<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
FORM 10-Q
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30,
September 30,
September 30,
1996
1996
1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______________
to
___________
COMMISSION FILE NUMBER 1-1059
1-1059
1-1059
CROWN CENTRAL PETROLEUM CORPORATION
CROWN CENTRAL PETROLEUM CORPORATION
CROWN CENTRAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its
charter)
Maryland
Maryland
Maryland
52-0550682
52-0550682
52-0550682
(State or other jurisdiction of (I.R.S.
Employer Identification Number)
incorporation or organization)
<PAGE>
One North Charles Street, Baltimore, Maryland
One North Charles Street, Baltimore, Maryland
One North Charles Street, Baltimore, Maryland
21201
21201
21201
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
410-539-7400
410-539-7400
410-539-7400
Not Applicable
Not Applicable
Not Applicable
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2)
has been subject to such filing requirements for
the past 90 days.
YES ___
X NO __
The number of shares outstanding at October 31,
1996 of the Registrant's $5 par value Class A and
Class B Common Stock was 4,817,394 shares and
5,168,686 shares, respectively.
-1-
<PAGE>
CROWN CENTRAL PETROLEUM CORPORATION AND
CROWN CENTRAL PETROLEUM CORPORATION AND
CROWN CENTRAL PETROLEUM CORPORATION AND
SUBSIDIARIES
SUBSIDIARIES
SUBSIDIARIES
Table of Contents
Table of Contents
Table of Contents
PAGE
PAGE
PAGE
PART I
PART I
PART I-
-
- FINANCIAL INFORMATION
FINANCIAL INFORMATION
FINANCIAL INFORMATION
Item 1- Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets
September 30, 1996 and December 31, 1995 ...........3-4
Consolidated Condensed Statements of
Operations
Three and nine months ended September 30,
1996
and 1995 5
<PAGE>
Consolidated Condensed Statements of Cash
Flows
Nine months ended September 30, 1996 and
1995 6
Notes to Unaudited Consolidated Condensed
Financial Statements 7-11
Item 2- Management's Discussion and Analysis of
Financial
Condition and Results of Operations12-16
PART II
PART II
PART II -
-
- OTHER INFORMATION
OTHER INFORMATION
OTHER INFORMATION
Item 1- Legal Proceedings 17
Item 6- Exhibits and Reports on Form 8-K 17
Exhibit 10(a) - Executive Severance Plan
effective September 26, 1996
Exhibit 10(b) - Supplemental Retirement
Income Plan as Restated effective
September 26, 1996
Exhibit 10(c) - Amendment effective as of
September 26, 1996 to the Crown Central
Employees
Savings Plan
Exhibit 10(d) - Amendment effective as of
September 26, 1996 to the Crown Central
Petroleum
Corporation 1994 Long-Term Incentive Plan
Exhibit 11 - Statement re: Computation of
Earnings Per Share
Exhibit 20 -Interim Report to
Stockholders for the
three and nine months ended September 30,
1996
Exhibit 27 - Financial Data Schedule
SIGNATURE
SIGNATURE
SIGNATURE 18
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Item 1 - Financial Statements
Item 1 - Financial Statements
<TABLE>
<PAGE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS
CONSOLIDATED CONDENSED BALANCE SHEETS
CONSOLIDATED CONDENSED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
September December
30 31
_______
1996 _______
1995
_
Assets
Assets
Assets (Unaudite
d)
<S> <C> <C>
Current Assets
Current Assets
Current Assets
Cash and cash equivalents ........... 23,402
$ 42,045
$
Accounts receivable - net ........... 106,728 105,799
Recoverable income taxes ............ 3,373 4,137
Inventories ......................... 92,539 96,025
Other current assets ................ _____
4,346
__
_____
2,595
__
Total Current Assets
Total Current Assets
Total Current Assets ............. 230,388 250,601
Investments and Deferred Charges
Investments and Deferred Charges
Investments and Deferred Charges ...... 34,614 30,633
Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment ......... 636,537 624,338
Less allowance for depreciation ..... _______
336,412 _______
322,358
Net Property, Plant and Equipment
Net Property, Plant and Equipment
Net Property, Plant and Equipment . 300,125 301,980
______
_
______
_
________
$ ________
$
________
________
_______
565,127 _______
583,214
_______
_______
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
<PAGE>
-3-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS
CONSOLIDATED CONDENSED BALANCE SHEETS
CONSOLIDATED CONDENSED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
September December
30 31
_______
1996 _______
1995
_
Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity (Unaudite
d)
<S> <C> <C>
Current Liabilities
Current Liabilities
Current Liabilities
Accounts Payable:
Crude oil and refined products .... 130,215
$ 112,036
$
Other ............................. 12,962 24,287
Accrued Liabilities ................. 40,084 66,788
Current portion of long-term debt ... ______
20,368
_
_____
1,559
__
Total Current Liabilities
Total Current Liabilities
Total Current Liabilities ....... 203,629 204,670
Long-Term Debt
Long-Term Debt
Long-Term Debt ........................ 127,529 128,506
Deferred Income Taxes
Deferred Income Taxes
Deferred Income Taxes ................. 21,909 27,995
Other Deferred Liabilities
Other Deferred Liabilities
Other Deferred Liabilities ............ 35,723 32,548
Common Stockholders' Equity
Common Stockholders' Equity
Common Stockholders' Equity
Common stock, Class A - par value $5 per
share:
Authorized shares -- 15,000,000;
issued and
outstanding shares -- 4,817,392 in 24,087 24,087
1996 and 1995 .........................
Common stock, Class B - par value $5 per
share:
Authorized shares -- 15,000,000;
issued and
outstanding shares -- 5,166,586 in
1996 and
5,135,558 in 1995 ................. 25,833 25,678
Additional paid-in capital .......... 92,207 92,249
Unearned restricted stock ........... (3,370 (3,733
) )
Retained earnings ................... ______
37,580
_
_
______
51,214
Total Common Stockholders' Equity
Total Common Stockholders' Equity
Total Common Stockholders' Equity 176,337 189,495
<PAGE>
________
$ ________
$
________
________
_______
565,127 _______
583,214
_______
_______
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
___
___
___
____
1996 _______
1995 _______
1996 _______
1995
_
_
Revenues
Revenues
Revenues
<S> <C> <C> <C> <C>
Sales and operating revenues 397,889
$ 367,120
$ $ $
1,200,18 1,092,07
8 8
Operating Costs and Expenses
Operating Costs and Expenses
Operating Costs and Expenses
Costs and operating expenses 368,068 333,888 992,948
1,118,43
5
Selling and administrative 22,815 20,567 69,438 59,691
expenses .....................
Depreciation and amortization 7,970 9,716 23,999 28,700
Sales of property, plant and ___
139
____
___
173
____
___
116
___
_
_____
equipment ....................
_______
398,992 _______
364,344
________
1,211,98
_
____
1,08____
1,33
_
_
8 _
9
Operating (Loss) Income
Operating (Loss) Income
Operating (Loss) Income ...... (1,103) 2,776 (11,800 10,739
Interest and other income .... 344 705 1,608 2,297
Interest expense ............. ______
(3,584)
_
)
______
(3,771
_
_______
(10,778 _______
(11,107
<PAGE>
(Loss) Income Before Income Taxes
(Loss) Income Before Income Taxes
(Loss) Income Before Income Taxes )
(4,343 )
(290 (20,970 1,929
Income Tax (Benefit) Expense
Income Tax (Benefit) Expense
Income Tax (Benefit) Expense . )
____
(707
___
_
)
____
(594
___
)
______
(7,336 _____
1,513
_
(Loss) Income Before
(Loss) Income Before
(Loss) Income Before )
(3,636 304 (13,634 416
Extraordinary Item
Extraordinary Item
Extraordinary Item ...........
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extinguishment of Debt (net o
Extinguishment of Debt (net o
Extinguishment of Debt (net of
f
f
income
income
income
tax benefit of $2,039)
tax benefit of $2,039)
tax benefit of $2,039) ..... _______
_______
______
)
______
(3,257
Net (Loss) Income
Net (Loss) Income
Net (Loss) Income ............ ______
(3,636
_
$ ___
304
___
_
$ _______
(13,634
_
$ ______
(2,841
_
$
_______
______
________
_______
Net (Loss) Income Per Share:
Net (Loss) Income Per Share:
Net (Loss) Income Per Share:
(Loss)
(Loss)
(Loss) Income Before
Income Before
Income Before
)
(.37
$ $ .03 )
(1.40
$ .04
$
Extraordinary Item
Extraordinary Item
Extraordinary Item ...........
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extinguishment of Debt
Extinguishment of Debt
Extinguishment of Debt ... _______
_______
______
____
(.33
__
)
Net (Loss) Income Per Share
Net (Loss) Income Per Share
Net (Loss) Income Per Share ____
(.37
_
$ _
)
__
___
___
.03
_
$ _
$_____
(1.40) _
$ ____
(.29
_
)
_______
______
______
_____
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
(Unaudited)
Nine Months Ended
<PAGE>
September 30
______
1996 ______
1995
__
___
<S> <C> <C>
Net Cash Flows From Operating
Net Cash Flows From Operating
Net Cash Flows From Operating
Activities
Activities
Activities
Net cash from operations before
changes in working capital .. 8,184
$ 22,350
$
Net changes in working capital _______
(18,280 _______
(20,864
items
)
Net Cash (Used in) Provided by
Net Cash (Used in) Provided by
Net Cash (Used in) Provided by
Operating Acti
Operating Acti
Operating Acti
vities
vities
vities ...... _______
(10,096 _____
1,486
__
Cash Flows From Investment
Cash Flows From Investment
Cash Flows From Investment
Activities
Activities
Activities
Capital Expenditures .......... (19,752 (27,137
)
Proceeds from sales of property,
plant
and equipment ............... 2,135 2,133
Deferred turnaround maintenance )
(4,518 (1,133
)
Other charges to deferred assets )
______
(4,413
_
______
(7,397
_
)
Net Cash (Used in) Investment
Net Cash (Used in) Investment
Net Cash (Used in) Investment _______
(26,548 _______
(33,534
Activities
Activities
Activities ......................
)
Cash Flows From Financing Activities
Cash Flows From Financing Activities
Cash Flows From Financing Activities
Proceeds from debt and credit 71,000 143,338
agreement borrowings ............
(Repayments) of debt and credit (53,181
agreement borrowings ............ (118,93
9)
Net cash flows from long-term (308) 427
notes receivable ................
Issuance of common stock ...... ___
490
____
_______
Net Cash Provided by Financing
Net Cash Provided by Financing
Net Cash Provided by Financing _
______
18,001 _
______
24,826
Activities
Activities
Activities ......................
Net (Decrease) in Cash and Cash
Net (Decrease) in Cash and Cash
Net (Decrease) in Cash and Cash _
$ ______
(7,222
_
$
Equivalents
Equivalents
Equivalents .....................
_
_______
)
<PAGE>
__
_______
(18,643
________
<FN>
See notes to unaudited consolidated condensed financial statements.
</TABLE>
-6-
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
Crown Central Petroleum Corporation and
Subsidiaries
September 30, 1996
Note A - Basis of Presentation
The accompanying unaudited consolidated condensed
financial statements have been prepared in
accordance with generally accepted accounting
principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not
include all of the information and footnotes
required by generally accepted accounting
principles for complete financial statements. In
the opinion of Management, all adjustments
considered necessary for a fair and comparable
presentation have been included. Operating
results for the three and nine months ended
September 30, 1996 are not necessarily indicative
of the results that may be expected for the year
ending December 31, 1996. The enclosed financial
statements should be read in conjunction with the
consolidated financial statements and footnotes
thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1995.
________________
Use of Estimates: The preparation of financial
statements in conformity with generally accepted
<PAGE>
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.
___________
Inventories - The Company's crude oil, refined
products, and convenience store merchandise and
gasoline inventories are valued at the lower of
cost (last-in, first-out) or market with the
exception of crude oil inventory held for resale
which is valued at the lower of cost (first-in,
first-out) or market. Materials and supplies
inventories are valued at cost. Incomplete
exchanges of crude oil and refined products due
the Company or owing to other companies are
reflected in the inventory accounts.
At September 30, 1996, approximately 792,000
barrels of crude oil and refined products
inventory aggregating approximately $22.2 million
was held in excess of anticipated year-end
quantities and was valued at the lower of cost
(first-in, first-out) or market. An actual
valuation of inventory under the LIFO method can
be made only at the end of each year based on the
inventory levels and costs at that time.
Accordingly, interim LIFO projections must be
based on Management's estimates of expected year-
end inventory levels and values.
