RRA Railamerica

RailAmerica (NYSE:RRA) announced today that it has completed the sale of its three railroad properties in Alberta, Canada to Canadian National Railway Company (CN). The three properties are the Central Western Railway, ("CWR"), the Lakeland & Waterways Railway ("LWR"), and the Mackenzie Northern Railway ("MKNR"). RailAmerica received cash proceeds of $22.2 million ($26 million CAD). In addition, RailAmerica may receive up to an additional $3.4 million ($4 million CAD) in future payments, depending on the development of new business on the acquired railways. "We are very pleased with the sale of these railroads. It will enable us to use the proceeds to reduce bank debt and will create financial capacity to acquire railroads that fit our criteria," said Charles Swinburn, Chief Executive Officer of RailAmerica. "We continually review the strategic and economic value of each of our railroads based on these criteria. This sale is a consequence of that continued review." "While future traffic growth prospects for the railroads are good, taking advantage of them would require significant capital investment." said Donald Redfearn, President of RailAmerica. "We determined that the prospect for using that capital to earn returns that meet our targets are better achieved at other railroads we own. CN will make an investment in these railroads to generate new traffic, and will benefit from the long distance line haul of that traffic. This mutually beneficial transaction is representative of our positive working relationship with CN." About the Railroads: The 21-mile CWR owns and operates a switching railway in Central Alberta. The CWR interchanges with CN at Dinosaur (Munson). The 120-mile LWR operates from Edmonton to Boyle and from Boyle to O'Morrow. The LWR interchanges with CN at the Walker Yard in Edmonton. The 600-mile MKNR runs north from Smith, Alberta, located about 130 miles north of Edmonton, to Hay River, Northwest Territories. The MKNR interchanges with CN in Smith. In 2005, the Alberta properties moved approximately 50,000 carloads, generated revenue of $26 million (US) and earnings per share of $0.04. The financial results of the Alberta properties will be reclassified to discontinued operations in RailAmerica's future financial statements. RailAmerica, Inc. (NYSE:RRA) is a leading short line and regional rail service provider with 43 railroads operating approximately 8,000 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.