8 November 2005
Canadian Pacific Railway Sells Southern Indiana Rail Line to Indiana Rail Road Co.
Canadian Pacific Railway announced today it has executed an agreement to sell its
92.3-mile track from Fayette, which is near Terre Haute, to Bedford, Ind., to Indiana Rail Road Co.
The sale of the Latta Subdivision is expected to close in the first half of 2006, pending approval of the U.S. Surface Transportation
Board. The sale includes trackage rights over CSX from Chicago to Terre Haute and from Bedford to Louisville, Ky. Terms were not
disclosed, but the sale will generate a modest gain for CPR and is part of the company's continuing efforts to streamline operations
and drive efficiency. The sale will not have a material effect on earnings.
Indiana Rail Road is an Indianapolis-based regional freight carrier operating a 155-mile railroad between
Indianapolis and Newton, Ill., over former Illinois Central track. In 1985, their last full year of operation, the Illinois Central
moved about 12,000 carloads. Since the acquisition, INRD has grown the business to more than 105,000 annual carloads. In the past 10
years, INRD has invested more than $50 million in upgrading track, bridges and its locomotive fleet.
INRD connects with all major Class I rail carriers in its territory: CSX Transportation, Canadian National, CPR, and Norfolk
Southern. INRD also connects with Indiana Southern Railroad, Central Railroad Co. of Indiana and Louisville & Indiana Railroad Co.
With the sale, INRD will acquire a connection with Paducah & Louisville Railway Inc.
"Indiana Rail Road sees this acquisition as an opportunity to grow rail transportation for the benefit of customers and assist
them in finding additional new markets for their products," said John Rickoff, EVP and COO of INRD. "We already have
relationships with many of the companies using this line. We look forward to providing customers with greater efficiencies and quality
transportation solutions."
The announcement comes six months after Canadian Pacific Railway said it would begin examining opportunities to improve rail service
in southern Indiana and the Louisville market for the benefit of CPR and its shippers. The company invited expressions of interest from
other companies.
In May, CPR said it would examine new operating arrangements with other railroads or the sale of the rail line to another operator.
"We are pleased with the sale to INRD and believe it will benefit the shippers in the region along with ensuring ongoing
employment for the employees on the line either with INRD or elsewhere on CPR's system" said Dave Craig, general manager business
development for CPR.
"We are excited about the growth opportunities the acquisition of this line will bring," said Thomas G. Hoback, INRD's
president and CEO. "Indiana Rail Road has a proven history of robust investment in the redevelopment and growth of its existing
lines. We see strong opportunities in Terre Haute and other on-line points to bring our unique brand of scheduled service
and innovative marketing ideas to these customers. Latta Yard at Jasonville will eventually become a major hub of the combined system,
and we will increase our presence in the Terre Haute market with high quality service."
Canadian Pacific Railway has about 90 employees in southern Indiana, with most working out of terminals at Jasonville and Terre Haute.
INRD will offer jobs to some CPR employees, and CPR has a sufficient need for employees at other locations on the CPR system within the
Midwest to provide work for anyone who does not go to work for INRD.
About Indiana Rail Road
INRD's primary businesses include transporting coal from southwestern Indiana and the Powder River Basin in Wyoming to several online
coal-fired electric utilities. The company also ships products for Marathon Ashland's refinery at Robinson, Ill.,
refrigerators from General Electric's plant in Bloomington, Ind., and moves raw materials into the Hershey chocolate plant in Robinson.
Other commodities handled include lumber, plastics, aggregates, food products, scrap metal and recyclables as well as grain and grain
products.
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