Table of Contents

SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 

Form 8-K 
CURRENT REPORT 
PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934 
Date of Report (Date of earliest event reported) — April 1, 2004 
Plains All American Pipeline, L.P. 
(Exact name of Registrant as specified in its charter) 
 	 	 	 	 	
DELAWARE	 	1-14569	 	76-0582150	
(State or other jurisdiction
of incorporation or organization)	 	(Commission File Number)	 	(I.R.S. Employer
Identification No.)	
333 Clay Street, Suite 1600 
Houston, Texas 77002 
(713) 646-4100 
(Address, including zip code, and telephone number, 
including area code, of Registrant’s principal executive offices) 

TABLE OF CONTENTS
									
	Item 2. Acquisition or Disposition of Assets	
	Item 7. Financial Statements and Exhibits	
SIGNATURES	
INDEX TO EXHIBITS	
Consent of PricewaterhouseCoopers LLP	
Link Energy LLC Consolidated Financial Statements	
Link Energy LLC Consolidated Financial Statements	
Unaudited Pro Forma Combined Financial Statements	

Table of Contents

Item 2.	Acquisition or Disposition of Assets	
      Plains All American Pipeline, L.P. (“PAA”) has completed the acquisition of the North American crude oil and pipeline operations (which accounts for substantially all of the historical consolidated operations) of Link Energy LLC. The total purchase price for the transaction was approximately $331 million, which included $273.5 million in cash, the assumption of $50.0 million of liabilities and net working capital items and $7.5 million of third-party transaction, closing and integration costs and other items. The transaction closed and was effective on April 1, 2004, and was funded by borrowings under our revolving credit facilities. Certain financial statements, including the historical consolidated financial statements of Link Energy LLC and pro forma combined financial statements of PAA are attached to this Form 8-K as Exhibits 99.1, 99.2 and 99.3. 

Item 7.	Financial Statements and Exhibits	
      (c) Exhibits 
 	 	 	 	 	
 	23	.1	 	Consent of PricewaterhouseCoopers LLP 	
 	99	.1	 	Link Energy LLC Condensed Consolidated Financial Statements (Unaudited) as of March 31, 2004 and December 31, 2003 (Successor Company) and for the Three Months Ended March 31, 2004 (Successor Company), One Month Ended March 31, 2003 (Successor Company) (Restated), and Two Months Ended February 28, 2003 (Predecessor Company) (Restated) 	
 	99	.2	 	Link Energy LLC Consolidated Financial Statements as of December 31, 2003 (Successor Company) and 2002 (Predecessor Company) (Restated) and for the Ten Months Ended December 31, 2003 (Successor Company) (Restated), Two Months Ended February 28, 2003 (Predecessor Company) (Restated) and Years Ended December 31, 2002 and 2001 (Predecessor Company) (Restated) 	
 	99	.3	 	Unaudited Pro Forma Combined Financial Statements of Plains All American Pipeline, L.P. as of and for the three months ended March 31, 2004 and for the year ended December 31, 2003. 	
1 

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SIGNATURES 
      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
		
 	PLAINS ALL AMERICAN PIPELINE, L.P. 	
			
 	By: 	Plains AAP, L.P., its general partner 	
 		
 	By: 	Plains All American GP LLC, its general partner 	
 		
 	By: 	/s/ TINA L. VAL 	

 	Name: Tina L. Val 	
			
 	Title:	Vice President — Accounting and 	
		
 	Chief Accounting Officer 	
Date: June 16, 2004 
2 

Table of Contents
INDEX TO EXHIBITS 
 	 	 	 	 	
 	23	.1	 	Consent of PricewaterhouseCoopers LLP 	
 	99	.1	 	Link Energy LLC Condensed Consolidated Financial Statements (Unaudited) as of March 31, 2004 and December 31, 2003 (Successor Company) and for the Three Months Ended March 31, 2004 (Successor Company), One Month Ended March 31, 2003 (Successor Company) (Restated), and Two Months Ended February 28, 2003 (Predecessor Company) (Restated) 	
 	99	.2	 	Link Energy LLC Consolidated Financial Statements as of December 31, 2003 (Successor Company) and 2002 (Predecessor Company) (Restated) and for the Ten Months Ended December 31, 2003 (Successor Company) (Restated), Two Months Ended February 28, 2003 (Predecessor Company) (Restated) and Years Ended December 31, 2002 and 2001 (Predecessor Company) (Restated) 	
 	99	.3	 	Unaudited Pro Forma Combined Financial Statements of Plains All American Pipeline, L.P. as of and for the three months ended March 31, 2004 and for the year ended December 31, 2003. 	
 
EXHIBIT 23.1 
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
      We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 333-91141, 333-54118, 333-74920) and Form S-3 (File Nos. 333-59224 and 333-68446) of Plains All American Pipeline, L.P. of our reports dated March 30, 2004, except as to the matters discussed in the Note 1 caption “Restatement of Financial Results” and in Note 10 which the date is June 15, 2004 relating to the consolidated financial statements of Link Energy LLC and its subsidiaries (Successor Company) and EOTT Energy Partners, L.P. and its subsidiaries (Predecessor Company), which appear in this Current Report on Form 8-K. 
PricewaterhouseCoopers LLP 
Houston, Texas 
June 15, 2004 

                                                                    Exhibit 99.1

Link Energy LLC

Link Energy LLC Condensed Consolidated Financial Statements (Unaudited) as of
March 31, 2004 and December 31, 2003 (Successor Company) and for the Three
Months Ended March 31, 2004 (Successor Company), One Month Ended March 31, 2003
(Successor Company) (Restated), and Two Months Ended February 28, 2003
(Predecessor Company) (Restated)

TABLE OF CONTENTS

         (1)      Condensed Consolidated Statements of Operations (Unaudited)
                  -Three Months Ended March 31, 2004 (Successor Company), One
                  Month Ended March 31, 2003 (Restated) (Successor Company), and
                  Two Months Ended February 28, 2003 (Restated) (Predecessor
                  Company)

         (2)      Condensed Consolidated Balance Sheets (Unaudited) -March 31,
                  2004 and December 31, 2003 (Successor Company)

         (3)      Condensed Consolidated Statements of Cash Flows (Unaudited) -
                  Three Months Ended March 31, 2004 (Successor Company), One
                  Month Ended March 31, 2003 (Restated) (Successor Company), and
                  Two Months Ended February 28, 2003 (Restated) (Predecessor
                  Company)

         (4)      Condensed Consolidated Statement of Members' Capital
                  (Unaudited) -Three Months Ended March 31, 2004 (Successor
                  Company)

         (5)      Notes to Condensed Consolidated Financial Statements
                  (Unaudited)

     For purposes of these financial statements, references to the "Predecessor
Company" are references to Link LLC for periods through February 28, 2003 (the
last day of the calendar month in which it emerged from bankruptcy) and
references to the "Successor Company" are references to Link LLC for periods
subsequent to February 28, 2003. The Successor Company's financial statements
are not comparable to the Predecessor Company's financial statements.

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In Thousands, Except per Unit Amounts)
                                   (Unaudited)

                                                                                SUCCESSOR COMPANY          | PREDECESSOR COMPANY
                                                                        ---------------------------------  | -------------------
                                                                         THREE MONTHS        ONE MONTH     |    TWO MONTHS
                                                                             ENDED             ENDED       |       ENDED
                                                                        MARCH 31, 2004     MARCH 31, 2003  |  FEBRUARY 28, 2003
                                                                        --------------     --------------  | -------------------
                                                                                                  |  
                                                                                             (RESTATED)    |      (RESTATED)
Operating Revenue ..................................................    $       40,682     $       17,733  |  $         31,635
Cost of Sales ......................................................             8,081              1,876  |             4,521
Operating Expenses .................................................            20,725              6,082  |            13,020
Depreciation and Amortization-operating ............................             5,054              1,707  |             4,123
                                                                        --------------     --------------  |  ----------------
Gross Profit .......................................................             6,822              8,068  |             9,971
Selling, General and Administrative Expenses .......................            18,514              3,885  |             6,846
Depreciation and Amortization-corporate & other ....................                 6                  1  |               519
Other (Income) Expense .............................................              (710)              (138) |                (8)
                                                                        --------------     --------------  |  ----------------
Operating Income (Loss) ............................................           (10,988)             4,320  |             2,614
Interest Expense and Related Charges ...............................           (11,531)            (3,301) |            (5,645)
Interest Income ....................................................                17                 23  |                58
Other, net .........................................................               (41)                 1  |                98
                                                                        --------------     --------------  |  ----------------
Income (Loss) from Continuing Operations Before Reorganization                                             |
   Items, Net Gain on Discharge of Debt, Fresh Start Adjustments and                                       |
   Cumulative Effect of Accounting Changes .........................           (22,543)             1,043  |            (2,875)
Reorganization Items (Note 5) ......................................                --                 --  |            (7,330)
Net Gain on Discharge of Debt (Note 5) .............................                --                 --  |           131,560
Fresh Start Adjustments (Note 6) ...................................                --                 --  |           (56,771)
                                                                        --------------     --------------  |  ----------------
Income (Loss) from Continuing Operations ...........................           (22,543)             1,043  |            64,584
Income (Loss) from Discontinued Operations (Note 7) ................               139             (6,471) |               519
                                                                        --------------     --------------  |  ----------------
Net Income (Loss) Before Cumulative                                                                        |
   Effect of Accounting Changes ....................................           (22,404)            (5,428) |            65,103
Cumulative Effect of Accounting Changes (Note 12) ..................                --                 --  |            (3,976)
                                                                        --------------     --------------  |  ----------------
Net Income (Loss) ..................................................    $      (22,404)    $       (5,428) |  $         61,127
                                                                        ==============     ==============  |  ================
Basic Net Income (Loss) Per Unit (Note 10)                                                                 |
     LLC Unit ......................................................    $        (1.81)    $        (0.44) |               N/A
                                                                        ==============     ==============  |  ================
     Common Unit ...................................................    $          N/A                N/A  |  $           0.14
                                                                        ==============     ==============  |  ================
     Subordinated Unit .............................................    $          N/A                N/A  |  $             --
                                                                        ==============     ==============  |  ================
Diluted Net Income (Loss) Per Unit (Note 10) .......................    $        (1.81)    $        (0.44) |  $           0.10
                                                                        ==============     ==============  |  ================
Average Units Outstanding for Diluted Computation ..................            12,353             12,317  |            27,476
                                                                        ==============     ==============  |  ================

   The accompanying notes are an integral part of these condensed consolidated
                              financial statements.

                                       3

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
                                   (Unaudited)

                                                                    MARCH 31, 2004    DECEMBER 31, 2003
                                     ASSETS
                                                                    --------------    -----------------
                                                                                
Current Assets
    Cash and cash equivalents .................................     $        2,929      $        2,450
    Restricted cash ...........................................              3,581               6,045
    Trade and other receivables, net of allowance for
       doubtful accounts of $1,210 and $1,210, respectively ...            406,512             446,030
    Inventories ...............................................              7,838               7,636
    Other .....................................................              6,682               6,283
                                                                    --------------      --------------
       Total current assets ...................................            427,542             468,444
                                                                    --------------      --------------

Property, Plant and Equipment .................................            277,480             278,724
    Less:  Accumulated depreciation ...........................             21,114              16,214
                                                                    --------------      --------------
       Net property, plant and equipment ......................            256,366             262,510
                                                                    --------------      --------------

Long-lived assets of discontinued operations ..................                 --                 838
Other Assets ..................................................              5,907               6,852
                                                                    --------------      --------------

Total Assets ..................................................     $      689,815      $      738,644
                                                                    ==============      ==============

                        LIABILITIES AND MEMBERS' CAPITAL

Current Liabilities
    Trade and other accounts payable ..........................     $      431,598      $      476,509
    Accrued taxes payable .....................................              3,964               6,700
    Term loans (Note 4) .......................................             75,000              75,000
    Commodity repurchase agreement (Note 4) ...................             16,860              18,000
    Receivable financing (Note 4) .............................             45,500              27,000
    Other .....................................................             24,668              27,982
                                                                    --------------      --------------
       Total current liabilities ..............................            597,590             631,191
                                                                    --------------      --------------

Long -Term Liabilities
    Senior notes (Note 4) .....................................            110,052             104,451
    Other .....................................................             15,607              17,399
                                                                    --------------      --------------
       Total long-term liabilities ............................            125,659             121,850
                                                                    --------------      --------------

Commitments and Contingencies (Note 11)

Members' Capital (Deficit)
    Members' Capital (Deficit) ................................            (33,434)            (14,392)
    Accumulated Other Comprehensive Income (Loss) .............                 --                  (5)
                                                                    --------------      --------------
    Total .....................................................            (33,434)            (14,397)
                                                                    --------------      --------------
Total Liabilities and Members' Capital ........................     $      689,815      $      738,644
                                                                    ==============      ==============

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                        4

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)

                                                                              SUCCESSOR COMPANY           | PREDECESSOR COMPANY
                                                                       THREE MONTHS         ONE MONTH     |     TWO MONTHS
                                                                           ENDED              ENDED       |        ENDED
                                                                      MARCH 31, 2004      MARCH 31, 2003  |  FEBRUARY 28, 2003
                                                                      --------------      --------------  | -------------------
                                                                                                 | 
                                                                                          (RESTATED)      |      (RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES                                                                      |
  Reconciliation of net income (loss) to net cash provided by                                             |
  (used in) operating activities                                                                          |
     Net income (loss) ..........................................     $      (22,404)     $       (5,428) |   $         61,127
     Depreciation and amortization ..............................              5,060               1,925  |              5,560
     Net unrealized change in crude oil trading activities ......                374                (895) |             (2,120)
     Gains on disposal of assets ................................               (730)               (103) |                 --
     Non-cash compensation expense ..............................              3,361                  --  |                 --
     Non-cash net gain for reorganization items and discharge                                             |
         of debt ................................................                 --                  --  |           (127,185)
     Fresh start adjustments ....................................                 --                  --  |             56,771
     Changes in components of working capital -                                                           |
       Receivables ..............................................             39,518             (33,040) |            (32,177)
       Inventories ..............................................               (202)             (5,769) |              6,757
       Other current assets .....................................                551              (3,073) |              2,428
       Trade accounts payable ...................................            (41,655)             33,067  |             47,845
       Accrued taxes payable ....................................             (2,736)                883  |              1,717
       Other current liabilities ................................                827                (407) |               (320)
     Other assets and liabilities ...............................              1,231              (1,026) |              2,530
                                                                      --------------      --------------  |   ----------------
  Net Cash Provided by (Used in) Operating Activities ...........            (16,805)            (13,866) |             22,933
                                                                      --------------      --------------  |   ----------------
                                                                                                          |
CASH FLOWS FROM INVESTING ACTIVITIES                                                                      |
  Proceeds from sale of property, plant and equipment ...........              1,614                 103  |                 --
  Release of restricted cash ....................................              2,464                  --  |                 --
  Additions to property, plant and equipment ....................               (899)               (259) |               (285)
                                                                      --------------      --------------  |   ----------------
  Net Cash Provided by (Used in) Investing Activities ...........              3,179                (156) |               (285)
                                                                      --------------      --------------  |   ----------------
                                                                                                          |
CASH FLOWS FROM FINANCING ACTIVITIES                                                                      |
  Increase (decrease) in receivable financing ...................             18,500             (10,000) |                 --
  Decrease in repurchase agreement ..............................             (1,140)                 --  |                 --
  Other .........................................................             (3,255)             (2,336) |              1,655
                                                                      --------------      --------------  |   ----------------
  Net Cash Provided By (Used in) Financing Activities ...........             14,105             (12,336) |              1,655
                                                                      --------------      --------------  |   ----------------
                                                                                                          |
Increase (Decrease) in Cash and Cash Equivalents ................                479             (26,358) |             24,303
Cash and Cash Equivalents Beginning of Period ...................              2,450              40,735  |             16,432
                                                                      --------------      --------------  |   ----------------
Cash and Cash Equivalents End of Period .........................     $        2,929      $       14,377  |   $         40,735
                                                                      ==============      ==============  |   ================
                                                                                                          |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                          |
  Cash Paid for Interest ........................................     $        8,231      $        2,084  |   $          5,599
                                                                      ==============      ==============  |   ================
  Cash Paid for Reorganization Items ............................     $           --      $        1,637  |   $          2,867
                                                                      ==============      ==============  |   ================
                                                                                                          |
SUPPLEMENTAL NON CASH INVESTING AND FINANCING INFORMATION                                                 |
  Discharge of 11% Senior Notes, including accrued interest .....     $           --      $           --  |   $        248,481
  Cancellation of additional partnership interests ..............     $           --      $           --  |   $          9,318
  Issuance of 9% Senior Notes and payment of interest in kind ...     $        5,460      $           --  |   $        104,000
  Issuance of new equity of Successor Company ...................     $           --      $           --  |   $         36,687

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                        5

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              CONDENSED CONSOLIDATED STATEMENTS OF MEMBERS' CAPITAL
                                 (In Thousands)
                                   (Unaudited)

                                                                                     ACCUMULATED
                                                                                        OTHER
                                                                     MEMBERS'       COMPREHENSIVE
                                                                     CAPITAL         INCOME (LOSS)        TOTAL
                                                                    ----------      --------------      ----------
                                                                                               
Members' Capital (Deficit) at December 31, 2003 ...............     $  (14,392)     $           (5)     $  (14,397)

  Net Loss ....................................................        (22,404)                 --         (22,404)

  Unrealized net losses on derivative instruments arising
  during the period ...........................................             --                  --              --

  Less reclassification adjustments for net realized losses
  on derivative instruments included in net loss ..............             --                   5               5
                                                                                                        ----------

  Comprehensive loss ..........................................                                            (22,399)
                                                                                                        ----------

  Restricted unit compensation expense ........................          3,361                  --           3,361

  Other .......................................................              1                  --               1
                                                                    ----------      --------------      ----------

Members' Capital (Deficit) at March 31, 2004 ..................     $  (33,434)     $           --      $  (33,434)
                                                                    ==========      ==============      ==========

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                        6

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. SALE OF CRUDE OIL BUSINESS

     On April 1, 2004, Link Energy LLC ("Link LLC") sold all of its crude oil
marketing, pipeline and trucking transportation business, which constitutes all
of Link LLC's remaining operations, to Plains All American Pipeline, L.P.
("Plains"). As a part of such sale, we agreed to settle all outstanding
litigation with Texas New Mexico Pipe Line Company, a wholly owned subsidiary of
Shell Pipeline Company. The $290 million proceeds from the transaction consist
of approximately $273 million in cash from Plains, plus assumption of certain
obligations and approximately $17 million in cash from Texas New Mexico Pipe
Line Company. Under the terms of the purchase and sale agreement, an escrow of
$10 million was established to provide for post-closing adjustments related to
inventory and working capital. Link LLC and Plains subsequently agreed that,
subject to the satisfaction of certain conditions, there would be no post
closing adjustments to inventory or working capital and Link LLC and Plains
would each receive one-half of the remaining escrow balance in accordance with
the terms of the purchase and sale agreement.

