(Source: RailAmerica press release, February 8, 2012)
JACKSONVILLE, Fla. — On February 8, RailAmerica, Inc. reported financial results for the quarter ended December 31, 2011. Fourth quarter 2011 revenue increased 15% to $147.3 million from $127.6 million in the fourth quarter of 2010. Freight revenue increased 5% to $103.3 million with average revenue per car up 7% and carloads down 2%. Non-freight revenue increased 48% to $44 million.
Fourth Quarter Highlights
• Revenue increased 15% versus fourth quarter 2010.
• Net income of $0.29 per share.
• Adjusted net income(1) of $0.33 per share.
RailAmerica President and Chief Executive Officer John Giles, said, “Our solid finish to 2011 gives us significant momentum as we move into the new year. Operating income excluding 45G credits, impairments and asset sales increased 30% in the fourth quarter. This strong increase was driven by continued execution of our pricing and productivity initiatives combined with excellent non-freight revenue growth led by Atlas.”
Giles continued, “Adding to the strong foundation of our core operations, we have achieved excellent traction in corporate development and continue making strides in reducing our debt costs. Last week we announced three investments – the acquisition of the Marquette Railroad and controlling investments in both the Wellsboro & Corning Railroad and the Industrial Waste Group, a transloading operation. In addition, we completed another $74 million redemption of our 9.25% senior notes and announced a tender offer for a substantial portion of the remaining senior notes.”
RailAmerica reported fourth quarter 2011 net income of $15.0 million, or $0.29 per diluted share. This compares to $17.9 million, or $0.33 per diluted share in the fourth quarter of 2010. Noteworthy items impacting the fourth quarters of 2011 and 2010 include:
• 45G tax credits: Congress extended the credits in December 2010 (for 2010 and 2011) resulting in the full-year income statement amount of $17.6 million benefiting the fourth quarter of 2010. In 2011, credits totaling $16.7 million were recognized in the income statement throughout the year with $3.6 million occurring in the fourth quarter. In addition to the income statement impact, a portion of the 45G tax credit was recognized as credits to capital expenditures in 2010 and 2011.
• Amortization of swap termination costs: Non-cash charges of $2.3 million and $4.3 million were recorded in interest expense during the fourth quarters of 2011 and 2010, respectively, due to the June 2009 termination of an interest rate swap agreement.
• Severance costs: Fourth quarter 2011 labor and benefits costs include $1.6 million in executive severance expense.
Taxes: Cash taxes paid in the fourth quarter of 2011 were $1.0 million compared to the financial statement provision for income tax expense of $5.3 million.
For the full year of 2011, operating revenue increased 12% to $551.1 million from $490.3 million in 2010. Full year 2011 net income was $36.9 million, or $0.70 per diluted share. This compares to net income of $19.1 million, or $0.35 per diluted share for full year 2010.
RailAmerica, Inc. owns and operates short-line and regional freight railroads in North America, operating a portfolio of 43 individual railroads with approximately 7,400 miles of track in 27 U.S. states and three Canadian provinces.