System-Wide Weekly Update #23

23 September 2004

This past week has been another very productive week on both properties as crews and managers make the final year end preparations to complete all projects by the end of the production season.

The DM&E CWR projects have been completed for weeks and the IC&E has completed the Calmar portion as well as CWR curve patch programs on the Mason City, Marquette, Chicago and River subs, leaving only the Kansas City sub curves to complete this year’s CWR projects

Tie crews are installing ties on the Huron and Black Hill subs of the DM&E and the River sub on the IC&E and have less than 15% of the ties remaining to be installed yet this year.

Surfacing crews on both properties are doing an excellent job and we expect to complete the over 800 miles of surfacing that is scheduled for this production season. We currently have 7 production surfacing crews of our own as well as 3 contract surfacing crews to accomplish this ambitious goal. These crews are over 75% completed toward achieving that lofty goal

The siding projects continue to progress well with the completion of the Cobden siding just recently. This leaves only the Florence connection and siding as major new construction projects to be completed yet this year.

The bridge crews are making excellent headway on the Sioux River Bridge near Volga and other crews are rebuilding all of the other structures on the Huron and Tracy subs.

Two new sets of crossovers for Muscatine and Davenport have been completed by LB Foster at Niles, Ohio and were delivered this past week. The Davenport crossover was installed and the Muscatine crossover will be installed in early October.

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

¨ 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 and we still expect to meet our aggressive ballasting requirements and surfacing goals.