IN RE OLYMPIC PIPE LINE COMPANY

SAMUEL STEINER, Bankruptcy Judge

This matter arises upon the Motion for Order Authorizing Post-Petition Borrowing Pursuant to Amended Loan Agreement [the "Motion"], filed by debtor and debtor in possession Olympic Pipe Line Company ["Olympic" or "debtor"], and was noted for hearing on November 20, 2003. Due and proper notice of the hearing upon the Motion was provided to required parties as evidenced by Affidavit of Mailing dated October 14, 2003 herein. By signature below, counsel for debtor certifies that no objections to the Motion were received by the Response date of November 7, 2003.

By the Motion, Olympic seeks authority to incur post-petition financing for the period through June 30, 2004, thus extending and modifying the authority granted pursuant to this court's Order Authorizing Post-Petition Borrowing entered June 4, 2003 in the above-captioned case [the "Borrowing Order"]. Specifically, Olympic seeks approval of (1) its entry into, and the terms of, the First Amendments to Loan and Security Agreement attached hereto as Exhibit 1 ["Amendments"], which amend the Loan and Security Agreement dated on or about March 27, 2003, by and among Olympic as Borrower, and ARCO Midcon LLC and Shell Pipeline Company LP as Lenders ["Agreement", with the Agreement as amended by the Amendments hereafter referred to as the "Amended Agreement"], and (2) the Extended Budget for the period through June 2004 attached hereto asExhibit 2. The court, having reviewed and considered the Motion, all declarations, exhibits, and evidence offered in support of or opposition to the Motion, and being otherwise duly advised, good cause appearing therefor,

THE COURT HEREBY FINDS AND CONCLUDES AS FOLLOWS:

A. On March 27, 2003 ["Petition Date"], the debtor filed a voluntary petition for relief under Chapter 11 of Title 11, U.S.C. ["Bankruptcy Code"]. Pursuant to sections 1107 and 1108 of the Bankruptcy Code, the debtor continues to operate its business as debtor in possession.

B. Consideration of the Motion by this court constitutes a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Based on the foregoing, this court has jurisdiction over this proceeding and the property affected thereby.

C. Pursuant to Fed.R.Bankr.Proc. 4001(c) and (d), the debtor has provided notice of the time, place and nature of this hearing to all parties known to assert security interests or liens, counsel for the official unsecured creditors committee ["Committee"], the Office of the United States Trustee, and all other parties required by the Standing Order Limiting Notice entered July 2, 2003 herein. The debtor has also provided notice of the motion to all known utilities. The foregoing notice is adequate and sufficient.

D. The relief sought in the Motion is necessary to allow debtor to maintain its operations, preserve and maximize the value of the assets of its estate, and provide an opportunity to reorganize or, in the alternative, liquidate such assets in an orderly fashion for the benefit of its creditors. Debtor lacks sufficient funds to maintain such operations, absent the entry of this Order. The preservation of the going concern value of debtor's business is critical to a successful reorganization under Chapter 11 of the Bankruptcy Code.

E. The debtor is unable to procure the requisite postpetition financing in the form of unsecured credit allowable as an administrative expense under sections 503(b)(1), 364(a) and/or 364(b) of the Bankruptcy Code, on terms and conditions more favorable to the estate than those offered by the Lenders, as evidenced by this Order and the relevant documents incorporated by reference herein. Without limiting the foregoing, the debtor is unable to procure the requisite postpetition financing, on terms and conditions more favorable to the estate than those offered by the Lenders, without the debtor granting to a postpetition lender, liens on assets of the debtor pursuant to sections 364(c)(2) and (3) of the Bankruptcy Code, similar to the liens required in the Amended Agreement.

F. Good cause has been shown for entry of this Order. Among other things, entry of this Order will minimize disruption of the debtor as a going concern, preserve and maintain the assets of this estate and increase the possibility of a successful reorganization or, in the alternative, an orderly liquidation of such assets. Accordingly, entry of this Order is in the best interests of the debtor, its creditors, and the estate.

G. Due and proper notice of the hearing upon the Motion has been provided to required parties in interest in the circumstances of this case.

H. Credit to be extended under the Amended Agreement, pursuant to the terms of this Order, will be extended in good faith, and therefore, the Lenders are entitled to the protection and benefits of section 364(e) of the Bankruptcy Code.

I. The Amended Agreement remains valid, enforceable and fully effective upon entry of this Order.

J. The continuation of a holdback estimated by debtor to be equivalent to one month's average utility usage, as originally established under the Agreement and the Borrowing Order, will continue to provide adequate assurance of payment to utilities within the meaning of section 366(b) of the Bankruptcy Code.

Based upon the foregoing and the court's additional findings and conclusions stated orally and recorded in open court, it is hereby:

ORDERED :

1. Motion Granted. The Motion is granted in accordance with the terms of this Order.

2. Authorization for Borrowings. The terms and conditions of the Amendments are approved, authorized and incorporated as part of this Order, and the Amended Agreement is binding on and enforceable against the debtor, its estate and any successor trustee or estate representative in this case, subject only to the terms of this Order. In the event of any inconsistency between this Order and the Amended Agreement, the terms of this Order shall control. The debtor shall be and hereby is authorized to borrow money from the Lenders on the terms and conditions contained, and on the basis of the security and priority provided for in the Amended Agreement. The obligations of the Lenders to make periodic advances according to the terms and conditions of the Amended Agreement shall be several and not joint. The debtor shall be permitted to use the proceeds of such Loans pursuant to, and only as limited by, the Extended Budget and the terms of this Order, provided that nothing herein shall be construed to permit, without further notice, hearing and order, the debtor to pay pre-petition claims or obligations incurred outside the ordinary course of business. Without limiting the foregoing, approval of the Extended Budget shall not constitute approval of the payment of pre-petition refund claims of the debtor's shippers, unless and until such payment of pre-petition refund claims is approved pursuant to separate notice, hearing and order approving any compromise with shippers which provides for such payment. The debtor is authorized to enter into, execute and perform its obligations under the Amended Agreement, and to execute and deliver to the Lenders such additional documents, instruments or agreements consistent with the terms of this Order as may reasonably be required to implement the terms or effectuate the purposes of the Amended Agreement.

3. Superpriority and Secured Claim; Shippers' Pari Passu Rights; Certain Advances. All provisions in the Borrowing Order with respect to the superiority and security interest / lien rights granted to the Lenders, and the pari passu rights granted to Shippers therein, shall continue under and are incorporated into this Order with appropriate reference to the Amended Agreement and Extended Budget,provided that the Carveout shall, in accordance with the Amendments, be $8,800,000. Consistent with the provisions of the Borrowing Order, Lenders shall advance sufficient funds to pay allowed administrative expenses consistent with, and up to the amount provided in, the Extended Budget (and subject to any cumulative variance permitted under the Loan Agreement) for the period ending on the Maturity Date or other date upon which further Loans would not otherwise be required. In no event shall Lenders be required to advance funds in excess of the Borrowing Limit.

4. Authorization to Enter Into Agreements; Effect. To evidence and implement the Amended Agreement and this Order, the debtor is hereby authorized and directed to enter into, execute and deliver, such agreements and other documents with the Lenders and others as may be reasonably requested in connection therewith. The provisions of the Amended Agreement are incorporated herein by reference as part of this Order, and the Amended Agreement and every other agreement or document executed or delivered in connection therewith, and consistent with the authority provided therein and in this Order, shall constitute and evidence the valid and binding obligations of the debtor, which obligations shall be fully enforceable against the estate and the debtor.

5. Protection from Modification on Appeal. The postpetition financing described herein having been extended in good faith, the Lenders and each of them are entitled to the full protections of Bankruptcy Code section 364(e) with respect to liens and priority created, authorized or continued by this Order in the event that this Order or any authorization contained herein is stayed, vacated, reversed or modified on appeal. Any such stay, vacation, reversal, or modification of this Order shall not affect the validity or priority of any obligation of debtor to Lenders pursuant to this Order.

6. Adequate Assurance to Utilities. The establishment, under the Agreement and Borrowing Order, of a holdback of $725,000 estimated by debtor to be equivalent to one month's average utility usage, shall continue under the Amended Agreement and this Order, and as so continued, provides adequate assurance of payment to utilities within the meaning of section 366(b) of the Bankruptcy Code. Debtor shall not draw the last $725,000 available of the $15,000,000 Borrowing Limit under the Amended Agreement, unless authorized to do so by a subsequent order of this court entered after further notice to utilities and a hearing.

