Presented by Dan Sabin, Iowa Northern Railway

1. Iowa Northern Railway Company
Presentation to Iowa DOT-DED’s
Moving Iowa Forward
April 24, 2012
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2. Moving Iowa Forward
April 24, 2012
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3. Iowa Northern Philosophy
• Run the Company like a business, not like a railroad.
• Encourage customers to grow their business with great service
and fair, competitive freight rates.
• Create new business.
• Be the solution.
• Tap the strengths of
each rail connection.
• Empower employees
to do their best in safe and
creative ways.
• Support the State and
Communities served.
• Take some risk.
• Facilitate new
industries and growth.
• Be easy to do
business with.
• Repeat, don’t act like a
railroad.
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4. Iowa Northern Railway Company
• IANR covers North Eastern Iowa with 195 route miles
• Sabin Group acquired the line in 1994 with about 15,000
revenue cars handled
• Should hit nearly 65,000 carloads in 2012
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5. Iowa Northern Railway
• IANR is a unique short line
with multiple rail
connections providing
independent access to North
American Rail System.
• Nearly 1 billion bushels of
corn within its market area.
• Cedar Rapids processors
need 350 million bushels of
corn annually, about 1
million per day.
• Aggressive in economic
growth and development in
market area.
• Averaged 18% annual growth
between 2003 and 2011,
despite two years of major
flood recovery.
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6. IANR has multiple railroad connections with
BNSF, CN, CP, IAIS (through CIC) and UP
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7. The Company’s Current Markets
• Grain
• Ethanol
• Wind Components
• Machinery
• Chemicals
• Fertilizer
• Bulk Products
• Food Products
• Bio-Mass
• Distillers Grains
• Corn Oil
• Trans-load Commodities
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8. Originally just a grain hauler, IANR elevators have
increased volumes of grain from 230 cars per month
in 1994 to nearly 2,000 per month today.
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9. Grain Traffic
• IANR will handle nearly 27,000 carloads of corn,
soybeans and oats in calendar year 2012 compared to
10,500 carloads in 2001. Most of the traffic moves to
Cedar Rapids, providing high utilization of hopper cars.
• If Cedar Rapids was an independent nation, it would rank
third in the world in the importation of corn, behind only
Japan and Mexico.
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10. IANR’s Grain Market
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11. Ethanol Related Products
Iowa Northern has grown from zero car
loads of ethanol related products in 2005 to
16,000 annual car loads in 2011.
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12. Three large fertilizer terminals have been
established along the line with more planned
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13. Iowa Northern Wind Energy Business
• IANR wind component
distribution center at Manly is the
largest in North America.
• Future wind business is
contingent on extension of tax
credits for wind energy.
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14. IANR handles Wind, Ethanol, Corn Oil, feed
additives and Chemicals at Manly Terminal
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15. IANR provides rail to truck transload service at several
locations, with new infrastructure at Waterloo and Manly
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16. Bryant Yard Trans-loading
•Base customer trans-loading food grade and industrial starch.
We are also handling other food grade traffic.
•Two new reload spurs have been built adjacent to IANR’s Bryant
Yard in Waterloo to provide the ability to grow the business.
Additional commodities: Powdered clay, tomato paste,
magnesium chloride, lube oil, bentonite clay.
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17. IANR provides container handling service
for inbound wind components at Manly
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18. IANR delivers John Deere Tractors from
Waterloo to UP at Cedar Rapids and Manly
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19. What’s new at IANR?
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20. Continued upgrading of the Railroad
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21. Acquisition of Non-Powered Slugs to
reduce emissions and fuel burn
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22. Forest City-Belmond Line
Saved the line from abandonment
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23. Iowa Northern is pleased with initial traffic volumes of
the 30 mile Garner Subdivision Acquisition
• Purchased the line from UP and started operations in
November, 2011 as a joint venture with the
community.
• IANR expected losses for the first year of
operations—modestly profitable from the start.
• More traffic handled in first month than the line
handled in the past five years.
• Averaging nearly 100 loads per month in first five
months of operation—corn and fertilizer.
• The line is well suited for industrial growth.
• A gateway for a new market territory for IANR. 23

