Ties Weekly Update #11

24 June, 2004

CONTINUING EXCELLENT PRODUCTION

As of the 24^th of June, we have installed over 110,000 of the 206,000 ties now scheduled to be installed by November 24^th 2004. All crews, both contractor and company, are doing an excellent job and are ahead of schedule.

¨ As of the 24^th of June, 160,000 ties have been delivered. Because of the shortage of gondolas, we now expect the delivery of ties to be completed by the end of July. Over 20,000 ties are currently under load and in transit toward our property.

¨ Wes Risseeuw’s DM&E east tie gang has completed tie installation between Lake Preston and De Smet. After ballasting and surfacing, this section of track will be raised to 30 MPH. We expect this to be completed by the end of June or early July. Wes’s crew will now make the first pass tie installation from Volga to Lake Preston and then will help with siding construction projects.

¨ The LA Colo tie gang has started at MP 180 and will continue toward Garvin with an expected completion date of June 30^th. They are currently between Revere and Tracy, and they expect to be completed with the Tracy sub sometime later today.

¨ Foreman Steve Koser’s crew has completed installing ties in the Calmar area and has moved westward on the Mason City sub to install 6,000 joint ties in that area. He expects to be completed with this project by mid July and return to Calmar to install switches and start the curve patch program.

¨ Jim Nemec’s west tie gang continues to improve on their production numbers and will be installing ties just south of Rapid City for the next couple weeks until that project is completed. From there they will move southward on the Black Hills sub and then to the PRC.