7. Matters which may be Heard on Shortened Time; Reservation of Certain Rights. Except to the extent inconsistent with current and any future negotiations and agreements among Olympic and its shippers, Tesoro Refining and Marketing Company d/b/a Tesoro Northwest ("Tesoro") and other shippers shall have the right, following five (5) business days' written notice and opportunity to object received by debtor's counsel, Committee counsel, and the Lenders' counsel, to seek (i) an order from this Court granting Tesoro and other shippers claims equal or superior to those of the Lenders hereunder related to refunds that Tesoro and other shippers may claim postpetition with respect to rates paid under pre-petition interim orders or tariffs of the FERC and/or Washington Utilities and Transportation Commission, or (ii) an order from this Court directing the debtor to comply with existing state and/or federal tariffs and/or orders in place as of the Petition Date; provided, in either event, that if relief is granted pursuant to a request brought pursuant to this paragraph, the Lenders are and will not be obligated to provide further funding on terms other than those provided in the Amended Agreement and the specific terms of this Order. All rights of all parties with respect to such claims of Tesoro and other shippers to refunds owed as of the Petition Date, and with respect to the pending FERC tariff proceeding, are preserved except as expressly provided in this Order. By way of example, the characterization of any particular expenditures in the Extended Budget shall not be binding upon Tesoro in tariff proceedings before the FERC or Washington Utilities and Transportation Commission. Nothing in this paragraph shall be construed to permit Tesoro and other shippers to seek any relief senior to or greater than the pari passu rights described in Paragraph 3, with respect to potential refund obligations described therein.

8. Consistency with Borrowing Order. Except as modified by or inconsistent with the terms of this Order, all terms, authorizations, waivers, notice requirements, and other provisions of the Borrowing Order are incorporated into this Order, and shall be effective with respect to the Amended Agreement and Extended Budget.

FIRST AMENDMENTS TO LOAN AND SECURITY AGREEMENT

These amendments ("Amendments") are made to the Loan and Security Agreement dated on or about March 27, 2003 ("Agreement"), by and among OLYMPIC PIPE LINE COMPANY, as debtor and debtor-in-possession ("Olympic" or the "Borrower"), on the one hand, and ARCO MIDCON LLC ("ARCO") and SHELL PIPELINE COMPANY LP ("SHELL") (hereinafter referred to collectively as the "Lenders"), on the other hand.

RECITALS

A. WHEREAS, on March 27, 2003, Borrower filed with the United States Bankruptcy Court for the Western District of Washington (the "Bankruptcy Court") a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, case no. 03-14059 (the "Bankruptcy Case");

B. WHEREAS, by orders dated April 4, 2003 and June 4, 2003, the Bankruptcy Court approved the Agreement on interim and final bases respectively, subject to certain terms and conditions contained in the orders;

C. WHEREAS, Borrower requires funds for an extended period of time to sustain its efforts to reorganize in the Bankruptcy Case; and

D. WHEREAS, Lenders are willing to make Loans to Borrower on the terms and conditions set forth herein to permit Borrower to use loaned funds for its business activities and reorganization efforts;

NOW THEREFORE, in consideration of the terms and conditions contained herein, and of all loans or extensions of credit made to or for the benefit of Borrower by the Lenders hereunder, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Borrower and Lenders, such parties hereby agree,effective from and after the Effective Date, as follows:

1. The following terms shall have the following meanings, which definitions shall supersede any prior definitions for such terms provided in the Agreement:

"Agreement" shall mean the Agreement as amended by these Amendments.

"Budget" shall mean, collectively, the Interim Budget, Final Budget and the extended Budget attached to these Amendments ("Extended Budget").

"DIP Orders" shall mean the Interim DIP Order, the Final DIP Order and the order approving these amendments in form and substance satisfactory to the Lenders and Olympic ("Extended DIP Order").

"Effective Date" shall mean the date eleven days after entry of the Extended DIP Order so long as no notice of appeal has been filed and the deadline to file a notice of appeal has not been extended,provided that in the event a notice of appeal from the Extended DIP Order is filed, Lenders may, in their sole discretion and upon terms mutually agreeable to them and each of them, waive the requirement that no notice of appeal has been filed such that the Amendments shall become effective regardless of any such appeal.

"Maturity Date" shall mean the earlier of (i) June 30, 2004, or (ii) the date on which there is an Event of Default under the Agreement; provided, however, that the Lenders, in their sole and absolute discretion, may elect to extend the Maturity Date at any time (and the definition of "Maturity Date" in section 2.6 of the Agreement shall be superseded).

2. Section 2.1(a) of the Agreement is amended to provide, additionally, that the Lenders, severally and not jointly, agree to make periodic advances from and after the date that is eleven days after entry of the Extended DIP Order, each such advance in the amount specified in the Extended Budget for the applicable monthly period,

3. Section 2.1(c) of the Agreement is amended to reflect the parties' prior agreement that in lieu of a monthly report showing Borrower's cash expenditures against the expenses set forth in the Budget, Borrower shall provide Lenders a monthly report showing a comparison of budget to actual expenditures on an accrual basis, and shall continue to provide reports of outstanding cash balances every two weeks.

4. Section 2.3 of the Agreement is amended to provide, additionally, that the Extended Budget shall supersede the Final Budget upon its effectiveness. With respect to the use of proceeds of Loans to pay pre-petition obligations of Borrower, the parties acknowledge that Borrower is in negotiations to settle certain pre-petition refund obligations owed to shippers based upon pre-petition orders of the Federal Energy Regulatory Commission and Washington Utilities and Transportation Commission, and that to the extent payment of such pre-petition refund obligations is approved by the Bankruptcy Court after notice and a hearing, use of Loan proceeds for such purpose shall be permitted so long as payment is made ratably to all shippers having such pre-petition refund rights (including without limitation, the Lenders and/or their affiliated companies).

5. The references in sections 2.3 and 4.1 of the Agreement, to the sum of $4,000,000 (which amount was superseded by the amount of $5,000,000 in the Final DIP Order), shall in each instance be amended to $8,800,000.

6. Section 2.8 of the Agreement is amended to provide, additionally, that the Final Budget shall be replaced by the Extended Budget for purposes of approval and implementation of these Amendments.

7. With reference to section 3.1(c) of the Agreement, the parties waive the requirement that neither of the DIP Orders, nor the Borrower's Liabilities and the Lender's rights and remedies thereunder, shall have been amended, modified or otherwise impaired solely to the extent such orders, liabilities, rights and remedies were amended or modified in the Interim DIP Order and/or the Final DIP Order, and to the extent expressly provided in these Amendments. The parties agree that all amendments and modifications to such liabilities, rights and remedies as are expressly contained in the Final DIP Order may be incorporated into the Extended DIP Order, and that any covenant violations or Events of Default that might otherwise arise based upon the specified amendments and modifications are waived.

8. With reference to section 3.1(g) of the Agreement, the parties acknowledge that Borrower, based upon its current knowledge, expects to receive the tax refund previously referenced in the Interim Budget, in the year 2004.

9. Section 4.1 of the Agreement is amended to provide that the liens, security interests and superpriority granted to Lenders under the Agreement shall continue to be effective under the Extended DIP Order.

10. Except as expressly provided herein, the terms and conditions of the Agreement shall remain effective.

IN WITNESS WHEREOF, the parties hereto have caused these Amendments to be executed by their respective officers thereunto duly authorized. OLYMPIC PIPE LINE COMPANY DEBTOR-IN-POSSESSION FINANCING BUDGET ACTUALS APRIL — AUGUST 2003 PROJECTIONS SEPTEMBER 2003 — JUNE 2004 As of September 18, 2003 OLYMPIC PIPE LINE COMPANY DEBTOR-IN-POSSESSION FINANCING BUDGET APRIL 2003-JUNE 2004 TABLE OF CONTENTS Balance Sheets Pages 1-4