24. Bio-Mass Material
• Regulators will require at least 10-20% biomass fuel for coal burning
power plants and a whole new industry is developing to convert crop
waste into all types of fuels.
• Iowa Northern has approximately 12 million tons of excess crop waste
within 30 miles of the line, providing an opportunity to generate up to
75,000+ carloads annually.
• Biomass will provide exceptional new revenue base to farmers.
• Biomass products could be the next major commodity handled by
railroads.
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25. Future Plans
• Butler Logistics Park
• Manly Logistics Park
• Garner-Forest City
Logistics Park
• Palo Logistics Park
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26. Manly Logistics Park will be the major
logistics campus in the State of Iowa
Manly Logistics Park UP Spine Line
UP connection to Manly Yard
Manly Terminal
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27. Manly Logistics Park
• A major development adding 162 acre park dedicated to
reducing costs to shippers in North Iowa and Southern
Minnesota
• Breaking ground this summer
• Sand drying and transfer station
• Trans loading facility for misc. commodities including lumber,
machinery, distillers grains, edible beans, stuffing containers
• Steel Distribution Center-Steel coils and plates inbound by
rail, outbound by truck to Midwestern markets
• Cold storage and freezer warehouse of major size with rail
cross dock
• Substantial intermodal facility for Northern Iowa-Southern
Minnesota
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28. Base case issues
• IANR receives regular inquiries for rail service to supplement or
replace current moves of freight by truck, particularly to Texas,
Mexico and California.
• Northern Iowa-Southern Minnesota is major origination area of
agricultural, food and manufactured goods with heavy daily
volumes to California, Texas and Mexico, both for domestic
consumption and export.
• Dray access to existing intermodal terminals is very expensive to
Northern Iowa-Southern Minnesota shippers with outbound-
inbound imbalance of 10 to 1, requiring higher dray costs for one-
way loaded moves. The Twin Cities, however is a larger
consumption area to create inbound-outbound load balances for
the region as a whole.
• The Upper Midwest does not have efficient access to good
intermodal service to many desired markets.
• Existing intermodal service in the region is not geared for Texas-
Mexico-California, so rail is not an option for most shippers.
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29. A new intermodal terminal for
Northern Iowa and Southern Minnesota
• Manly is an excellent location for a new intermodal facility in an
untapped market territory. The Upper Midwest area is truck
oriented without suitable direct intermodal service to Texas, Mexico
and California.
• Upper Midwestern dray costs are too expensive to existing
intermodal facilities, so trucks retain almost all of the market to
California, Texas and Mexico.
• MLP is close enough to the markets to be the immediate solution
for significant intermodal business with a high consumption point in
the Twin Cities Metropolitan area and high product origination in
Northern Iowa and Southern Minnesota.
• With the lack of intermodal facilities in the region, Manly could
become a favorable railhead funnel from a large gathering area.
• IANR can work closely with connecting lines to develop a strong
feeder volume into their existing intermodal networks. 29

30. Manly is a strategic location for a new Intermodal Terminal
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31. TWIN CITIES
Highway Miles Manly To: WINONA
Waterloo 94 ROCHESTER
LA CROSSE
SIOUX FALLS Rochester 95
Minneapolis 124
Winona 125 MANLY
Des Moines 130 MASON CITY
La Crosse 145
Cedar Rapids 148
Dubuque 177 WATERLOO DUBUQUE
SIOUX CITY Sioux Falls 214
Sioux City 223
Davenport 229 CEDAR RAPIDS
Omaha 265 DAVENPORT
DES MOINES
OMAHA
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32. High dray costs from the area currently prevents
shippers from conversion of their freight to rail
Manly based trucking support would lower dray costs
between MLP and the Twin Cities providing greater volume
Mason City, IA to: Highway Miles Est. Cost Per Mile Est. Dray Cost
Minneapolis 138 1.75-2.50+FS 250-550
Rochelle, IL 305 2.50+FS 1,048
Kansas City 462 2.25+FS 1,430
Chicago 350 2.50+FS 1,203
Joliet 358 2.50+FS 1,230
Council Bluffs 247 2.50+FS 850
MLP 12 Hourly 75
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33. Property currently available and under IANR control
UP Spine Line
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34. MLP layout design with intermodal facility included
Sand Processing Steel Distribution
Loop Track
Intermodal Facility
Trans-Load Tracks Cold Storage Warehouse & Cross Dock
• Major cross dock and warehouse operation planned adjacent
to potential intermodal site, allowing consolidation, stuffing
and heavy containers. Steel distribution facility adjacent to
cross dock.
• Major truck base planned near MLP.
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35. Where do we go from here?
www.iowanorthern.com
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36. Hawkeye Express, LLC was founded to handle 5,000 football
fans to Kinnick Stadium on each game day.
30,000 fans handled during the 2011 Football Season.
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