___________________
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 operating retail
marketing facilities and costs of environmental
matters related to ongoing refinery, terminal and
retail marketing operations are recognized as
described below. Expenditures for equipment
necessary for environmental issues relating to
ongoing operations are capitalized. The Company
accrues environmental and clean-up related costs
<PAGE>
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 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.
-7-
<PAGE>
____________________________________________
Financial Instruments and Hedging Activities - The
Company periodically enters into interest rate
swap agreements to effectively manage the cost of
borrowings. All interest rate swaps are subject
to market risk as interest rates fluctuate.
Interest rate swaps are designated to the
Company's long-term debt and are accounted for as
a hedge, the net amounts payable or receivable
from periodic settlements under outstanding
interest rate swaps are included in interest
expense. Realized gains and losses from
terminated interest rate swaps are deferred and
amortized into interest expense over the shorter
of the term of the underlying debt or the
remaining term of the original swap agreement.
Settlement of interest rate swaps involves the
receipt or payment of cash on a periodic basis
during the duration of the contract, or upon the
Company's termination of the contract, for the
differential of the interest rates swapped over
the term of the contract.
Other instruments are used in an effort to
minimize the exposure of the Company's refining
margins to crude oil and refined product price
fluctuations. Hedging strategies used to minimize
this exposure include fixing a future margin
between crude oil and certain finished products
(crack spread strategies) and also hedging fixed
price purchase and sales commitments of crude oil
and refined products (fixed price strategies).
Futures, forwards and exchange traded options
entered into with commodities brokers and other
integrated oil and gas companies are utilized to
execute the Company's strategies. These
instruments generally allow for settlement at the
end of their term in either cash or product.
Realized gains and losses from crack spread
hedging strategies are recognized in costs and
<PAGE>
operating expenses when the associated finished
product is produced. Realized gains and losses
from fixed price inventory hedging strategies
adjust the carrying value of the underlying
inventory and are recognized in costs and
operating expenses when the associated inventory
is consumed in refining operations or sold.
Unrealized gains and losses associated with fixed
price inventory hedging strategies are deferred in
inventory and other current assets and liabilities
to the extent that the associated inventory has
not been consumed in refining operations or sold.
The Company's hedging activities are intended to
reduce volatility while providing an acceptable
profit margin on a portion of production. However,
the use of such a program can limit the Company's
ability to participate in an improvement in
related refined product profit margins.
___________
Credit Risk - The Company is potentially subjected
to concentrations of credit risk with accounts
receivable, interest rate swaps, and futures,
forwards and exchange traded options for crude oil
and finished products. 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
September 30, 1996. The Company evaluates the
credit worthiness of the counterparties to
interest rate swaps, and 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.
________________________
Statements of Cash Flows - Net changes in
working capital items presented in the Unaudited
Consolidated Condensed Statements of Cash Flows
reflects changes in all current assets and current
liabilities with the exception of cash and cash
equivalents and the current portion of long-term
debt.
_________________
Reclassifications - To conform to the 1996
presentation, Sales and operating revenues and
Costs and operating expenses for the three and
nine months ended September 30, 1995 have been
adjusted to exclude all federal and state excise
taxes. As a result, Sales and operating revenues
and Costs and operating expenses decreased
$107,617,000 and $311,395,000, respectively, for
the three and nine months ended September 30, 1995
<PAGE>
from the numbers originally reported. This
adjustment had no effect on net income or loss for
either period.
-8-
<PAGE>
<TABLE>
<CAPTION>
Note B - Inventories
Note B - Inventories
Note B - Inventories
Inventories consist of the following:
September December
30 31
_______
1996 _______
1995
__
__
(thousands of
dollars)
<S> <C> <C>
................................
Crude oil 55,452
$ 58,047
$
Refined products......................... ______
91,608 ______
77,342
Total inventories at FIFO (approximates 147,060 135,389
current cost)............................
LIFO allowance........................... _______
(68,043 _______
(52,301
Total crude oil and refined products .. ______
79,017 ______
83,088
Merchandise inventory at FIFO 6,895 6,453
(approximates current cost)..............
LIFO allowance........................... ______
(1,674 ______
(1,674
) )
al merchandise
Tot ..................... _____
5,221
_
_
_____
4,779
Materials and supplies inventory at FIFO _
. _____
8,301 _____
8,158
_
Total Inventory
Total Inventory
Total Inventory ....................... ______
92,539
_
$ ______
96,025
_
$
_______
_______
</TABLE>
As a result of decreased crude oil requirements at
the Pasadena refinery, the company achieved a
reduction in LIFO inventories during the third
quarter of 1996 which is not expected to be
replaced by year-end. The impact of this interim
LIFO inventory reduction was to reduce the net
loss for the three and nine months ended September
<PAGE>
30, 1996 by approximately $2.1 million ($.22 per
share).
<TABLE>
<CAPTION>
Note C - Long-term Debt and Credit Arrangements
Note C - Long-term Debt and Credit Arrangements
Note C - Long-term Debt and Credit Arrangements
Long-term debt consists of the following:
September December
30 31
______
_______
________
1996 ________
1995
__
_
(thousands of
dollars)
<S> <C> <C>
Unsecured 10 7/8% Senior Notes........... 124,739
$ 124,716
$
Credit Agreement......................... 19,000
Purchase Money Lien...................... 3,629 4,492
Other obligations........................ ___
529
____
____
___
857
147,897 130,065
Less current portion ______
20,368
_
_____
1,559
__
Long-Term Debt
Long-Term Debt
Long-Term Debt ........................ _
$_______
127,529 ____
128,
_
$ ___
506
________
_____
___
</TABLE>
As of October 31, 1996, under the terms of the
Credit Agreement dated as of September 25, 1995,
as amended (Credit Agreement), which is used
solely for the purpose of financing the working
capital requirements of the Company, the Company
had no outstanding cash borrowings, outstanding
irrevocable standby letters of credit in the
principal amount of $60.5 million for performance
obligations related to crude oil acquisition,
environmental and insurance matters and had unused
commitments available for future cash borrowings
and letters of credit totaling $69.5 million. As
of September 30, 1996, the Company was in
compliance with all covenants and provisions of
the Credit Agreement, as amended, and forecasts
that, but there can be no assurance that, it will
remain in compliance for the remainder of the
year.
-9-
<PAGE>
<PAGE>
The $125 million unsecured 10.875% Senior Notes
(Notes), which were issued under an Indenture
(Indenture) are used principally to finance the
permanent capital requirements of the Company. As
of September 30, 1996, the Company was in
compliance with the terms of the Indenture. The
Indenture includes certain restrictions and
limitations customary with senior indebtedness of
this type which limit the amount of additional
indebtedness the Company may incur outside of the
Credit Agreement and under certain circumstances,
restrict the Company from declaring dividends. As
of September 30, 1996, the Indenture substantially
restricted the Company from effecting borrowings
outside of the Credit Agreement and precluded the
payment of dividends. The Company has not paid a
dividend on its shares of common stock since the
first quarter, 1992.
Note D - Derivative Financial Instruments
There were no interest rate swap agreements
outstanding during the first nine months of 1996.
At September 30, 1996, the Company has recorded a
deferred gain of $.7 million related to canceled
interest rate swap agreements which will be
amortized into income over the remaining terms of
the original swap agreements ranging from 1996 to
1998. The Company may utilize interest rate swaps
in the future to further manage the cost of funds.
Note E - Calculation of Net (Loss) Income Per
Common Share
Net income (loss) per common share for the three
and nine months ended September 30, 1996 and 1995
is based on the weighted average of common shares
outstanding of 9,718,152 and 9,697,598,
respectively.
Note F - Long-Term Incentive Plan and Stock Option
Plan
Under the terms of the 1994 Long-term Incentive
Plan (Plan), the Company may distribute to
selected employees restricted shares of the
Company's Class B Common Stock and options to
purchase Class B Common Stock. Up to 1.1 million
shares of Class B Common Stock may be distributed
under the Plan. The balance sheet caption
"Unearned restricted stock" is charged for the
market value of restricted shares at their grant
<PAGE>
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.
Performance Vested Restricted Stock (PVRS) awards
are subject to the attainment of performance goals
and certain restrictions including the receipt of
dividends and transfers of ownership. Beginning
with grants made in 1996, shares not earned by the
attainment of performance goals will be earned
upon the completion of a 5 year service
requirement. As of September 30, 1996, 250,970
shares of PVRS (net of cancellations) have been
registered in participants names and are being
held by the Company subject to the attainment of
the related performance goals or the related
service requirement.
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. As of
September 30, 1996, grants of non-qualified stock
options have been awarded to participants to
purchase 515,955 shares of the Company's Class B
Common Stock (net of cancellations).
Under the terms of the 1995 Management Stock
Option Plan, a maximum of 500,000 shares of Class
B Common Stock was available for distribution. The
Company awarded to participants non-qualified
stock options to purchase 444,896 shares of the
Company's Class B Common Stock (net of
cancellations) at a price equal to 100% of the
fair market value of the stock at 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.
Shares of Class B Common Stock available for
issuance under options or awards amounted to
388,179 at September 30, 1996.
-10-
<PAGE>
<TABLE>
<CAPTION>
Detail of the Company's stock options are as
follows:
<PAGE>
Common Price
____
Range
________
per
________
Shares
_________
share
_
<S> <C> <C>
_____________________________
1994 Long-Term Incentive Plan
Granted - 1994................. 109,800 $16.13 -
$16.88
Canceled - 1994................ ____
(950
___
$16.88
)
Outstanding - December 31, 108,850 $16.13 -
.............................
1994 $16.88
Granted - 1995
................. _______
396,150 $12.81 -
$13.75
Outstanding - December 31, 505,000 $12.81 -
.............................
1995 $16.88
Granted - 1996................. 103,100 $15.38 -
$19.50
Exercised - 1996............... $12.81 -
(26,972 $16.88
)
Canceled - 1996................ _______
(92,145 $12.81 -
)
$17.06
Outstanding - September 30, _______
488,983 $12.81 -
1996............................. $19.50
_______
Shares Exercisable at September _______
162,155 $12.81 -
30, 1996......................... $16.88
_______
_________________________________
1995 Management Stock Option Plan
Granted - 1995................. _______
461,760 $13.75 -
$16.06
Outstanding - December 31, 1995 461,760 $13.75 -
$16.06
Exercised - 1996............... (6,756) $13.75
Canceled - 1996................ _______
(16,864 $13.75
)
Outstanding - September 30, _______
438,140 $13.75 -
.............................
1996 $16.06
_______
<PAGE>
Shares exercisable at _______
146,147 $13.75 -
September 30, 1996............... $16.06
_______
Total outstanding - September 30, _______
927,123 $12.81 -
.............................
1996 $19.50
_______
Total exercisable - September 30, ____
,302
___
308 $12.81 -
.............................
1996 $16.88
____
___
</TABLE>
Note G - Litigation and Contingencies
Except as disclosed in this note, there have been
no material changes in the status of litigation
and contingencies as discussed in Note I of Notes
to Consolidated Financial Statements in the Annual
Report on Form 10-K for the fiscal year ended
December 31, 1995.
All issues relating to the examination by the
Internal Revenue Service of tax returns for fiscal
years 1988 and 1989 have now been resolved, with
no material adverse impact to the Company.
-11-
<PAGE>
Item 2 Management's Discussion and Analysis of
-
Financial Condition
and Results of Operations
Results of Operations
The Company's Sales and operating revenues
increased $30.8 million or 8.4% in the third
quarter of 1996 and $108.1 million or 9.9% for the
nine months ended September 30, 1996 from the
comparable periods in 1995. The third quarter
increase in Sales and operating revenues was
primarily attributable to a 18% increase in the
average sales price per gallon of petroleum
products which was partially offset by a 8.8%
decrease in petroleum product sales volumes. The
year to date increase was a result primarily of an
11.6% increase in the average sales price per
gallon of petroleum products offset by a 1.6%
decrease in petroleum product sales volumes.
Additionally, there were slight increases in
merchandise sales of 5.1% and 3.3% for the three
<PAGE>
and nine months ended September 30, 1996,
respectively, compared to the same 1995 periods.
Merchandise gross margin (merchandise gross profit
as a percent of merchandise sales) increased from
27.2% to 29.2% for the third quarter of 1995 and
1996, respectively and from 26.3% to 28.9% for the
nine months ended September 30, 1995 and 1996,
respectively. The increases in gross margin are a
result of the Company's merchandise pricing
program which has selectively increased targeted
merchandise yet still maintains an everyday low
pricing policy which is competitive with major
retail providers in the applicable market area.