     In conjunction with this transaction, the requisite holders of Link LLC's
9% senior notes provided the necessary consents to amend the indenture effective
as of the closing of the transaction, to remove substantially all of the
covenants in the indenture and to provide that Plains would not be required to
assume the senior notes as otherwise required by the indenture. The holders of
approximately 86% of the outstanding senior notes agreed to sell their notes to
us for 100% of the principal and accrued interest at the closing of the
transaction. The other holders of the senior notes have been offered the right
to resell their notes on the same terms. Senior noteholders that sell their
notes to us on these terms will also receive their proportionate share of up to
$25 million from any funds (including funds released from the escrow) that may
remain after we make provision for our outstanding liabilities, obligations and
contingencies. The potential premium is in exchange for the senior noteholders'
waiver and modification of certain provisions of the notes, including the right
to have Plains assume the notes, and approximates the premium on the notes
reflected by the estimated market value if Plains had assumed the notes.

     Upon the closing of the transaction, we used the proceeds of the sale to
repay and redeem approximately $249 million of long and short-term debt, which
included our existing credit facilities, the majority of our 9% senior notes
referenced above, and other indebtedness and accrued interest. In addition, we
paid transaction expenses of approximately $4.6 million. See further discussion
regarding the repayment of debt in Note 4.

     As a result of the closing of the transaction, we have no further
operations and will wind down over a period of time. Funds released from the
escrow plus remaining funds from the transaction are being used to wind down
Link LLC and make provisions for any remaining liabilities or claims, and to
make the additional payments described above to redeem the remaining outstanding
senior notes. See discussion regarding the offer to repurchase the remaining
outstanding senior notes not tendered at the closing of the transaction in Note
4.

                                       7

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     The following is a pro-forma summary of Link LLC's net assets on April 2,
2004 (post the closing of the Plains transaction and the repayment of debt on
April 1, 2004 with the net proceeds from the Plains transaction):

                                                   (in millions)
                                                   -------------
                                                
                  Assets
                  Cash and restricted cash ...     $         33
                  Other current assets .......                5
                                                   ------------
                     Total Assets ............               38
                                                   ------------
                  Liabilities
                  Trade and other payables ...               11
                  9% Senior notes ............               16
                                                   ------------
                     Total Liabilities .......               27
                                                   ------------
                     Net Assets ..............     $         11
                                                   ============

     As senior noteholders that have sold their notes to us have the right to
receive their proportionate share of up to $25 million of any remaining funds as
previously discussed, there will not be any liquidating or other distributions
to the holders of Link LLC's units.

     A Special Committee of the Board of Directors of Link LLC reviewed the
transaction with its financial advisor, Petrie Parkman & Company, which rendered
an opinion that the Plains transaction, as summarized in its opinion, was fair
from a financial point of view.

2. BASIS OF PRESENTATION

     Organization

     Effective October 1, 2003, EOTT Energy, LLC ("EOTT LLC") changed its name
to Link Energy LLC ("Link LLC"). Link LLC is a Delaware limited liability
company that was formed on November 14, 2002 to assume and continue the business
formerly directly owned by EOTT Energy Partners, L.P. (the "MLP"). The MLP
emerged from bankruptcy and merged into EOTT Energy Operating Limited
Partnership resulting in EOTT LLC becoming the successor registrant to the MLP
on March 1, 2003, the effective date of the Third Amended Joint Chapter 11 Plan
of Reorganization, as supplemented ("Restructuring Plan"). We operated
principally through four affiliated operating limited partnerships, Link Energy
Limited Partnership, Link Energy Canada Limited Partnership, Link Energy
Pipeline Limited Partnership, and EOTT Energy Liquids, L.P. (see Note 7 for
information regarding the disposition of our Liquids operations), each of which
is a Delaware limited partnership. Link Energy General Partner, LLC served as
the general partner for our four affiliated operating limited partnerships.
Until the MLP emerged from bankruptcy, EOTT Energy Corp. (the "General
Partner"), a Delaware corporation and a wholly owned subsidiary of Enron Corp.
("Enron"), served as the general partner of the MLP and owned an approximate
1.98% general partner interest in the MLP. Unless the context otherwise
requires, the terms "we," "our," "us," and "Link" refer to Link Energy LLC and
its four affiliated operating limited partnerships, Link Energy Finance Corp.,
and Link Energy General Partner, LLC (the "Subsidiary Entities"), and for
periods prior to our emergence from bankruptcy in March 2003, such terms and
"EOTT" refer to EOTT Energy Partners, L.P. and its sole general partner, EOTT
Energy Corp., as well as the Subsidiary Entities.

                                       8

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Interim Financial Statements

     The financial statements presented herein have been prepared by Link LLC in
accordance with generally accepted accounting principles in the United States
and the rules and regulations of the Securities and Exchange Commission. The
financial statements presented herein have been prepared on a going concern
basis as the sale of substantially all of our assets to Plains and the winding
down of Link LLC occurred subsequent to the period ended March 31, 2004. Interim
results are not necessarily indicative of results for a full year. The financial
information included herein has been prepared without audit. The condensed
consolidated balance sheet at December 31, 2003 has been derived from, but does
not include all the disclosures contained in, the audited financial statements
for the year ended December 31, 2003. In the opinion of management, all of these
unaudited statements include all adjustments and accruals consisting only of
normal recurring adjustments, except for those relating to fresh start reporting
and those more fully discussed in Notes 5 and 6, which are necessary for a fair
presentation of the results of the interim periods reported herein. These
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and accompanying notes included in our
Annual Report on Form 10-K as amended on June 16, 2004 for the year ended
December 31, 2003.

Fresh Start Reporting

     As a result of the application of fresh start reporting under the American
Institute of Certified Public Accountants Statement of Position No. 90-7 ("SOP
90-7"), "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code," as of February 28, 2003 (the date chosen for accounting purposes), Link
LLC's financial results for the one month ended March 31, 2003, and the two
months ended February 28, 2003 include two different bases of accounting and
accordingly, the financial condition, operating results and cash flows of the
Successor Company and the Predecessor Company have been separately disclosed.
For a further discussion of fresh start reporting, see Note 6. For purposes of
these financial statements, references to the "Predecessor Company" are
references to us for periods through February 28, 2003 (the last day of the
calendar month in which we emerged from bankruptcy) and references to the
"Successor Company" are references to Link LLC for periods subsequent to
February 28, 2003. The Successor Company's financial statements are not
comparable to the Predecessor Company's financial statements. See further
discussion in Note 6.

Partnership Status

     As a limited liability company, we are generally treated like a partnership
for federal income tax purposes and like a corporation with limited liability
for state law and other non-tax purposes. In other words, for federal income tax
purposes, we do not pay tax on our income or gain, nor are we entitled to a
deduction for our losses, but such gains or losses are allocated to each member
in accordance with the member's interest in us and the member will be
responsible for paying the income tax applicable to such membership interest. In
order for us to continue to be classified as a partnership for federal income
tax purposes, at least 90% of our gross income for every taxable year must
consist of "qualifying income" within the meaning of the Internal Revenue Code.
In 2002 and 2003, we recognized income from our settlement with Enron and
discharge of indebtedness in excess of 10% of our gross income for each of those
years.

     We were trying to raise additional equity and we believed that we might not
be able to access the capital markets without a higher degree of certainty as to
our classification for federal income tax purposes. Therefore, in January 2004,
we requested a private letter ruling from the Internal Revenue Service to
determine either that the income from our settlement with Enron and the debt
discharge income is qualifying income or that the recognition of such income
should be disregarded for purposes of the qualifying income test because it was
an inadvertent result of our bankruptcy. Due to the fact that the Company is no
longer trying to raise equity, we retracted the private letter ruling request
from the Internal Revenue Service in April 2004.

                                       9

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Reclassifications

     Certain reclassifications have been made to prior period amounts to conform
with the current period presentation.

3. RESTATEMENT OF FINANCIAL RESULTS.

     As reported in our Amendment No. 1 to our Form 10-K for the year ended
December 31, 2003, we have restated our prior year financial results to reflect
inventory and accounts payable reconciliation adjustments in prior periods. The
restatement resulted in a decrease in our net loss for the one month ended March
31, 2003 of $1.2 million and an increase in our net income for the two months
ended February 28, 2003 of $0.9 million.

     A summary of the effects of the restatement on reported amounts for the one
month ended March 31, 2003 and the two months ended February 28, 2003 are
presented below. (Amounts in thousands, except per share amounts.)

                                          SUCCESSOR COMPANY   |  PREDECESSOR COMPANY
                                             ONE MONTH        |        TWO MONTHS
                                               ENDED          |          ENDED
                                           MARCH 31, 2003     |   FEBRUARY 28, 2003
                                         ------------------   |  -------------------
                                                        |  
REVENUE                                                       |
  As Reported ......................     $           17,315   |  $           31,979
  As Restated ......................                 17,733   |              31,635
GROSS PROFIT                                                  |
  As Reported ......................                  8,077   |               9,681
  As Restated ......................                  8,068   |               9,971
OPERATING INCOME                                              |
  As Reported ......................                  4,329   |               2,324
  As Restated ......................                  4,320   |               2,614
NET INCOME (LOSS)                                             |
  As Reported ......................                 (6,650)  |              60,267
  As Restated ......................                 (5,428)  |              61,127
DILUTED EARNINGS (LOSS) PER UNIT                              |
  As Reported ......................                  (0.54)  |                0.08
  As Restated ......................                  (0.44)  |                0.10

                                       10

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

4. CREDIT RESOURCES

Summary of Exit Credit Facilities, Senior Notes, and Other Debt

     The tables below provide a summary of our financing arrangements as of
March 31, 2004 (in millions).

                                             COMMITMENT/         AMOUNT
                                             FACE AMOUNT      OUTSTANDING
                                            -------------     -----------
                                                        
Exit Credit Facilities:
     Letter of Credit Facility ........     $       260.0     $     235.9
     Trade Receivables Agreement ......             100.0            45.5
     Commodity Repurchase Agreement ...              16.9            16.9
     Term Loans .......................              75.0            75.0

Senior Notes ..........................             114.7           110.0   (1)

Other Debt:
     Enron Note .......................               5.7             6.3   (1)
     Big Warrior Note .................               2.4             2.2   (1)
     Ad Valorem Tax Liability .........               4.5             4.5

- ----------
     (1)  These notes were adjusted to fair value pursuant to the adoption of
          fresh start reporting required by SOP 90-7.

      On April 1, 2004, we utilized net proceeds from the sale of the crude oil
business to Plains to repay the following debt outstanding and related accrued
interest at March 31, 2004 (in millions):

                                                              
                Trade Receivables Agreement ................     $   45.5
                Commodity Repurchase Agreement .............         16.9
                Term Loans .................................         75.0
                Senior Notes ...............................         99.0
                Enron Note .................................          5.7
                Big Warrior Note ...........................          2.4
                                                                 --------
                     Total principal .......................        244.5
                     Interest ..............................          4.6
                                                                 --------
                      Total principal and interest paid ....     $  249.1
                                                                 ========

      The outstanding letters of credit and the ad valorem liability were
assumed by Plains in connection with the sale of the crude oil business.

      Subsequent to the sale of the crude oil business, we offered to repurchase
the remaining senior notes not redeemed on April 1 (approximately $15.7 million)
for 101% of the principal amount plus any accrued and unpaid interest thereon to
the payment date. As of June 14, 2004, we have only $0.1 million of senior notes
outstanding.

5. BANKRUPTCY PROCEEDINGS AND RESTRUCTURING PLAN

     On October 8, 2002, the MLP and the Subsidiary Entities filed
pre-negotiated voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code (the "EOTT Bankruptcy"). The filing was made in
the United States Bankruptcy Court for the Southern District of Texas, Corpus
Christi Division (the "EOTT Bankruptcy Court"). Additionally, the General
Partner filed a voluntary petition for reorganization

                                       11

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

under Chapter 11 on October 21, 2002 in the EOTT Bankruptcy Court in order to
join in the voluntary, pre-negotiated Restructuring Plan. On October 24, 2002,
the EOTT Bankruptcy Court administratively consolidated, for distribution
purposes, the General Partner's bankruptcy filing with the previously filed
cases. The EOTT Bankruptcy Court confirmed our Restructuring Plan on February
18, 2003, and it became effective March 1, 2003. We filed a motion closing the
bankruptcy case on April 14, 2004, and the order closing the case was entered on
June 2, 2004.

     The following reorganization items and net gain on discharge of debt, which
were specifically related to the EOTT Bankruptcy, were recorded during the two
months ended February 28, 2003, (in thousands):

                                                                 
        Reorganization items - legal and professional fees ....     $  (7,330)
        Net gain on discharge of 11% senior notes,
          related accrued interest and other debt (1) .........     $ 131,560

- ----------
     (1)  The gain on discharge of debt was recorded net of the 9% senior notes
          and limited liability company units issued to the creditors upon
          emergence from bankruptcy.

6. FRESH START REPORTING

     As previously discussed, our Consolidated Financial Statements reflect the
adoption of fresh start reporting required by SOP 90-7 for periods subsequent to
our emergence from bankruptcy. In accordance with the principles of fresh start
reporting, we have adjusted our assets and liabilities to their fair values as
of February 28, 2003. The net effect of the fresh start reporting adjustments
was a loss of $56.8 million, which is reflected in the results of operations of
the Predecessor Company for the two months ended February 28, 2003.

                                       12

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     The effects of the reorganization pursuant to the Restructuring Plan and
the application of fresh start reporting on the Predecessor Company's
consolidated balance sheet as of February 28, 2003 are as follows (in
thousands):

                                             PREDECESSOR         DEBT DISCHARGE
                                               COMPANY             AND RECLASS         FRESH START      SUCCESSOR COMPANY
                                           FEBRUARY 28, 2003       ADJUSTMENTS         ADJUSTMENTS      FEBRUARY 28, 2003
                                           -----------------     --------------       -------------     -----------------
                                              (RESTATED)                                                    (RESTATED)
                                                                                            
Assets
Current Assets
Cash and cash equivalents ................       $  40,735        $      --              $      --           $  40,735
Trade and other receivables ..............         439,361               --                     --             439,361
Inventories ..............................          25,525               --                    750(g)           26,275
Other ....................................          12,911               --                 (2,021)(h)          10,890
                                                 ---------        ---------              ---------           ---------
     Total current assets ................         518,532               --                 (1,271)            517,261
                                                 ---------        ---------              ---------           ---------

Property, Plant and Equipment, at cost ...         598,633               --               (267,654)(i)         330,979
Less: Accumulated depreciation ...........         223,188               --               (223,188)(i)              --
                                                 ---------        ---------              ---------           ---------
     Net property, plant and equipment ...         375,445               --                (44,466)            330,979
                                                 ---------        ---------              ---------           ---------

Goodwill .................................           7,436               --                 (7,436)(j)              --
                                                 ---------        ---------              ---------           ---------
Other Assets .............................          10,762               --                 (2,880)(h)           7,882
                                                 ---------        ---------              ---------           ---------

     Total Assets ........................       $ 912,175        $      --              $ (56,053)          $ 856,122
                                                 =========        =========              =========           =========
Liabilities and Members'/Partners'
 Capital
Current Liabilities
Trade and other accounts payable .........       $ 451,873        $  17,406(a)           $      --           $ 469,279
Accrued taxes payable ....................          13,045           (8,307)(b)                 --               4,738
Term loans ...............................          75,000          (75,000)(c)                 --                  --
Repurchase agreement .....................          75,000          (75,000)(c)                 --                  --
Receivable financing .....................          50,000               --                     --              50,000
Other ....................................          19,226            2,815(a)(b)              318(k)           22,359
                                                 ---------        ---------              ---------           ---------
     Total current liabilities ...........         684,144         (138,086)                   318             546,376
                                                 ---------        ---------              ---------           ---------

Long-Term Liabilities
9% Senior Notes ..........................              --           98,800(d)                  --              98,800
Term loans ...............................              --           75,000(c)                  --              75,000
Repurchase agreement .....................              --           75,000(c)                  --              75,000
Ad valorem tax liability .................              --            6,992(b)                  --               6,992
Other ....................................          17,781               --                    400(k)           18,181
                                                 ---------        ---------              ---------           ---------
     Total long-term liabilities .........          17,781          255,792                    400             273,973
                                                 ---------        ---------              ---------           ---------

Liabilities Subject to Compromise ........         284,843         (284,843)(a)                 --                  --
Additional Partnership Interests .........           9,318           (9,318)(e)                 --                  --
Members'/Partners' Capital (Deficit) .....         (83,911)         176,455(f)             (56,771)             35,773
                                                 ---------        ---------              ---------           ---------

    Total Liabilities and
    Members'/Partners' Capital ...........       $ 912,175        $      --              $ (56,053)          $ 856,122
                                                 =========        =========              =========           =========

Notes:

(a)  Liabilities subject to compromise have been adjusted to reflect the
     settlement of the claims and discharge of the 11% senior notes and related
     accrued interest in connection with the Restructuring Plan.

(b)  To reclassify current and long-term amounts due to taxing authorities for
     accrued but unpaid ad valorem taxes in connection with the Restructuring
     Plan.

(c)  To reflect the refinancing on a long-term basis of amounts outstanding
     under the Debtor-in-Possession Financing Facilities.

(d)  To reflect the issuance of 9% senior unsecured notes (face amount of $104
     million) to all former senior note holders and general unsecured creditors
     with allowed claims in connection with the Restructuring Plan, recorded at
     fair value.

(e)  To reflect the cancellation of the additional partnership interests in
     connection with the Restructuring
         Plan.

(f)  To reflect the issuance of limited liability company units pursuant to the
     Restructuring Plan and the net gain on extinguishment of debt.

                                       13

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(g)  To adjust inventory to fair value.

(h)  To reflect the elimination of deferred turnaround costs, which are included
     in the fair value of property, plant and equipment of the Successor
     Company.

(i)  To adjust property, plant, and equipment to fair value.

(j)  To reflect the elimination of goodwill resulting from the fair value
     allocation.

(k)  To reflect the Enron and Big Warrior notes at fair value.

7. DISCONTINUED OPERATIONS

West Coast Assets

     Effective October 1, 2003, we sold all of the assets comprising our natural
gas gathering, processing, natural gas liquids fractionation, storage and
related trucking and distribution facilities located on the West Coast.

     Revenues and results of operations for the West Coast operating segment for
the three months ended March 31, 2004, the one month ended March 31, 2003 and
the two months ended February 28, 2003, are shown below (in thousands). We did
not allocate any interest expense to the West Coast discontinued operations for
any of the periods presented below.

                                                 SUCCESSOR COMPANY              |  PREDECESSOR COMPANY
                                          ------------------------------------  |  -------------------
                                           THREE MONTHS           ONE MONTH     |      TWO MONTHS
                                              ENDED                 ENDED       |        ENDED
                                          MARCH 31, 2004       MARCH 31, 2003   |   FEBRUARY 28, 2003
                                          --------------     -----------------  |  -------------------
                                                                       |  
Revenues ..........................            $ --               $2,934        |        $5,571
                                               ====               ======        |        ======
                                                                                |
Income (loss) from discontinued                                                 |
    operations ....................            $ --               $  248        |        $  395
                                               ====               ======        |        ======

Liquids Operations

     Effective December 31, 2003, we sold all of our remaining natural gas
liquids assets for approximately $20 million, plus inventory value. The assets
included our underground salt dome storage facility and related pipeline grid
near Mont Belvieu, Texas as well as our processing facility and former methyl
tertiary butyl ether ("MTBE") plant at Morgan's Point, near La Porte, Texas.

