting from a settlement of our business interruption insurance claims related to a 2007 fire at our McKee Refinery.
Due to the impact of the continuing economic slowdown on refining industry fundamentals, during the third quarter of 2009, we continued to assess our assets for potential impairment. This evaluation included an assessment of our operating assets as well as an evaluation of our capital projects classified as "construction in progress." As a result of this analysis, we recorded asset impairment losses of $417 million and $575 million for the third quarter and first nine months of 2009, respectively. Of these amounts, approximately $340 million related to the write-off in the third quarter of 2009 of costs related to the gasification unit at our Delaware City Refinery. The remaining write-offs related to the permanent cancellation of various capital projects at various refineries.
Our profitability is substantially determined by the spread between the price of refined products and the price of crude oil, referred to as the "refined product margin." The economic slowdown that has existed throughout 2009 has caused a continuing weakness in demand for refined products, which put pressure on refined product margins during the third quarter and first nine months of 2009. This reduced demand, combined with increased inventory levels, caused a significant decline in diesel and jet fuel margins in the third quarter and first nine months of 2009 compared to the corresponding periods of 2008. However, margins on other refined products were generally favorable in 2009 compared to 2008. Although overall gasoline margins were somewhat lower in the third quarter of 2009 compared to the third quarter of 2008, they were favorable in all of our regions for the first nine months of 2009 compared to the same period of 2008. In addition, lower costs of crude oil and other feedstocks significantly improved margins on certain secondary products, such as asphalt, fuel oils, and petroleum coke, during the third quarter and first nine months of 2009 compared to 2008.
Because more than 65% of our total crude oil throughput generally consists of sour crude oil and acidic sweet crude oil feedstocks that historically have been purchased at prices less than sweet crude oil, our profitability is also significantly affected by the spread between sweet crude oil and sour crude oil prices, referred to as the "sour crude oil differential." Sour crude oil differentials for the third quarter and first nine months of 2009 were substantially lower than the 2008 differentials for the corresponding periods. We believe that this decline in sour crude oil differentials was partially caused by a reduction in sour crude oil production by OPEC and other producers, which reduced the supply of sour crude oil and increased the price of sour crude oils relative to sweet crude oils. In addition, high prices of residual fuel oil relative to sweet crude oil prices caused a significant reduction in discounts realized on residual fuel oil that we processed during the third quarter and first nine months of 2009. These higher residual fuel oil

prices also contributed to the decrease in sour crude oil differentials because sour crude oil competes with residual fuel oil as a refinery feedstock. In March 2009, we issued $750 million of 10-year notes and $250 million of 30-year notes. Proceeds from these notes were used to make $209 million of scheduled debt payments in April 2009, fund our acquisition of certain ethanol plants from VeraSun, and maintain our capital investment program. In April and May of 2009, we acquired seven ethanol plants and a site under development from VeraSun for $477 million, plus $79 million primarily for inventory and certain other working capital. The new ethanol business reported $49 million and $71 million of operating income for the three and nine months ended September 30, 2009, respectively.
In June 2009, we sold in a public offering 46 million shares of our common stock at a price of $18.00 per share and received proceeds, net of underwriting discounts and commissions and other issuance costs, of $799 million.

RESULTS OF OPERATIONS
Third Quarter 2009 Compared to Third Quarter 2008
                              Financial Highlights
                (millions of dollars, except per share amounts)

                                                                   Three Months Ended September 30,
                                                             2009 (a)             2008             Change

Operating revenues                                         $   19,489         $  35,960         $  (16,471 )


Costs and expenses:
Cost of sales                                                  18,104            32,506            (14,402 )
Operating expenses                                                923             1,136               (213 )
Retail selling expenses                                           182               201                (19 )
General and administrative expenses                               167               169                 (2 )
Depreciation and amortization expense:
Refining                                                          345               331                 14
Retail                                                             25                28                 (3 )
Ethanol                                                             7                 -                  7
Corporate                                                          12                11                  1
Asset impairment loss (b)                                         417                43                374
Gain on sale of Krotz Springs Refinery                              -              (305 )              305

Total costs and expenses                                       20,182            34,120            (13,938 )


Operating income (loss)                                          (693 )           1,840             (2,533 )
Other income, net                                                   9                36                (27 )
Interest and debt expense:
Incurred                                                         (149 )            (112 )              (37 )
Capitalized                                                        19                31                (12 )


Income (loss) before income tax expense (benefit)                (814 )           1,795             (2,609 )
Income tax expense (benefit)                                     (185 )             643               (828 )


Net income (loss)                                          $     (629 )       $   1,152         $   (1,781 )


Earnings (loss) per common share - assuming dilution       $    (1.12 )       $    2.18         $    (3.30 )

See the footnote references on page 54.

