UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
COMMISSION FILE NUMBER 1-1059
CROWN CENTRAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-0550682
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One North Charles Street, Baltimore, Maryland 21201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 410-539-7400
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
The number of shares outstanding at July 31, 1994 of the Registrant's
$5 par value Class A and Class B Common Stock was 4,817,392 shares and
4,984,806 shares, respectively.
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Crown Central Petroleum Corporation and Subsidiaries
Table of Contents
-PAGE-
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets
June 30, 1994 and December 31, 1993 3-4
Consolidated Condensed Statements of Operations
Three and six months ended June 30, 1994 and 1993 5
Consolidated Condensed Statements of Cash Flows
Six months ended June 30, 1994 and 1993 6
Notes to Unaudited Consolidated Condensed
Financial Statements 7-8
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 12
Item 6 - Exhibits and Reports on Form 8-K 12
Exhibit 20 - Interim Report to Stockholders for the three
and six months ended June 30, 1994
SIGNATURE 12
-2-
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
June 30 December 31
Assets 1994 1993
----------- -----------
(Unaudited)
Current Assets
Cash and cash equivalents $ 43,354 $ 52,021
Accounts receivable - net 99,474 91,413
Recoverable income taxes 4,102
Inventories 127,161 86,811
Other current assets 3,702 762
-------- --------
Total Current Assets 277,793 231,007
Investments and Deferred Charges 35,299 42,908
Property, Plant and Equipment 683,208 676,405
Less allowance for depreciation 303,323 294,142
-------- --------
Net Property, Plant and Equipment 379,885 382,263
-------- --------
$692,977 $656,178
======== ========
<FN>
See notes to unaudited consolidated condensed financial statements.
-3-
CONSOLIDATED CONDENSED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
June 30 December 31
Liabilities and Stockholders' Equity 1994 1993
----------- ------------
(Unaudited)
Current Liabilities
Accounts payable:
Crude oil and refined products $133,029 $104,166
Other 17,812 20,500
Accrued liabilities 68,536 50,145
Income taxes payable 3,264
Current portion of long-term debt 10,017 1,094
------- -------
Total Current Liabilities 229,394 179,169
Long-Term Debt 57,272 65,579
Deferred Income Taxes 77,548 81,217
Other Deferred Liabilities 31,715 31,860
Common Stockholders' Equity
Common stock, Class A - par value $5 per share:
Authorized 7,500,000 shares; issued and
outstanding shares--4,817,392 in 1994 and 1993 24,087 24,087
Common stock, Class B - par value $5 per share:
Authorized 7,500,000 shares: issued and
outstanding shares--4,978,906 in 1994
and 5,015,206 in 1993 24,895 25,076
Additional paid-in capital 91,020 91,870
Retained earnings 158,694 157,320
Unearned restricted stock (1,648)
-------- --------
Total Common Stockholders' Equity 297,048 298,353
-------- --------
$692,977 $656,178
======== ========
<FN>
See notes to unaudited consolidated condensed financial statements.
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
-------- -------- -------- --------
Revenues:
Sales and operating revenues (including
excise taxes of $104,563, $73,397,
$198,119 and $138,286) $453,423 $447,777 $847,009 $861,079
-------- -------- -------- --------
Operating Costs and Expenses:
Costs and operating expenses 434,144 413,978 777,559 800,657
Selling and administrative expenses 19,125 23,445 41,185 46,030
Depreciation and amortization 10,438 10,471 21,069 20,770
Sales of property, plant and equipment (22) (248) (345) (277)
-------- -------- -------- --------
463,685 447,646 839,468 867,180
-------- -------- -------- --------
Operating (Loss) Income (10,262) 131 7,541 (6,101)
Interest and other income 476 166 869 219
Interest expense (1,946) (1,936) (3,857) (3,620)
-------- -------- -------- --------
(Loss) Income Before Income Taxes (11,732) (1,639) 4,553 (9,502)
Income Tax (Benefit) Expense (4,446) 627 3,179 (1,516)
-------- -------- -------- --------
Net (Loss) Income $ (7,286) $ (2,266) $ 1,374 $ (7,986)
======== ======== ======== ========
Net (Loss) Income Per Share $ (.74) $ (.23) $ .14 $ (.81)
======== ======== ======== ========
<FN>
See notes to unaudited consolidated condensed financial statements.
