Slide 1: Power REIT 2012 Proxy Contest
Power REIT 2012 Proxy Contest David H. Lesser Chairman and CEO 212 - 750 - 0373 dlesser@pwreit.com Arun Mittal, CFA VP Bus. Development 212 - 750 - 0373 amittal@pwreit.com POWER REIT Presentation to ISS and Institutional Shareholders May 2012
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement This presentation may contain forward - looking statements regarding future events and the future performance of Power REIT (the “ Company ” ) that involve risks and uncertainties that could cause actual results to differ materially from those projected. The Company may use w
Slide 3: The Dorsey Campaign
THE DORSEY CAMPAIGN 3
Slide 4: Introduction
Introduction ▪ Dorsey ’ s 2011 campaign was not in the interest of shareholders and Dorsey ’ s 2012 campaign is not in the interests of shareholders – Conflicts of Interest due to relationship with Mr. Parsons/Wheeling & Lake Erie Railway – No business plan, management team or specified assets to in
Slide 5: Dorsey 2012 Proxy Fight: nominees have not reached out to company
Dorsey 2012 Proxy Fight Dorsey and his nominees have not reached out to company to express concerns, propose a business plan or participate in the nomination process ▪ Company ’ s phone calls and letters have been met with silence ▪ Dorsey ’ s proposed business plan in 2012 contest has changed from
Slide 6: Dorsey 2012 Proxy Fight Consists of Defamatory and False Information
Dorsey 2012 Proxy Fight Consists of Defamatory and False Information ▪ Dorsey uses false and misleading statements in proxy, violating Rule 14a - 9 of the Exchange Act of 1934; the SEC, in its comments letter from 2011 noted (the letter is available online 1 ): We note that the filing persons have m
Slide 7: Dorsey's Facts are Misleading and Wrong: Keystone
0% 50% 100% 150% 200% 250% 300% 350% 400% 6/1/1997 10/1/1997 2/1/1998 6/1/1998 10/1/1998 2/1/1999 6/1/1999 10/1/1999 2/1/2000 6/1/2000 10/1/2000 2/1/2001 6/1/2001 10/1/2001 2/1/2002 6/1/2002 10/1/2002 2/1/2003 6/1/2003 10/1/2003 2/1/2004 Keystone Cum. Returns Dorsey ’ s Facts are Misleading and Wron
Slide 8: Dorsey 2012 Proxy Fight a continuation of 2011 Proxy Fight
Dorsey 2012 Proxy Fight a continuation of 2011 Proxy Fight Dorsey ’ s Core Platform in 2011 Proxy Fight: Do Nothing ▪ In 2011, Paul Dorsey (a 0.06% holder) sought to replace entire board; his Nominees were: – Paul Dorsey No public board qualifications – Robert Dorsey (brother of Paul Dorsey) No publ
Slide 9: Dorsey's 2011 Do Nothing Plan was Not in Shareholder Interest
Dorsey ’ s 2011 Do Nothing Plan was Not in Shareholder Interest PW’s Revenues are Flat, Expenses are Increasing Due to Inflation ▪ The Company ’ s dividend fell under prior management by approximately 10% from 2000 to 2010 to pay for increased public company expenses. ▪ Moreover, assuming status quo
Slide 10: Dorsey's 2011 Campaign Designed to Restore a Failed Business Strategy
Dorsey ’ s 2011 Proxy Campaign Was Designed to Restore a Failed Business Strategy Old Management Did Nothing and Significantly Underperformed the Markets ▪ Historical Mismanagement. Constant revenues and dividends (declining in real terms) and complete absence of a strategic growth plan led to signi
Slide 11: Historical Mismanagement Mirrored in Dorsey 2011 Proxy Fight
Historical Mismanagement Mirrored in Dorsey 2011 Proxy Fight Issues Explanation Lack of Insider Ownership By Executive Management & Trustees Former President owned 0% shares Former Secretary, Treasurer owned 0% shares Trustees owned 1.1% of shares (other than Mr. Lesser who joined board in 2009) Lac
Slide 12: A 2011 Dorsey Nominee Sues the Company in December 2011
A 2011 Dorsey Nominee Sues the Company in December 2011 ▪ Mr. Parsons serves as Chairman of Wheeling & Lake Erie (WLE), which, together with Norfolk Southern Corporation (NSC), sued Power REIT and P&WV in December 2011 after new management sought compliance with the lease ▪ Litigation is disclosed i
Slide 13: Why You Should Vote For the Board of Trustee's Nominees
WHY YOU SHOULD VOTE FOR THE BOARD OF TRUSTEE ’ S NOMINEES? 13
Slide 14: Aligned Interests and Good Corporate Governance
Aligned Interests and Good Corporate Governance The Company ’ s nominee slate are the better choice for shareholders ▪ Substantial Transaction and Value Creation Experience, Business Contacts Mr. Lesser Senior VP, Crescent Realty, Trustee, Keystone (KTR), director in Merrill Lynch real - estate grou