Statements of Income Pages 5-8

Statement of Cash Flows Pages 9-10

Professional Fees Costs Detail Pages 11-12

Key Management Assumptions — Balance Sheets Pages 13-17

Key Management Assumptions — Statements of Income Pages 18-21

OLYMPIC PIPE LINE COMPANY BALANCE SHEETS ACTUAL | PROJECTED Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 ASSETS Current Assets Cash and Short Term Investments $ 1,090,870 $ 2,079,199 $ 1,606,135 $ 1,853,286 $ 3,983,764 $ 4,984,938 $ 3,729,550 $ 500,000 $ 500,000 $ 500,000 Accounts Receivable — Affiliates 395,341 2,201,302 3,736,456 3,932,975 2,746,340 3,572,178 2,576,656 3,122,737 3,012,513 3,022,716 Accounts Receivable — Other 1,825,123 2,5S9,620 4,087,887 3,675,964 5,052,292 3,316,786 4,030,303 4,710,975 2,031,972 2,040,663 Accounts Receivable — NROA Claim 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Product Inventory 363,690 211,728 232,654 285,223 273,061 412,227 412,227 412,227 412,227 412,227 Prepaid Pension 2,989,093 Other Prepaid Expenses Assets 1,494,558 1,651,100 1,460,953 1,335,166 1,198,308 779,408 489,403 2,096,177 1,963,245 1,661,506 Total Current Assets 9,158,675 9,702,949 12,124,085 12,082,614 14,253,765 14,065,537 12,233,138 11,342,116 8,919,957 8,637,111 Property, Plant, and Equipment Construction in Progress 43,508,566 43,935,439 37,952,460 24,440,264 24,049,932 25,381,954 22,918,143 23,973,921 24,993,963 26,548,973 Pipeline and Equipment 122,511,200 122,511,200 128,932,249 143,425,211 144,555,333 144,555,333 148,532,927 149,060,816 149,705,838 150,483,342 Less: Accumulated Depreciation (50,385,347) (50,612,332) (50,901,197) (51,288,731) (51,523,545) (51,791,234) (52,037,655) (52,284,599) (52,532,232) (52,780,322) Total PP E 115,633,920 115,834,307 115,983,532 116,576,744 117,081,720 118,146,053 119,413,415 120,750,138 122,167,568 124,251,993 Non-Current Assets Deferred Other 6,701 — — — 62,081 63,949 63,949 63,949 63,949 63,949 Total Non-Current Assets 6,701 — — — 62,031 63,949 63,949 63,949 63,949 63,949 TOTAL ASSETS $ 124,799,296 $125,537,256 $128,107,617 $128,659,358 $131,397,566 $132,275,539 $131,715,502 $132,656,204 $131,151,475 $132,953,053 OLYMPIC PIPE LINE COMPANY BALANCE SHEETS ACTUAL PROJECTED Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 LIABILITIES AND EQUITY Current Liabilities New Borrowings/Funding $ — $ — $ — $ — $ — $ — $ — $ 1,495,500 $ 1,710,119 $ 4,469,425 Notes Payable — Equilon 45,303,931 — — — — — — — — — Notes Payable — Atlantic Richfield 63,382,774 — — — — — — — — — Prepayments — ARCO Shell 1,435,867 — — — — — — — — — Accounts Payable — Affiliates 1,480,424 1,170,328 1,614,631 978,939 1,774,439 889,873 889,873 850,332 850,332 910,873 Accounts Payable — Other 1,882,375 375,849 566,873 1,076,705 303,659 1,393,928 1,236,557 820,154 882,811 1,083,004 Notes Payable — Chase 30,000,000 — — — — — — — — — Current Portion LTD — Prudential 1,500,000 — — — — — — — — — Accrued Interest Financing Fees 16,993,374 — — — — — — 2,150 6,758 15,641 Accrued Liabilities — Emp. Benefits 132,083 5,870 5,870 196,969 196,969 196,969 326,176 326,176 326,176 455,383 Accrued Liabilities — Other 2,000,266 1,050,659 1,927,274 3,185,730 4,599,574 4,309,098 6,015,793 5,515,953 6,213,297 4,909,937 Accrued Liabilities — Litigation 17,700,000 12,000,000 12,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 Deferred Revenue — — — — — — — — — — FERC Refund Liability 14,472,721 — — — — 1,480,623 1,788,643 2,245,386 2,174,314 2,102,989 WUTC Refund Liability 1,734,434 — — — — — — — — — Federal Income Tax Payable (6,866,846) (6,866,846) (6,866,846) (6,866,846) (6,866,846) (6,866,846) (6,866,646) (6,866,846) (6,866,846) (6,866,846) Property and Use Tax Payable 1,313,296 98,790 186,290 273,790 361,290 448,790 386,290 386,290 386,290 366,290 WA Public Utilities Tax Payable 36,820 20,984 42,141 21,861 (6,296) (5,052) (5,052) (5,052) (5,052) (5,052) State/Franchise Tax Payable (152,256) (152,382) (152,328) (152,328) (173,282) (173,282) (173,282) (173,282) (173,282) (173,282) Total Current Liabilities 192,349,262 7,703,252 9,323,910 9,714,820 11,189,507 12,674,101 14,598,151 15,596,762 16,504,916 18,288,362 Non-Current Liabilities Long Term Debt — Prudential 9,500,000 — — — — — — — — — Accrued Liability — Pension — 1,095,346 1,085,346 1,095,346 1,095,346 1,095,346 1,095,346 1,095,346 1,313,206 1,313,206 Environmental Liability 3,432,332 3,389,846 3,345,738 3,324,566 3,317,903 3,299,007 3,198,151 3,125,753 2,984,200 3,285,864 Liabilities Subject to Compromise — 198,353,268 198,573,268 91,048,172 91,490,607 91,567,384 91,429,664 91,429,884 88,864,330 88,489,654 Deferred Fed, Income Tax Payable 4,666,846 4,666,900 4,666,846 4,666,846 4,666,846 4,666,846 4,666,846 4,666,846 4,666,846 4,666,846 Total Non-Current Liabilities 17,599,178 207,505,360 207,681,193 100,134,930 100,570,702 100,628,583 100,390,227 100,317,329 97,828,582 97,755,570 Equity Capital Stock 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 Additional Paid in Capital — — — 108,686,705 108,686,705 108,686,705 106,686,705 108,686,705 108,686,705 108,686,705 Retained Earnings — Prior Year (84,771,680) (84,771,680) (84,835,698) (84,835,696) (84,835,698) (84,835,698) (84,835,698) (84,835,698) (84,835,698) (84,835,698) Retained Earnings — Current (2,877,464) (3,379,254) (2,541,370) (3,520,976) (2,693,227) (3,357,729) (5,603,461) (5,588,972) (5,512,607) (5,421,463) Accum. Other Comp. Income — (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) Cash Dividends — — — — — — — — — — Total Equity (85,149,144) (89,671,355) (88,897,489) 18,809,610 19,637,359 18,972,857 16,727,125 16,741,614 16,817,979 16,909,123 TOTAL LIABILITIES EQUITY $ 124,799,296 $ 125,537,258 $ 128,107,619 $ 128,659,359 $ 131,397,567 $132,275,541 $131,715,504 $132,656,205 $131,151,477 $132,953,055 OLYMPIC PIPE LINE COMPANY BALANCE SHEETS PROJECTED Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 ASSETS Current Assets Cash and Short Term Investments $ 500,000 $ 970,056 $ 584,408 $ 500,000 $ 500,000 $ 575,239 Accounts Receivable — Affiliates 2,992,860 2,625,095 2,728,561 3,009,264 3,122,784 2,756,811 Accounts Receivable — Other 2,015,231 1,701,949 1,790,087 2,029,204 2,125,907 1,814,151 Accounts Receivable — NRDA Claim 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Product inventory 412,227 412,227 412,227 412,227 412,227 412,227 Prepaid Pension — — — — — — Other Prepaid Expenses Assets 1,516,530 1,371,555 1,226,579 1,112,297 967,322 822,346 Total Current Assets 3,436,848 8,080,881 7,741,863 8,062,992 8,128,240 7,380,774 Property, Plant, and Equipment Construction in Progress 25,071,671 23,594,369 22,117,068 21,065,368 20,013,667 18,961,967 Pipeline and Equipment 152,869,692 155,256,041 157,642,390 160,241,540 162,840,690 165,439,840 Less: Accumulated Depreciation (53,098,547) (53,416,771) (53,734,996) (54,053,220) (54,371,445) (54,689,670) Total PP E 124,842,81 125,433,639 126,024,462 127,253,687 128,482,912 129,712,137 Non-Current Assets Deferred Other — — — — — — Total Non-Current Assets — — — — — — TOTAL ASSETS $ 133,279,664 $133,514,520 $133,766,323 $135,316,679 $136,611,152 $137,092,911 OLYMPIC PIPE LINE COMPANY BALANCE SHEETS PROJECTED Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 LIABILITIES AND EQUITY Current Liabilities New Borrowings/Funding $ 5,862,935 $ 5,862,935 $ 5,862,935 $ 6,227,472 $ 6,430,119 $ 6,430,119 Notes Payable — Equilon — — — — — — Notes Payable — Atlantic Richfield — — — — — — Prepayments — ARCO Shell — — — — — — Accounts Payable — Affiliates 860,320 860,320 860,320 860,320 860,320 860,320 Accounts Payable — Other 555,358 528,864 630,837 731,128 739,150 768,090 Notes Payable — Chase — — — — — — Current Portion LTD — Prudential — — — — — — Accrued Interest Financing Fees 30,494 47,350 64,206 81,586 99,781 118,267 Accrued Liabilities — Emp. Benefits 455,383 455,383 174,753 174,753 174,753 349,505 Accrued Liabilities — Other 3,871,399 4,300,718 5,136,235 3,792,658 4,363,127 4,999,945 Accrued Liabilities — Litigation 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 Deferred Revenue — — — — — — FERC Refund Liability 2,031,412 1,959,582 1,887,497 1,815,156 1,742,560 1,669,706 WUTC Refund Liability — — — — — — Federal income Tax Payable (6,866,846) (6,866,846) (6,866,846) — — — Property and Use Tax Payable 427,957 469,623 511,290 427,957 469,623 511,290 WA Public Utilities Tax Payable — — — — — — State/Franchise Tax Payable — — — — — — Total Current Liabilities 18,228,411 18,617,929 19,261,226 25,111,029 