-5-
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
(Unaudited)
Six Months Ended June 30
1994 1993
-------- --------
Net Cash Flows From Operating Activities
Net cash from operations before
changes in working capital $ 18,558 $ 13,147
Net changes in working capital (14,151) (20,267)
-------- --------
Net Cash Provided by (Used in)
Operating Activities 4,407 (7,120)
-------- --------
Cash Flows From Investment Activities
Capital expenditures (13,989) (17,201)
Proceeds from sale of property, plant
and equipment 3,289 1,856
Deferred turnaround maintenance and other 284 (3,445)
-------- --------
Net Cash (Used in) Investment Activities (10,416) (18,790)
-------- --------
Cash Flows From Financing Activities
Net cash flows from long-term debt (76) (122)
Net proceeds from purchase money lien 693
Proceeds from interest rate swap terminations 2,403
Net cash flows from long-term
notes receivable (541) (53)
Purchases of common stock (2,734)
-------- --------
Net Cash (Used in) Provided by Financing Activities (2,658) 2,228
-------- --------
Net (Decrease) in Cash and Cash Equivalents $(8,667) $(23,682)
======== ========
<FN>
See notes to unaudited consolidated condensed financial statements.
-6-
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Crown Central Petroleum Corporation and Subsidiaries
June 30, 1994
Note A - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of Management, all adjustments considered necessary for a
fair and comparable presentation have been included. Operating results
for the three and six months ended June 30, 1994 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1994. The enclosed financial statements should be read in
conjunction with the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1993.
Cash and Cash Equivalents - Cash in excess of daily requirements is
invested in marketable securities with maturities of three months or
less. Such investments are deemed to be cash equivalents for purposes
of the statements of cash flows.
Inventories - The Company's crude oil, refined products, and
convenience store merchandise and gasoline inventories are valued at
the lower of cost (last-in, first-out) or market with the exception of
crude oil inventory held for resale which is valued at the lower of
cost (first-in, first-out) or market. Materials and supplies
inventories are valued at cost. Incomplete exchanges of crude oil and
refined products due the Company or owing to other companies are
reflected in the inventory accounts.
At June 30, 1994, approximately 1.5 million barrels of crude oil and
refined products, or approximately $30.9 million of inventory, were
held in excess of anticipated year-end quantities and were valued at
the lower of cost (first-in, first-out) or market. An actual valuation
of inventory under the LIFO method can be made only at the end of each
year based on the inventory levels and costs at that time.
Accordingly, interim LIFO projections must be based on Management's
estimates of expected year-end inventory levels and values.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes." The income tax provision for the three and six months
ended June 30, 1994 has been computed based upon the Company's
estimated effective tax rate for the year, after recognizing permanent
tax differences, to which the federal statutory rate of 35%, state
income taxes of approximately 4% and state franchise taxes have been
applied. Certain state franchise taxes are calculated based on the
Company's net assets and not as a percentage of income.
Statements of Cash Flows - Net changes in working capital items
presented in the Consolidated Condensed Statements of Cash Flows
reflects changes in all current assets and current liabilities with the
exception of cash and cash equivalents and the current portion of long-
term debt.
Reclassifications - Deferred gains from interest rate swap terminations
for the six months ended June 30, 1993 have been reclassified on the
Consolidated Condensed Statements of Cash Flows as a cash inflow from
financing activities consistent with the presentation in the
Consolidated Statements of Cash Flows in the Annual Report on Form 10-K
for the fiscal year ended December 31, 1993. These deferred gains had
previously been reported as a cash inflow from operations in the
Company's Form 10-Q for the period ended June 30, 1993. This
reclassification had no effect on the net decrease in cash and cash
equivalents for the six months ended June 30, 1993.
