System-Wide Weekly Update #20

26 August 2004

Excellent progress has continued throughout the past week on both CWR projects on the IC&E railroad. The LA Colo crew is nearing the halfway point of the 15 track miles that they are scheduled to lay in the Calmar area and the IC&E’s CWR crew is about 1/3 completed on the curve patch project that has taken them from the east end of the Mason City sub to the Marquette sub, and now to the Chicago sub. This curve patch project will continue through the end of the year on the River and Kansas City subs.

Surfacing crews on both properties continue to make good progress across both systems toward the goal of surfacing over 800 pass miles.

The siding projects on the DM&E are progressing extremely well with 4 siding projects now nearly complete. The De Smet extension was put into service on Friday the 20^th and the Cobden siding is expected to be completed by the second week of September. That will leave only the Florence siding to finish later in the year to complete all the siding projects for the year.

The bridge crews are making excellent headway on the Sioux River Bridge near Volga and another crew has completed the rebuild of the Mine Creek Bridge at MP 196.7 on the Tracy sub.

Two new sets of cross-overs, for Muscatine and Davenport, have been completed and will be delivered by the end of next week and will be installed in early September.

¨ Equipment problems that have plagued some of the crews, both Company and Contractor, seem to be mostly behind us, which has improved the productivity of all crews over the past week.

¨ The last shipment of ties for the DM&E project is on the property, leaving only the ties for the Florence connection left to be delivered. All ties have been delivered and unloaded on the IC&E.

¨ Both of our major ballast suppliers have been challenged by this year’s aggressive schedule, but they are both catching up with their stockpiles so we still expect to meet our surfacing goals.

¨ The Elkton siding, which was put into service the 28^th of July, had its final surfacing completed two weeks ago. The De Smet extension was put into service Friday, the 20^th of August and the remainder of the Cobden siding is expected to be completed by mid to late September.