1. Three Issues Facing the Rail Industry S Southwestern Rail Conference Dallas, Texas, January 28, 2010 June 17, 2009 June 17, 2009

2. Executive Summary Overview of Iowa Pacific and Subsidiaries Three Issues Facing the Rail Industry Question and Answer

3. Overview of Iowa Pacific and Subsidiaries All subsidiaries 100% owned by IPH except BARS All subsidiaries 100% owned by IPH except BARS Permian Basin Railways owns 6 railroads –Texas-New Mexico Railroad (2002) –West Texas & Lubbock Railway (2002) –Arizona Eastern Railway (2004) –San Luis & Rio Grande Railroad (2005) –Chicago Terminal Railroad (2006) –Mt. Hood Railroad (2008) Central Car Repair (2002) provides AAR repair services to the railroads and contract repair services to other railroads and private owners Isla Largo, LLC (2002) owns and leases rail equipment High Iron Travel Company (2006) operates private car and special train excursions, and handles customer entertainment functions for the railroads British American Railway Services owns four subsidiaries –Dartmoor Railway –Weardale Railway –RMS Locotec –Devon and Cornwall Railway

4. Review of Business Strategy “We should be called the Kennel Club because we only buy the dogs.” Objective: Achieve long-term growth and stability through acquisitions and “same-store” business development Acquisition drivers –Poor financial performance of target (“we’re the ‘workout’ guys”) –Motivated seller (“a dollar down and a dollar a week”) –Long-term revenue and EBITDA growth prospects (we are patient investors) –Diversification of customer, commodity, geography Business Development tactics –Invest in infrastructure of railroad and customer –Improve and add services –Provide or arrange for equipment –“Stay in front of the customer” – a strong sales presence

5. Other IPH Updates BARS subsidiary Devon and Cornwall Railway recently received its UK Freight License, which permits operation freight trains across the 10,000 UK network

6. Other IPH Updates $17 million upgrade project in Texas and New Mexico nearing completion

7. Other IPH Updates IPH was selected to operate the publicly owned line between Saratoga Springs and North Creek, NY

8. Other IPH Updates Weardale Railway completed a $2 million line-reopening project, and is operating a non-subsidized commuter service between Stanhope and Bishop Auckland, as part of planning permission for a new coal terminal

9. IPH Passenger Services Four US and two UK railroads run passenger services IPH has developed a fleet of excellent passenger cars In addition to scenic train rides, IPH markets numerous special event trains High Iron Travel operates special trains nationwide, and leases cars for use on Amtrak special trains

10. Three Thorny Issues Subsidized Truck Competition Disintegration of the Carload Network Cost and Control of Access to Rail Infrastructure

11. Subsidized Truck Competition

12. Disintegration of the Carload Network

13. Cost and Control of Access to Rail Infrastructure

14. What is an equitable way to develop the optimum use of US rail infrastructure?

15. Questions