UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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 Identification Number)
incorporation or organization)

ONE NORTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(Address of principle executive offices) (Zip Code)

Registrant's telephone number, including area code: (410) 539-7400

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Class A Common Stock - $5 Par Value American Stock Exchange
Class B Common Stock - $5 Par Value American Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

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 aggregate market value of the voting stock held by nonaffiliates as of
December 31, 1998 was $48,195,847.

The number of shares outstanding at January 31, 1999 of the registrant's $5 par
value Class A and Class B Common Stock was 4,817,394 shares and 5,236,217
shares, respectively.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of Stockholders on April
22, 1999 are incorporated by reference into Items 10 through 13, Part III.

CROWN CENTRAL PETROLEUM CORPORATION
AND SUBSIDIARIES

TABLE OF CONTENTS

PAGE

PART I

Item 1 Business.................................................................... l

Item 2 Properties.................................................................. 3

Item 3 Legal Proceedings........................................................... 7

Item 4 Submission of Matters to a Vote of
Security Holders............................................................ 8

PART II

Item 5 Market for the Registrant's Common
Equity and Related Stockholder Matters...................................... 9

Item 6 Selected Financial Data..................................................... 10

Item 7 Management's Discussion and Analysis
of Financial Condition and Results of Operations............................ 11

Item 7a Qualitative and Quantitative Disclosures About Market Risk.................. 19

Item 8 Financial Statements and Supplementary Data................................. 20

Item 9 Changes in and Disagreements with Auditors on
Accounting and Financial Disclosure......................................... 41

PART III

Item 10 Directors and Executive Officers of the Registrant.......................... 42

Item 11 Executive Compensation...................................................... 43

Item 12 Security Ownership of Certain
Beneficial Owners and Management............................................ 43

Item 13 Certain Relationships and Related Transactions.............................. 43

PART IV

Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K..................................................... 43

PART I

FACTORS AFFECTING FORWARD-LOOKING STATEMENTS

This Annual Report contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts included in this Annual Report on Form 10-K,
including without limitation those under "Liquidity and Capital Resources",
"Additional Factors that May Affect Future Results" and "Impact of Year 2000"
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations" regarding the Company's financial position and results of
operations, are forward-looking statements. Such statements are subject to
certain risks and uncertainties, such as changes in prices or demand for the
Company's products as a result of competitive actions or economic factors,
changes in the cost of crude oil, changes in operating costs resulting from new
refining technologies, increased regulatory burdens or inflation, and the
Company's ability to continue to have access to capital markets and commercial
bank financing on favorable terms. Should one or more of these risks or
uncertainties, among others as set forth in this Annual Report on Form 10-K for
the year ended December 31, 1998, materialize, actual results may vary
materially from those estimated, anticipated or projected. Although the Company
believes that the expectations reflected by such forward-looking statements are
reasonable based on information currently available to the Company, no
assurances can be given that such expectations will prove to have been correct.
Cautionary statements identifying important factors that could cause actual
results to differ materially from the Company's expectations are set forth in
this Annual Report on Form 10-K for the year ended December 31, 1998, including
without limitation in conjunction with the forward-looking statements included
in this Annual Report on Form 10-K that are referred to above. All
forward-looking statements included in this Annual Report on Form 10-K and all
subsequent oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by these
cautionary statements.

ITEM 1. BUSINESS

GENERAL

Crown Central Petroleum Corporation and subsidiaries (the Company), which traces
its origins to 1917, is a large independent refiner and marketer of petroleum
products in the United States. The Company owns and operates two high-conversion
refineries with a combined capacity of 152,000 barrels per day of crude oil - a
100,000 barrel per day facility located in Pasadena, Texas, near Houston (the
Pasadena refinery) and a 52,000 barrel per day facility located in Tyler, Texas
(the Tyler refinery, and together with the Pasadena refinery, the Refineries).
The Company is also a leading independent marketer of refined petroleum products
and merchandise through a network of 343 gasoline stations and convenience
stores located in the Mid-Atlantic and Southeastern United States. In support of
these businesses, the Company operates 13 product terminals located on three
major product pipelines along the Gulf Coast and the Eastern Seaboard and in the
Central United States.

The Refineries are strategically located and have direct access to crude oil
supplies from major and independent producers and trading companies, thus
enabling the Company to select a crude oil mix to optimize refining margins and
minimize transportation costs. The Pasadena refinery's Gulf Coast location
provides access to tankers, barges and pipelines for the delivery of foreign and
domestic crude oil and other feedstocks. The Tyler refinery benefits from its
location in East Texas due to its ability to purchase high quality crude oil
directly from nearby suppliers at a favorable cost and its status as the only
supplier of a full range of refined petroleum products in its local market area.
The Refineries are operated to generate a product mix of over 88% higher margin
fuels, primarily transportation fuels such as gasoline, highway diesel and jet
fuel as well as home heating oil. During the past five years, the Company has
invested over $39 million for environmental compliance, upgrading, expansion and
process improvements at its two refineries. As a result of these expenditures,
the Refineries have a high rate of conversion to higher margin fuels.

The Company is one of the largest independent retail marketers in its core
retail market areas within Maryland, Virginia and North Carolina. The Company
has a geographic concentration of retail locations in high growth areas such as
the metropolitan Baltimore, Maryland and Washington, DC area, Tidewater and
Richmond, Virginia, Charlotte and Raleigh, North Carolina and Atlanta, Georgia.
Over the past several years, the Company has rationalized and refocused its
retail operations, resulting in significant improvements in average unit
performance and positioning these operations for growth from a profitable base.
For the year ended December 31, 1998, average merchandise sales per unit
increased 6.6% on a same store basis when compared with 1997. The Company has
made substantial investments of approximately $24 million at its retail
locations pursuant to environmental requirements since 1989. All of the
Company's retail units are currently in full compliance with the 1998
underground storage tank environmental standards.

Sales values of the principal classes of products sold by the Company during the
last three years are included in Management's Discussion and Analysis of
Financial Condition and Results of Operations on page 11 of this report.

At December 31, 1998, the Company employed 3,028 employees. The total number of
employees increased approximately 7.4% from year-end 1997.

REGULATION

Like other companies in the petroleum refining and marketing industries, the
Company's operations are subject to extensive regulation and the Company has
responsibility for the investigation and clean-up of contamination resulting
from past operations. Current compliance activities relate to air emissions
limitations, waste water and storm water discharges and solid and hazardous
waste management activities. In connection with certain of these compliance
activities and for other reasons, the Company is engaged in various
investigations and, where necessary, remediation of soils and ground water
relating to past spills, discharges and other releases of petroleum, petroleum
products and wastes. The Company's environmental activities are different with
respect to each of its principal business activities: refining, terminal
operations and retail marketing. The Company is not currently aware of any
information that would suggest that the costs related to the air, water or solid
waste compliance and clean-up matters discussed herein will have a material
adverse effect on the Company. The Company anticipates that substantial capital
investments will be required in order to comply with federal, state and local
provisions. A more detailed discussion of environmental matters is included in
Note A and Note I of Notes to Consolidated Financial Statements on pages 25 and
35, respectively, of this report, and in Management's Discussion and Analysis of
Financial Condition and Results of Operations on pages 11 through 18 of this
report.

COMPETITIVE CONDITIONS

Oil industry refining and marketing is highly competitive. Many of the Company's
principal competitors are integrated multinational oil companies that are
substantially larger and better known than the Company. Because of their
diversity, integration of operations, larger capitalization and greater
resources, these major oil companies may be better able to withstand volatile
market conditions, compete on the basis of price and more readily obtain crude
oil in times of shortages.

The principal competitive factors affecting the Company's refining operations
are crude oil and other feedstock costs, refinery product margins, refinery
efficiency, refinery product mix and product distribution and transportation
costs. Certain of the Company's larger competitors have refineries which are
larger and more complex and, as a result, could have lower per barrel costs or
higher margins per barrel of throughput. The Company has no crude oil reserves
and is not engaged in exploration. The majority of the Company's total crude oil
purchases are transacted on the spot market. The Company believes that it will
be able to obtain adequate crude oil and other feedstocks at generally
competitive prices for the foreseeable future.

The principal competitive factors affecting the Company's retail marketing
operations are locations of stores, product price and quality, appearance and
cleanliness of stores and brand identification. Competition from large
integrated oil companies, as well as from convenience stores which sell motor
fuel, is expected to continue. The principal competitive factors affecting the
Company's wholesale marketing business are product price and quality,
reliability and availability of supply and location of distribution points.

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 in excess of $1 million.

ITEM 2. PROPERTIES

REFINING OPERATIONS

OVERVIEW

The Company owns and operates two strategically located, high conversion
refineries with a combined capacity of 152,000 barrels of crude oil per day--a
100,000 barrel per day facility located in Pasadena, Texas, near Houston, and a
52,000 barrel per day facility located in Tyler, Texas. Both refineries are
operated to generate a product mix of over 88% higher margin fuels, primarily
transportation fuels such as gasoline, highway diesel and jet fuel, as well as
home heating oil. When operating to maximize the production of light products,
the product mix at both of the Refineries is approximately 55% gasoline, 33%
distillates (such as diesel, home heating oil, jet fuel, and kerosene), 6%
petrochemical feedstocks and 6% slurry oil and petroleum coke.

The Pasadena refinery and Tyler refinery averaged production output of 102,810
barrels per day and 52,146 barrels per day, respectively, during 1998. While
both refineries primarily run sweet (low sulphur content) crude oil, they can
process up to 20% of certain sour (high sulphur content) crude oil in their mix.

The Company's access to extensive pipeline networks provides it with the ability
to acquire crude oil directly from major integrated and independent domestic
producers, foreign producers, or trading companies, and to transport this crude
to the refineries at a competitive cost. The Pasadena refinery has docking
facilities which provide direct access to tankers and barges for the delivery of
crude oil and other feedstocks. The Company also has agreements with terminal
operators for the storage and handling of the crude oil it receives from large
ocean-going vessels and which the Company transports to the refineries by
pipeline. The Tyler refinery benefits from its location in East Texas since the
Company can purchase high quality crude oil at favorable prices directly from
nearby producers. In addition, the Tyler refinery is the only supplier of a full
range of petroleum products in its local market area. See "-- Supply,
Transportation and Wholesale Marketing."

PASADENA REFINERY

The Pasadena refinery is located on approximately 174 acres in Pasadena, Texas
and was the first refinery built on the Houston Ship Channel. The refinery has
been substantially modernized since 1969 and today has a rated crude capacity of
100,000 barrels per day. During the past five years, the Company has invested
approximately $25 million in major upgrades and maintenance projects.

The Company's refining strategy includes several initiatives to enhance
productivity. For example, the Pasadena refinery has an extensive plant-wide
distributed control system which is designed to improve product yields, make
more efficient use of personnel and optimize process operations. The distributed
control system uses technology that is fast, accurate and provides increased
information to both operators and supervisors. This equipment also allows the
use of modern advanced control techniques for optimizing unit operations.

The Pasadena refinery has a crude unit with a 100,000 barrels per day
atmospheric column and a 38,000 barrels per day vacuum tower. Major downstream
units consist of a 52,000 barrels per day fluid catalytic cracking unit, a
12,000 barrels per day delayed coking unit, two alkylation units with a combined
capacity of 10,000 barrels per day of alkylate production, and a continuous
regeneration reformer with a capacity of 24,000 barrels per day. Other units
include two depropanizers that can produce 5,500 barrels per day of refinery
grade propylene, a liquified petroleum gas recovery unit that removes
approximately 1,000 barrels per day of liquids from the refinery fuel system and
a methyl tertiary butyl ether ("MTBE") process which can produce approximately
1,500 barrels per day of MTBE for gasoline blending, a reformate splitter, and a
compression facility capable of transporting up to 14 million standard cubic
feet per day of process gas to a neighboring petrochemical plant.

The Clean Air Act mandates that after January 1, 1995 only reformulated gasoline
("RFG") may be sold in certain ozone non-attainment areas, including some
metropolitan areas where the Company sells gasoline. Using production from its
MTBE unit, the Pasadena refinery can currently produce 12,000 barrels per day of
winter grade RFG. With additional purchases of MTBE, ethanol or other
oxygenates, all of the Pasadena refinery's current gasoline production could
meet winter grade RFG standards. In 1996, the Company completed the construction
of a reformate splitter at its Pasadena refinery. This process unit enables the
refinery to make 12,000 barrels per day of summer grade RFG using its own MTBE,
and up to 100% of its Pasadena refinery gasoline production as summer grade RFG
with the purchase of additional oxygenates. This project enables the Company to
satisfy all of its retail RFG requirements.

In 1998, the Pasadena refinery operated at only 87% of rated crude unit capacity
with production yielding approximately 58% gasoline and 29% distillates. Of the
total gasoline production, approximately 33% was premium octane grades. In
addition, the Pasadena refinery produced and sold by-products including
propylene, propane, slurry oil, petroleum coke and sulphur.

The Company owns and operates storage facilities located on approximately 130
acres near its Pasadena refinery which, together with tanks on the refinery
site, provide the Company with a storage capacity of approximately 6.2 million
barrels (2.8 million barrels for crude oil and 3.4 million barrels for refined
petroleum products and intermediate stocks).

The Pasadena refinery's refined petroleum products are delivered to both
wholesale and retail customers. Approximately one-half of the gasoline and
distillate production is sold wholesale into the Gulf Coast spot market and
one-half is shipped by the Company on the Colonial and Plantation pipelines for
sale in East Coast wholesale and retail markets. The Company's retail gasoline
requirements represent approximately 56% of the Pasadena refinery's total
gasoline production capability.

TYLER REFINERY

The Tyler refinery is located on approximately 100 of the 529 acres owned by the
Company in Tyler, Texas and has a rated crude capacity of 52,000 barrels per
day. The Tyler refinery's location provides access to nearby high quality East
Texas crude oil which accounts for approximately 70% of its crude supply. This
crude oil is transported to the refinery on the McMurrey and Scurlock pipeline
systems. The Company owns the McMurrey system and has a long-term contract for
use of the Scurlock system with Scurlock Permian Pipe Line Corporation. The
Company also has the ability to ship crude oil to the Tyler refinery by pipeline
from the Gulf Coast and does so when market conditions are favorable. Storage
capacity at the Tyler refinery exceeds 2.7 millions barrels (1.2 million barrels
for crude oil and 1.5 million barrels for refined petroleum products and
intermediate stocks), including tankage along the Company's pipeline system.

The Tyler refinery has a crude unit with a 52,000 barrels per day atmospheric
column and a 16,000 barrels per day vacuum tower. The other major process units
at the Tyler refinery include an 18,000 barrels per day fluid catalytic cracking
unit, a 6,000 barrels per day delayed coking unit, a 20,000 barrels per day
naphtha hydrotreating unit, a 12,000 barrels per day distillate hydrotreating
unit, two reforming units with a combined capacity of 16,000 barrels per day, a
5,000 barrels per day isomerization unit, and an alkylation unit with a capacity
of 4,700 barrels per day.

In 1998, the Tyler refinery operated at approximately 96% of rated crude unit
capacity, with production yielding approximately 54% gasoline and approximately
36% distillates. Of the total gasoline production, approximately 27% was premium
octane grades. In addition, the refinery produced and sold by-products including
propylene, propane, slurry oil, petroleum coke and sulphur. The Tyler refinery
is the principal supplier of refined petroleum products in the East Texas market
with approximately 60% of production distributed at the refinery's truck
terminal. The remaining production is shipped via the Texas Eastern Products
Pipeline for sale either from the Company's terminals or from other terminals
along the pipeline. Deliveries under term exchange agreements account for the
majority of the truck terminal sales.

RETAIL OPERATIONS

Overview

The Company traces its retail marketing history to the early 1930's when it
operated a retail network of 30 service stations in the Houston, Texas area. It
began retail operations on the East Coast in 1943. The Company has been
recognized as an innovative industry leader and, in the early 1960's, pioneered
the multi-pump retailing concept which has since become an industry standard in
the marketing of gasoline.

