Greg Imbruce gimbruce@jefco.

com (203) 708-5804

HIGH YIELD RESEARCH

ENERGY Refining & Marketing November 11, 2004

Crown Central Petroleum Corp.

www.crownfleet.com
Coupon 10.875% Maturity 2/1/05 Principal ($MM) $125.0 Seniority Sr. Notes Ratings Caa3/NR Offer Price 97.0 YTW 25.23%

Rating: Strong Buy

Spread 2,317 Next Call Now Call Price 100.00

Update: Pension Settlement & Pasadena Sale Enhance Asset Coverage

Equity Value: Privately Held Financial Data

FYE 12/31: EBITDA (US$MM) Q1 Q2 Q3 Q4 Year Net Debt (WorkCap) ($MM) EBITDA/Interest (EBITDA-Capex)/Interest Net Debt/EBITDA 2003 ($10.0) $6.4 $21.5 ($15.1) $2.8 $196.7 0.2x NM 70.0x 2004E $9.8(A) $21.2(A) $11.4(E) $15.9(E) $58.3(E) $196.2 3.9x 3.4x 3.4x 2005E $9.4(E) $25.0(E) $15.8(E) $10.7(E) $61.0(E) $166.0 4.7x 3.5x 2.7x

Summary:
Crown Central Petroleum announced on 11/5/04: (i) a $45.0 mm Pension Settlement with the PBGC; and (ii) the proposed sale of the Company's Pasadena Refinery (expected to close prior to YE) for $42.5 mm. These are positive events for the Sr. Noteholders in that the values provide an incremental $22.4 mm (18 pts) of net asset value above that estimated in our 10/6/04 report, increasing the Sr. Notes' asset coverage to 1.46x from 1.28x. We continue to recommend the Sr. Notes as a Strong Buy at 97 (25.2% YTM) based on the better than expected Pension Settlement and Pasadena sale. In addition, in the case Crown is unsuccessful in selling the Tyler refinery in a timely manner, we believe the Company will use a combination of cash-on-hand and issue $55 mm of New Secured Notes (excluding any additional working capital facilities) to meet the 2/1/05 maturity. We anticipate that the unencumbered refining assets would serve as collateral for the New Notes (the Bank Facility is currently secured only by working capital) and are encouraged that such a transaction would be well received noting todays strong High Yield market and healthy Refining industry. We believe the Rosenbergs, the sole shareholder, will continue to take the necessary actions to avoid default and fund maturity of the Sr. Notes in order to preserve their equity value. Additionally, we anticipate the Noteholder Group, apparently headed by the Quadrangle Group, will provide the necessary flexibility to avoid a fire sale of the Tyler refinery and, if required exchange their $50 mm in Sr. Notes (40% of the amount outstanding) for a similar amount of New Notes. Pension Settlement The Company reached a $45.0 mm settlement with the PBGC for the underfunded Pension liability - the resolution of this lingering liability was $20.9 mm lower than our $65.9 mm estimate and well below the $121 mm and $51 mm estimated by the PBGC on a terminated basis and the Companys external actuaries on an ongoing basis, respectively. Pasadena Sale On 10/22/04, Crown executed an asset purchase agreement (Agreement) with Pasadena Refining Systems, Inc. (PRS) for the sale of the Pasadena refinery to PRS for $42.5 mm plus the value of crude and product inventory at the refinery on the date of closing. The closing may be deferred until no later than 12/31/04. In our 10/6/04 report, we valued the Pasadena refinery at $47.9 mm or $5.4 mm higher than the actual sale price. Recognize, however, that $6.9 mm (50% of Environment Liabilities - Continued Ops.) of environmental liabilities were included in the liability section of our analysis. On a net basis, therefore, the Pasadena sale was $1.5 mm higher than our estimated $41.1 mm net Pasadena value. Noteholder Approval The Agreement is subject to Sr. Noteholders of at least 70% of the outstanding principal amount effectively approving the Pasadena sale.

Source: Jefferies & Co. estimates and Company Reports

Company Description:
Crown Central Petroleum Corporation (Crown), based in Baltimore, Maryland, is an independent refiner and marketer of petroleum products in the U.S., privately owned by the Rosenberg family through its parent company, Rosemore, Inc. (Rosemore). The Company has been in liquidation mode since early 2003 and through 2Q04 sold substantially all of its retail sites (gasconvenience stations) and most of its product terminals, with the balance expected to close in 3Q04. We understand the Company is currently in negotiations on its remaining assets - the Pasadena and Tyler refineries. These two medium complexity Gulf Coast refineries have a combined capacity of 152,000 barrels of crude oil per day (BPD): Pasadena (Pasadena, TX) is a 100,000 BPD facility (8.4 Nelson Complexity), and Tyler (Tyler, TX), a 52,000 BPD facility (9.0 Nelson Complexity). During 2003, Pasadena and Tyler averaged production output of 76,075 BPD (76% Utilization) and 52,534 BPD (100%+ Utilization), respectively. Both refineries are operated to generate a product mix of approximately 88% higher margin fuels. When operating to maximize the production of light products, the product mix at both refineries is approximately 55% gasoline, 33% distillates, 6% petrochemical feedstocks, and 6% slurry oil and petroleum coke.

