<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) APRIL 30, 1999
-------------------------------
RAILAMERICA, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-20618 65-0328006
---------------------- -------------------------------
(Commission File Number) (IRS Employer Identification No.)
301 YAMATO ROAD, SUITE 1190
BOCA RATON, FLORIDA 33431
- --------------------------------------------------------------------------------
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 994-6015
-----------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Attached hereto as exhibit 7(a) and incorporated herein by reference:
(a) Financial Statements of Business Acquired.
Report of Independent Certified Public Accountants
Statement of Operations and Retained Earnings for the year ended June 30,
1998
Balance Sheet as of June 30 1998
Statement of Cash Flows for the year ended June 30, 1998
Notes to financial statements
Unaudited Balance Sheet as of March 31, 1999
Unaudited Income Statement for the nine months ended March 31, 1999
Unaudited Statement of Cash Flows for the nine months ended March 31, 1999
Attached hereto as exhibit 7(b) and incorporated herein by reference:
(b) Pro Forma Financial Information.
Pro forma consolidated balance sheet as of March 31, 1999
Pro forma consolidated income statement for the three months ended March
31, 1999.
Pro forma consolidated income statement for the year ended December 31,
1998.
Notes to pro forma consolidated financial statements.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAILAMERICA, INC.
Dated: July 14, 1999 By:/s/ Gary O. Marino
-------------------------------------
Name:Gary O. Marino
Its: Chairman, CEO and President
<PAGE> 4
V/Line Freight Corporation
Report of Independent Certified Public Accountants
To the Board of Directors and Shareholders
V/Line Freight Corporation
In our opinion, the accompanying balance sheet and the related statement of
operations and retained earnings, and of cash flows present fairly, in all
material respects, the financial position of V/Line Freight Corporation (the
"Company") at June 30, 1998, and the results of its operations and its cash
flows for the year ended June 30, 1998, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Miami, Florida
July 14, 1999
<PAGE> 5
V/Line Freight Corporation
Statement of Operations and Retained Earnings
For the year ended 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
OPERATING REVENUE
Freight revenue 99,777
Other revenue 24,365
--------
124,142
--------
VICTORIAN GOVERNMENT CONTRIBUTIONS
Termination payments 3,300
CSO contributions from government 6,480
--------
9,780
--------
TOTAL REVENUE 133,922
--------
LESS OPERATING EXPENSES
Employee costs 35,534
Supplies and other services 106,589
Depreciation 3,711
--------
Total operating expenses 145,834
--------
Operating loss (11,912)
Interest expense (398)
--------
Pre-tax loss (12,310)
Income tax --
--------
NET LOSS (12,310)
========
RECONCILIATION OF RETAINED EARNINGS
Opening balance --
net deficit after abnormal item and income tax (12,310)
--------
Closing balance (12,310)
========
</TABLE>
The above statement of operations and retained earnings should be read in
conjunction with the accompanying notes.
<PAGE> 6
V/Line Freight Corporation
Balance Sheet
As at 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
CURRENT ASSETS
Cash and bank balances 1,665
Receivables 9,942
Inventories 2,242
-------
Total Current Assets 13,849
-------
NON-CURRENT ASSETS
Plant and equipment 58,657
-------
Total Non-Current Assets 58,657
-------
TOTAL ASSETS 72,506
=======
CURRENT LIABILITIES
Accounts payable and accrued expenses 15,653
Other current liabilities 8,840
-------
Total Current Liabilities 24,493
-------
NON-CURRENT LIABILITIES
Long-term debt 18,800
Other liabilities 7,457
-------
Total Non-Current Liabilities 26,257
-------
TOTAL LIABILITIES 50,750
-------
OWNER'S EQUITY
Contributed capital 34,066
Retained earnings (12,310)
-------
TOTAL OWNER'S EQUITY 21,756
-------
TOTAL LIABILITIES AND OWNER'S EQUITY 72,506
=======
</TABLE>
The above balance sheet should be read in conjunction with the accompanying
notes.
