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RailAmerica Transfers Ownership of E&N Railway to the Island Corridor Foundation

Posted on: Thursday, 23 March 2006, 09:01 CST

RailAmerica, Inc. (NYSE:RRA), announced today that it will transfer ownership of the right of way corridors of the 181-mile E&N Railway to the Island Corridor Foundation on Friday, March 24, 2006. The Island Corridor Foundation is a non-profit organization which anticipates using the railroad for passenger service. The Island Corridor Foundation is managed by 13 First Nations Groups and 6 municipalities on Vancouver Island. RailAmerica will receive approximately 850,000 ($1 million CAD) in cash and a promissory note for approximately $300,000 ($350,000 CAD) from the sale of contract and regulatory rights associated with the rail operation. RailAmerica anticipates being able to utilize approximately $4.3 million ($5 million CAD) in tax benefits in Canada from the charitable gift donation.

A transition agreement between the parties provides that RailAmerica's subsidiary, E&N Railway, will continue to operate the railroad until operations are transferred to a new railway operator, on or before June 30, 2006.

RailAmerica recognized a $12.6 million pre-tax or ($8.7 million after-tax) impairment charge in the third quarter of 2004 at which time it announced plans to dispose of the railroad. This transaction will have no material impact on RailAmerica's 2006 financial results.

RailAmerica, Inc. (NYSE:RRA) is a leading short line and regional rail service provider with 42 railroads operating approximately 7,800 miles in the United States and Canada. The Company is a member of the Russell 2000(R) Index. Its website may be found at http://www.railamerica.com.

DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements regarding future events that involve risks and uncertainties that could cause actual results to differ materially. Forward-looking statements speak only as of the date the statement was made. The Company assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the Company does update any forward-looking statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements. We refer you to the documents that RailAmerica files from time to time with the Securities and Exchange Commission, such as the Form 10-K, Form 10-Q and Form 8-K, which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release.

Source: Business Wire

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