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JEFFERIES HIGH YIELD RESEARCH

Energy Refining & Marketing

Pasadena Escrow Amounts Approximately $7.0 mm of the $42.5 mm purchase price for Pasadena will be escrowed at closing for certain claims that may be made by PRS against Crown under the representations, warranties, and indemnitities contained in the Agreeement. Similarly, PRS will place $7.0 mm in escrow at closing as security for its obligation to indemnify Crown against primarily environmental liabilities which it is assuming from Crown. 50% of the amount remaining after any claims will be released on the first anniversary of the closing date and the remainder18-months after the closing date. Pasadena Refining Systems, Inc. PRS is an affiliate of Astra Oil Company, Inc. of Huntington Beach, California. PRS parent is Transcor S.A., a subsidiary of Belgiums Compagnie Nationale a Portefeuille.

Variance - Pasadena Sale & Pension Settlement (EXPECTED CASE) 10/6/04 Adj. For Adj. Est. Actual 10/6/04 ASSETS Working Capital Cash $105.1 -$105.1 +Acct. Rec. $106.4 -$106.4 +Other Asset Sales/Assets $14.2 -$14.2 -Accts. Payable & Accrued Liabilities $170.5 -$170.5 WorkCap - Cont'd Operations $55.2 -$55.2 WorkCap - Discontinued Ops. $24.7 -$24.7 Total WorkCap $79.9 -$79.9 Inventory Crude Oil Inventory Other Inventory Total Inventories Refineries Tyler Refinery Pasadena Refinery Total Refineries 2H04E FCF Total Assets LIABILITIES Pension Settlement Other/Environmental Total Liabilities Net Value to Sr. Nts. Sr. Nts. O/S Equity Value Future Recovery

Variance

--------

$62.7 $3.3 $66.0

----

$62.7 $3.3 $66.0

----

$42.7 $47.9 $90.6 $16.7 $253.2

-($5.4) ($5.4) -($5.4)

$42.7 $42.5 $85.2 $16.7 $247.8

-($5.4) ($5.4) -($5.4)

$66.1 $27.2 $93.3 $159.9 $125.0 $34.9 128%

($20.9) ($6.9) ($27.8) $22.4 $125.0 NA 18%

$45.2 $20.3 $65.5 $182.3 $125.0 $57.3 146%

($20.9) ($6.9) ($27.8) $22.4 $125.0 NA 18%

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J E F F E R I E S H I G H Y I E L D R E S E AR C H

Energy Refining & Marketing

I, Greg Imbruce, certify that all of the views expressed in this report accurately reflect my personal views about the subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
This material has been prepared by Jefferies & Company, Inc. ("Jefferies") a U.S.-registered broker-dealer, employing appropriate expertise, and in the belief that it is fair and not misleading. It is approved for distribution in the United Kingdom by Jefferies International Limited ("JIL") regulated by the Financial Services Authority ("FSA"). The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore except for any obligations under the rules of the FSA, we do not guarantee its accuracy. Additional and supporting information is available upon request. This is not an offer or solicitation of an offer to buy or sell any security or investment. Any opinion or estimates constitute our best judgment as of this date, and are subject to change without notice. Jefferies and JIL and their affiliates and their respective directors, officers and employees may buy or sell securities mentioned herein as agent or principal for their own account. This material is intended for use only by professional or institutional investors falling within articles 19 or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 and not the general investing public. None of the investments or investment services mentioned or described herein are available to other persons in the U.K. and in particular are not available to "private customers" as defined by the rules of the FSA or to anyone in Canada who is not a "Designated Institution" as defined by the Securities Act (Ontario). STRONG BUY: Significant price appreciation is expected in this situation, or significant outperformance relative to the balance of the issues in thesector/industry is expected over a near term period. BUY: These bonds are expected to outperform other issues in the sector/industry group over the intermediate term. HOLD: These bonds are fairly valued currently, If owned, there is not an apparent catalyst to sell in the intermediate term. In the interim, the bond is likely to perform as well as the average bond in the sector/industry. SELL: There is a significant likelihood that these bonds will underperform relative to its sector/industry in the near term. NR: Not Rated

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HIGH YIELD RESEARCH

HIGH YIELD AND SPECIAL SITUATIONS GROUP RESEARCH

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