     Revenues and results of operations for the Liquids Operations for the three
months ended March 31, 2004, the one month ended March 31, 2003 and the two
months ended February 28, 2003 are shown below (in thousands). We did not
allocate any interest expense to the Liquids discontinued operations for any
periods presented below.

                                               SUCCESSOR COMPANY             |  PREDECESSOR COMPANY
                                         ----------------------------------  |  -------------------
                                          THREE MONTHS        ONE MONTH      |       TWO MONTHS
                                             ENDED              ENDED        |         ENDED
                                         MARCH 31, 2004     MARCH 31, 2003   |   FEBRUARY 28, 2003
                                         --------------     --------------   |   -----------------
                                                              (RESTATED)     |       (RESTATED)
                                                                             |
                                                                    |  
Revenues ..........................           $ --              $ 8,525      |        $40,337
                                              ====              =======      |        =======
                                                                             |
Income (loss) from discontinued                                              |
    operations ....................           $139              $(6,719)     |        $   124
                                              ====              =======      |        =======

                                       14

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

8. INVENTORY

     In connection with the sale of the crude oil business to Plains on April 1,
2004, Link LLC personnel, accompanied by Plains representatives, completed a
comprehensive physical measurement of all crude oil volumes held by Link LLC in
its pipelines and storage tanks. The measurement process was completed as of
March 31, 2004. The results of the measurement process identified approximately
70,000 barrels of crude oil tank bottoms that were previously classified as
merchantable crude oil inventory. Storage tank bottoms include sediment, water
or non-merchantable paraffin that accumulate at the bottom of the tank. A charge
of $2.1 million was recorded to cost of sales in the three months ended March
31, 2004 to reflect the write-down of our inventory.

9. CAPITAL

The following is a rollforward of LLC units and warrants outstanding:

                                                    LLC
                                                   Units         Warrants
                                                 ----------     ----------
                                                          
Outstanding at December 31, 2003 ...........     13,182,889        922,432
   Exercise of warrants ....................             26            (26)
   Change in restricted units outstanding ..         25,000             --
                                                 ----------     ----------
Outstanding at March 31, 2004 ..............     13,207,915        922,406
                                                 ==========     ==========

     Under the Link LLC Equity Incentive Plan ("Incentive Plan") adopted in June
2003, 1.2 million restricted units were authorized to be issued to certain key
employees and directors. The Incentive Plan had a ten-year term and restricted
unit awards granted thereunder typically vested over a three-year period. We
have recorded non-cash compensation expense of $3.5 million related to the
Incentive Plan for the three months ended March 31, 2004. The following table
sets forth the Incentive Plan activity for the three months ended March 31,
2004:

                                           Number of
                                        Restricted Units
                                        ----------------
                                     
Outstanding at December 31, 2003 ...         830,000
   Granted .........................          35,000
   Forfeited .......................         (10,000)
                                            --------
Outstanding at March 31, 2004 ......         855,000
                                            ========

     In March 2004, the Company agreed to repurchase 105,000 restricted units
for $4,000. As a result, we accelerated the recognition of non-cash compensation
expense of approximately $1.0 million, which is included in the $3.5 million of
total non-cash compensation expense discussed above.

     In connection with the sale of our crude oil business to Plains on April 1,
2004, officers and certain key employees signed a settlement and release
agreement in connection with consideration received under change in control
agreements. The settlement and release agreement required, among other things,
the relinquishment of the remaining 750,000 restricted units.

                                       15

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

10. EARNINGS PER UNIT

     Basic earnings per unit include the weighted average impact of outstanding
units (i.e., it excludes unit equivalents). Diluted earnings per unit consider
the impact of all potentially dilutive securities.

Successor Company

     Basic and diluted net loss per unit for the Successor Company were $1.81
for the three months ended March 31, 2004 and $0.44 per unit (as restated) for
the one month ended March 31, 2003. Outstanding warrants and restricted units
were determined to be antidilutive and are not included in the computation of
fully diluted earnings per unit. For the three months ended March 31, 2004,
basic and diluted net loss per unit from continuing operations were $1.82 and
basic and diluted net income per unit for discontinued operations were $0.01.
For the one month ended March 31, 2003, basic and diluted net income per unit
from continuing operations were $0.08 and basic and diluted net loss per unit
from discontinued operations were $0.52.

Predecessor Company

     Total and per unit information related to income (loss) from continuing
operations, discontinued operations, the cumulative effect of an accounting
change and net income (loss) for the Predecessor Company is shown in the table
below. All amounts exclude amounts allocated to the General Partner (in
thousands, except per unit amounts):

                                                                       Two Months Ended February 28, 2003 (Restated)
                                                     ---------------------------------------------------------------------------
                                                                           Basic (1)
                                                     -------------------------------------------------
                                                              Common                Subordinated                 Diluted
                                                     -----------------------   -----------------------   -----------------------
                                                       Income        Per         Income        Per         Income        Per
                                                       (Loss)        Unit       (Loss)         Unit        (Loss)        Unit
                                                     ----------   ----------   ----------   ----------   ----------   ----------
                                                                                                    
Income (Loss) from Continuing Operations .........   $    2,133   $     0.11   $       --   $       --   $    2,133   $     0.08
Income (Loss) from Discontinued Operations(2) ....          519         0.03           --           --          519         0.02
Cumulative Effect of Accounting Changes(3) .......           --           --           --           --           --           --
                                                     ----------   ----------   ----------   ----------   ----------   ----------
Net Income (Loss) ................................   $    2,652   $     0.14   $       --   $       --   $    2,652   $     0.10
                                                     ==========   ==========   ==========   ==========   ==========   ==========
Weighted Average Units Outstanding ...............                    18,476                     9,000                    27,476
                                                                  ==========                ==========                ==========

(1)     Net income (loss), excluding the approximate two percent General
        Partner interest, has been apportioned to each class of unitholder based
        on the ownership of total units outstanding in accordance with the MLP's
        Partnership Agreement. Net losses are not allocated to the common and
        subordinated unitholders to the extent that such allocations would cause
        a deficit capital account balance or increase any existing deficit
        capital account balance. Any remaining losses are allocated to the
        General Partner as a result of the balances in the capital accounts of
        the common and subordinated unitholders. Effective with the third
        quarter of 2002, all losses were being allocated to the General Partner.
        The disproportionate allocation of 2002 net losses among the unitholders
        and the General Partner was recouped during the two months ended
        February 28, 2003.

(2)     Earnings (loss) per unit from discontinued operations has been
        determined based on the difference between the amount of net income
        (loss) allocated to each class of unitholder and the amount of income
        (loss) from continuing operations allocated to each class of unitholder.
        Earnings (loss) per unit for the two months ended February 28, 2003,
        have been impacted by the disproportionate allocation of income and loss
        discussed above.

(3)     The cumulative effect of accounting changes was allocated to the General
        Partner and subsequently recouped by the General Partner during the two
        months ended February 28, 2003.

                                       16

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

11. COMMITMENTS AND CONTINGENCIES

     Litigation. We are, in the ordinary course of business, a defendant in
various lawsuits, some of which are covered in whole or in part by insurance. We
believe that the ultimate resolution of litigation, individually and in the
aggregate, will not have a materially adverse impact on our financial position
or results of operations. Prior to and since the commencement of our bankruptcy
proceedings, various legal actions arose in the ordinary course of business, of
which the significant actions are discussed below.

     John H. Roam, et al. vs. Texas-New Mexico Pipe Line Company and EOTT Energy
Pipeline Limited Partnership, Cause No. CV43296, In the District Court of
Midland County, Texas, 238th Judicial District (Kniffen Estates Suit). The
Kniffen Estates Suit was filed on March 2, 2001, by certain residents of the
Kniffen Estates, a residential subdivision located outside of Midland, Texas.
The allegations in the petition state that free crude oil products were
discovered in water wells in the Kniffen Estates area, on or about October 3,
2000. The plaintiffs claim that the crude oil products are from a 1992 release
from a pipeline then owned by the Texas-New Mexico Pipe Line Company ("Tex-New
Mex"). We purchased that pipeline from Tex-New Mex in 1999. With respect to us,
the plaintiffs were seeking damages arising from any contamination of the soil
or groundwater since we acquired the pipeline in question. No specific amount of
money damages was claimed in the Kniffen Estates Suit, but the plaintiffs did
file proofs of claim in our bankruptcy proceeding totaling $62 million. In
response to the Kniffen Estates Suit, we filed a cross-claim against Tex-New
Mex. In the cross-claim, we claimed that, in relation to the matters alleged by
the plaintiffs, Tex-New Mex breached the Purchase and Sale Agreement between the
parties dated May 1, 1999, by failing to disclose the 1992 release and by
failing to undertake the defense and handling of the toxic tort claims, fair
market value claims, and remediation claims arising from the release. On April
5, 2002, we filed an amended cross-claim which alleged that Tex-New Mex
defrauded us as part of Tex-New Mex's sale of the pipeline systems to us in
1999. The amended cross-claim also alleged that various practices employed by
Tex-New Mex in the operation of its pipelines constituted gross negligence and
willful misconduct and voided our obligation to indemnify Tex-New Mex for
remediation of releases that occurred prior to May 1, 1999. In the Purchase and
Sale Agreement, we agreed to indemnify Tex-New Mex only for certain remediation
obligations that arose before May 1, 1999, unless these obligations were the
result of the gross negligence or willful misconduct of Tex-New Mex prior to May
1, 1999. EOTT Energy Pipeline Limited Partnership ("PLP") and the plaintiffs
agreed to a settlement during our bankruptcy proceedings. The settlement
provides for the plaintiffs' release of their claims filed against PLP in this
proceeding and in the bankruptcy proceedings, in exchange for an allowed general
unsecured claim in our bankruptcy of $3,252,800 (as described above, the
plaintiffs filed proofs of claim in our bankruptcy proceedings totaling $62
million). The allowed general unsecured claim was accrued at December 31, 2002.
On April 1, 2003, we filed a second amended cross-claim in this matter. In
addition to the claims filed in the previous cross-claims, we requested (i)
injunctive relief for Tex-New Mex's refusal to honor its indemnity obligations;
(ii) injunctive relief requiring Tex-New Mex to identify, investigate and
remediate sites where the conduct alleged in our cross-claim occurred; and (iii)
restitution damages of over $125,000,000. At a hearing on April 11, 2003, the
court severed into a separate action EOTT's cross-claims against Tex-New Mex
that extend beyond the crude oil release and groundwater contamination in the
Kniffen Estates subdivision ("EOTT's Over-Arching Claim"). Developments in
EOTT's Over-Arching Claim are described immediately below. The trial of EOTT's
Kniffen Claims commenced on June 16, 2003, and the jury returned its verdict on
July 2, 2003. The jury found that Tex-New Mex's gross negligence and willful
misconduct caused the contamination in the Kniffen Estates. The jury also found
that Tex-New Mex committed fraud against us with respect to the Kniffen Estates
site. On November 28, 2003, the court the final judgment which provides for the
award to us of (i) actual damages in the amount of $7,701,938, (ii) attorney's
fees in the amount of $1,400,000, (iii) prejudgment interest in the amount of
$1,044,509 and (iv) punitive damages in the amount of $18,203,876. The final
judgment also contains a finding that Tex-New Mex is obligated to indemnify us
for future remediation costs incurred at the Kniffen Estates site. On March 31,
2004, we entered into a settlement agreement with Tex-New Mex that resolves this
lawsuit, EOTT's Over-Arching Claim, and the litigation with Jimmie T. Cooper and
Betty P. Cooper that is described below. Pursuant to the terms of the
settlement, we received cash payments totaling $25 million ($17

                                       17

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

million from Tex-New Mex and the remainder as part of the proceeds received in
the Plains transaction) on April 1, 2004, and all claims in this litigation were
released. In addition, the settlement provided for the termination of all
environmental indemnity obligations under the agreements governing Tex-New Mex's
sale of its pipeline system to us. In accordance with the terms of the
settlement, the amended judgment was vacated and this lawsuit was dismissed on
April 15, 2004.

     EOTT Energy Operating Limited Partnership vs. Texas-New Mexico Pipeline
Company, Cause No. CV-44, 099, In the District Court of Midland County, Texas,
238th Judicial District ("EOTT's Over-Arching Claim"). As described above, the
claims in this lawsuit were severed from EOTT's Kniffen Claims on April 11,
2003. In this lawsuit, we alleged that various practices employed by Tex-New Mex
in the operation of its pipelines and handling of spills constitute gross
negligence and willful misconduct, thus triggering Tex-New Mex's obligation to
indemnify us for remediation of releases where such practices ("Non-Remediation
Practices") were employed. In addition to damages, we were seeking (a)
injunctive relief requiring Tex-New Mex to honor its indemnity obligations under
the Purchase and Sale Agreement and (b) injunctive relief requiring Tex-New Mex
to identify, investigate, and remediate sites where Tex-New Mex employed the
Non-Remediation Practices. Discovery opened in EOTT's Over-Arching Claim on
December 1, 2003. On March 3, 2004, we amended our petition to specifically list
more than 200 contamination sites where Tex-New Mex employed the Non-Remediation
Practices. The March 31, 2004 settlement agreement that provided for the
resolution of the Kniffen Estates Suit also provided for the release of all
claims in EOTT's Over-Arching Claim. In accordance with the terms of that
settlement agreement, EOTT's Over-Arching Claim was dismissed with prejudice on
April 20, 2004.

     Bankruptcy Issues related to Claims Made by Texas-New Mexico Pipeline
Company and its affiliates. Tex-New Mex, Shell Oil Company ("Shell") and Equilon
filed proofs of claim in our bankruptcy, each filing similar claims in the
amount of $112 million. In July of 2003, we entered into an agreement with
Shell, Tex-New Mex and Equilon whereby all of their claims were either
withdrawn, estimated or allowed, leaving the value of the claims estimated for
distribution purposes at $56,924.52. In connection with the settlement of the
Kniffen Estates Suit and the Over-Arching Claim, we have resolved all of our
outstanding bankruptcy claims with Shell and its related entities.

     Jimmie T. Cooper and Betty P. Cooper vs. Texas-New Mexico Pipeline Company,
Inc., EOTT Energy Pipeline Limited Partnership, and EOTT Energy Corp., Case No.
CIV-03-0035 JB/LAM, In the United States District Court for the District of New
Mexico. This lawsuit was filed on October 1, 2002. The plaintiffs in this
lawsuit are surface interest owners of certain property located in Lea County,
New Mexico. The plaintiffs alleged that aquifers underlying their property and
water wells located on their property were contaminated as a result of spills
and leaks from a pipeline running across their property that is or was owned by
Tex-New Mex and us. The plaintiffs sought payment of costs that would be
incurred in investigating and remediating the alleged crude oil releases and
replacing water supplies from aquifers that have allegedly been contaminated and
damages in an unspecified amount arising from the plaintiffs' alleged fear of
exposure to carcinogens and the alleged interference with the plaintiffs' quiet
enjoyment of their property. The plaintiffs are also seeking an unspecified
amount of punitive damages. EOTT and the plaintiffs agreed to the terms of a
settlement, whereby the plaintiffs agreed to release their claims against us and
received an allowed general unsecured claim in our bankruptcy in the amount of
$1,027,000. The allowed general unsecured claim was accrued at December 31,
2002. On October 21, 2003, the plaintiffs filed a motion seeking our dismissal
from this lawsuit. Tex-New Mex opposed this motion, and on October 31, 2003,
Tex-New Mex filed a motion for leave to file a cross-claim against us. In the
proposed cross-claim, Tex-New Mex is seeking a declaratory judgment finding that
we are contractually obligated to indemnify Tex-New Mex for all costs Tex-New
Mex has incurred or will incur related to the defense of the plaintiffs' claims
in this lawsuit. The proposed cross-claim also alleges that we failed to assume
Tex-New Mex's defense of this lawsuit and failed to indemnify Tex-New Mex for
the expenses Tex-New Mex has incurred in this lawsuit, and that such actions by
us constitute a breach of the Purchase and Sale Agreement governing Tex-New
Mex's sale of the subject pipeline to us. The March 31, 2004 settlement
agreement that provided for the resolution of the Kniffen Estates Suit also
provided

                                       18

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

for the release of Tex-New Mex's claims against us in this lawsuit. In
accordance with the terms of that settlement agreement, this lawsuit was
dismissed with prejudice on April 20, 2004.

     In re EOTT Energy Partners, L.P., Case No. 02-21730, EOTT Energy Finance
Corp., Case No. 02-21731, EOTT Energy General Partner, L.L.C., Case No.
02-21732, EOTT Energy Operating Limited Partnership, Case No. 02-21733, EOTT
Energy Canada Limited Partnership, Case No. 02-21734, EOTT Energy Liquids, L.P.,
Case No. 02-21736, EOTT Energy Corp., Case No. 02-21788, Debtors (Jointly
Administered under Case No. 02-21730), In the United States Bankruptcy Court for
the Southern District of Texas, Corpus Christi Division. On October 8, 2002, we
and all of our subsidiaries filed voluntary petitions for relief under Chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Texas (the "EOTT Bankruptcy Court") to facilitate
reorganization of our business and financial affairs for the benefit of us, our
creditors and other interested parties. Additionally, the General Partner filed
its voluntary petition for reorganization under Chapter 11 on October 21, 2002
in the EOTT Bankruptcy Court. Our Restructuring Plan was confirmed on February
18, 2003 and became effective on March 1, 2003. Shell and Tex-New Mex filed a
notice of appeal to our plan confirmation on February 24, 2003. A hearing on the
appeal was held in the District Court on August 19, 2003, where the judge ruled
the appeal was moot. The ruling became final on October 24, 2003. We filed a
motion closing the bankruptcy case on April 14, 2004, and the order closing the
case was entered on June 2, 2004.

     Blackmore Partners, L.P. v. Link Energy, LLC, J. Robert Chambers, Julie H.
Edwards, Thomas M. Matthews, Robert E. Ogle, James M. Tidwell, S. Wil VanLoh,
Jr., and Daniel J. Zaloudek, Case No. 454-N, In the Court of Chancery of the
State of Delaware in and for New Castle County, for the alleged breach of
fiduciary duties to certain unitholders in connection with the anticipated
distribution of proceeds resulting from the sale of substantially all of the
Company's operating assets to Plain Marketing, L.P., Plains Pipeline, L.P. and
Plains All American Pipeline, L.P. effective April 1, 2004 (the "Transaction").
The suit was brought by a unitholder who claims that the Company and its
directors in place at the time of the Transaction favored the interests of
unitholders who were also the holders of the Company's 9% Senior Notes (the
"Notes") to the detriment of plaintiff and the other members of the class as
defined by plaintiff (i.e., unitholders who do not also own a portion of the
Notes). The plaintiff maintains that the Company's liquidation plan is
inequitable and discriminatory since it allegedly provides a $25 million
supplemental payment to the unitholders who also own the Notes. Based on
management's current knowledge, we believe the allegations are without merit. We
can provide no assurances regarding the outcome of this lawsuit, but will
continue to gather and analyze new information as it becomes available.