This marketing strategy has resulted in average
monthly gasoline sales volume and merchandise
sales increases on a same store basis of
approximately 4.7% and 7.7%, respectively, for the
nine months ended September 30, 1996 compared to
the same 1995 periods and has contributed to the
$2.6 million or 13.4% increase in merchandise
gross profit. Aggregate year to date merchandise
gross profit on a same store basis increased by
19.3% in 1996 compared to the same 1995 period.
Costs and operating expenses increased $34.2
million or 10.2% in the third quarter of 1996 and
$125.5 million or 12.6% for the nine months ended
September 30, 1996 from the comparable periods in
1995. The third quarter increase was due to a
22.6% increase in the average cost per barrel
consumed of crude oil and feedstocks. The year to
date increase in Costs and operating expenses was
due to a 15.3% increase in the average cost per
barrel consumed of crude oil and feedstocks.
These increases were partially offset by decreases
in volumes sold as previously discussed. During
1996, the crude oil futures market has experienced
significant backwardation wherein the future
months prices of crude oil are transacted at
values less than the current month. However, when
the future month has become the current month, the
price has generally increased. In order to price
its crude oil close to the time when products are
being refined and thereby to effectively achieve
the instantaneous 3-2-1 crack spread, the Company
has been utilizing a practice of deferring the
pricing of a majority of its crude oil until the
finished petroleum products are refined. During
1996, this practice has effectively resulted in
approximately $29.7 million of additional costs as
compared with the costs that would have been
recognized if the crude oil were priced at the
time it was contracted. The Company is currently
evaluating this practice. The results of
operations were significantly affected by the
Company's use of the LIFO method to value
<PAGE>
inventory, which decreased the Company's gross
margin $.38 per barrel ($15.7 million) in 1996,
and increased gross margin $.01 per barrel ($.3
million) in 1995. As a result of decreased crude
oil requirements at the Pasadena refinery, the
company achieved a reduction in LIFO inventories
during the third quarter of 1996 which is not
expected to be replaced by year-end. The impact
of this interim LIFO inventory reduction was to
reduce the net loss for the three and nine months
ended September 30, 1996 by approximately $2.1
million ($.22 per share).
In early 1996, the Company adjusted its gasoline
and distillate production to take advantage of
better distillate margins compared to gasoline
margins. Correspondingly, yields of distillates
were increased to 49,300 bpd (33.3%) for the nine
months ended September 30, 1996 from 45,900 bpd
(29.7%) in the comparable 1995 period, while
gasoline production was decreased from 93,300 bpd
(60.3%) for the nine months ended September 30,
1995 to 86,900 bpd (58.8%) for nine months ended
September 30, 1996. Yields of distillates
remained consistent at 51,700 bpd (34.6%) for the
third quarter 1996 compared to 51,700 bpd (32.5%)
for the same period in 1995 while gasoline
production decreased slightly from 90,600 bpd
(57%) for the third quarter 1995 to 85,400 bpd
(57%) for the third quarter 1996.
-12-
<PAGE>
Selling and administrative expenses increased $2.2
million or 10.9% for the three months ended
September 30, 1996 and $9.7 million or 16.3% for
the nine months ended September 30, 1996 compared
to the same periods in 1995. These increases are
principally due to increases in store level
operating expenses, primarily related to
additional units and increased labor costs.
Additionally, the Company recorded approximately
$1 million in corporate administrative expenses
associated with a management reorganization in
early 1996.
Operating costs and expenses for the three months
ended September 30, 1996 included $.2 million
related to environmental matters and also $.2
million for retail units that have been closed.
This compares to $1.2 million and $.6 million,
respectively, for the three months ended September
30, 1995. For the nine months ended September 30,
1996, Operating costs and expenses included $1.3
<PAGE>
million related to environmental matters and
reductions of $.2 million relating to retail units
that have been closed compared to $2.3 million and
$1.6 million, respectively, for the same 1995
period. Additionally, Operating costs and
expenses for the third quarter and year to date
periods of 1996 were reduced by $1.1 million and
$3.7 million, respectively, related to the
adjustment of certain pending litigation and
employee benefit costs and other accruals.
Depreciation and amortization decreased $1.7
million or 18% in the third quarter of 1996 and
$4.7 million or 16.4% for the nine months ended
September 30, 1996 compared to the same 1995
periods. These decreases are primarily the result
of a reduction in the depreciable base of the
Tyler refinery assets due to the adoption of SFAS
No. 121 ``
Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be
Disposed Of''
effective October 1, 1995.
In the first quarter of 1995, the Company
completed the sale of $125 million of Unsecured
10.875% Senior Notes due February 1, 2005 priced
at 99.75% (Notes). Approximately $55 million of
the net proceeds from the sale were used to retire
the Company's outstanding 10.42% Senior Notes,
including a prepayment premium of $3.4 million.
The remaining portion of the outstanding 10.42%
Senior Notes had been paid on January 3, 1995 as
part of the regularly scheduled debt service. In
the first quarter of 1995, the Company recorded an
extraordinary loss of $3.3 million (net of income
tax benefits of $2 million) consisting of
redemption related premiums and the write-off of
deferred financing costs associated with the
10.42% Senior Notes.
Liquidity and Capital Resources
Net cash used in operating activities (including
changes in working capital) totaled $10.1 million
for the nine months ended September 30, 1996
compared to cash provided from operating
activities of $1.5 million for the nine months
ended September 30, 1995. The 1996 outflows
consist primarily of $18.3 million related to
working capital requirements resulting primarily
from decreases in accrued income and excise tax
liabilities and other accounts payable and to
increases in accounts receivable and prepaid
operating expenses, principally related to
insurance premiums. These working capital
outflows were partially offset by decreases in
crude oil and finished products inventories and
increases in crude oil and refined products
<PAGE>
payables. Partially offsetting these cash
outflows was net cash provided by operations of
$8.2 million before changes in working capital.
The 1995 outflows consist of net cash provided by
operations before changes in working capital of
$22.4 million which was partially offset by $20.9
million related to working capital requirements
resulting from decreases in crude oil, refined
products and other payables and increases in
prepaid operating expenses. These working capital
outflows were partially offset by decreases in
receivables and in crude oil and finished product
inventories and increases in accrued liabilities.
Net cash outflows from investment activities were
$26.5 million for the nine months ended September
30, 1996 compared to a net outflow of $33.5
million for the same 1995 period. The 1996 amount
consists principally of capital expenditures of
$19.8 million (which includes $8.5 million for
refinery operations and $8.7 million relating to
marketing operations). Additionally, there were
refinery turnaround expenditures of $4.5 million
and increases in other deferred assets of $4.4
million. These cash outflows were partially offset
by proceeds from the sale of property, plant and
equipment of $2.1 million. The 1995 activity
relates primarily to $27.1 million of capital
expenditures ($11.9 million relating to refinery
operations and $15.2 relating to the marketing
area). In addition, there were increases in other
deferred assets of $7.4 million, which consists
primarily of $2.9 million in loan placement fees
related to the sale of $125 million of unsecured
10.875% Senior Notes in January 1995, and refinery
turnaround expenditures of $1.1 million. The 1995
cash outflows were partially offset by proceeds
from the sale of property, plant and equipment of
$2.1 million.
-13-
<PAGE>
Net cash provided by financing activities was $18
million for the nine months ended September 30,
1996 compared to cash provided by financing
activities of $24.8 million for the nine months
ended September 30, 1995. The 1996 cash inflow
consists principally of $17.8 million in net
proceeds received from debt and credit agreement
borrowings due primarily to net cash borrowings
from the Company's unsecured revolving Credit
Agreement. Additionally, cash inflows include $.5
million from issuances of the Company's common
stock due to the exercise of stock options issued
under the Company's incentives plans. Partially
<PAGE>
offsetting these cash inflows were increases of
$.3 million in long-term notes receivable. The
1995 cash inflows relate to $24.4 million in net
proceeds received from debt and credit agreement
borrowings due primarily to the sale in January
1995 of $125 million of unsecured 10.875% Senior
Notes net of amounts used to repay outstanding
balances relating to the 10.42% Senior Notes
(including a prepayment premium) and credit
agreement borrowings.
Cash and cash equivalents at September 30, 1996
were $24.2 million lower than at September 30,
1995. This decrease resulted primarily from cash
used in investment activities of $30.4 million,
which includes capital expenditures of $27.3
million, net of $6.4 million of proceeds received
from the sale of property, plant and equipment.
Additionally, cash outflows from investment
activities included deferred turnaround charges of
$6.4 million and charges to other deferred assets
of $3.5 million. These cash outflows were
partially offset by an increase in cash of $6.8
million resulting from the consolidation of the
Company's wholly-owned insurance subsidiaries in
the fourth quarter of 1995. Cash used in
operating activities totaled $7.4 million for the
twelve month period ended September 30, 1996.
These cash outflows were partially offset by cash
provided by financing activities of $13.6 million
for the period October 1, 1995 to September 30,
1996 relating primarily to net borrowings from the
Company's debt and credit agreement facilities of
$13.4 million for the twelve month period ended
September 30, 1996.
The ratio of current assets to current liabilities
at September 30, 1996 was 1.13:1 compared to
1.48:1 at September 30, 1995 and 1.22:1 at
December 31, 1995. If FIFO values had been used
for all inventories, assuming an incremental
effective income tax rate of 38.5%, the ratio of
current assets to current liabilities would have
been 1.30:1 at September 30, 1996, 1.59:1 at
September 30, 1995 and 1.35:1 at December 31,
1995.
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
<PAGE>
extremely difficult to reasonably quantify future
environmental related expenditures, the Company
anticipates that a substantial capital investment
will be required over the next several years to
comply with existing regulations. The Company
believes, but provides no assurance, that cash
provided from its operating activities, together
with other available sources of liquidity,
including borrowings under the Credit Agreement,
or a successor agreement, will be sufficient to
fund these costs. The Company had recorded a
liability of approximately $17 million as of
September 30, 1996 to cover the estimated costs of
compliance with environmental regulations which
are not anticipated to be of a capital nature.
The liability of $17 million includes accruals for
issues extending past 1997.
Environmental liabilities are subject to
considerable uncertainties which affect the
Company's ability to estimate its ultimate cost of
remediation efforts. These uncertainties include
the exact nature and extent of the contamination
at each site, the extent of required cleanup
efforts, varying costs of alternative remediation
strategies, changes in environmental remediation
requirements, the number and financial strength of
other potentially responsible parties at multi-
party sites, and the identification of new
environmental sites. As a result, charges to
income for environmental liabilities could have a
material effect on results of operations in a
particular quarter or year as assessments and
remediation efforts proceed or as new claims
arise. However, management is not aware of any
matters which would be expected to have a material
adverse effect on the Company.
-14-
<PAGE>
During the years 1996-1998, the Company estimates
environmental expenditures at the Pasadena and
Tyler refineries of at least $6.9 million and
$13.5 million, respectively. Of these
expenditures, it is anticipated that $4.4 million
for Pasadena and $8.1 million for Tyler will be of
a capital nature, while $2.5 million and $5.4
million, respectively, will be related to
previously accrued non-capital remediation
efforts. At the Company's marketing facilities,
capital expenditures relating to environmental
improvements are planned totaling approximately
$25.5 million through 1998. Environmental
expenditures at the Pasadena and Tyler refineries
and at the Company's marketing facilities totaled
<PAGE>
$1.4 million, $1.8 million and $1.3 million,
respectively, for the nine months ended September
30, 1996.
The Company's principle purchases (crude oil and
convenience store merchandise) are transacted
primarily under open lines of credit with its
major suppliers. The Company maintains two credit
facilities to finance its business requirements
and supplement internally generated sources of
cash.
The Credit Agreement dated as September 25, 1995
(Credit Agreement) is used solely for the purpose
of financing the working capital requirements of
the Company. As of October 31, 1996, the Company
had outstanding irrevocable standby letters of
credit in the principal amount of $60.5 million
for performance obligations related to crude oil
acquisition, environmental and insurance matters
and unused commitments available for future cash
borrowings and letters of credit totaling $69.5
million. As of September 30, 1996, the Company
was in compliance with all covenants and
provisions of the Credit Agreement as amended and
forecasts that, but there can be no assurance
that, it will remain in compliance for the
remainder of the year.