25,879,432 26,707,242 Non-Current Liabilities Long Term Debt — Prudential — — — — — — Accrued Liability — Pension 1,313,206 1,313,206 1,313,206 1,313,206 1,313,206 1,313,206 Environmental Liability 3,235,454 3,185,045 3,134,635 3,084,226 3,033,816 2,983,406 Liabilities Subject to Compromise 88,113,460 87,735,800 87,356,610 36,976,903 86,593,674 86,209,915 Deferred Fed. Income Tax Payable 4,666,846 4,666,846 4,666,846 — — — Total Non-Current Liabilities 97,328,986 96,900,897 96,471,297 91,373,335 90,940,696 90,506,528 Equity Capital Stock 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 Additional Paid in Capital 108,686,705 108,686,705 108,686,705 108,686,705 108,666,705 108,686,705 Retained Earnings — Prior Year (90,257,161) (90,257,161) (90,257,161) (90,257,161) (90,257,161) (90,257,161) Retained Earnings — Current 813,145 1,086,572 1,124,680 1,923,193 2,881,903 2,970,020 Accum. Other Comp. Income (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) (4,020,421) Cash Dividends — — — — — — Total Equity 17,722,268 17,995,695 18,033,803 18,832,316 19,791,025 19,879,143 TOTAL LIABILITIES EQUITY $133,279,666 $133,514,522 $133,766,326 $135,316,681 $136,611,153 $137,092,913 OLYMPIC PIPE LINE COMPANY STATEMENTS OF INCOME ACTUAL PROJECTED Total April — Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Dec. 2003 REVENUE Operating Revenue Transportation $ 3,267,703 $ 4,562,419 $ 3,842,010 $ 4,490,865 $ 4,154,043 $ 3,610,136 $ 4,621,449 $ 4,417,330 $ 4,436,224 $ 37,402,228 Tariff Refunds — — — — (1,480,623) (308,020) (410,022) — — (2,198,665) Total Operating Revenue 3,267,703 4,562,419 3,842,010 4,490,865 2,673,420 3,302,167 4,211,427 4,417,330 4,436,224 35,203,564 Other Revenue Gain/(Loss) Income (342,668) (118,321) (35,470) (146,456) 85,897 — — — — (557,018) Interest Income 4,653 2,687 1,860 2,386 2,190 — — — — 13,976 Miscellaneous Income 11,561 12,576 10,990 8,930 (45,006) 4,167 4,167 4,167 4,167 15,718 Total Other Revenue (326,454) (102,858) (22,620) (135,140) 43,081 4,167 4,167 4,167 4,167 (527,324) Total Revenue 2,941,249 4,459,561 3,819,390 4,355,725 2,716,501 3,306,333 4,215,593 4,421,497 4,440,390 34,676,239 EXPENSES Operating Expenses Salaries, Benefits, Payroll Taxes 654,329 600,726 804,229 637,447 640,884 770,091 601,343 819,203 791,091 6,319,343 Supplies/Maintenance Materials 47,262 40,257 47,360 37,903 57,315 96,500 62,500 62,500 62,500 508,097 Outside Services 574,595 645,818 242,689 98,392 464,406 357,099 405,432 405,432 617,432 3,811,294 Project Expenses 53,186 154,667 432,789 367,378 487,967 2,286,725 609,667 609,667 618,381 5,620,427 Rentals 29,560 17,354 65,320 63,417 18,739 82,700 50,700 50,700 50,700 429,190 Administrative Fee 90,419 90,419 90,419 90,419 90,419 90,419 90,419 90,419 90,419 813,770 Miscellaneous 79,825 78,547 78,788 64,104 17,529 118,091 69,091 69,091 69,091 644,155 Total Operating Expenses 1,529,176 1,627,788 1,761,594 1,359,060 1,771,259 3,801,624 1,889,151 2,107,011 2,299,613 18,146,276 Power Expense Utilities/Operating Fuel and Power 704,953 542,846 716,607 610,147 750,365 586,096 723,533 674,902 676,164 5,985,613 Polymer Additives (DRA) 151,689 204,288 185,555 249,543 45,924 156,438 156,438 156,438 156,438 1,462,751 Total Power Expense 856,642 747,134 902,162 859,690 796,289 742,534 879,971 831,340 832,602 7,448,364 Non-Operating Expenses Insurance Expense 154,632 141,275 140,934 149,367 140,934 132,932 132,932 132,932 132,932 1,258,869 Professional Fees 651,733 674,603 $68,493 673,193 294,109 774,687 749,368 509,375 709,375 5,904,936 Property Tax 87,500 87,500 87,500 87,500 87,500 (200,000) — — — 237,500 State Franchise Tax 18,723 23,418 100,779 26,470 27,831 53,867 53,867 53,867 53,867 412,688 Issuance Expense 451 31,095 — — — — — — — 31,546 Interest Expense Financing Fees (82,303) — 550,000 — (4,608) — 248,871 462,975 72,767 1,247,703 Depreciation 226,485 288,865 387,534 292,202 267,689 246,421 246,943 247,633 248,090 2,451,863 Total Non-Operating Expanses 1,057,221 1,246,756 2,135,240 1,228,732 813,455 1,007,907 1,431,981 1,406,782 1,217,031 11,545,104 Total Expenses 3,443,039 3,621,678 4,798,996 3,447,482 3,381,003 5,552,065 4,201,104 4,345,133 4,349,246 37,139,744 OLYMPIC PIPE LINE COMPANY STATEMENTS OF INCOME ACTUAL PROJECTED Total April — Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Dec.2003 Gain/(Loss) Extraordinary Items Sea Tac Sale Proceeds — — — — — — — — — — Loss on PP E Capital Assets — — — (101,448) — — — — — (101,448) Total Gain/(Loss) Extraordinary — — — (101,448) — — — — — (101,448) Income Before Taxes (501,790) 837,883 (979,606) 806,795 (664,502) (2,245,731) 14,489 76,364 91,144 (2,564,953) Tax Expense Federal Income Tax — — — — — — — — — — State Income Tax — — — (20,954) — — — — — (20,954) Total Tax Expense — — — (20,954) — — — — — (20,954) — INCOME AFTER TAXES $ (501,790) $ 837,883 $ (979,606) $ 827,749 $ (664,502) $ (2,245,731) $ 14,439 $ 76,364 $ 91,144 $ (2,543,999) THROUGHPUT (Barrels Transported) 9,109,026 9,536,392 8,208,883 9,696,555 9,258,916 7,895,032 9,746,390 9,091,295 9,108,295 81,650,784 (Barrels per Day) 303,634 307,626 273,629 312,792 298,675 263,168 314,400 303,043 293,816 296,912 (Days per Period) 30 31 30 31 31 30 31 30 31 275 OLYMPIC PIPE LINE COMPANY STATEMENTS OF INCOME PROJECTED Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Total 2004 REVENUE Operating Revenue Transportation $ 4,380,936 $ 3,699,888 $ 3,891,493 $ 4,411,313 $ 4,621,536 $ 3,943,807 $ 24,948,974 Tariff Refunds — — — — — — — Total Operating Revenue 4,380,936 3,699,888 3,891,493 4,411,313 4,621,536 3,943,807 24,948,374 Other Revenue Gain/(Loss) Income — — — — — — — Interest Income — — — — — — — Miscellaneous Income 4,167 4,167 4,167 4,167 4,167 4,167 4,167 Total Other Revenue 4,167 4,167 4,167 4,167 4,167 4,167 25,000 Total Revenue 4,385,103 3,704,055 3,895,660 4,415,479 4,625,703 3,947,974 24,973,974 EXPENSES Operating Expenses Salaries, Benefits, Payroll Taxes 608,083 608,083 782,636 608,083 608,083 782,836 3,998,005 Supplies/Maintenance Materials 48,948 48,948 48,943 48,948 48,948 48,948 293,688 Outside Services 370,833 370,833 520,833 370,833 370,833 370,833 2,375,000 Project Expenses 329,167 329,167 329,167 382,500 382,500 382,500 2,135,000 Rentals 63,760 63,760 63,760 63,760 63,760 63,760 382,563 Administrative Fee 93,667 93,667 93,667 93,667 93,667 93,667 562,000 Miscellaneous 50,600 50,600 86,100 50,600 50,600 86,100 374,600 Total Operating Expenses 1,565,058 1,565,058 1,925,311 1,618,392 1,618,392 1,828,644 10,120,856 Power Expense Utilities/Operating Fuel and Power 872,657 566,683 614,320 684,001 716,092 621,597 3,875,349 Polymer Additives (DRA) 156,829 156,329 156,829 156,829 156,829 156,829 940,976 Total Power Expense 829,486 723,512 771,149 840,830 872,921 778,426 4,816,324 Non-Operating Expenses Insurance Expense 146,225 146,225 146,225 146,225 146,225 146,225 877,351 Professional Fees 544,400 508,800 529,600 527,500 546,400 550,000 3,206,700 Property Tax 41,667 41,667 41,667 41,667 41,667 41,667 250,000 State Franchise Tax 49,910 49,910 49,910 49,910 49,910 49,910 299,462 Issuance Expense — — — — — — — Interest Expense Financing Fees 76,986 77,231 75,466 74,218 73,254 146,759 523,913 Depreciation 318,225 318,225 318,225 318,225 318,225 318,225 1,909,348 Total Non-Operating Expenses 1,177,413 1,142,058 1,161,092 1,157,744 1,175,681 1,252,786 7,066,774 Total Expenses 3,571,957 3,430,628 3,857,552 3,616,966 3,666,994 3,859,857 22,003,954 OLYMPIC PIPE LINE COMPANY STATEMENTS OF INCOME PROJECTED Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Total 2004 Gain /(Loss) Extraordinary Items Sea Tac Sale Proceeds — — — — — — — LOBS on PP E Capital Assets — — — — — — — Total Gain/(Loss) Extraordinary — — — — — — — Income Before Taxes 813,145 273,427 38,108 798,513 958,709 88,118 2,970,020 Tax Expense Federal Income Tax — — — — — — — State Income Tax — — — — — — — Total Tax Expense — — — — — — — INCOME AFTER TAXES $ 813,145 $ 273,427 $ 38,108 $ 798,513 $ 958,709 $ 88,118 $ 2,970,020 THROUGHPUT (Barrels Transported) 8,957,958 7,546,672 8,181,063 9,109,026 9,536,392 8,277,978 51,609,089 (Barrels per Day) 288,966 269,524 263,905 303,634 307,626 275,933 285,133 (Days per Period) 31 28 31 31 30 181 OLYMPIC PIPE LINE COMPANY STATEMENT OF CASH FLOWS ACTUAL PROJECTED Total April — Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Dec. 2003 Cash from Operating Activities Net Income $ (501,790) $ 837,383 $ (979,606) $ 827,749 $ (664,502) $ (2,245,731) $ 14,489 $ 