EXHIBIT 20
OCTOBER 28, 1999
RESULTS THIRD QUARTER 1999
--------------------------
Dear Shareholders:
For the third quarter of 1999, Crown Central Petroleum had a
net loss of $6.0 million ($0.61 per share) compared to a net
profit of $3.1 million ($0.31 per share) for the same period in
1998. Sales and operating revenues in the quarter amounted to
$359.9 million compared to $312.5 million last year. For the
first nine months of the year, Crown reported a net loss of $28.9
million ($2.93 per share) on revenues of $866.5 million. This
compares to a net loss of $12.8 million ($1.30 per share) on
revenues of $979.3 million for the same period in 1998.
The $4.54 per barrel margin realized by the Company's
refineries in the third quarter compared favorably with the
market 20 day delayed Gulf Coast 3.2.1 crack spread of $4.00 per
barrel. This performance reflects the Company's ability to
produce above market performance in a challenging refining
environment.
West Texas Intermediate crude oil prices averaged $21.72 per
barrel in the third quarter, up 53% from last year's third
quarter average of $14.18 per barrel. Crude prices increased
from a low of $19.32 per barrel at the beginning of the quarter
to $24.46 per barrel at its close.
Accordingly, under the last-in, first-out (LIFO) method used
by the Company for recording inventory, rising crude prices
negatively impacted reported results. The LIFO inventory
provision was $29.1 million for the third quarter and $50.6
million for the first nine months of 1999. Conversely, falling
crude prices in 1998 resulted in a LIFO recovery for the third
quarter and the first nine months.
Although the Company realized a net loss for the quarter,
EBITDAAL (earnings before interest, taxes, depreciation,
amortization, gain or loss on property sales, and the LIFO
inventory provision), which measures the Company's cash flow, was
strong for the third quarter 1999 resulting in a realized
contribution of $33.0 million as compared to $14.0 million for the
same period in 1998. For the nine months, EBITDAAL was $43.2
million in 1999 compared to a negative $3.7 million in 1998, a
$46.9 million improvement. This is mainly attributable to strong
refining and wholesale performance.
Despite the operating loss reported for the quarter under the
Company's LIFO inventory accounting, we experienced very positive
cash flow from operations. During this extremely volatile period
in oil prices we have maintained a solid balance sheet as our
working capital ratio, measured on a FIFO inventory basis
reflecting the Company's liquidity, remains at the December 31,
1998 level of over 1.1 to 1.
Subsequent to the end of the quarter, the Company completed
the sales of certain non-strategic retail units resulting in cash
proceeds of approximately $10 million, which will be reflected in
fourth quarter operating results.
Sincerely,
/s/-- HENRY A. ROSENBERG, JR.
----------------------------
HENRY A. ROSENBERG, JR.
Chairman of the Board,
Chief Executive Officer and President
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EXHIBIT 20
CROWN CENTRAL PETROLEUM CORPORATION
OPERATING STATISTICS
Nine Months Ended Three Months Ended
September 30 September 30
1999 1998 1999 1998
------ ------ ------ ------
COMBINED REFINERY OPERATIONS
- ----------------------------
Production (BPD - M) 140 158 149 158
Production (MMbbl) 38.3 43.2 13.7 14.6
Sales (MMbbl) 33.7 47.4 12.3 16.3
Gross Margin ($/bbl) 3.40 1.77 4.54 2.57
Gross Profit ($MM) 114.7 84.0 55.7 41.8
Operating Cost ($/bbl) (2.88) (2.12) (2.65) (2.10)
Operating Cost ($MM) (97.0) (100.6) (32.6) (34.1)
Refining Operating Profit (Loss) ($MM) 17.7 (16.6) 23.1 7.7
RETAIL
- ------
Number Stores 345 342 345 342
Volume (pmps - Mgal) 121 128 125 133
Volume (MMgal) 377 395 130 136
Gasoline Gross Margin ($/gal) 0.084 0.098 0.068 0.115
Gasoline Gross Profit ($MM) 31.6 38.9 8.8 15.6
Merchandise Sales (pmps - $M) 26.1 24.5 27.9 26.7
Merchandise Sales ($MM) 81.0 75.3 28.9 27.4
Merchandise Gross Margin (%) 31.7 30.5 33.5 30.5
Merchandise Gross Profit ($MM) 25.7 23.0 9.7 8.4
Ancillary Income, Net ($MM) 10.6 9.0 3.6 3.1
Retail Gross Profit ($MM) 67.9 70.9 22.1 27.1
Retail Operating Costs (pmps - $M) (20.9) (20.0) (20.7) (20.7)
Retail Operating Costs ($MM) (65.0) (61.5) (21.4) (21.2)
Retail Operating Profit (Loss) ($MM) 2.9 9.4 0.7 5.9
WHOLESALE / TERMINAL
OPERATING PROFIT (LOSS) ($MM) 13.5 (4.3) 6.6 (1.1)
OTHER
- -----
LIFO (Provision) Recovery ($MM) (50.6) 18.9 (29.1) 3.1
Corporate Overhead ($MM) (18.4) (18.0) (6.2) (6.2)
Net Interest (Expense) ($MM) (10.7) (9.2) (3.8) (3.1)
Other (Expense) Income ($MM) 1.0 1.0 (0.2) (0.7)
Income Tax Benefit (Expense) ($MM) 15.7 6.0 2.9 (2.5)
Total Net (Loss) Income ($MM) (28.9) (12.8) (6.0) 3.1
Depreciation & Amortization ($MM) 27.4 25.2 9.5 8.6
Net Interest Expense ($MM) 10.7 9.2 3.8 3.1
LIFO Provision (Recovery) ($MM) 50.6 (18.9) 29.1 (3.1)
Loss from Asset Disposals ($MM) (0.9) (0.4) (0.5) (0.2)
Income Tax (Benefit) Expense ($MM) (15.7) (6.0) (2.9) 2.5
EBITDAAL ($MM) 43.2 (3.7) 33.0 14.0
Capital Expenditures ($MM) 18.3 25.8 5.4 9.1
[FN]
- ------------------------------------------------------------------------------
BPD = Barrels per day pmps = per month per store
M = in thousands
MM = in millions
bbl = barrel or barrels as applicable
gal = gallon or gallons as applicable
Note: To conform to the 1999 presentation, the Retail information
for 1998 has been restated. This restatement had no
effect on the retail gross profit as originally presented.
</FN>
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EXHIBIT 20
CROWN CENTRAL PETROLEUM CORPORATION AND SUBSIDIARIES
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
Nine Months Ended Three Months Ended
September 30 September 30
1999 1998 1999 1998
--------- --------- --------- ---------
Sales and operating revenues $ 866,478 $ 979,254 $ 359,899 $ 312,461
(Loss) income before income taxes (44,542) (18,809) (8,921) 5,558
Net (loss) income (28,887) (12,811) (6,018) 3,083
Net (loss) income per share:
Basic and diluted $ (2.93)$ (1.30) $ (0.61)$ 0.31
Weighted average shares used in the computation
of net (loss) income per share:
Basic 9,856,584 9,829,683 9,845,218 9,839,282
Diluted 9,856,584 9,829,683 9,845,218 9,873,177
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