News for Customers, Connections and Friends of Anacostia Rail Holdings and Affiliates

ApexAANACOSTIA

Welcome to the fi rst issue of our new newsletter—Apex—designed to keep you on top of what’s happening at Anacostia Rail Holdings.

This is part of our overall effort to improve communi-cation at Anacostia. Our objective is to let you know who we are and what we’re working on.

To begin, Anacostia is a company on the move. Elsewhere, you’ll read about recent management and marketing changes at fi ve of our six railroads.

Like many organizations, Anacostia is staffed with exceptional people—eager to help. Our sales directors will be visiting with customers on a regular basis to dis-cuss your needs, our service, and how—together—we can plan for the future.

In other news, Anacostia is in the pro-cess of updating its website with fresh, easier to fi nd information about our com-pany. Among the improvements will be new maps, a complete database of indus-trial sites, and help for customers new to railroading.

Of interest to our Class I railroad part-ners will be timely and relevant informa-tion about our customers, including their transload and other capabilities.

Happily, and as you will read else-where, customers once again are ex-panding with new facilities and more traffi c for Anacostia’s railroads. We’ll continue to profi le customers and the new opportunities they present to our connections.

Communication is a two-way process. We hope Apex will encourage you to ask questions, schedule visits, and above all, consider the possibilities.

We’re all looking forward to a safe and productive 2013.

APRIL 2013

In this issue:TOP MANAGEMENT, MARKETING MOVES—Changes at Chicago South Shore & South Bend, Louisville & Indiana, New York & Atlantic, Northern Lines, and Pacifi c Harbor Line. (See MANAGEMENT, page 2).

NEW YORK & ATLANTIC SURVIVES SANDY—storm’s shutdown gives NYA time to inspect tracks, serve customers—minus passenger trains. (Above).

CSS GROWS EAST END—South Shore freight increased service from three to fi ve days a week, December 1, 2012. (See SOUTH SHORE, page 3).

ST. CLOUD SHUTTLE—Northern Lines starts serving ADM-Benson Quinn’s new 3.2-million bushel elevator at St. Cloud, Minn. (See ADM, page 2).

ANACOSTIA’S NEW LOGO—The Anacostia organization has a new logo. How it came about is explained. (See NEW LOGO, page 4).

VIEWPOINT

No. 1

Eric Jakubowski

New York & Atlantic survives SandyThe New York & Atlantic was the fi rst rail-

road in the New York metro area to restore service after Hurricane Sandy struck Long Is-land Monday, October 29, with 90 mph winds and a record 14-ft. storm surge.

“We had an amazing recovery,” says NYA President Paul Victor. “We enjoy good rela-tions with the Long Island Rail Road. They al-lowed us to operate before passenger trains.”

Despite personal turmoil, fl ooding and power outages, NYA employees answered the call. “Everyone called to work, came to work,” says Victor. “We’re very proud and grateful for their efforts.”

Clearing the tracksThe next morning, NYA ran inspection

trains, clearing tracks and freeing crossing gates—tied up as a precaution against wind damage. “In two days,” notes Victor, “we were able to run our network at restricted speed.”

CLEARING TRACKS— New York & Atlantic’s Engineering crew removes trees and other debris from the Bay Ridge branch in Brooklyn. NYA resumed operation beginning October 30, the day after Sandy blew through town.

NYA delivered cars of propane, food and beer to amazed Long Island customers. “Nor-mally, the fi rst train on the line was ours,” Victor added. “There were no delays because there were no passenger trains anywhere.”

Starting November 1, NYA assembled trains for CSX, loaning them locomotives un-til they could get power down from Selkirk yard in Albany, N.Y. CSX and Providence & Worcester restored service later that week. “By the end of the week, we had service all the way out to the east end,” says Victor. “We were ready before our customers were.”

Remarkable supportLIRR provided remarkable support, ac-

cording to Victor. “They raised weight restric-tions to 286,000 lbs. for many commodities including brick, dry wall, feed, lumber and steel.” Outbound debris shipments jumped to summertime levels.

www.anacostia.com

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Management moves at AnacostiaA retirement and several vacancies

triggered top management and market-ing changes on fi ve of Anacostia’s six railroad affi liates.

