EXHIBIT 20
(LOGO) CROWN CENTRAL PETROLEUM CORPORATION
REFINERS / MARKETERS OF PETROLEUM PRODUCTS & PETROCHEMICALS
ONE NORTH CHARLES STREET, P.O. BOX 1168, BALTIMORE, MARYLAND 21203, (410)
539-7400
OCTOBER 29, 1998
RESULTS THIRD QUARTER 1998
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Dear Shareholders:
For the third quarter of 1998, Crown Central Petroleum had a net
profit of $3.1 million ($.31 per share) compared to a net profit of $11.3
million ($1.16 per share) for the same period in 1997. Sales and operating
revenues in the quarter amounted to $312.5 million compared to $414.5
million last year. For the first nine months of the year, Crown reported a
net loss of $12.8 million ($1.30 per share) on revenues of $979.3 million.
This compares to a net profit of $19.9 million ($2.04 per share) on
revenues of $1.2 billion for the same period in 1997.
A significant domestic inventory surplus, largely resulting from the
1998 mild winter coupled with high refining utilization rates, continued to
depress industry-wide refining margins. However, the Company's $2.57 per
barrel margin realized by our refineries in the third quarter compared
favorably with the market 3.2.1 crack spread of $2.52. Such performance
reflects the Company's ability to produce above market performance in a
challenging refining environment.
West Texas Intermediate crude oil prices were weak and averaged $13.98
per barrel in the third quarter, down 38% from last year's third quarter
average of $19.38. Prices did show strength towards the end of the quarter
reaching $15.97 on September 30. Currently, crude prices have
significantly fallen back to the low $14 level.
Gulf Coast storms did not seriously impact Crown's operations, but did
effect other refineries and, in fact, were partially responsible for the
price increase in late September. Our refineries at Houston and Tyler
operated well during the period at capacity utilization rates marginally
above industry averages.
Crown's retail marketing segment results were positive for the
quarter. Third quarter same store merchandise sales showed a 1.8% increase
over the same 1997 period although margins were consistent. Crown's same-
store gross retail gasoline margins increased 36% for the third quarter
while retail gasoline gallonage was down 2%.
In early 1999, Crown is anticipating a proposed rule from the
U.S. Environmental Protection Agency (EPA) which will likely require a
significant reduction in gasoline sulfur content. The amount and effective
date of that reduction will influence the timing of anticipated capital
investments at both refineries. Crown has been involved in deliberations
concerning the proposed rule and has represented its interests with EPA and
industry trade groups.
Sincerely,
/s/ - - Henry A. Rosenberg, Jr.
HENRY A. ROSENBERG, JR.
Chairman of the Board,
Chief Executive Officer and President
Crown Central Petroleum Corporation and Subsidiaries
Dollars in thousands, except per share data
Nine Months Ended
September 30
1998 1997
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Sales and operating revenues $979,254 $1,203,654
(Loss) income before income
taxes (18,809) 31,854
Net (loss) income (12,811) 19,896
Net (loss) income per share
Basic $ (1.30) $ 2.04
Diluted (1.30) 2.03
Weighted average shares used
in the computation of (loss)
income per share
Basic 9,829,683 9,738,821
Diluted 9,829,683 9,816,985
Three Months Ended
September 30
1998 1997
-------- ----------
Sales and operating revenues $312,461 $ 414,473
(Loss) income before income
taxes 5,558 17,540
Net (loss) income 3,083 11,265
Net (loss)income per share
Basic $ 0.31 $ 1.16
Diluted 0.31 1.12
Weighted average shares used
in the computation of (loss)
income per share
Basic 9,839,282 9,748,174
Diluted 9,873,177 10,049,672
<FN>
- -------------------------------------------------------------
To conform to the 1998 presentation, Sales and operating revenues for the
three and nine months ended September 30,, 1997 have been restated. These
restatements had no effect on the net income or net income per share
amounts previously reported.