As of December 31, 1998, the Company had 343 retail locations. Of these 343
units (228 owned and 115 leased), the Company directly operated 241 and the
remainder were operated by independent dealers. The Company conducts its
operations in Maryland through an independent dealer network as a result of
legislation which prohibits refiners from operating gasoline stations in
Maryland. The Company believes that the high proportion of Company-operated
units enables it to respond quickly and uniformly to changing market conditions.

While most of the Company's units are located in or around major metropolitan
areas, its sites are generally not situated on major interstate highways or
inter-city thoroughfares. These off-highway locations primarily serve local
customers and, as a result, the Company's retail marketing unit volumes are not
as highly seasonal or dependent on seasonal vacation traffic as locations
operating on major traffic arteries. The Company is one of the largest
independent retail marketers of gasoline in its core retail market areas within
Maryland, Virginia and North Carolina. The Company has a geographic
concentration of retail locations in high growth areas such as the metropolitan
Baltimore, Maryland and Washington DC area, Tidewater and Richmond, Virginia,
Raleigh and Charlotte, North Carolina and Atlanta, Georgia. The Company's three
highest volume core markets are Baltimore, the suburban areas of Maryland and
Virginia surrounding Washington, D.C., and the greater Norfolk, Virginia area.

RETAIL UNIT OPERATIONS

The Company conducts its retail marketing operations through three basic store
formats: convenience stores, mini-marts and gasoline stations. At December 31,
1998, the Company had 76 convenience stores, 121 mini-marts and 146 gasoline
stations.

The Company's convenience stores operate primarily under the names Fast Fare and
Zippy Mart. These units generally contain 1,500 to 2,800 square feet of retail
space and typically provide gasoline and a variety of convenience store
merchandise such as tobacco products, beer, wine, soft drinks, snacks, dairy
products and baked goods and more recently food service items.

The Company's mini-marts generally contain up to 800 square feet of retail space
and typically sell gasoline and much of the same merchandise as at the Company's
convenience stores. The Company has installed lighted canopies which extend over
the multi-pump fuel islands at most of its locations. This provides added
security and protection from the elements for customers and employees.

The Company's gasoline stations generally contain up to 100 square feet of
retail space in an island kiosk and typically offer gasoline and a limited
amount of merchandise such as tobacco products, candies, snacks and soft drinks.

The Company's units are brightly decorated with its trademark signage to create
a consistent appearance and encourage customer recognition and patronage. The
Company believes that consistency of brand image is important to the successful
operation and expansion of its retail marketing system. In all aspects of its
retail marketing operations the Company emphasizes quality, value, cleanliness
and friendly and efficient customer service.

While the Company derives approximately 71% of its retail revenue from the sale
of gasoline, it also provides a variety of merchandise and other services
designed to meet the non-fuel needs of its customers. Sales of these additional
products are an important source of revenue, contribute to increased
profitability and serve to increase customer traffic. The Company believes that
its existing retail sites present significant additional profit opportunities
based upon their strategic locations in high traffic areas. The Company also
offers ancillary services such as compressed air service, car washes, vacuums,
and automated teller machines, and management continues to evaluate the addition
of new ancillary services such as the marketing of fast food from major branded
chains.

DEALER OPERATIONS

The Company maintains 102 dealer-operated units, all of which are located in
Maryland. Under the Maryland Divorcement Law, refiners are prohibited from
operating gasoline stations. The Maryland units are operated under a Branded
Service Station Lease and Dealer Agreement (the "Dealer Agreement"), generally
with a term of three years. Pursuant to the Dealer Agreement, a dealer leases
the facility from the Company and purchases and resells Crown-branded motor fuel
and related products. Dealers purchase and resell merchandise from independent
third parties. The Dealer Agreement sets forth certain operating standards;
however, the Company does not control the independent dealer's personnel,
pricing policies or other aspects of the independent dealer's business. The
Company believes that its relationship with its dealers has been very favorable
as evidenced by a low rate of dealer turnover.

The Company realizes little direct benefit from the sale of merchandise or
ancillary services at the dealer operated units, and the revenue from these
sales is not reflected in the Company's Consolidated Financial Statements.
However, to the extent that the availability of merchandise and ancillary
services increases customer traffic and gasoline sales at its units, the Company
benefits from higher gasoline sales volumes.

SUPPLY, TRANSPORTATION AND WHOLESALE MARKETING

SUPPLY

The Company's refineries, terminals and retail outlets are strategically located
in close proximity to a variety of supply and distribution channels. As a
result, the Company has the flexibility to acquire available domestic and
foreign crude oil economically, and also the ability to cost effectively
distribute its products to its own system and to other domestic wholesale
markets. Purchases of crude oil and feedstocks are determined by quality, price
and general market conditions.

TRANSPORTATION

Most of the domestic crude oil processed by the Company at its Pasadena refinery
is transported by pipeline. The Company's purchases of foreign crude oil are
transported primarily by tankers under spot charters which are arranged by
either the seller or the Company. The Company is not currently obligated under
any time-charter contracts. The Company has an approximate 5% interest in the
Rancho Pipeline and generally receives between 20,000 and 25,000 barrels per day
of crude through this system. Foreign crudes (principally from the North
Sea,West Africa and South America) account for approximately 64% of total
Pasadena crude supply and are delivered by tanker. Most of the crude for the
Tyler refinery is gathered from local East Texas fields and delivered by two
pipeline systems, one of which is owned by the Company. Foreign crude also can
be delivered to the Tyler refinery by pipeline from the Gulf Coast.

TERMINALS

The Company operates eight product terminals located along the Colonial and
Plantation pipeline systems and, in addition to the terminal at the Tyler
refinery, operates four product terminals located along the Texas Eastern
Products Pipeline system. These terminals have a combined storage capacity of
1.7 million barrels. The Company's distribution network is augmented by
agreements with other terminal operators also located along these pipelines. In
addition to serving the Company's retail requirements, these terminals supply
products to other refiner/marketers, jobbers and independent distributors.

WHOLESALE MARKETING

Approximately 16% of the gasoline produced by the Company's Pasadena refinery is
transported by pipeline for sale at wholesale through Company and other
terminals in the Mid-Atlantic and Southeastern United States. Heating oil is
also regularly sold at wholesale through these same terminals. Gasoline, heating
oil, diesel fuel and other refined products are also sold at wholesale in the
Gulf Coast market.

The Company has entered into product exchange agreements for approximately
one-quarter of its Tyler refinery production with two major oil companies
headquartered in the United States. These agreements provide for the delivery of
refined products at the Company's terminals, in exchange for delivery by these
companies of a similar amount of refined products to the Company. These exchange
agreements provide the Company with the ability to broaden its geographic
distribution, supply markets not connected to the refined products pipeline
systems and reduce transportation costs.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in various matters of litigation, the ultimate
determination of which, in the opinion of management, will not have a material
adverse effect on the Company. The Company's legal proceedings are further
discussed in Note I of Notes to Consolidated Financial Statements on page 35 of
this report.

The Pasadena and Tyler refineries and many of the Company's other facilities are
involved in a number of environmental enforcement actions or are subject to
agreements, orders or permits that require remedial activities. Environmental
expenditures, including these matters, are discussed in the Liquidity and
Capital Resources section of Management's Discussion and Analysis of Financial
Conditions and Results of Operations on pages 13 through 17 of this report, and
in Note I of Notes to Consolidated Financial Statements on page 35 of this
report. These enforcement actions and remedial activities, in the opinion of
management, are not expected to have a material adverse effect on the Company.

On July 21, 1997, Texans United for a Safe Economy Education Fund, the Sierra
Club, the Natural Resources Defense Council, Inc. and several individuals filed
a Clean Air Act citizens' suit in the United States District Court for the
Southern District of Texas against the Company, alleging violations by the
Company's Pasadena refinery of certain state and federal environmental air
regulations. Texans United for a Safe Economy Education Fund, et al. vs. Crown
Central Petroleum Corporation, H-97-2427 (S.D. Tex.). On July 31, 1998, United
States District Judge Vanessa Gilmore granted the Company's Motion for Summary
Judgment as to all of the plaintiff's claims. She subsequently rejected the
plaintiff's motion to reconsider her decision. Some of the plaintiffs have now
noted an appeal to the United States Court of Appeals for the Fifth Circuit. The
appeal is pending.

On June 25, 1997, a purported class action lawsuit was filed in the state
district court of Harris County, Texas by individuals who claim to have suffered
personal injuries and property damage from the operation of the Company's
Pasadena refinery. Allman, et al. vs. Crown Central Petroleum Corporation, et
al., C.A. No. 97-39455 (District Court of Harris County, Texas). This suit seeks
unspecified compensatory damages and $50 million in punitive damages. The
plaintiffs have now dropped all class action claims. The matter is in discovery.

In October 1998, the Company was served in a lawsuit naming it as an additional
defendant in an existing lawsuit filed by approximately 5,500 Houston Ship
Channel area residents against 11 other refineries and petrochemical plant
operators. Crye et al. vs. Reichhold Chemicals, Inc., et al., 97-24399 (334th
Judicial District, Harris Co., Tex.). The plaintiffs claim they are adversely
affected by the noise, light, emissions and discharges from defendants'
operations and seek unspecified damages and injunctive relief for alleged
nuisance, trespass, negligence, and gross negligence.

Seven employees at the Pasadena refinery and one at the Tyler refinery have
filed a purported class action suit in the United States District Court for the
Eastern District of Texas alleging race and sex discrimination in violation of
Title VII of the Civil Rights Act of 1964, as amended, and in violation of the
Civil Rights Act of 1871, as amended. Lorretta Burrell, et al. vs. Crown Central
Petroleum Corporation, C.A. No. 97-CVO-357 (E.D. Tex.). The plaintiffs have now
dropped their efforts to certify company-wide classes and have limited their
proposed class to certain women and African-Americans who have been employed at
the Company's two Texas refineries. The Company plans to vigorously oppose
certification of even this limited class. The Company has filed Motions for
Partial Summary Judgment against all of the individual claims of five of the
eight named plaintiffs and plans to file similar motions with respect to the
remaining three.

On December 15, 1998, five shareholders filed a derivative lawsuit in District
Court for Harris County, Texas against each of the Company's then-current
directors and three of its non-director officers. Knox, et al. v. Rosenberg, et
al., C.A. No. 1998-58870. Three of the plaintiff shareholders are locked-out
union employees and the remaining two are retired union employees. The
defendants have removed the case to the United States District Court for the
Southern District of Texas, H-99-0123. The suit alleges that the defendants
breached their fiduciary duties, committed "constructive fraud", "abuse of
control", and were unjustly enriched. The Company expects to defend and
indemnify the defendants to the extent permitted by law and the Company's
charter and by-laws. Discovery has not yet begun.

A review of the Allman, Burrell, Crye, and Knox cases suggests that the Company,
and in the Knox case the individual defendants, have meritorious defenses. The
Company intends to vigorously defend these cases and in the opinion of
management, there is no reasonable basis to believe that the eventual outcome of
any of these cases will have a material adverse effect on the Company.

In February 1998, the Company and thirteen other companies, including several
major oil companies, were sued on behalf of the EPA and the TNRCC under the
Comprehensive Environmental Response Compensation, and Liability Act of 1980
(the "Superfund Statute") to recover the costs of removal and remediation at the
Sikes Disposal Pits Site (the "Sikes Site") in Harris County, Texas. The Company
does not believe that it sent any waste material to the Sikes Site or that there
is any credible evidence to support the government's claim that it did so. In
fact, the Company has developed considerable evidence to support its position
that it should not have been named as a Potentially Responsible Party ("PRP").
The EPA and TNRCC allege that they incurred costs in excess of $125 million in
completing the remediation at the Sikes Site. Since the Superfund Statute
permits joint and several liability and any PRP is theoretically at risk for the
entire judgment, the Company intends to vigorously defend this action. Based
upon the information currently available, the Company expects that it will
eventually prevail in this matter. In addition, the Company has been named by
the EPA and by several state environmental agencies as a PRP at various other
federal and state Superfund sites. The Company's exposure in these matters has
either been resolved, is properly reserved or is de minimis and is not expected
to have a material adverse effect on the Company.

The foregoing environmental proceedings are not of material importance to
Crown's accounts and are described in compliance with SEC rules requiring
disclosure of such proceedings although not material.

The Company's collective bargaining agreement with the Oil Chemical & Atomic
Workers Union ("OCAW") covering employees at the Pasadena refinery expired on
February 1, 1996. Following a number of incidents apparently intended to disrupt
normal operations at the refinery and also as a result of the unsatisfactory
status of the negotiations, on February 5, 1996 the Company implemented a lock
out of employees in the collective bargaining unit at the Pasadena facility.
OCAW subsequently filed a number of unfair labor practice charges with the
National Labor Relations Board ("NLRB") and all of these charges have been
dismissed by the NLRB. The lock out and negotiations on a new contract continue.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the last three
months of the fiscal year covered by this report.

[This space intentionally left blank]

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

The Company's common stock is listed on the American Stock Exchange under the
ticker symbols CNP A and CNP B.

COMMON STOCK MARKET PRICES AND CASH DIVIDENDS

1998 1997
--------------------- ------------------------
Sales Price Sales Price
High Low High Low
-------- ---- ----- ----

CLASS A COMMON STOCK
First Quarter............. $ 22 $ 18 1/4 $ 14 1/4 $ 11 1/8
Second Quarter............ 19 12 1/2 15 7/16 12 1/8
Third Quarter............. 13 1/16 9 22 1/2 14 3/4
Fourth Quarter............ 10 1/4 7 1/16 21 7/8 17 1/2

Yearly............. 22 7 1/16 22 1/2 11 1/8

CLASS B COMMON STOCK
First Quarter............. $ 20 3/4 $ 18 $ 13 3/4 $ 11
Second Quarter............ 18 3/4 11 3/4 15 7/16 11 5/8
Third Quarter............. 13 1/16 9 22 1/4 14 3/4
Fourth Quarter............ 10 7/16 6 3/4 20 3/8 16 5/8

Yearly............. 20 3/4 6 3/4 22 1/4 11

The payment of cash dividends is dependent upon future earnings, capital
requirements, overall financial condition and restrictions as described in Note
C of Notes to Consolidated Financial Statements on page 27 of this report. There
were no cash dividends declared on common stock in 1998 or 1997.

The number of shareholders of the Company's common stock based on the number of
record holders on December 31, 1998 was:

Class A Common Stock.................. 534
Class B Common Stock.................. 608

TRANSFER AGENT & REGISTRAR
Boston EquiServe
Boston, Massachusetts

ITEM 6. SELECTED FINANCIAL DATA

The selected consolidated financial data for the Company set forth below for the
five years ended December 31, 1998 should be read in conjunction with the
Consolidated Financial Statements.

1998 1997 1996 1995 1994
----- ----- ---- ------- -------
(Thousands of dollars except per share amounts)

Sales and operating revenues...... $1,264,317 $1,609,083 $1,641,875 $1,456,990 $1,323,407
(Loss) income before extraordinary
item............................ (29,380) 19,235 (2,767) (67,367) (35,406)
Extraordinary item................ (3,257)
Net (loss) income................. (29,380) 19,235 (2,767) (70,624) (35,406)
Total assets...................... 521,583 600,967 570,528 583,494 704,076
Long-term debt.................... 129,899 127,506 127,196 128,506 96,632

PER SHARE DATA:
(Loss) income before extraordinary
item............................. (2.99) 1.97 (.28) (6.95) (3.63)
Net (loss) income................. (2.99) 1.97 (.28) (7.28) (3.63)

PER SHARE DATA - ASSUMING DILUTION:
(Loss) income before extraordinary (2.99) 1.94 (.28) (6.95) (3.63)
item..............................
Net (loss) income................. (2.99) 1.94 (.28) (7.28) (3.63)

To conform to the 1998 presentation, Sales and operating revenues for the years
ended December 31, 1997, 1996, 1995, and 1994, respectively, have been restated.
These restatements had no effect on the Net income (loss) and the Net income
(loss) per share amounts previously reported. See Note A to the accompanying
financial statements.