Louisville & IndianaMike Stolzman, formerly president

of Pacifi c Harbor Line, is the new presi-dent of the 106-mile Louisville & Indiana Railroad, effective October 1, 2012. He succeeds John Secor, who retired after heading L&I since its startup in 1994. Also, John Goldman joined L&I as vice president, succeeding Dan Rickel. John had been superintendent for CN at Fond du Lac, Wis.

Pacifi c Harbor LineOtis Cliatt II, vice president at

PHL since 2010, took over from Mike Stolzman as president. Joel Torres, NY&A chief transportation and commer-cial offi cer 2007-2010, succeeds Otis as

Otis Cliatt II Joel TorresJohn GoldmanJustin ChalichJames Bonner Andy LaurentChuck Compton

VP, effective February 18.New York & Atlantic

James Bonner, general manager at Connecticut Southern Railroad, joined New York & Atlantic January 1, 2013 as director of marketing and sales.

Chicago South Shore & South Bend

At the Chicago South Shore & South Bend Railroad, Chuck Compton be-came chief administrative offi cer. Andy Laurent, manager growth initiatives, succeeded Chuck advancing to director marketing and sales, effective January 1.

Northern Lines Railway

Anacostia’s Northern Lines based in St. Cloud, Minn., has a new president, Justin Chalich. He was promoted from general manager, effective September 12, 2012, succeeding Dan Rickel.

Sidman named ARH general counsel

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Mark Sidman is Anacostia Rail Hold-ings’ general counsel—a new post effec-tive January 1, 2013.

A founder and former partner with Weiner Brodsky Sidman Kider PC, Mark has provided more than 30 years of legal assistance to rail industry clients, includ-ing Anacostia.

Based in Washington, D.C., Mark’s re-sponsibilities include legal guidance, reg-ulatory matters, transaction negotiations and related material.

“He will strengthen our team as we continue to grow,” says Anacostia Pres-ident and CEO Peter Gilbertson.

Mark holds a B.A. in economics from Hobart College and a J.D. from the Uni-versity of Pittsburgh School of Law.

Mike Stolzman

ADM-Benson Quinn opens St. Cloud shuttle elevatorSt. Cloud, Minn. is the site of

ADM-Benson Quinn’s new shuttle loader grain elevator.

The 3.2-million bushel facility, served by Northern Lines Railway, loaded its fi rst train December 8, 2012. Since then, ADM has been loading about one 110-car shuttle train a week of corn and soy-beans from regional farmers for export to Asian markets, via BNSF Railway, and to

ST. CLOUD SHUTTLE—A BNSF unit grain train is loaded at ADM-Benson Quinn’s new 3.2-million bushel facility in St. Cloud, Minn., served by Northern Lines Railway.

markets from Illinois to Mexico.Featuring six bins and grain drying ca-

pabilities, the $20 million facility has a teardrop loop track to speed loading.

“Construction involved building 5,000 feet of new track,” notes Justin Chalich, NLR president. “It was a pret-

ty complicated deal.”The elevator is located in St. Joseph

Township on an 80-acre site, near In-terstate 94 and Minnesota Highway 23, served by NLR’s Rockville branch.

ADM operates 191 elevators with ca-pacity exceeding 420 million bushels.

April 2013

ApexPUBLISHED BY

Anacostia Rail Holdings

224 S. Michigan Ave., Suite 600Chicago, IL 60604

312-341-1026

www.anacostia.com

Peter A. Gilbertson, President

Eric Jakubowski, Chief Commercial Officer

APEXAPEXAANACOSTIA

3

South Shore grows the east endIt was the classic chicken or the egg

dilemma—Chicago South Shore & South Bend wanted to grow its east end busi-ness, but customers countered that more and better service would have to come fi rst.

“The burden of proof was on us,” re-calls Andy Laurent, South Shore’s new director of marketing and sales. “We hired additional crews and established a new plan—increasing service from three to fi ve days a week.” After three months, business is up, reports Andy. “It is work-ing very well.”

Getting new business on a railroad that’s been moving freight for 97 years doesn’t come easy. Most of the line west of Michigan City is squeezed by the south-ern tip of Lake Michigan, urban areas and Indiana Dunes National Lakeshore.