-7-
Note B - Inventories
Inventories consist of the following:
June 30 December 31
1994 1993
---------- -----------
(thousands of dollars)
Crude oil $ 63,175 $ 38,989
Refined products 87,315 60,519
-------- --------
Total inventories at FIFO
(approximates current cost) 150,490 99,508
LIFO allowance (36,374) (25,828)
-------- --------
Total crude oil and refined products 114,116 73,680
-------- --------
Merchandise inventory at FIFO
(approximates current cost) 7,570 7,200
LIFO allowance (2,387) (2,387)
-------- --------
Total merchandise 5,183 4,813
-------- --------
Materials and supplies inventory at FIFO 7,862 8,318
-------- --------
Total Inventory $127,161 $ 86,811
======== ========
Note C - Long-term Debt and Credit Arrangements
As of June 30, 1994, the Company has entered into interest rate swap
agreements with maturities ranging from 1996 to 1998, to effectively
convert $47,500,000 of its unsecured 10.42% Senior Notes (Notes) to
variable interest rates. During 1993, the Company terminated certain
other interest rate swap agreements associated with its 10.42% Notes
resulting in deferred gains of $1.6 million at June 30 1994, which will
be recognized as a reduction of interest expense over the remaining
swap periods which range from 1996 to 1997. As a result of its
interest rate swap program, the Company's overall effective interest
rate on the Notes for the six months ended June 30, 1994 was reduced
from 10.5% to 8.7% per annum.
Note D - Long-Term Incentive Plan
At the Annual Meeting held April 24, 1994, stockholders approved the
1994 Long-Term Incentive Plan (Plan). Under the Plan, the Company may
distribute to selected employees restricted shares of the Company's
Class B Common Stock and options to purchase Class B Common Stock. Up
to 1.1 million shares of Class B Common Stock may be distributed under
the Plan over a five year period. During the second quarter of 1994,
the Company acquired 135,000 shares of Class B Common Stock at a cost
of $2,734,000 which could be required for use in connection with the
awards of stock and options under the Plan during the first year. The
balance sheet caption "Unearned restricted stock" is charged for the
market value of restricted shares issued, and is shown as a reduction
of stockholders' equity.
Note E - Calculation of Net Income (Loss) Per Common Share
Net (loss) income per common share for the three and six months ended
June 30, 1994 is based upon the number of common shares outstanding of
9,796,298. Net (loss) per common share for the three and six months
ended June 30, 1993 is based upon the number of common shares
outstanding of 9,832,598.
Note F - Commitments and Contingencies
There have been no material changes in the status of contingencies as
discussed in Note G of Notes to Consolidated Financial Statements in
the Annual Report on Form 10-K for the fiscal year ended December 31,
1993.
-8-
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The Company's Sales and operating revenues increased $5.6 million or
1.3% in the second quarter of 1994 and decreased $14.1 million or 1.6%
for the six months ended June 30, 1994 from the comparable periods in
1993. The Company's Sales and operating revenues include all Federal
and State Excise Taxes. These taxes totalled $104.6 million and $73.4
million for the three months ended June 30, 1994 and 1993,
respectively; and $198.1 million and $138.3 million for the six months
ended June 30, 1994 and 1993, respectively. The second quarter
increase was primarily attributable to the increase in excise taxes and
a 6.8% increase in petroleum product sales volumes. These increases
were partially offset by a 12.8% decrease in the average sales price
per gallon of petroleum products. The year to date decrease was a
result primarily of a 13.6% decrease in the average sales price per
gallon of petroleum products which was partially offset by the increase
in excise taxes and a 3.8% increase in petroleum products sales
volumes.