The $125 million unsecured 10.875% Senior Notes
(Notes) due January 25, 2005 require semi-annual
interest payments. There are no sinking fund
requirements on the Notes. This facility is
principally used to finance the permanent capital
requirements of the Company and, to the extent
required, working capital. At the Company's
option, up to $37.5 million of the Notes may be
redeemed at 110.875% of the principal amount at
any time prior to February 1, 1998. After such
date, they may not be redeemed until February 1,
2000 when they are redeemable at 105.438% of the
principal amount, 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. These restrictions and limitations
include, but are not limited to, restrictions on
the incurrence of additional indebtedness, on the
payment of dividends and on the repurchase of
capital stock. These restrictions and limitations
are not applicable to letter of credit
availability and up to $50 million of cash
borrowings provided by the Credit Agreement. As
of September 30, 1996, the Indenture substantially
restricted the Company from effecting borrowings
outside of the Credit Agreement and precluded the
<PAGE>
Company from paying any dividends. The Company
has not paid a dividend on its shares of common
stock since the first quarter of 1992. As
outlined in the Company's planned capital
requirements described below, while the Company is
limited by the Indenture from effecting borrowings
outside of the Credit Agreement, it does not
currently plan to effect any borrowings outside of
the Credit Agreement.
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 net capital
expenditures and deferred turnaround costs in 1996
are projected to approximate $37 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's
existing Credit Agreement matures on September 30,
1997. It is management's intention to extend or
replace the existing Credit Agreement prior to its
expiration date in order that cash provided from
its operating activities, together with other
available sources of liquidity, including
availability from the Credit Agreement, or a
successor agreement, will be sufficient over the
next year to make required payments of principal
and interest on its debt, including interest
payments due on the Notes, permit anticipated
capital expenditures and fund the Company's
working capital requirements.
The Company places its temporary cash investments
in high credit quality financial instruments which
are in accordance with the covenants of the
Company's financing agreements. These securities
mature within ninety days, and, therefore, bear
minimal risk. The Company has not experienced any
losses on its investments.
The Company faces intense competition in all of
the business areas in which it operates. Many of
the Company's competitors are substantially larger
and 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.
-15-
<PAGE>
Merchandise sales and operating revenues from the
Company's convenience stores are seasonal in
nature, generally producing higher sales and net
<PAGE>
income in the summer months than at other times of
the year. Gasoline sales, both at the Crown
multi-pumps and convenience stores, are also
somewhat seasonal in nature and, therefore,
related revenues may vary during the year. The
seasonality does not, however, negatively impact
the Company's overall ability to sell its refined
products.
The Company maintains business interruption
insurance to protect itself against losses
resulting from shutdowns to refinery operations
from fire, explosions and certain other insured
casualties. Business interruption coverage begins
for such losses at the greater of $5 million or
shutdowns for periods in excess of 25 days.
As discussed in Item 3. Legal Proceedings of the
Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, the Company's collective
bargaining agreement at its Pasadena refinery
expired on February 1, 1996, and 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 with management
and supervisory personnel and intends to continue
full operations until an agreement is reached with
the collective bargaining unit. The Oil, Chemical
& Atomic Workers Union (OCAW) filed unfair labor
practice charges against the Company in connection
with the lock-out. The Regional Office of the
National Labor Relations Board (NLRB) has
dismissed the charges; and; accordingly, no
accruals related to back wages have been recorded.
The union appealed this ruling, and the General
Counsel of the NLRB currently has the matter under
consideration. In July and August, the union
filed additional unfair labor practice charges and
those charges have also been dismissed by the
Regional Office. The OCAW has appealed the
dismissal of the charges filed in July. The
Company intends to continue to vigorously contest
all of the matters that have been appealed.
-16-
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
There has been no material change in the status of
legal proceedings as reported in Item 3 of the
Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995.
<PAGE>
The unfair labor practice charges filed by the
Oil, Chemical & Atomic Workers Union in connection
with the lock-out of employees in the collective
bargaining unit at the Pasadena refinery, which
were previously reported in the Annual Report on
Form 10-K for the year ended December 31, 1995,
were dismissed by the Regional Office of the
National Labor Relations Board. The union appealed
this ruling, and the General Counsel of the NLRB
currently has the matter under consideration. In
July and August, the union filed additional unfair
labor practice charges and those charges have also
been dismissed by the Regional Office. The OCAW
has appealed the dismissal of the charges filed in
July. The Company intends to continue to
vigorously contest all of the matters that have
been appealed.
The Company is involved in various matters of
litigation, the ultimate determination of which,
in the opinion of management, is not expected to
have a material adverse effect on the Company.
Item 6 - Exhibits and Reports on Form 8-K
Item 6 - Exhibits and Reports on Form 8-K
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit:
10(a) - Executive Severance Plan effective
September 26, 1996
10(b) - Supplemental Retirement Income Plan as
Restated effective September 26, 1996
10(c) - Amendment effective as of September 26,
1996 to the Crown Central Employees Savings Plan
10(d) - Amendment effective as of September 26,
1996 to the Crown Central Petroleum Corporation
1994 Long-Term Incentive Plan
11 - Statement re: Computation of Earnings Per
Share
20 - Interim Report to Stockholders for the three
and nine months ended September 30, 1996
27 - Financial Data Schedule
(b) Reports on Form 8-K:
<PAGE>
There were no reports on Form 8-K filed with the
Securities and Exchange Commission during the
three months ended September 30, 1996.
-17-
<PAGE>
SIGNATURE
SIGNATURE
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant
has duly caused this report on Form 10-Q for the
quarter ended September 30, 1996 to be signed on
its behalf by the undersigned thereunto duly
authorized.
CROWN CENTRAL PETROLEUM CORPORATION
CROWN CENTRAL PETROLEUM CORPORATION
CROWN CENTRAL PETROLEUM CORPORATION
/s/---Jan L. Ries
/s/---Jan L. Ries
/s/---Jan L. Ries
Jan L. Ries
Controller
Chief Accounting Officer
and Duly Authorized Officer
Date: November 14, 1996
-18-
<PAGE>
CROWN CENTRAL PETROLEUM CORPORATION
EXECUTIVE SEVERANCE PLAN
The Crown Central Petroleum Corporation Executive
Severance Plan (the "Plan") is hereby established
by Crown Central Petroleum Corporation, a Maryland
corporation (the "Corporation") for the benefit of
its eligible executives. The purpose of the Plan
is to provide certain benefits to eligible
executives in the event of a termination of
employment under defined circumstances after a
Change of Control.
Section 1. Definitions. For purposes of this
Plan:
<PAGE>
(a)"Beneficiary" shall mean the person or entity
designated by an Executive, by written instrument
delivered to the Corporation, to receive the
benefits payable under this Plan in the event of
the Executive's death. If an Executive fails to
designate a Beneficiary, or if no Beneficiary
survives the Executive, such death benefits shall
be paid to the Executive's estate.
(b)"Board" shall mean the Board of Directors of
the Corporation.
(c)"Change in Control" shall mean:
(i)A tender offer or exchange offer is made
whereby the effect of such offer is to take over
and control the affairs of the Corporation, and
such offer is consummated for the ownership of
securities of the Corporation representing twenty
percent (20%) or more of the combined voting power
of the Corporation's then outstanding voting
securities.
(ii) The Corporation is merged or consolidated
with another corporation and, as a result of such
merger or consolidation, less than seventy five
percent (75%) of the combined voting power of the
surviving or resulting corporation shall then be
owned in the aggregate by the former stock holders
of the Corporation.
(iii)The Corporation transfers substantially all
of its assets to another corporation or entity
that is not a wholly owned subsidiary of the
Corporation.
(iv) Any person (as such term is used in Sections
3(a)(9) and 13(d)(3) of the Exchange Act) is or
becomes the beneficial owner, directly or
indirectly, of securities of the Corporation
representing twenty percent (20%) or more of the
combined voting power of the Corporation's then
outstanding securities.
-1-
<PAGE>
(v) As the result of a tender offer, merger,
consolidation, sale of assets, or contested
election, or any combination of such transactions,
the persons who were members of the Board
immediately before the transaction, cease to
constitute at least a majority thereof.
(d)"Code" shall mean the Internal Revenue Code of
1986.
<PAGE>
(e)``Compensation'' shall mean the total
compensation paid to a Participant by the
Corporation as reportable on Internal Revenue
Service Form W-2 (i) plus any amount contributed
by the Participant pursuant to a salary reduction
agreement and which is not includible in gross
income under Code Sections 125 or 402(a)(8), and
any amount of salary reductions elected by the
Participant under the Supplemental Savings Plan,
and (ii) reduced by any income recognized by the
Participant from the exercise of stock options,
the grant of stock or any other income arising
from the Crown Central Petroleum Corporation 1994
Long Term Incentive Plan or any successor plan of
the Corporation.
(f)"Effective Date" shall mean September 26,
1996, subject to approval of the Plan by the
Board.
(g)"Executive" shall mean only a Vice President
or higher executive officer of the Corporation on
the Effective Date, and any Vice President or
higher executive officer of the Corporation hired
after the Effective Date upon approval of his
participation in the Plan by the Board.
(h)``Final Compensation'' shall mean an amount
equal to a Participant's Compensation for the
calendar year during the three calendar years
prior to the termination of the Participant's
employment for which the Participant received the
largest amount of Compensation.
(i)"Good Cause" shall mean:
(i)fraud or material misappropriation by the
Executive with respect to the business or assets
of the Corporation,
(ii) the persistent refusal or willful failure of
the Executive materially to perform his duties and
responsibilities to the Corporation, which
continues after the Executive receives notice of
such refusal or failure, or
(iii)the Executive's conviction of a felony or
crime involving moral turpitude.
-2-
<PAGE>
(j)"Good Reason" shall exist with respect to an
Executive if, without the Executive's express
written consent:
<PAGE>
(i)there is a significant adverse change in the
nature or the scope of the Executive's authority
or in his overall working environment after a
Change of Control;
(ii) the Executive is assigned duties materially
inconsistent with his duties, responsibilities and
status at the time of a Change of Control;
(iii)there is a reduction, which is not agreed to
by the Executive, in the Executive's rate of base
salary, incentive compensation, welfare benefits,
or perquisites such as car allowances as in effect
at the time of a Change of Control; or
(iv) the Corporation changes by 50 miles or more
the principal location in which the Executive is
required to perform services from the location at
which the Executive was employed as of the Change
of Control.
(k)"Incentive Plan" means the Crown Central
Petroleum Corporation 1994 Annual Incentive Plan
as changed from time to time.
(l)"Retirement Plan" shall mean any qualified or
supplemental employee pension benefit plan, as
defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"),
currently or hereinafter made available by the
Corporation in which an Executive is eligible to
participate.
(m)"Severance Benefit" shall mean the Salary
Continuance Benefit and the Welfare Continuance
Benefit.
(n) "Severance Period" shall mean the period
beginning on the date an Executive's employment
with the Corporation terminates and ending on the
date 24 months thereafter.
(o)"SRI Plan" shall mean the Crown Central
Petroleum Corporation Supplemental Retirement
Income Plan For Senior Executives, as amended from
time to time.
(p)"Supplemental Savings Plan" shall mean the
Crown Central Petroleum Employees Supplemental
Savings Plan, as amended from time to time.
(q)"Welfare Continuance Benefit" shall mean the
benefit provided in Section 5(e).
-3-
<PAGE>
<PAGE>
(r)"Welfare Plan" shall mean any health and
dental plan, disability plan, survivor income plan
or life insurance plan, as defined in Section 3(1)
of ERISA, currently or hereafter made available by
the Corporation in which an Executive is eligible
to participate.
All references made to the masculine gender are
intended to refer equally to the female gender.
Section 2. Supplemental Retirement Benefits.
(a)Upon a Change of Control, the following
provisions shall apply to the Executives who are
Participants in the SRI Plan as of the Change of
Control and who, within 24 months of a Change of
Control, terminate employment for Good Reason or
are terminated without Good Cause. All
capitalized terms used in this Section 2(a) shall
have the meanings as provided in the SRI Plan.
(i)For purposes of calculating the Regular SRI
Benefit, a Participant's age shall be deemed to be
the Participant's actual age plus three (3) years
(but not in excess of age 65) (the ``
Enhanced
Age''
), and the Participant's Total Service shall
be deemed to be the Participant's actual Total
Service plus three (3) years (the ``
Enhanced
Service''
). The Participant shall be deemed to
earn his Compensation for the last 12 months
before the Change of Control for each of the
deemed additional three (3) years.
(ii) The Participant shall be entitled to an
immediate payment of the Actuarial Equivalent of
his Regular SRI Benefit Plan as adjusted by this
Plan and his Limitation SRI Benefit. Payment
shall be made as a single lump sum payment.