To conform to the 1998 presentation, Total assets at December 31, 1997, 1996,
1995, and 1994, respectively, have been restated. See Note A to the accompanying
financial statements.

The net loss in 1998 was unfavorably impacted by a $7.1 million reserve to
reflect the decline in inventory values of crude oil and petroleum products when
valuing inventories at the lower of cost of market.

The extraordinary loss in 1995, which was recorded in the first quarter,
resulted from the early retirement of the remaining principal balance of the
Company's 10.42% Senior Notes with the proceeds from the sale of $125 million of
Unsecured Senior Notes due February 1, 2005.

The net loss in 1995 was unfavorably impacted by a pre-tax write-down of certain
refinery assets of $80.5 million in the fourth quarter relating to the adoption
of Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of".

The net loss in 1994 was unfavorably impacted by a pre-tax write-down of $16.8
million in the third quarter relating to the abandonment of plans to construct a
hydrodesulphurization unit at the Pasadena refinery.

There were no cash dividends declared in 1998, 1997, 1996, 1995 or 1994.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The Company's Sales and operating revenues decreased 21.4% in 1998 compared to a
2% decrease in 1997. The 1998 decrease in Sales and operating revenues was
primarily due to a 25.2% decrease in the average unit selling price of petroleum
products. These decreases were partially offset by a 2.5% increase in petroleum
product sales volumes and an $8.7 million or 8.4% increase in merchandise sales.
The 1997 decrease in Sales and operating revenues was primarily due to a 3.6%
decrease in the average unit selling price of petroleum products. These
decreases were partially offset by a 1% increase in petroleum product sales
volumes and a $1.6 million or 1.6% increase in merchandise sales.

As previously mentioned, merchandise sales increased $8.7 million or 8.4% to
$112.4 million for the year ended December 31, 1998 compared to the same period
in 1997, while merchandise gross profit increased $4 million or 12.7% for the
year ended December 31, 1998 compared to the same period in 1997. Merchandise
gross margin (merchandise gross profit as a percent of merchandise sales) was
31.6% and 30.4% for the years ended December 31, 1998 and 1997, respectively.
These aggregate increases are attributable to a slight increase in the number of
operating units during the period and to the Company's merchandise pricing
program which has selectively increased margins on targeted merchandise yet
still maintains an everyday low pricing policy which is competitive with major
retail providers in the applicable market area. As a result of the strategy,
aggregate merchandise gross profit, on a same store basis, increased 4.7% in
1998 as compared to 1997. Same store average monthly merchandise sales increased
approximately 6.6% in 1998 as compared to 1997.

Gasoline sales accounted for 56.2% of total 1998 revenues, while distillates and
merchandise sales represented 27% and 8.9%, respectively. This compares to a
dollar mix from sales of 55.4% gasoline, 28.9% distillates and 6.4% merchandise
in 1997; and 54.1% gasoline, 31% distillates and 6.2% merchandise in 1996.

The following table depicts the sales values of the principal classes of
products sold by the Company, which individually contributed more than ten
percent of consolidated Sales and operating revenues during the last three
years:

SALES OF PRINCIPAL PRODUCTS
MILLIONS OF DOLLARS 1998 1997 1996
-------- ------- ------

Gasoline $711.1 $892.2 $881.1
No. 2 Fuel & Diesel 315.9 419.4 436.4

Costs and operating expenses decreased 19.5% in 1998 compared to a 4.2% decrease
in 1997. The 1998 decrease was primarily attributable to the decrease in the
price of crude oil. The Company utilizes the last-in, first-out (LIFO) method to
value inventory resulting in a better matching of current revenues and costs.
The impact of LIFO was to decrease the Company's Costs and operating expenses by
approximately $24.8 million in 1998 while decreasing Costs and operating
expenses by $27.3 million in 1997. Additionally, there was a decrease in the
average consumed cost per barrel of crude oil and feedstocks of 29.9%. These
decreases were partially offset by slight increases in petroleum products sales
volumes as mentioned above and a $7.1 million cost increase resulting from
valuing inventories at the lower of cost or market. This $7.1 million inventory
reserve was precipitated by industry-wide declines in the market prices of crude
oil and refined products. The 1997 decrease was attributable to a decrease in
the average consumed cost per barrel of crude oil and feedstocks of 6.6%. This
decrease was partially offset by slight increases in petroleum products sales
volumes. The average consumed cost per barrel includes only those costs directly
associated with the purchase and processing of crude oil and feedstocks.
Accordingly, refinery operating expenses are not included in the average
consumed cost per barrel of crude oil and feedstocks.

On October 15, 1998, the Company executed a Crude Oil Processing Agreement
(Processing Agreement) with Statoil Marketing and Trading (US) Inc., (Statoil)
whereby the Company processes a monthly average of 35,000 barrels per day of
crude oil owned and supplied by Statoil at the Company's Pasadena, Texas
refinery. The Company receives a specified fee per barrel processed and returns
to Statoil a specified mix of finished petroleum products. This Processing
Agreement is scheduled to expire on October 14, 2000. As a result of this
Processing Agreement, the Company has decreased the level of crude oil and
finished product inventories maintained and owned by the Company, as well as,
the level of accounts receivable owed to the Company. These decreases in working
capital needs generate positive cash flows approximating $15-$18 million based
upon the prices prevailing during the Processing Agreement.

The Company utilizes the last-in, first-out (LIFO) method to value its
inventory. The LIFO method attempts to achieve a better matching of costs to
revenues by including the most recent costs of products in Costs and operating
expenses. The impact of the Company's use of the LIFO method was to increase the
Company's gross margin over what it would have been had the first-in, first-out
(FIFO) method of inventory valuation been utilized in 1998 and 1997 by $.44 per
barrel ($24.8 million) and $.51 per barrel ($27.3 million), respectively, while
decreasing the Company's 1996 gross margin by $.02 per barrel ($.9 million). The
1998 LIFO impact is net of a $.5 million decrease in gross margin attributable
to lower inventory levels and the resulting liquidation of LIFO layers, which
were carried at higher costs prevailing in prior years. The 1996 LIFO impact is
net of a $5.9 million increase in gross margin attributable to changes in the
base year costs for a portion of the Company's LIFO inventories and reductions
in inventory levels resulting in liquidations of LIFO layers which were carried
at lower costs from prior years. There were no LIFO layer liquidations in 1997.

Total yields of distillates decreased slightly to 48,700 barrels per day (bpd)
(31.4%) in 1998 from 52,800 bpd (33.2%) in 1997 while total production of
finished gasoline decreased slightly to 87,500 bpd (56.5%) in 1998 from 89,000
bpd (56.5%) in 1997. Total yields of finished gasoline were increased slightly
to 89,000 barrels per day (bpd) (56.5%) in 1997 from 85,500 bpd (56%) in 1996
while distillate production was increased slightly to 52,800 bpd (33.2%) in
1997, from 51,700 bpd (33.9%) in 1996. Total refinery production was 155,000 bpd
in 1998, 159,000 bpd in 1997 and 152,600 bpd in 1996.

Selling expenses increased 11.9% in 1998 after decreasing 4.7% in 1997. The 1998
increase was primarily due to increases in store level operating expenses and
marketing support costs attributable to the 2.1% increase in the number of
retail operating units and increases in labor rates, advertising and maintenance
costs. The 1997 decrease was primarily due to decreases in store level operating
expenses which include decreases related to environmental expenses and decreases
in advertising and insurance related accruals. At December 31, 1998, the Company
operated 267 retail gasoline facilities and 76 convenience stores compared to
266 retail gasoline facilities and 70 convenience stores at December 31, 1997
and 264 retail gasoline facilities and 79 convenience stores at December 31,
1996.

Administrative expenses increased 9% in 1998 compared to 1997. Administrative
expenses in 1997 were comparable to 1996. The 1998 increase was primarily due to
increases in expenses associated with the company-wide business process
reengineering project which includes a company-wide computer system upgrade
which will add year 2000 capability to the Company's computer systems.

Operating costs and expenses in 1998, 1997, and 1996 include $2.6 million, $.8
million and $.5 million, respectively, of accrued litigation costs.
Additionally, 1998 expenses include reductions of $2.9 million related to
favorable resolution of certain litigation and insurance claims. Also included
in the 1997 expenses is $1.7 million relating to the closure or sale of several
marketing terminal locations and certain other corporate strategic initiatives.
Included in Operating costs and expenses in 1996 was $1.9 million related to
environmental matters. Operating costs and expenses in 1998, 1997 and 1996 have
been reduced by $2.2 million, $1.8 million and $4.8 million, respectively,
relating to adjustments in certain liability reserves.

Depreciation and amortization increased 7.6% in 1998 compared to 1997.
Depreciation and amortization in 1997 was comparable to 1996. The 1998 increases
were primarily attributable to the amortization of refinery deferred turnaround
expenses related to the turnarounds performed in the second and fourth quarters
of 1997 and in the first quarter of 1998. Additionally, there were increases in
amortization of costs related to the systems development costs and the
associated company-wide computer upgrade projects.

Interest and other income in 1998 was comparable to 1997. Interest and other
income increased $.6 million in 1997. The 1997 increase is due primarily to an
increase in interest income of $1 million due to an increase in the average
daily cash invested of $23.2 million which was partially offset by a loss of $.5
million from the equity in losses in affiliates.

Interest expense in 1998 was comparable to 1997 which was comparable to 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents were $29.1 million lower at year-end
1998 than at year-end 1997. The decrease was attributable to the net impact of
cash provided by operating activities of $1.5 million, cash inflows from
financing activities of $13.2 million, offset by $43.8 million of net cash
outflows from investment activities.

Net cash inflows from operating activities in 1998 is due primarily to $10.8
million in net inflows relating to other assets and liabilities. These inflows
were primarily the result of decreases in accounts receivable and in crude oil
and finished product inventories. The decreases in crude oil and refined
products inventories were due primarily to a decline in the market value of
crude oil and refined petroleum products and to decreases in inventory levels as
a result of the crude oil processing agreement with Statoil Marketing and
Trading (US) Inc. which decreases proprietary production levels thereby
decreasing the need to maintain higher volumes of inventory. Additionally, there
were increases in other accounts payable and in accrued excise tax liabilities.
Partially offsetting these cash inflows were cash outflows relating to decreases
in crude oil and refined products payables. Cash outflows also include
collateral deposits and deferred placement costs associated with the execution
of a new financing arrangement. The timing of collection of the Company's
receivables is impacted by the specific type of sale and associated terms. Bulk
sales of finished products are typically sold in 25,000 barrel increments with
three day payment terms. Rack sales at the Company's product terminals are sold
by truckload (approximately 8,000 gallons) with seven to ten day payment terms.
While the Company's overall sales are aligned to its refining capability,
receivables can vary between periods depending upon the specific type of sale
and associated payment terms for sales near the end of a reporting period.

Net cash inflows from financing activities in 1998 relates primarily to net cash
borrowings from debt and credit agreements of $12.2 million. Additionally, cash
inflows include $.6 million from issuances of the Company's Class B Common Stock
due to exercises of stock options and to net proceeds of $.4 million from the
reduction of long-term notes receivable.

Net cash outflows from investment activities in 1998 consisted principally of
capital expenditures of $36.2 million (which includes $22.2 million related to
the marketing area, $11.7 million for refinery operations and $2.2 million
related to corporate strategic projects) and $3.5 million of refinery deferred
turnaround costs. Additionally, cash outflows from investing activities include
$3.9 million in capitalized costs of software developed for the Company's own
use and $2 million in charges to deferred assets. The total outflows from
investment activities were partially offset by $1 million in dividends received
from the Company's unconsolidated subsidiaries and net proceeds from the sale of
property, plant and equipment of $.8 million.

The ratio of current assets to current liabilities was 1.12:1 and 1.45:1,
respectively, at December 31, 1998 and 1997. If FIFO values had been used for
all inventories, the ratio of current assets to current liabilities would have
been 1.14:1 at December 31, 1998 and 1.60:1 at December 31, 1997.

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 significant capital investments will continue to be required over the next
several years to comply with existing regulations. The Company believes that
cash provided from its operating activities, together with other available
sources of liquidity will be sufficient to fund these costs. The Company had
recorded a liability of approximately $7.1 million as of December 31, 1998 to
cover the estimated costs of compliance with environmental regulations which are
not anticipated to be of a capital nature. The liability of $7.1 million
includes accruals for issues extending past 1999.

arise. However, management is not aware of any matters which would be expected
to have a material adverse effect on the Company.

During 1999, the Company estimates environmental expenditures at the Pasadena
and Tyler refineries, of at least $4.4 million and $1.4 million, respectively.
Of these expenditures, it is anticipated that $2.1 million for Pasadena and $1
million for Tyler will be of a capital nature, while $2.3 million and $.4
million, respectively, will be related to previously accrued non-capital
remediation efforts. At the Company's marketing facilities, environmental
expenditures relating to previously accrued non-capital compliance efforts are
planned totaling approximately $1.7 million during 1999.

As a result of overall favorable credit relationships, the Company has been able
to maintain open lines of credit with its major suppliers. Effective as of
December 10, 1998, the Company entered into an $80 million Loan and Security
Agreement (Secured Credit Facility) for cash borrowing and letter of credit
needs. The Secured Credit Facility, which has a three-year term and is secured
by certain current assets of the Company, is intended for general corporate and
working capital requirements. It includes limitations on additional indebtedness
and cash dividends and requires compliance with financial covenants dealing with
minimum levels of working capital and net worth. Availability under the Secured
Credit Facility is limited to the lesser of $80 million or eligible collateral.
At December 31, 1998, the borrowing capacity totaled $48.9 million due to
abnormally low inventory levels and prices. The Company expects that with
average inventory operating levels and crude oil in the $14 - $15 per barrel
range, the availability under the Secured Credit Facility will range from $60
million to $75 million.

As of December 31, 1998, under the terms of the Secured Credit Facility, the
Company had cash borrowings of $10 million and outstanding irrevocable letters
of credit in the principal amount of $13.2 million, which was collateralized by
cash. This collateral is included on the balance sheet as Restricted Cash and
was returned to the Company in early January 1999. The cash borrowings were
repaid in January 1999. The unused availability under the terms of the Secured
Credit Facility was $38.9 million at year end. The Company pays an annual
commitment fee on the unused portion of the credit line.

In March 1999, the Company amended the Secured Credit Facility to provide up to
$125 million availability for cash borrowing and letter of credit needs. Up to
$75 million of the secured credit facility continues to be subject to
availability of eligible collateral as discussed above. The increased
availability is not subject to the limitation of eligible collateral as that
term is defined in the Secured Credit Facility.

At the Company's option, the Unsecured 10.875% Senior Notes (Notes) may be
redeemed at 105.438% of the principal amount at any time after January 31, 2000
and thereafter at an annually declining premium over par until February 1, 2003
when they are redeemable at par. The Notes were issued under an Indenture which
includes certain restrictions and limitations customary with senior indebtedness
of this type including, but not limited to, the payment of dividends and the
repurchase of capital stock. There are no sinking fund requirements on the
Notes.

The purchase money liens outstanding as of December 31, 1998, primarily include
the financing of land, buildings and equipment at certain service station and
convenience store locations. These borrowings are generally repayable over 60 to
72 months with an effective interest rate based upon a fixed spread over the
then current applicable U.S. Treasury Note rate. Purchase money liens are
secured by assets having a cost basis of $14.4 million and $8.8 million at
December 31, 1998 and 1997, respectively. The cost basis of assets securing
purchase money liens was reduced by $6.5 million in January 1999 due to the
repayment of one of the instruments. The remaining principal balance is payable
monthly through May 2004.