<PAGE> 7
V/Line Freight Corporation
Statement of Cash Flows
For the year ended 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts
Customer receipts 113,997
Interest received 70
Contributions from Government 9,780
--------
123,847
--------
PAYMENTS
Payments to suppliers 93,251
Payroll 35,412
Termination payments 3,300
Borrowing costs 317
--------
132,280
--------
NET CASH USED IN OPERATING ACTIVITIES (8,433)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of assets 133
Payments for assets (8,835)
--------
NET CASH PROVIDED BY INVESTING ACTIVITIES (8,702)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 47,100
Repayment of borrowings (28,300)
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 18,800
--------
NET INCREASE IN CASH HELD 1,665
CASH AT THE BEGINNING OF THE FINANCIAL YEAR --
--------
CASH AT THE END OF THE FINANCIAL YEAR 1,665
========
</TABLE>
The above statement of cash flows should be read in conjunction with the
accompanying notes.
<PAGE> 8
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
ORGANISATION
V/Line Freight Corporation's ("VLF" or the "Company") principal operations
include rail transportation. VLF was established in March 1997 by section 4 of
the Rail Corporations Act 1996. Operations commenced on 1 July 1997. The Company
hauls varied products, principally grain, in Victoria, Australia.
(a) Basis of accounting
The accompanying financial statements have been prepared in accordance with U.S.
Generally Accepted Accounting. All amounts shown are in Australian Dollars.
(b) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(c) Revenue Recognition
Revenue comprises revenue earned (net of discounts and allowances) from the
provision of services. Revenue is recognized when goods and services are
provided to the customer.
Subsidies and grants received from the State are recognized as revenue when the
contribution is receivable.
(d) Inventories
Inventories are carried at the lower of cost and net realizable value. The
weighted average cost method is used to value diesel fuel.
<PAGE> 9
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Plant and Equipment
The Victorian Government's corporatisation of VLF involved assets and
liabilities (excluding accounts receivable and accounts payable) specifically
attributable to the Public Transport Corporation's freight business being
identified and allocated to VLF. The assets and liabilities were included in an
Allocation Statement dated 30 June 1997 (subsequently amended and dated 30 June
1997), pursuant to section 40 of the Rail Corporations Act 1996.
As part of the allocation process, and as stipulated in the Allocation Statement
the total value attributed to assets and liabilities allocated to VLF at 1 July
1997, was $54 million. This was based on a business valuation and required write
down of these assets to their recoverable amount. This write down took place in
the accounts of the Public Transport Corporation prior to transfer.
The methodology used to develop the business valuation was the net present value
of future cash flows. This methodology is based on the premise that the value of
a business is the net present value of its future cash flows.
The future cash flows used in the formulation of the business valuation involve
subjective judgement and analysis and are subject to significant uncertainties
and contingencies, many of which are outside the control of the State and the
Corporation. No representation is made that the future cash flows will be
achieved. Actual future events may vary significantly from the future cash flows
and the assumptions on which they were based.
The business valuation impacting on plant and equipment, which have future
economic benefit, have been allocated across each class of asset in proportion
to their written down values immediately prior to the finalization of Allocation
Statement, as recorded in the fixed asset register of the Public Transport
Corporation at 30 June 1997.
Costs of improvements are capitalized, and expenditures for maintenance and
repairs of properties are expensed as incurred.
(f) Deprecation and Amortization
All non current assets are depreciated or amortized using the straight line
method based upon the estimated useful life of each asset. The estimated useful
are as follows:
<TABLE>
<CAPTION>
ASSET CLASS USEFUL LIVES
----------- ------------
<S> <C>
Commercial vehicles 5 years
Locomotives 15 years
Plant and equipment 10 years
Wagons 25 years
Leasehold improvements 3 to 10 years
</TABLE>
<PAGE> 10
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Provisions for Employee Entitlements
Provision has not been made for non-vesting sick leave as the anticipated
pattern of future sick leave taken indicates that accumulated non-vesting leave
will not be paid.
In determining the liability for employee entitlements, consideration has been
given to future increases in wage and salary rates and VLFS experience with
staff departures. Related on-costs have also been included in the liability.
