Ties Weekly Update #14

15 July, 2004

CONTINUING EXCELLENT PRODUCTION

As of July 15^th, we have installed nearly 130,000 of the 206,000 ties now scheduled to be installed by November 24^th 2004. All crews are doing an excellent job and should complete all projects on or ahead of schedule.

¨ As of July 15^th, 190,000 ties have been delivered to our properties. We now expect the delivery of ties to be completed by the end of July or early in August.

¨ Wes Risseeuw’s DM&E east tie gang has been putting in ties on the CWR project areas to break up bad tie clusters. They will spend the next few weeks assisting with new siding construction projects at Elkton and De Smet.

¨ The LA Colo tie gang has completed their first three sections of tie installation on the IC&E and DM&E and will now focus on the CWR project on the IC&E. This crew has already installed ties between Austin and Owatonna on the IC&E, and between Owatonna and Mankato, and Sleepy Eye and Garvin on the DM&E. They still need to complete the tie installation between Garvin and the Minnesota South Dakota state line later in the year.

¨ Foreman Steve Koser’s crew has completed the installation of 6,000 ties west of Mason City and will be traveling eastward to begin installing switches in the Calmar rail project area, then installing CWR on the IC&E’s curve patch program. They will spend most of the remainder of the year on this curve patch project

¨ Jim Nemec’s west tie gang has completed the section of tie between Rapid City and Hermosa and after one week of installing rail south of Fairburn, they will travel to Dakota Jct. to install more ties at that location.

¨ The RJ Corman tie crew will begin installing ties on Friday the 16^th near Volga. This crew will install all of the remaining ties between Lake Preston and the Minnesota state line.