76,364 $ 91,144 $ (2,543,999) Adjustments to Net Income: Depreciation 226,485 288,865 387,534 234,814 267,689 246,421 246,943 247,633 248,090 2,394,475 Accounts Receivable (826,719) (3,063,421) 215,404 (189,693) 909,668 282,006 (1,226,754) 2,789,227 (18,894) (1,129,176) Product Inventory 151,962 (20,926) (52,569) 12,162 (139,166) — — — — (48,537) Prepaid Expenses Other Assets (156,542) 190,147 125,787 74,777 417,032 290,005 (1,606,774) 132,932 301,740 (230,897) A/P Other Accrued Liabilities 1,390,581 1,511,947 1,132,591 1,436,298 (84,773) 1,549,324 (953,633) 764,608 (1,033,743) 5,713,200 Accrued Litigation Liabilities — — (1,000,000) — — — — — — (1,000,000) Accrued Environmental Liabilities (42,486) (44,108) (21,172) (6,663) (18,896) (100,856) (72,399) (141,553) 301,664 (146,468) Accrued Liabilities — Benefits Pension 1,095,346 — 191,099 — — 129,207 — 217,860 129,207 1,762,719 Deferred Revenue — — — — — — — — — — FERC Refund Liability — — — — 1,480,623 308,020 456,744 (71,073) (71,324) 2,102,989 WUTC Refund Liability — — — — — — — — — — Prepayments — — ARCO Shell — — — — — — — — — — Federal Tax Payable — — — — — — — — — — Deferred Taxes 6,755 (54) — — — — — — — 6,701 Other Taxes Payable 71,609 108,711 67,220 38,389 88,744 (62,500) — — 312,173 Net Cash from Operating Activities 1,415,201 (190,956) 66,288 2,427,833 2,256,419 395,895 (3,141,334) 4,015,999 (52,116) 7,193,130 Cash from/fused for) Investing Capital Expenditures (426,871) (438,090) (980,746) (739,790) (1,332,022) (1,513,783) (1,583,667) (1,665,064) (2,332,514) (11,012,547) Property Sales (Net) — — — — — — — — — — Contributed PP E (Net) — — — — — — — — — — Net Cash from Investing Activities (426,871) (438,090) (980,746) (739,790) (1,332,022) (1,513,783) (1,583,667) (1,665,064) (2,332,514) (11,012,547) Cash from/fused for) Financing Short Term Debt — — — — — — — — — — Long Term Debt — — — — — — — — — — Notes Payable — — — — — — — — — — Liabilities Subject to Compromise — 220,000 1,161,608 442,435 76,778 (137,500) — (2,565,554) (374,676) (1,176,909) Additional Paid in Capital — — — — — — — — — — Dividends Paid — — — — — — — — — — Prior Years' Retained Earnings — (64,018) — — — — — — — (164,018) Net Cash from Financing Activities — 155,982 1,161,608 442,435 76,778 (137,500) — (2,565,554) (374,676) (1,240,927) Increase/(Decrease) in Cash 988,330 (473,064) 247,150 2,130,478 1,001,174 (1,255,388) (4,725,051) (214,619) (2,759,306) (5,060,295) Cash — Beginning of Period 1,090,870 2,079,199 1,606,135 1,853,286 3,933,764 4,384,938 3,729,550 (995,500) (1,210,119) 1,090,870 Cumulative Cash Requirements $ 2,079,199 $ 1,606,135 $ 1,853,286 $ 3,983,764 $ 4,984,938 $ 3,729,550 $ (995,500) $ (1,210,119) $ (3,969,425) $ (3,969,425) New Borrowings Cumulative Cash Requirements $ 2,079,199 $ 1,606,135 $ 1,853,286 $ 3,983,764 $ 4,984,938 $ 3,729,550 $ (995,500) $ (1,210,119) $ (3,969,425) $ (3,969,425) Assumed Operating Cash Balance (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) Total New Borrowings Required — — — — — — (1,495,500) (1,710,119) (4,469,425) (4,469,425) New Borrowings Ending Balance — — — — — — (1,495,500) (1,710,119) (4,469,425) (4,469,425) Ending Cash Balance $ 2,079,199 $ 1,606,135 $ 1,853,286 $ 3,983,764 $ 4,984,938 $ 3,729,550 $ 500,000 $ 500,000 $ 500,000 $ 500,000 OLYMPIC PIPE LINE COMPANY STATEMENT OF CASH FUOWS PROJECTED Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Total 2004 Cash from Operating Activities Net Income $ 813,145 $ 273,427 $ 38,108 $ 798,513 $ 958,709 $ 88,118 $ 2,970,020 Adjustments to Net Income: Depreciation 318,225 318,225 318,225 318,225 318,225 318,225 1,909,348 Accounts Receivable 55,288 681,048 (191,605) (519,819) (210,223) 577,723 492,416 Product Inventory — — — — — — — Prepaid Expenses Other Assets 208,925 144,976 144,976 114,282 144,976 144,976 903,108 AJP Other Accrued Liabilities (1,601,884) 419,682 954,345 (1,225,906) 596,686 684,244 (172,832) Accrued Litigation Liabilities — — — — — — — Accrued Environmental Liabilities (50,410) (50,410) (50,410) (50,410) (50,410) (50,410) (302,458) Accrued Liabilities — Benefits Pension — — (280,630) — — 174,753 (105,878) Deferred Revenue — — — — — — — FERC Refund Liability (71,577) (71,831) (72,085) (72,340) (72,596) (72,854) (433,283) WUTC Refund Liability — — — — — — — Prepayments — — ARCO Shell — — — — — — — Federal Tax Payable — — — 6,866,846 — — 6,866,846 Deferred Taxes — — — (4,666,846) — — (4,666,846) Other Taxes Payable 220,001 41,667 41,667 (83,333) 41,667 41,667 303,334 Net Cash from Operating Activities (108,288) 1,756,783 902,590 1,479,211 1,727,033 2,006,447 7,763,776 Cash from/(used for) Investing Capital Expenditures (909,048) (909,048) (909,048) (1,547,450) (1,547,450) (1,547,450) (7,369,492) Property Sales (Net) — — — — — — — Contributed PP E (Net) — — — — — — — Net Cash From Investing Activities (909,048) (909,048) (909,048) (1,547,450) (1,547,450) (1,547,450) (7,369,492) Cash from/(used for) Financing Short Term Debt — — — — — — — Long Term Debt — — — — — — — Notes Payable — — — — — — — Liabilities Subject to Compromise (376,175) (377,679) (379,190) (380,707) (382,230) (383,759) (2,279,739) Additional Paid in Capital — — — — — — — Dividends Paid — — — — — — — Prior Years' Retained Earnings — — — — — — — Net Cash from Financing Activities (376,175) (377,679) (379,190) (380,707) (382,230) (383,759) (2,279,739) Increase/(Decrease) in Cash (1,393,510) 470,056 (385,648) (445,946) (202,646) 75,239 (1,885,455) Cash — Beginning of Period (3,969,425) (5,362,935) (4,892,879) (5,278,527) (5,727,472) (5,930,119) (3,969,425) Cumulative Cash Requirements $ (5,362,935) $ (4,892,879) $ (5,278,527) $ (5,727,472) $(5,930,119) $ (5,854,880) $ (5,854,880) New Borrowings Cumulative Cash Requirements $ (5,362,935) $ (4,892,879) $ (5,278,527) $ (5,727,472) $(5,930,119) $ (5,654,880) $ (5,854,880) Assumed Operating Cash Balance (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) Total Mew Borrowings Required (5,862,935) (5,392,879) (5,778,527) (6,227,472) (6,430,119) (6,354,880) (6,354,880) New Borrowings Ending Balance (5,862,935) (5,862,935) (5,862,935) (6,227,472) (6,430,119) (6,430,119) (6,430,119) Ending Cash Balance $ 500,000 $ 970,056 $ 584,408 $ 500,000 $ 500,000 $ 575,239 $ 575,239 OLYMPIC PIPE LINE COMPANY PROFESSIONAL FEES COSTS ACTUAL PROJECTED Total Apr. — Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Dec. 2003 Restructuring Fees Bucknell Stehlik Sato Stubner $ 100,000 $ 100,000 $ 90,000 $ 100,000 $ 34,459 $ 120,000 $ 120,000 $ 80,000 $ 80,000 $ 824,459 PricewaterhouseCoopers 50,000 50,000 35,000 35,000 (8,546) 60,000 60,000 20,000 20,000 321,454 Danielson Harrigan Leyh Tollefson — — 50,000 — — 12,500 12,500 12,500 12,500 100,000 Creditors' Committee Fees Expenses 50,000 60,000 115,000 90,000 40,674 150,000 115,000 35,000 35,000 690,674 Audit Fees — — — — — — — — 200,000 200,000 U.S. Trustee Fees 250 — 10,000 — — 10,000 — — 10,000 30,250 Total Restructuring Fees 200,250 210,000 300,000 225,000 66,587 352,500 307,500 147,500 357,500 2,166,837 Tariff Related Fees Danielson Harrigan Leyh Tollefson 120,000 120,000 170,000 90,000 60,000 12,500 12,500 12,500 12,500 610,000 Karr Tuttle Campbell 15,000 50,000 75,000 50,000 25,000 23,438 10,000 5,000 5,000 258,438 Sidley Austin Brown Wood 33,540 44,760 39,200 50,000 54,810 133,064 46,600 45,000 45,000 493,974 Regulatory Economics Group 21,943 20,843 41,293 62,193 80,332 55,243 51,393 20,000 20,000 373,239 Law Economics Consulting Group 4,000 7,000 7,000 6,000 54,338 15,000 20,000 15,000 5,000 133,338 PricewaterhouseCoopers — — 10,000 10,000 — 10,000 10,000 — — 40,000 Total Tariff Related Fees 194,483 242,603 342,493 268,193 274,480 249,245 152,493 97,500 87,500 1,906,990 Whatcom Creek Other Litigation Danielson Harrigan Leyh Tollefson City of Seattle (1) 85,000 85,000 85,000 85,000 340,000 ARCO Coverage Bl Claims (Net) (2) 187,000 147,000 51,000 125,000 50,000 32,933 109,375 109,375 109,375 1,021,058 Karr Tuttle Campbell 40,000 45,000 45,000 45,000 20,000 — 45,000 50,000 50,000 340,000 Yarmuth Wilsdon Calfo 30,000 30,000 30,000 10,000 5,000 55,009 5,000 5,000 5,000 175,009 Conflict Committee — — — — — — 45,000 15,000 15,000 75,000 Insurance Recoveries — — — — (121,958) — — — — (121,958) Total Whatcom Creek Other 257,000 222,000 226,000 180,000 (46,958) 172,942 289,375 264,375 264,375 1,829,109 Total Professional Fees $ 651,733 $ 674,603 $ 863,493 $ 673,193 $ 294,109 $ 774,687 $ 749,368 $ 509,375 $ 709,375 $ 5,904,936 Notes:

(1) Assumes that the City of Seattle litigation is completed by December 2003. The 2004 budget will need to be revised if this litigation continues into 2004.

(2) Fees have been budgeted for the Bl Claims net of insurance reimbursements.

(3) Represents the amount that each professional was (over) / under the fees approved in August and September 2003.

OLYMPIC PIPE LINE COMPANY PROFESSIONAL FEES COSTS Grand Total Retainers (Over) Approx. Total PROJECTED April 2003- Held at /Under (3) Fees Per Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Total 2004 June 2004 3/28/2003 Applications Carveout Restructuring Fees Bucknell Stehlik Sato Stubner $ 90,000 $ 110,000 $ 110,000 $ 130,000 $ 90,000 $ 90,000 $ 620,000 $ 1,444,459 $ 61,893 $ 75,541 $ 1,458,107 PricewaterhouseCoopers 23,000 23,000 22,000 20,000 24,000 25,000 137,000 458,454 65,457 58,547 451,543 Danielson Harrigan Leyh Tollefson 30,000 30,000 30,000 30,000 30,000 30,000 180,000 280,000 — — 280,000 Creditors' Committee Fees Expenses 45,000 55,000 55,000 65,000 45,000 45,000 310,000 1,000,674 — 119,327 1,120,000 Audit Fees — — — — — — — 200,000 — — 200,000 U.S. Trustee Fees — — 10,000 — — 10,000 20,000 50,250 — — 50,250 Total Restructuring Fees 188,000 218,000 227,000 245,000 189,000 200,000 1,267,000 3,433,837 127,351 253,414 3,559,900 Tariff Related Fees Danielson Harrigan Leyh Tollefson 75,000 35,000 35,000 — — — 145,000 755,000 50,512 — 704,488 Karr Turtle Campbell 15,000 7,000 7,000 1,000 — — 30,000 288,438 6,943 1,562 283,057 Sidley Austin Brown Wood 38,400 38,400 38,400 38,400 38,400 38,400 230,400 724,374 99,619 (56,964) 567,791 Regulatory Economics Group 44,000 26,400 13,200 34,100 55,000 17,600 190,300 563,539 116,848 (23,239) 423,452 Law Economics Consulting Group 5,000 5,000 5,000 5,000 5,000 5,000 30,000 163,338 180,922 (34,338) (51,922) Price Waterhouse Coopers — — — — — — — 40,000 — — 40,000 Total Tariff Related Fees 177,400 111,800 98,600 78,500 98,400 61,000 625,700 2,534,690 454,844 (112,980) 1,966,867 Whatcom Creak Other Litigation Danielson Harrigan Leyh Tollefson City of Seattle (1) — — — — — — — 340,000 — — 340,000 ARCO Coverage Bl Claims (Net) (2) 115,000 115,000 140,000 140,000 195,000 225,000 930,000 1,951,058 — 76,442 2,027,500 Karr Turtle Campbell 39,000 39,000 39,000 39,000 39,000 39,000 234,000 574,000 — 40,000 614,000 Yarmuth Wilsdon Calfo 5,000 5,000 5,000 5,000 5,000 5,000 30,000 205,009 35,714 (50,009) 119,286 Conflict Committee 20,000 20,000 20,000 20,000 20,000 20,000 120,000 195,000 — — 195,000 Insurance Recoveries — — — — — — — (121,958) — 121,958 — Total Whatcom Creek Other 179,000 179,000 204,000 204,000 259,000 289,000 1,314,000 3,143,109 35,714 188,391 3,295,786 Total Professional Fees $ 544,400 $ 508,800 $ 529,600 $ 527,500 $ 546,400 $ 550,000 $ 3,206,700 $ 9,111,636 $ 617,903 $ 328,826 $ 8,822,553 Private Confidential