ANNUAL LEAVE
The provisions for employee leave entitlements for annual leave represents the
amount which VLF has a present obligation to pay resulting from employees'
services provided up to balance date.
LONG SERVICE LEAVE
The liability for employee entitlements relating to long service leave
represents the present value of the estimated future cash outflows resulting
from employees' services provided up to a balance date. Liabilities for employee
entitlements which are not expected to be settled within twelve months are
discounted using the Commonwealth long term bond rate at balance date.
(h) Long-term debt
Borrowings are carried in the balance sheet at their principal amount, interest
expense is accrued over the period it becomes due and is recorded as part of
creditors.
(i) Income Taxes
The Corporation is subject to the Victorian Government's Tax Equivalent System
pursuant to section 88 of the State Owned Enterprises Act 1992.
The Company provides for income taxes pursuant to Financial Accounting Standard
Board Statement No. ("SFAS No.") 109, "Accounting for Income Taxes". Under SFAS
No. 109, deferred income taxes are determined based on the differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates in effect when the differences are expected to
reverse.
The liability method of accounting for income taxes requires a valuation
allowance against deferred tax assets if, based on the weight of available
evidence, it is more likely than not that some or all of the deferred tax asset
will not be realized.
(j) Government Guarantee
While in Government ownership, the Government has undertaken to ensure that
adequate financial accommodation is available for the Corporation to enable it
to meet its obligations as and when they fall due.
(k) Superannuation
The Company makes contibutions to the Victorian and State Superannuation funds
on behalf of its employees. The contributions made are based on amounts
stipulated by the Victorian Government and are recorded as an expense as the
contributions are made in accordance with SFAS No. 87. No separate actuarial
calculation is performed for the Company as the contributions are determined by
the Victorian Government and the Company has no liability beyond the amounts
they have been required to fund.
<PAGE> 11
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
2. OPERATING REVENUE
Other revenue consists primarily of the following:
OTHER REVENUE
Diesel fuel supplied to other organisations 21,030
Interest revenue 70
Supply of other goods and services 3,132
Proceeds from disposal of assets 133
------
Total other revenue 24,365
======
</TABLE>
3. INCOME TAX
The components of the provision (benefit) for income taxes have been calculated
in accordance with Note 1(i) and are as follows:
<TABLE>
<S> <C>
Current --
Deferred (7,665)
------
(7,665)
Change in valuation allowance (7,665)
------
--
</TABLE>
For the year ended June 30, 1998, the effective tax rate differed from the
statutory rate primarily due to the difference in depreciation expense for tax
purposes as well as the 100% valuation allowance on the deferred tax asset.
At 30 June 1998, deferred tax assets and liabilities are comprised of the
following:
<TABLE>
<S> <C>
Deferred tax assets
Net operating loss carryforward 10,170
Provision for Rebates 343
Inventory 62
Deferred tax liabilities:
Provision for employee entitlements (1,309)
Plant and equipment (1,601)
------
7,665
Valuation allowance (7,665)
------
Deferred income tax asset, net --
======
</TABLE>
<PAGE> 12
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
4. INVENTORIES
Vehicle maintenance spares
Fuel 1,631
611
-------
Total inventory
2,242
=======
<CAPTION>
1998
$'000
<S> <C>
5. PLANT AND EQUIPMENT
ASSETS ALLOCATED TO V/LINE FREIGHT CORPORATION
