System-Wide Monthly Update #3

26, June 2006

The 2006 capital program has gotten off to a great start in the second quarter with three of four major CWR projects already being completed. Over 65% of the ties scheduled to be installed in 2006 are already installed and surfacing crews have now surfaced over 25% of their schedule pass miles.

Highlights are listed below.

¨ All three major CWR projects that involved new rail have been completed already this year. Those projects were 10 miles of rail near Springfield Minnesota on the DM&E, 14 miles of CWR south of Austin Minnesota on the IC&E, and 11 miles of CWR near Bellevue also on the IC&E. The last project in Bellevue was completed in early June. The last project, a 17 mile CWR project that involves used CWR supplied by the UP railroad will be completed in the third and fourth quarters north of Kansas City. More rail updates on “rail page”

¨ The last part of the CWR program is our annual curve patch program, which will involve the replacement of rail in nearly 40 curves totaling nearly 10 track miles. Further updates for the CWR program are on the “rail page”.

¨ We have done preliminary engineering work for the Calmar siding and have decided it will be necessary to abandon this location in favor of one further east, on the west side of Ossian. This location will be studied and surveyed and the final decision on whether to move forward will be made within the next few weeks.

¨ Six of the 40 new turnouts that are scheduled to be installed on the two properties in 2006 have been installed thus far. Other turnouts are scheduled to be installed soon and many are being delivered to project areas. More details on the “rail page”.

¨ 90,000 of the 150,000 ties scheduled for installation in this year’s program have already been installed on the two properties. More details of the tie projects will be on the “tie update” page.

¨ There will be several major bridge projects on the two properties this year with the most notable being the redecking and rail renewal on Bridge # 1500, the Missouri River bridge in Pierre SD. More information on bridge projects are included on the “Bridge page”.

¨ Surfacing estimates for 2006 are over 850 miles with over 180,000 tons of ballast used. A progress report on the surfacing schedule is on the “surfacing page”.