Kathy Liebler
                        Director of Public Information

C   O   M   M   I   S   S   I   O   N                N   E   W   S             R   E   L   E   A   S   E   

  Contact:  Kathy Liebler, 717-939-9551 Ex 2840

TURNPIKE ANNOUNCES FISCAL 1998-99 FINANCIAL RESULTS 

Harrisburg PA – The Pennsylvania Turnpike Commission’s Operating Results for the 1998-1999 Fiscal Year reflected another year of healthy traffic volumes and revenue growth that resulted in record net operating earnings. On the strength of commercial traffic growth, which increased more than six percent over the previous fiscal year, and solid passenger traffic growth of three percent, the Turnpike’s total revenue grew 4.5 percent to $361.5 million, up $15.6 million over the prior year. This marks the first time that total operating revenue exceeded $350 million in a single fiscal period.

The Turnpike capitalized on its revenue results by managing operating spending to only 1.6 percent growth over the prior year, which was also 1.6 percent under its spending budget. As a result, operating earnings totaled $200.7 million, surpassing the $200 million mark for the first time in the Turnpike Commission’s history.

The Commission’s interest and other income grew 6.4 percent this year, to $15.1 million, due to improved returns from the structured Investment Policies implemented nearly two years ago. Overall, the Turnpike’s robust revenue performance, in combination with prudent spending management and investments, resulted in net earnings growth of $14 million dollars to $215.9 million, up 7.0 percent over 1998’s net earnings level.

Total Turnpike traffic volume, both passenger cars and commercial vehicles combined, exceeded 156.2 million, growing 5.1 million vehicles over the 1997-98’s fiscal year volume. During the June 1^st, 1998 through May 31^st, 1999 period, 136,399,025 passenger cars traveled the roadway, which was 3,927,415 more than the year before. In the same timeframe, commercial vehicles using the Turnpike increased 1,206,058 over the prior year, to a level of 19,833,208 vehicles.

"This is the third consecutive year that we’ve successfully executed according to our financial model, which dictates that we limit expense growth to a rate less than revenue growth, which, of course, guarantees us annual net earnings increases," said Blair Fishburn, Deputy Executive Director for Finance and Administration.

Over the past three years since 1996, traffic on the Pennsylvania Turnpike has grown 13 percent and operating revenue grew 14 percent as a result. By limiting expense growth to just four percent during this time and gaining a five percent increase in interest and other income, the Commission’s net earnings have risen by 21percent. Total three-year revenue growth, using fiscal year 1996 as the base, totaled $43.6 million and generated $38 million growth in net earnings.

"I look at it this way," said Fishburn, "for every dollar of revenue growth since 1996, the Commission’s net expenses grew only thirteen cents. Therefore, eighty-seven cents of net earnings growth were generated from every dollar of revenue growth since 1996, which we’ve directed to the Turnpike’s capital improvement programs."

"We look at our performance using 1996 as the base because fiscal 1997 was the first year that we began implementing our improved management practices, new business processes and strategic financial management programs," said John T. Durbin, Executive Director. "Given this year’s performance and that of the past three years, I have to say that not only are the changes working, but our results clearly prove and validate we’ve been successful at managing the Turnpike as a business and demonstrating continuous improvement along the way."

Fishburn explained that the strategy of minimizing spending growth during times of healthy traffic increases and robust revenue growth, enables the Commission to pump significantly more money into capital programs that will improve both the roadway and services to the Turnpike’s customers.

"The solid net earnings growth achieved over the past three fiscal periods has enabled us to sharply and dramatically increase our funding of highway, technology and infrastructure capital programs," Durbin said. The Commission’s Capital budget for projects within these three program areas for fiscal 1999-2000 is $253.2 million, up $75.5 million from fiscal 1998-99 ’s budget and is $117.7 million greater than actual capital spending in fiscal year 1997-’98. The growth of net earnings has afforded fiscal 2000’s capital budget to a level that is 87 percent higher than the Turnpike capital spending level in fiscal 1998.

Wall Street’s credit rating agencies continue to recognize the Commission’s financial growth and stability with the highest toll road credit ratings given to U.S. tolling authorities. They are "AA-" from Fitch/IBCA, "Aa3" from Moody’s Investor Services and "AA-" from Standard & Poor’s.

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 P.O. Box 67676, Harrisburg, PA 17106-7676         Phone: (717) 939-9551         Fax: (717) 986-9649