Surfacing Weekly Update #3

29 April 2004

ON SCHEDULE

As of 29 April, we have surfaced over 57 of the 800 pass miles to be surfaced in 2004, scheduled to be completed by November 24th. As of now, it appears we will meet that schedule. The surfacing is on schedule.

¨ 20 of the 53 new Ballast cars that were leased for 2 years have arrived on line and 19 more are in route

¨ Surfacing started March 17, 2004

¨ As of 29 April, 20,500 tons (approximately 275 car loads) of ballast has been delivered. This is 1/10^th of the 200,000 tons expected to be delivered this year.

¨ The Transportation Department has been doing an excellent job moving the ballast that is required on the entire property, especially on the Owatonna sub.

¨ Surfacing crews have been working on both properties removing the winter’s slow orders and slow orders that were placed due to geometry car readings as well as working on capital projects.

¨ We are doing extensive ballasting and surfacing on the Owatonna sub that is now slow ordered to 10 mph or in the “excepted” track category and plan to have this subdivision up to FRA class 2 by the end of June. As noted in the Tie Update section, with expected completion of tie installation there, this track should come out of “excepted” status and into “Class 1” by May 7.