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 1999 are projected
to approximate $42 million. The capital expenditures relate primarily to planned
enhancements at the Company's refineries, retail unit improvements and to
company-wide environmental requirements. The Company believes, but there can be
no assurance, that cash provided from its operating activities, together with
other available sources of liquidity, including the Secured Credit Facility,
will be sufficient over the next several years to make required payments of
principal and interest on its debt, permit anticipated capital expenditures and
fund the Company's working capital requirements. The Secured Credit Facility
expires on December 10, 2001 but may be extended for additional one year periods
upon agreement between the Company and the Agent. Any major acquisition would
likely require a combination of additional debt and equity.

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
these 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,
therefore, the Company's earnings can be 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 has disclosed in Note I of Notes to Consolidated Financial
Statements on page 35 of this report, various contingencies which involve
litigation and environmental liabilities. Depending on the occurrence, amount
and timing of an unfavorable resolution of these contingencies, the outcome of
which cannot reasonably be determined at this time, it is possible that the
Company's future results of operations and cash flows could be materially
affected in a particular quarter or year. However, the Company has concluded,
after consultation with counsel, that there is no reasonable basis to believe
that the ultimate resolution of any of these contingencies will have a material
adverse effect on the Company. Additionally, as discussed in Item 3. Legal
Proceedings on page 7 of this report, the Company's collective bargaining
agreement at its Pasadena refinery expired on February 1, 1996. On February 5,
1996, the Company invoked a lock out of employees in the collective bargaining
unit. The Company has been operating the Pasadena refinery without interruption
since the lock out and intends to continue full operations in this manner, until
an agreement is reached with the collective bargaining unit.

EFFECTS OF INFLATION AND CHANGING PRICES

The Company's Consolidated Financial Statements are prepared on the historical
cost method of accounting and, as a result, do not reflect changes in the
dollar's purchasing power. In the capital intensive industry in which the
Company operates, the replacement costs for its properties would generally far
exceed their historical costs. As a result, depreciation would be greater if it
were based on current replacement costs. However, since the replacement
facilities would reflect technological improvements and changes in business
strategies, such facilities would be expected to be more productive and
versatile than existing facilities, thereby increasing profits and mitigating
increased depreciation and operating costs.

In recent years, crude oil and refined petroleum product prices have been
volatile which has impacted working capital requirements. If the prices increase
in the future, the Company would expect a related increase in working capital
needs.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

The Company's operating results have been, and will continue to be, affected by
a wide variety of factors that could have an adverse effect on profitability
during any particular period, many of which are beyond the Company's control.
Among these are the supply and demand for crude oil and refined products, which
is largely driven by the condition of local and worldwide economies and
politics, although seasonality and weather patterns also play a significant
part. Governmental regulations and policies, particularly in the areas of energy
and the environment, also have a significant impact on the Company's activities.
Operating results can be affected by these industry factors, by competition in
the particular geographic markets that the Company serves and by
Company-specific factors, such as the success of particular marketing programs
and refinery operations.

In addition, the Company's profitability depends largely on the difference
between market prices for refined petroleum products and crude oil prices. This
margin is continually changing and may significantly fluctuate from time to
time. Crude oil and refined products are commodities whose price levels are
largely determined by market forces beyond the control of the Company.
Additionally, due to the seasonality of refined products and refinery
maintenance schedules, results of operations for any particular quarter of a
fiscal year are not necessarily indicative of results for the full year. In
general, prices for refined products are significantly influenced by the price
of crude oil. Although an increase or decrease in the price of crude oil
generally results in a corresponding increase or decrease in prices for refined
products, often there is a lag time in the realization of the corresponding
increase or decrease in prices for refined products. The effect of changes in
crude oil prices on operating results therefore depends in part on how quickly
refined product prices adjust to reflect these changes. A substantial or
prolonged increase in crude oil prices without a corresponding increase in
refined product prices, a substantial or prolonged decrease in refined product
prices without a corresponding decrease in crude oil prices, or a substantial or
prolonged decrease in demand for refined products could have a significant
negative effect on the Company's earnings and cash flows.

The Company is dependent on refining and selling quantities of refined products
at margins sufficient to cover operating costs, including any future
inflationary pressures. The refining business is characterized by high fixed
costs resulting from the significant capital outlays associated with refineries,
terminals and related facilities. Furthermore, future regulatory requirements or
competitive pressures could result in additional capital expenditures, which may
or may not produce desired results. Such capital expenditures may require
significant financial resources that may be contingent on the Company's
continued access to capital markets and commercial bank financing on favorable
terms.

Purchases of crude oil supply are typically made pursuant to relatively
short-term, renewable contracts with numerous foreign and domestic major and
independent oil producers, generally containing market-responsive pricing
provisions. Futures, forwards and exchange traded options are used to minimize
the exposure of the Company's refining margins to crude oil and refined product
fluctuations. The Company also selectively uses the futures market to help
manage the price risk inherent in purchasing crude oil in advance of the
delivery date, and in maintaining the value of inventories contained within its
refinery and pipeline system. Hedging strategies used to minimize this exposure
include fixing a future margin between crude and certain finished products and
also hedging fixed price purchase and sales commitments of crude oil and refined
products. While the Company's hedging activities are intended to reduce
volatility while providing an acceptable profit margin on a portion of
production, the use of such a program can effect the Company's ability to
participate in an improvement in related product profit margins. Although the
Company's net sales and operating revenues fluctuate significantly with
movements in industry crude oil prices, such prices do not have a direct
relationship to net earnings, which are subject to the impact of the Company's
LIFO method of accounting discussed below. The effect of changes in crude oil
prices on the Company's operating results is determined more by the rate at
which the prices of refined products adjust to reflect such changes.

The following table estimates the sensitivity of the Company's income before
taxes to price changes which impact its refining and retail margins based on a
representative production rate for the Refineries (net of the Statoil contract
which provides a fixed margin) and a representative amount of total gasoline
sold at the Company's retail units:

EARNINGS SENSITIVITY CHANGE ANNUAL IMPACT
-------------------- ------ --------------
Refining margin............. $0.10/bbl $ 4.4 million
Retail margin............... $0.01/gal $ 5.3 million

Based on December 31, 1998 crude oil and refined products market prices (market
prices), the Company's outstanding derivative commodity instruments held at
December 31, 1998 are anticipated to result in an increase in future earnings of
approximately $1.0 million. If market prices were to increase by 10%, the
anticipated increase in future earnings would approximate $2.3 million.
Similarly, if market prices were to decrease by 10%, the anticipated decrease in
futures earnings would approximate $(.2) million.

The Company conducts environmental assessments and remediation efforts at
multiple locations, including operating facilities and previously owned or
operated facilities. The Company accrues environmental and clean-up related
costs of a non-capital nature when it is both probable that a liability has been
incurred and the amount can be reasonably estimated. Accruals for losses from
environmental remediation obligations generally are recognized no later than
completion of the remedial feasibility study. Estimated costs, which are based
upon experience and assessments, are recorded at undiscounted amounts without
considering the impact of inflation, and are adjusted periodically as additional
or new information is available. Expenditures for equipment necessary for
environmental issues relating to ongoing operations are capitalized.

The Company's crude oil, refined products and convenience store merchandise and
gasoline inventories are valued at the lower of cost (based on the last-in,
first-out or LIFO method of accounting) or market, with the exception of crude
oil inventory held for resale which is valued at the lower of cost (based on the
first-in first-out or FIFO method of accounting) or market. Under the LIFO
method, the effects of price increases and decreases in crude oil and other
feedstocks are charged directly to the cost of refined products sold in the
period that such price changes occur. In periods of rising prices, the LIFO
method may cause reported operating income to be lower than would otherwise
result from the use of the FIFO method. Conversely, in periods of falling prices
the LIFO method may cause reported operating income to be higher than would
otherwise result from the use of the FIFO method.

IMPACT OF YEAR 2000

The Company uses software and related information technologies and other
equipment throughout its businesses that may be affected by the year 2000 issue.

The year 2000 issue is the result of computer programs being written using two
digits rather than four to define a particular year. These computer programs
include both information technology (IT) systems such as software programs and
non-information technology (non-IT) systems such as embedded microcontrollers in
electronic equipment. Any of the Company's computer programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, manufacture products, send invoices, or
engage in similar normal business activities. The Company initially commenced
its year 2000 readiness program in early 1995.

The Company began a long-term project which encompassed an in-depth evaluation
of all current business processes and the redesign of any of these processes
where significant opportunity for improvement was identified. One of the results
of this project was the decision to purchase and implement an enterprise-wide
state-of-the-art fully integrated software package (SAP R/3(TM)) which was
selected in connection with re-designing business practices to further enhance
operating and record keeping efficiencies. This software is year 2000 compliant.
Due to the enterprise-wide scale of the project, the majority of the Company's
year 2000 issues should be resolved as an added benefit of this software
implementation. The following paragraphs address those computer systems that are
not encompassed within the SAP R/3(TM) system.

The evaluation of the Company's state of readiness relating to its year 2000
issues is a continual process emphasizing a constant awareness of computer
systems and business relationships that may be sensitive to year 2000 issues.
Management has categorized the activities necessary to solve the year 2000
issues into the identification and assessment phase, the remediation phase, and
the testing and contingency planning phase. The identification and assessment
phase includes conducting a comprehensive inventory and evaluation of all of the
Company's information technology (IT) systems and non-IT electronic equipment
(collectively referred to as computer programs) to identify those computer
programs that contain date sensitive features. Those computer programs that
contain such features are then further evaluated and categorized as either
mission critical or non-mission critical based upon their relative importance to
the uninterrupted continuation of the Company's daily operations. Mission
critical computer programs gain top priority when allocating the available
resources to solve year 2000 issues.

As of January 31, 1999, with the exception of the non-IT electronic equipment at
the Company's two refineries, the Company had completed the identification and
assessment of all of its information technology (IT) systems and non-IT
electronic equipment, both mission critical and non-mission critical. A
consulting group was engaged to assist with the identification and assessment of
the non-IT electronic equipment at the Pasadena refinery, and similar efforts
were undertaken by Company employees at the Tyler refinery. As of March 15,
1999, substantially all of the assessment work at the Pasadena refinery has been
completed, while the Tyler refinery assessment is 60% complete. The Company
expects to complete the remaining assessment activities at the Tyler refinery
early in the second quarter of 1999.

The assessment phase also includes the identification of and communication with
hardware and software vendors with whom the Company transacts business, third
parties with whom the Company exchanges information electronically, major or
sole source suppliers, government agencies, and major customers. The focus of
these communications is to determine the state of readiness of each of these
third parties with respect to their own year 2000 issues and how their progress
may impact the Company. The majority of responses received to third party
inquiries indicate that they are working on their year 2000 issues, but the
responses do not provide specific details. Follow-up action related to material
third party inquiries and responses is expected to continue in 1999 as these
material third parties progress in their own year 2000 readiness projects. The
Company has no means of ensuring that third parties with whom it deals will be
year 2000 compliant or that the information obtained from such third parties
regarding year 2000 compliance will prove to be accurate.

The remediation phase includes the repair, upgrade or replacement of all
computer programs identified as non-compliant in the assessment phase. These
activities will include all computer programs that have not been scheduled to be
repaired, upgraded or replaced as well as those that had been scheduled but
whose timing of repair, upgrading or replacement was accelerated to resolve the
Company's year 2000 issues. The Company's primary strategy for correcting year
2000 issues is to replace all non-compliant technology with newly purchased
technology that, in addition to being year 2000 compliant, provides enhanced
business functionality and capabilities. This phase has been on-going since 1995
and is expected to be substantially completed by September 30, 1999.

The total cost associated with required modifications and replacement of the
Company's systems in response to the year 2000 issue is not expected to
materially affect the Company's financial condition or results of operations.
The estimated total cost of the year 2000 effort is approximately $1.7 million.
This estimate does not include costs to replace or upgrade systems that were
previously planned and not accelerated due to the year 2000 issue. The total
amount expended through March, 1999 was approximately $.7 million. The future
cost is estimated to be approximately $1.0 million. The Company's year 2000
efforts are funded primarily from existing IT and business unit budgets.

The testing and contingency planning phase includes testing the computer
programs worked on in the remediation phase for accuracy as well as concurrently
developing contingency plans that may be put into effect in the event that
significant deficiencies are identified. Contingency planning also encompasses
developing alternative sources of supply in the event of failure by material
third parties to remedy their own year 2000 issues. Testing of computer programs
is expected to be completed as remediation or replacement of individual programs
is completed. Due to the number of computer programs utilized by the Company and
the need to begin remediation, replacement, and testing of mission critical
programs in a timely manner, any or all of the phases identified may be
performed concurrently. Testing of implemented technologies will be a continual
process with the expectation that all of the Company's mission critical systems
will be tested by the end of the third quarter of 1999.
Contingency plans will be formulated as the need arises.

While the Company's management anticipates that all mission critical computer
programs will be assessed, remedied and tested by the dates set forth in the
preceding paragraphs, there can be no assurance that all will be completely
error free and that such programs will be compliant by such dates. We rely on
third party software, equipment and services to conduct our business. While the
Company believes it has made reasonable efforts to address this issue, it has no
means of ensuring that third parties with whom it deals will be year 2000
compliant or that the information obtained from such third parties regarding
year 2000 compliance will prove to be accurate.

The Company believes the most reasonably likely worst case year 2000 scenarios
would be failure of the control systems at the Company's refineries, or the
failure of key customers or suppliers (e.g. utility providers) to achieve year
2000 compliance. Either of these scenarios could result in lost sales or lost
production due to the forced shutdown for an indefinite period at one or both
refineries. In order to mitigate the affect of any such disruption, the Company
may increase inventory levels prior to year-end 1999 based on assessments made
closer to the end of 1999. In the event that only one refinery is affected by
year 2000 failures, the Company has the flexibility of shifting feedstocks
between facilities, or procuring petroleum products via sale, trade or exchange
agreements in order to meet any contractual requirements.

The failure to correct a material year 2000 problem or the inability of any key
customer, key supplier or a governmental agency to make the necessary computer
system changes on a timely basis, the inaccuracy of responses received from
these third parties, and the potential shortage of skilled human resources to
install and test upgraded software and equipment could result in interruptions
to Company operations or business activities. Such interruptions could have a
material adverse impact on the Company's results of operations, liquidity or
financial condition. Due to the general uncertainty inherent in the year 2000
issue, particularly as it relates to the readiness of the Company's key
customers and suppliers, and of governmental agencies, the Company cannot
ascertain at this time whether the consequences of the year 2000 failures will
have a material impact on the Company's results of operations, liquidity or
financial condition. Insurance coverage available at this time is limited to
business interruption resulting from fire, explosion, or related perils which
are caused by a year 2000 system failure.

The foregoing year 2000 discussion constitutes a "forward-looking" statement
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. It is based on management's current expectations, estimates and
projections, which could ultimately prove to be inaccurate.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's market risk disclosures relating to outstanding derivative
commodity instruments are discussed in Item 7 Management's Discussion and
Analysis of Financial Condition and Results of Operations on pages 14 through 16
of this report.