See Management Assumptions OLYMPIC PIPE LINE COMPANY DEBTOR-IN-POSSESSION FINANCING BUDGET ACTUALS APRIL — AUGUST 2003 PROJECTIONS SEPTEMBER 2003 — JUNE 2004 KEY MANAGEMENT ASSUMPTIONS The projections are based on internally prepared information and other public and non-public sources that are believed to be reliable. Such information is subject to change and may also vary based upon the position of the various parties-in-interest to the bankruptcy proceeding to which the company is a party. Accordingly there can be not definitive assurances that these projections will be achieved. Furthermore, it is likely that there will be differences between the projected and actual results and/or timing of assumed events, and those differences may be material. Certain major assumptions, such as the projected tariff rate increase and its timing may materially impact the required borrowing requirements of the company if not realized as assumed. BALANCE SHEET ITEM ASSUMPTION Current Assets Cash Cash balances are projected based on monthly operating results and an assumed minimum constant operating cash balance of $0.5 million. AIR — Affiliates Assumed monthly increases of approximately 54% of the current period's transportation revenue, less collection of the previous month's balance in the months of September 2003 to June 2004. The ending A/R Affiliates balance includes approximately $.627 million of pre-petition receivables from affiliates that is not assumed to be paid during the term of the projections. Projected decreases in balance were based on the assumption of collection of the previous month's billings. A/R — Other Assumed monthly increases in September 2003 — June 2004 of approximately 46% of the current period's transportation revenue. Assumed monthly decreases for collection of the previous month's billings less approximately $215,000 per month in September to October 2003 for amounts currently not being paid by certain shippers who are claiming a right of offset. In November 2003, assumed that approximately $2.6 million of A/R — Other is offset against pre-petition shipper refunds due and classified as Liabilities subject to Compromise based on the anticipation of approval of the Tariff Settlement Agreement. For October 2003 to June 2004 assumed that A/R — Other will be reduced each month for the collection of the previous months billings. A/R — NRDA Claim This receivable is related to the assumed $1 million payment of NRDA fines projected to occur sometime after June 2004. The fines are reimbursable by insurance proceeds and the collection from the insurance is also assumed to occur sometime after June 2004. Prepaid Expense Other Assumed changes for prepayments and amortization of insurance based on current insurance costs and Assets amortization schedules. Annual insurance premium of approximately $1.7 million is assumed to be paid and charged to prepaid expense in October 2003. Additionally, reduction of prepaid expense for the application of professional retainers is assumed to occur in September and December 2003 in lieu of payment otherwise due to the professionals. Property Plant Equipment Construction in Progress CIP is increased each month based on the projected capital expenditure spending assumed by management for the months of September 2003 to June 2004. The capital budget is based on certain specific capital projects budgeted for this time frame. In addition, approximately $3.6 million that was not spent on capital projects in the first five months of bankruptcy and included in previous budgets is projected to occur in the months of September to December 2003. Management has assumed that 1/3 of the capital expenditures incurred in 2003 will be transferred to PP E as the expenditure is incurred. In addition, approximately $3.6 million of specific capital projects incurred prior to September 2003 are projected to be moved to PP E in the months of September to December 2003. In 2004 it is assumed that approximately $2.1 million of capital projects will be transferred from CIP to PP E each month. The actual completion of certain projects and the corresponding entries to transfer the projects to fixed assets will most likely vary from these estimates; however the transfer from CIP to PP E would not affect the total PP E balance at the end of each period assuming expenditures for projects are made as projected. Accordingly, the transfer of CIP to PP E does not affect the cash needs of the Company. Pipeline Equipment See Construction in Progress above. Current Liabilities New Borrowings/Funding The projections assume the DIP Lenders, pursuant to the executed loan agreement, fund cash shortfalls. Interest is calculated at 3.45% and is accrued monthly based on the outstanding balance. Notes Payable — Equilon The Equilon and Atlantic Richfield debt is assumed to be stayed following the March 27, 2003 filing date. The Atlantic Richfield outstanding balance of both entities is reclassified to Liabilities Subject to Compromise. In June 2003 the principal balances of $45.3 million and $63.4 million to Equilon and Atlantic Richfield, respectively, were converted to equity. Prepayments — ARCO Shell Certain prepayments were made pre-petition by ARCO Shell. These prepayments are assumed to be stayed following the March 27, 2003 filing date. The balance due to both entities is reclassified to Liabilities Subject to Compromise. A/P — Affiliates Assumed the balance outstanding is stayed following the March 27, 2003 filing date. The balance is reclassified to Liabilities Subject to Compromise. Post-petition obligations to Affiliates are assumed to be paid in the ordinary course of business in the month following the month the obligations are incurred for the months of September 2003 to June 2004. A/P — Other Assumed the balance outstanding as of the filing date is stayed. The pre-petition balance is reclassified to Liabilities Subject to Compromise. Post-petition obligations to vendors are assumed to be paid in the month following the month they are incurred for the months of September 2003 to June 2004. Notes Payable — Chase The Chase note (paid by ARCO and Shell prior to filing) is assumed to be stayed following the filing date of March 27, 2003. The outstanding balance of $30 million is reclassified to Liabilities Subject to Compromise, Current Portion of L-T Debt The Prudential note (paid post-petition by ARCO and Shell along with accrued interest and a prepayment fee) is assumed to be stayed following the filing date of March 27, 2003. The principal amount has been reclassified to Liabilities Subject to Compromise. Accrued Interest Financing Pre-petition accrued interest has been reclassified to Liabilities Subject to Compromise following the filing Fees date of March 27, 2003. Interest on new borrowings is accrued monthly at a rate of 3.45%. Accrued Liabilities — Pre-petition accrued employee variable pay program bonuses are reclassified to Liabilities Subject to Employee Benefits Compromise following the filing date of March 27, 2003. Post-petition estimated bonuses and incremental pay increases in the variable pay program are accrued quarterly and the post-petition accruals are projected to be paid in March 2004. Accrued Liabilities — Other Management assumed that certain estimated accrued liabilities at the time of filing not booked as accounts payable are reclassified to Liabilities Subject to Compromise along with other unsecured pre-petition claims. These amounts have been adjusted from month to month as better estimates have become known. From September 2003 to June 2004 increases are budgeted related to accrued professional fees which are assumed to be paid in September and December 2003 and in April 2004, Other liabilities accrued in September 2003 to June 2004 are assumed to be paid in the month following accrual. Accrued Liabilities — Litigation The estimated accruals related to certain business interruption litigation, the NOPV litigation and personal injury lawsuits are reclassified to Liabilities Subject to Compromise. In June 2003 a $1.0 million payment for federal criminal charges was paid in accordance with the approved settlement agreement. FERC Tariff Refund Estimated pre-petition liabilities to shippers related to the FERC Tariff Refund were assumed to be stayed and transferred to Liabilities Subject to Compromise upon the bankruptcy filing. Based on the pending Tariff Settlement Agreement the projections assume that the balance of pre-petition FERC and WUTC Tariffs Refunds plus interest at 4.8% and net of amounts withheld from shippers payments post-petition will be paid to shippers (a totai of approximately $14,5 million) in equal monthly installments of approximately $.431 million over a term of 36 months. For purposes of these projections the payments have been assumed to begin in November 2003 after the court and the regulatory bodies have approved the settlement agreement. Post-petition FERC Tariff Refunds are projected to be due under the Tariff Settlement Agreement in the approximate amount of $2.2 million by October 2003. Under the settlement agreement and for purposes of these projections these amounts are assumed to be refunded with interest at 4.25% in equal 30 equal monthly installments in the amount of approximately $78,694 per month beginning in November 2003. WUTC Tariff Refund Estimated pre-petition liabilities to shippers related to the WUTC Tariff Refund are assumed to be stayed and transferred to Liabilities Subject to Compromise. See above FERC Tariff Refunds for assumptions as to refunds to be paid on WUTC Tariff Refunds. Federal Income Tax Payable Assumed receipt of a $2.2 million tax refund in April 2004 which offsets both this account and