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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Executive Summary
Las Vegas Railway Express, Inc. (the “Company”, “LVRE”) will operate the “X” Train, a luxury
passenger train, on a 330 mile route between Los Angeles and Las Vegas and will offer a
compelling alternative to current travel options
Trains Outfitted With First Class Accommodations
− Deluxe first class cars with executive seats, multiple flat screens in each car, bar and five-star food service, smoking cars, limited card
games (for hotel credit—no gambling) , corporate suites and door-to-door hotel transfers upon arrival in Las Vegas
Concierge Reservation Services: Pre- and post-boarding at discounted prices from hotels, restaurants, shows
− Non-train booking income provides supplementary growth opportunity
Procure Operating rights for passenger train service over existing Union Pacific (“UP”) and Burlington Northern
Santa Fe (“BNSF”) rail systems
− LVRE to provide market rate fees to railroads to for financial incentive to give priority to LVRE trains
− LVRE has negotiated right-of-way over longer and slower UP freight trains
− UP has agreed to a 90% on-time arrival guarantee
Quick Train Statistics
Average Speed – 65 mph
Trip Time – 5 hours
Fare – $99/passenger (one-way)
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Market and Competition
Driving is cheapest and most popular mode of travel, but route congestion and safety are prevalent and
growing problems
12MM individuals drive between Los Angeles and Las Vegas each year
Single highway (I-15) drive over mountain pass (plus intersections)
– On peak travel days (which coincide with Las Vegas as entertainment destination) the drive can take 6+ hours
– Drive takes ~4.5 hours on uncongested days (Monday afternoon, Tuesday and Wednesday)
I-15 between Los Angeles and Las Vegas is the most dangerous highway in the country (according to U.S. DOT)
Typical trip costs: ~$68/one way (17 gallons of gas)
Flying is more expensive and door-to-door transit time only marginally faster than driving
2MM individuals fly to Las Vegas each year from one of four Los Angeles airports
Tickets are $280-$320 per person one way
Flying has its own issues:
– 1 hour actual flight time, plus drive time in traffic to airport
– Incur additional parking fees
– Must endure check-in and airport security procedures
– Additional waiting time in advance of flight
– Total time: ~4.5 hours
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Flying is generally an uncomfortable experience given driving to airport through congestion, airport procedures, uncomfortable seats due to small plane configuration, lack of carry-on baggage space, limited service and Las Vegas hotel transfer
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Compelling Opportunity
Ample demand exists in current market to make LVRE a winner
Las Vegas Municipal RTC Survey estimated 4MM individuals would use rail if a viable option existed
Other surveys estimate that 30% of the 12MM individuals which travel to Las Vegas do so for
entertainment alone (gambling, shows, world-class dining, shopping, etc.—excludes travel for business,
conventions, athletic events, etc.)