Costs and operating expenses increased $20.2 million or 4.9% in the
second quarter of 1994 compared to the second quarter in 1993. The
increase was due to the increase in excise taxes and petroleum product
sales volumes as previously mentioned. These increases were partially
offset by a 13% decrease in the average cost per barrel consumed of
crude oil and feedstocks. Costs and operating expenses decreased $23.1
million or 2.9% for the six months ended June 30, 1994 compared to the
same period in 1993. This decrease was due to a 19.2% decrease in the
average cost per barrel consumed of crude oil and feedstocks which was
partially offset by increases in excise taxes and sales volume
increases as previously discussed. The results of operations were
affected by the Company's use of the LIFO method to value inventory
which decreased the Company's gross margin $.47 per barrel ($6.5
million) for the three months ended June 30, 1994, while increasing the
gross margin $.17 per barrel ($2.4 million) for the three months ended
June 30, 1993. The use of the LIFO method decreased the Company's
gross margin $.38 per barrel ($10.5 million) and $.05 per barrel ($1.5
million) for the six months ended June 30, 1994 and 1993, respectively.
Total refinery throughput averaged 151,000 barrels per day (bpd) for
the second quarter of 1994 compared to 155,000 bpd for the second
quarter of 1993. Total refinery throughput averaged 155,000 bpd for
the six months ended June 30, 1994 compared to 153,000 bpd for the same
period in 1993. Yields of gasoline and distillates were 89,000 bpd
(58.7%) and 49,000 bpd (32.5%), respectively, in the second quarter of
1994 and 89,000 bpd (57.4%) and 50,000 bpd (32.2%), respectively, for
the second quarter of 1993. Yields of gasoline and distillates were
89,000 bpd (57.3%) and 52,000 bpd (33.3%), respectively, for year to
date 1994 and 86,000 bpd (56.1%) and 49,000 bpd (32.1%), respectively,
for the year to date 1993.
A majority of the Company's total crude oil and related raw material
purchases are transacted on the spot market. The Company continues to
selectively enter into forward hedging contracts to minimize price
fluctuations for a portion of its crude oil and refined products.
Selling and administrative expenses decreased $4.3 million or 18.4% for
the three months ended June 30, 1994 and $4.8 million or 10.5% year to
date 1994 as compared to the same periods in 1993. The decreases are
principally due to decreased costs associated with the sale or closing
throughout 1993 of retail marketing outlets which were either not
profitable or did not fit with the Company's strategic direction, and
reductions related to the Company's administrative functions. As of
June 30, 1994, the Company operated 250 retail gasoline facilities and
106 convenience stores compared to 256 retail gasoline facilities and
159 convenience stores at June 30, 1993.
In the three and six months ended June 30, 1994, operating costs and
expenses included $1 million and $1.9 million, respectively, related to
environmental matters and retail outlet closings. This compares to $2
million and $3.6 million for the same periods of 1993.
-9-
Liquidity and Capital Resources
Net cash provided by operating activities (including changes in working
capital) totaled $4.4 million for the six months ended June 30, 1994
compared to cash used in operating activities of $7.1 million for the
six months ended June 30, 1993. The 1994 inflows consist of $18.6
million in cash provided by operations which were partially offset by
cash outflows of $14.2 million related to working capital requirements
resulting from increases in the value and volume of crude oil and
finished product inventories, receivables and prepaid operating
expenses. These working capital outflows were partially offset by
increases in inventory payables and in accrued excise tax liabilities.
In 1993, outflows consisted of $20.3 million related to working capital
requirements resulting from increases in the value and volume of crude
oil and finished product inventories and a decrease in inventory
payables. These working capital outflows were partially offset by
decreases in accounts receivable and increases in accrued excise tax
liabilities.
Net cash outflows from investment activities were $10.4 million for the
six months ended June 30, 1994 compared to a net outflow of $18.8
million for the same 1993 period. The 1994 activity relates primarily
to $14 million of capital expenditures (which includes $8.2 million for
refinery operations and $4.2 million related to the marketing area).
These cash outflows were partially offset by proceeds from the sale of
property, plant and equipment of $3.3 million. The 1993 amount
consists principally of capital expenditures of $17.2 million ( $8.4
million relating to marketing and $7.9 million relating to the
refineries) and $2.6 million in Tyler Refinery deferred turnaround
charges.