Locomotives 70,718
Wagons 43,025
Plant and equipment 7,915
Commercial vehicles 761
Leasehold improvements --
-------
122,419
-------
AT COST
Locomotives 4,616
Wagons 4,330
Plant and equipment 193
Commercial vehicles --
Leasehold improvements 688
-------
9,827
-------
TOTAL
Locomotives 75,334
Wagons 47,355
Plant and equipment 8,108
Commercial vehicles 761
Leasehold improvements 688
-------
132,246
-------
ACCUMULATED DEPRECIATION
Locomotives 42,855
Wagons 26,197
Plant and equipment 4,968
Commercial vehicles 494
Leasehold improvements 33
-------
74,547
-------
</TABLE>
<PAGE> 13
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
NET BOOK VALUE
Locomotives 32,479
Wagons 21,158
Plant and equipment 3,140
Commercial vehicles 267
Leasehold improvements 655
WORK IN PROGRESS 958
-------
TOTAL NON-CURRENT ASSETS 58,657
=======
6. PROVISIONS
Long service leave 7,540
Annual leave 6,085
Other leave types 2,672
-------
16,297
=======
Comprising of:
Current 8,840
Non-current 7,457
-------
Total provisions 16,297
=======
7. LONG-TERM DEBT
At 30 June 1998, long term debt consisted of the following:
Treasury Corporation Victoria 18,800
-------
Total borrowings 18,800
=======
</TABLE>
Borrowing limits are set each year pursuant to the Borrowing and Investment
Powers Act 1987. The loan held with Treasury Corporation Victoria has no fixed
term and has a floating interest rate. The weighted average effective interest
rate was 5.17%
8. RECONCILIATION OF CONTRIBUTED CAPITAL
<TABLE>
<S> <C>
Stock 2,417
Non-current assets 51,583
-------
Opening balance 54,000
</TABLE>
<PAGE> 14
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
Less:
Employee provisions transferred from the Public
Transport Corporation 19,934
-------
Closing balance 34,066
=======
9. SUPERANNUATION
Contributions made
Victorian Superannuation Fund 44
State Superannuation Fund 1,621
Public Transport Corporation * 380
-------
Total contributions 2,045
=======
</TABLE>
* Reimbursements for superannuation contributions made on behalf of V/Line
Freight Corporation
VICTORIAN SUPERANNUATION FUND (VICSUPER SCHEME)
1. Contributions are made in accordance with the Superannuation Guarantee
(Administration) Act of 1992.
2. Outstanding contributions at balance date $143,000.
STATE SUPERANNUATION FUND
1. Contributions are made in accordance with the actuarial calculations as
advised by the State Superannuation Fund.
2. Outstanding contributions at balance at $143,000.
10. LEASE COMMITMENTS
<TABLE>
<S> <C>
Total operating lease contracted for at balance date but not
provided for in the account
Payable no later than one year 1,398
Payable later than one year, not later than two years 1,398
Payable later than two years, not later than three years 1,316
Payable later than three years, not later than four years 337
Payable later than four years, not later than five years 337
Payable later than five years --
------
Total lease commitments 4,786
======
</TABLE>
<PAGE> 15
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
11. SUBSEQUENT EVENTS
As of 30 April 1999 the assets and liabilities of V/Line Freight were sold to
RailAmerica for $73 million, together with a 45 year lease of infrastructure
assets. This has not resulted in any assets being realised below their book
value.
12. CASH FLOW RECONCILIATION
RECONCILIATION OF CASH USED IN OPERATING ACTIVITIES
<TABLE>
<CAPTION>
1998
$'000
<S> <C>
NET LOSS (12,310)
ADDITIONS:
Depreciation 3,711
Decrease in inventories 175
Increase in creditors and accruals 13,703
--------
17,589
--------
REDUCTIONS:
Increase in debtors 9,942
Profit on disposal of assets 133
Provision for termination payments of annual leave
and long service leave 3,637
--------
13,712
--------
Cash used in operating activities (8,433)