Non-train booking services will generate a high-margin, supplemental and diversified revenue
stream
Online booking platform and concierge reservation service offer travelers an easy and convenient
solution for lodging and entertainment booking
Opportunity to capture additional fee income from current train passengers
LVRE team of experienced Las Vegas leisure and gaming experts possess deep relationships with top
Vegas hotels and casinos and intimate knowledge of the market
Conservative non-train revenue forecast means greater upside exists beyond current projections
LVRE need only capture a small fraction of the overall market to achieve profitability
Break even projected at 120,000 passengers per year
Year 1 – Two trains making two round trips 2 days a week (Thursday, Friday –Sunday)
– Travel Thursday, Friday & Sunday (most popular travel days and most highly congested highway times)
– Overall capacity of 1,200 passengers on a train of 15 cars
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Non-Train Revenues
High-Margin Supplementary Revenue Stream
Booking platform will be sole channel to purchase “X” Train tickets
– In discussions with Navitaire Rail to build custom tailored ticketing and reservation portal
LVRE will offer packages and specials to bundle with train tickets
– High hit bookings: Hotel rooms, shuttle transfers (model assumes 40-50% capture rate)
– Specialty bookings: Golf packages, shows, club bookings etc. (model assumes ~20% capture rate)
Projections calculated using a full bottom-up model for each bucket of non-train revenue
White-Glove Concierge Booking and Reservation Service
Sales team will proactively call customers after booking to upsell bundled packages
Onboard concierge to book hotels, restaurant reservations, golf and other packages
Attractive Upside Potential
Current model assumes very conservative capture rate
Management’s hospitality experience suggests actual upsell rates could meaningfully exceed
forecasted assumptions
Potential volume discounts from hotels, restaurants, shows, etc. currently not reflected in the model
– Discounts passed on to customers to further encourage bundling
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Financial Metrics
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Las Vegas Railway Express 5 Year Financial Plan
Year 1 Yr 1 Exit Rate Year 2 Year 3 Year 4 Year 5
TOTAL TRAIN REVENUES 63,212,326$ 67,663,898$ 140,818,446$ 228,704,957$ 326,871,861$ 435,319,156$ TOTAL TRAIN EXPENSES 55,330,506$ 56,054,193$ 106,254,411$ 157,125,222$ 208,601,521$ 260,605,959$
TRAIN OPERATING INCOME 7,881,820$ 11,609,706$ 34,564,035$ 71,579,735$ 118,270,340$ 174,713,197$
NET INCOME 4,762,001 7,222,406 22,033,289 46,093,494 76,442,388 113,130,245
Full Operating Ratio 87.53% 82.84% 75.45% 68.70% 63.82% 59.87%
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Financial Metrics
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Las Vegas Railway Express 5 Year Financial Plan
1 Train 1 Train Add 1 Train-YE 2 Add 2 Trains-YE 4 Add 2 Trains-YE 6 Add 2 Trains-YE 8
Year 1 Yr 1 Exit Rate Year 2 Year 3 Year 4 Year 5Xtrain Metrics and Financial Statistics
Number of Trains at Beginning of Yr 0 0 2 4 6 8New Trains Added 2 2 2 2 2 2Annual Ridership 227,058 243,048 470,106 713,154 956,202 1,199,250 Ridership Growth 107% 52% 34% 25%Annual Round Trips 208 208 416 624 832 1,040 Avg # of Riders per Round Trip 1,092 1,169 1,130 1,143 1,149 1,153
Market Penatration (vs 12,000,000) 1.9% 2.0% 3.9% 5.9% 8.0% 10.0%
Avg Ticket Price per Rider 198.00$ 198.00$ 218.00$ 238.00$ 258.00$ 278.00$ Average Revenue per Customer 278.40$ 278.40$ 299.55$ 320.70$ 341.84$ 362.99$
Revenues 63,212,326 67,663,898 140,818,446 228,704,957 326,871,861 435,319,156
Operating Expenses: TrainC.O.G.S. 4,096,127$ 4,384,587$ 8,480,714$ 12,865,300$ 17,249,887$ 21,634,473$
Train Payroll 1,921,200$ 1,921,200$ 3,746,580$ 5,727,587$ 7,738,105$ 9,914,447$ Other Train Operating Expenses 45,531,529$ 45,966,756$ 89,792,126$ 133,816,856$ 178,467,488$ 223,529,497$ Total Train Operating Expenses 51,548,856$ 52,272,543$ 102,019,420$ 152,409,744$ 203,455,480$ 255,078,417$
Train Operating Ratio 82% 77% 72% 67% 62% 59%
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Operating Agreement with Union Pacific Railroad
Union Pacific Railroad
Rail access agreement to run trains on UP route from Las Vegas to Daggett, California
Market Rate fee structure
Right of way agreement to pass slower freight trains
– Guarantee 90% On- Time arrival
– LVRE will pay competitive market rate—incentivizing freight rail companies to give priority to LVRE trains
