When RailAmerica was formed in 1986, the Company was operating in an environment where exceptional growth opportunities had evolved for those in the short line railroad industry, brought about by the passage of the Staggers Rail Act of 1980. This Act gave the Interstate Commerce Commission (ICC) the authority to exempt certain transactions from regulation and streamlined procedures involved with the purchase and sale of rail properties. Consequently, RailAmerica's initial strategy was directed at the acquisition and operation of short line and regional railroads. The first two such lines, the Huron and Eastern Railway Company and the Saginaw Valley Railroad Company, were acquired in 1986 and 1991, respectively.

In November of 1992, RailAmerica had its initial public offering and was listed on the NASDAQ, thus setting the foundation for greater expansion of the company. Its third railroad, the South Central Tennessee Railroad, was acquired in February of 1994 and included 50 miles of rail line.

During 1994 and 1995, RailAmerica added significant personnel to its management team at both the officer and director levels. The Company also acquired two additional short line railroads, Dakota Rail in Minnesota and the West Texas and Lubbock Railroad in Texas. The Company's aggressive growth continued in 1996 with the acquisition of three additional short line railroads across the United States. These included the Minnesota Northern Railroad, the Cascade & Columbia River Railroad Company in Washington and the Otter Tail Valley Railroad in Minnesota.

In early 1997, RailAmerica acquired its first railroad outside of the U.S. with the purchase of the 1,400-mile Chilean railroad, Ferronor. Ferronor operates the only north-south railroad in Northern Chile, extending from LaCalera near Santiago to its northern terminus at Iquique, approximately 120 miles south of Peru.

Expansion of the Company continued with the purchase of the 60-mile St. Croix Valley Railroad Company in August 1997 from Burlington Northern Santa Fe Railroad (BNSF). This purchase represented RailAmerica's eleventh railroad, its fourth railroad in Minnesota, and the third overall transaction between BNSF and RailAmerica. In October 1997, RailAmerica's subsidiary, RailAmerica Australia P.T.Y. Ltd., through its membership in the Great Southern Railway Limited consortium, expanded into Australia with the acquisition of the 4,000-mile transcontinental Australian passenger rail service concession.

In August 1998 RailAmerica acquired the 13-mile Ventura County Railroad Company, located in Oxnard, California. In early 1999, the Company acquired its thirteenth railroad, and its first in Canada, with its purchase/lease of the 181-mile Esquimalt and Nanaimo Railway Company (E&N) from Canadian Pacific Railway, located on British Columbia's Vancouver Island.

In April 1999, RailAmerica completed its largest international acquisition with the purchase of Australia's V/Line Freight railroad from the Victorian Government for $103 million, which included the purchase of 107 locomotives and over 2,800 railcars. This regional railroad provides rail freight service across southeastern Australia over approximately 3,150 miles of track. Now known as Freight Australia, operations commenced at this railroad on May 1, 1999.

RailAmerica completed another large North American acquisition in July 1999 with the purchase of the outstanding stock of Canada's third largest rail system, RaiLink Ltd., for $70 million. On July 26, 1999, the Company commenced operations of this 2,500-mile rail system, which operates or has interests in 11 regional/short line railroads serving the provinces of Alberta, the Northwest Territories, Ontario, Québec and New Brunswick and the Northwest Territories.

On September 3, 1999, RailAmerica took over the operations of the 369-mile, East Peoria, Illinois-based Toledo, Peoria & Western Railroad (TPW), one of its largest U.S. rail operations. This transaction had a purchase price of approximately $18 million. The acquisition included 22 locomotives, numerous rail cars, vehicles, rail maintenance equipment and two fully-equipped intermodal facilities.

On February 4, 2000, RailAmerica completed its acquisition of RailTex, North America's largest short line freight railroad company at that time. The $325 million acquisition marked a new era in the history of the global short line and regional railroad industry. Upon closing of the RailTex acquisition, RailAmerica became the largest operator of short line and regional freight railroads in the world, with 39 short line and regional railroads operating approximately 11,000 total track miles in the United States, Canada, Australia and the Republic of Chile.

