The railroad released its 2006 financial statements late last month, and reported a net income of $10.4 million, a 17 percent decrease compared to the year before.

The railroad attributed the decline to a drop in business from its main customer, Flint Hills Resources, which operates a refinery near Fairbanks. The company has faced a $250 million liability relating to tariffs on North Slope oil purchased for the refinery.

As a result of the uncertainty, the company bought less oil for refining, a move that resulted in fewer fuel shipments by the railroad. The railroad had projected a $7 million decline in profits.

But after last summer's oil spill, and the discovery of major corrosion in the gathering station pipelines on the Slope, the railroad saw an unexpected boost in revenues. The railroad was tasked to oversee three rail-barge sailings to transport replacement pipe.

Overall, freight service revenues reached $89.6 million, a 5 percent decline compared to the previous year. The railroad transported 4 million tons of gravel, the third highest volume ever. A recent purchase of 26 new flat cars is expected to increase trailer and container transports.

A slight increase in passenger service also helped lessen the sting. Passenger service revenue hit $21 million in 2006, attributed in part to changes that allow easier Internet bookings and the ability to purchase first-class upgrades online. More than half a million people rode the rails last year.

Total assets hit $714 million, a 24 percent increase over 2005. Assets increased due to the corporation's capital improvement plan that includes replacing track, straightening curves along the line and building new passenger depots.

The Alaska Railroad for the first time took on public debt in 2006, after issuing $76.4 million in tax-exempt bonds. Money was used to expedite track rehabilitation work, buy new passenger coaches and to fund the next phase of its collision avoidance system. The Legislature approved the sale of up to $165 million in bonds.

Real estate earnings remained steady, netting more than $6.5 million to the corporation. The railroad said it anticipates strong property development interest on holdings in the coming years.

The railroad had its safest year ever, it said. Reportable injuries came in below the goal of 2.5 per 200,000 work hours. The corporation saw fewer cases of derailments, vehicle accidents and employee injuries.

For 2007, freight revenues are projected to reach $92.3 million while passenger revenues should hit $23.6 million.