Sole Right to run privately operated passenger service on Daggett to Las Vegas rail corridor for 5 years
Provisions for running additional trains in future years
Capital Improvements to be paid for by LVRE for capacity improvement
UPRR completed RTC capacity planning
Agreement finalized
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Union Pacific Project Team
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Union PacificJohn Rebensdorf VP Operations Omaha, NE
Jerry Wilmoth General Manager Network Infrastructure Roseville, CA
Don Caldwell Real Estate Group Rancho Cucamonga, CA
Terry M Tate Director Transportation Services – West Salt Lake City. UT
David D Orrell, PE Director Construction/Public Projects Omaha, NE
Rick Durrant Director Quality Services – West Roseville, CA
Neil ScottSuperintendent Transportation SVCS – Utah
Salt Lake City, UT
James MarshallProgram Manager – Commuter Engineering Salt Lake City, UT
Simon J Hjelm Capacity Planning Omaha, NE
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
BNSF Operating Agreement Summary
Market Rate $142 per train mile
Guarantee 90% on time operations
Priority scheduling over freight
BNSF dispatch Fullerton to Daggett, California
Operations commence while construction on Cap Ex is underway
Economic Benefits to BNSF Direct LVRE
» Year 1 $9,746,880 Year 2
$19,493,760
» Year 3 $38,987,520
» Year 4 $58,481,280
» Year 5 $77,975,040
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Project Team BNSF
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Burlington Northern Santa FeMatt Rose Chairman/CEO Ft. Worth, TX
Carl Ice President/COO Ft. Worth, TX
Rollin Bredenberg VP Capacity Planning Ft. Worth, TX
DJ Mitchell AVP Passenger Rail Ft. Worth, TX
Rich Wessler Director Passenger Rail Operations Ft. Worth, TX
Gary Agnew General Director Resource Planning Ft. Worth, TX
Rick L Depler Asst. Director Passenger Operations Ft. Worth, TX
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Haulage Agreement with Amtrak
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Operating train crews and scheduling
Experienced crew and maintenance teams
Familiar with the Los Angeles to Las Vegas route on the BNSF and UP rail lines
Established security and safety procedures
Efficient operating performance record
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Amtrak Project Team
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AmtrakJoe McHugh VP Policy & Development Washington, DC.
Stephen Gardner VP Policy & Development Washington, DC.
Jonathan Hutchinson Director – Corridor Development Oakland, CA.
Don Kushto Principal – Host Railroads Philadelphia, PA.
William Sheridan Chief, Service Planning/Strategy Washington, DC.
Paul Vilter AVP – Host Railroads Philadelphia, PA.
Suzanne Fike Principal Officer – Strategic Partnerships Oakland, CA.
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Rail Car Procurement & Refit
Agreement in place to acquire 24 Bi-Level Budd 7600 Series passenger cars from Transportation Management Services
BRC Coach & Transit of Las Vegas Nevada to complete refit and refurbishment of rail cars
Don Primi of Rail Enterprises serves as Owner’s representative on refit & FRA, UPRR and BNSF compliance
Interior design by Carpenter Sellers DelGatto, architects
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Metrolink Feeder System12 million passengers a year ride this system
These are examples of specifications and drawing disclosures of the train concept that will help you understand what constitutes a complete design of the train, which are provided as examples only. Actual designs will vary from these illustrations.
Las Vegas Station Site
These are examples of specifications and drawing disclosures of the train concept that will help you understand what constitutes a complete design of the train, which are provided as examples only. Actual designs will vary from these illustrations.
LV Station Design Phase 1(All station Designs subject to final approval by UPRR)
These are examples of specifications and drawing disclosures of the train concept that will help you understand what constitutes a complete design of the train, which are provided as examples only. Actual designs will vary from these illustrations.
Capacity up to 3 trains & 700,000 riders annually
LV Station Phase 2(All station Designs subject to final approval by UPRR)
These are examples of specifications and drawing disclosures of the train concept that will help you understand what constitutes a complete design of the train, which are provided as examples only. Actual designs will vary from these illustrations.
