Ties Weekly Update #17

5 August , 2004

CONTINUING EXCELLENT PRODUCTION

As of August 5, 2004, we have installed nearly 150,000 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 August, over 197,000 ties have been delivered to our properties. We now expect the delivery of ties to be completed by early next week, with the exception of the Florence ties which we will have delivered in early September.

¨ Wes Risseeuw’s DM&E east tie gang has taken a short break from their tie installation duties to help with the construction of the Elkton and De Smet sidings. Once those sidings are completed, Wes will return to his tie installation duties from De Smet toward Huron.

¨ 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, except for a short period of time when they will install about 5,000 ties in the Quad Cities area in September.

¨ Jim Nemec’s west tie gang has completed the section of ties between Rapid City and Hermosa. This tie crew is now installing ties just North of Dakota Jct on the lower Black Hills sub.

¨ The RJ Corman tie crew began installing ties on Friday the 16^th at Volga and has completed the tie installation between Volga and Lake Preston. They have now traveled back to Volga and will install ties heading eastward to the state line.