     EPA's Section 308 Request. In July 2001, Enron received a request for
information from the EPA under Section 308 of the CWA, requesting information
regarding certain spills and releases from oil pipelines owned or operated by
Enron and its affiliated companies for the time period July 1, 1998 to July 11,
2001. Enron responded in January of 2002 to the EPA's Section 308 request in its
capacity as the operator of the pipelines actually owned by us and on our
behalf. Under the terms of the Enron Settlement Agreement dated October 8, 2002,
we would be required to indemnify EOTT Energy Corp., as the prior general
partner, and its affiliates including Enron Pipeline Services Company, with
regard to any environmental remediation, except for claims of gross negligence
and willful misconduct. While we cannot predict the outcome of the EPA's Section
308 request, the EPA could seek to impose liability for environmental cleanup on
us with respect to the matters being reviewed. The outcome of the EPA's Section
308 request is not yet known, and we are unaware of any potential liability.

     Environmental. Prior to the sale of all of our assets, we were subject to
extensive federal, state and local laws and regulations covering the discharge
of materials into the environment, or otherwise relating to the protection of
the environment, and which require expenditures for remediation at various
operating facilities and waste disposal sites, as well as expenditures in
connection with the construction of new facilities. At the federal level, such
laws include, among others, the Clean Air Act, the Clean Water Act, the Oil
Pollution Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation

                                       19

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

and Liability Act, and the National Environmental Policy Act, as each may be
amended from time to time. Failure to comply with these laws and regulations may
result in the assessment of administrative, civil, and criminal penalties or the
imposition of injunctive relief.

     Prior to the sale of our Liquids Operations discussed further in Note 7, we
produced MTBE at our Morgan's Point Facility. MTBE is used as an additive in
gasoline. Due to health concerns around MTBE, there have been lawsuits filed
against companies involved in the production of MTBE. We have not been named in
any such actions, nor do we anticipate being included in any such actions.
However, we can provide no assurances that we may not be included in such
actions due to our past production of MTBE.

     We have incurred spill clean up and remediation costs associated with the
assets acquired from Tex-New Mex as well as in connection with other properties
we own in various locations throughout the United States. We have insurance
covering clean up and remediation costs that may be incurred in connection with
properties not acquired from Tex-New Mex. However, no assurance can be given
that the insurance will be adequate to cover any such cleanup and remediation
costs.

     The following are summaries of environmental remediation expense, estimated
environmental liabilities, and amounts receivable under insurance policies for
the indicated periods (in thousands):

                                                 SUCCESSOR COMPANY       | PREDECESSOR COMPANY
                                       --------------------------------- | -------------------
                                         THREE MONTHS        ONE MONTH   |    TWO MONTHS
                                            ENDED              ENDED     |       ENDED
                                        MARCH 31, 2004    MARCH 31, 2003 | FEBRUARY 28, 2003
                                       ---------------    -------------- | -------------------
                                                                         |
                                                                | 
Remediation expense ..............          $ 1,407           $   926    |      $ 1,979
Estimated insurance recoveries ...             (361)               --    |          (79)
                                            -------           -------    |      -------
Net remediation expense ..........          $ 1,046           $   926    |      $ 1,900
                                            =======           =======    |      =======

                                                                  SUCCESSOR COMPANY             |  PREDECESSOR COMPANY
                                                          ------------------------------------  |  -------------------
                                                           THREE MONTHS           ONE MONTH     |     TWO MONTHS
                                                               ENDED                ENDED       |        ENDED
                                                          MARCH 31, 2004        MARCH 31, 2003  |   FEBRUARY 28, 2003
                                                          --------------        --------------  |   -----------------
                                                                         ,             |   
Environmental liability at beginning of period ...            $ 12,216             $ 13,440     |       $ 13,440
Remediation expense ..............................               1,407                  926     |          1,979
Cash expenditures ................................              (2,400)              (1,176)    |         (1,979)
                                                              --------             --------     |       --------
Environmental liability at end of period .........            $ 11,223             $ 13,190     |       $ 13,440
                                                              ========             ========     |       ========

                                                                       SUCCESSOR COMPANY           |  PREDECESSOR COMPANY
                                                               ---------------------------------   |  -------------------
                                                                THREE MONTHS          ONE MONTH    |        TWO MONTHS
                                                                   ENDED                ENDED      |          ENDED
                                                               MARCH 31, 2004      MARCH 31, 2003  |    FEBRUARY 28, 2003
                                                               --------------      --------------  |   ------------------
                                                                                          |   
Environmental insurance receivable at                                                              |
     beginning of period ..............................            $ 3,089            $ 8,837      |       $ 8,803
Estimated recoveries ..................................                361                 --      |            79
Cash receipts .........................................                 --             (1,780)     |           (45)
                                                                   -------            -------      |       -------
Environmental insurance receivable at end of period ...            $ 3,450            $ 7,057      |       $ 8,837
                                                                   =======            =======      |       =======

     The environmental liability was classified in Other Current ($6.7 million)
and Other Long-Term Liabilities ($4.5 million) and the insurance receivable was
classified in Trade and Other Receivables ($3.0 million) and Other Assets ($0.4
million) at March 31, 2004.

                                       20

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

12. NEW ACCOUNTING STANDARDS

Accounting Standards Adopted - First Quarter 2004

     In December 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003), "Consolidation of Variable Interest Entities - an Interpretation
of ARB No.51" ("FIN 46R"). FIN 46R replaces FIN 46 which we implemented
effective with the adoption of fresh start reporting on March 1, 2003. FIN 46R
is required to be implemented by the end of the first reporting period beginning
after December 15, 2003. We adopted FIN 46R effective January 1, 2004. Adoption
of FIN 46R had no impact on our financial statements.

Accounting Standards Previously Adopted - Cumulative Effect of Accounting
Changes

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This statement required entities to record the fair
value of a liability for legal obligations associated with the retirement
obligations of tangible long-lived assets in the period in which it is incurred.
When the liability is initially recorded, a corresponding increase in the
carrying value of the related long-lived asset would be recorded. Over time,
accretion of the liability is recognized each period, and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss on settlement. We adopted the accounting principle
required by the new statement effective January 1, 2003. As a result of the
adoption of SFAS 143 on January 1, 2003, we recorded a liability of $1.7
million, property, plant and equipment, net of accumulated depreciation of $0.1
million and a cumulative effect of a change in accounting principle of $1.6
million.

     In October 2002, the EITF reached a consensus in EITF Issue 02-03 to
rescind Issue EITF 98-10, and related interpretive guidance, and preclude mark
to market accounting for energy trading contracts that are not derivative
instruments pursuant to SFAS 133. The consensus requires that gains and losses
(realized and unrealized) on all derivative instruments held for trading
purposes be shown net in the income statement, whether or not the instrument is
settled physically. The consensus to rescind EITF Issue 98-10 was effective for
all new contracts entered into (and physical inventory purchased) after October
25, 2002. For energy trading contracts and physical inventories that existed on
or before October 25, 2002, that remained at December 31, 2002, the consensus
was effective January 1, 2003 and was reported as a cumulative effect of a
change in accounting principle. The cumulative effect of the accounting change
at January 1, 2003 was a loss of $2.4 million.

13. BUSINESS SEGMENT INFORMATION

     We have two reportable segments, which management reviews in order to make
decisions about resources to be allocated and assess performance: North American
Crude Oil and Pipeline Operations. The North American Crude Oil segment
primarily purchases, gathers, transports and markets crude oil. The Pipeline
Operations segment operates approximately 6,900 miles of active common carrier
pipelines in 12 states. Effective December 31, 2003, we sold our Liquids
Operations and therefore the results of operations related to these assets have
been classified as discontinued operations presented herein. We sold all of our
natural gas liquids assets on the West Coast on October 1, 2003 and therefore,
the results of operations related to these assets previously included in the
West Coast Operations segment have been reclassified to discontinued operations
for all periods presented herein.

     The accounting policies of the segments are the same as those described in
the summary of significant accounting policies as discussed in Note 2 included
in our Annual Report on Form 10-K (as amended) for the year ended December 31,
2003. We evaluate performance based on operating income (loss).

                                       21

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     We account for intersegment revenue for our North American Crude Oil
Operations as if the sales were to third parties, that is, at current market
prices. Intersegment revenues for Pipeline Operations are based on published
pipeline tariffs.

FINANCIAL INFORMATION BY BUSINESS SEGMENT
(IN THOUSANDS)

                                                    NORTH                         CORPORATE
                                                  AMERICAN         PIPELINE         AND
                                                  CRUDE OIL       OPERATIONS      OTHER (a)       CONSOLIDATED
                                                -------------    -------------   -------------    -------------
                                                                                      
THREE MONTHS ENDED MARCH 31, 2004
(SUCCESSOR COMPANY)

Revenue from external customers .............   $      29,307    $      11,375   $          --    $      40,682

Intersegment revenue (b) ....................          (2,407)          15,357         (12,950)              --
                                                -------------    -------------   -------------    -------------

  Total operating revenue ...................          26,900           26,732         (12,950)          40,682
                                                -------------    -------------   -------------    -------------

Gross profit (loss) .........................          (1,621)           8,443              --            6,822
                                                -------------    -------------   -------------    -------------

Operating income (loss) .....................          (4,533)           6,266         (12,721)         (10,988)

Other expenses, net .........................              --               --         (11,555)         (11,555)
                                                -------------    -------------   -------------    -------------

Income (loss) from continuing operations ....          (4,533)           6,266         (24,276)         (22,543)
                                                -------------    -------------   -------------    -------------

Total assets ................................         474,576          203,680          11,559          689,815
                                                -------------    -------------   -------------    -------------

Depreciation and amortization ...............             638            4,416               6            5,060
                                                -------------    -------------   -------------    -------------

                                                              NORTH                         CORPORATE
                                                            AMERICAN         PIPELINE          AND
                                                            CRUDE OIL       OPERATIONS       OTHER (a)      CONSOLIDATED
                                                          -------------    -------------   -------------    -------------
                                                                                                
ONE MONTH ENDED MARCH 31, 2003
(SUCCESSOR COMPANY) (RESTATED)

Revenue from external customers .......................   $      16,768    $         965   $          --    $      17,733

Intersegment revenue (b) ..............................          (2,913)           8,568          (5,655)              --
                                                          -------------    -------------   -------------    -------------

   Total operating revenue ............................          13,855            9,533          (5,655)          17,733
                                                          -------------    -------------   -------------    -------------

Gross profit ..........................................           3,852            4,216              --            8,068
                                                          -------------    -------------   -------------    -------------

Operating income (loss) ...............................           3,313            3,238          (2,231)           4,320

Other expense .........................................              --               --          (3,277)          (3,277)
                                                          -------------    -------------   -------------    -------------

Income (loss) from continuing operations before
   cumulative effect of accounting changes (c) ........           3,313            3,238          (5,508)           1,043
                                                          -------------    -------------   -------------    -------------
Total assets ..........................................         547,962          221,766          99,884          869,612
                                                          -------------    -------------   -------------    -------------

Depreciation and amortization .........................             376            1,331               1            1,708
                                                          -------------    -------------   -------------    -------------

_________________________________________________________________________________________________________________________

                                       22

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                                              NORTH                         CORPORATE
                                                            AMERICAN         PIPELINE          AND
                                                            CRUDE OIL       OPERATIONS       OTHER (a)       CONSOLIDATED
                                                          -------------    -------------   -------------    -------------
                                                                                                
TWO MONTHS ENDED FEBRUARY 28, 2003
(PREDECESSOR COMPANY) (RESTATED)

Revenue from external customers .......................   $      27,213    $       4,422   $          --    $      31,635

Intersegment revenue (b) ..............................          (1,768)          11,828         (10,060)              --
                                                          -------------    -------------   -------------    -------------

  Total operating revenue .............................          25,445           16,250         (10,060)          31,635
                                                          -------------    -------------   -------------    -------------

Gross profit (loss) ...................................           3,752            6,219              --            9,971
                                                          -------------    -------------   -------------    -------------

Operating income (loss) ...............................           2,365            4,261          (4,012)           2,614

Other expense .........................................              --               --          (5,489)          (5,489)

Reorganization items, net gain on discharge
   of debt and fresh start adjustments (c) ............              --               --          67,459           67,459
                                                          -------------    -------------   -------------    -------------
Income (loss) from continuing operations ..............           2,365            4,261          57,958           64,584
                                                          -------------    -------------   -------------    -------------

Total assets ..........................................         505,965          226,646         123,511          856,122
                                                          -------------    -------------   -------------    -------------

Depreciation and amortization .........................             837            3,286             519            4,642
                                                          -------------    -------------   -------------    -------------

- -------------------------------------------------------------------------------------------------------------------------

(a)      Corporate and Other also includes intersegment eliminations.

(b)      Intersegment sales for North American Crude Oil are made at prices
         comparable to those received from external customers. Intersegment
         sales for Pipeline Operations are based on published pipeline tariffs.

(c)      The two months ended February 28, 2003 include a gain from
         reorganization items of $7.3 million, a gain on discharge of debt of
         $131.6 million and a loss related to fresh start adjustments of $56.8
         million. See Notes 5 and 6. 2002 includes a net gain from
         reorganization items of $32.8 million

                                       23

                                                                    Exhibit 99.2

Link Energy LLC

Link Energy LLC Consolidated Financial Statements as of December 31, 2003
(Successor Company) and 2002 (Predecessor Company) (Restated) and for the Ten
Months Ended December 31, 2003 (Successor Company) (Restated), Two Months Ended
February 28, 2003 (Predecessor Company) (Restated) and Years Ended December 31,
2002 and 2001 (Predecessor Company) (Restated)

                                 LINK ENERGY LLC
                          (a LIMITED LIABILITY COMPANY)
                          INDEX TO FINANCIAL STATEMENTS

                                                                                                 Page
                                                                                                 ----
                                                                                              
Financial Statements
     Report of Independent Auditors (Successor Company).......................................    F-2
     Report of Independent Auditors (Predecessor Company).....................................    F-3
     Consolidated Statements of Operations -
         Ten Months Ended December 31, 2003 (Successor Company) (Restated)
         Two Months Ended February 28, 2003 (Predecessor Company) (Restated) and
         Years Ended December 31, 2002 and 2001 (Predecessor Company) (Restated)..............    F-4
     Consolidated Balance Sheets - December 31, 2003 (Successor Company)
         and 2002 (Predecessor Company) (Restated)............................................    F-5
     Consolidated Statements of Cash Flows  -
         Ten Months Ended December 31, 2003 (Successor Company) (Restated)
         Two Months Ended February 28, 2003 (Predecessor Company) (Restated) and
         Years Ended December 31, 2002 and 2001 (Predecessor Company) (Restated)..............    F-6
     Consolidated Statements of Members'/Partners' Capital -
         Ten Months Ended December 31, 2003 (Successor Company) (Restated)
         Two Months Ended February 28, 2003 (Predecessor Company) (Restated) and
         Years Ended December 31, 2002 and 2001 (Predecessor Company) (Restated)..............    F-7
     Notes to Consolidated Financial Statements (Restated)....................................    F-8
Supplemental Schedule

     Schedule II - Valuation and Qualifying Accounts and Reserves.............................    S-1

                                       F-1

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Unitholders of Link Energy LLC:

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, members' capital and cash flows present
fairly, in all material respects, the financial position of Link Energy LLC and
its subsidiaries (Successor Company) at December 31, 2003 and the results of
their operations and their cash flows for the period from March 1, 2003 to
December 31, 2003 in conformity with accounting principles generally accepted in
the United States of America. In addition, in our opinion, the financial
statement schedule listed in the accompanying index present fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements. These financial statements
and the financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audit. We conducted our
audit of these statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

As discussed in the Note 1 caption "Restatement of Financial Results" and in
Note 10 to the consolidated financial statements, the Company has restated its
financial results for the period from March 1, 2003 to December 31, 2003.

As discussed in Note 1 to the consolidated financial statements, the United
States Bankruptcy Court for the Southern District of Texas confirmed the
Company's voluntary petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code (the "plan") on February 18, 2003, to be effective on March 1,
2003. In connection with its emergence from bankruptcy, the Company adopted
fresh start accounting as of February 28, 2003.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and has a net capital deficiency that raises substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

PRICEWATERHOUSECOOPERS LLP
Houston, Texas

March 30, 2004, except as to the matters discussed in the Note 1 caption
"Restatement of Financial Results" and in Note 10 which the date is June 15,
2004

                                      F-2

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Unitholders of Link Energy LLC:

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, partners' capital and cash flows present
fairly, in all material respects, the financial position of EOTT Energy
Partners, L.P. and its subsidiaries (Predecessor Company) at December 31, 2002
and the results of their operations and their cash flows for the period from
January 1, 2003 to February 28, 2003, and for each of the two years in the
period ended December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the accompanying index presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in the Note 1 caption "Restatement of Financial Results" and in
Note 10 to the consolidated financial statements, the Company has restated its
financial results for the period from January 1, 2003 to February 28, 2003, and
for each of the two years in the period ended December 31, 2002.

As discussed in Note 1 to the consolidated financial statements, the Company
filed a petition on October 8, 2002 with the United States Bankruptcy Court for
the Southern District of Texas for reorganization under the provisions of
Chapter 11 of the U.S. Bankruptcy Code. The Company's reorganization plan was
confirmed on February 18, 2003, to be effective on March 1, 2003. In connection
with its emergence from bankruptcy, the Company adopted fresh start accounting
as of February 28, 2003.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and has a net capital deficiency that raises substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 20 to the consolidated financial statements, the Company
adopted the provisions of Emerging Issues Task Force No. 02-03, "Issues Involved
in Accounting for Derivative Contracts Held for Trading Purposes and Contracts
Involved in Energy Trading and Risk Management Activities," related to the
rescission of Emerging Issues Task Force Issue 98-10, "Accounting for Contracts
Involved in Energy Trading and Risk Management Activities," as of January 1,
2003. As discussed in Note 20 to the consolidated financial statements, the
Company changed its method of accounting for asset retirement obligations as of
January 1, 2003.

