Surfacing Weekly Update #4

6 May 2004

CONTINUING ON SCHEDULE

As of 6 May, we have surfaced over 81 of the 800 pass miles to be surfaced in 2004, scheduled to be completed by November 24th. As of now, it appears we will meet and may very well exceed that schedule. The surfacing is slightly ahead of schedule.

¨ All of the 53 new Ballast cars that were leased for 2 years have arrived on line with over 30 already in service and receiving very good reviews from the engineering forces

¨ Surfacing started March 17, 2004 and is progressing at nearly 25 pass miles per week

¨ As of 6 May 2004, over 32,500 tons (over 400 car loads) of ballast has been delivered. This is over 15% of the 200,000 tons expected to be delivered this year.

¨ The Transportation Department has been doing an excellent job moving the ballast that is required on the entire property, especially on the Owatonna sub. Also, Customer Service reps Terri Jaacks and Lisa Van Steenwyk have been invaluable in our efforts to get the ballast loads and empties properly billed and moved to the unloading locations and back to the pits for reloading

¨ Surfacing crews have been working on both properties removing the winter’s slow orders and slow orders that were placed due to geometry car readings as well as working on capital projects.

¨ We are doing extensive ballasting and surfacing on the Owatonna sub that is now slow ordered to 10 mph or in the “excepted” track category and plan to have this subdivision up to FRA class 2 by the end of June. As noted in the Tie Update section, with expected completion of tie installation there, and removing excessive cross level spots, we expect this track to be removed from the “excepted” status by Friday the 14^th of May.