</FN>
CROWN CENTRAL PETROLEUM CORPORATION
OPERATING STATISTICS
Nine Months Ended
September 30
1998 1997
-------- --------
COMBINED REFINERY OPERATIONS
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Production (BPD - M) 158 159
Production (MMbbl) 43.2 43.4
Sales (MMbbl) 47.4 42.8
Gross Margin ($/bbl) 1.77 3.18
Gross Profit ($MM) 84.0 136.1
Operating Cost ($/bbl) (2.12) (2.24)
Operating Cost ($MM) (100.6) (96.1)
Refining Operating (Loss) (16.6) 40.0
Profit ($MM)
RETAIL
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Number Stores 342 339
Volume (pmps - Mgal) 128 130
Volume (MMgal) 395 396
Gasoline Gross Margin ($/gal) 0.118 0.105
Gasoline Gross Profit ($MM) 46.8 41.5
Merchandise Sales (pmps - $M) 27.2 25.8
Merchandise Sales ($MM) 83.7 78.7
Merchandise Gross Margin (%) 30.8 30.6
Merchandise Gross Profit ($MM) 25.8 24.1
Retail Gross Profit ($MM) 72.6 65.6
Retail Operating Costs (pmps - $M) (20.4) (18.0)
Retail Operating Costs ($MM) (62.6) (54.9)
Retail Non-Operating (Expense) ($MM) (0.6) (0.9)
Retail Operating Profit ($MM) 9.4 9.8
WHOLESALE/TERMINAL
OPERATING (LOSS) PROFIT ($MM) (4.3) (2.9)
OTHER
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LIFO Recovery (Provision) ($MM) 18.9 15.0
Corporate Overhead ($MM) (18.0) (15.2)
Net Interest (Expense) ($MM) (9.2) (8.8)
Other Income(Expense)($MM) 1.0 (6.0)
Income Tax Benefit(Expense)($MM) 6.0 (12.0)
Total Net (Loss) Income($MM) (12.8) 19.9
Depreciation & Amortization ($MM) 25.2 23.2
Net Interest Expense ($MM) 9.2 8.8
LIFO (Recovery) Provision ($MM) (18.9) (15.0)
(Gain) from Asset Disposals ($MM) (0.4) (0.4)
Income Tax (Benefit) Expense($MM) (6.0) 12.0
EBITDAAL ($MM) (3.7) 48.5
Capital Expenditures ($MM) 25.8 20.4
Three Months Ended
September 30
1998 1997
-------- --------
COMBINED REFINERY OPERATIONS
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Production (BPD - M) 158 158
Production (MMbbl) 14.6 14.5
Sales (MMbbl) 16.3 15.0
Gross Margin ($/bbl) 2.57 4.16
Gross Profit ($MM) 41.8 62.3
Operating Cost ($/bbl) (2.10) (2.23)
Operating Cost ($MM) (34.1) (33.4)
Refining Operating (Loss)
Profit ($MM) 7.7 28.9
RETAIL
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Number Stores 342 339
Volume (pmps - Mgal) 133 132
Volume (MMgal) 136 134
Gasoline Gross Margin ($/gal) 0.129 0.092
Gasoline Gross Profit ($MM) 17.6 12.3
Merchandise Sales (pmps - $M) 29.4 27.6
Merchandise Sales ($MM) 30.2 28.1
Merchandise Gross Margin (%) 30.6 30.1
Merchandise Gross Profit ($MM) 9.2 8.4
Retail Gross Profit ($MM) 26.8 20.7
Retail Operating Costs (pmps - $M) (20.1) (18.5)
Retail Operating Costs ($MM) (20.6) (18.8)
Retail Non-Operating (Expense)($MM) (0.3) (0.1)
Retail Operating Profit ($MM) 5.9 1.8
WHOLESALE / TERMINAL
OPERATING (LOSS) PROFIT ($MM) (1.1) 1.2
OTHER
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LIFO Recovery (Provision) ($MM) 3.1 (1.7)
Corporate Overhead ($MM) (6.2) (4.7)
Net Interest (Expense) ($MM) (3.1) (2.9)
Other Income(Expense)($MM) (0.7) (5.0)
Income Tax Benefit(Expense)($MM) (2.5) (6.3)
Total Net (Loss) Income($MM) 3.1 11.3
Depreciation & Amortization ($MM) 8.6 7.9
Net Interest Expense ($MM) 3.1 2.9
LIFO (Recovery) Provision ($MM) (3.1) 1.7
(Gain) from Asset Disposals ($MM) (0.2) (0.3)
Income Tax (Benefit) Expense $MM) 2.5 6.3
EBITDAAL ($MM) 14.0 29.8
Capital Expenditures ($MM) 9.1 8.2
<FN>
BPD = Barrels Per Day
bbl = barrel or barrels as applicable
gal = gallon or gallons as applicable
pmps = per month per store
M = in thousands
MM = in millions
</FN>