New growth

New growth has to spring from South Shore’s east end, including the 20-mile Kingsbury branch that CSS bought from Norfolk Southern in 2000. The branch has fi ve industrial development sites.

The main line has two prime industrial parks at New Carlisle, including a 160-acre site owned by CSS. Five Star Sheets is the largest customer, manufacturing corrugated cardboard for box plants. Other fi rms include Helena Chemical, which supplies agricultural chemicals,

TRACKS IN THE SNOW—This wayfreight on South Shore’s 20-mile Kingsbury branch, southeast of Michi-gan City, is making tracks to LaPorte, Stillwell and Kingsbury, Indiana—communities offering fi ve prime industrial sites totaling 589 acres.

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and Unifrax—maker of fi lter and insula-tion medium. Both rely on South Shore for inbound shipments.

New spur track

360 Degree Metal Recycling plans to build a spur track soon, which will let them load between 500 and 1,000 car-loads of scrap annually, according to Andy. “We’re looking forward to that.” In addition to Arcelor Mittal, CSS has joint-line access to all the lake front mills.

CSS has connections

“Because most of our customers use more than one railroad,” notes Andy, “we have a big advantage as a neutral connec-tion with every railroad serving Chicago.”

Since Indiana became a right-to-work state in the last six months, it’s gener-ated a lot of interest with industries and manufacturing concerns. “They’re look-ing at Indiana again,” says Andy, who adds, “We have a very friendly economic environment.”

Bonner boards NY&AAfter joining the New York & Atlantic

Railway January 1 as director of market-ing and sales, James Bonner can truly say, “This isn’t Kansas anymore.”

He’s held a lot of posts since leaving Kyle Railways in Phillipsburg, Kans. in 2008 and brings solid operating and mar-keting savvy to the Big Apple—most re-cently as general manager of Connecticut Southern in Hartford, Conn.

“My initial goal is carload growth,” says James. “I’ve been visiting customers, see-ing how they can utilize rail more often.”

James works closely with Rita Var-guez, senior manager-commercial and planning. “Rita’s technical assistance and back offi ce support are invaluable,” says James. “She optimizes the team.”

Compton, Laurent get new slots at South ShoreIt’s something old and something new for

Andy Laurent and Chuck Compton. Andy became director of marketing and

sales at the Chicago South Shore & South Bend, January 1. Chuck is chief adminis-trative offi cer—a new post and right-hand man to CSS President Andrew Fox.

Broader role

Chuck, who has been with CSS for about 20 years, has a new role: minding South Shore’s rolling assets. “Principally, that’s nearly 600 freight cars,” says Chuck. He continues to handle coal pricing for the NIPSCo and Arcelor Mittal accounts.

In addition, he oversees human re-sources, contracts, easements and ven-dor relationships. He’ll also represent the railroad at civic, economic and busi-

ness organizations. Andy, who was South Shores’s manager

of growth initiatives, now serves as chief commercial offi cer—responsible for sales and pricing of everything that isn’t related to coal. This includes steel, building mate-rials, chemicals and forest products.

Business and industrial development

“I will continue to be in charge of busi-ness development and industrial develop-ment,” explains Andy, “plus taking over all sales, other than NIPSCo.”

Andy’s real estate activities have been transferred to Chuck.

Andy joined CSS in 2008 from the City of South Bend, where he had been project manager for six years in the Economic Development Division.

April 2013 Apex AANACOSTIA

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The Anacostia FamilyANACOSTIA & PACIFIC COMPANY, INC.— is a transportation development and con-sulting fi rm with offi ces in Chicago and New York City. It has developed eight new U. S. railroads since it was found-ed in 1985. In each case, Anacostia & Pacifi c negotiated the acquisition terms, developed the business plan and recruit-ed senior management. Its principal sub-sidiary is Anacostia Rail Holdings.

ANACOSTIA RAIL HOLDINGS—is a short line rail- road holding company. Its railroads operate in C a l i f o r n i a , I l l i n o i s , I n d i a n a , Kentucky, Minnesota , New York and Texas.

