Ties Monthly Update #2

11 May 2005

THREE TIE PROJECTS DONE!!

The additional capital that was just recently approved has added 100,000 ties to our Capital program meaning we now have nearly 185,000 ties to install in the 2005 production season. These ties are still scheduled to be installed with 3 railroad crews and one contractor by the end of October.

¨ The DM&E West tie gang, under foreman Jim Nemec, has already installed ties on the Crawford sub and the east end of the PRC. They are now working on the west end of the PRC. This crew has a total of 26,000 ties to install in this production season, mostly on the PRC.

¨ The DM&E east tie gang (foreman Kim Camp) has already completed two small projects. The first project was 2,500 ties on the Hartland sub and the second project was the Waseca sub for another 2,500 ties. This crew’s last scheduled project for the year is 26,000 ties on the Tracy sub between Sleepy Eye and Mankato.

¨ Steve Koser’s IC&E tie crew started this year on the double track of Kansas City and has installed 15,000 of the 20,000 ties scheduled for this area. This crew has nearly 60,000 ties to install this year, plus installing all of the CWR in the curve patch program.

¨ Contractor LA Colo started his production this year on the Chicago sub where he installed 12,000 ties. Other projects for this year include ties on the Owatonna, Mason City, and Marquette subs and another project on the Chicago sub.

¨ As of May 11, 2005, nearly 90,000 ties have been delivered and unloaded on the two properties.

¨ The remaining 95,000 ties that are now required to be delivered because of the added capital projects are expected to be on the property by the end of June.

¨ As of May 11^th, over 45,000 ties have already been installed.