Slide 15: Management Has Made Significant Progress in 2011
Management Has Made Significant Progress in 2011 - 2 ▪ Short - term dividend reduction due to increased costs related to reorganizing and implementing new business plan – Trustees and management own 9.9% and are aligned to bear short - term pain to create long - term value ▪ Business plan builds on
Slide 16: New Management Difference
New Management Difference 16 Old Management Issues Lack of Insider Ownership By Executive Management & Trustees Lack of Full - time Attention by Management Lack of Experience by Mgt. Restrictive Corporate Structure Substantial Conflict of Interest New Management Insider management and trustee owners
Slide 17: PW Stock Has Appreciated Under Mr. Lesser, but hampered by WLE Litigation
8.5 9.5 10.5 11.5 12.5 13.5 14.5 15.5 11/30/2010 12/31/2010 1/31/2011 2/28/2011 3/31/2011 4/30/2011 5/31/2011 6/30/2011 7/31/2011 8/31/2011 9/30/2011 10/31/2011 11/30/2011 12/31/2011 1/31/2012 2/29/2012 3/31/2012 4/30/2012 Stock Px PW Stock Has Appreciated Under Mr. Lesser, but hampered by WLE Litig
Slide 18: Conclusion
18 Conclusion For all of the reasons described in this presentation, We urge you to vote for the Board of Trustee ’ s Nominees ▪ Current management is implementing a business plan designed to create substantial value ▪ Board of Trustees’ Nominees have experience and track - record to create sharehol
Slide 19: Strategic Growth Plan and Corporate Summary
STRATEGIC GROWTH PLAN AND CORPORATE SUMMARY 19
Slide 20: Company Snapshot
20 Company Snapshot Our goal is to create shareholder value and grow cash flow and dividends per share through acquisitions ▪ Power REIT is a listed infrastructure real - estate investment trust (AMEX: PW) – Shares Outstanding: 1,623,250 – Share Price (May 3, 2012) 9.52 – Market Cap: ~$16mm – Divide
Slide 21: Foundation Established in 2011-2012 to Facilitate Growth
Foundation Established in 2011 - 2012 to Facilitate Growth 1967 Pittsburgh & West Virginia Railroad listed on AMEX as the first infrastructure REIT - Received critical IRS ruling that forms the basis of many infrastructure REIT investments 1968 – 2010 Shareholder value destroyed due to fixed revenue
Slide 22: New Growth Business Plan
New Growth Business Plan Legacy Business Plan Asset(s): Pittsburgh & West Virginia Railroad Revenue : Fixed rent of $915,000 / annually under 99 - year lease with Norfolk Southern Dividend Growth : None Diversification: Single asset Value Creation: Negative: Shareholder value degraded over time due
Slide 23: Power REIT Investment Highlights
Power REIT Investment Highlights 23 Power REIT is an Innovative Infrastructure REIT Targeting a Large, Attractive Market Massive U.S. infrastructure investment opportunity Superior return profile of infrastructure assets compared to traditional real - estate Attractive opportunity to grow cash flow
Slide 24: Significant Investment Opportunity
24 Significant Investment Opportunity Significant opportunity to invest in energy and transportation real - estate with a focus on renewable energy real - estate Wind Farms - Land, air rights - Towers - Supporting real - estate Solar Farms - Land, air rights - Balance of System - Supporting real - e
Slide 25: Attractive Return Profile
25 Attractive Return Profile We believe energy infrastructure assets offer attractive risk - adjusted returns relative to traditional real - estate ▪ Infrastructure Investment Rationale: – We believe we can acquire infrastructure assets at higher yields than traditional real - estate investments – U
Slide 26: Substantial Embedded Growth Potential as a Small-Cap REIT
Substantial Embedded Growth Potential as a Small - Cap REIT 26 1. The above financial model illustrates a hypothetical transaction and is intended to describe the value that can be created by Power REIT if it acquires $50 million of its intended assets. Actual results may differ from this example. 2
Slide 27: Litigation with Norfolk Southern Corporation
Litigation with Norfolk Southern Corporation ( “ NSC ” ) P&WV is seeking to protect it s contractual rights under its lease 1 ▪ Litigation commenced in December 2011 ▪ P&WV is seeking to protect its contractual rights under the lease, including the right to additional payments from Norfolk Southern