Key questions and answers from the first quarter fiscal 2008 earnings call conducted by Sunoco on May 1, 2008.

Doug Terreson (Morgan Stanley): What trend do you expect from operating costs in the coming quarters?

Terence P. Delaney: My expectation for the second quarter would be very much like the first quarter, may be modestly higher as we pick up some additional production barrels. The big variable elements are fuel cost, the absolute cost of natural gas and how much of that we purchase. Those expenses will continue to be high and I would expect them to continue at levels like the first quarter. Relative to last year, it’s really depreciation, fuel cost, catalyst cost, utilities and things of that nature.

Neil McMahon (Stanford Bernstein): What margins are we looking at to run at full rates?

Terence P. Delaney: A lot of things will be factored into that including how much would be produced from the last barrels that we put through the crude unit. One of the elements that will be important to that is the absolute cost of bringing crude into our refineries, including what we're paying for quality differentials and transportation.

Neil McMahon (Stanford Bernstein): In terms of the portfolio changing discussion, have you got anywhere in the last few months in terms of looking at the portfolio of refining assets in the overall chemical assets.

Thomas W. Hofmann: As far as refining assets, we're trying to do some of the things we spoke about. As far as chemicals, we continue to look at that, they had a good quarter this quarter; they've been generating positive cash flows. If there are opportunities to put those assets together somebody else will do that, we haven't found those opportunities yet, we continue to look at that and that's where we are. When you look at our portfolio, it’ll get out certainly by the end of the second quarter; third quarter is not going to look demonstrably different than it looks today.

Jeff Dietert (Simmons & Company International): It's a big loss for a single quarter and is there things you can do to prevent such a large loss in the event the industry conditions happened again?

Terence P. Delaney: We can always collect volumes further, but we ran the units. Our overall utilization was around 85% for the quarter. We did accelerate some maintenance into the quarter. We are always trying to optimize around the crude slate that we can run. However in this kind of margin environment, maybe with high insight the next biggest most drastic step would be to more drastically shut down whole units or parts of refineries. Generally though, you don't do that easily or all that quickly. We did slowdown runs and accelerate maintenance, but I don't know if there was much more that we could do.

Jeff Dietert (Simmons & Company International): What would you anticipate net financing expense would look like in the second quarter?

Terence P. Delaney: Probably more on the $8 million to $10 million range.

Paul Sankey (Deutsche Bank Securities): It was a tough quarter and still tough in the Atlantic Basin for crude supplies. Could you talk about the impact of the attitude in Nigeria and the issues in the North Sea in terms of how you manage that process and the expected Q2 results in terms of premiums that you have to pay for light-sweet crude?

Terence P. Delaney: Some of the things you just referred to are more recent and will come into play in our second quarter. In the first quarter, Nigerian and another West African light-sweet crude premiums were rich and for us and resulted in a crude cost of $2.92 a barrel over our marker. I would expect that to be maybe even higher in the second quarter to the tune of about another $1. There are issues going on in Nigeria, though I understand the strike has been settled, but the continued premiums there remain and the second quarter will be even more expensive for us in that regard.

Paul Sankey (Deutsche Bank Securities): Are you going to get any help with freight rates in Q2 versus Q1?

Terence P. Delaney: In the late Q2, we will get some help though not in the early Q2.

Arjun Murti (Goldman Sachs): With the two new coke plants, is that straight additions to your CapEx for this year or there are going to be some offsets elsewhere?

Terence P. Delaney: The two plants that we announced are additions to what we provided in December. In the aggregate, the incremental spending that we'd expect on those to this year is probably in a range of $190 million.

Arjun Murti (Goldman Sachs): You've got some incremental projects and target debt-to-cap. Are you going to consider these in terms of how much stock you may or may not buy back each quarter?

Thomas W. Hofmann: I think that's fair and we are always flexible as we have more or less cash flows. Previously, we had the opportunity to put that money back into the business and now we do with this coke plant, that’s always our first choice.

Mark Gilman (Benchmark Company): Did you make any changes on the crude side in response to conditions in the market?

Terence P. Delaney: Not particularly. We have to work within a certain range of the light-sweet barrel and we're usually working with West Africans of different type. We have brought in cash being crudes and things of that nature but nothing significant.