the Deferred Federal Income Tax Payable classified in long term liabilities. Property Use Tax Payable Assumed that at the point of filing the liability is stayed and transferred to Liabilities Subject to Compromise. The Company has just successfully negotiated a revaluation that will lower its property tax assessment for 2003 and will be seeking Bankruptcy Court approval of the settlement. Property taxes have been adjusted in September 2003 to reflect the settlement and no further accrual has been made for 2003. Post-petition taxes accrued in 2003 are assumed to be paid in April 2004 (1/3) and October 2004 (2/3). Non-Current Liabilities Long Term Debt — Prudential See Current Portion of Long Term Debt description above. Environmental Liability — Long Environmental Liability is the liability accrued for the clean up of various sites where spills or other Term contamination may have occurred and is assumed to be paid monthly based on current estimates of how the work will be performed to clean the sites. Liabilities Subject to All stayed liabilities as a result of the bankruptcy filing have been reclassified to Liabilities Subject to Compromise Compromise at the date of filing. In June 2003 the principal balances of $45.3 million and $63.4 million to Equilon and Atlantic Richfield, respectively, were converted to equity under the when the Court will approve the original DIP funding agreement. Additional amounts have been included in Liabilities Subject to Compromise as estimates of outstanding liabilities have been adjusted with better information post-petition. In November 2003 reductions in Liabilities Subject to Compromise are projected to occur for pre-petition FERC and WUTC Tariff Refunds described above, and in September 2003 an adjustment to reduce Property Taxes Due is assumed to reflect the reduction in assessed 2003 property taxes referred to above. Deferred Federal Income Tax See Federal Income Tax Payable above. No taxes are projected to be due for the current year. Payable Private Confidential OLYMPIC PIPE LINE COMPANY DEBTOR-IN-POSSESSION FINANCING BUDGET ACTUALS APRIL — AUGUST 2003 PROJECTIONS SEPTEMBER 2003 — JUNE 2004 KEY MANAGEMENT ASSUMPTIONS INCOME STATEMENT ITEM ASSUMPTION Revenue — 2003/2004 Transportation Revenue Volumes have been projected based on 2002 annual volumes. Certain assumptions have been made in the monthly volumes for anticipated down time for maintenance, etc. Down time and maintenance may occur in periods other than as projected and revenues for a given period may vary accordingly. A FERC tariff rate increase of 54.46% is assumed to be approved and incorporated into the rates charged starting May 1, 2003. Beginning in November 2003 the terms of the proposed Tariff settlement Agreement are assumed to take effect for both FERC and WUTC tariff rates charged by the company. Revenues and cash requirements of the company may vary materially depending on the timing and amounts of any actual FERC and WUTC rate increases. Other Revenue Miscellaneous income and interest income have been estimated based on previous years' results. Gain (toss) income is related to over (short) measurements of fuel readings at the beginning point of transmission vs. the delivery point priced at the OPIS index rate. Operating Expense Salaries, Benefits Payroll Estimated payroll, benefits and payroll taxes are based on current employees dedicated 100% to OPL Taxes pursuant to the Operating Agreement with BP. Pursuant to the agreement these individuals are BP employees and OPL reimburses BP for all their associated costs. OPL accrues a liability quarterly for potential bonuses and pay increases due to employees pursuant to the variable pay program. Amounts due under the variable pay program are not payable to employees until the year following the accrual. The projections assume the hiring of two additional administrative support personnel due to increased administrative burdens being placed on OPL. Projected salaries, wages and benefits for the full year of 2003 are consistent with fixed bid amounts pursuant to the Operating Agreement with BP. Supplies Maintenance Estimated supplies and maintenance are based on the fixed bid submitted and approved by the Board of Directors under the terms of the Operating Agreement with BP. Outside Services Estimated outside services are based on previous years' results and includes expenses for contractor services, outsourced services and other services. Project Expense The project budget is based on certain specific projects budgeted for this time frame by management, in addition to the specific projects budgeted, approximately $2.4 million that was not spent on projects in the first five months of bankruptcy and included in previous budgets is projected to be spent in the months of September to December 2003. Project expenses consist primarily of preventative and other recurring maintenance and repairs. These projects can be generally grouped into several categories including the following: • Pipe inspection and Repairs • Equipment Facility Inspections, Maintenance and Repairs • Pipeline Conflict Prevention Resolution (line depth lowering) • Geotechnical Monitoring Repairs (erosion other goetechnical) • Corrosion Protection • Right of Way Maintenance • Risk Reduction, Mitigation Emergency Response Work • Training Safety • Containment Projects Rentals Estimated Rentals expense is based on the fixed bid submitted and approved by the Board of Directors under the terms of the Operating Agreement with BP. Administrative Fee The Administrative Fee is based on the fixed bid submitted and approved by the Board of Directors under the terms of the Operating Agreement with BP. The annual Administrative and General Overhead Fee agreed to for 2003 under the terms of the Operating Agreement is $1.085 million and pursuant to the contract is to cover ". . . the expense of the Operator's and its affiliates executive, administration and planning, accounting, non-project engineering and technical services, logistics, general services, human resources, purchasing, financial services, FERC tariff administration, land, information systems and computing, products movement, health environment and safety, and legal departments, as well as miscellaneous expenses applicable to such personnel, such as office space rental, general stationary, printing and office supplies." Miscellaneous Expense Estimated Miscellaneous expense is based on the fixed bid submitted and approved by the Board of Directors under the terms of the Operating Agreement with BP. Power Expense Utilities Fuel Utilities and fuel have been estimated at approximately 0.095 and $0.074 per barrel transported for August 2003 and September to December 2003, respectively and $0.075 per barrel transported for January to June 2004 based on prior months costs. Polymer Additives Polymer Additive costs are based on the previous year's actual usage and price per gallon. Non-Operating Expense Insurance Expense Insurance expense is based on information provided by the Marsh Group. Insurance premiums are paid annually in October and charged to prepaid expense when paid and then amortized monthly to expense over the course of the year. Professional Fees Estimated based on budgets provided by individual professionals assisting in the Ch. 11 reorganization, Tariff related matters and Whatcom Creek related litigation (budgeted to be net of insurance recoveries) and other legal matters. The budget for professional fees for September through December 2003 has been increased $340,000 to reflect litigation with the City of Seattle. These estimates are based on the funds made available for professional fees under the extended DIP Loan Agreement and the assumption that favorable results will be realized in attempting to settle contested matters. The fees currently budgeted do not necessarily reflect the likely costs in the event of full litigation of certain major cases and/or proceedings. This estimate also includes fees budgeted for Unsecured Creditors' Committee professionals, quarterly U.S. Trustee fees and audit fees. Property Tax Property taxes are based on a monthly accrual of estimated annual property taxes for 2003 and 2004. In September 2003 the Company completed successful negations to lower its property tax assessment for 2003. As a result of the revised assessment the September 2003 property tax expense is projected to be credited $200,000 and no expense is accrued for the balance of the year. In 2004 the monthly expense is based on an estimated annual amount of $500,000. State Franchise Tax State Franchise taxes and fees are based on an even monthly allocation using 2002 as a base of reference. Issuance Expense Issuance expense was related to the Prudential indebtedness and was written off in May 2003. Interest Expense Financing Interest expense is based on Olympic's projected new borrowings required, using an interest rate of 3.45%, Fees which is approximately the current 30 day LIBOR rate plus 2%. Based on the DIP Loan Agreement, financing and related loan fees of $200,000 are projected to be paid in October, and an additional $75,000 facility fee is projected to be made in June 2004. Interest expense also includes amounts accrued on the Tariff Refunds pursuant to the Tariff Settlement Agreement. Depreciation Depreciation is based on estimated monthly expense amounts for August to December 2003 and estimated 2004 depreciation divided by 12 for monthly amounts in 2004. Tax Expense Federal Income Tax No taxes are assumed to be accrued in 2003 based on the company's current tax position. State Income Tax No taxes are assumed to be accrued in 2003 based on the company's current tax position. Private Confidential