[This space intentionally left blank]

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars)

December 31
1998 1997
----- ----

ASSETS

CURRENT ASSETS
Cash and cash equivalents......................... $ 14,470 $ 43,586
Restricted cash................................... 12,000
Accounts receivable, less allowance for
doubtful accounts (1998--$739; 1997--$738)...... 60,227 102,529
Recoverable income taxes.......................... 616 3,819
Inventories....................................... 80,104 109,279
Other current assets.............................. 1,411 2,097
-------- --------
TOTAL CURRENT ASSETS............................ 168,828 261,310

INVESTMENTS AND DEFERRED CHARGES.................... 47,044 44,448

PROPERTY, PLANT AND EQUIPMENT
Land.............................................. 48,651 45,148
Petroleum refineries.............................. 375,114 364,081
Marketing facilities.............................. 217,208 200,011
Pipelines and other equipment..................... 27,422 25,823
-------- --------
668,395 635,063

Less allowance for depreciation................. 362,684 339,854
-------- --------
NET PROPERTY, PLANT AND EQUIPMENT............. 305,711 295,209
-------- --------
$521,583 $600,967
======== ========

See notes to consolidated financial statements

CONSOLIDATED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars)

December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
----- -----

CURRENT LIABILITIES
Accounts payable:
Crude oil and refined products................. $ 48,466 $ 104,391
Other.......................................... 36,750 27,330
Accrued liabilities.............................. 53,730 46,766
Borrowings Under Secured Credit Facility.........
10,000
Current portion of long-term debt................ 1,307 1,498
---------- ----------
TOTAL CURRENT LIABILITIES........................ 150,253 179,985

LONG-TERM DEBT...................................... 129,899 127,506

DEFERRED INCOME TAXES............................... 23,947 43,854

OTHER DEFERRED LIABILITIES.......................... 38,711 42,267

COMMON STOCKHOLDERS' EQUITY
Class A Common Stock--par value $5 per share:
Authorized--7,500,000 shares;
issued and outstanding shares--
4,817,394 in 1998 and in 1997.................... 24,087 24,087

Class B Common Stock--par value $5 per share:
Authorized--7,500,000 shares;
issued and outstanding shares--
5,236,217 in 1998 and 5,240,774 in 1997.......... 26,181 26,204
Additional paid-in capital....................... 91,466 94,655
Unearned restricted stock........................ (1,500) (5,291)
Retained Earnings................................ 38,539 67,700
---------- ----------
TOTAL COMMON STOCKHOLDERS' EQUITY................ 178,773 207,355
---------- ----------
$ 521,583 $ 600,967
========== ==========

See notes to consolidated financial statements

CONSOLIDATED STATEMENTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars, except per share amounts)

Year Ended December 31
1998 1997 1996
----- ----- ----

REVENUES
Sales and operating revenues.......................... $1,264,317 $1,609,083 $1,641,875

OPERATING COSTS AND EXPENSES
Costs and operating expenses.......................... 1,155,194 1,435,707 1,499,063
Selling expenses...................................... 87,121 77,864 81,682
Administrative expenses............................... 22,427 20,578 20,599
Depreciation and amortization......................... 34,017 31,623 31,756
Sales, abandonments and write-down of property, plant
and equipment..................................... (408) 402 217
---------- ---------- ----------
1,298,351 1,566,174 1,633,317
---------- ---------- ----------
OPERATING (LOSS) INCOME.................................. (34,034) 42,909 8,558
Interest and other income............................. 3,029 2,617 2,001
Interest expense...................................... (14,740) (14,168) (13,982)
---------- ---------- ----------

(LOSS) INCOME BEFORE INCOME TAXES........................ (45,745) 31,358 (3,423)

INCOME TAX (BENEFIT) EXPENSE............................. (16,365) 12,123 (656)
---------- ---------- ----------

NET (LOSS) INCOME........................................ $ (29,380) $ 19,235 $ (2,767)
========== ========== ==========

EARNINGS PER COMMON SHARE:
Net (Loss) Income..................................... $ (2.99) $ 1.97 $ (.28)
========== ========== ==========

EARNINGS PER COMMON SHARE - ASSUMING DILUTION:
Net (Loss) Income..................................... $ (2.99) $ 1.94 $ (.28)
========== ========== ==========

See notes to consolidated financial statements

CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars, except per share amounts)

Class A Class B Additional Unearned
Common Stock Common Stock Paid-In Restricted Retained
Shares Amount Shares Amount Capital Stock Earnings Total
-------- ------- ------ ------ ------- ------- --------- -------

BALANCE AT JANUARY 1,
1996 4,817,392 $ 24,087 5,135,558 $ 25,678 $ 92,249 $ (3,733) $ 51,214 $189,495
Net (loss) for 1996 (2,767) (2,767)
Adjustment to minimum
Pension liability, net of
Deferred income taxes
of $79 146 146
Stock registered to
Participants of stock
Incentive plans 45,450 227 466 (693)
Cancellation of
non-vested stock
Registered to
participants of
stock incentive plans (51,050) (255) (591) 846
Stock option exercises 35,828 179 337 516
Market value adjustments to
Unearned Restricted
Stock (629) 629
Other 2 (15) (15)
--------- -------- --------- -------- -------- -------- -------- --------
BALANCE AT DECEMBER 31, 4,817,394 24,087 5,165,786 25,829 91,817 (2,951) 48,593 187,375
1996
Net income for 1997 19,235 19,235
Adjustment to minimum
Pension liability, net of
Deferred income tax
benefit of $69 (128) (128)
Stock registered to
Participants of stock
Incentive plans 92,700 464 736 (1,200)
Cancellation of
non-vested stock
Registered to
participants of
stock incentive plans (81,700) (409) (571) 980
Stock option exercises 63,988 320 557 877
Market value adjustments to
Unearned Restricted
Stock 2,120 (2,120)
Other (4) (4)
--------- -------- --------- -------- --------- -------- -------- ---------
BALANCE AT DECEMBER 31, 4,817,394 24,087 5,240,774 26,204 94,655 (5,291) 67,700 207,355
1997
Net (loss) for 1998 (29,380) (29,380)
Adjustment to minimum
Pension liability, net of
Deferred income tax
benefit of $117 219 219
Stock registered to
Participants of stock
Incentive plans 85,415 427 645 (1,072)
Cancellation of
non-vested stock
Registered to
participants of
stock incentive plans (114,140) (571) (1,649) 2,220
Stock option exercises 41,814 209 387 596
Market value adjustments to
Unearned Restricted
Stock (2,530) 2,530
Other (17,646) (88) (42) 113 (17)
--------- -------- --------- -------- -------- -------- -------- --------
BALANCE AT DECEMBER 31,
1998 4,817,394 $ 24,087 5,236,217 $ 26,181 $ 91,466 $ (1,500) $ 38,539 $178,773
========= ========= ========= ======== ========= ======== ========= ========

See notes to consolidated financial statements

CONSOLIDATED STATEMENTS OF CASH FLOWS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars)

Year Ended December 31
1998 1997 1996
----- ------ ------

CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income.................................... $(29,380) $ 19,235 $ (2,767)
Reconciling items from net (loss) income to net
Cash provided by operating activities:
Depreciation and amortization...................... 34,017 31,623 31,756
(Gain) loss on sales of property, plant
And equipment.................................... (408) 402 217
Equity loss in unconsolidated subsidiaries......... 1,042 500
Deferred income taxes.............................. (16,874) 10,310 (1,406)
Other deferred items............................... 2,219 (1,446) 1,837
Changes in assets and liabilities
Accounts receivable................................ 42,302 10,918 (7,648)
Inventories........................................ 29,175 (43,275) 30,021
Other current assets............................... 686 11,110 (10,612)
Crude oil and refined products payable............. (55,925) (8,141) 496
Other accounts payable............................. 9,420 4,905 (1,862)
Accrued liabilities and other deferred liabilities. 3,447 2,443 (10,250)
Recoverable and deferred income taxes.............. 170 4,010 3,263
Restricted Cash.................................... (12,000)
Deferred financing costs........................... (6,430)
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES........ 1,461 42,594 33,045
-------- -------- --------

CASH FLOWS FROM INVESTMENT ACTIVITIES
Capital expenditures............................... (36,161) (31,924) (24,101)
Proceeds from sales of property, plant and equipment 786 7,337 2,494
Investment in affiliates........................... 959 136
Capitalization of software costs.................. (3,898) (3,946) (6,077)
Deferred turnaround maintenance.................... (3,461) (14,054) (4,846)
Other (charges) credits to deferred assets......... (2,030) 466
-------- -------- --------
NET CASH (USED IN) INVESTMENT ACTIVITIES......... (43,805) (41,985) (32,530)
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt and credit agreement borrowings. 79,770 27,776 108,000
Repayments of debt and credit agreement borrowings. (67,600) (27,378) (109,522)
Net repayments (issuances) of long-term notes 461 376 (228)
receivable.........................................
Issuances of common stock.......................... 597 877 516
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 13,228 1,651 (1,234)
-------- -------- --------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS. (29,116) 2,260 (719)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR....... 43,586 41,326 42,045
-------- -------- --------

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 14,470 $ 43,586 $ 41,326
======== ======== ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest (net of amount capitalized)............. $ 21,442 $ 13,232 $ 13,007
Income taxes..................................... 1,328 2,746 904

See notes to consolidated financial statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Crown Central Petroleum Corporation and Subsidiaries

NOTE A--DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

Description of Business: Crown Central Petroleum Corporation and subsidiaries
(the Company) operates primarily in two business segments as an independent
refiner and marketer of petroleum products, including petrochemical feedstocks.
The Company operates two refineries, one located near Houston, Texas with a
rated capacity of 100,000 barrels per day of crude oil and another in Tyler,
Texas with a rated capacity of 52,000 barrels per day of crude oil. Its
principal business is the wholesale and retail sale of its products through 13
product terminals located on three major product pipelines along the Gulf Coast
and the Eastern Seaboard and in the Central United States and through a network
of 343 gasoline stations, convenience stores and mini-marts located in the
Mid-Atlantic and Southeastern United States.

Employment at the Company's Pasadena and Tyler refineries represent
approximately 10% and 7%, respectively, of the Company's total employment at
December 31, 1998. Additionally, approximately 70% of the Pasadena refinery
employees and approximately 61% of the Tyler refinery employees are subject to
collective bargaining agreements. The Company's collective bargaining agreement
with the Paper, Allied-Industrial, Chemical and Energy Workers International
Union (PACE), formerly the Oil Chemical & Atomic Workers Union (OCAW), covering
employees at the Pasadena refinery expired on February 1, 1996. The Pasadena
refinery employees subject to the PACE agreement were locked out by the Company
on February 5, 1996. The Company has been operating the Pasadena refinery
without interruption since the lock out and intends to continue full operations
in this manner, until an agreement is reached with the collective bargaining
unit. Negotiations for a new agreement are ongoing.

The Company has a contract to process 35,000 barrels per day of crude oil into
refined product for one customer at its Pasadena refinery. The customer retains
ownership of the crude oil and the refined products. The Company receives a
fixed processing fee per barrel. This contract runs through October 14, 2000.

Locot Corporation, a wholly-owned subsidiary of the Company, is the parent
company of La Gloria Oil and Gas Company (La Gloria) which operates the Tyler
refinery, product terminals located along the Texas Eastern Products Pipeline
system and through a subsidiary, a pipeline gathering system in Texas.

FZ Corporation, a wholly owned subsidiary of the Company, is the parent company
of Fast Fare, Inc. which operates two convenience store chains in six states,
retailing both merchandise and gasoline.

The following summarizes the significant accounting policies and practices
followed by the Company:

Principles of Consolidation: The consolidated financial statements include the
accounts of Crown Central Petroleum Corporation and all majority-owned
subsidiaries. All significant inter-company accounts and transactions have been
eliminated. The Company's investments in unconsolidated subsidiaries are
accounted for under the equity method.

Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

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.
Cash with restrictions on usage are not deemed to be cash equivalents for
purposes of the Balance Sheets and the Statements of Cash Flows. Temporary cash
overdrafts are included in accounts payable.

Accounts Receivable: The majority of the Company's accounts receivable relate to
sales of petroleum products to third parties operating in the petroleum
industry.

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.

Property, Plant and Equipment: Property, plant and equipment is carried at cost.
Depreciation and amortization of plant and equipment are primarily provided
using the straight-line method over estimated useful lives. Construction in
progress is recorded in property, plant and equipment.

Expenditures which materially increase values, change capacities or extend
useful lives are capitalized in property, plant and equipment. Routine
maintenance, repairs and replacement costs are charged against current
operations. At intervals of two or more years, the Company conducts a complete
shutdown and inspection of significant units (turnaround) at its refineries to
perform necessary repairs and replacements. Costs associated with these
turnarounds are deferred and amortized over the period until the next planned
turnaround.

Upon sale or retirement, the costs and related accumulated depreciation or
amortization are eliminated from the respective accounts and any resulting gain
or loss is included in operating results.

Depreciation of property, plant and equipment was approximately $24,288,000,
$24,307,000 and $25,410,000 in the years ended December 31, 1998, 1997 and 1996,
respectively.

Software Capitalization: Costs of developing and implementing software designed
for the Company's own use are capitalized as incurred. Amortization is provided
using the straight-line method over the estimated remaining useful lives of the
related software.

Environmental Costs: The Company conducts environmental assessments and
remediation efforts at multiple locations, including operating facilities, and
previously owned or operated facilities. Estimated closure and post-closure
costs for active, refinery and finished product terminal facilities are not
recognized until a decision for closure is made. Estimated closure and
post-closure costs for active and operated retail marketing facilities and costs
of environmental matters related to ongoing refinery, terminal and retail
marketing operations are recognized as follows. Expenditures for equipment
necessary for environmental issues relating to ongoing operations are
capitalized. The Company accrues 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. Accruals for losses from
environmental remediation obligations generally are recognized no later than
completion of the remediation feasibility study. Estimated costs, which are
based upon experience and assessments, are recorded at undiscounted amounts
without considering the impact of inflation, and are adjusted periodically as
additional or new information is available.

Sales and Operating Revenues: Resales of crude oil are recorded net of the
related crude oil cost (first-in, first-out) in sales and operating revenues.

Interest Capitalization: Interest costs incurred during the construction and
preoperating stages of significant construction or development projects is
capitalized and subsequently amortized by charges to earnings over the useful
lives of the related assets.

Amortization of Goodwill: The excess purchase price over the estimated fair
value of assets of businesses acquired is being amortized on a straight-line
basis over 20 years.

Derivative Financial Instruments: The Company uses the futures, forwards, and
exchange traded options to manage the price risk inherent in purchasing crude
oil in advance of the delivery date, and in maintaining the value of inventories
contained within its refinery and pipeline system. Hedging strategies used to
minimize this exposure include fixing a future margin between crude oil and
certain finished products and also hedging fixed price purchase and sales
commitments of crude oil and refined products. These instruments generally allow
for settlement at the end of their term in either cash or product.

Net realized gains and losses from these hedging strategies are recognized in
costs and operating expenses when the associated refined products are sold.
Unrealized gains and losses are deferred in other current assets and liabilities
to the extent that the associated refined products have not been sold. While the
Company's hedging activities are intended to reduce volatility and provide an
acceptable profit margin on a portion of production, the use of such a program
can effect the Company's ability to participate in an improvement in related
refined product profit margins.

Credit Risk - Because the Company has a large and diverse customer base with no
single customer accounting for a significant percentage of accounts receivable,
there was no material concentration of credit risk in these accounts at December
31, 1998. The Company evaluates the credit worthiness of counterparties to
futures, forwards and exchange traded options and considers non-performance
credit risk to be remote. The amount of exposure with such counterparties is
generally limited to unrealized gains on outstanding contracts.

Stock Based Compensation - The Company has adopted the disclosure provisions
prescribed by SFAS 123 which permit companies to continue to value their
stock-based compensation using the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25 while providing pro-forma disclosures
of net income and earnings per share calculated using the fair value based
method.

Reclassifications - To conform to the 1998 presentation, the Consolidated
Statements of Operations for the years ended December 31, 1997 and 1996,
respectively, have been restated. Service station rental income and certain
other retail marketing recoveries, which had previously been reported as a
reduction of Selling and administrative expenses, have been reclassified and are
now reported as components of Sales and operating revenues, and Costs and
operating expenses, respectively. Additionally, beginning with the three months
ended March 31, 1998, the Company began reporting Selling expenses and
Administrative expenses as separate amounts in the Consolidated Condensed
Statements of Operations. Selling and administrative expenses as originally
reported in the Company's Form 10-K for the years ending December 31, 1997 and
1996, have been restated to reflect these changes. These reclassifications had
no effect on the net income or net income per share amounts as originally
reported.

To conform to the 1998 presentation, certain Consolidated Balance Sheet amounts
at December 31, 1997 have been restated.