Capacity up to 8 trains and 2 million riders annually
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Development Timeline
Uses of Proceeds
The Company estimates that it will require $35MM to begin Phase I operations in the 1st year
– Use of proceeds include:
» Railcar purchase, design, refurbishment and outfitting
» Las Vegas Depot design and construction
» UP & BSNF mileage fees
» Salaries and other professional fees (legal, marketing/PR, etc.)
» IT and corporate infrastructure development
Anticipated Timeline of Significant Events
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1Q 2012 1Q 20134Q 20123Q 20122Q 2012
Close $35MM Round
Retrofit Design Work Refurbishment and Outfitting
Site Design Depot and Station Construction
Rail Cars
Las Vegas Depot
BNSF & UP Fees
Financing
Mileage Fees
Completion
andLaunch
Mezzanine Financing
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Organizational Chart
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President/CEOMichael A. Barron
Human ResourcesVicki DiBernardo
Training & Development
Legal
Operations ChiefJim Wilson
DirectorMaintenance Operations
DirectorLogistics
Safety Officer
Station DevelopmentDianne Barron
Passenger ServicesPenny Stegeman
DirectorFood & Beverage
Bartenders
Waitstaff
support
ChefsCooks
Support
On Board Operations
(2)
Housekeeping
Engineering Support
Security
DirectorRetail Sales
VP Sales & Marketing
Don Adams
Director Marketing
Social media
DirectorSales
Ticket Manager
ManagerCall Center Operations
ManagerCorporate Sales
CIOBob Gottesman
Website Development
On Board technicalOperations
Corporate SystemsInfrastructure
VP Asset Development
Joe Cosio-Barron
Rail Car
Locomotives
CFOWanda
Witoslawski
Controller
Senior Accountant
Investor RelationsMike Mason
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Key Personnel
Gilbert H. Lamphere – Chairman of the Board
Mr. Lamphere serves on the Board of Directors of CSX Corporation ($25bn, 23,000 mile railroad) and has served on
the board of Canadian National Railway ($25bn, 15,000 mile transcontinental railroad), Chaired the Board of the
Illinois Central Railroad ($2.5bn, 1,000 mile Class 1 railroad between Chicago and New Orleans) and served on the
board of Florida East Coast Railway ($2.8bn railroad, 350 miles down East Coast of Florida). He was also
instrumental in the investment and oversight of Mid South Rail. Mid South, Illinois Central and Canadian National
became successively the most efficient railroads with the lowest operating ratios in North America.
Michael Barron – President/CEO
Mr. Barron has been a developer of new business enterprises for nearly 30 years. Trained as a City & Regional
Planner, Mr. Barron was responsible for Monterey California’s downtown redevelopment project of famous Cannery
Row and Fisherman’s Wharf. Mr. Barron founded Citidata, the first electronic provider of computerized real estate
multiple listing service (MLS) information in the nation. He led the business development team at TRW that acquired
11 companies and became the world’s largest repository of real estate property information - Experian. He founded
and served as President, Finet Holdings Corporation (NASDAQ:FNCM), a publicly traded mortgage banking business
specializing in e-mortgage financing on site in real estate offices. The company maintained a market capitalization of
$500mm. Mr. Barron pioneered the first nationwide commercially deployed video conference mortgage financing
platform for Intel Corporation operating in 20 states and funded over $1bn in closed loans annually. He was CEO for
Shearson Home Loans and founded Liberty Capital, a $100mm asset management company based in Las Vegas,
Nevada.
Wanda Witoslawski - Chief Financial Officer
Ms. Witoslawski has served in progressively responsible financial positions for public companies over the past twelve
years. She served as Controller for Ocean West Enterprises until its acquisition by Shearson Home Loans in 2005
where she managed the accounting function for a staff of 1,350 employees and $200mm credit facility. Upon
Shearson’s exit from mortgage banking in 2007, she joined the principals Mr. Barron and Mr. Cosio-Barron as
Controller at Liberty Capital Asset Management, an investor in acquiring defaulted mortgage pools, managing public
accounting documents for SEC filings and the financial supervision over the liquidation of over 4,000 mortgage loans
the company had acquired. 25
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Key Personnel (cont.)