Net cash used in financing activities was $2.7 million for the six
months ended June 30, 1994 compared to cash provided by financing
activities of $2.2 million for the six months ended June 30, 1993. The
1994 cash outflows relate primarily to the acquisition of 135,000
shares of Class B Common Stock for use in connection with the awards of
stock and options under the 1994 Long-Term Incentive Plan, as disclosed
in Note D of Notes to Unaudited Consolidated Condensed Financial
Statements. The 1993 inflows are the result of proceeds from the
termination of interest rate swap contracts.
Cash and cash equivalents at June 30, 1994 were $11.5 million higher
than at June 30, 1993. This increase resulted from cash provided by
operating activities of $40.4 million for the twelve month period ended
June 30, 1994, and net proceeds received from the purchase money lien
of $6.2 million. These cash inflows were partially offset by cash used
in investment activities of $31.7 million for the period July 1, 1993
to June 30, 1994, which includes capital expenditures of $37.6 million
and deferred turnaround costs of $1.7 million net of $6.9 million of
proceeds received from the sale of property plant and equipment.
Additionally, cash used in financing activities includes the
acquisition of shares of Class B Common Stock as previously discussed.
The ratio of current assets to current liabilities was 1.21:1 at June
30, 1994 and 1993, compared to 1.29:1 at December 31, 1993. If FIFO
values had been used for all inventories, assuming an incremental
effective income tax rate of 38.5%, the ratio of current assets to
current liabilities would have been 1.30:1 at June 30, 1994, 1.35:1 at
June 30, 1993 and 1.36:1 at December 31, 1993.
Like other petroleum refiners and marketers, the Company's operations
are subject to extensive and rapidly changing federal and state
environmental regulations governing air emissions, waste water
discharges, and solid and hazardous waste management activities. The
Company's policy is to accrue environmental and clean-up related costs
of a non-capital nature when it is both probable that a liability has
been incurred and that the amount can be reasonably estimated. While
it is often extremely difficult to reasonably quantify future
environmental related expenditures, the Company anticipates that a
substantial capital investment will be required over the next several
years to comply with existing regulations. The Company had recorded a
liability of approximately $16.5 million as of June 30, 1994 to cover
the estimated costs of compliance with environmental regulations which
are not anticipated to be of a capital nature.
-10-
Environmental liabilities are subject to considerable uncertainties
which affect the Company's ability to estimate its ultimate cost of
remediation efforts. These uncertainties include the exact nature and
extent of the contamination at each site, the extent of required
cleanup efforts, varying costs of alternative remediation strategies,
changes in environmental remediation requirements, the number and
financial strength of other potentially responsible parties at multi-
party sites, and the identification of new environmental sites. As a
result, charges to income for environmental liabilities could have a
material effect on results of operations in a particular quarter or
year as assessments and remediation efforts proceed or as new claims
arise. However, management is not aware of any matters which would be
expected to have a material adverse effect on the Company's
consolidated financial position, cash flow or liquidity.
During the years 1994 - 1996, the Company estimates environmental
expenditures at the Houston and Tyler refineries, of at least $4.9
million and $16.8 million, respectively. Of these expenditures, it is
anticipated that $3.5 million for Houston and $15.8 million for Tyler
will be of a capital nature, while $1.4 million and $1 million,
respectively, will be related to previously accrued non-capital
remediation efforts. At the Company's marketing facilities,
environmental related expenditures (capital and non-capital) of at
least $10.5 million are planned for 1994 and 1995, which includes $5.1
million previously accrued relating to site testings and inspections,
site clean-up, and monitoring wells.
As a result of a strong balance sheet and overall favorable credit
relationships, the Company has been able to maintain open lines of
credit with its major suppliers. Under the Revolving Credit Agreement
(Credit Agreement), effective as of May 10, 1993, the Company had
outstanding as of July 31, 1994, irrevocable standby letters of credit
in the principal amount of $18.8 million for purposes in the ordinary
course of business. During the second quarter of 1994, the Company
obtained an additional uncommitted line of credit with a major
financial institution, for up to $20 million in standby letters of
credit, primarily for the purchase of crude oil. This facility has not
been used as of July 31, 1994.