(iii)To determine the Actuarial Equivalent of a
Participant's Regular SRI Benefit, the following
provisions shall apply. The Actuarial Equivalent
shall be determined under the provisions of the
Retirement Plan relating to the calculation of
lump sum payments. The amount of the Regular SRI
Benefit shall be calculated with the enhancements
provided in Section 2(a)(i). The Participant's
benefit shall be deemed to start at: (A) age 65 if
the Participant's Enhanced Service is less than
ten (10) years; (B) age 55 if the Participant's
Enhanced Service is ten (10) years or more and
Enhanced Age is less than age 55; (C) immediately
if the Participant's Enhanced Service is ten (10)
years or more and Enhanced Age is age 55 or older;
and (D) immediately if the Participant's Enhanced
<PAGE>
Service is less than ten (10) years and Enhanced
Age is age 65 or older. The Participant's age for
purposes of the calculation shall be: (A) the
Participant's actual age if the Participant's
Enhanced Service is ten (10) years or more and
Enhanced Age is age 55 or older; (B) the
Participant's actual age if the Participant's
Enhanced Age is age 65 or older; and (C) the
Participant's Enhanced Age in all other cases.
-4-
<PAGE>
(iv) Immediately prior to a Change of Control,
the Crown Central Petroleum Corporation
Supplemental Retirement Income Plan For Senior
Executives Plan Trust (the ``
Trust'') shall become
effective. The Corporation shall immediately fund
the Trust with an amount equal to then Actuarial
Equivalent of the SRI Benefits, as determined
under Section 2(a)(iii), of all Participants in
the SRI Plan who are Executives at the time of the
Change of Control. The Corporation will maintain
sufficient assets in the Trust to pay such SRI
Benefits for 24 months after the Change of
Control. The Trust shall be funded with cash or
cash equivalents other than stock of the
Corporation.
(v) The provisions of Section 6 of the SRI Plan
relating to noncompetition shall not apply.
(b)Upon a Change of Control, the following
provisions shall apply to the Executives who are
Participants in the Savings Plan as of the Change
of Control and who, within 24 months of a Change
of Control, terminate employment for Good Reason
or are terminated without Good Cause. All
capitalized terms used in this Section 2(a) shall
have the meanings as provided in the Supplemental
Savings Plan.
(i)An Executive shall be fully vested in the
Participant's Matching Credits Account.
(ii) The Corporation shall make an additional
contribution to the Participant's Matching Credits
Account in the Supplemental Savings Plan. The
additions contribution shall be equal to two (2)
times the sum of the Corporation's Matching
Contributions under the Savings Plan to the
Participant plus the amounts credited to the
Participant's Matching Credits Account in the
Supplemental Savings Plan for the calendar year
prior to the Change of Control.
<PAGE>
Section 3. Annual Incentive Plan.
This Section 3 shall apply to all Executives who
are employed on the date of the Change of Control.
Upon a Change of Control, for purposes of the
Crown Central Petroleum Corporation 1994 Annual
Incentive Plan (``
Annual Incentive Plan'') for the
fiscal year in which the Change of Control occurs,
the Corporation shall be deemed to have achieved
the level of performance as to each Performance
Criteria that is the greater of (a) the actual
level of performance, or (b) the level of
performance that would result in a 100-percent
Performance Adjustment. Any Executive who is not
employed on the last day of the calendar year in
which the Change of Control occurs shall receive a
pro rata award under the Annual Incentive Plan as
adjusted under this Section 3 based on the portion
of the calendar year during which the Executive
was employed.
-5-
<PAGE>
Section 4. Outplacement Services.
Upon a Change of Control, any Executive who,
within 24 months of a Change of Control,
terminates employment for Good Reason or is
terminated without Good Cause shall be entitled to
receive complete outplacement services, including
job search and interview skill services. The
services shall be provided by a nationally
recognized outplacement organization selected by
the Executive with the approval of the Corporation
(which approval shall not be unreasonably
withheld). The services shall be provided for up
to 24 months after the Executive's termination of
employment.
Section 5. Benefits Upon Termination of
Employment.
(a)Subject to the provisions of Section 8, an
Executive shall be entitled to a Salary
Continuance Benefit and a Welfare Continuance
Benefit if (i) the employment of the Executive
with the Corporation is terminated by the
Corporation for any reason other than Good Cause,
or (ii) the Executive terminates his employment
with the Corporation for Good Reason within 24
months after a Change of Control.
(b)The Salary Continuance Benefit shall be a lump
sum payment equal to two (2) times the Executive's
Final Compensation.
<PAGE>
(c)Payment of the Salary Continuance Benefit
shall be subject to the following terms and
conditions:
(i)Salary Continuance Benefits shall be made net
of all required federal and state withholdings
taxes and similar required withholdings.
(ii) Payment of the Salary Continuance Benefit
shall not affect the entitlement of the Executive
or his Beneficiary, or any other person entitled
to receive benefits with respect to the Executive
under any Retirement Plan, Welfare Plan, or other
plan or program maintained by the Corporation in
which the Executive participates at the date of
termination of employment.
(iii)The Salary Continuance Benefit shall not be
affected by any employment which the Executive may
obtain after termination with the Corporation nor
otherwise subject to mitigation in any respect.
-6-
<PAGE>
(d)During the Severance Period, an Executive and
his dependents will continue to be covered by all
Welfare Plans in which he and his dependents were
participating immediately prior to the date of his
termination (the "Welfare Continuance Benefit").
Any changes to any Welfare Plan during the
Severance Period shall be applicable to the
Executive and his dependents as if he continued to
be an employee of the Corporation. The
Corporation will pay the costs of the Welfare
Continuance Benefit for the Executive and his
dependents under the Welfare Plans on the same
basis as applicable, from time to time, to active
employees covered under the Welfare Plans. If
such participation in any one or more of the
Welfare Plans included in the Welfare Continuance
Benefit is not possible under the terms of the
Welfare Plan, the Corporation will provide
substantially identical benefits directly or
through an other insurance arrangement. The
Welfare Continuance Benefits as to any Welfare
Plan will cease if and when the Executive notifies
the Corporation that all or part of the Welfare
Continuance Benefit may be terminated.
Section 6. Death.
If an Executive dies while receiving a Welfare
Continuation Benefit, the Executive's spouse and
other dependents shall continue to be covered
<PAGE>
under all applicable Welfare Plans during the
remainder of the Severance Period.
Section 7. Determinations of Eligibility.
If an Executive makes a claim for benefits under
the Plan and that claim is denied, the Corporation
shall seek legal advice from a special independent
counsel selected by the Executive and approved by
the Corporation (which approval shall not be
unreasonably withheld), and who has not otherwise
performed services for the Company within the last
five (5) years (other than in connection with this
Plan) or for the Executive. Such counsel shall
render a written opinion to the Corporation and
Executive as to whether and to what extent the
Executive is entitled to benefits under the Plan.
The Corporation shall indemnify the Executive
against any and all expenses (including attorneys'
fees) which are incurred by the Executive in
connection with any claim made for benefits under
the Plan that is initially denied by the
Corporation and that is ultimately paid under the
Plan.
Section 8. Release of Claims.
In consideration for and as a condition to
receiving any payments under this Plan, the
Executive must execute a written release in a form
provided by the Corporation. In addition to any
other provisions determined by the Corporation,
the release may provide that the Executive agrees,
for himself and his heirs, representatives,
successors and assigns, that the Executive has
finally and permanently separated from employment
with the Corporation, and that he waives, releases
and forever discharges the Corporation from any
and all claims, known or unknown, that he has or
may have, including but not limited to those
relating to or arising out of his employment with
the Corporation and the termination thereof,
including but not limited to any claims of
wrongful discharge, breach of express or implied
contract, fraud, misrepresentation, defamation,
liability in tort, any claims under Title VII of
the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, the Employee
Retirement Income Security Act, the Fair Labor
Standards Act, or any other federal, state or
local law relating to employment, employee
benefits or the termination of employment,
excepting only any claims to vested retirement
benefits.
-7-
<PAGE>
<PAGE>
Section 9. No Setoff.
Payment of a Severance Benefit shall be in
addition to any other amounts otherwise payable to
the Executive, including any accrued but unpaid
vacation pay. No payments or benefits payable to
or with respect to an Executive pursuant to this
Plan shall be reduced by any amount the Executive
may owe to the Corporation (except for amounts
owed to the Corporation on account of loans,
travel or standing advances, personal charges on
Corporation credit cards or accounts, or the value
of Corporation property not returned to the
Corporation), or by any amount an Executive may
earn or receive from employment with another
employer or from any other source.
Section 10. No Assignment of Benefit.
No interest of any Executive or any Beneficiary
under this Plan, or any right to receive any
payment or distribution hereunder, shall be
subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or
other alienation or encumbrance of any kind, nor
may such interest or right to receive a payment or
distribution be taken, voluntarily or
involuntarily, for the satisfaction of the
obligations or debts of, or other claims against,
the Executive or Beneficiary, including claims for
alimony, support, separate maintenance, and claims
in bankruptcy proceedings.
Section 11. Benefits Unfunded.
All rights under this Plan of the Executives and
Beneficiaries, shall at all times be entirely
unfunded, and no provision shall at any time be
made with respect to segregating any assets of the
Corporation for payment of any amounts due
hereunder except as provided with respect to the
SRI Plan. The Executives and Beneficiaries shall
have only the rights of general unsecured
creditors of the Corporation.
Section 12. Applicable Law.
This Plan shall be construed and interpreted
pursuant to the laws of the State of Maryland.
Section 13. No Employment Contract.
Nothing contained in this Plan shall be construed
to be an employment contract between an Executive
and the Corporation.
<PAGE>
-8-
<PAGE>
Section 14. Severability.
In the event any provision of this Plan is held
illegal or invalid, the remaining provisions of
this Plan shall not be affected thereby.
Section 15. Successors.
The Plan shall be binding upon and inure to the
benefit of the Corporation, the Executives and
their respective heirs, representatives and
successors.
Section 16. Litigation Expenses.
The Corporation shall pay the litigation expenses,
including reasonable attorneys' fees, incurred by
any Executive or Beneficiary in a suit against the
Corporation in which such Executive or Beneficiary
successfully sues to enforce his rights under the
Plan.
Section 17. Amendment and Termination.
The Board shall have the right to amend the Plan
from time to time and may terminate the Plan at
any time, except as provided below:
(a)No amendment may be made to the Plan and the
Plan may not be terminated for 24 months after a
Change of Control,
(b)No amendment or termination shall reduce the
benefits payable to an Executive who is receiving
a Severance Benefit, and
(c)No amendment or termination that would
adversely affect an Executive shall be effective
with respect to any existing Participant until 24
months after approval of the amendment or
termination by the Board.
CROWN CENTRAL PETROLEUM CORPORATION
Date: September 26, 1996
By Henry A. Rosenberg, Jr.
Chairman of the Board
Attest:
<PAGE>
Delores B. Rawlings
<PAGE>
CROWN CENTRAL PETROLEUM CORPORATION
SUPPLEMENTAL RETIREMENT INCOME PLAN
FOR SENIOR EXECUTIVES
AS RESTATED
EFFECTIVE SEPTEMBER 26, 1996
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Purpose 1
Section 2. Definitions 1
Section 3. SRI Benefits Formulae 2
Section 4. Payment of SRI Benefits 3
Section 5. Form of Regular SRI Benefit 4
Section 6. No Competition 5
Section 7. Pre-Retirement Death Benefits5
Section 8. Effective Date 6
Section 9. Unfunded Plan 6
Section 10. Non-Guarantee of Employment 6
Section 11. Amendments/Termination 7
Section 12. Non-Assignability 7
Section 13. Plan Administration 7
Section 14. Withholding of Taxes 7
Section 15. Successor Company 7
Section 16. Governing Law 7
<PAGE>
Section 17. Change of Control 7
Section 18. Claim Procedures 7
CROWN CENTRAL PETROLEUM CORPORATION
SUPPLEMENTAL RETIREMENT INCOME PLAN
FOR SENIOR EXECUTIVES
Section 1. Purpose.
The purpose of this Plan is to provide
Supplemental Retirement Income Benefits (``SRI
Benefits''
) for those eligible senior executives
of Crown Central Petroleum Corporation (``Crown'')
and its subsidiaries (the ``
Crown Subsidiaries '')
whose Regular Retirement Benefits, as hereinafter
defined, are in the opinion of the Board of
Directors unreasonably small in comparison to
their Terminal Compensation, as hereinafter
defined, or whose Regular Retirement Benefits
shall have been reduced by reason of certain
statutory limits under the Internal Revenue Code
of 1986, as amended (the ``
Code'').
