Surfacing Weekly Update #22

16 September 2004

SURFACING CONTINUES ON SCHEDULE

As of September 16th, we have surfaced over 575 of the 800 pass miles that we had projected to be surfaced in the 2004 production year, over 70% of the total miles scheduled. As of now, it appears we will meet or exceed that schedule.

¨ There have been some minor breakdowns on the production tampers recently which have reduced some of the pass miles we had expected to be getting from a couple of crews, but these problems have been corrected. We now expect to have increased production from our surfacing equipment for the remainder of the year.

¨ We added a contract surfacing crew from Progress Rail last week and they will surface on the Kansas City sub and River subs in Iowa for the remainder of the year

¨ We have also added a contract surfacing crew, Railworks, on the DM&E who will work between Verdi and Huron.

¨ The ARB surfacing crew continues to perform well on the Waseca sub of the DM&E and will assist west of Mankato when they complete their work east of Owatonna. We expect them to be west of Mankato by the end of September or first of October

¨ As of September 16, 2004, nearly 190,000 tons of ballast has been distributed on both properties. This is over 80% of the 230,000 tons of ballast that we now require to complete this year’s projects. The amount of ballast that is required for the two properties this year increased by more than ½ of what is required in a normal year.

¨ We continue to work very closely with the LG Everist Quarry and New Ulm Quartzite Quarry to provide adequate supplies of ballast throughout this busy season.