BC FERRIES RELEASES THIRD QUARTER RESULTS

Revenue Increases by $12.9 Million
Net Loss for Period $14.6 Million

VICTORIA – British Columbia Ferry Services Inc. (BC Ferries) today released its third quarter results for fiscal 2008/09. The company reported a net loss of $14.6 million for the three months ended December 31, 2008, compared to a net loss of $7.8 million in the same quarter last year. Net earnings for the nine-month period ended December 31, 2008 were $47.5 million, down from $67.7 million for the same period in the previous year.

Due to the seasonality of ferry travel, BC Ferries typically generates higher net earnings in the first and second quarters, which are subsequently reduced by net losses in the last two quarters of its fiscal year. The company utilizes the third and fourth quarters to perform upgrades, maintenance and refits and to undertake mandatory inspections on the majority of its vessels.

For the three months ended December 31, 2008, total revenue increased by $12.9 million to $149.4 million while total expenses increased $19.7 million to $164.0 million, compared to the same period last year. Revenues for the nine months ended December 31, 2008 increased $36.9 million to $553.4 million with expenses in the same period increasing $57.1 million to $505.9 million, compared to the nine months ended December 31, 2007. Of this increase in expenses, over $32 million is due to higher fuel expense primarily as a result of a lift in fuel prices as established by the British Columbia Ferries Commissioner. Amortization and interest expense have increased $17.2 million and $12.5 million respectively, due to our significant asset renewal program.

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