RailAmerica, Inc. reported its financial results for the fourth quarter and full year ended December 31, 2005.
Income from continuing operations for the fourth quarter ended December 31, 2005 was $9.4 million, or $0.24 per share compared to $4.3 million, or $0.11 per share for the same period in 2004. Consolidated revenue from continuing operations for the fourth quarter of 2005 increased $15.3 million, or 15.7%, to $112.1 million, from $96.8 million in 2004. On a "same railroad" basis, revenue for the fourth quarter of 2005 increased $8.9 million, or 9.1%, to $105.7 million, from $96.8 million in the fourth quarter of 2004.
Consolidated operating income for the fourth quarter of 2005 increased to $14.0 million, compared to $11.9 million in 2004. The operating ratio for the fourth quarter of 2005 was 87.5% compared to 87.7% in the 2004 quarter. Casualty expense in the fourth quarter of 2005 decreased to $5.6 million from $6.1 million in the same period in 2004. Interest expense in the fourth quarter of 2005 increased to $6.6 million from $4.0 million in the 2004 quarter. The fourth quarter 2005 track maintenance tax credit was $4.6 million. Net income for the fourth quarter of 2005, which includes discontinued
operations, was $7.7 million, or $0.20 per share, compared to $4.3 million, or $0.11 per share in 2004. As a result of the sale of the San Luis & Rio Grande railroad property and the three Alberta railroad properties, the financial results of those railroads have been reclassified to discontinued operations.
For the year ended December 31, 2005, revenue from continuing operations increased 14.7% to $423.7 million from $369.4 million in 2004. Income from continuing operations for the year ended December 31, 2005 was $30.8 million, or $0.80 per share, compared to a loss of $23.1 million or $0.66 per share from continuing operations for the year ended December 31, 2004. The Company believes that presenting the results of 2004 operations adjusted for the refinancing costs, the E&N impairment charge and the former CEO's retirement charge provide a better basis for comparison of 2005's financial results with those of the prior year.
Excluding charges of $12.6 million, ($8.7 million net-of-tax, or $0.25 per share) for the impairment of
the E&N Railway, the $39.5 million (of which $20 million was non-cash) ($26.9 million net-of-tax, or $0.77 per share) for the debt refinancing, and the $6.7 million, ($5.6 million net-of-tax, or $0.16 per share) for the former CEO's retirement in 2004, earnings from continuing operations were $18.1 million or $0.52 per share. The operating ratio for 2005 was 87.9% compared to 84.3% in 2004, including the above 2004 adjustments.
The full year 2005 track maintenance tax credit was $12.7 million. Net income for the year ended December 31, 2005, which includes discontinued operations, was $30.8 million, or $0.80 per share, compared to a loss of $25.9 million or a loss of $0.74 per share for the year ended December 31,
2004.
Charles Swinburn, RailAmerica's Chief Executive Officer said, "Notwithstanding the challenges from our Ohio operations and Class I congestion, I am pleased with our fourth quarter. Those results included our recently acquired Alcoa railroads, whose performance exceeded our initial expectations. I am especially pleased with the safety and training initiatives that we implemented in 2005. In the fourth quarter, casualty and insurance expense declined to 5.0% of revenue from 6.3% in the 2004 quarter."
Michael Howe, RailAmerica's Executive Vice President and Chief Financial Officer said, "Due to the sales of the SLRG and Alberta properties, the results of those railroads are now in discontinued operations. The four properties sold generated revenue of approximately $7.8 million and earnings per share of $0.01 in the fourth quarter 2005, and revenue of approximately $30 million and earnings per share of $0.05 per share for the full year. As of December 31, 2005, our net debt-to-capital ratio was 49.3%, which is well within our desired range of 45 to 55 percent."