Section 2. Definitions. The following terms shall
have the following meanings unless otherwise
clearly required by the context:
(a) ``Actuarial Equivalent'' shall be determined
by using the mortality table prescribed by the
Secretary of the Treasury under Code section
417(e)(3)(A) as changed from time to time, and an
interest rate for any calendar year that is the
annual rate of interest on 30-year Treasury
securities as published by the Secretary of the
Treasury for November of the immediately prior
calendar year.
(b) The term ``
annual amount of a Participant's
Regular Retirement Benefits'' shall mean the
Participant's Regular Retirement Benefit payable
during a period of twelve (12) months commencing
on the date as of which the SRI Benefits are being
determined.
(c) ``Compensation'' shall mean actual periodic
compensation payable currently in cash, exclusive
of any director's fees, bonuses, employee
benefits, compensation from stock options, or
compensation payable at a deferred date, but
inclusive of amounts deducted therefrom such as,
but not limited to, deductions for withheld taxes
and contributions to employee benefit plans.
Compensation for any period of absence because of
sickness or accident during which the Participant
is paid compensation at a reduced rate shall mean
the Compensation which would have been payable
<PAGE>
except for such reduction. In computing
Compensation, there shall be excluded any payment
for accumulated vacation which is paid after
termination of employment.
(d) ``
Participant'' shall mean any employee of
Crown who is a Vice President or higher executive
officer of Crown.
(e) ``Plan''
shall mean the Crown Central
Petroleum Corporation Supplemental Retirement
Income Plan For Senior Executives, as amended from
time to time.
-1-
<PAGE>
(f) ``Regular Retirement Benefit'' shall mean
the benefits to which a Participant would be
entitled upon retirement or termination of
employment under the Retirement Plan calculated as
a five-year certain and life annuity with 60
monthly payments guaranteed. Determination of a
Participant's Regular Retirement Benefit shall not
take into account any ad hoc post-retirement
benefit increases which from time to time may be
effected by an amendment to the Retirement Plan.
Nevertheless, all determinations of a
Participant's Regular Retirement Benefit shall
take into account post-retirement cost-of-living
adjustments of the dollar limitation described in
Section 415(b)(1)(A) of the Code, as amended, if
and to the extent the Retirement Plan specifically
provides for such post-retirement adjustments to
be taken into account in determining the
Participant's retirement benefits payable
thereunder.
(g) ``Retirement Plan ''
shall mean the Crown
Central Petroleum Retirement Plan, as amended from
time to time, or any successor plan or plans.
(h) ``Tax Limits'' shall mean the limitations on
compensation and benefits under Code sections
401(a)(17) and 415.
(I) ``
Terminal Compensation ''
shall mean an
amount equal to one-third (1/3) of a Participant's
Compensation for the thirty-six (36) consecutive
months prior to the termination of the
Participant's employment for which the Participant
received the largest amount of Compensation.
(j) ``Total Service'' shall mean the period from
a Participant's first day of employment with Crown
or a Crown Subsidiary until the Participant's last
day of employment with Crown or a Crown
<PAGE>
Subsidiary, including any period in which the
Participant was not a Participant.
All references made to the masculine gender are
intended to refer equally to the female gender.
Section 3. SRI Benefits Formulae. SRI Benefits
shall consist of a Regular SRI Benefit or a
Limitation SRI Benefit or both. Each benefit
shall be determined as follows:
(a) Subject to the further provisions of Section
3, the annual Regular SRI Benefit for a
Participant shall be an amount equal to the excess
of (i) Sixty Percent (60%) of such Participant's
Terminal Compensation over (ii) the sum of the
annual amount of such Participant's Regular
Retirement Benefit and such Participant's
Limitation SRI Benefit. If a Participant
terminates employment prior to age 55 or, with
less than five (5) years of Total Service prior to
age 65, no Regular SRI Benefit is payable.
(b) The Limitation SRI Benefit shall be the
excess, if any, of the Regular Retirement Benefit
to which a Participant would be entitled under the
Retirement Plan, in accordance with elections made
by the Participant pursuant to the Retirement
Plan, if calculated without regard to (i) any Tax
Limits, or (ii) any provision of the Retirement
Plan for reduction of benefits payable thereunder
by reason of contributions which shall have been
made to other plans, over the Regular Retirement
Benefit to which such Participant shall actually
be entitled under the Retirement Plan.
-2-
<PAGE>
(c) The full Regular SRI Benefit shall be payable
if a Participant terminates employment at or after
age 65 with ten (10) or more years of Total
Service. If a Participant terminates employment
at or after age 65 with less than ten (10) years
of Total Service, the Regular SRI Benefit shall be
multiplied by a fraction, the numerator of which
is the Participant's full months of Total Service
and the denominator is 120, and the product shall
be payable to the Participant as a Regular SRI
Benefit.
(d) If the Participant terminates employment
before age 65 with at least ten (10) years of
Total Service, the Regular SRI Benefit is the
benefit calculated under Section 3(a), except that
the Applicable Percentage from the following table
<PAGE>
shall be substituted for 60% in Section 3(a) based
on the Participant's attained age at the
Participant's termination of employment.
Attained Age Applicable Percentage
55 30%
56 34%
57 38%
58 42%
59 46%
60 50%
61 52%
62 54%
63 56%
64 58%
65 60%
The Participant's attained age shall be calculated
in years and full months. The Applicable
Percentage shall be the interpolated percentage
between any two years of attained age based on the
Participant's years and full months of age.
(e) If a Participant terminates employment at or
after age 55 and before age 65 with at least five
(5) years but less than ten (10) years of Total
Service, the Regular SRI Benefit shall be the
Regular SRI Benefit calculated under Section 3(a)
multiplied by a fraction, the numerator of which
is the Participant's full months of Total Service
and the denominator is 120.
(f) In the case of a Participant described in
Section 3(d) who is not eligible to commence
benefits under the Retirement Plan at his
termination, the annual Regular SRI Benefit shall
initially be the amount calculated under Section
3(d) determined as if no amounts are payable from
the Retirement Plan or as a Limitation SRI
Benefit. When the Participant becomes eligible to
commence benefits under the Retirement Plan, the
annual Regular SRI Benefit payable thereafter
shall be reduced by the annual amount of the
Regular Retirement Benefit and Limitation SRI
Benefit which the Participant could elect to
receive at that time.
-3-
<PAGE>
Section 4. Payment of SRI Benefits. The Regular
SRI Benefit and the Limitation SRI Benefit shall
be paid as follows:
<PAGE>
(a) The Regular SRI Benefit for any Participant
who has attained age 65 shall be paid upon the
Participant's termination of employment with Crown
and the Crown Subsidiaries. The Regular SRI
Benefit for any Participant who has attained age
55 but not age 65 and who has completed at least
ten (10) years of Total Service shall be paid upon
the Participant's termination of employment with
Crown and the Crown Subsidiaries. One-twelfth
(1/12th) of such annual Regular SRI Benefit shall
be payable on the first day of each month.
(b) The Regular SRI Benefit for any Participant
who, at his termination of employment, has not
attained age 65 and who has completed less than
ten (10) years of Total Service shall be paid upon
the Participant's attainment of age 65. One-
twelfth (1/12th) of such annual Regular SRI
Benefit shall be payable on the first day of each
month.
(c) When a Participant begins to receive benefits
under the Retirement Plan, such Participant shall
be entitled, subject to the provisions of Section
6, to receive a Limitation SRI Benefit, if any.
The Limitation SRI Benefit shall commence at the
same time and shall be paid in the same form as
the benefit to the Participant under the
Retirement Plan. Any death benefit payable based
on the form of payment of the Limitation SRI
Benefit shall be payable at the same time and to
the same beneficiary(s) in the same proportions as
the death benefits under the Retirement Plan.
Section 5. Form of Regular SRI Benefit.
(a) Unless the Participant elects an optional
form of payment under Section 5(b), the Regular
SRI Benefit shall be payable as a five-year
certain and life annuity with 60 monthly payments
guaranteed.
(b) A Participant may elect not to receive his
Regular SRI Benefit in the form described in
Section 5(a) and may elect as provided in Section
5(d) to receive the Actuarial Equivalent of his
Regular SRI Benefit in one of the following forms:
(1) The Actuarial Equivalent of the Regular SRI
Benefit may be paid in the form of a single life
annuity, payable in equal monthly amounts for the
life of the Participant.
(2) The Actuarial Equivalent of the Regular SRI
Benefit may be paid in the form of a joint and
100% survivor annuity for the lives of the
Participant and his spouse. Under this form of
<PAGE>
payment, the Participant will receive reduced
payments for his lifetime and, after his death, a
survivor annuity will be payable for the lifetime
of his spouse equal to 100% of the amount of the
annuity payments that were payable to the
Participant. If the Participant's spouse dies
after Regular SRI Benefit payments begin but
before the Participant dies, the Regular SRI
Benefit shall continue to be paid to the
Participant in the same amount that was payable
before the death of his spouse.
-4-
<PAGE>
(3) The Actuarial Equivalent of the Regular SRI
Benefit may be paid in the form of a joint and 50%
survivor annuity for the lives of the Participant
and his spouse. Under this form of payment, the
Participant will receive reduced payments for his
lifetime and, after his death, a survivor annuity
will be payable for the lifetime of his spouse
equal to 50% of the amount of the annuity payments
that were payable to the Participant. If the
Participant's spouse dies after Regular SRI
Benefit payments begin but before the Participant
dies, the Regular SRI Benefit shall continue to be
paid to the Participant in the same amount that
was payable before the death of his spouse.
(4) The Actuarial Equivalent of the Regular SRI
Benefit may be paid in a ten-year certain and
continuous form. Under this form of payment, the
Participant will receive equal monthly
installments for his lifetime and, in the event of
his death prior to receipt of 120 payments,
whichever is applicable, payments will continue
for the balance of such 120 payments to his
beneficiary.
(c) The following rules apply to payments of all
Regular SRI Benefits and Limitation SRI Benefits
under the Plan. If the present value of a
Regular SRI Benefit or a Limitation SRI Benefit
payable under the Plan, including a Regular SRI
Benefit or Limitation SRI Benefit payable to
beneficiaries, is $10,000 or less on the
commencement date of the Participant's or
beneficiary's benefit, the Actuarial Equivalent
present value shall be paid in a single-sum
payment. Payment shall be made as soon as
practicable following the Participant's last day
of service or as soon as practicable after death
for payment to a beneficiary.
<PAGE>
(d) The Participant shall be provided suitable
forms for the making of elections under Section
5(b). To be valid, an election or revocation of
an election of an alternative benefit form (i)
must be signed by the Participant, (ii) must
designate a specific alternate form of benefits,
and (iii) except for an initial election upon
participation, will not be effective until six
(6) months after the date of the election. Any
election shall remain in effect until six (6)
months after a subsequent election is filed by the
Participant.
-5-
<PAGE>
Section 6. No Competition. Notwithstanding the
provisions of Sections 4 and 5, no Regular SRI
Benefit or Limitation SRI Benefit shall be payable
to a Participant whose employment with Crown and
the Crown Subsidiaries shall have terminated prior
to the date on which such Participant shall attain
the age of sixty-five (65) years, or to the
surviving spouse or other beneficiary of such a
Participant, if within two (2) years after such
termination of employment the Participant shall,
without the approval of Crown as expressed in a
resolution by its Board of Directors, render
services for compensation as an officer,
consultant, employee or otherwise to any
corporation or other entity in direct or indirect
competition with Crown or any Crown subsidiary, or
enter into any business or occupation on a self-
employed basis which is in direct or indirect
competition with Crown or any Crown Subsidiary
provided, however, that nothing contained in this
Section 6 shall be deemed to require the repayment
by the Participant of any Regular SRI Benefit or
Limitation SRI Benefit paid to him prior to the
time he commences rendering such services or
enters into such business or occupation.