In December 2001, RailAmerica announced that its majority-owned Chilean railroad, Ferronor, would commence operating the Potrerillos Railway on January 2, 2002, under a new agreement with Codelco, the world's largest copper producer. In connection with this agreement, Ferronor announced the signing of a new 15-year, US$69 million take-or-pay transportation contract with Codelco. The Potrerillos Railway operates 91 kilometers (57 miles) of rail line from Potrerillos, Chile, to a connection with Ferronor at Diego Almagro, Chile, with continuing service for 159 kilometers (99 miles) on Ferronor to the Port of Barquitos.

In January 2002, after nine years of trading on the NASDAQ, RailAmerica commenced trading on the New York Stock Exchange under the ticker symbol "RRA."

In January 2002, RailAmerica acquired StatesRail, a leading short line operator in the U.S, for $90 million. The acquisition added eight railroads (including seven freight railroads and a tourist railroad in Hawaii) with 1,647 miles of track in 11 states to RailAmerica's portfolio. It also included approximately 100 locomotives and 2,600 railcars.

Also in January 2002, RailAmerica acquired ParkSierra, an operator of three short line railroads operating 751 miles of track in four western states, for $48 million, adding three more railroads and 31 locomotives to its West Coast Region.

In May 2002, RailAmerica successfully completed a $475 million senior secured loan financing, which consisted of a six-year $100 million revolving credit facility and a seven-year $375 million term loan. The financing allows RailAmerica to reduce its required principal amortization, lowering interest costs and increase unused availability. The financing proceeds were used to prepay the Company's existing senior indebtedness and for other general corporate purposes.

In June 2003, RailAmerica acquired two new rail lines for a total of $22 million. On June 1, service commenced on 288 miles of rail line contiguous to RailAmerica's Alabama & Gulf Coast Railway (AGR). Purchased from the Burlington Northern and Santa Fe Railway Company, this line runs from Amory, Mississippi to Mobile, Alabama, connecting directly with AGR at Kimbrough, Alabama.

Also in June 2003, RailAmerica purchased 154 miles of rail line in southern Colorado from the Union Pacific Railroad. The new line will be operated by the San Luis & Rio Grande Railroad Company (SLRG), a RailAmerica subsidiary. The SLRG acquisition brings the total number of railroads owned and operated by RailAmerica to 49. The company now operates 49 railroads on approximately 17,700 route miles in the United States, Canada, Australia and Chile, including track access arrangements.

In January 2004, RailAmerica acquired the assets of The Central Michigan Railway Company (CMGN) for $25.3 million. The Central Michigan Railway operates 100 miles of rail line from Midland, Michigan south to Durand, Michigan. The CMGN is being operated as part of our Huron and Eastern Railway.

In February 2004, RailAmerica completed the sale of its Chilean railroad interest, Ferronor for $18.1 million.

On August 1, 2004, the Chicago, Fort Wayne and Eastern Railroad (CFE) commenced operations. The CFE was acquired through a lease agreement with CSX Transportation, Inc. The 276- mile line runs from Crestline, OH to Tolleston, IN and directly connects with RailAmerica's Indiana & Ohio Railway (IORY). Traffic on the line also interchanges with CSXT, Norfolk Southern and Indian Harbor Belt Railroad Company.

In August 2004, RailAmerica completed its US $204 million sale of Freight Australia.

In October 2004, RailAmerica completed the acquisition of the 107-mile Midland Subdivision from CSX Transportation. The line runs between Columbus and Cincinnati, Ohio and is operated as part of the Indiana & Ohio Central Railroad.

In December 2004, RailAmerica completed the sale of its Arizona Eastern Railway Company and West Texas and Lubbock Railroad Company, Inc. subsidiaries to Permian Basin Railways, Inc.

In October 2005, RailAmerica announced the completion of its acquisition of four short line railroads from Alcoa for a purchase price of $77.5 million in cash. The four railroads, which operate a total of 25 miles, serve Alcoa aluminum manufacturing operations in Texas and New York and a former Alcoa owned specialty chemicals facility in Arkansas.

In December 2005, RailAmerica sold its Colorado property, the San Luis and Rio Grande Railroad (SLRG).

In January 2006, RailAmerica sold its Alberta, Canada properties, the Mackenzie Northern Railway (MKNR), the Lakeland & Waterways Railway (LWR) and the Central Western Railway (CWR).