 
5 September 2007
DM&E, IC&E, and Cedar American Rail Holdings Overview
For legal and regulatory historical reasons, our rail system is
comprised of three entities (the DM&E Railroad, the IC&E Railroad, and Cedar American Rail Holdings) that are operated as a
single system under common ownership and common management. Roughly 1,000 employees drive the system. 150 of those are Cedar American
employees, which means they work for both operating railroads together, providing operations, marketing, IT, and other administration
support. The two operating railroads account for the balance of the other 1,000 employees. The system collectively owns over 8,000 rail
cars and about 200 locomotives. Sioux Falls is headquarters for the entire system.
DM&E Railroad began operations in 1986. Today it is one of the largest regional (Class II) railroads in the United States, with
1,103 miles of track located principally in South Dakota and Minnesota. The DM&E's mainline extends from the Mississippi River at
Winona, Minnesota, across southern Minnesota and central South Dakota to Rapid City. In 1996 acquired more than 200 miles of track from
UP, extending from Colony, Wyoming, through Rapid City to Crawford, Nebraska. Of the 1,103 miles, 908 miles are owned by the DM&E
and the remainder are operated under long-term trackage rights agreements.
IC&E Railroad began operations is 2002. It has 1,400 miles of track in Illinois, Iowa, Minnesota, Missouri, and Wisconsin.
IC&E's main lines extend from Chicago to Kansas City, Misouri, and from Sabula, Iowa, on the Mississippi River northwesterly to
Minneapolis-St. Paul using trackage rights over the Canadian Pacific from LaCrescent, Minnesota, to the Twin Cities.
Branch lines (known as the "Corn Lines") extend from Marquette, Iowa, west to Mason City and Sheldon, Iowa, and from Austin,
Minnesota, to Jackson and Rosemount, Minnesota.
History
1983-1985 - Chicago & NorthWestern Railroad files to abandon a South Dakota segment of what is today the DM&E
Railroad. South Dakota US Senator Larry Pressler opposes the abandonment and wins the case before the ICC in 1985. Later in 1985
Senator Pressler strikes a deal with C&NW that leads to the creation of DM&E as an alternative to abandonment.
September 1986 - DM&E was formed through the acquisition of 826 miles of rail infrastructure and 139 miles of trackage rights, and
certain buildings, locomotives, vehicles, equipment, and inventory from the C&NW. C&NW had operated the railroad for over 75
years. Lombard Investments, Inc.'s affiliated investor group provided the equity capital for the transaction and currently controls the
Company.
June 1994 - DM&E completed the restructuring of certain operating agreements, and a subsequent recapitalization.
1995-1996 - DM&E issued revenue bonds with the South Dakota Railroad Authority and borrowed under a bank facility to
finance the upgrade of approximately 100 miles of its mainline track between Wessington and Pierre, South Dakota.
May 1996 - DM&E acquired the Colony Line from the UP.
February 1998 - DM&E filed its application with the STB seeking authority to construct approximately 260 miles of new railroad
line, primarily in southwestern South Dakota and northeastern Wyoming, to access low-sulfur western coal reserves for
movement to Midwestern and Eastern utilities (the "PRB Project").
December 1998 - STB issued decision that the PRB Project meets the statutory transportation related requirements and is consistent with
the criteria for a Certificate of Public Convenience and Necessity.
November 2001 - STB published the final EIS that is favorable to the PRB Project.
January 2002 - STB issued its Decision granting final approval to the PRB Project.
February 2002 - IC&E executes a definitive Asset Purchase Agreement to acquire the assets of IMRL railroad.
July 2002 - IC&E begins Operations.
March 2003 - STB grants Common Control of DM&E and IC&E.
December 2003 - FRA-RRIF Loan (refinancing and capital) Approved.
April - December 2004 - $65 Million Dollar FRA-RRIF Capital Program.
Current Operations
The system transports nearly 250,000 carloads of freight yearly through the upper Midwest. The principal commodities handled include
grain and grain products (approximately 37% of total carloadings), coal (17%), chicals (11%), bentonite and kaolin clay (8%), steel
products (7%), scrap materials (7%), and forest products (5%). Much of the system's traffic base is comprised of bulk commodity
traffic. However, both its customer and commodity base are diversified, and it is generally the most cost-competitive
transportation option for its customers.
Structure and Management
Cedar American Rail Holdings, DM&E, and IC&E are organized broadly into five functional departments: (1) Transportation
(train operations), (2) Mechanical (locomotive and car maintenance), (3) Engineering (track maintenance), (4) Finance & Accounting,
and (5) Marketing. The senior management team has tremendous depth and a diverse experience base that provides for operational
excellence, as well as long-term vision and strategic focus. The seasoned management team is led by Kevin V. Schieffer,
who has been DM&E's CEO since 1996 and has been intimately involved with the creation and development of the Company since 1983,
three years prior to its start-up. After a 1983 abandonment battle, Mr. Schieffer worked directly with the Chicago &
North Western Railroad in 1985 to develop the compromise agreement that led to the creation of the DM&E. He continued to be
involved in significant C&NW/DM&E issues in the first decade of DM&E operations. As legal counsel for the Company in 1993
he led negotiations with C&NW that led to its successful re-financing and freight car fleet acquisition. He also
negotiated the 1996 acquisition of the 203-mile Colony Line (which today runs north-south through Rapid City
on DM&E's west end). In addition, the seven executive officers have over 170 years of combined experience in the railroad industry.