CHICAGO SOUTH SHORE & SOUTH BEND RAILROAD— is headquartered in Michi-gan City, Ind., operating 127 route miles of line between Chicago and South Bend, Ind. CSS operations date to 1903. Fol-lowing bankruptcy in 1989, the track and passenger operations were taken over in 1990 by Northern Indiana Commut-er Transportation District (NICTD) and freight service was acquired by Anacos-tia & Paci f ic . Sou th S h o r e serves m a j o r steel and utility facilities and the Illinois International Port in Chicago. http://www.southshorefreight.com

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Anacostia’s new logoNorthern Lines’ new bossAnacostia & Pacifi c CEO Peter Gilb-

ertson agreed with the graphics consul-tant—the company’s logo didn’t fi t with the others. “It looks like something from the 1980s,” recalls Peter. “It didn’t look like a railroad logo.”

He wanted to keep the letter A. It’s a Union Pacifi c ‘City of’ font—also, a deeper, stronger PMS 3425 green. “The circle and diamond design is a railroad classic,” says Peter. “Simple. Effective.”

Justin Chalich was promoted from gener-al manager to president of Northern Lines Railway, effective September 12, 2012.

He joined NLR, when the railroad be-gan operations in 2005. Prior to that, he worked for Northern Plains Railroad in Fordville, N.D. in a variety of transporta-tion and mechanical assignments.

Justin served as NLR’s manager of maintenance and operations from 2006 until September 2011, when he became general manager.

In addition to studies at Moorhead (Minn.) State University, Justin complet-ed railroad training at the University of Wisconsin-Madison, University of Ten-nessee-Chattanooga, and the Michigan State Certifi cate Program in Railway Management.

GULF COAST SWITCHING COMPANY—p r o v i d e s s w i t c h i n g and track maintenance s e r v i c e s at Robinson Yard in Dayton, Tex. GCS was acquired by Anacostia in 2008.

THE LOUISVILLE & INDIANA RAILROAD—was formed in 1994 and operates 106 miles of former Pennsylvania Railroad m a i n l i n e and is the most di- rect route b e t w e e n L o u i s v i l l e and India- napolis. LIRC serves nu- merous major companies and the port of Jeffersonville, Ind. The L&I has been designated a future high-speed rail corridor by the U.S. Department of Transportation. http://www.anacostia.com/lirc/lir.html

NEW YORK & ATLANTIC RAILWAY—was formed in 1997 to operate freight trains on the lines owned by Long Island Rail Road. NYA serves a diverse customer base and shares track with the d e n s e s t passenger system in the United States. Its innovative labor agree-ments permit effi cient operations.http://www.anacostia.com/nya/nya.html

NORTHERN LINES RAILWAY—based in St. Cloud, Minn., began operations in 2005. NLR op- erates 17 route miles of former BNSF t r a c k , which was built by the Great Northern R a i l w a y as part of its St. Paul, Minn. to Fargo, N.D. main line.http://www.anacostia.com/nlr/nlr.html

PACIFIC HARBOR LINE, INC.—began oper-ations in 1998 and provides rail-switch-ing services for the Ports of Long Beach and Los Angeles, originally served by the Southern Pacifi c, Union Pacifi c and the Santa Fe railways (now Union Pacifi c and B N S F ) . C o m b i n e d , this is the largest con-tainer port complex in the United States and the eighth busiest in the world. PHL serves nine on-dock intermodal terminals and provides dispatching services for about 90 intermodal or unit trains per day. http://www.anacostia.com/phl/phl.html

RAIL LOGISTICS SERVICE, INC.—is an equipment fi nancing company estab-lished in 2001 to acquire and secure fi nancing for locomotives, freight cars and other equipment leased to the other subsidiaries.

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L&I is looking upLouisville & Indiana is undergoing

some changes, reports Mike Stolzman, the railroad’s new president.

“L&I’s car velocity is faster, dwell time for freight cars has been reduced, on-time performance has improved, a new train dispatching system has been im-plemented and offi ces at Columbus and Clagg Tower (Ohio River Bridge) have been renovated.”

Track improvements

As a result of trackwork, all slow or-ders have been removed on the railroad and 20 highway grade crossings have been upgraded to current standards.

“There has been a 20-to-30 percent increase in traffi c, versus a year ago,” adds Mike.

April 2013