PRICEWATERHOUSECOOPERS LLP
Houston, Texas

March 30, 2004, except as to the matters discussed in the Note 1 caption
"Restatement of Financial Results" and in Note 10 which the date is June 15,
2004

                                      F-3

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In Thousands, Except Per Unit Amounts)

                                                   SUCCESSOR COMPANY  |                 PREDECESSOR COMPANY
                                                   -----------------  |  -----------------------------------------------
                                                                      |                        YEAR ENDED DECEMBER 31,
                                                      TEN MONTHS      |      TWO MONTHS      ---------------------------
                                                         ENDED        |        ENDED
                                                   DECEMBER 31, 2003  |  FEBRUARY 28, 2003       2002             2001
                                                   -----------------  |  -----------------   -----------        --------
                                                       (RESTATED)     |      (RESTATED)       (RESTATED)       (RESTATED)
                                                                |                                  
Operating Revenue.............................     $         153,033  |  $          31,635   $   182,932        $250,571
                                                                      |
Cost of Sales.................................                23,863  |              4,521        25,007          43,149
Operating Expenses............................                70,102  |             13,020        94,274          97,969
Depreciation and Amortization-operating.......                17,139  |              4,123        26,621          27,802
                                                   -----------------  |  -----------------   -----------        --------
Gross Profit..................................                41,929  |              9,971        37,030          81,651
                                                                      |
Selling, General and Administrative Expenses..                45,959  |              6,846        53,480          45,051
Depreciation and Amortization-corporate & other                   22  |                519         3,267           3,083
Other (Income) Expense........................               (13,867) |                 (8)        6,710          (1,092)
Impairment of Assets..........................                     -  |                  -         1,168               -
                                                   -----------------  |  -----------------   -----------        --------
                                                                      |
Operating Income (Loss).......................                 9,815  |              2,614       (27,595)         34,609
                                                                      |
Interest Expense and Related Charges..........               (32,708) |             (5,645)      (45,876)        (35,363)
Interest Income...............................                    77  |                 58           127           1,319
Other, net....................................                   115  |                 98           (44)           (517)
                                                   -----------------  |  -----------------   -----------        --------
                                                                      |
Income (Loss) from Continuing Operations                              |
    Before Reorganization Items, Net Gain on                          |
    Discharge of Debt and Fresh Start                                 |
    Adjustments...............................               (22,701) |             (2,875)      (73,388)             48
Reorganization Items..........................                     -  |             (7,330)       32,847               -
Net Gain on Discharge of Debt (Note 5)........                     -  |            131,560             -               -
Fresh Start Adjustments (Note 6)..............                     -  |            (56,771)            -               -
                                                   -----------------  |  -----------------   -----------        --------
Income (Loss) from Continuing Operations......               (22,701) |             64,584       (40,541)             48
Loss from Discontinued Operations (Note 8)....               (30,214) |                519       (62,713)        (16,605)
                                                   -----------------  |  -----------------   -----------        --------
Income (Loss) Before Cumulative Effect of                             |
    Accounting Change.........................               (52,915) |             65,103      (103,254)        (16,557)
Cumulative Effect of Accounting Change                                |
    (Notes 2 & 20)............................                     -  |             (3,976)            -           1,073
                                                   -----------------  |  -----------------   -----------        --------
Net Income (Loss).............................     $         (52,915) |  $          61,127   $  (103,254)       $(15,484)
                                                   =================  |  =================   ===========        ========
Basic Net Income (Loss) Per Unit (Note 12)                            |
      LLC Unit................................     $           (4.29) |  $             N/A   $       N/A        $    N/A
                                                   =================  |  =================   ===========        ========
      Common Unit.............................     $             N/A  |  $            0.14   $     (0.03)       $  (0.55)
                                                   =================  |  =================   ===========        ========
      Subordinated Unit.......................     $             N/A  |  $               -   $     (3.23)       $  (0.55)
                                                   =================  |  =================   ===========        ========
Diluted Net Income (Loss) Per Unit (Note 12)..     $           (4.29) |  $            0.10   $     (1.08)       $  (0.55)
                                                   =================  |  ==================  ===========        ========
Distributions Per Unit........................     $               -  |  $               -   $      0.25        $   1.90
                                                   =================  |  =================   ===========        ========
Average Units Outstanding for Diluted Computation             12,331  |             27,476        27,476          27,476
                                                   =================  |  =================  ============        ========

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F - 4

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

                                                                     SUCCESSOR COMPANY |  PREDECESSOR COMPANY
                                                                     ----------------- |  -------------------
                                                                     DECEMBER 31, 2003 |   DECEMBER 31, 2002
                                                                     ----------------- |  -------------------
                                                                                       |       (RESTATED)
                                                                                 |  
                              ASSETS                                                   |
                                                                                       |
Current Assets                                                                         |
    Cash and cash equivalents.................................       $          2,450  |    $         16,432
    Restricted cash (Note 8)..................................                  6,045  |                   -
    Trade and other receivables, net of allowance for                                  |
       doubtful accounts of $1,210 and $1,210, respectively...                446,030  |             407,096
    Inventories of continuing operations......................                  7,636  |              15,389
    Inventories of discontinued operations....................                      -  |              16,970
    Other.....................................................                  6,283  |              23,888
                                                                     ----------------  |    ----------------
       Total current assets...................................                468,444  |             479,775
                                                                     ----------------  |    ----------------
Property, Plant and Equipment.................................                278,724  |             546,410
    Less:  Accumulated depreciation...........................                 16,214  |             205,351
                                                                     ----------------  |    ----------------
       Net property, plant and equipment......................                262,510  |             341,059
                                                                     ----------------  |    ----------------
Long-lived assets of discontinued operations..................                    838  |              39,899
Goodwill......................................................                      -  |               7,436
Other Assets..................................................                  6,852  |               4,070
                                                                     ----------------  |    ----------------
Total Assets..................................................       $        738,644  |    $        872,239
                                                                     ================  |    ================
            LIABILITIES AND MEMBERS'/PARTNERS' CAPITAL                                 |
                                                                                       |
Current Liabilities                                                                    |
    Trade and other accounts payable..........................       $        476,509  |    $        389,925
    Accrued taxes payable.....................................                  6,700  |              11,327
    Term loans (Note 4).......................................                 75,000  |              75,000
    Commodity repurchase agreement (Note 4)...................                 18,000  |              75,000
    Receivable financing (Note 4).............................                 27,000  |              50,000
    Other.....................................................                 27,982  |              23,274
                                                                     ----------------  |    ----------------
       Total current liabilities..............................                631,191  |             624,526
                                                                     ----------------  |    ----------------
Long -Term Liabilities                                                                 |
    Senior notes (Note 4).....................................                104,451  |                   -
    Other.....................................................                 17,399  |              15,817
                                                                     ----------------  |    ----------------
       Total long-term liabilities............................                121,850  |              15,817
                                                                     ----------------  |    ----------------
Liabilities Subject to Compromise (Note 5)....................                      -  |             292,827
                                                                     ----------------  |    ----------------
Commitments and Contingencies (Note 15)                                                |
                                                                                       |
Additional Partnership Interests (Note 18)....................                      -  |               9,318
                                                                     ----------------  |    ----------------
Members'/Partners' Capital (Deficit)                                                   |
    Partners' Capital (Deficit)...............................                      -  |             (70,249)
    Members' Capital (Deficit)................................                (14,392) |                   -
    Accumulated Other Comprehensive Income (Loss).............                     (5) |                   -
                                                                     ----------------  |    ----------------
    Total.....................................................                (14,397) |             (70,249)
                                                                     ----------------  |    ----------------
Total Liabilities and Members'/Partners' Capital..............       $        738,644  |    $        872,239
                                                                     ================  |    ================

   The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                     F - 5

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

                                                              SUCCESSOR COMPANY |               PREDECESSOR COMPANY
                                                              ----------------- |  ------------------------------------------------
                                                                                |                       YEAR ENDED DECEMBER 31,
                                                              TEN MONTHS ENDED  |   TWO MONTHS ENDED   ----------------------------
                                                              DECEMBER 31, 2003 |  FEBRUARY 28, 2003       2002             2001
                                                              ----------------- |  -----------------   ------------      ----------
                                                                 (RESTATED)     |      (RESTATED)       (RESTATED)       (RESTATED)
                                                                                |
                                                                          |                                  
CASH FLOWS FROM OPERATING ACTIVITIES                                            |
    Reconciliation of net income (loss) to net cash                             |
      provided by (used in) operating activities                                |
      Net income (loss)..................................      $     (52,915)   |    $      61,127     $   (103,254)     $  (15,484)
      Depreciation.......................................             19,242    |            5,560           35,535          33,469
      Amortization of goodwill and other.................                  -    |                -            2,015           2,609
      Impairment of assets...............................              2,751    |                -           77,268          29,057
      Write-down of liquids operations inventories.......              4,003    |                -                -               -
      Net unrealized change in crude oil trading                                |
       activities........................................                822    |           (2,120)          (1,755)          2,053
      (Gains) losses on disposal of assets...............             (2,727)   |                -              984             229
      Non-cash compensation expense......................              2,306    |                -                -               -
      Non-cash net gain for reorganization items and                            |
       discharge of debt.................................                  -    |         (127,185)        (37,802)               -
      Fresh start adjustments............................                  -    |           56,771                -               -
      Changes in components of working capital--                                |
        Receivables......................................             (6,475)   |          (32,177)          94,089         421,680
        Inventories......................................             12,762    |            6,757           54,077           1,799
        Other current assets.............................              3,192    |            2,428            7,411          (1,780)
        Trade accounts payable...........................              9,034    |           47,845          (96,934)       (537,198)
        Accrued taxes payable............................              1,962    |            1,717            2,481          (1,909)
        Other current liabilities........................             14,500    |             (320)             (98)         19,249
      Other assets and liabilities.......................             (8,623)   |            2,530              682           4,968
                                                               -------------    |    -------------     ------------      ----------
    Net Cash Provided by (Used in) Operating Activities..               (166)   |           22,933           34,699         (41,258)
                                                               -------------    |    -------------     ------------      ----------
CASH FLOWS FROM INVESTING ACTIVITIES                                            |
                                                                                |
    Proceeds from sale of assets.........................             62,197    |                -            2,390          17,209
    Increase in restricted cash..........................             (6,045)   |                -                -               -
    Acquisitions.........................................                  -    |                -                -        (117,000)
    Additions to property, plant and equipment...........             (9,153)   |             (285)         (31,238)        (36,228)
                                                               -------------    |    -------------     ------------      ----------
    Net Cash Provided by (Used in) Investing Activities..             46,999    |             (285)         (28,848)       (136,019)
                                                               -------------    |    -------------     ------------      ----------
CASH FLOWS FROM FINANCING ACTIVITIES                                            |
                                                                                |
    Increase (decrease) in receivable financing..........            (23,000)   |                -            7,500          42,500
    Increase (decrease) in short-term borrowings.........                  -    |                -          (40,000)         40,000
    Increase in term loans...............................                  -    |                -           75,000               -
    Increase (decrease) in repurchase agreements.........            (57,000)   |                -          (25,000)        100,000
    Debt issuance cost...................................             (3,758)   |                 -            (750)              -
    Distributions to unitholders.........................                  -    |                -           (4,712)        (43,163)
    Exercise of warrants.................................                444    |                -                -               -
    Other................................................             (1,804)   |            1,655           (4,398)        (13,349)
                                                               -------------    |    -------------     ------------      ----------
    Net Cash Provided by (Used in) Financing Activities..            (85,118)   |            1,655            7,640         125,988
                                                               -------------    |    -------------     ------------      ----------
Increase (Decrease) in Cash and Cash Equivalents.........            (38,285)   |           24,303           13,491        (51,289)
Cash and Cash Equivalents Beginning of Period............             40,735    |           16,432            2,941          54,230
                                                               -------------    |    -------------     ------------      ----------
Cash and Cash Equivalents End of Period..................      $       2,450    |    $      40,735     $     16,432      $    2,941
                                                               =============    |    =============     ============      ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                |
                                                                                |
    Cash Paid for Interest...............................      $      19,558    |    $       5,599     $     34,931      $   33,041
                                                               =============    |    =============     ============      ==========
    Cash Paid for Reorganization Items...................      $       6,271    |    $       2,867     $      4,955      $        -
                                                               =============    |    =============     ============      ==========
SUPPLEMENTAL NON CASH INVESTING AND FINANCING                                   |
   INFORMATION                                                                  |
                                                                                |
    Discharge of 11% Senior Notes, including accrued                            |
     interest............................................      $           -    |    $     248,481     $          -      $        -
                                                               =============    |    =============     ============      ==========
    Cancellation of additional partnership interests.....      $           -    |    $       9,318     $          -      $        -
                                                               =============    |    =============     ============      ==========
    Issuance of 9% Senior Notes and payment of interest                         |
     in kind.............................................      $       5,200    |    $     104,000     $          -      $        -
                                                               =============    |    =============     ============      ==========
    Issuance of new equity of Successor Company..........      $           -    |    $      36,687     $          -      $        -
                                                               =============    |    =============     ============      ==========

  The accompanying notes are an integral part of these consolidated financial
                                   statements.

                                      F - 6

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
              CONSOLIDATED STATEMENTS OF MEMBERS'/PARTNERS' CAPITAL
                                 (In Thousands)

                                                                PARTNERS CAPITAL
                                                       ------------------------------------

                                                                                                         ACCUMULATED
                                                                                                            OTHER
                                                         COMMON    SUBORDINATED   GENERAL    MEMBERS'    COMPREHENSIVE
                                                      UNITHOLDERS  UNITHOLDERS    PARTNER     CAPITAL    INCOME (LOSS)     TOTAL
                                                      -----------  ------------   --------   ---------   -------------   ---------
                                                                                                       
Partners' Capital (Deficit) at December 31, 2000
  (Unaudited).....................................     $  47,832    $  41,247     $  7,285   $       -    $          -   $  96,364
  Net loss (Restated).............................       (10,207)      (4,973)        (304)          -               -     (15,484)
  Cash distribution...............................       (35,105)      (7,200)        (858)          -               -     (43,163)
                                                       ---------    ---------     --------    --------    ------------   ---------
Partners' Capital (Deficit) at December 31, 2001
   (Restated).....................................         2,520       29,074        6,123           -               -      37,717
  Net loss (Restated).............................          (553)     (29,074)     (73,627)          -               -    (103,254)
  Cash distribution...............................        (4,619)           -          (93)          -               -      (4,712)
                                                       ---------    ---------      -------    --------    ------------   ---------
Partners' Capital (Deficit) at December 31, 2002
 (Restated).......................................        (2,652)           -      (67,597)          -               -     (70,249)
  Loss before reorganization items, net gain on
    discharge of debt and fresh start adjustments
    (Restated)....................................             -            -       (6,332)          -               -      (6,332)
  Reorganization items and net gain on
    discharge of debt.............................        17,624       35,354       80,374      35,773               -     169,125
  Fresh start adjustments.........................       (14,972)     (35,354)      (6,445)          -               -     (56,771)
                                                       ---------    ---------     --------   ---------    ------------   ---------
Members' Capital at February 28, 2003
  (Successor Company) (Restated)..................     $       -    $       -     $      -   $  35,773    $          -   $  35,773
                                                       ==========   =========     ========   =========    ============   =========
- ------------------------------------------------------------------------------------------------------------------------------------

Members' Capital at March 1, 2003
  (Successor Company) (Restated)..................     $       -    $       -     $      -   $  35,773    $          -   $  35,773
  Net loss (Restated).............................             -            -            -     (52,915)              -     (52,915)
  Unrealized net losses on derivative instruments
    arising during the period.....................             -            -            -           -            (160)
  Less reclassification adjustment for net
    realized losses on derivative instruments
    included in net loss..........................             -            -            -           -             155          (5)
                                                                                                                         ---------
  Comprehensive loss..............................                                                                         (52,920)
                                                                                                                         ---------
  Exercise of warrants............................             -            -            -         444               -         444
  Issuance of restricted units....................             -            -            -      12,450               -      12,450
  Less unearned compensation expense..............             -            -            -     (10,144)              -     (10,144)
                                                       ---------    ---------     --------   ---------    ------------   ---------
Members' Capital at December 31, 2003
  (Successor Company).............................     $       -    $       -     $      -   $ (14,392)   $         (5)  $ (14,397)
                                                       =========    =========     ========   =========    ============   =========

   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F - 7

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

1.    BASIS OF PRESENTATION

Name Change and Organization

      Effective October 1, 2003, EOTT Energy LLC ("EOTT LLC") changed its name
to Link Energy LLC ("Link LLC"). In connection with our name change, we also
changed the names of several of our subsidiaries as listed in the table below.

                NEW NAME                                                     FORMER NAME
                                                          
Link Energy Limited Partnership                              EOTT Energy Operating Limited Partnership
Link Energy Pipeline Limited Partnership                     EOTT Energy Pipeline Limited Partnership
Link Energy Canada Limited Partnership                       EOTT Energy Canada Limited Partnership
Link Energy Finance Corp.                                    EOTT Energy Finance Corp.
Link Energy General Partner LLC                              EOTT Energy General Partner, L.L.C.
Link Energy Canada, Ltd.                                     EOTT Energy Canada Management Ltd.

      Link LLC is a Delaware limited liability company that was formed on
November 14, 2002 in anticipation of assuming and continuing the business
formerly directly owned by EOTT Energy Partners, L.P. (the "MLP"), which, as
described in Note 5 below, filed for Chapter 11 reorganization with its wholly
owned subsidiaries on October 8, 2002. The MLP emerged from bankruptcy and
merged into EOTT Energy Operating Limited Partnership resulting in EOTT LLC
becoming the successor registrant to the MLP on March 1, 2003, the effective
date of the Third Amended Joint Chapter 11 Plan of Reorganization, as
supplemented ("Restructuring Plan"). We operate principally through four
affiliated operating limited partnerships, Link Energy Limited Partnership, Link
Energy Canada Limited Partnership, Link Energy Pipeline Limited Partnership, and
EOTT Energy Liquids, L.P. (see Note 8 for information regarding the disposition
of our Liquids operations), each of which is a Delaware limited partnership.
Link Energy Finance Corp. was formed in order to facilitate certain investors'
ability to purchase our senior notes. Link Energy General Partner, LLC serves as
the general partner for our four affiliated operating limited partnerships.
Until the MLP emerged from bankruptcy, EOTT Energy Corp. (the "General
Partner"), a Delaware corporation and a wholly owned subsidiary of Enron Corp.
("Enron"), served as the general partner of the MLP and owned an approximate
1.98% general partner interest in the MLP. The General Partner filed for
bankruptcy on October 21, 2002. Unless the context otherwise requires, the terms
"we," "our," "us," and "Link" refer to Link Energy LLC and its four affiliated
operating limited partnerships, Link Energy Finance Corp., and Link Energy
General Partner, LLC (the "Subsidiary Entities"), and for periods prior to our
emergence from bankruptcy in March 2003, such terms and "EOTT" refer to EOTT
Energy Partners, L.P. and its sole general partner, EOTT Energy Corp., as well
as the Subsidiary Entities.

Restatement of Financial Results

      We have restated our financial results for the ten months ended December
31, 2003, the two months ended February 28, 2003, and the years ended December
31, 2002 and 2001 as more fully discussed in Note 10. The restatement relates to
control deficiencies identified with inventory and accounts payable
reconciliation procedures in our pipeline and liquids operations. The
restatement results in a decrease in our net loss for the ten months ended
December 31, 2003 of $0.9 million, an increase in our net income for the two
months ended February 28, 2003 of $0.9 million, and an increase in our net loss
for the years ended December 31, 2002 and 2001 of $1.5 million and $0.3 million
respectively.