DM&E maintains a cost-effective operating structure. The Company benefits from its freedom from traditional industry
work rules and wage rate agreements and operates two person train crews. DM&E maintains a base track maintenance crew and contracts
for major projects during the construction seasons. DM&E maintains cost-efficient on-line locomotive and
car repair facilities and contracts for major repairs as needed.
Management Team
Kevin V. Schieffer has been the President and Chief Executive Officer of the DM&E since 1996, and is now the President and CEO of
Cedar American Rail Holdings. Mr. Schieffer has a long history and close association with the Company starting in 1983, three years
prior to its start-up. Following a two-year abandonment fight, he initiated negotiations with the C&NW
Railroad in 1985, which led to the creation of the DM&E the following year. From 1982 to 1987, Mr. Schieffer served as counsel to
South Dakota Senator Larry Pressler for the Senate Commerce, Science, and Transportation Committee, which involved various rail policy
issues. From 1987 to 1991, he served as Senator Pressler's chief-of-staff. He also taught at Georgetown University Law
School as an Adjunct Professor of Law. Former President Bush appointed Mr. Schieffer as U.S. Attorney for South Dakota in 1991, in
which position he served until 1993. From 1993 to 1996, he served as chief legal counsel to the Company, during which time he was
involved in the recapitalization of the Company in 1994, and the acquisition of the 203-mile Colony line in 1996. Mr.
Schieffer received his BA from the University of South Dakota (Phi Beta Kappa, University Scholar) and received his law degree from
Georgetown University (International Law Review).
Lynn A. Anderson has been Vice President - Marketing, Strategic Planning, and Public Affairs of the DM&E since its inception and is
now the Vice President of Marketing for Cedar American Rail Holdings. Mr. Anderson is also the Corporate Secretary of the Company.
Prior to joining the DM&E, Mr. Anderson spent 15 years with the C&NW Railroad, lastly as General Manager - Grain Marketing and
Pricing. Mr. Anderson has a Bachelor of Science degree in Industrial Administration from Iowa State University. Mr. Anderson is a
graduate of the College of Transportation and Distribution in Chicago, is the past President of the Minnesota Regional Railroad
Association, served thirteen years on the Board of Directors of the Brookings Municipal Utilities and served on the Board of Directors
of the South Dakota Chamber of Commerce and Industry. Mr. Anderson also serves on the Surface Transportation Board's National Grain Car
Council. He is a registered practitioner before the Surface Transportation Board.
Kurt V. Feaster joined the DM&E in 1992 as Chief Financial Officer and is now Senior Vice President of Finance and CFO for Cedar
American Rail Holdings. Prior to joining the DM&E, Mr. Feaster was CFO of the Wheeling & Lake Erie Railway (1990-1992) and
Montana Rail Link (1987-1990). Mr. Feaster was Deputy Director of the Railroad Accounting Principles Board (a special U.S.
Congressional agency). Prior to service with the federal agency, he held various positions with the Soo Line, Bessemer and Lake Erie,
Duluth, Missabe and Iron Range, and Elgin Joliet and Eastern Railroads. Mr. Feaster is a CPA and has a Bachelor of Science degree in
Business Administration from Illinois State University and a master's degree in Business Administration from the University of Illinois
and has taught accounting courses for the University of Minnesota (Duluth and Minneapolis campuses) and the University of Pittsburgh.
Steven O. Scharnweber joined the DM&E in October 1995 as its Manager of Track Maintenance and is now Vice President of Engineering
and Chief Engineer of Cedar American Rail Holdings. Mr. Scharnweber has over 30 years of experience in the railway industry,
principally with the C&NW in various engineering positions. He is a member of the American Railway Engineering and Maintenance of
Way Association and the American Welding Society.
Daniel L. Goodwin joined the DM&E in January 1997 as its Chief Mechanical Officer and now is the CMO for Cedar American Rail
Holdings. Mr. Goodwin has 33 years of experience in the railroad industry, most recently as Superintendent of Motive Power for the
Wheeling & Lake Erie Railway Company. Mr. Goodwin has also held various positions at the Norfolk & Western Railroad. Mr.
Goodwin also teaches classes in electrical and mechanical training.
Richard D. Awe was hired as the Chief Transportation Officer for IC&E and DM&E in July 2002. Mr. Awe has over 37 years in the
railroad industry working in various positions with the Milwaukee Road, Soo Line, Canadian Pacific, and IMRL. He has an extensive
background in dispatching and train operations. Richard has developed a good working relationship with other railroads within the
industry. Mr. Awe also serves on the board of directors of the Kansas City Terminal Railroad.
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