Refining:
Operating income (loss) $ (674 ) $ 1,913 $ (2,587 ) Throughput margin per barrel (c) $ 4.86 $ 13.11 $ (8.25 ) Operating costs per barrel (b):
Refining operating expenses $ 3.94 $ 4.78 $ (0.84 ) Depreciation and amortization 1.58 1.39 0.19

Total operating costs per barrel $ 5.52 $ 6.17 $ (0.65 )

Throughput volumes (thousand barrels per day):
Feedstocks:
Heavy sour crude 443 565 (122 ) Medium/light sour crude 544 670 (126 ) Acidic sweet crude 24 75 (51 ) Sweet crude 676 578 98 Residuals 211 282 (71 ) Other feedstocks 179 136 43

Total feedstocks 2,077 2,306 (229 ) Blendstocks and other 302 281 21

Total throughput volumes 2,379 2,587 (208 )

Yields (thousand barrels per day):
Gasolines and blendstocks 1,207 1,136 71 Distillates 744 906 (162 ) Petrochemicals 72 66 6 Other products (d) 360 464 (104 )

Total yields 2,383 2,572 (189 )

Retail - U.S.:
Operating income $ 79 $ 81 $ (2 ) Company-operated fuel sites (average) 998 984 14 Fuel volumes (gallons per day per site) 4,963 4,946 17 Fuel margin per gallon $ 0.231 $ 0.273 $ (0.042 ) Merchandise sales $ 315 $ 292 $ 23 Merchandise margin (percentage of sales) 28.7 % 29.8 % (1.1 )% Margin on miscellaneous sales $ 22 $ 24 $ (2 ) Retail selling expenses $ 120 $ 134 $ (14 ) Depreciation and amortization expense $ 17 $ 18 $ (1 )

Retail - Canada:
Operating income $ 32 $ 26 $ 6 Fuel volumes (thousand gallons per day) 3,115 3,126 (11 ) Fuel margin per gallon $ 0.263 $ 0.261 $ 0.002 Merchandise sales $ 58 $ 56 $ 2 Merchandise margin (percentage of sales) 28.6 % 28.6 % - % Margin on miscellaneous sales $ 10 $ 10 $ - Retail selling expenses $ 62 $ 67 $ (5 ) Depreciation and amortization expense $ 8 $ 10 $ (2 )

See the footnote references on page 54.

Ethanol (a):
Operating income $ 49 N/A $ 49 Ethanol production (thousand gallons per day) 2,116 N/A 2,116 Gross margin per gallon of ethanol production $ 0.59 N/A $ 0.59 Operating costs per gallon of ethanol production:
Ethanol operating expenses $ 0.31 N/A $ 0.31 Depreciation and amortization 0.03 N/A 0.03

Total operating costs per gallon of ethanol production $ 0.34 N/A $ 0.34

See the footnote references on page 54.

                  Refining Operating Highlights by Region (e)
                (millions of dollars, except per barrel amounts)

                                                                 Three Months Ended September 30,
                                                             2009               2008             Change

Gulf Coast:
Operating income (loss)                                   $     (81 )        $  1,159         $  (1,240 )
Throughput volumes (thousand barrels per day)                 1,238             1,324               (86 )
Throughput margin per barrel (c)                          $    4.66          $  13.21         $   (8.55 )
Operating costs per barrel (b):
Refining operating expenses                               $    3.81          $   4.83         $   (1.02 )
Depreciation and amortization                                  1.57              1.37              0.20

Total operating costs per barrel                          $    5.38          $   6.20         $   (0.82 )


Mid-Continent:
Operating income                                          $       5          $    296         $    (291 )
Throughput volumes (thousand barrels per day)                   374               426               (52 )
Throughput margin per barrel (c)                          $    5.38          $  13.23         $   (7.85 )
Operating costs per barrel (b):
Refining operating expenses                               $    3.69          $   4.41         $   (0.72 )
Depreciation and amortization                                  1.53              1.28              0.25

