System-Wide Weekly Update #33

9 December 2004

The production season has finally come to a successful conclusion on both properties as our field engineering forces do final clean up on all of the projects that were completed this year and managers prepare estimates for the 2005 production season.

The amount of work that was completed this year by the engineering forces on these two railroads was phenomenal compared to previous years’ capital programs.

The focal point of all of the construction efforts this year was the CWR program where nearly 100 track miles of continuous welded rail (CWR) was laid on the two properties, with close to 70 miles being on the DM&E and approximately 30 miles on the IC&E. This large CWR program included two large projects on the Huron sub totaling nearly 60 miles and one on the Tracy sub of nearly 8 miles on the DM&E. On the IC&E we had a significant project of over 30 miles near Calmar on the Mason City sub and a curve patch program of nearly 10 miles that repaired over 30 curves on the Mason City, Marquette, Chicago, River and Kansas City subdivisions.

Another focal point of this year’s program was the addition of two new sidings and 4 extensions to improve capacity on the DM&E. The new sidings included one of 9600’ in Cobden and one of nearly 9000’ in Florence. The Florence siding is part of a new interchange with the BN that was also completed this year. The siding extensions were in De Smet, Elkton, Tracy and Sanborn and will allow the meeting of trains up to 110 cars long at more locations

Engineering crews also unloaded over 255,000 tons ballast to surface over 800 pass miles of track in 2004. This ballast number is nearly 3 times what is normally used in a year and the surfacing dollars are close to double the amount normally spent.

There were over 245,000 ties installed on the two systems this year, which again is nearly 3 times the normal amount of ties installed. Most of these ties were installed on the Huron and Tracy subs of the DM&E and the Owatonna and Mason City subs of the IC&E. Other tie projects included those on the PRC and Black Hills subs of the DM&E and Marquette, River and Kansas City subs on the IC&E.

Along with all of the above projects, crews from the two companies assembled and installed over 45 new premium turnouts on the two properties this past year. These turnouts were primarily installed in conjunction with CWR and siding projects, but there were several others installed to improve service to customers or Company reliability. Those additional switches were installed in Colony WY, Philip SD, Huron SD, Owatonna MN, Marquette IA, Davenport IA, Muscatine IA, and Moravia IA. The Moravia switches were part of a new interchange with the APNC Railroad.