Section 7. Pre-Retirement Death Benefits. Pre-
Retirement Death Benefits consist of a Regular SRI
Death Benefit or a Limitation SRI Death Benefit,
or both. The benefits shall be determined as
follows:
(a) If a Participant who is married at the time
of his death dies after attaining the age of
fifty-five (55) years while still employed by
Crown or a Crown Subsidiary, his surviving spouse
shall be entitled to receive a Regular SRI Death
Benefit. The monthly amount of the Regular SRI
Death Benefit shall be the same as the monthly
payment which would have been initially payable
<PAGE>
pursuant to Section 5 if such Participant had
terminated on the date of his death, had the
greater of five (5) years or his actual Years of
Total Service, had elected to receive the Regular
SRI Benefit in the form of a joint and 100%
survivor annuity for the lives of the Participant
and his spouse, and had died immediately following
such termination. If the Participant had less
than ten (10) years of Total Service at death, the
Regular SRI Death Benefit shall be multiplied by a
fraction, the numerator of which is the
Participant's full months of Total Service and the
denominator is 120, and the product shall be
payable to the spouse as the Regular SRI Death
Benefit. If the spouse is not eligible to
commence benefits under the Retirement Plan at the
Participant's death, the Regular SRI Death Benefit
shall initially be the amount calculated as if no
amounts are payable to the spouse from the
Retirement Plan or as a Limitation SRI Benefit.
When the surviving spouse becomes eligible to
commence benefits under the Retirement Plan, the
annual Regular SRI Death Benefit shall be reduced
by the annual amount of the Regular Retirement
Benefit and Limitation SRI Benefit which the
spouse could elect to receive at that time. The
death benefit shall be payable monthly on the
first day of each month.
(b) The Limitation SRI Death Benefit shall be the
excess, if any, of the death benefits which would
be payable by reason of the death of a Participant
while still employed by Crown or a Crown
Subsidiary under the Retirement Plan in accordance
with the elections made by the Participant
pursuant to the Retirement Plan, if the Tax Limits
were not taken into account, over the death
benefits to which the spouse of the Participant is
actually entitled under the Retirement Plan. The
Limitation SRI Death Benefit shall be paid at the
same time, in the same form and to the same
beneficiaries, as the death benefit under the
Retirement Plan.
Section 8. Effective Date. This restatement of
the Supplemental Retirement Income Plan For Senior
Executives shall become effective as of September
26, 1996, subject to approval by the Board of
Directors of Crown. The plan as in effect prior
to this restatement shall govern all rights of
Participants who became entitled to benefits prior
to this restatement.
-6-
<PAGE>
<PAGE>
Section 9. Unfunded Plan. There is no fund
associated with this Plan. Crown and the Crown
Subsidiaries shall be required to make payments
only as benefits become due and payable. No
Participant or beneficiary shall have any right,
other than the right of an unsecured general
creditor, against Crown or the Crown Subsidiaries
in respect to the benefits payable, or which may
be payable, to such Participant or beneficiary
hereunder. If Crown or the Crown Subsidiaries
acting in their sole discretion, establishes a
reserve or other fund associated with this Plan,
then, except as may otherwise be provided in the
instrument pursuant to which such reserve or fund
is established, no Participant or beneficiary
shall have any right to or interest in any
specific amount or asset of such reserve or fund
by reason of amounts which may be payable to such
person under this Plan, nor shall such person have
any right to receive any payment under this Plan
except as and to the extent expressly provided in
this Plan.
Section 10. Non-Guarantee of Employment. Nothing
contained in this Plan shall be construed as a
contract of employment between Crown or any Crown
Subsidiary and any Participant, or as a right of
any such Participant to be continued in employment
or as a limitation of the right of Crown or any
Crown Subsidiary to deal with any Participant, as
to their hiring, discharge, layoff, compensation,
and all other conditions of employment in all
respects as though this Plan did not exist.
Section 11. Amendments/Termination. Crown
reserves the right to make from time to time
amendments to or terminate this Plan by vote duly
adopted by the Board of Directors (or any duly
authorized committee thereof); provided, however,
that no such amendment or termination shall
adversely affect a Participant's benefits as of
the date of such action.
Section 12. Non-Assignability. The benefits
payable under this Plan shall not be subject to
alienation, assignment, pledge, garnishment,
execution or levy of any kind and any attempt to
cause any such benefits to be so subjected shall
not be recognized.
Section 13. Plan Administration. This Plan shall
be operated and administered by the Board whose
decision on all matters involving the
interpretation and administration of this Plan
shall be final and binding.
<PAGE>
Section 14. Withholding of Taxes. All amounts
payable hereunder shall be reduced for the amounts
required to be withheld pursuant to any applicable
governmental law or regulation with respect to
taxes or any similar provisions.
Section 15. Successor Company. In the event of
the dissolution, merger, consolidation or
reorganization of Crown, the successor shall have
all of the powers, duties and responsibilities of
Crown under this Plan.
-7-
<PAGE>
Section 16. Governing Law. This Plan shall be
construed and enforced in accordance with, and
governed by, the laws of the State of Maryland.
Section 17. Change of Control. The Board of
Directors may adopt additional provisions with
respect to SRI Benefits that are applicable in the
case of a change of control.
Section 18. Claim Procedures.
(a) A Participant or beneficiary shall be
entitled to file a claim for benefits under the
Plan. Any claim shall be filed with the Secretary
of the Corporation on behalf of the Board. The
claim is required to be in writing. If the claim
is denied by the Board, in whole or in part, the
claimant shall be furnished within 90 days after
the Board's receipt of the claim (or within 180
days after such receipt if special circumstances
require an extension of time) a written notice of
denial of the claim containing the following:
i. Specific reason or reasons for denial;
ii. Specific reference to pertinent Plan
provisions on which the denial is based;
iii. A description of any additional material or
information necessary for the claimant to perfect
the claim, and an explanation of why the material
or information is necessary; and
iv. An explanation of the claims review
procedure.
(b) A claimant may request a review of a denial
at any time within 60 days following the date the
claimant received written notice of the denial of
his claim. For purposes of this Section, any
action required or authorized to be taken by the
<PAGE>
claimant may be taken by a representative
authorized in writing by the claimant to represent
him. The Board shall afford the claimant a full
and fair review of the decision denying the claim
and, if so requested, shall:
i. Permit the claimant to review any documents
that are pertinent to the claim; and
ii. Permit the claimant to submit to the Board
issues and comments in writing.
-8-
<PAGE>
(c) The decision on review by the Board shall be
in writing and shall be issued within 60 days
following receipt of the request for review. The
period for decision may be extended to a date not
later than 120 days after such receipt if the
Board determines that special circumstances
require extension. The decision on review shall
include specific reasons for the decision and
specific references to the pertinent Plan
provisions on which the decision of the Board is
based.
IN WITNESS WHEREOF, Crown Central Petroleum
Corporation has caused this restated Plan to be
executed the 26th day of September, 1996.
CROWN CENTRAL PETROLEUM CORPORATION
By: Henry A. Rosenberg, Jr.
Chairman of the Board
<PAGE>
THIS FOURTH AMENDMENT TO THE
CROWN CENTRAL PETROLEUM CORPORATION
EMPLOYEES SAVINGS PLAN, made on this 26th day of
September, 1996 BY CROWN CENTRAL PETROLEUM
CORPORATION, a Maryland Corporation:
WITNESSETH
WHEREAS, Crown Central Petroleum Corporation (the
"Company") maintains the Crown Central Petroleum
<PAGE>
Employees Savings Plan, amended and restated as of
January 1, 1987 and as subsequently amended (the
"Plan"). The Company has the power to amend the
Plan and now wishes to do so.
NOW, THEREFORE, the Plan is amended as follows:
I. Effective September 26, 1996, Section 5.1(a)
is amended to read as follows:
(a) Pursuant to procedures adopted by the Plan
Administrator and uniformly applied, but subject
to the further conditions in this Section 5.2
prescribed, Participants may direct through a plan
fiduciary who shall be identified at all times,
the sale or redemption of investments in their
accounts and the reinvestment of the proceeds of
such sale or redemption at least once in each
calendar quarter, except as otherwise required in
order to make a permitted withdrawal in cash.
Only for periods prior to September 26, 1996, any
election made by a Participant who is an officer
or director of the Company to sell Class A or
Class B Common Stock of the Company as well as any
election made by such a Participant to purchase
Class A or Class B Common Stock of the Company
with the proceeds of a sale or redemption of other
investments in such Participant's Accounts (i) may
not be made within less than six months before or
after any other election by such Participant to
sell or purchase Class A or Class B Common Stock
of the Company and (ii) may only be made during
the period in each calendar quarter which begins
on the third business day following the release of
quarterly or annual statements of sales and
earnings of the Company and ends on the twelfth
business day following such date.
II. Effective September 26, 1996, Section
7.5(a) is amended to read as follows:
(a) Officers and Directors.
Only for periods prior to September 26, 1996,
Participants who are officers or directors of the
Company and who withdraw Class A or Class B Common
Stock of the Company under this Article, must
either (i) cease further purchases in the Plan of
Class A Common Stock of the Company (or of any
other equity security of the Company which may be
offered for acquisition under this Plan) for six
(6) months or (ii) enter into a written agreement
with the Company to hold such withdrawn stock for
at least six (6) months prior to disposition
thereof.
III. In all respects not amended, the Plan is
hereby ratified and confirmed.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the Company had caused this
Amendment to be executed by its duly authorized
officer and its corporate seal duly attested as of
the day and year first above written.
ATTEST:
Delores B. Rawlings
CROWN CENTRAL PETROLEUM CORPORATION
By Henry A. Rosenberg, Jr.
Chairman of the Board
<PAGE>
THIS FIRST AMENDMENT TO THE CROWN CENTRAL
PETROLEUM
CORPORATION 1994 LONG TERM INCENTIVE PLAN, made on
this 26th day of September , 1996 BY CROWN
CENTRAL PETROLEUM CORPORATION, a Maryland
Corporation:
WITNESSETH
WHEREAS, Crown Central Petroleum Corporation (the
"Company") maintains the Crown Central Petroleum
Corporation 1994 Long Term Incentive Plan,
effective as of January 1, 1994 (the "Plan"). The
Company has the power to amend the Plan and now
wishes to do so.
NOW, THEREFORE, the Plan is amended as follows:
I. Effective September 26, 1996, Section 4(a)(1)
is amended to read as follows:
``
(1) The purchase price of the Stock subject to
the option may be paid, at the Participant's
election, in one or more of the following methods:
(A) in cash, (B) by delivery of a properly
executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to
the Corporation, from the sale or loan proceeds
with respect to the sale of Stock or a loan
secured by Stock, the amount necessary to pay the
exercise price, (C) by having shares of Stock
deducted from the payment to satisfy the
obligation in full or in part, or (D) by
<PAGE>
delivering already owned Stock which the
Participant has owned at least six months. The
number of shares of Stock to be deducted or
delivered shall be determined by the Committee
with reference to the Fair Market Value of the
Stock when the exercise is made. The Committee
may authorize any other methods for the payment of
the exercise price that it determines are
consistent with the Plan's purpose and applicable
law. No fractional shares of Stock will be issued
or accepted.''
II. Effective September 26, 1996, Section
6(a)(4) is amended to read as follows:
``
(4) Withholding. A provision requiring the
withholding of applicable taxes required by law
from all amounts paid in satisfaction of an Award.
A Participant must elect one or more of the
following methods to satisfy the withholding
obligation: (A) paying the amount of any taxes in
cash or through withholding from compensation, (B)
having shares of Stock deducted from the payment
to satisfy the obligation in full or in part, or
(C) delivering already owned Stock which the
Participant has owned at least six months to
satisfy the obligation in full or in part. The
amount of the withholding and the number of shares
to be deducted or delivered shall be determined by
the Committee with reference to the Fair Market
Value of the Stock when the withholding is
required to be made.''
III. Effective September 26, 1996, Section
6(a)(6) is deleted in its entirety.
IV. Effective September 26, 1996, the second
sentence of Section 7 is amended to read as
follows:
``
The Committee may at any time alter or amend any
or all Award Agreements under the Plan to the
extent permitted by law, but no such alteration or
amendment shall impair the rights of any holder of
an Award without the holder's consent, except to
preserve the Award as exempt from Section 16(b) of
the Exchange Act.''
V. Effective September 26, 1996, the first
sentence of Section 8(a) is amended to read as
follows:
``
The Plan and all Awards granted pursuant thereto
shall be administered by a Committee of the Board
of Directors, which Committee shall consist of not
less than two (2) members of such Board of
Directors who are ``Non-Employee Directors''
under
<PAGE>
Rule 16b-3(b)(3) of the Exchange Act and shall be
constituted so as to permit the Plan to comply
with the administration requirements of Code
Section 162(m)(4)(C).''
VI. In all respects not amended, the Plan is
hereby ratified and confirmed.
* * * * *
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by its duly authorized
officer and its corporate seal duly attested as of
the day and year first above written.
ATTEST:
Delores B. Rawlings
CROWN CENTRAL PETROLEUM CORPORATION
By Henry A. Rosenberg, Jr.