========
</TABLE>
NON-CASH INVESTING ACTIVITIES
On 1 July 1997 assets valued at $54,000,000 and liabilities worth $25,204,000
were transferred from the Public Transport Corporation to V/Line Freight
Corporation. The transfer was pursuant to Section 40(1) of the Rail Corporations
Act 1996. The acquisitions are not reflected in the cash flow statement. The
Corporation has available for use a borrowing limit of $25 million at 30 June
1998. This limit is set by the Treasurer of Victoria.
<PAGE> 16
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
13. TRANSACTIONS WITH OTHER VICTORIAN GOVERNMENT CONTROLLED ENTITIES
(a) The assets and liabilities transferred from the Public Transport
Corporation to V/Line Freight Corporation on 1 July 1997 were held in the
books of the Public Transport Corporation at the following costs and
transferred at the following written down values;
<TABLE>
<CAPTION>
COMMERCIAL PLANT AND
LOCOMOTIVES WAGONS VEHICLES EQUIPMENT
$'000 $'000 $'000 $'000
<S> <C> <C> <C> <C>
NON-CURRENT ASSETS
Cost 70,718 43,025 761 7,915
Accumulated depreciation 40,752 25,036 443 4,605
-----------------------------------------------------
Net book value 29,966 17,989 318 3,310
=====================================================
<CAPTION>
FUEL STOCK
$'000 $'000
<S> <C> <C>
CURRENT ASSETS
Cost 784 1,633
=====================
<CAPTION>
PROVISIONS
$'000
<S> <C>
CURRENT LIABILITIES 25,204
=====================
</TABLE>
<TABLE>
<CAPTION>
(b) During the 1997/98 financial year transactions were
undertaken with other Victorian Government 1998/99
controlled entities. These transactions $'000
are summarised as follows:
INTRA INTER
<S> <C> <C>
Assets 53 1,257
Liabilities 23,484 4,503
Revenues 1,067 21,786
Expenses 28,409 35,120
==========================
</TABLE>
<PAGE> 17
V/Line Freight Corporation
Notes to the financial statements
For the year ended 30 June 1998
14. FINANCIAL INSTRUMENTS
(A) TERMS AND CONDITIONS
FINANCIAL ASSETS
CASH
Cash is held on call at bank
RECEIVABLES
Accounting Policy - see Note 1(c)
Credit sales are payable by end of month following month of invoice.
FINANCIAL LIABILITIES
CREDITOR AND ACCRUALS
Trade liabilities are normally settled by end of month following month of
invoice.
BORROWINGS (Note 8)
Accounting Policy - see Note 1(h)
Borrowing limits are set each year pursuant to the Borrowing and Investment
Power Act 1987. The loan held with Treasury Corporation Victoria has no fixed
term and has a floating interest rate.
(B) NET FAIR VALUES
Cash The carrying amount approximates to fair value due to its nature.
Receivables The carrying amount approximates fair value.
Creditors The carrying amount approximates fair value.
Borrowings The carrying amount approximates fair value.
(C) CREDIT RISK EXPOSURES
The Corporation's maximum exposure to credit risk at balance date in relation to
each class of recognised financial asset is the carrying amount indicated in the
balance sheet.
Credit risk in receivables is managed by:
(i) Enforcing disclosed payment terms
(ii) Debt collection policies and procedures including use of a debt
collection agency.
<PAGE> 18
V/LINE FREIGHT CORPORATION
UNAUDITED BALANCE SHEET
AS OF MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS
Current Assets
Cash $ 220
Accounts receivable 12,017
Inventories 2,130
--------
Total current assets 14,367
--------
Property, plant and equipment 40,079
--------
Total assets $ 54,446
========
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 6,269
Accrued expenses 1,561
--------
Total current liabilities 7,830
--------
TCV borrowings 10,104
Employee provisions 13,042
Equity
Capital 34,321
Accumulated deficit (10,851)
--------
Total equity 23,470
--------
Total liabilities and equity $ 54,446
========
</TABLE>
<PAGE> 19
V/LINE FREIGHT CORPORATION
UNAUDITED INCOME STATEMENT
FOR THE NINE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<S> <C>
Operating revenue:
Transportation revenue $ 54,332
Other revenue 6,146
--------
Total operating revenue 60,478
--------
Operating expenses
Transportation expenses 60,937
General and administrative expenses 3,767
Depreciation 2,412
--------
Total operating expenses 67,116
--------
Operating loss (6,638)
Other expenses 655
--------
Loss before income taxes (7,292)
Provision for income taxes 0
--------
Net loss $ (7,292)
========
</TABLE>
<PAGE> 20
V/LINE FREIGHT CORPORATION
UNAUDITED STATEMENT OF CASH FLOW
FOR THE NINE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (7,292)
Non-cash adjustments
Depreciation 2,412
Changes in current assets and current liabilities
