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On Dec. 20, RailAmerica Inc. projected it would earn about $460 million in 2003 revenue — slightly better than 2002's predicted total despite a weak U.S. economy and a long-running Australian drought that's shrinking grain revenue.


The short-line holding company also expects capital expenditures to remain flat, at $65 million, next year.


"Domestically, our North American railroad operations are expected to continue to grow revenue and improve their operating ratio over 2002," said Gary Marino, RailAmerica chairman, president and chief executive officer, in a prepared statement. "Our Chilean operations should continue to benefit in 2003 from our new copper business, and the recently announced,
company-wide cost-cutting initiatives should result in savings of more than $10 million in 2003, which will help offset the decline in Australian grain business."


RailAmerica expects its North American operations, which represent 75 percent of its total revenue, to grow carloads and revenue between 5 percent and 6 percent by diversifying commodity bases, improving interchange service with Class Is and cutting costs.


But the company projects Freight Australia's 2003 revenue will decline about 25 percent compared with 2001, which was a normalized grain year. Grain shipments, which accounted for 44 percent of Freight Australia's 2001 carloads, are expected to drop to less than 20 percent in 2003.


In Chile, RailAmerica predicts Ferronor will grow 2003 revenue between 16 percent and 18 percent compared with 2002 by taking advantage of new take-or-pay transportation contracts garnered in late 2001 and 2002.


Despite mixed financial fortunes, RailAmerica also expects to continue adding properties to its growing roster of railroads next year.


"The market for acquisitions has grown stronger, especially in North America, and we expect to take full advantage of the opportunities that are present while adhering to our strategy of making acquisitions that are accretive, improve our balance sheet and generate free cash flow," said Marino.