Letter From Jack Koraleski

October 3, 2005

To our Customers:

I wanted to provide you with information on damage from flooding we experienced over the weekend in Kansas and to give you a progress report on our recovery from Hurricanes Katrina and Rita.

Weekend Storm in Kansas

On Saturday night October 1, a very severe storm in the Topeka, Kansas, region dumped between 10-12 inches of rain over several hours in a fairly localized area. The resulting runoff from this rain caused bridge damage on four of our lines. There was erosion damage and also extensive washouts – several of which are hundreds of feet in length – in many places along these lines.

The affected lines carry all of our traffic between the Kansas City and St. Louis gateways and points West including the Powder River Basin Coal fields.

We began mobilizing our repair crews and materials that night. Since then our crews have been working around the clock in the area and one line has been reopened with limited service on Monday. We anticipate the other lines to reopen with limited service by mid-week. However, it is likely that it will take at least seven days before normal operations can be resumed. While the impact will be the greatest on our coal business, all of our business groups will be affected to some degree by this damage and its effect on our overall network operations.

Hurricane Recovery Continues

We are making good progress in our recovery from Hurricane Katrina. As of October 3, 2005, only stations in New Orleans proper remain embargoed. We anticipate lifting those embargoes as the recovery of that city continues.

The recovery from Hurricane Rita continues slowly as the Lake Charles and Beaumont areas continue to suffer from a lack of electricity and other basic needs. This makes it very difficult for our customers to return to operation and for our employees to return to the area. Some communities still are preventing people from returning to their homes. Obviously, this has put a strain on our crew base in some areas. In response, we have extra employees from around the system working in the Houston to New Orleans area filling in for some of our train service employees who cannot yet return to work. The leaders of several of our Unions are working closely with the company to facilitate the scheduling and return of our employees.

We have been told that it is likely that it will take another two to four weeks before power will be restored to our railroad and to customers in the Lake Charles area. In the meantime, we are using hundreds of portable generators throughout the region to supply power to crossing signals so that we can operate over lines that have no electricity. Our goal is to restore service as our customers come on line and we are working closely with them to manage that process. However, in some cases we have been unable to communicate with customers due to the lack of phone service.

A particular challenge is the large number of private empty cars that are currently moving toward customers in the area that cannot receive them because they are either closed or their receiving tracks are full. We are attempting to find places to park these empties so they do not overwhelm our yards and sidings and thus slow the recovery process.

We want to thank you for your cooperation as we work our way through these challenges.