Chairman of the Board
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
EXHIBIT 11
EXHIBIT 11
CROWN CENTRAL PETROLEUM CORPORATION AND
SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
COMPUTATION OF EARNINGS PER SHARE
COMPUTATION OF EARNINGS PER SHARE
(thousands of dollars except per share amounts)
Nine Months
Ended
September 30
_________
1996 ____
<PAGE>
___
________
1995
Primary and Fully Diluted
Primary and Fully Diluted
Primary and Fully Diluted
Earnings Per Share
Earnings Per Share
Earnings Per Share
<S> <C> <C>
Net (loss) _
$ _
$______
(2,841
_
_______
_______
(13,634
__
) )
________
Shares outstanding as reported
at January 1,
1996 and 1995, respectively
9,952,95 9,803,09
0 8
Restricted shares held by the
Company at
January 1 (255,300 (105,500
) )
Weighted average effect of
34,728 shares of common
stock issued in 1996 ______
20,502
_
______
Weighted average number of
common shares
outstanding, as adjusted at
September 30
________
9,718,15
__
________
9,697,59
__
_________
________
__
_
2 _
8
_
_
Net (loss) per common share _
$ _____
(1.40
_
_
$____
(.29
) )
______
_____
<PAGE>
</TABLE>
<PAGE>
CROWN
(registered trademark)
Crown Central Petroleum Corporation
Refiners / marketers of petroleum products & petrochemicals
One North Charles Street, P.O. Box 1168, Baltimore, Maryland
21203, (410) 539-7400
EXHIBIT 20
October 31, 1996
RESULTS THIRD QUARTER 1996
Dear Shareholders:
For the third quarter of 1996, Crown Central
Petroleum had a net loss of $3.6 million ($.37
per share) compared to a net income of $.3 million
($.03 per share) for the same period in 1995.
Sales and operating revenues in the quarter
amounted to $398 million compared to $367 million
last year. For the nine months, Crown is
reporting a net loss of $13.6 million ($1.40 per
share) on revenues of $1.2 billion. This
compares to net income of $.4 million ($.04 per
share) before an extraordinary charge for the
early retirement of debt of $3.3 million ($.33 per
share) on revenues of $1.1 billion for the same
period in 1995.
The reported loss for the third quarter was
primarily the result of higher costs for crude and
feed stocks in the world market due to a number of
factors, including unrest in the Middle East.
During the quarter, commodity crude traded in the
range of $20 to $24 per barrel. Henry A.
Rosenberg, Jr., Chairman of the Board, Chief
Executive Officer and President observed,
``
Gasoline and distillate prices lagged the
dramatic crude oil prices increase resulting in
pressure on the company's gross refining margin.''
During this period of rapidly rising crude
oil prices, the company's reported operating
results were negatively impacted by its use of the
LIFO (last-in, first-out) method of valuing
inventory. For the third quarter of 1996, LIFO
negatively impacted net income by $4.3 million,
compared with a $1.6 million favorable impact for
<PAGE>
the same period last year when prices decreased
during the quarter. Accordingly, the company's
cash flow from operations, EBITDAAL (earnings
before interest, taxes, depreciation,
amortization, abandonment and LIFO) was markedly
stronger in the current quarter at $13.9 million
compared to $10.2 million in 1995.
The refining margins on the Gulf Coast
continued during this period at historically low
levels. In order to minimize exposure to price
volatility, refiners have kept crude inventories
at historic low levels. This has necessitated
more spot purchases of crude supplies which adds
further
pressure on pricing. Current supplies of U.S.
oil stocks are about 79 days versus a historic
average of 93 days 10 years ago.
Even with the difficult operating
environment, CrownCen, Crown's marketing unit,
continued to produce positive results.
Merchandise sales at comparable stores were 4.3%
higher and gasoline volumes were 2.2% over the
same period last year. Gasoline and merchandise
margins rose 2.8% and 15.4% respectively over last
year's extraordinary gains. Retail net profit, at
$5.7 million in both periods, remained steady even
though operating expenses increased due to higher
labor costs associated with the new minimum wage
law and the need to maintain a competitive
compensation scale.
Despite this challenging environment,
innovative and creative refining/marketing
strategies can be developed. For example, Crown's
recent arrangements for processing with Statoil
and an ethylene sales agreement with Shell
Chemical provide enhanced opportunities for
reducing the effects of prolonged refining down
cycles to which Crown continues to have exposure.
Crown will actively consider other opportunities
to increase its profitability and market share.
These are challenging times in our industry and
Crown personnel have learned it is not business as
usual
At the Pasadena refinery, the lock-out
continues. On several occasions, Crown has
offered, through the federal mediation service, to
reopen negotiations to discuss the company's July
12 proposal. Unfortunately, the OCAW (Oil,
Chemical and Atomic Workers Union) has failed to
respond. Meanwhile, the maintenance program is on
schedule and refining production at Pasadena is
being maintained at the optimum operating level.
Crown is pleased by the NLRB (National Labor
Relations Board) dismissal of all unfair labor
practice charges filed by OCAW, most notably the
decision that the lock-out was not illegal. While
OCAW has appealed several of the decisions, we are
<PAGE>
confident the NLRB's original findings will be
affirmed.
Performance of all our personnel, under
difficult circumstances, has been excellent and in
the finest traditions of the company. We owe a
debt of gratitude and recognition to all those
involved.
Sincerely,
HENRY A. ROSENBERG, JR.
Chairman of the Board, Chief Executive Officer,
and President
____
NOTE
Due to a revision in recording intracompany
sales transactions during the third quarter of
1996, Sales and operating revenues for the
three and nine months ended September 30, 1996
as originally reported in the Letter to the
Shareholders dated October 31, 1996, have been
revised to exclude the effects of these
transactions. This revision had no effect on
net loss or net loss per share as originally
reported for the three and nine months ended
September 30, 1996.
<PAGE>
<TABLE>
<CAPTION>
Crown Central Petroleum Corporation and Subsidiaries
Dollars in thousands, except per share data
Nine Months Ended Three Months Ended
September 30 September 30
1996 1995 1996 1995
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Sales and operating $ $ 397,889
$ 367,120
$
revenues 1,200,188 1,092,078
(Loss) income before (20,970) 1,929 (4,343) (290)
income taxes
(Loss) income before (13,634) 416 )
(3,636 304
extraordinary item
(Loss) from extraordinary
__
1/
item
---- )
(3,257 ---- ----
Net (loss) income __
2/ (13,634) (2,841) (3,636) 304
<PAGE>
(Loss) income per share (1.40) .04 )
(.37 .03
before extraordinary item
(Loss) per share from ---- )
(.33 ---- ----
extraordinary item
Net (loss) income per )
(1.40 )
(.29 )
(.37 .03
share
Weighted average shares
used in the computation of 9,718,152 9,697,598 9,718,152 9,697,598
(loss) income per share
<FN>
During the first quarter of 1995, the Company incurred an
__
1/
extraordinary loss as a result of the early retirement of its
outstanding 10.42% Senior Notes (Notes). The outstanding
Notes were retired on January 24, 1995 from the proceeds
received from the sale of $125 million of unsecured 10 7/8%
Senior Notes due February 1, 2005.
As a result of decreased crude oil requirement at the
__
2/
Pasadena
refinery, the Company achieved a reduction in LIFO
inventories
during the third quarter of 996 which is expected to be
replaced
by year-end. The impact of this interim LIFO inventory
reduction
was to reduce the net loss for the three and nine months
ended
September 30, 1996 by approximately $2.1 million ($.22
per share).
____
NOTE
Due to a revision in recording intracompany
sales transactions during the third quarter of
1996, Sales and operating revenues for the
three and nine months ended September 30, 1996
as originally reported in the Letter to the
Shareholders dated October 31, 1996, have been
revised to exclude the effects of these
transactions. This revision had no effect on
net loss or net loss per share as originally
reported for the three and nine months ended
September 30, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<PAGE>
CROWN CENTRAL PETROLEUM CORPORATION
OPERATING STATISTICS
Nine Months Ended Three Months Ended
September 30 September 30
1996 1995 1996 1995
--------- ---------- --------- ---------
<S> <C> <C> <C> <C>
COMBINED REFINERY
OPERATIONS
-----------------------
Production (BPD - M) 151 156 152 159
Production (MMbbl) 41.4 42.5 14.0 14.6
Sales (MMbbl) 43.9 40.2 13.8 15.0
Gross Margin ($/bbl) 2.20 2.72 2.46 1.98
Gross Profit ($MM) 96.6 109.3 33.9 29.7
Operating Cost ($/bbl) 2.19 2.47 2.32 2.16
Operating Cost ($MM) 96.3 99.2 32.1 32.4
Net Refining Profit 0.3 10.1 1.8 (2.7)
(Loss) ($MM)
RETAIL
-----------------------
Number Stores 344 348 344 348
Volume (pmps - Mgal) 129 122 133 128
Volume (MMgal) 398 381 138 133
Gasoline Gross Margin 0.13 0.12 0.14 0.14
($/gal)
Gasoline Gross Profit 51.1 45.5 19.2 18.6
($MM)
Merchandise Sales (pmps 24.9 23.9 26.1 24.5
- $M)
Merchandise Sales ($MM) 77.2 74.7 26.9 25.6
Merchandise Gross 28.9 26.3 29.2 27.2
Margin (%)
Merchandise Gross 22.3 19.7 7.9 7.0
Profit ($MM)
Retail Gross Profit 73.4 65.2 27.1 25.6
($MM)
Retail Operating Costs (19.4) )
(16.7 (20.0) (17.5)
(pmps - $M)
Retail Operating Costs (59.9) )
(52.3 (20.6) )
(18.3
($MM)
Retail Non-Operating
Income (Expense) ($MM) 0.0 (3.0) (0.8) (1.6)
Retail Net Profit ($MM) 13.5 9.9 5.7 5.7
WHOLESALE / TERMINAL
NET PROFIT (LOSS) 1.0 0.8 1.3 (0.1)
($MM)
OTHER
----------
<PAGE>
LIFO (Provision) (15.7) 0.3 )
(6.8 2.5
Recovery ($MM)
Corporate Overhead / (20.0) )
(19.1 (6.3) )
(5.7
Other ($MM)
Income Tax Benefit 7.3 )
(1.5 0.7 0.6
(Expense) ($MM)
(Loss) from )
(3.3
Extraordinary Item
($MM)
Total Net (Loss) Income (13.6) )
(2.8 )
(3.6 0.3
($MM)
Depreciation & 24.0 28.6 8.0 9.7
Amortization ($MM)
Net Interest Expense 9.5 8.5 3.3 3.1
($MM)
LIFO Provision 15.7 )
(0.3 6.8 )
(2.5
(Recovery) ($MM)
Loss from Asset 0.1 0.0 0.1 0.2
Disposals ($MM)
Loss from Extraordinary 3.3
Item ($MM)
EBITDAAL ($MM) 28.3 38.8 13.9 10.2
Capital Expenditures 19.8 27.1 5.0 12.4
($MM)
<FN>
BPD = Barrels Per Day
bbl = barrel or barrels as applicable
gal = gallon or gallons as applicable
pmps = per month per store
M = in thousands
MM = in millions
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<PERIOD-TYPE> 9-MOS
<CAPTION>
Crown Central Petroleum Corporation and Subsidiaries
Dollars in thousands, except per share data
<PAGE>
Crown Central Petroleum Corporation and Subsidiaries
Financial Data Schedule
(In thousands, except per share amounts)
Nine Months Ended
_________________________
September 30, 1996
<S> <C>
<CASH> $ (1,892)
<SECURITIES> 25,294
<RECEIVABLES> 107,802
<ALLOWANCES> 1,074
<INVENTORY> 92,539
<CURRENT-ASSETS> 230,388
<PP&E> 636,537
<DEPRECIATION> 336,412
<TOTAL-ASSETS> 565,127
<CURRENT-LIABILITIES> 203,629
<BONDS> 127,529
0
0
<COMMON> 49,920
<OTHER-SE> 126,417
<TOTAL-LIABILITY-AND-EQUITY> 565,127
<SALES> 1,200,188
<TOTAL-REVENUES> 1,200,188
<CGS> 1,118,435
<TOTAL-COSTS> 1,118,435
<OTHER-EXPENSES> 93,230
<LOSS-PROVISION> 323
<INTEREST-EXPENSE> 10,778
<INCOME-PRETAX> (20,970)
<INCOME-TAX> (7,336)
<INCOME-CONTINUING> (13,634)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,634)
<EPS-PRIMARY> (1.40)
<EPS-DILUTED> (1.40)
</TABLE>