Fresh Start Reporting

      As a result of the application of fresh start reporting under the American
Institute of Certified Public Accountants Statement of Position No. 90-7 ("SOP
90-7"), "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code," as of February 28, 2003 (the date chosen for accounting purposes), Link's
financial results for the ten months ended December 31, 2003 and the two months
ended February 28, 2003 include two different bases of accounting and
accordingly,

                                       F-8

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

the financial condition, operating results and cash flows of the Successor
Company and the Predecessor Company have been separately disclosed. For a
further discussion of fresh start reporting, see Note 6. For purposes of these
financial statements, references to the "Predecessor Company" are references to
us for periods through February 28, 2003 (the last day of the calendar month in
which we emerged from bankruptcy) and references to the "Successor Company" are
references to Link for periods subsequent to February 28, 2003. The Successor
Company's financial statements are not comparable to the Predecessor Company's
financial statements. See further discussion in Note 6.

Partnership Status

      As a limited liability company, we are generally treated like a
partnership for federal income tax purposes and like a corporation with limited
liability for state law and other non-tax purposes. In other words, for federal
income tax purposes, we do not pay tax on our income or gain, nor are we
entitled to a deduction for our losses, but such gains or losses are allocated
to each member in accordance with the member's interest in us and the member
will be responsible for paying the income tax applicable to such membership
interest. Our taxable income or loss, which may vary substantially from the net
income or net loss we report in our consolidated statement of operations, is
includable in the federal income tax returns of our members. The aggregate
difference in the basis of our net assets for financial and tax reporting
purposes cannot be readily determined as we do not have access to information
about each member's tax attributes in Link.

      In order for us to continue to be classified as a partnership for federal
income tax purposes, at least 90% of our gross income for every taxable year
must consist of "qualifying income" within the meaning of the Internal Revenue
Code. In 2002 and 2003, we recognized income from our settlement with Enron and
discharge of indebtedness in excess of 10% of our gross income for each of those
years. As disclosed in more detail in our Third Amended Joint Chapter 11 Plan
which is incorporated by reference into our Annual Report on Form 10-K for the
year ended December 31, 2002, we concluded that income from our settlement with
Enron and our debt discharge income constituted "qualifying income," although
the matter was not free from doubt. In January 2004, we requested a private
letter ruling from the Internal Revenue Service to determine either that the
income from our settlement with Enron and the debt discharge income is
qualifying income or that the recognition of such income should be disregarded
for purposes of the qualifying income test because it was an inadvertent result
of our bankruptcy.

      We are unable to predict how or when the Internal Revenue Service will
rule. If the ruling is favorable, we will continue to be treated as a
partnership for federal income tax purposes for so long as we satisfy the
qualifying income test. If we are unable to obtain a favorable ruling and are
unsuccessful in litigating the matter should we choose to do so, we will be
taxable as a corporation for the year in which we failed to meet the qualifying
income test and every year thereafter. Any classification of us as a corporation
could result in a material reduction in the value of our units.

LLC Agreement

      Under our Limited Liability Company Agreement (the "LLC Agreement"), our
Board may, but is not required, to make distributions to each interest holder,
and in any event, our exit credit facilities do not permit us to make any cash
distributions so long as we have any indebtedness or other obligations
outstanding under the exit credit facilities. Similar to a corporation, members
do not share our liability. Under our LLC Agreement, members are also entitled
to certain information about us and to vote for directors and on certain other
matters. The holders of the majority of outstanding units have the right to vote
on mergers and the election or removal of directors. The holders of two-thirds
of the units have the right to approve additional issuances of equity and
certain amendments to the LLC Agreement. Members are not entitled to participate
in our management directly, but participate indirectly through the election of
our directors.

                                      F-9

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

Reclassifications

      Certain reclassifications have been made to prior period amounts to
conform with the current period presentation.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Principles of Consolidation. We own and operate our assets through our
operating limited partnerships. The accompanying financial statements reflect
the consolidated accounts of Link Energy LLC and the operating limited
partnerships after elimination of intercompany transactions.

      Nature of Operations. Through our affiliated limited partnerships, Link
Energy Limited Partnership, Link Energy Canada Limited Partnership, Link Energy
Pipeline Limited Partnership, and EOTT Energy Liquids, L.P., we are engaged in
the purchasing, gathering, transporting, trading, storage and resale of crude
oil and related activities. Prior to their disposition in 2003, we were also
engaged in the operation of a hydrocarbon processing plant (the "Morgan's Point
Facility"), a natural gas liquids storage facility (the "Mont Belvieu Facility")
and natural gas liquids assets on the West Coast. See Note 8 for information
regarding the disposition of our Morgan's Point Facility, Mont Belvieu Facility
and natural gas liquids assets on the West Coast. The results of operations
related to these assets have been reclassified to discontinued operations for
all periods presented herein. Our remaining principal business segments are our
North American Crude Oil gathering and marketing operations and our Pipeline
Operations.

      Use of Estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

      Cash Equivalents. We record as cash equivalents all highly liquid
short-term investments having original maturities of three months or less.

      Restricted Cash. Restricted cash represents cash which is not available
for general corporate purposes. At December 31, 2003, restricted cash is
comprised of amounts to be used for the settlement of certain obligations
related to our Liquids Operations, which were sold on December 31, 2003. See
further discussion in Note 8.

      Inventory. Inventory includes crude oil inventory in our North American
Crude Oil gathering and marketing operations and our Pipeline Operations.
Inventory is stated at average cost for all periods presented.

      Property, Plant and Equipment. Property, plant and equipment is stated at
historical cost for the Predecessor Company and has been adjusted to reflect the
adoption of fresh start reporting for the Successor Company. See Note 7. Normal
maintenance and repairs are charged to expense as incurred while significant
improvements which extend the life of the asset are capitalized. Upon retirement
or sale of an asset, the asset and the related accumulated depreciation are
removed from the accounts and any resulting gain or loss is reflected in the
results of operations.

      Impairment of Assets. We evaluate impairment of our long-lived assets in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," and would
recognize an impairment when estimated undiscounted future cash flows associated
with an asset or group of assets are less than the asset carrying amount.
Long-lived assets are subject to factors which could affect future cash flows.
These factors include competition, our financial condition and cost of credit
which impacts our ability to maintain or increase our crude oil volumes,
regulation, environmental matters, consolidation in the industry, refinery
demand for specific grades of crude oil, area market price structures and
continued developmental drilling in certain areas of the United States. We
continuously monitor these factors and pursue alternative strategies to maintain
or enhance cash flows

                                      F-10

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

associated with these assets; however, no assurances can be given that we can
mitigate the effects, if any, on future cash flows related to any changes in
these factors. See Note 8 for further discussion of asset impairments.

      Depreciation. Depreciation is provided by applying the straight-line
method to the basis of property, plant, and equipment over the estimated useful
lives of the assets. Asset lives are 10 to 20 years for barging, terminalling,
gathering and pipeline facilities, 5 to 10 years for transportation equipment,
and 3 to 20 years for other buildings and equipment.

      Goodwill. Effective January 1, 2002, we adopted SFAS No. 142, "Goodwill
and Other Intangible Assets." SFAS No. 142 requires entities to discontinue the
amortization of goodwill, allocate all existing goodwill among its reporting
segments based on criteria set by SFAS No. 142 and perform initial impairment
tests by applying a fair value-based analysis on the goodwill in each reporting
segment. Goodwill is to be tested for impairment annually or more frequently if
circumstances indicate a possible impairment. Goodwill was allocated to the
North American Crude Oil segment and in 2002 no impairment of goodwill was
required. Our reported income from continuing operations of $0.05 million ($0.00
per diluted unit) in 2001 included amortization of goodwill of $1.0 million
($0.4 per diluted unit). Our income from continuing operations in 2001,
excluding the amortization of goodwill, would have been $1.0 million ($0.04 per
diluted unit). In connection with the adoption of fresh start reporting (see
Note 6), all remaining goodwill at February 28, 2003 was eliminated.

      Pipeline Linefill. Pipeline linefill, which consists of minimum operating
requirements is recorded at cost for the Predecessor Company and was adjusted to
fair value in connection with the adoption of fresh start reporting for the
Successor Company (See Note 6). Total minimum operating linefill requirements
held in third party pipelines and our pipelines at December 31, 2003 and 2002
were 2.1 million barrels valued at $39.7 million and 2.9 million barrels valued
at $50.2 million, respectively. Minimum linefill requirements held in third
party pipelines at December 31, 2003 and 2002 were valued at $6.3 million and
$8.8 million, respectively, and classified as Other Assets and Other Current
Assets, respectively, on the balance sheet. Minimum linefill requirements held
in our pipelines at December 31, 2003 and 2002, were valued at $33.4 million and
$41.4 million, respectively, and classified as Property, Plant and Equipment on
the balance sheet. See Note 8 for information regarding the sale of certain
linefill.

      Derivative and Hedging Activities. We utilize derivative instruments to
minimize our exposure to commodity price fluctuations. Generally, as we purchase
lease crude oil at prevailing market prices, we enter into corresponding sales
transactions involving either physical deliveries of crude oil to third parties
or a sale of futures contracts on the NYMEX. Price risk management strategies,
including those involving price hedges using NYMEX futures contracts, are very
important in managing our commodity price risk. Such hedging techniques require
resources for managing both future positions and physical inventories. We effect
transactions both in the futures and physical markets in order to deliver the
crude oil to its highest value location or otherwise to maximize the value of
the crude oil we control. Throughout the process, we seek to maintain a
substantially balanced risk position at all times. We do have certain risks that
cannot be completely hedged such as basis risks (the risk that price
relationships between delivery points, grades of crude oil or delivery periods
will change) and the risk that transportation costs will change.

      Effective January 1, 1999, we began reporting energy trading contracts (as
defined) at fair value in the balance sheet with changes in fair value included
in earnings in accordance with Emerging Issues Task Force ("EITF") Issue 98-10,
"Accounting for Contracts Involved in Energy Trading and Risk Management
Activities."

      Effective January 1, 2001, we began reporting derivative activities in
accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended. SFAS No. 133 requires that derivative instruments be
recorded in the balance sheet as either assets or liabilities measured at fair
value. Under SFAS No. 133, we are required to "mark-to-fair value" all of our
derivative instruments at the end of each reporting period. At the date of
initial adoption of SFAS No. 133, the difference between the fair value of
derivative instruments and the previous carrying amount of those derivatives was
recorded as the cumulative effect of a change in accounting principle. The
cumulative effect of adopting SFAS No. 133 effective January 1, 2001 was a $1.3
million ($0.05 per diluted unit) increase in income. SFAS No. 133 requires that
changes in the derivative's fair value be recognized currently in earnings
unless

                                      F-11

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

specific hedge accounting criteria are met. Qualifying criteria include, among
other requirements, that we formally designate, document, and assess the
effectiveness of the hedging instruments as they are established and at the end
of each reporting period. Special accounting for qualifying hedges allows a
derivative's gains and losses to offset related results from the hedged item in
the income statement. Changes in the fair value of derivatives designated as
cash flow hedges are deferred to Other Comprehensive Income (Loss) ("OCI"), a
component of Members' Capital, and reclassified into earnings when the
associated hedged transaction affects earnings. Deferral of derivative gains and
losses through OCI is limited to the portion of the change in fair value of the
derivative instrument which effectively hedges the associated hedged
transaction; ineffective portions are recognized currently in earnings.
Beginning in the second quarter of 2003, we designated certain of our derivative
instruments as cash flow hedges of forecasted transactions. These hedges were
for a maximum of two-months and had no material effect on our OCI or earnings
for the ten months ended December 31, 2003. The ineffective portions of our
hedged transactions were not material to our earnings for the ten months ended
December 31, 2003. SFAS No. 133 requires that any cash flow hedges, for which it
is probable that the original forecasted transactions will not occur by the end
of the originally specified time period, be discontinued and reclassified into
earnings, and that such reclassifications be recorded and separately disclosed.
We had no such reclassifications for the ten months ended December 31, 2003. All
unrealized derivative gains and losses included in accumulated other
comprehensive income (loss) at December 31, 2003 are expected to be reclassified
to net income (loss) within the next twelve months. Realized derivative gains
and losses are included in Operating Revenue in our Statement of Operations.

      Changes in the market value of transactions designated as energy trading
activities in accordance with EITF Issue 98-10 (prior to the rescission of EITF
Issue 98-10) and derivative instruments accounted for under SFAS No. 133, are
recorded in revenues every period as unrealized gains or losses. The related
price risk management assets and liabilities are recorded in other current or
non-current assets and liabilities, as applicable, on the balance sheet. The
fair value of transactions is determined primarily based on forward prices of
the commodity, adjusted for certain transaction costs associated with the
transactions. For the ten months ended December 31, 2003, we had net unrealized
losses of $0.8 million, for the two months ended February 28, 2003, we had net
unrealized gains of $4.5 million and for the years ended December 31, 2002 and
2001, we had net unrealized gains of $1.8 million and net unrealized losses of
$2.5 million, respectively.

      In the first quarter of 2001, we changed our method of accounting for
inventories used in our energy trading activities from the average cost method
to the fair value method. The cumulative effect of the change in accounting for
inventories as of January 1, 2001 was $0.2 million ($0.01 per diluted unit) and
is reported as a decrease in net income for 2001. The change in accounting for
inventories increased reported net income in 2001 by approximately $2.6 million.
The consensus to rescind EITF Issue 98-10 eliminated EOTT's basis for
recognizing physical inventories at fair value. With the rescission of EITF
Issue 98-10, inventories purchased after October 25, 2002 were valued at average
cost.

      In October 2002, the EITF reached a consensus in EITF Issue 02-03 "Issues
Involved in Accounting for Derivative Contracts Held for Trading Purposes and
Contracts Involved in Energy Trading and Risk Management Activities." The EITF
reached a consensus to rescind EITF Issue 98-10, and related interpretive
guidance, and preclude mark to market accounting for energy trading contracts
that are not derivative instruments pursuant to SFAS No. 133. See Note 20 for
discussion of the cumulative effect of the change in accounting principle. The
consensus requires that gains and losses (realized and unrealized) on all
derivative instruments held for trading purposes be shown net in the income
statement, whether or not the instrument is settled physically.

      Revenue Recognition. Prior to the rescission of EITF Issue 98-10 in the
fourth quarter of 2002, substantially all of our current gathering, marketing
and trading activities were accounted for on a fair value basis with changes in
fair value included in earnings. Qualifying derivative instruments are accounted
for pursuant to SFAS No. 133 and energy trading activities were accounted for
pursuant to EITF Issue 98-10. We recognize revenue on the accrual method, for
non trading activities and non-derivative instruments, based on the right to
receive payment for goods and services delivered to third parties.

                                      F-12

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      Certain estimates were made in determining the fair value of contracts. We
have determined these estimates using available market data and valuation
methodologies. Judgment is required in interpreting market data, and the use of
different market assumptions or estimation methodologies may affect the
estimated fair value amounts.

      Cost of Sales and Operating Expenses. Cost of sales includes the cost of
purchasing crude oil and associated transportation costs. Operating expenses
consist of field and pipeline expenses, including payroll and benefits,
utilities, telecommunications, fuel and power, environmental expenses and
property taxes.

      Receivable Financing. SFAS No. 140 "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities - A Restatement of FASB
Statement No. 125" was effective March 31, 2001. Under SFAS No. 140, transfers
of accounts receivable under our receivables agreement, discussed further in
Note 4, are accounted for as financings. Costs associated with the transfers are
classified as "Interest Expense and Related Charges" on the Consolidated Income
Statement.

      Foreign Currency Transactions. Canadian operations represent all of our
foreign activities. The U.S. dollar is the functional currency. Foreign currency
transactions are initially translated into U.S. dollars. The resulting gains and
losses are included in the determination of net income (loss) in the period in
which the exchange rate changes. The gain (loss) on foreign currency
transactions, included in "Other, net" on the Consolidated Income Statement was
a gain of $0.1 million for the ten months ended December 31, 2003 and a gain of
$0.1 million for the two months ended February 28, 2003. No gain or loss was
recognized for the year ended December 31, 2002 and a $0.3 million loss was
recognized for the year ended December 31, 2001.

      Environmental. Expenditures for ongoing compliance with environmental
regulations that relate to current operations are expensed or capitalized as
appropriate. Estimated liabilities are recorded when environmental assessments
indicate that remedial efforts are probable and the costs can be reasonably
estimated. Estimates of the liability and insurance recovery, if any, are based
upon currently available facts, existing technology and presently enacted laws
and regulations and are included in the balance sheet on an undiscounted basis.

      Unit Based Compensation Plans. We account for unit-based compensation
using the intrinsic value recognition provisions of APB No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. If we had elected to
recognize compensation cost based on the fair value recognition provisions of
SFAS No. 123, "Accounting for Stock Based Compensation", net income (loss) and
net income (loss) per unit would be unchanged for the ten months ended December
31, 2003, the two months ended February 28, 2003 and for the years ended
December 31, 2002 and 2001.

3.    LIQUIDITY/GOING CONCERN

GENERAL

      We emerged from bankruptcy on March 1, 2003 as a highly leveraged company
and have not been able to significantly reduce our debt to date. We will not be
able to continue as a viable business unless we reduce our debt and attract new
volumes.

      Our Restructuring Plan anticipated profitable Liquids Operations and a
quick return of crude oil volume growth in 2003. After incurring an operating
loss of $31.0 million from our Liquids Operations since our emergence from
bankruptcy, we sold our Liquids Operations in December 2003 for approximately
$20 million (see Note 8). Our pre-bankruptcy customers and business partners
have been less willing to do business with us than we anticipated as a result of
our being highly leveraged and having shown no substantive improvement in our
financial performance. Although our Restructuring Plan assumed that our
marketing volumes would increase to approximately 350,000 barrels per day by

                                      F-13

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

the end of 2003, our actual marketing volumes were approximately 254,000 barrels
per day in December 2003, and we do not anticipate an appreciable increase in
volumes for the remainder of 2004.

      Furthermore, as a result of our bankruptcy, we incurred higher costs in
obtaining credit than we had in the past. Our trade creditors were less willing
to extend credit to us on an unsecured basis and the amount of letters of credit
we have been required to post for our marketing activities increased
significantly. Our letters of credit outstanding at December 31, 2003 were $250
million with a maximum commitment available of $260 million.

      Our cash flow from operations is not sufficient to meet our current cash
requirements and, as a result, we have been borrowing under our Trade
Receivables Agreement in order to fund our operations and capital needs. Absent
a significant improvement in our business performance, we expect to continue to
borrow to meet our cash requirements to the extent borrowed funds are available.
At March 19, 2004, we have approximately $23.0 million in borrowing availability
under our Trade Receivables Agreement. Based on our current cash requirements,
we may exhaust our sources of available cash in the second quarter of 2004.

      We have sold substantially all of our non-strategic assets in an effort to
reduce our aggregate indebtedness, which was approximately $268 million as of
March 15, 2004. We will not be able to use funds from future asset sales, if
any, to meet our current cash needs because the proceeds from any such sales are
likely to be required to reduce our outstanding indebtedness. In addition to
asset sales, we have attempted, without success, to raise additional equity and
to convert indebtedness to equity.