Accounts receivable (5,433)
Inventories (304)
Accounts payable and accrued liabilities (1,973)
Employee provisions 2,449
--------
Cash used in operating activities (10,141)
--------
Cash from investing activities:
Capital expenditures (4,808)
--------
Cash flow from financing activites:
Contributed capital 16,203
Net paydowns in borrowings (2,116)
--------
14,087
--------
Net decrease in cash (862)
Cash as of June 30, 1998 1,082
--------
Cash as of March 31, 1999 $ 220
========
</TABLE>
<PAGE> 21
RAILAMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
V/Line Pro Forma
RailAmerica Freight Adjustments Consolidated
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash $ 2,555 $ 220 $ 12,276 a $ 15,051
Accounts and notes receivable 12,833 12,017 24,850
Inventories 14,820 2,130 16,950
Other current assets 1,980 0 1,980
-------------- ------------- ------------ ------------
Total current assets 32,188 14,367 12,276 58,831
------------
Property, plant and equipment, net 116,545 40,079 85,397 e 242,021
Notes receivable and investment 3,230 0 3,230
Deposit on purchase agreement 18,494 0 (18,494) c 0
Other assets 3,345 0 3,916 a 10,292
3,031 d
Excess of costs over net assets of companies
acquired, net 2,214 0 2,214
-------------- ------------- ------------ ------------
Total assets $ 176,016 $ 54,446 $ 86,126 $ 316,588
============== ============= ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 3,373 $ 0 $ $ 3,373
Current maturities of subordinated debt 254 0 254
Accounts payable 10,347 6,269 16,616
Accrued expenses and income taxes payable 5,431 1,561 6,992
-------------- ------------- ------------ ------------
Total current liabilities 19,405 7,830 0 27,235
-------------- ------------- ------------ ------------
Long-term debt, less current maturities 80,559 0 100,000 a 180,559
Subordinated debt, less current maturities 374 0 3,925 a 6,939
2,640 d
Other liabilities 413 23,147 23,560
Deferred income taxes 8,498 0 8,498
Minority interest 8,303 0 8,303
Redeemable convertible preferred stock 10,692 0 10,692
Stockholders' equity:
Common stock 12 0 12
Additional paid-in capital 40,790 34,321 (34,321) b 43,821
3,031 d
Retained earnings 10,248 (10,851) 10,851 b 10,248
Accumulated other comprehensive income 641 0 641
Less Treasury stock (3,919) 0 (3,919)
-------------- ------------- ------------ ------------
Total stockholders' equity 47,772 23,470 (20,439) 50,803
-------------- ------------- ------------ ------------
Total liabilities and stockholders' equity $ 176,016 $ 54,446 $ 86,126 $ 316,688
============== ============= ============ ============
</TABLE>
The accompanying notes are an integral part of
the pro forma consolidated financial statements.
<PAGE> 22
RAILAMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED INCOME STATEMENT
THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS, EXCEPT EPS)
<TABLE>
<CAPTION>
V/Line PRO FORMA
RAILAMERICA Freight ADJUSTMENTS ADJUSTED
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Operating revenue:
Transportation - railroad $ 9,288 $ 19,009 $ 4,310 a $ 32,607
Manufacturing 10,418 --- --- 10,418
Other 937 3,433 --- 4,370
-------------- ------------- -------------- -------------
Total operating revenue 20,643 22,442 4,310 47,396
-------------- ------------- -------------- -------------
Operating expenses:
Transportation - railroad 4,920 22,976 --- 27,896
Cost of goods sold - manufacturing 7,717 --- --- 7,717
Selling, general and administrative 3,516 --- --- 3,516
Depreciation and amortization 1,250 954 874 b 3,078
-------------- ------------- -------------- -------------
Total operating expenses 17,403 23,930 874 42,207
-------------- ------------- -------------- -------------
Operating income (loss) 3,240 (1,488) 3,437 5,190
Interest expense (1,430) (234) (2,509) c (4,173)
Other income (expense) 242 --- (1,096) d (854)
Minority interest in income of subsidiary (365) --- --- (365)
-------------- ------------- -------------- -------------
Income from continuing operations
before income taxes 1,687 (1,722) (168) (202)
Provision for income taxes 484 0 (680) e (196)
-------------- ------------- -------------- -------------
Income from continuing operations $ 1,203 $ (1,722) $ 512 $ (6)
============== ============= ============== =============
Basic earnings per common share $0.10 $0.00
============== =============
Weighted average common shares 10,118 11,001
============== =============
</TABLE>
The accompanying notes are in integral part of the pro
forma consolidated financial statements.