Recently Issued Pronouncements - In June 1998, The FASB issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (SFAS No. 133), which requires that all derivatives be
recognized as either assets or liabilities in the statement of financial
position and that those instruments shall be measured at fair value. SFAS No.
133 also prescribes the accounting treatment for changes in the fair value of
derivatives which depends on the intended use of the derivative and the
resulting designation. Designations include hedges of the exposure to changes in
the fair value of a recognized asset or liability, hedges of the exposure to
variable cash flows of a forecasted transaction, hedges of the exposure to
foreign currency translations, and derivatives not designated as hedging
instruments. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999. The Company expects to adopt SFAS No. 133 in the first quarter of the year
2000. The financial statement impact of adopting SFAS No. 133 has not yet been
determined.

NOTE B--INVENTORIES

Inventories consist of the following:

December 31
1998 1997
------ -----
(thousands of dollars)

Crude oil............................................. $ 26,489 $ 42,164
Refined products...................................... 39,776 79,905
-------- --------
Total inventories at FIFO (approximates current cost) 66,265 122,069
LIFO allowance net of lower of cost or market reserve. (184) (25,586)
-------- --------
Total crude oil and refined products............... 66,081 96,483
-------- --------

Merchandise inventory at FIFO (approximates current cost) 7,950 6,806
LIFO allowance........................................ (2,515) (1,929)
-------- --------
Total merchandise.................................. 5,435 4,877
-------- --------

Materials and supplies inventory at FIFO.............. 8,588 7,919
-------- --------
TOTAL INVENTORY.................................... $ 80,104 $109,279
======== ========

As a result of a reduction in LIFO inventory quantities, the net loss for 1998
increased by approximately $.5 million ($.05 per share). Due to the decline in
crude oil purchase prices, refined products inventories have been reduced by a
reserve of approximately $7.1 million to reflect valuing inventories at the
lower of cost or market.

NOTE C--LONG-TERM DEBT AND CREDIT ARRANGEMENTS

Long-term debt consists of the following:

December 31
1998 1997
------ -----
(thousands of dollars)

Unsecured 10.875% Senior Notes......................... $124,810 $124,779
Loan and Security Agreement............................ 10,000
Purchase Money Liens................................... 6,159 3,859
Other obligations...................................... 237 366
-------- --------
141,206 129,004

Less current portion - Loan and Security Agreement..... 10,000
Less current portion................................... 1,307 1,498
-------- --------
LONG-TERM DEBT...................................... $129,899 $127,506
======== ========

The aggregate maturities of long-term debt through 2003 are as follows (in
thousands): 1999 - $11,307; 2000 - $612; 2001 - $608; 2002 - $588; 2003 - $715.

The 10 7/8% Senior Notes due 2005 (Notes) were issued under an Indenture, which
includes certain restrictions and limitations, including the payment of
dividends, repurchase of capital stock and the incurrence of additional debt.
The Indenture also includes a provision limiting liens unless the Notes are
directly secured equally and ratably with any liability secured by a lien.
During 1998, the Company decided to replace its existing, unsecured credit
facility with a new facility to be secured by certain current assets. As of
December 2, 1998, the Indenture was amended, following a consent by the required
number of Note holders, to allow for a lien on certain current assets securing
the payment of indebtedness under a secured credit facility.

Effective as of December 10, 1998, the Company entered into an $80 million Loan
and Security Agreement (Secured Credit Facility) for cash borrowing and letter
of credit needs. The Secured Credit Facility, which has a three-year term and is
secured by certain current assets of the Company, is intended for general
corporate and working capital requirements. It includes limitations on
additional indebtedness and cash dividends and requires compliance with
financial covenants dealing with minimum levels of working capital and net
worth. Availability under the Secured Credit Facility is limited to the lesser
of $80 million or eligible collateral. At December 31, 1998, eligible collateral
totaled $48.9 million due to abnormally low inventory levels and prices.
Borrowings under the Secured Credit Facility bear interest based on the prime
rate or LIBOR based rates.

The costs associated with obtaining the Secured Credit Facility and with
amending the Senior Note Indenture of $5.9 million have been capitalized and are
being amortized over the life of the Secured Credit Facility or the remaining
term of the Indenture as applicable. Amortization of these charges is included
as a component of interest costs. The unamortized balance of deferred loan fees
associated with the unsecured credit facility amounted to $.8 million at the
time of replacement and have been written off as interest expense.

In March 1999, the Company amended the Secured Credit Facility to provide up to
$125 million availability for cash borrowing and letter of credit needs. Up to
$75 million of the Secured Credit Facility continues to be subject to
availability of eligible collateral as discussed above. The increased
availability is not subject to the limitation of eligible collateral as that
term is defined in the Secured Credit Facility. The increased availability is
being provided through a related party of the Company.

As of December 31, 1998, under the terms of the Secured Credit Facility, the
Company had cash borrowings bearing interest at 8% per annum of $10 million and
outstanding irrevocable letters of credit in the principal amount of $13.2
million, which was collateralized by cash (classified as "Restricted Cash" on
the Balance Sheet). The unused commitments under the terms of the Secured Credit
Facility were $38.9 million at year end. The Company pays an annual commitment
fee on the unused portion of the credit line.

The following interest costs were charged to pre-tax income:

Year Ended December 31
1998 1997 1996
----- ----- ----
(thousands of dollars)

Total interest costs incurred................... $17,344 $16,330 $15,822
Less: Capitalized interest...................... 2,604 2,162 1,840
------- ------- -------
INTEREST EXPENSE $14,740 $14,168 $13,982
======= ======= =======

NOTE D--CRUDE OIL AND REFINED PRODUCT HEDGING ACTIVITIES

The net deferred gain from futures contracts (excluding forward contracts)
included in crude oil and refined product hedging strategies was approximately
$187,000 at December 31, 1998. Included in these hedging strategies are futures
contracts maturing in January 1999. The Company is using these contracts to
defer the pricing of approximately 9.7% of its crude oil commitments for the
aforementioned period.

NOTE E--INCOME TAXES

Significant components of the Company's deferred tax liabilities and assets are
as follows:

1998 1997
---- -----
(thousands of dollars)

Deferred tax liabilities:
Depreciation and amortization.................... $(65,240) $(66,958)
Other............................................ (35,778) (26,260)
-------- --------
Total deferred tax liabilities................. (101,018) (93,218)

Deferred tax assets:
Post-retirement and pension obligations.......... 10,747 9,067
Environmental, litigation and other accruals..... 7,901 8,240
Construction and inventory cost not currently 2,457 9,758
deductible....................................
Benefit of future tax NOL carry forwards......... 31,863 5,630
Other............................................ 24,103 16,669
-------- --------
Total deferred tax assets...................... 77,071 49,364
-------- --------

Net deferred tax liabilities................... $(23,947) $(43,854)
======== ========

No valuation allowance is considered necessary for the above deferred tax
assets. The Company has tax credit carry-forwards of approximately $252,000
which expire in the years 2009 through 2018, an alternative minimum tax credit
carry-forward of $833,000 and net operating loss carry-forwards of approximately
$91,500,000 which expire in the years 2009 through 2018.

Significant components of the income tax (benefit) provision for the years ended
December 31 follows:

1998 1997 1996
---- ---- ----
(thousands of dollars)

Current:
Federal.................................. $ 0 $ 1,062 $ 0
State.................................... 509 750 750
--------- --------- ---------
Total Current.......................... 509 1,812 750

Deferred:
Federal.................................. (15,723) 10,062 (911)
State.................................... (1,151) 249 (495)
--------- --------- ---------
Total Deferred......................... (16,874) 10,311 (1,406)
--------- --------- ---------

INCOME TAX (BENEFIT) EXPENSE............. $ (16,365) $ 12,123 $ (656)
========= ========= =========

Current state tax provision includes $750,000 of franchise taxes for each of the
years ended December 31, 1998, 1997 and 1996. In addition, the year ended
December 31, 1998 includes a franchise tax refund of $241,000 related to fiscal
years up to 1996.

The following is a reconciliation of the statutory federal income tax rate to
the actual effective income tax rate for the years ended December 31:

1998 1997 1996
---- ---- ----
(thousands of dollars)

Income tax (benefit) expense calculated at the
statutory federal income tax rate........... $(16,011) $ 10,975 $(1,198)
Amortization of goodwill and purchase 145 145 145
adjustment.....................................
State taxes (net of federal benefit)........... (252) 650 166
Other.......................................... (247) 353 231
-------- -------- --------
INCOME TAX (BENEFIT) EXPENSE................ $(16,365) $ 12,123 $ (656)
======== ======== ========

NOTE F--CAPITAL STOCK AND NET INCOME PER COMMON SHARE

Class A Common stockholders are entitled to one vote per share and have the
right to elect all directors other than those to be elected by other classes of
stock. Class B Common stockholders are entitled to one-tenth vote per share and
have the right to elect two directors. The average outstanding and equivalent
shares excludes 214,325, 260,700 and 249,700 shares of Performance Vested
Restricted Stock (PVRS) shares registered to participants in the 1994 Long-Term
Incentive Plan (Plan) at December 31, 1998, 1997 and 1996, respectively. The
PVRS shares are not considered outstanding for earnings per share calculations
until the shares are released to the Plan participants.

The following table provides a reconciliation of the basic and diluted earnings
per share calculations:

Year Ended December 31
--------------------------------------
1998 1997 1996
------ ------ -------
(dollars in thousands, except per share data)

(LOSS) INCOME APPLICABLE TO COMMON SHARES

Net (loss) income................................ $ (29,380) $ 19,235 $ (2,767)
========= ========= =========

Common shares outstanding at January 1, 1998
1997 and 1996, respectively.................. 10,058,168 9,983,180 9,952,950

Restricted shares held by the Company at January 1,
1998, 1997 and 1996, respectively............ (260,700) (249,700) (255,300)

Weighted average effect of shares of common stock
issued for stock option exercises............ 35,237 18,531 24,043
--------- --------- ---------

Weighted average number of common shares
outstanding, as adjusted at December 31,
1998, 1997 and 1996, respectively............. 9,832,705 9,752,011 9,721,693

Effect of Dilutive Securities:
Employee stock options 113,060
Restricted stock awards 33,833
--------- --------- ---------

Weighted average number of common shares
outstanding, as adjusted at December 31, 1998,
1997 and 1996, respectively -
assuming dilution..... ...................... 9,832,705 9,898,904 9,721,693
========= ========= =========

EARNINGS PER SHARE:

Net (loss) income................................ $ (2.99) $ 1.97 $ (.28)
========= ========= =========

EARNINGS PER SHARE - ASSUMING DILUTION:

Net (loss) income................................ $ (2.99) $ 1.94 $ (.28)
========= ========= =========

At December 31, 1998, the Company had non-qualified stock options outstanding
representing 1,065,027 potential common shares. Due to the net loss from
operations for the years ended December 31, 1998 and 1996, the effect of
dilutive securities under stock options and awards were excluded from the
diluted earnings per share calculations.

NOTE G--LONG-TERM INCENTIVE PLAN

Under the terms of the 1994 Long-term Incentive Plan (Plan), the Company may
distribute to 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. The balance sheet caption
"Unearned restricted stock" is charged for the market value of restricted shares
at their grant date and changes in the market value of shares outstanding until
the vesting date, and is shown as a reduction of stockholders' equity. The
impact is further reflected within Class B Common Stock and Additional
Paid-in-Capital.

PVRS awards are subject to minimum years of service requirements from the date
of grant with earlier vesting possible subject to the attainment of performance
goals. Additionally, PVRS awards are subject to certain other restrictions
including the receipt of dividends and transfers of ownership. As of December
31, 1998, 214,325 shares of PVRS have been registered in participants names and
are being held by the Company subject to the attainment of the related
performance goals or years of service. PVRS awards to employees who have left
the Company are canceled. PVRS awards granted prior to 1996 whose related
performance goals have not been achieved are forfeited.

Under the 1994 Long-Term Incentive Plan, non-qualified stock options are granted
to participants at a price not less than 100% of the fair market value of the
stock on the date of grant. The exercise period is ten years with the options
vesting one-third per year over three years after a one-year waiting period.

Under the terms of the 1995 Management Stock Option Plan, the Company may award
to participants non-qualified stock options to purchase shares of the Company's
Class B Common Stock at a price equal to 100% of the fair market value of the
stock at the date of grant. Up to 500,000 shares of Class B Common Stock may be
distributed under the Plan. The exercise period is ten years with the options
vesting one-third per year over three years after a one-year waiting period.

Shares of Class B Common Stock available for issuance under options or awards
amounted to 213,189 and 372,176 at December 31, 1998 and 1997, respectively.

Detail of the Company's stock options are as follows:

Common Price Range Weighted Average
Shares Per Share Price Per Share
------- ----------- ---------------

1994 Long-Term Incentive Plan
Outstanding - January 1, 1996................. 505,000 $12.81 - $16.88 $14.11
--------

Granted - 1996................................ 106,500 $13.75 - $19.50 $17.01
Exercised - 1996.............................. (29,072) $12.81 - $16.88 $14.60
Canceled - 1996............................... (97,872) $12.81 - $17.69 $14.26
--------
Outstanding - December 31, 1996............... 484,556 $12.81 - $19.50 $14.69
========
Shares exercisable at December 31, 1996.... 156,756 $12.81 - $16.88 $14.59
========

Granted - 1997................................ 166,600 $11.69 $11.69
Exercised - 1997.............................. (4,963) $12.81 - $16.13 $13.24
Canceled - 1997............................... (4,536) $12.81 - $17.06 $15.37
--------
Outstanding - December 31, 1997............... 641,657 $11.69 - $19.50 $13.92
========
Shares exercisable at December 31, 1997 ... 310,142 $12.81 - $19.50 $14.66
========
Granted - 1998................................ 165,915 $ 9.38 - $15.00 $14.92
Exercised - 1998.............................. (29,942) $12.81 - $17.69 $14.27
Canceled - 1998............................... (37,982) $11.69 - $17.69 $13.20
--------
Outstanding - December 31, 1998............... 739,648 $ 9.38 - $19.50 $14.17
========
Shares exercisable at December 31, 1998.... 509,559 $ 9.38 - $19.50 $14.20
========

Common Price Range Weighted Average
Shares Per Share Price Per Share
------- ----------- ---------------

1995 Management Stock Option Plan
Outstanding - January 1, 1996................. 461,760 $13.75 - $16.06 $13.77

Exercised - 1996.............................. (6,756) $13.75 $13.75
Canceled - 1996............................... (24,524) $13.75 $13.75
--------
Outstanding - December 31, 1996............... 430,480 $13.75 - $16.06 $13.77
========
Shares exercisable at December 31, 1996 143,493 $13.75 - $16.06 $13.77
========

Exercised - 1997.............................. (59,025) $13.75 $13.75
Canceled - 1997............................... (32,704) $13.75 $13.75
--------
Outstanding - December 31, 1997............... 338,751 $13.75 - $16.06 $13.78
========

Shares exercisable at December 31, 1997 207,388 $13.75 - $16.06 $13.78
========
Exercised - 1998.............................. (11,872) $13.75 - $16.06 $14.27
Canceled - 1998............................... (1,500) $13.75 $13.75
--------
Outstanding - December 31, 1998............... 325,379 $13.75 - $16.06 $13.76
========
Shares exercisable at December 31, 1998 325,379 $13.75 - $16.06 $13.76
========
Total outstanding - December 31, 1998........... 1,065,027 $ 9.38 - $19.50 $14.04
=========
Total exercisable - December 31, 1998........... 834,938 $ 9.38 - $19.50 $14.03
========

The weighted average remaining life for options outstanding at December 31, 1998
was approximately seven years for the Long-Term Incentive Plan and also
approximately seven years for the Management Stock Option Plan.

