System-Wide Monthly Update #7

11 July 2007

The 2007 capital season has been progressing full steam since start up with many projects completed or underway.  The highlights of the 2007 capital season are the CWR projects where we are laying over 130 miles of new CWR across the properties.  We have already laid over 80 miles with 5 projects being already completed.  Along with the CWR projects, we have installed over 40 of the 76 turnouts currently scheduled for installation in 2007. More updates on the CWR and turnout projects on the “rail” page.

Tie projects are also progressing well with over 85,000 ties already installed by Company and contract crews thus far in 2007.  Details of projects completed and underway are on the “Tie” page.

Surfacing crews have surfaced over 300 miles of track already in 2007 of the nearly 900 miles that are scheduled.  More updates on the “Surfacing” page.

Bridge crews have also had a busy spring with several bridges under construction, being repaired or completely rebuilt.  More updates are available on the “Bridge” page. 

Summaries of the major projects are below and more details will be on the following pages.

¨ The major rail projects for 2007 are as follows:

1. Approximately 32 miles of new 115# CWR between Colony, Wyoming and Sturgis, South Dakota on the DM&E’s Black Hills Subdivision.

2. Approximately 23 miles of new 115# CWR between Owanka, South Dakota and Rapid City, South Dakota on the DM&E’s PRC Subdivision.

3. Over 7 miles of new 136# CWR rail through Pierre and Fort Pierre, South Dakota on the DM&E’s Pierre and PRC Subdivisions.

4. Approximately 30 miles of new 136# CWR between Sleepy Eye, Minnesota and Mankato, Minnesota on the DM&E’s Tracy Subdivision.

5. Over 7 miles of new 115# CWR just west of Algona, Iowa on the IC&E’s Mason City Subdivision.

6. Nearly 8 miles of 136# CWR north of Dubuque, Iowa on the IC&E’s Marquette Subdivision.

1. Over 15 miles of 136# CWR between Samoa, Iowa and Bellevue, Iowa on the IC&E’s Marquette Subdivision.

2. Over 8 miles of new premium 115# CWR and 136# CWR for curve replacement on the IC&E’s Kansas City, River, Marquette and Mason City Subdivisions.

¨ The Major tie projects for 2007 are as follows:

1. IC&E Tie projects

1. 11,000 ties on the Rockford Subdivision

2. 20,000 ties on the Marquette Subdivision north of Dubuque

3. 22,000 ties on the Marquette Subdivision between Lansing, Iowa and La Crescent, Minnesota

4. 13,000 ties on the Mason City Subdivision near New Hampton, Iowa

5. 14,000 ties on the west end of the Mason City Subdivision

6. 12,000 ties on the Jackson Subdivision

7. 12,000 ties on the Kansas City Subdivision west of Nahant, Iowa

8. 20,000 ties on the Kansas City Subdivision south of Chillicothe, Missouri

9. Also, up to 6,000 ties will be installed in various sidings and yards across the line

2. DM&E Tie Projects for 2007 are as follows:

1. 25,000 ties on the Black Hills Subdivision between Sturgis, South Dakota and Smithwick, South Dakota. This project is actually divided into two project areas, Rapid City north and Hermosa south.

2. 20,000 ties on the PRC Subdivision between Pierre, South Dakota and Midland, South Dakota

3. Also, 6,000 yard ties will be installed in the Huron, South Dakota, Pierre, South Dakota, Rapid City, South Dakota and Waseca, Minnesota yards.