System-Wide Weekly Update #31

18 November 2004

After weeks and weeks of tremendous amounts of hard work and effort, the engineering departments are finally able to start seeing the end of the line as far as completing the major projects for the year, and the transportation department is starting to realize the benefits from the track structure improvements that have been accomplished.

The last two major tie programs were completed this week, one on the DM&E’s PRC sub and the other on the IC&E’s Kansas City sub. We will continue to install some ties in the Quad Cities area of the IC&E and in the Philip, Wall, Wasta and Colony WY areas of the DM&E in conjunction with some smaller projects that continue in these areas, but, overall, we consider the tie program completed for the year. The 245,000 ties that were installed over the course of the year is nearly three times what historically has been installed annually on the two properties.

The surfacing projects are also nearing or have reached completion across both properties with two of the contracting crews leaving the properties and the other contracting crews to leave the properties shortly. The employee crews will continue operating until the end of the year or weather forces them to quit. Overall, on the two properties, over 255,000 tons of ballast was unloaded and 800 miles of surfacing completed this year. This is over twice the amount of ballast and one third more surfacing pass miles than are normally done during a year.

A total of 41 switches were installed on the two properties this year across the two systems on various capital projects to increase reliability and also for some of our customers to increase their capacity. In past years the normal number of switches installed by both properties averaged about 15.

The projects that are still ongoing are Bruce Wold’s IC&E crew building and installing 2 switches and a connecting track at Moravia, IA to interchange with the APNC Railroad. On the DM&E, Chad Roob’s crew is installing a switch in Huron for the Barti Metal Company. In Philip, SD Kevin Pinney is spearheading the installation of a new west pass switch and relocation of the old switch to improve reliability in that area, and Rick Hansen continues to oversee the installation of the final two switches at Colony WY.

¨ Equipment problems were very minor this year and were one of the big contributing factors that allowed us to be successful in this year’s aggressive schedule.

¨ Ties will soon start being delivered for the 2005 programs

¨ The E-80 bridge crews currently have three crews working on bridges on the Tracy, Huron and PRC subs

¨ LG Everist and New Ulm Quartzite Quarry have done an excellent job supplying this year’s ballast.