System-Wide Weekly Update #9

10 June 2004

This week crews on both properties have been assembling switches and crossings in anticipation of their installation with the respective CWR projects. The rail laying resumed again on June 4^th on the DM&E at MP 235.5 and has progressed westward toward Tyler. This section should be completed no later than Friday the 18^th. The crew will work one more week after that, and we expect the CWR to be completed to around MP 257 before they leave on an extended July 4^th holiday. There are currently 47 miles of CWR remaining to be laid and 16 switches left to install on the CWR projects on both properties. Tie and surfacing programs are all progressing very well with over 90,000 ties being installed and 1,000 carloads of ballast being unloaded already this year. Progress is being made on the Huron and Owatonna subs on the respective railroads to remove slow orders to help with congestion problems in those areas. Siding projects are progressing well with work beginning this week on the ties at Sanborn and the switch at Cobden, as well as the completion of the dirt work at Elkton. The De Smet sub grade work should begin within the next couple weeks.

¨ Equipment continues to be very reliable with only minor breakdowns reported.

¨ Some relief has been noted for the gondola supply and we have started receiving ties and bridge material as well as being able to ship out scrap material recovered from the CWR projects.

¨ All new, air operated ballast cars are in service with only a very few minor problems being noted.

¨ Birmingham Diamonds have been unloaded with assembly scheduled for the week of June 14^th and installation the week of July 12^th.

¨ Progress is being made on the three additional siding projects that were recently approved. These projects are: 1) an extension of 4000’ at Elkton 2) rebuilding the Sanborn siding and 3) an extension of nearly 4000’ at De Smet.