The $60 million outstanding under the Company's unsecured 10.42% Senior
Notes dated as of January 3,1991, as amended (Notes) requires seven
annual repayments of $8.6 million beginning in January 1995. The
Company has various options available to either repay or refinance this
debt including short-term borrowings, long-term borrowings, lease
financing and structures such as the Purchase Money Lien.
As discussed in Note C of Notes to Unaudited Consolidated Condensed
Financial Statements, the Company has entered into interest rate swap
agreements to effectively convert $47,500,000 of its Notes to variable
interest rates with maturities ranging from 1996 to 1998. According to
the terms of these swap agreements, interest rates are reset on various
predetermined dates which range from August 1994 to March 1998. Due to
recent increases in market interest rates, it is possible the Company's
effective interest rate will increase from current levels.
The Notes and Credit Agreement limit the payment of cash dividends on
common stocks and require the maintenance of various covenants
including, but not limited to, minimum working capital, a maximum fixed
charge coverage ratio, and minimum consolidated tangible net worth of
$285 million, all as defined. At June 30, 1994, the Company was in
compliance with all covenants and provisions of the Notes and Credit
Agreement. Meeting the covenants imposed by the Notes and Credit
Agreement is dependent, among other things, upon the level of future
earnings and the rate of capital spending.
The Company's management is involved in a continual process of
evaluating growth opportunities in its core business as well as its
capital resource alternatives. Total capital expenditures and deferred
turnaround costs in 1994 are projected to approximate the 1993
expenditures of $44.9 million. The capital expenditures relate
primarily to planned enhancements at the Company's refineries, retail
unit improvements and company-wide environmental requirements.
Management anticipates funding these 1994 expenditures principally
through funds from operations, existing available cash and has
alternative financing options as previously discussed.
-11-
The Company places its temporary cash investments in high credit
quality financial instruments which are in accordance with the
covenants of the Company's financing agreements. These securities
mature within ninety days, and, therefore, bear minimal risk. The
Company has not experienced any losses on its investments.
The Company faces intense competition in all of the business areas in
which it operates. Many of the Company's competitors are substantially
larger and Crown's sales volumes generally represent a small portion of
the overall products sold in the Company's marketing areas. Therefore,
the Company's earnings are affected by the marketing and pricing
policies of its competitors, as well as changes in raw material costs.
Merchandise sales and operating revenues from the Company's convenience
stores are seasonal in nature, generally producing higher sales and net
income in the summer months than at other times of the year. Gasoline
sales, both at the Crown multi-pumps and convenience stores, are also
somewhat seasonal in nature and, therefore, related revenues may vary
during the year. The seasonality does not, however, negatively impact
the Company's overall ability to sell its refined products.
The Company maintains business interruption insurance to protect itself
against losses resulting from shutdowns to refinery operations from
fire, explosions and certain other insured casualties. Business
interruption coverage begins for such losses at the greater of $5
million or shutdowns for periods in excess of 25 days.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The solid waste violations that were alleged as a result of Texas Water
Commission inspections in 1991, 1992 and 1993 at the Company's Pasadena
Refinery have been settled. There have been no other material changes
in the status of legal proceedings as reported in Item 3 of the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1993.
The Company is involved in various matters of litigation, the ultimate
determination of which, in the opinion of management, is not expected
to have a material adverse effect on the Company's financial position.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit:
20 - Interim Report to Stockholders for the three and six
months ended June 30, 1994
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed with the Securities and
Exchange Commission during the three months ended June 30,
1994.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 10-Q for the
quarter ended June 30, 1994 to be signed on its behalf by the
undersigned thereunto duly authorized.
CROWN CENTRAL PETROLEUM CORPORATION
John E. Wheeler, Jr.
John E. Wheeler, Jr.,
Senior Vice President - Treasurer and Controller,
Chief Accounting Officer and Duly Authorized Officer
Date: August 9, 1994
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