System-Wide Weekly Update #15

22 July 2004

This week was spent mainly on switch installation on both properties.

On the IC&E, Project Supervisor Goffinet and the crews of Steve Koser, Randy Parmenter, and Remington Hill as well as local forces installed all of the 8 switches on the IC&E property that are included in the RRIF portion of the capital program. These switches were all installed between Calmar and Lawler on the Mason City sub.

On the DM&E, Project Supervisor Trudeau and the crews of Chad Roob and Mike Anderson installed the last 4 of the 10 total switches that were included in the DM&E RRIF program.

On both properties, we will continue to weld and surface through these switch and CWR areas to complete the projects and completely remove any remaining slow orders.

The IC&E crews will begin installing curve patch rail on Monday the 26^th and we now expect to start the Calmar rail project on Monday the 2^nd of August.

¨ Equipment problems seem to be mostly behind us. This has improved the production on all crews.

¨ A large shipment of ties was recently received and is nearly completely unloaded on the DM&E, which will complete most of the requirements for ties on these properties. We still need about 15,000 ties for the IC&E and about 8,000 ties for the Florence connection to be delivered, but those projects are for later in the year, so there is no immediate need of these to be delivered.

¨ Because of the high business levels, we have been struggling somewhat with ballast moves, however, with the end of the CWR outages on the DM&E, we expect our ballast deliveries to increase over the next several weeks.

¨ Sanborn siding was put into service on June 24^th and crews have been working on the Cobden, Elkton and De Smet sidings with expectations of having all of these projects completed by mid- September.