All options were granted at an exercise price equal to the fair market value of
the common stock at the date of grant. The weighted average fair value at the
date of grant for options granted under the Long-Term Incentive Plan was $3.57,
$2.31 and $3.36 for 1998, 1997 and 1996, respectively. There were no grants
under the Management Stock Option Plan in 1998, 1997, or 1996. The fair value of
options at date of grant was estimated using the Black-Scholes model with the
following assumptions:

LONG-TERM INCENTIVE PLAN 1998 1997 1996
- ------------------------ --------- --------- -------

Expected life (years) 3 3 3
Risk Free Interest Rate 5.63% 5.67% 6.04%
Volatility 27.5% 27.0% 26.0%
Dividend Yield 0.0% 0.0% 0.0%

The Company granted 85,415, 92,700 and 45,450 of shares of PVRS Awards during
1998, 1997 and 1996, respectively. The weighted average fair value at date of
grant for PVRS Awards granted in 1998, 1997 and 1996 was $14.94, $11.69 and
$17.05, respectively, which in each case represents the market value of the
Company's Class B Common Stock at the date of grant. The amount of compensation
expense recognized for PVRS Awards was not significant for 1998, 1997, or 1996.

Stock-based compensation costs would have increased the pretax loss by
approximately $864,000 ($540,000 after tax or $.05 per basic and diluted share)
for the year ended December 31, 1998, decreased the pretax income by
approximately $1,610,000 ($1,007,000 after tax or $.10 per basic and diluted
share), and increased pretax loss by approximately $1,320,000 ($805,000 after
tax or $.08 per basic and diluted share) for the years ended December 31, 1997
and 1996, respectively, had the fair values of options and the PVRS granted
since 1995 been recognized as compensation expense on a straight line basis over
the vesting period of the grant giving consideration to achievement of
performance objectives where applicable. The pro-forma effect on net income for
1998, 1997 and 1996 is not representative of the pro-forma effect on net income
in future years as it does not consider the pro-forma compensation expense
related to grants made prior to 1995.

NOTE H--EMPLOYEE BENEFIT OBLIGATIONS

The Company has a defined benefit pension plan covering the majority of
full-time employees. The Company also has several defined benefit plans covering
only certain senior executives. Plan benefits are generally based on years of
service and employees' average compensation. The Company's policy is to fund the
pension plans in amounts which comply with contribution limits imposed by law.
Plan assets consist principally of fixed income securities and stocks.

The following table sets forth the changes in the benefit obligation and plan
assets of the Company's pension plans for the years ended December 31, 1998 and
1997, respectively:

December 31
1998 1997
----- -----
(thousands of dollars)

CHANGE IN PENSION PLANS' BENEFIT OBLIGATION

Pension plans' benefit obligation - beginning of $132,652 $120,367
year.......................................

Service cost.................................. 4,913 4,500
Interest cost................................. 8,882 8,787
Benefits paid................................. (5,984) (5,729)
Administrative expenses....................... (843) (874)
Actuarial loss................................ 4,448 5,601
Other......................................... (2,367) 0
-------- --------

Pension plans' benefit obligation - end of year 141,701 132,652
-------- --------

CHANGE IN PENSION PLAN ASSETS

Fair value of plan assets - beginning of year. 115,402 104,651

Actual return on plan assets.................. 15,701 16,705
Benefits paid................................. (5,627) (5,358)
Administrative expenses....................... (843) (874)
Other......................................... 862 278
-------- --------

Fair value of plan assets - end of year....... 125,495 115,402
-------- --------

RECONCILIATION OF FUNDED STATUS

Funded status................................. (16,206) (17,250)
Unrecognized actuarial (loss)................. 4,665 8,272
Unrecognized net (asset) at transition........ (471) (509)
Unrecognized prior service cost............... (794) (845)
-------- --------

Net amount recognized at end of year.......... $(12,806) $(10,332)
======== ========

Amounts recognized in the Balance Sheet consist of:

Year Ended December 31
1998 1997
------ -----
(thousands of dollars)

Accrued pension liability..................... $ (14,516) $(12,653)
Intangible asset.............................. 1,001 1,276
Accumulated other comprehensive income........ 709 1,045
-------- --------

Net amount recognized at end of year.......... $ (12,806) $(10,332)
========= ========

Other comprehensive income attributable to change
in additional minimum liability recognition... $ (336) $ 197
========== ========

Net periodic pension costs consisted of the following components:

Year Ended December 31
1998 1997 1996
------- ----- ------
(thousands of dollars)

Service cost - benefit earned during the year... $ 4,913 $ 4,500 $ 4,737
Interest cost on projected benefit obligations.. 8,882 8,787 8,175
Expected (return) on plan assets................ (10,951) (9,864) (8,953)
Amortization of prior service cost.............. (51) 66 31
Recognized actuarial loss....................... 76 53 406
Amortization of transition (asset) obligation... (38) (38) (38)
-------- -------- --------
Net periodic pension cost................... $ 2,831 $ 3,504 $ 4,358
======== ======== ========

Assumptions used in the accounting for the defined benefit plans as of December
31 were:

1998 1997 1996
------ ------ -----

Weighted average discount rates................. 6.75% 7.00% 7.50%
Rates of increase in compensation levels........ 4.00% 4.00% 4.00%
Expected long-term rate of return on assets..... 9.75% 9.75% 9.75%

The Company's defined benefit pension plans which cover only certain senior
executives are unfunded plans. The projected benefit obligation and accumulated
benefit obligation were $6,374,000 and $5,715,000, respectively, as of December
31, 1998, and $6,352,000 and $5,790,000, respectively, as of December 31, 1997.

In addition to the defined benefit pension plan, the Company provides certain
health care and life insurance benefits for eligible employees who retire from
active service. The post-retirement health care plan is contributory, with
retiree contributions consisting of co-payment of premiums and other cost
sharing features such as deductibles and coinsurance. Beginning in 1998, the
Company "capped" the amount of premiums that it will contribute to the medical
plans. Should costs exceed this cap, retiree premiums would increase to cover
the additional cost.

The following table sets forth changes in the accrued cost of the Company's
post-retirement benefit plans recognized in the Company's Balance Sheet:

Year Ended December 31
1998 1997
---- ----
(thousands of dollars)

Accumulated post-retirement benefit obligation (APBO):
Benefit obligation - beginning of year........... $ 12,624 $12,302

Service cost..................................... 390 326
Interest cost.................................... 1,058 859
Benefits and estimated administrative expenses (1,112) (1,053)
paid..........................................
Actuarial loss................................... 353 523
Other............................................ 3,046 (333)
-------- -------
Benefit obligation - end of year............... $ 16,359 $12,624
======== =======

RECONCILIATION OF FUNDED STATUS

Funded status.................................... $(16,359) $(12,624)
Unrecognized actuarial loss...................... 6,775 3,708
Unrecognized prior service cost.................. (921) (1,039)
-------- --------

Net amount recognized at end of year............. $(10,505) $ (9,955)
======== ========

Amounts recognized in the Balance Sheet consist of:

Accrued benefit liability....................... $(10,505) $ (9,955)
======== =========

The weighted average discount rate used in determining the APBO was 6.75% and
7.00% in 1998 and 1997, respectively.

The Company's policy is to fund postretirement costs other than pensions on a
pay-as-you-go basis.

Net periodic postretirement benefit costs include the following components:

Year Ended December 31
1998 1997 1996
---- ---- ----

(thousands of dollars)

Service cost.......................................... $ 390 $ 326 $ 354
Interest cost on accumulated postretirement benefit 1,058 859 856
obligation............................................
Amortization of prior service cost.................... (118) (118) (118)
Recognized actuarial loss............................. 332 212 173
------ ------ ------
Net periodic postretirement benefit cost.......... $1,662 $1,279 $1,265
====== ====== ======

As a result of the expense cap implemented in 1998, no further increase in the
cost of medical care has been assumed for years subsequent to 1998. The medical
trend rate assumption affects the amounts reported. For example, a
one-percentage-point change in the medical trend rate would have the following
effects:

1-Percentage- 1-Percentage-
Point Point
Increase Decrease
-------- -----------
(thousands of dollars)

Effect on total of service and interest cost
components...................................... $ 77 $ (62)
Effect on accumulated postretirement benefit
obligation...................................... 764 (638)

NOTE I--LITIGATION AND CONTINGENCIES

The Company has been named as a defendant in various matters of litigation, some
of which are for substantial amounts, and involve alleged personal injury and
property damage from prolonged exposure to petroleum, petroleum related products
and substances used at its refinery or in the petroleum refining process. The
Company is a co-defendant with numerous other defendants in a number of these
suits. The Company is vigorously defending these actions, however, the process
of resolving these matters could take several years. The liability, if any,
associated with these cases was either accrued in accordance with generally
accepted accounting principles or was not determinable at December 31, 1998. The
Company has consulted with counsel with respect to each such proceeding or large
claim which is pending or threatened. While litigation can contain a high degree
of uncertainty and the risk of an unfavorable outcome, in the opinion of
management, there is no reasonable basis to believe that the eventual outcome of
any such matter or group of related matters will have a material adverse effect
on the Company.

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
continuing capital investments will be required over the next several years to
comply with existing regulations. The Company has recorded a liability of $7.1
million as of December 31, 1998 and $11.1 million as of December 31, 1997
relative to the estimated costs of environmental issues of a non-capital nature.
The liability is not discounted, it is expected to be expended over the next
five years and is included in the balance sheet as a noncurrent liability. No
amounts have been accrued as receivables for potential reimbursement or as
recoveries to offset this liability.

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 clean-up efforts, varying costs of alternative
remediation strategies, changes in environmental remediation requirements, the
number and strength of other potentially responsible parties at multi-party
sites, and the identification of new environmental sites. It is possible that
the ultimate cost, which cannot be determined at this time, could exceed the
Company's recorded liability. As a result, charges to income for environmental
liabilities could have a material effect on the results of operations in a
particular quarter or year as assessments and remediation efforts proceed or as
new claims arise. In addition, the Company has been named by the Environmental
Protection Agency and by several state environmental agencies as a potentially
responsible party at various federal and state Super fund sites. Management is
not aware of any environmental matters which would reasonably be expected to
have a material adverse effect on the Company.

NOTE J--NONCANCELLABLE LEASE COMMITMENTS

The Company has noncancellable operating lease commitments for refinery,
computer, office and other equipment, transportation equipment, an airplane,
service station and convenience store properties, and office space. Lease terms
range from three to ten years for refinery, computer, office and other equipment
and four to eight years for transportation equipment. The airplane lease which
commenced in 1992 and has a term of seven years was cancelled in March 1999. The
majority of service station properties have lease terms of 20 years. The average
lease term for convenience stores is approximately 13 years. The Corporate
Headquarters office lease commenced in 1993 and has a ten year term beginning in
1993. Certain of these leases have renewal provisions.

Future minimum rental payments under noncancellable operating lease agreements
as of December 31, 1998 are as follows (in thousands):

1999.................................. $ 13,102
2000.................................. 11,796
2001.................................. 10,168
2002.................................. 9,003
2003.................................. 7,968
After 2003........................... 16,832
-------------
Total Minimum Rental Payments.... $ 68,869
=============

Rental expense for the years ended December 31, 1998, 1997 and 1996 was
$13,426,000, $12,927,000 and $12,935,000, respectively.

NOTE K--INVESTMENTS AND DEFERRED CHARGES

Investments and deferred charges consist of the following:

December 31
1998 1997
---- ----
(thousands of dollars)
System development costs.......................... $18,410 $ 16,065
Deferred turnarounds.............................. 12,570 16,874
Loan expense...................................... 7,886 2,168
Long-term notes receivable........................ 1,955 1,715
Goodwill.......................................... 953 1,367
Investments....................................... 929 2,930
Intangible pension asset.......................... 688 917
Other............................................. 3,653 2,412
------- --------
INVESTMENTS AND DEFERRED CHARGES.............. $47,044 $ 44,448
======= ========

Accumulated amortization of goodwill was $5,638,000 and $5,224,000 at December
31, 1998 and 1997, respectively. Accumulated amortization of system development
costs was $1,397,000 and $489,000 at December 31, 1998 and 1997, respectively.

NOTE L--FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company considers cash and cash equivalents, accounts receivable,
investments in subsidiaries, long-term notes receivable, accounts payable and
long-term debt to be its financial instruments. The carrying amount reported in
the balance sheet for cash and cash equivalents, accounts receivable and
accounts payable, represent their fair values. The fair value of the Company's
long-term notes receivable at December 31, 1998 was estimated using a discounted
cash flow analysis, based on the assumed interest rates for similar types of
arrangements. The approximate fair value of the Company's Long-Term Debt at
December 31, 1998 was estimated using a discounted cash flow analysis, based on
the Company's assumed incremental borrowing rates for similar types of borrowing
arrangements. The fair value of its investments in subsidiaries is not
determinable since these investments do not have quoted market prices.

The following summarizes the carrying amounts and related approximate fair
values as of December 31, 1998 and 1997, respectively, of the Company's
financial instruments whose carrying amounts do not equal its fair value:

December 31, 1998 December 31, 1997
Carrying Approximate Carrying Approximate
Amount Fair Value Amount Fair Value
-------- ----------- -------- -----------
(thousands of dollars) (thousands of dollars)

Assets

Long-Term Notes Receivable... $ 1,955 $ 1,325 $ 1,715 $ 1,825

Liabilities

Long-Term Debt............... $ 129,899 $ 128,544 $ 127,506 $ 127,675

NOTE M--SEGMENT INFORMATION

The Company has two reportable segments: refinery operations and retail
marketing. The Company's refinery operations segment consists of two
high-conversion petroleum refineries, one located in Pasadena, Texas and the
other located in Tyler, Texas. The Pasadena and Tyler refineries sell petroleum
products directly to other oil companies, jobbers, and independent marketers. In
addition, the Pasadena refinery sells directly into the Gulf Coast spot market
as well as to an independent network of dealer-operated retail units that sell
Crown-branded petroleum products and to the Company's own retail segment. The
Company's retail segment sells petroleum products and convenience store
merchandise directly to retail customers.

The Company evaluates performance and allocates resources based on profit or
loss from operations before income taxes, interest income or expense, and
corporate expenses. The accounting policies of the reportable segments are the
same as those described in the summary of accounting policies described in Note
A of Notes to Consolidated Financial Statements on page 25 of this Annual Report
on Form 10-K.

Intersegment sales and transfers are recorded at market prices. Income or loss
on intersegment sales is eliminated in consolidation.

The Company's reportable segments are business divisions that offer different
operating and gross margin characteristics and different distribution methods.
The reportable segments are each managed separately due to their distinct
operating characteristics.

Year ended December 31, 1998:

Refinery Retail
Operations Marketing Totals
---------- --------- ------
(thousands of dollars)

Revenues from external customers............. $ 829,465 $434,059 $1,263,524
Intersegment revenues........................ 228,420 228.420
Depreciation and amortization expense........ 22,303 9,419 31,722
(Loss) income................................ (20,087) 12,820 (7,267)
Total assets................................. 302,829 150,152 452,981

Year ended December 31, 1997:

Refinery Retail
Operations Marketing Totals
---------- --------- ------
(thousands of dollars)

Revenues from external customers............. $1,090,478 $511,312 $1,601,790
Intersegment revenues........................ 424,369 424,369
Depreciation and amortization expense........ 21,074 9,104 30,178
Income....................................... 49,480 17,319 66,799
Total assets................................. 363,272 140,749 504,021

Year ended December 31, 1996:

Refinery Retail
Operations Marketing Totals
---------- --------- ------
(thousands of dollars)

Revenues from external customers............. $1,114,146 $515,040 $1,629,186
Intersegment revenues........................ 388,464 388,464
Depreciation and amortization expense........ 20,604 9,825 30,429
(Loss) income................................ 17,497 11,051 28,548

Sales and operating revenues reconciliation:

Year ended December 31
1998 1997 1996
---- ---- ----
(thousands of dollars)

Total external revenues for reportable segments $1,263,524 $1,601,790 $1,629,186
Intersegment revenues for reportable segments 228,420 424,369 388,464
Other revenues............................... 5,106 12,709 10,150
Other adjustments............................ (4,313) (5,416) 2,539
Elimination of intersegment revenues......... (228,420) (424,369) (388,464)
---------- ---------- ----------
Sales and operating revenues............. $1,264,317 $1,609,083 $1,641,875
========== ========== ==========

Other adjustments includes items that are reported as a component of Sales and
operating revenues for management reporting purposes but are reported as a
component of operating expenses in accordance with generally accepted accounting
principles.

