News Release

Watco Companies Announces Track Expansion in Oklahoma

PITTSBURG, KANSAS and FORT WORTH, TEXAS – December 28, 2004:

The Stillwater Central Railroad, a wholly owned subsidiary of Watco Companies, will begin operations Wednesday, Dec. 29, of approximately 15 additional miles of track that connects two of its existing railroad subdivisions in Oklahoma.

Through a lease agreement with The Burlington Northern and Santa Fe Railway Company (BNSF), the Stillwater Central Railroad (SLWC) will take over operations between Wheatland and Oklahoma City. Thirty customers will be served, predominantly industrial switching customers. Commodities primarily moved on the addition include steel, chemical, food, and forest products, and building materials.

In addition to the track miles, SLWC will also take over operation of the BNSF’s "North Yard" in Oklahoma City. Operation of this yard allows the SLWC to partner with the BNSF, moving BNSF traffic from Oklahoma City to Tulsa.

"This lease creates yet another partnership between the BNSF and Watco Companies," said Rick Webb, Watco Companies CEO. "Three years ago today, we signed a contract with the BNSF to expand the Stillwater Central Railroad into southwest Oklahoma to better serve our customers throughout the high plains. Today we again strive to improve our Customer Service by connecting two existing lines and growing the business in Oklahoma. Three of Oklahoma’s largest industrial communities, Lawton, Oklahoma City and Tulsa, can now be connected via the Stillwater Central Railroad. The ability to move products from north or south into the Oklahoma City area, or travel smoothly through the metro area, will improve Customer Service and allow us to help grow the Oklahoma economy. Achievement of our core goals will be our first priority— providing the customer with the right car, at the right time, in the right condition and at the right price.

"This is the second contract we have entered into with the BNSF in 24 hours. Today we also began operations of the Mission Mountain Railroad, another lease-purchase from the BNSF. We have a tremendously successful relationship with the BNSF and look forward to each and every opportunity to partner with them," Webb said.

"BNSF continuously reviews its network to ensure the most efficient use of assets and to provide the most effective service for its customers," said BNSF’s Pete Rickershauser, vice president, Network Development. "We have a longstanding relationship with the Watco Companies, and Watco consistently meets and exceeds the expectations of customers as well as working with BNSF and government agencies not only to preserve but also to enhance local rail service."

Printable maps of the SLWC are available at www.watcocompanies.com ; click on Railroads and then Stillwater Central Railroad.

Watco Companies, Inc. (Watco), a Pittsburg, Kansas, based company, operates ten short line railroads and operates in 23 states. Besides the Stillwater Central Railroad, Watco operates the South Kansas and Oklahoma Railroad, the Kansas and Oklahoma Railroad, the KAW Railroad, the Timber Rock Railroad, the Eastern Idaho Railroad, the Palouse River and Coulee City Railroad, the Pennsylvania Southwestern, the Mission Mountain Railroad and the Great Northwest Railroad. Watco also operates industrial switching locations and mechanical and locomotive shops across the United States.

A subsidiary of Burlington Northern Santa Fe Corporation (NYSE:BNI), BNSF operates one of the largest railroad networks in North America, with about 32,500 route miles covering 28 states and two Canadian provinces. The railway is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, transports the components of many of the products we depend on daily, and hauls enough low-sulphur coal to generate about ten percent of the electricity produced in the United States. BNSF is an industry leader in Web-enabling a variety of customer transactions at www.bnsf.com.

BNSF Headquarters
BNSF Railway Company
2650 Lou Menk Dr. 2nd Floor
P.O. Box 961057
Fort Worth, TX 76161-0057
Phone: (817) 352-1000