System-Wide Monthly Update # 7

19, October 2005

The 2005 production continues to progress well, and even though there have been some project delays, we still expect all projects to be completed by the end of the production season. We have had an additional project approved by the board just recently and that is a 10 mile CWR project on track # 2 through Liberty Missouri. This project was made possible by working with the UP to utilize usable 136# CWR and used plates to replace the 115# jointed rail that is currently in track at this location.

¨ Both large CWR projects, one north of Plymouth IA. on the IC&E, and the other east of Revere MN. on the DM&E, are completed and track speeds have been raised to 40 mph in these areas.

¨ The “Curve Patch” program for 2005 will include laying over 75,000 feet of premium rail on over 35 curves between Nora Junction on the Mason City sub, to Airline Junction on the Kansas City sub. There are only 3 curves left on this project all on the River sub which will be done by Mr Koser’s crew after the Bettendorf ties are installed.

¨ The last two tie projects to be completed will be the 20,000 ties on the River sub of the IC&E which is just getting started and the 10,000 ties on the PRC of the DM&E which is about ½ completed.

¨ The Aurora yard project between Aurora and Brookings is progressing very nicely and will have three of the four tracks put into service within the next two weeks. The last track will be put into service by Thanksgiving.

¨ The most notable bridge projects of 2005 are the complete rebuild of Bridge 1506 at Fort Pierre, South Dakota and Bridge 434.5 at Sleepy Eye, Minnesota on the DM&E. Several lesser projects will be completed on both properties.

¨ All materials for all projects have been in good supply and have been readily available, although high steel and fuel prices have hampered some deliveries and have raised the prices on many items. All materials have been delivered and are on site ready for installation.

¨ Thirty new premium turnouts have been delivered and installed on the two properties.

¨ Current estimates are for about 220,000 tons of ballast for the 2005 season’s 925 miles of surfacing.