Depreciation and amortization expense reconciliation:

Year ended December 31
1998 1997 1996
---- ---- ----
(thousands of dollars)

Depreciation and amortization expense for
reportable Segments......................... $ 31,722 $ 30,178 $ 30,429

Other Depreciation and amortization expense.. 2,295 1,445 1,327
---------- ---------- ----------
Depreciation and amortization expense.... $ 34,017 $ 31,623 $ 31,756
========== ========== ==========

Profit (loss) reconciliation:

Year ended December 31
1998 1997 1996
---- ----- -----
(thousands of dollars)

Total (loss) income for reportable segments.. $ (7,267) $ 66,799 $ 28,548
Other income (loss).......................... 1,018 511 (263)
Unallocated amounts:
Corporate (expenses)....................... (27,094) (24,470) (19,424)
Net interest (expense)..................... (12,402) (11,482) (12,284)
---------- ---------- ----------
(Loss) income before income taxes........ $ (45,745) $ 31,358 $ (3,423)
========== ========== ==========

Total assets reconciliation:

December 31
1998 1997
---- ----
(thousands of dollars)

Total assets for reportable segments......... $ 452,981 $ 504,021
Other assets................................. 1,068,875 927,689
Elimination of intercompany receivables...... (806,072) (636,542)
Elimination of investment in consolidated
subsidiaries................................. (194,201) (194,201)
---------- ----------
Total assets............................... $ 521,583 $ 600,967
========== ==========

Assets dedicated to a particular segments operations' are included in that
segment's total assets. Assets which benefit both segments or are considered
corporate assets are not allocated.

Sales and operating revenues by major product:

Year ended December 31
1998 1997 1996
---- ---- ----
(thousands of dollars)

Petroleum products........................... $1,140,153 $1,487,067 $ 1,522,439
Convenience store merchandise................ 112,441 103,679 102,029

The Company sells all of its products in the United States.

[This space intentionally left blank]

REPORT OF INDEPENDENT AUDITORS

To the Stockholders
Crown Central Petroleum Corporation

We have audited the accompanying consolidated balance sheets of Crown Central
Petroleum Corporation and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, changes in common stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Crown
Central Petroleum Corporation and subsidiaries at December 31, 1998 and 1997,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.

/s/---Ernst & Young LLP

Baltimore, Maryland
February 25, 1999
Except for Note C, as to which the date is March 29, 1999.

UNAUDITED
QUARTERLY RESULTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars, except per share amounts)

First Second Third Fourth
Quarter Quarter Quarter Quarter Yearly
------- ------- ------- ------- ------

1998
Sales and operating revenues... $ 327,639 $ 339,154 $ 312,461 $ 285,063 $1,264,317
Gross profit................... 13,144 36,908 44,250 14,821 109,123
Net (loss) income.............. (13,743) (2,151) 3,083 (16,569) (29,380)
Net (loss) income per share.... (1.40) (.22) .31 (1.68) (2.99)
Net (loss) income per share -
assuming dilution............ (1.40) (.22) .31 (1.68) (2.99)

1997
Sales and operating revenues... $ 396,102 $ 393,079 $ 414,473 $ 405,429 $1,609,083
Gross profit................... 35,044 48,119 51,570 38,643 173,376
Net income (loss).............. 724 7,907 11,265 (661) 19,235
Net income (loss) per share.... .07 .82 1.16 (.07) 1.97
Net income (loss) per share -
assuming dilution............ .07 .81 1.12 (.07) 1.94

To conform to the presentation for the year ended December 31, 1998, Sales and
operating revenues and Gross profit amounts for the first quarter of 1998 and
for each of the periods presented in 1997 have been restated from those amounts
originally reported. These restatements had no effect on the Net (loss) income
or the Net (loss) income per share amounts previously reported.

Gross profit is defined as Sales and operating revenues less Costs and operating
expenses (including applicable property and other operating taxes).

Per share amounts are based upon the weighted average number of common shares
outstanding at the end of each quarter.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has not filed a Form 8-K within the last twenty-four (24) months
reporting a change of independent auditors or any disagreement with the
independent auditors.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Following is a list of Crown Central Petroleum Corporation's executive officers,
their ages and their positions and offices as of March 1, 1999:

HENRY A. ROSENBERG, JR. (69)
Director since 1955, Chairman of the Board and Chief Executive Officer since May
1975 and also President since March 1, 1996.

RANDALL M. TREMBLY (52)
Executive Vice President since April 1996; Senior Vice President - Refining from
July 1995 to March 1996; Vice President - Refining from December 1991 to June
1995.

JOHN E. WHEELER, JR. (46)
Executive Vice President - Chief Financial Officer since April 1998; Executive
Vice President - Chief Financial Officer and Treasurer from February 1998 to
April 1998; Senior Vice President - Finance and Treasurer from October 1996 to
January 1998; Senior Vice President - Finance from April 1996 to September 1996;
Senior Vice President - Treasurer and Controller from June 1994 to March 1996;
Vice President - Treasurer and Controller from December 1991 to June 1994.

THOMAS L. OWSLEY (58)
Senior Vice President - Legal since May 1998; Vice President - Legal from April
1983 to May 1998.

J. MICHAEL MIMS (49)
Senior Vice President - Human Resources since May 1998; Vice President - Human
Resources from June 1992 to May 1998.

FRANK B. ROSENBERG (40)
Senior Vice President - Marketing since April 1996; Vice President - Marketing
from January 1993 to March 1996. Frank B. Rosenberg is the son of Henry A.
Rosenberg, Jr.

WILLIAM A. WOLTERS (52)
Senior Vice President - Supply and Transportation since December 1998; Vice
President Supply and Logistics and Assistant Secretary from February 1998 to
December 1998; General Manager - Raw Material Supply and Assistant Secretary
from September 1985 to January 1998.

PAUL J. EBNER (41)
Vice President - Shared Services since April 1996; Vice President - Marketing
Support Services from December 1991 to March 1996.

JAMES R. EVANS (52)
Vice President - Retail Marketing since June 1996; General Manager of Retail
Operations from February 1995 to May 1996; General Manager of Direct Operations
from November 1993 to January 1995.

DENNIS W. MARPLE (50)
Vice President - Wholesale Sales and Terminals since January 1996; General
Manager Wholesale Sales from February 1995 to December 1995; Vice President -
LaGloria Supply, Trading and Transportation from October 1989 to January 1995.

PHILIP A. MILLINGTON (45)
Vice President - Treasurer since April 1998; Chief Financial Officer U. S.
Corrections Corporation from May 1997 to November 1997; Chief Financial Officer
Builders' Supply and Lumber Company, Inc., from June 1995 to May 1997;
Treasurer-LaFarge Corporation November 1987 to May 1995.

DOLORES B. RAWLINGS (61)
Vice President - Secretary since April 1996; Secretary from November 1990 to
March 1996.

JAN L. RIES (50)
Corporate Controller since November 1996; Marketing Division Controller from
January 1992 to October 1996.

There have been no events under any bankruptcy act, no criminal proceedings and
no judgments or injunctions material to the evaluation of the ability and
integrity of any Director or Executive Officer during the past five years. The
information required in this Item 10 regarding Directors of the Company and all
persons nominated or chosen to become directors is hereby incorporated by
reference to the definitive Proxy Statement which will be filed with the
Commission pursuant to Regulation 14A on or about March 29, 1999.

ITEM 11. EXECUTIVE COMPENSATION

The information required in this Item 11 regarding executive compensation is
hereby incorporated by reference to the definitive Proxy Statement which will be
filed with the Commission pursuant to Regulation 14A on or about March 29, 1999.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The information required in this Item 12 regarding security ownership of certain
beneficial owners and management is hereby incorporated by reference to the
definitive Proxy Statement which will be filed with the Commission pursuant to
Regulation 14A on or about March 29, 1999.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required in this Item 13 regarding certain relationships and
related transactions is hereby incorporated by reference to the definitive Proxy
Statement which will be filed with the Commission pursuant to Regulation 14A on
or about March 29, 1999.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a) (1) LIST OF FINANCIAL STATEMENTS
The following Consolidated Financial Statements of Crown Central Petroleum
Corporation and Subsidiaries, are included in Item 8 on pages 20 through 39 of
this report:

o Consolidated Statements of Operations -- Years ended December 31, 1998,
1997 and 1996

o Consolidated Balance Sheets -- December 31, 1998 and 1997

o Consolidated Statements of Changes in Common Stockholders' Equity --
Years ended December 31, 1998, 1997 and 1996

o Consolidated Statements of Cash Flows -- Years ended December 31, 1998,
1997 and 1996

o Notes to Consolidated Financial Statements -- December 31, 1998

(a) (2) LIST OF FINANCIAL STATEMENT SCHEDULES

The schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.

(a) (3) and (c) LIST OF EXHIBITS

EXHIBIT
NUMBER

3 ARTICLES OF INCORPORATION AND BYLAWS

(a) Amended and Restated Charter of Crown Central Petroleum Corporation was
previously filed with the Registrants' Proxy Statement dated March 15,
1996 for the Annual Meeting of Shareholders held on April 25, 1996 as
Exhibit A of Appendix A, herein incorporated by reference.

(b) Bylaws of Crown Central Petroleum Corporation as amended and restated at
July 30, 1998 was previously filed with the Registrant's Form 10-Q for
the quarter ended June 30, 1998 as Exhibit 3, herein incorporated by
reference.

4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES

(a) Loan and Security Agreement effective as of December 10, 1998 between
the Registrant and Congress Financial Corporation.

(b) First Restated Credit Agreement effective as of August 1, 1997 between
the Registrant and various banks was previously filed with the
Registrant's Form 10-Q for the quarter ended June 30, 1997 as Exhibit 4,
herein incorporated by reference.

(c) Amendment, effective as of March 31, 1998, to the First Restated Credit
Agreement effective as of August 1, 1997 was previously filed with the
Registrant's From 10-Q for the quarter ended March 31, 1998 as Exhibit
4, herein incorporated by reference.

(d) Amendment, effective as of June 30, 1998, to the First Restated Credit
Agreement effective as of August 1, 1997 was previously filed with the
Registrant's From 10-Q for the quarter ended June 30, 1998 as Exhibit 4,
herein incorporated by reference.

(e) Form of Indenture for the Registrant's 10 7/8% Senior Notes due 2005
filed on January 17, 1995 as Exhibit 4.1 of Amendment No. 3 to
Registration Statement on Form S-3, Registration No. 33-56429, herein
incorporated by reference.

(f) First Supplemental Indenture, effective as of December 2, 1998, to the
Indenture for the Registrant's 10 7/8% Senior Notes due 2005.

10 MATERIAL CONTRACTS

(a) Crown Central Petroleum Corporation Retirement Plan effective as of July
1, 1993, was previously filed with the Registrant's Form 10-K for the
year ended December 31, 1993 as Exhibit 10(a), herein incorporated by
reference.

(b) First Amendment effective as of January 1, 1994 to the Crown Central
Petroleum Corporation Retirement Plan was previously filed with the
Registrant's Form 10-K for the year ended December 31, 1997 as Exhibit
10(b), herein incorporated by reference.

(c) Second Amendment effective as of June 29 1995 to the Crown Central
Petroleum Corporation Retirement Plan was previously filed with the
Registrant's Form 10-K for the year ended December 31, 1997 as Exhibit
10(c), herein incorporated by reference.

(d) Third Amendment effective as of December 18, 1997 to the Crown Central
Petroleum Corporation Retirement Plan was previously filed with the
Registrant's Form 10-K for the year ended December 31, 1997 as Exhibit
10(d), herein incorporated by reference.

(e) Supplemental Retirement Income Plan for Senior Executives as Restated
effective September 26, 1996 was previously filed with the Registrant's
Form 10-Q for the quarter ended September 30, 1996 as Exhibit 10(b),
herein incorporated by reference.

(f) Employee Savings Plan as amended and restated effective January 1, 1987
was previously filed with the Registrant's Form 10-K for the year ended
December 31, 1995 as Exhibit 10(c), herein incorporated by reference.

(g) Amendment effective as of September 26, 1996 to the Crown Central
Petroleum Employees Savings Plan was previously filed with the
Registrant's Form 10-Q for the quarter ended September 30, 1996 as
Exhibit 10(c), herein incorporated by reference.

(h) Amendment effective as of June 26, 1997 to the Crown Central Employees
Savings Plan was previously filed with the Registrant's Form 10-K for
the year ended December 31, 1997 as Exhibit 10(h), herein incorporated
by reference.

(i) Fourth Amendment, effective as of June 25, 1998, to the Crown Central
Petroleum Corporation Employees Savings Plan was previously filed with
the Registrant's Form 10-Q for the quarter ended June 30, 1998 as
Exhibit 10, herein incorporated by reference.

(j) Crude oil processing agreement between the Registrant and Statoil
Marketing and Trading (US) Inc. was previously filed with the
Registrant's Form 10-Q for the quarter ended September 30, 1998 as
Exhibit 10, herein incorporated by reference. Certain portions of the
Agreement have been omitted because of their confidential nature, and
have been filed separately with the Securities and Exchange Commission
marked "Confidential Treatment".

(k) Directors' Deferred Compensation Plan adopted on August 25, 1983 was
previously filed with the Registrant's Form 10-Q for the quarter ended
September 30, 1983 as Exhibit 19(b), herein incorporated by reference.

(l) The 1994 Long-Term Incentive Plan, as amended and restated effective as
of December 17, 1998.

(m) Amendment, effective as of March 25, 1999 to the Crown Central Petroleum
Corporation 1994 Long-Term Incentive Plan, as amended and restated.

(n) Executive Severance Plan, as amended and restated effective as of
December 17, 1998.

(o) The 1995 Management Stock Option Plan filed on April 28, 1995 as Exhibit
4 of Registration Statement on Form S-8, Registration No. 33-58927,
herein incorporated by reference.

(p) Advisory and Consultancy Agreement dated October 28, 1993 between Jack
Africk, Director and Crown Central Petroleum Corporation was previously
filed with the Registrant's Form 10-Q for the quarter ended September
30, 1994 as Exhibit 99, herein incorporated by reference.

(q) Employees Supplementary Savings Plan filed on February 27, 1995 as
Exhibit 4 of Registration Statement on Form S-8, Registration No.
33-57847, herein incorporated by reference.

13 ANNUAL REPORT TO SECURITY HOLDERS, FORM 10-Q OR QUARTERLY REPORT TO
SECURITY HOLDERS Annual Report Exhibits:
(a) Shareholders' Letter dated March 1, 1999
(b) Operating Results and Key Financial Statistics
(c) Directors and Officers of the Company
(d) Corporate Information
(e) Supplement to the Annual Report - Operating Statistics

21 SUBSIDIARIES OF THE REGISTRANT Exhibit 21 is included on page 46 of this
report.

23 CONSENT OF INDEPENDENT AUDITORS Exhibit 23 is included on page 47 of
this report.

24 POWER OF ATTORNEY
Exhibit 24 is included on page 48 of this report.

27 FINANCIAL DATA SCHEDULE
(a) December 31, 1998
(b) December 31, 1997 - as revised

99 FORM 11-K WILL BE FILED UNDER COVER OF FORM 10-K/A BY JUNE 30, 1999.

(B) REPORTS ON FORM 8-K
There were no reports filed on Form 8-K for the three months ended
December 31, 1998.

NOTE: Certain exhibits listed on pages 43 through 45 of this report and filed
with the Securities and Exchange Commission, have been omitted. Copies
of such exhibits may be obtained from the Company upon written request,
for a prepaid fee of 25 cents per page.