Joseph A. Cosio-Barron –Vice President – Asset Development
Mr. Cosio-Barron currently serves as LVRE’s Executive Vice President and has over 35 years of experience in real
estate investment and development. Previously, Mr. Cosio-Barron was President of Shearson Home Loans and co-
founded Liberty Capital, a $100 million asset management company based in Las Vegas. He has also served as the
Managing Partner and President of CBS Consultants, Inc. a financial firm offering highly specialized services in
securities compliance, development and lending for hotels, resorts, casinos and entertainment, as Executive Vice
President of Finet Holdings Corporation, President of Terra West Construction, Senior Vice-President of Multi-Financial
Corporation.
John H. Marino, Vice President –Rail Operations (interim)
Mr. Marino currently serves as Vice President – Rail Operations where he supervises the Company’s activities with the
Class 1 railroads, railcar procurement, and railset maintenance. Mr. Marino also serves as President of Transportation
Management Services, Inc., and was previously President and Chief Operating Officer of Rail America (NYSE:RA), co-
founder of Huron & Eastern Railway Company, Inc., President of Huron Transportation Group, President and Chief
Executive Officer of several short line railroads, as an officer of the Reading Railroad and with the United States
Railway Association.
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Key Personnel (cont.)
Donald J. Adams, Vice President, Sales & Marketing
Mr. Adams currently serves as Vice President of Sales & Marketing for the LVRE. Mr. Adams has spent the last 35
years as Founder and Chief Executive Officer of Allstate Ticketing in Las Vegas. Allstate ticketing is the oldest
and largest broker of sightseeing tours in Nevada, with over 20 (and growing) locations including the Flamingo,
Harrah's, Hoover Dam, Las Vegas Convention and Visitors Authority and McCarran International airport. Mr.
Adams and Allstate were pioneers in using the web-based platforms for the industry and in 2005 sold Allstate to
Travelocity, Inc. Prior to founding Allstate, Mr. Adams served in executive roles for many Las Vegas gaming
companies.
Dianne D. David-Barron, Stations Development Manager
Ms. David-Barron serves as LVRE’s Stations Development Manager. Ms. David-Barron has been an executive in the
real estate and mortgage industries for 38 years. She is currently responsible for the construction and
operations of the Las Vegas, Nevada, X Train Railway Station and for the integration of the service in Fullerton,
California Station. Ms. David-Barron was previously the VP of the REO Department for Liberty Capital Asset
Management, where she he managed a portfolio in excess of 4,000 loans located in 23 states. Ms. David-Barron
has also served as Vice President of Residential Lending for Shearson Home Loans, Sales Manager for Virtual
Mortgage Network, Vice President of Lender Services for Finet Corporation and as President of the Lender
Services Division of American Financial Network.
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Confidential – May not reproduce or distributewithout permission of Las Vegas Railway Express, Inc.
Team Board Members and Consultants
LVRE is supported by a team of experienced consultants and advisors whose specialties include
railroad operations, investment banking, legal, insurance, real estate development, and
marketing
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John McPherson President Illinois Central Railroad (ret)President – Florida East Coast Railway (ret.) Board Member - LVRE
Tom Mulligan Director, Passenger Ops. – Union Pacific (ret.)Board Member - LVRE
John Marino President Rail America (ret)
Board Member - LVRE
Mark Schulte Managing Director Dahlman Rose
Investment Bankers
Rob Pek President – BRC Coach and Transit
Brian Harrington Harrington Group LLC - Insurance
Mike DelGatto CSD Architects
Dave Sundaram Odyssey Real Estate Capital – Commercial RE
Chet Opheikens R&O Construction – General Contractor
Phil Cherry Lamar Advertising
Daniel T. Behr Jordan, Knauff & Co
Jody Walker Walker Engineering – Civil Engineers