<PAGE> 23
RAILAMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT EPS)
<TABLE>
<CAPTION>
V/Line PRO FORMA
RAILAMERICA Freight ADJUSTMENTS ADJUSTED
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Operating revenue:
Transportation - railroad $ 30,304 $ 65,144 $ 16,543 a $ 111,991
Manufacturing 39,887 --- --- 39,887
Other 2,700 8,366 --- 11,066
Motor Carrier 4,252 --- --- 4,252
-------------- ------------ ------------- ------------
Total operating revenue 77,143 73,510 16,543 167,196
-------------- ------------ ------------- ------------
Operating expenses:
Transportation - railroad 15,702 80,308 --- 96,010
Cost of goods sold - manufacturing 28,583 --- --- 28,583
Selling, general and administrative 12,399 --- --- 12,399
Depreciation and amortization 3,379 2,780 4,297 b 10,456
Motor Carrier 4,438 --- --- 4,438
-------------- ------------ ------------- ------------
Total operating expenses 64,501 83,088 4,297 151,886
-------------- ------------ ------------- ------------
Operating income (loss) 12,642 (9,578) 12,245 15,310
Interest expense (4,947) (630) (9,995) c (15,572)
Other income (expense) 13 --- (4,245) d (4,232)
Minority interest in income of subsidiary (1,672) --- --- (1,672)
-------------- ------------ ------------- ------------
Income from continuing operations
before income taxes 6,036 (10,208) (1,995) (6,167)
Provision for income taxes 1,570 --- (4,393) e (2,823)
-------------- ------------ ------------- ------------
Income from continuing operations $ 4,466 $ (10,208) $ 2,398 $ (3,344)
============== ============ ============= ============
Basic earnings per common share $0.47 ($0.35)
============== ============
Weighted average common shares 9,553 10,856
============== ============
</TABLE>
The accompanying notes are an integral part of the pro
forma consolidated financial statements.
<PAGE> 24
RailAmerica, Inc. and Subsidiaries
Notes to Unaudited Pro Forma
Consolidated Financial Statements
1 Basis of Combination
The pro forma condensed consolidated financial statements for March 31,
1999 combine the unaudited balance sheets and statements of income of
RailAmerica., Inc. and subsidiaries (the "Company") and V/Line Freight
Corporation ("VLF"). The pro forma condensed consolidated financial
statements for December 31, 1998 combine the statements of income of
the Company and VLF.
2. Pro Forma Balance Sheet Adjustments
The following adjustments were made to arrive at the pro forma
consolidated balance sheet as of March 31, 1999:
a. Record debt issued to fund the acquisition including the deferred loan
costs.
b. Record the elimination of common stock and accumulated deficit of VLF.
c. Eliminate the deposit used to fund the acquisition.
d. Record the value of the warrants and convertible subordinated debt
issued in conjunction with the acquisition.
e. Property, plant and equipment were adjusted based upon the purchase
price, cost of the acquisition, current assets acquired and
liabilities assumed.
3. Pro Forma Statement of Income Adjustments
The following adjustments were made to arrive at the pro forma
consolidated statements of income for the year ended December 31, 1998
and the three months ended March 31, 1999:
a. Record track access fees and infrastructure revenue.
b. Increase in depreciation resulting from the changes in the values and
depreciable lies of the property, plant and equipment.
c. Increase in interest expense reflects the issuance of debt related
to the acquisition. The debt consists of $100,000,000 bridge loan at
an average rate of 11.65% and $6,000,000 of subordinated debt at 10%.
d. Amortization of deferred loan costs over the lives of the appropriate
loans. The deferred loan costs includes 750,000 warrants valued at
$4.04 per warrant and fees paid.
e. Tax effect of adjustments.