      We are in advanced discussions with a potential buyer regarding the sale
of substantially all of our assets; however, there can be no assurances that we
can consummate a transaction. The net proceeds of the transaction would be used
to repay all of our outstanding indebtedness, as well as to satisfy other
existing obligations. If the transaction were consummated, we would have no
further operations and would wind down over a period of time. If we are not
successful in consummating the transaction, we will continue to pursue other
strategic alternatives, which include the sale of additional assets (singularly
or in groups) or a voluntary filing under the U.S. Bankruptcy Code. Based on our
existing level of indebtedness, it is unlikely that either a sale or bankruptcy
would yield any material residual value for the Company's unitholders.

FACTORS ADVERSELY AFFECTING OUR LIQUIDITY AND WORKING CAPITAL

      Our ability to fund our liquidity and working capital requirements has
been adversely affected by various factors, including the following:

      -     COVENANT BREACHES UNDER EXIT CREDIT FACILITIES. During the last four
            months of 2003 and in January 2004, we have breached certain
            covenants under our exit credit facilities, which include the Letter
            of Credit Agreement, the Term Loan, the Trade Receivables Agreement
            and the Commodity Repurchase Agreement. These covenants are
            discussed below. We have obtained a waiver of these 2003 violations
            and are currently in discussions with our lenders regarding a waiver
            for January 2004. In addition, we have reduced the lenders' maximum
            commitment under the Letter of Credit Facility from $325 million to
            $260 million.

            -     Minimum Consolidated EBIDA. We are required to maintain a
                  minimum, rolling cumulative four month total of consolidated
                  Earnings Before Interest Depreciation and Amortization,
                  subject to certain adjustments, as defined ("Minimum
                  Consolidated EBIDA"). For the rolling four-month periods ended
                  September 30, 2003, October 31, 2003, November 30, 2003,
                  December 31, 2003 and January 31, 2004, the required Minimum
                  Consolidated EBIDA under our exit credit facilities and our
                  actual consolidated EBIDA were as follows:

                                      F-14

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

                                     REQUIRED
    ROLLING FOUR-MONTH         MINIMUM CONSOLIDATED    ACTUAL CONSOLIDATED
       PERIOD ENDED                   EBIDA                   EBIDA
- --------------------------     --------------------    -------------------
                                                            (RESTATED)
                                                 
September 30, 2003.......           $ 6.6 million         $ 1.2 million
October 31, 2003.........           $ 8.7 million         $ 2.9 million
November 30, 2003........           $10.4 million         $(1.4) million
December 31, 2003........           $12.7 million         $(2.2) million
January 31, 2004.........           $16.0 million         $ 1.0 million

                  For the rolling four-month periods ending February 29, 2004,
                  March 31, 2004 and April 30, 2004, we will be required to
                  maintain Minimum Consolidated EBIDA of $15.7 million, $16.9
                  million and $16.5 million, respectively. Thereafter, the
                  requirement continues to increase until it reaches $17.4
                  million for the four-month period ended August 31, 2004.
                  Because this covenant becomes increasingly stringent, we
                  expect we will not be in compliance with this covenant and
                  thereby will be in default under our exit credit facilities
                  for the foreseeable future.

            -     Interest Coverage. We are required to maintain a minimum ratio
                  of consolidated EBIDA to interest expense, subject to certain
                  exclusions ("Interest Coverage Ratio"), over rolling
                  consecutive four month periods. For the rolling four-month
                  periods ended September 30, 2003, October 31, 2003, November
                  30, 2003, December 31, 2003 and January 31, 2004, the required
                  Interest Coverage Ratio under our exit credit facilities and
                  our actual interest coverage ratio were as follows:

                                       REQUIRED
   ROLLING FOUR-MONTH                  INTEREST            ACTUAL INTEREST
      PERIOD ENDED                  COVERAGE RATIO         COVERAGE RATIO
- -------------------------          ----------------        ---------------
                                                              (RESTATED)
                                                     
September 30, 2003.......              .62 to 1.00           .13 to  1.00
October 31, 2003.........              .79 to 1.00           .31 to  1.00
November 30, 2003........              .93 to 1.00          (.15) to 1.00
December 31, 2003........             1.11 to 1.00          (.23) to 1.00
January 31, 2004.........             1.36 to 1.00           .10 to  1.00

                  For the rolling four-month periods ending February 29, 2004,
                  March 31, 2004 and April 30, 2004, we will be required to
                  maintain an Interest Coverage Ratio of 1.35 to 1.00, 1.36 to
                  1.00 and 1.34 to 1.00, respectively. This ratio requirement
                  continues to increase until it reaches 1.42 to 1.0 for the
                  four-month period ended August 31, 2004. Because this covenant
                  becomes increasingly stringent, we expect we will not be in
                  compliance with this covenant and thereby will be in default
                  under our exit credit facilities for the foreseeable future.

            -     Minimum Consolidated Tangible Net Worth. At the end of each
                  month, from March 31, 2003 to December 31, 2003, we were
                  required to maintain a minimum consolidated tangible net
                  worth, subject to certain adjustments, as defined ("Minimum
                  Consolidated Tangible Net Worth"), of $8.5 million. Actual
                  Minimum Consolidated Tangible Net Worth at December 31, 2003
                  was $12.8 million. From January 31, 2004 to August 30, 2004,
                  we are required to maintain a Minimum Consolidated Tangible
                  Net Worth of $10 million. Actual Minimum Consolidated Tangible
                  Net Worth at January 31, 2004 was $9.9 million.

                                      F-15

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

                  -     Covenant Breach relating to Borrowing Base Calculation.
                        We are required to maintain asset values (the "Borrowing
                        Base") at all times that exceed our aggregate
                        outstanding letters of credit ("LC Obligations"). As of
                        February 15, 2004, aggregate LC Obligations exceeded the
                        Borrowing Base by approximately $1.9 million. This
                        represented a payment default of $1.9 million under our
                        Letter of Credit Facility which was subsequently waived.
                        As of March 15, 2004, the Borrowing Base exceeded LC
                        Obligations by approximately $12 million.

                  -     Consequences of Covenant Breaches. Any default (covenant
                        default or payment default, after applicable cure
                        periods) under any of our exit credit facilities will
                        cause a cross-default under all the other exit credit
                        facilities. If a payment default under any of the exit
                        credit facilities or any other debt obligation involves
                        indebtedness of $10 million or more, or there is an
                        acceleration of the indebtedness of $10 million or more,
                        then the payment default under the exit credit
                        facilities would be a default under the indenture
                        relating to the 9% Senior Notes (the "9% Senior Notes
                        Indenture"). A default under the 9% Senior Notes
                        Indenture will cause a cross-default under our exit
                        credit facilities.

                        Any breaches, unless waived, could severely limit our
                        access to liquidity and credit support and result in our
                        being required to repay all outstanding indebtedness,
                        plus accrued and unpaid interest, under our exit credit
                        facilities as well as the 9% Senior Note Indenture.
                        Although our exit credit facility lenders provided a
                        waiver for our breaches of covenants as of December 31,
                        2003, there can be no assurance they will provide
                        waivers for any subsequent period, including January 31,
                        2004, or that any amendment to our exit credit
                        facilities required to obtain such assurance will not
                        adversely affect our liquidity.

                  -     Maturities of our Exit Facilities. In addition, we
                        extended our Trade Receivables Agreement and Commodity
                        Repurchase Agreement to June 1, 2004 (although we have
                        an option to extend the maturity to August 30, 2004,
                        subject to us being in compliance with our debt
                        covenants) and our Term Loan and Letter of Credit
                        Facility mature on August 30, 2004. As of March 15,
                        2004, we had $53.0 million of outstanding borrowings
                        under our Trade Receivables Agreement, $16.9 million of
                        outstanding borrowings under our Commodity Repurchase
                        Agreement, and $75 million of borrowings under our Term
                        Loan Agreement. Since we did not reduce Standard
                        Chartered's exposure below $200 million by March 1,
                        2004, we paid a $2.5 million fee to Standard Chartered
                        on March 15, 2004. We may not be able to repay the
                        indebtedness under our exit credit facilities at
                        maturity. Any replacement credit facilities, to the
                        extent obtainable, may be at significantly greater cost
                        to us. There can be no assurances, however, that
                        replacement credit facilities can be obtained.

            -     COVENANT BREACH UNDER ENRON NOTE. We are required to maintain
                  at all times a letter of credit securing a promissory note
                  payable to Enron Corp. (the "Enron Note") in the initial
                  principal amount of $6.2 million. We failed to cause such
                  letter of credit to be renewed at least 10 business days prior
                  to its expiration, which resulted in an event of default
                  under, and the automatic acceleration of, the Enron Note. As
                  of December 31, 2003, $5.7 million was due and payable under
                  the Enron Note. A replacement letter of credit has been
                  issued, and we have asked Enron Corp. to waive the event of
                  default and rescind the automatic acceleration of the note.
                  There can be no assurance that Enron Corp. will provide the
                  waiver or when such a waiver will be provided.

GOING CONCERN

      Our Consolidated Financial statements have been prepared assuming we will
continue as a going concern which contemplates the realization of assets and
settlement of liabilities in the normal course of business. The factors
discussed

                                      F-16

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

above raise substantial doubt about our ability to continue as a going concern.
Our Consolidated Financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

4.    CREDIT RESOURCES

SUMMARY OF DEBTOR IN POSSESSION ("DIP") FINANCING

      On October 18, 2002, we entered into agreements with Standard Chartered,
SCTS, Lehman and other lending institutions for $575 million in DIP financing
facilities. The DIP facilities provided (i) $500 million of credit and financing
facilities through Standard Chartered and SCTS, which included up to $325
million for letters of credit through Standard Chartered and $175 million of
inventory repurchase/accounts receivable financing through SCTS, and (ii) $75
million of term loans through Lehman and other lending institutions. The credit
facilities were subject to a borrowing base and were secured by a first-priority
lien on all, or substantially all, of our real and personal property. At
December 31, 2002 we had amounts outstanding under the repurchase agreement and
accounts receivable financing agreement of $75 million and $50 million,
respectively, at weighted average interest rates of 4.4% and 4.7%, respectively.
As of February 28, 2003, we had outstanding approximately $313 million of
letters of credit, $125 million of inventory repurchase/accounts receivable
financing, and $75 million of term loans. The DIP financing facilities contained
certain restrictive covenants that, among other things, limited distributions,
other debt, and certain asset sales. On February 28, 2003, as we emerged from
bankruptcy, the DIP financing facilities were refinanced by the same
institutions. The following discussion provides an overview of our
post-bankruptcy debt.

SUMMARY OF EXIT CREDIT FACILITIES, SENIOR NOTES, AND OTHER DEBT

      Our emergence from bankruptcy, as of March 1, 2003, was financed through a
combination of exit credit facilities, senior notes and other debt associated
with settlement of claims during our bankruptcy proceedings. The table below
provides a summary of these financing arrangements as of December 31, 2003.

                        SUMMARY OF FINANCING ARRANGEMENTS
                                  (IN MILLIONS)

                                                     COMMITMENT/         AMOUNT
                                                     FACE AMOUNT      OUTSTANDING          MATURITY
                                                                              
Exit Credit Facilities:
      Letter of Credit Facility................   $      260.0        $   250.1        August 30, 2004
      Trade Receivables Agreement..............          100.0(1)          27.0        March 1, 2004(2)
      Commodity Repurchase Agreement...........           18.0             18.0        March 1, 2004(2)
      Term Loans...............................           75.0             75.0        August 30, 2004

Senior Notes...................................          109.2            104.5        March 1, 2010(3)(4)

Other Debt:
      Enron Note...............................            5.7              6.4        October 1, 2005(3) (5)
      Big Warrior Note.........................            2.5              2.3        March 1, 2007(3)
      Ad Valorem Tax Liability.................            6.6              6.6        March 1, 2009

                                      F-17

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

(1)   $50 million of this commitment is unavailable ten days each month.

(2)   On March 1, 2004, we extended these arrangements for 3 months until June
      1, 2004 and paid an extension fee of $0.4 million. We have an option to
      extend these arrangements until August 30, 2004 subject to the payment of
      extension fees of $0.4 million and us being in compliance with our debt
      covenants.

(3)   These notes were adjusted to fair value pursuant to the adoption of fresh
      start reporting required by SOP 90-7.

(4)   On September 1, 2003 and March 1, 2004, we issued an additional senior
      note in the amount of $5.2 million and $5.5 million, respectively, in lieu
      of the first and second semi-annual payment of interest on our senior
      notes.

(5)   See discussion below regarding event of default.

The following is a summary of our scheduled debt maturities at December 31, 2003
(in millions):

                                                                                          After
                                    2004       2005       2006       2007       2008       2008       Total
                                  --------   --------   --------   --------   --------   --------   ---------
                                                                               
Senior Notes.................     $      -   $      -   $      -   $      -   $      -   $  109.2   $   109.2
Term Loans(1)................         75.0          -          -          -          -          -        75.0
Commodity Repurchase
   Agreement (1).............         18.0          -          -          -          -          -        18.0
Trade Receivables
   Agreement(1)..............         27.0          -          -          -          -          -        27.0
Enron Note (2)...............          1.0        4.7          -          -          -          -         5.7
Big Warrior Note.............          0.3        0.4        0.4        1.4          -          -         2.5
Ad Valorem Tax Liability.....          2.8        0.9        1.0        1.1        0.8          -         6.6
                                  --------   --------   --------   --------   --------   --------   ---------
                                  $  124.1   $    6.0   $    1.4   $    2.5   $    0.8   $  109.2   $   244.0
                                  ========   ========   ========   ========   ========   ========   =========

(1)   See previous discussion of covenant violations and cross defaults.

(2)   See discussion below regarding event of default.

Exit Credit Facilities

      On February 11, 2003, we entered into our exit credit facilities with the
same lenders and under substantially the same terms in the DIP financing
facilities. These new facilities were effective March 1, 2003 and $2.9 million
of facility and extension fees were paid in connection with these new
facilities. Such fees are being amortized as interest expense over the terms of
the facilities.

Letter of Credit Facility

      The Letter of Credit Facility, as amended, with Standard Chartered
provides $260 million of financing until August 30, 2004 and is subject to
defined borrowing base limitations. The borrowing base is (as of the date of
determination) the sum of cash equivalents, specified percentages of eligible
receivables, deliveries, fixed assets, inventory, margin deposits and undrawn
product purchase letters of credit, minus (i) first purchase crude payables,
other priority claims, aggregate net amounts payable by the borrowers under
certain hedging contracts and certain eligible receivables arising from future
crude oil obligations, (ii) the principal amount of loans outstanding and any
accrued and unpaid fees and expenses under the Term Loans, and (iii) all
outstanding amounts under the Amended and Restated Commodity Repurchase
Agreement and the Amended and Restated Receivables Purchase Agreement ("SCTS
Purchase Agreements"). Pursuant to a scheduled advance rate reduction, effective
July 1, 2003, the specified percentages of eligible receivables and fixed assets
in the borrowing base were reduced. As of February 15, 2004, our aggregate
letter of credit obligation exceeded the borrowing base by approximately $1.9
million. We have obtained a waiver of this violation from our lenders. As of
March 15, 2004, the Borrowing Base exceeded LC Obligations by approximately $12
million.

      The Letter of Credit Facility required an upfront facility fee of $1.25
million that was paid at closing. Since we did not reduce Standard Chartered's
exposure below $200 million by March 1, 2004, we paid a $2.5 million fee to
Standard Chartered. Letter of credit fees range from 2.25% to 2.75% per annum
depending on usage. The commitment fee is 0.5%

                                      F-18

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

per annum of the unused portion of the Letter of Credit Facility. Additionally,
we agreed to a fronting fee, which is the greater of 0.25% per annum times the
face amount of the letter of credit or $250. An annual arrangement fee of 1% per
annum times the average daily maximum commitment amount, as defined in the
Letter of Credit Facility, is payable on a monthly basis.

      The exit credit facilities include various financial covenants that we
must adhere to on a monthly basis as discussed in Note 3 and set forth below.

            -     Current Ratio. We must maintain a ratio of consolidated
                  current assets, subject to certain adjustments to consolidated
                  current liabilities less funded debt, as defined, of 0.90 to
                  1.00 for the term of the exit credit facilities. The actual
                  Current Ratio at December 31, 2003 was 1.00 to 1.00.

      For purposes of determining the financial information used in the
financial covenants set forth above and in Note 3, we are required to exclude
all items directly attributable to our Liquids Operations and the West Coast
natural gas liquids assets ("Designated Assets") for the first five months ended
May 31, 2003, and to make "permitted adjustments" (changes due to fresh start
reporting, income and expenses attributable to the Designated Assets during the
first five months ended May 31, 2003, changes due to the cumulative affect of
changes in GAAP, which are approved by the bank, gains or losses from the sales
of assets or Designated Assets and any write-downs on Designated Assets), as
defined.

      In connection with the sale of assets in 2003 discussed in Note 8, the
Letter of Credit Facility was amended to allow the net proceeds from these asset
sales to be used to repay amounts outstanding under the Commodity Repurchase
Agreement.

      In addition, there are certain restrictive covenants that, among other
things, limit other debt, certain asset sales, mergers and change in control
transactions. Additionally, the exit credit facilities prohibit us from making
any distributions, or purchases, acquisitions, redemptions or retirement of our
LLC units so long as we have any indebtedness, liabilities or other obligations
outstanding to Standard Chartered, SCTS, Lehman, or any other lenders under
these facilities.

SCTS Purchase Agreements

      We have an agreement with SCTS similar to our pre-bankruptcy inventory
repurchase agreement, which provides for the financing of purchases of crude oil
inventory utilizing a forward commodity repurchase agreement ("Commodity
Repurchase Agreement"). The maximum commitment under the Commodity Repurchase
Agreement was $75 million. It required an upfront facility fee of approximately
$378,000 and carried an interest rate of LIBOR plus 3%. During the fourth
quarter of 2003, net proceeds of $57 million from the disposition of assets were
used to repay amounts outstanding under the Commodity Repurchase Agreement and
the maximum commitment amount was reduced to $18 million. The Commodity
Repurchase Agreement had an initial term of six months to August 30, 2003, at
which time we had the option to extend for an additional twelve months. In
August 2003, we amended the Commodity Repurchase Agreement to provide us the
option to (1) extend the maturity date to March 1, 2004 and (2) prior to March
1, 2004, extend the maturity date to August 30, 2004. The election of each
option will require the payment of an extension fee of $375,000. We elected to
extend the maturity date to March 1, 2004, which required the payment of the
extension fee of $375,000 and increased the interest rate to LIBOR plus 7%. We
subsequently elected to extend the Commodity Repurchase Agreement to June 1,
2004, although we have an option to extend the maturity to August 30, 2004,
subject to us being in compliance with our debt covenants. The election of the
option required the payment of an extension fee of $0.2 million. At December 31,
2003, we had outstanding repurchase agreements of $18 million with an interest
rate of 8.2%.

