Surfacing Weekly Update #26

14 October 2004

SURFACING CREWS

As of October 7, we have surfaced over 690 of the 800 pass miles that we had projected to be surfaced in the 2004 production year, over 85% of the total miles scheduled. All information from the field still indicates to us that the schedule will be met or exceeded yet this fall.

¨ The engineering management teams on both properties have determined that there is a need for another surfacing crew on the DM&E to complete the surfacing projects this year. Safe Trak will be starting on the Huron sub near the state line around the middle of next week and will surface from there to Volga, SD.

¨ We also recently added a contract surfacing crew from Progress Rail Services on the Kansas City sub and this crew will spend the remainder of the year on the Kansas City and River subs.

¨ The Railworks surfacing crew will work on the DM&E between Verdi and Huron for the remainder of the year. They have been getting excellent production and are currently near Manchester.

¨ The ARB surfacing crew continues to perform well and has completed the Waseca sub of the DM&E and also the Mankato Hill on the Tracy sub. They are now spot surfacing between Mankato and Sleepy Eye and will be working west from Harvestland elevator starting Monday.

¨ Kent Maxon’s crew is working near the new Florence siding area and when finished will travel back to Garvin and start the final surfacing pass westward toward the state line.

¨ As of October 14, 2004 over 230,000 tons of ballast has been distributed on both properties. This is over 90% of the 255,000 tons of ballast that we now believe we will require to complete this year’s projects. The engineering and transportation managers are working very closely with the New Ulm and LG Everist Quarries to complete these deliveries on time.