Total operating costs per barrel                          $    5.22          $   5.69         $   (0.47 )


Northeast:
Operating income (loss)                                   $    (134 )        $    387         $    (521 )
Throughput volumes (thousand barrels per day)                   485               552               (67 )
Throughput margin per barrel (c)                          $    2.86          $  13.53         $  (10.67 )
Operating costs per barrel (b):
Refining operating expenses                               $    4.26          $   4.54         $   (0.28 )
Depreciation and amortization                                  1.59              1.36              0.23

Total operating costs per barrel                          $    5.85          $   5.90         $   (0.05 )


West Coast:
Operating income                                          $      67          $    114         $     (47 )
Throughput volumes (thousand barrels per day)                   282               285                (3 )
Throughput margin per barrel (c)                          $    8.51          $  11.60         $   (3.09 )
Operating costs per barrel (b):
Refining operating expenses                               $    4.35          $   5.53         $   (1.18 )
Depreciation and amortization                                  1.58              1.70             (0.12 )

Total operating costs per barrel                          $    5.93          $   7.23         $   (1.30 )


Operating income (loss) for regions above                 $    (143 )        $  1,956         $  (2,099 )
Asset impairment loss applicable to refining                   (417 )             (43 )            (374 )
Loss contingency accrual related to Aruban tax
matter (f)                                                     (114 )               -              (114 )

Total refining operating income (loss)                    $    (674 )        $  1,913         $  (2,587 )

See the footnote references on page 54.

             Average Market Reference Prices and Differentials (g)
                              (dollars per barrel)

                                                      Three Months Ended September 30,
                                                     2009            2008         Change

Feedstocks:
West Texas Intermediate (WTI) crude oil           $   68.18       $  117.83     $  (49.65 )
WTI less sour crude oil at U.S. Gulf Coast (h)         1.72            4.05         (2.33 )
WTI less Mars crude oil                                1.78            5.26         (3.48 )
WTI less Maya crude oil                                5.01           11.36         (6.35 )

Products:
U.S. Gulf Coast:
Conventional 87 gasoline less WTI                      7.85           12.13         (4.28 )
No. 2 fuel oil less WTI                                4.53           19.27        (14.74 )
Ultra-low-sulfur diesel less WTI                       6.99           23.91        (16.92 )
Propylene less WTI                                     8.22            7.21          1.01
U.S. Mid-Continent:
Conventional 87 gasoline less WTI                      8.11            8.62         (0.51 )
Low-sulfur diesel less WTI                             8.01           25.55        (17.54 )
U.S. Northeast:
Conventional 87 gasoline less WTI                      8.34            5.80          2.54
No. 2 fuel oil less WTI                                4.95           19.86        (14.91 )
Lube oils less WTI                                    28.89           89.33        (60.44 )
U.S. West Coast:
CARBOB 87 gasoline less WTI                           18.00           11.28          6.72
CARB diesel less WTI                                   9.29           22.94        (13.65 )

The following notes relate to references on pages 50 through 54.

(a) The information presented for the three months ended September 30, 2009 includes the operations related to the acquisition of certain ethanol plants from VeraSun. Ethanol plants located in Charles City, Fort Dodge, and Hartley, Iowa; Aurora, South Dakota; and Welcome, Minnesota were purchased on April 1, 2009, and ethanol plants in Albert City, Iowa and Albion, Nebraska were purchased on April 9, 2009 and May 8, 2009, respectively.

(b) The asset impairment loss for the three months ended September 30, 2009 relates primarily to charges of approximately $340 million resulting from the permanent shutdown of the gasification unit at our Delaware City Refinery. The remaining loss for the three months ended September 30, 2009 relates to the permanent cancellation of certain capital projects classified as "construction in progress" as a result of the unfavorable impact of the continuing economic slowdown on refining industry fundamentals. Losses resulting from the permanent cancellation of certain capital projects in prior periods have been reclassified from operating expenses and presented separately for comparability with the third quarter 2009 presentation. The asset impairment loss amounts have been excluded from operating costs in determining operating costs per barrel, resulting in an adjustment to the operating costs per barrel previously reported in 2008.

(c) Throughput margin per barrel represents operating revenues less cost of sales divided by throughput volumes.

(d) Other products primarily include gas oils, No. 6 fuel oil, petroleum coke, and asphalt.

(e) The regions reflected herein contain the following refineries: