RailAmerica, Inc. reported first quarter 2006 earnings from continuing operations of $6.6 million, or $0.17 per diluted share, compared to $4.9 million, or $0.13 per diluted share, for the first quarter of 2005.

The 2006 results include a pre-tax charge of $350,000, or $0.01 per share, to facilitate earlier receipt of funds from two notes held by the Company related to the 2004 sale of its Chilean railroad, Ferronor.

Net income for the first quarter of 2006, which includes discontinued operations, was $15.0 million, or $0.39 per share, compared to $6.2 million, or $0.16 per share in the first quarter of 2005. The 2006 results include the recognition of a $13.4 million pre-tax gain ($8.3 million net of tax) for the expiration of the warranty period related to the sale of Freight Australia and a resulting adjustment to the reserves in discontinued operations.

Consolidated revenue from continuing operations for the first quarter of 2006 increased $13.3 million, or 13.1%, to $115.0 million, from $101.7 million in 2005. On a "same railroad" basis, revenue for the first quarter of 2006 increased $7.3 million, or 7.2%, from the first quarter of 2005. Consolidated operating income for the first quarter of 2006 increased 45% to $14.3 million from $9.9 million in 2005. The operating ratio for the first quarter of 2006 was 87.6% compared to 90.3% in the 2005 first quarter.

Charles Swinburn, RailAmerica's Chief Executive Officer, said, "We are very pleased with our results this quarter. Our "same railroad" revenue growth was led by improving yields related to pricing and commodity mix. Additionally, the railroads that were acquired from Alcoa continue to produce strong results. Finally, we are also seeing positive results from the training and safety initiatives that we rolled out in late 2004, with casualty and insurance expense declining $1.5 million to $4.5 million, or 3.9% of revenue, from $6.0 million, or 5.9% of revenue in the 2005 first quarter."

Michael Howe, RailAmerica's Executive Vice President and Chief Financial Officer said, "We are pleased with the operating income increase of 45% compared to a revenue increase of 13%. Proceeds from the sale of the Alberta properties in January were used to pay down debt, bringing our net debt to capital at March 31, 2006 to 46.8% from 49.3% at December 31, 2005."