      In addition, we also have an agreement with SCTS similar to our
pre-bankruptcy trade receivables agreement, which provides for the financing of
up to an aggregate amount of $100 million of certain trade receivables ("Trade
Receivables Agreement") outstanding at any one time. The discount fee is LIBOR
plus 3% and an upfront facility fee of approximately $504,000 was paid. The
Trade Receivables Agreement had an initial term of six months to August 30,
2003, at which time we had the option to extend for an additional twelve months.
In August 2003, we amended the Trade Receivables

                                      F-19

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

Agreement to provide us the option to (1) extend the maturity date to March 1,
2004 and (2) prior to March 1, 2004, extend the maturity date to August 30,
2004. The election of each option will require the payment of an extension fee
of $0.5 million. We elected to extend the maturity date to March 1, 2004, which
required the payment of an extension fee of $0.5 million and increased the
interest rate to LIBOR plus 7%. We subsequently elected to extend the Trade
Receivables Agreement to June 1, 2004, although we have an option to extend the
maturity to August 30, 2004. The election of the option required the payment of
an extension fee of $250,000. Receivables financed at December 31, 2003 totaled
$27 million at a weighted average interest rate of 8.1%.

Term Loan Agreement

      We entered into an agreement with Lehman, as Term Lender Agent, and other
lenders (collectively, "Term Lenders"), which provides for term loans in the
aggregate amount of $75 million (the "Term Loans"). The Term Loans mature on
August 30, 2004.

      The financing included two term notes. The Tier-A Term Note is for $50
million with a 9% per annum interest rate. The Tier-B Term Note is for $25
million with a 10% per annum interest rate. Interest is payable monthly on both
notes. An upfront fee of $750,000 was paid and we agreed to pay a deferred
financing fee in the aggregate amount of $2 million on the maturity date of the
Term Loans. This latter fee was fully accrued as of February 28, 2003.

      The Term Loans are collateralized and have certain repayment priorities
with respect to collateral proceeds pursuant to the Intercreditor and Security
Agreement that is discussed below. Under the Term Loan Agreement, term loan debt
outstanding is subject to a borrowing base as defined in the Letter of Credit
Agreement. Further, the Term Loan Agreement contains financial covenants that
mirror those outlined above in the discussion of the Letter of Credit Facility.

Intercreditor and Security Agreement

      In connection with the Letter of Credit Facility, the Term Loans and the
SCTS Purchase Agreements, we entered into the Intercreditor and Security
Agreement ("Intercreditor Agreement") with Standard Chartered, Lehman, SCTS and
various other secured parties ("Secured Parties"). This agreement provides for
the sharing of collateral among the Secured Parties and prioritizes the
application of collateral proceeds which provides for repayment of the Tier-A
Term Note and the Standard Chartered letter of credit exposure above $300
million prior to other secured obligations.

      In addition, to the extent that drawings are made on any letters of
credit, Standard Chartered, as Collateral Agent, may distribute funds from our
debt service payment account to itself (as letter of credit issuer ("LC Issuer")
on behalf of the letter of credit participants) as needed to allow Link LLC to
reimburse Standard Chartered, as letter of credit issuer, for such drawings.

Senior Notes

      On October 1, 1999, we issued to the public $235 million of 11% senior
notes. The senior notes were due October 1, 2009, and interest was paid
semiannually on April 1 and October 1. The senior notes were fully and
unconditionally guaranteed by all of our operating limited partnerships but were
otherwise unsecured. On October 1, 2002, we did not make the interest payment of
$12.9 million on our 11% senior notes. These notes were cancelled effective
March 1, 2003 as a result of our Restructuring Plan and the holders of these
notes, along with our general unsecured creditors with allowed claims, received
a pro rata share of $104 million of 9% senior unsecured notes, plus a pro rata
share of 11,947,820 Link LLC units.

                                      F-20

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

Link LLC Senior Notes 2010

      In February 2003, we issued $104 million of 9% senior unsecured notes to
the Bank of New York, as depositary agent, which was subsequently allocated by
the depositary agent to former holders of the 11% senior notes described above
and our general unsecured creditors with allowed claims. The senior notes are
due in March 2010, and interest will be paid semiannually on September 1 and
March 1, with the first payment made on September 1, 2003. Under the terms of
the indenture governing our senior notes, we are allowed to pay interest
payments in kind by issuing additional senior notes on the first two interest
payment dates. If we make payments in kind, we must make the payments as if
interest were being charged at 10% per annum instead of 9% per annum. On
September 1, 2003, we issued an additional senior note in the aggregate
principal amount of $5.2 million to the Bank of New York in lieu of the first
interest payment. On March 1, 2004, we issued an additional senior note in the
aggregate principal amount of $5.5 million to the Bank of New York in lieu of
the second interest payment. We may not optionally redeem the notes. The notes
are subject to mandatory redemption or sinking fund payments if we sell assets
and use the money for certain purposes or if we have a change of control.
Provisions of the indenture could limit additional borrowings, sale and lease
back transactions, affiliate transactions, purchases of our own equity, payments
on debt subordinated to the senior notes, distributions to members, certain
merger, consolidation or change in control transactions, or sale of assets if
certain financial performance ratios are not met.

Other Debt

      In connection with our settlement with Enron as part of the Restructuring
Plan, we executed a $6.2 million note payable to Enron ("Enron Note") that is
guaranteed by our subsidiaries. The Enron Note is secured by an irrevocable
letter of credit and bears interest at 10% per annum. Interest is paid
semiannually on April 1 and October 1, beginning on April 1, 2003 and we are
allowed to pay interest payments in kind on the first two interest payment
dates. Principal payments of $1 million are payable in October 2003 and October
2004, with the remaining principal balance due in October 2005. On October 1,
2003, we paid our first principal payment of $1.0 million and elected to pay our
interest payment of $0.3 million in kind. We failed to cause the letter of
credit to be renewed at least 10 business days prior to its expiration, which
resulted in an event of default under, and the automatic acceleration of, the
Enron Note. A replacement letter of credit has been issued and we have requested
Enron to waive the event of default and rescind the automatic acceleration of
the note. There can be no assurance that Enron will provide the waiver, and
therefore, the Enron Note is recorded in Other Current Liabilities on the
Consolidated Balance Sheet at December 31, 2003.

      In connection with a settlement with Big Warrior Corporation ("Big
Warrior") during our bankruptcy, we executed a $2.7 million note payable to Big
Warrior, which is secured by a second lien position in one of our Mississippi
pipelines. The four-year note is payable in quarterly installments which began
June 1, 2003 based on a seven-year amortization schedule, at an interest rate of
6% per annum. A final balloon payment is due March 1, 2007. Effective July 31,
2003, Farallon Capital Partners, L.P. ("Farallon") and Tinicum Partners, L.P.
("Tinicum"), both of which are Term Lenders, purchased this note from Big
Warrior.

      In conjunction with our Restructuring Plan, we agreed to pay accrued but
unpaid ad valorem taxes over six years from the effective date of our
Restructuring Plan. This debt bears interest at 6% with principal and interest
payments due quarterly. The first payment was made on June 1, 2003. Unpaid ad
valorem taxes of $2 million associated with the Liquids Operations sold on
December 31, 2003 (see Note 8) were paid in January 2004.

5.    BANKRUPTCY PROCEEDINGS AND RESTRUCTURING PLAN

      On October 8, 2002, the MLP and the Subsidiary Entities filed
pre-negotiated voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code (the "EOTT Bankruptcy"). The filing was made in
the United States Bankruptcy Court for the Southern District of Texas, Corpus
Christi Division (the "EOTT Bankruptcy Court"). Additionally, the General
Partner filed a voluntary petition for reorganization under Chapter 11 on
October 21, 2002 in the EOTT Bankruptcy Court in order to join in the voluntary,
pre-negotiated Restructuring Plan. On October 24, 2002,

                                      F-21

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

the EOTT Bankruptcy Court administratively consolidated, for distribution
purposes, the General Partner's bankruptcy filing with the previously filed
cases. We operated as debtors-in-possession under the Bankruptcy Code, which
means we continued to remain in possession of our assets and properties and
continued our day-to-day operations. The EOTT Bankruptcy Court confirmed our
Restructuring Plan on February 18, 2003, and it became effective March 1, 2003.

      We entered into an agreement, dated October 7, 2002, with Enron, Standard
Chartered Bank ("Standard Chartered"), Standard Chartered Trade Services
Corporation ("SCTS"), Lehman Commercial Paper Inc. ("Lehman Commercial") and
holders of approximately 66% of the outstanding principal amount of our 11%
senior notes (the "Restructuring Agreement"). Under this Restructuring
Agreement, Enron, Standard Chartered, SCTS, Lehman Commercial and approximately
66% of our 11% senior note holders agreed to vote in favor of the Restructuring
Plan, and to refrain from taking actions not in support of the Restructuring
Plan.

      The Restructuring Plan, however, was subject to the approval of the EOTT
Bankruptcy Court, and the Settlement Agreement with Enron ("Enron Settlement
Agreement") was subject to the additional approval of the United States
Bankruptcy Court for the Southern District of New York (the "Enron Bankruptcy
Court"), where Enron and certain of its affiliates filed for Chapter 11
bankruptcy protection. The EOTT Bankruptcy Court approved the Enron Settlement
Agreement on November 22, 2002, and the Enron Bankruptcy Court approved the
Enron Settlement Agreement on December 5, 2002. The major provisions of the
Restructuring Plan, which became effective March 1, 2003, are as follows:

      -     Enron has no further affiliation with us. The General Partner will
            be liquidated as soon as reasonably possible with no material effect
            to us.

      -     We consummated the Settlement Agreement with Enron effective
            December 31, 2002. In the fourth quarter of 2002, we recognized a
            gain of $45.5 million related to the Settlement Agreement with
            Enron.

      -     We converted to a limited liability company structure and EOTT LLC
            (subsequently renamed Link Energy LLC) became the successor
            registrant to the MLP. The MLP was merged into EOTT Energy Operating
            Limited Partnership.

      -     We are now managed by a seven-member Board of Directors. One of the
            directors is the chief executive officer of Link LLC, and the
            remaining six directors were selected by the former senior note
            holders who signed the Restructuring Agreement.

      -     We cancelled our outstanding $235 million of 11% senior unsecured
            notes. Our former senior unsecured note holders and holders of
            allowed general unsecured claims received a pro rata share of $104
            million of 9% senior unsecured notes and a pro rata share of
            11,947,820 limited liability company units of EOTT LLC representing
            97% of the newly issued units.

      -     We cancelled the MLP's publicly traded common units, and the former
            holders of the MLP's common units received 369,520 limited liability
            company units of EOTT LLC, representing 3% of newly issued units,
            and 957,981 warrants to purchase an additional 7% of the new units.
            We cancelled the MLP's subordinated units and additional partnership
            interests. See Note 18.

      -     We were authorized to develop, and the board has subsequently
            approved, a management incentive plan. The incentive plan reserves
            1.2 million of EOTT LLC's authorized units for issuance to certain
            key employees and directors. See Note 19.

      -     We closed exit credit facilities with Standard Chartered, SCTS,
            Lehman, and other lenders on February 28, 2003. See further
            discussion in Note 4.

                                      F-22

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      As a result of the confirmation of our Restructuring Plan, the following
liabilities that were deemed subject to compromise were either discharged by the
EOTT Bankruptcy Court or retained as ongoing obligations of the Successor
Company. Estimated liabilities subject to compromise at December 31, 2002 were
as follows (in thousands):

                                                                   
11% Senior Notes..................................................    $          235,000
Interest payable - 11% Senior Notes...............................                13,481
Accounts payable and suspense payable.............................                34,876
Allowed claims for environmental settlements and contingencies                     7,970
Other.............................................................                 1,500
                                                                      ------------------
         Total....................................................    $          292,827
                                                                      ==================

      The following reorganization items and net gain on discharge of debt,
which were specifically related to the EOTT Bankruptcy, were recorded during the
two months ended February 28, 2003, (in thousands):

                                                                   
Reorganization items - legal and professional fees................    $           (7,330)
Net gain on discharge of 11% senior notes,
  related accrued interest and other debt (1).....................    $          131,560

      (1)   The gain on discharge of debt was recorded net of the 9% senior
            notes and limited liability company units issued to the creditors
            upon emergence from bankruptcy.

6.    FRESH START REPORTING

      As previously discussed, our Consolidated Financial Statements reflect the
adoption of fresh start reporting required by SOP 90-7 for periods subsequent to
our emergence from bankruptcy. In accordance with the principles of fresh start
reporting, we have adjusted our assets and liabilities to their fair values as
of February 28, 2003. The net effect of the fresh start reporting adjustments
was a loss of $56.8 million, which is reflected in the results of operations of
the Predecessor Company for the two months ended February 28, 2003.

      The enterprise value of Link on the effective date of the Restructuring
Plan was determined to be approximately $363 million. The enterprise value was
determined with the assistance of a third party financial advisor using
discounted cash flow, comparable transaction and capital market comparison
analyses, adjusted for the actual working capital as of the effective date of
the Restructuring Plan. The discounted cash flow analyses were based upon five
year projected financial results, including an assumption for terminal values
using cash flow multiples, discounted at our estimated post-restructuring
weighted-average cost of capital.

      Pursuant to SOP 90-7, the reorganization value of Link on the effective
date of the Restructuring Plan was determined to be approximately $856 million,
which represented the enterprise value plus the fair value of current
liabilities exclusive of funded debt on February 28, 2003. We have allocated the
reorganization value as of February 28, 2003 to tangible and identifiable
intangible assets in conformity with SFAS No. 141, "Business Combinations",
using discounted cash flow and replacement cost valuation analyses, and
liabilities, including debt, were recorded at their net present values.
Independent third-party valuation specialists were used to determine the
allocation of the reorganization value to our tangible and identifiable
intangible assets and to determine the fair value of our long-term liabilities.

      The valuations were based on a number of estimates and assumptions, which
are inherently subject to significant uncertainties and contingencies beyond our
control. Accordingly, there can be no assurance that the valuations will be
realized, and actual results could vary significantly.

                                      F-23

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      The effects of the reorganization pursuant to the Restructuring Plan and
the application of fresh start reporting on the Predecessor Company's
consolidated balance sheet as of February 28, 2003 are as follows (in
thousands):

                                             PREDECESSOR COMPANY    DEBT DISCHARGE AND        FRESH START          SUCCESSOR COMPANY
                                              FEBRUARY 28, 2003    RE-CLASS ADJUSTMENTS       ADJUSTMENTS          FEBRUARY 28, 2003
                                             -------------------   --------------------     ----------------      -----------------
                                                 (RESTATED)                                                            (RESTATED)
                                                                                                      
Assets
Current Assets
Cash and cash equivalents................     $       40,735       $               -        $              -         $       40,735
Trade and other receivables..............            439,361                       -                       -                439,361
Inventories..............................             25,525                       -                     750(g)              26,275
Other....................................             12,911                       -                  (2,021)(h)             10,890
                                              --------------       -----------------        ----------------         --------------
     Total current assets................            518,532                       -                  (1,271)               517,261
                                              --------------       -----------------        ----------------         --------------

Property, Plant and Equipment, at cost...            598,633                       -                (267,654)(i)            330,979
Less: Accumulated depreciation...........            223,188                       -                (223,188)(i)                  -
                                              --------------       -----------------        ----------------         --------------
     Net property, plant and equipment...            375,445                       -                 (44,466)               330,979
                                              --------------       -----------------        ----------------         --------------

Goodwill ................................              7,436                       -                  (7,436)(j)                  -
                                              --------------       -----------------        ----------------         --------------
Other Assets.............................             10,762                       -                  (2,880)(h)              7,882
                                              --------------       -----------------        ----------------         --------------

     Total Assets........................     $      912,175       $               -        $        (56,053)        $      856,122
                                              ==============       =================        ================         ==============
Liabilities and Members'/Partners'
 Capital
Current Liabilities
Trade and other accounts payable.........     $      451,873       $          17,406(a)     $              -         $      469,279
Accrued taxes payable....................             13,045                  (8,307)(b)                   -                  4,738
Term loans...............................             75,000                 (75,000)(c)                   -                      -
Repurchase agreement.....................             75,000                 (75,000)(c)                   -                      -
Receivable financing.....................             50,000                       -                       -                 50,000
Other....................................             19,226                   2,815(a)(b)               318(k)              22,359
                                              --------------       -----------------        ----------------         --------------
     Total current liabilities...........            684,144                (138,086)                    318                546,376
                                              --------------       -----------------        ----------------         --------------

Long-Term Liabilities
9% Senior Notes..........................                  -                  98,800(d)                    -                 98,800
Term loans...............................                  -                  75,000(c)                    -                 75,000
Repurchase agreement.....................                  -                  75,000(c)                    -                 75,000
Ad valorem tax liability.................                  -                   6,992(b)                    -                  6,992
Other....................................             17,781                       -                     400(k)              18,181
                                              --------------       -----------------        ----------------         --------------
     Total long-term liabilities.........             17,781                 255,792                     400                273,973
                                              --------------       -----------------        ----------------         --------------

Liabilities Subject to Compromise........            284,843                (284,843)(a)                   -                      -
Additional Partnership Interests.........              9,318                  (9,318)(e)                   -                      -
Members'/Partners' Capital (Deficit) ....            (83,911)                176,455 (f)             (56,771)                35,773
                                              --------------       -----------------        ----------------         --------------

    Total Liabilities and

    Members'/Partners' Capital...........     $      912,175       $               -        $        (56,053)        $      856,122
                                              ==============       =================        ================         ==============

Notes:

(a)   Liabilities subject to compromise have been adjusted to reflect the
      settlement of the claims and discharge of the 11% senior notes and related
      accrued interest in connection with the Restructuring Plan. See further
      discussion in Note 5.

(b)   To reclassify current and long - term amounts due to taxing authorities
      for accrued but unpaid ad valorem taxes in connection with the
      Restructuring Plan.

(c)   To reflect the refinancing on a long-term basis of amounts outstanding
      under the Debtor-in-Possession Financing Facilities.

(d)   To reflect the issuance of 9% senior unsecured notes (face amount of $104
      million) to all former senior note holders and general unsecured creditors
      with allowed claims in connection with the Restructuring Plan, recorded at
      fair value.

(e)   To reflect the cancellation of the additional partnership interests in
      connection with the Restructuring Plan.

(f)   To reflect the issuance of limited liability company units pursuant to the
      Restructuring Plan and the net gain on extinguishment of debt.

                                      F-24

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

(g)   To adjust inventory to fair value.

(h)   To reflect the elimination of deferred turnaround costs, which are
      included in the fair value of property, plant and equipment of the
      Successor Company.

(i)   To adjust property, plant, and equipment to fair value.

(j)   To reflect the elimination of goodwill resulting from the fair value
      allocation.

(k)   To reflect the Enron and Big Warrior notes at fair value.

7.    PROPERTY, PLANT AND EQUIPMENT

      The components of property, plant and equipment are as follows (in
thousands):

                                                                       SUCCESSOR COMPANY  |  PREDECESSOR COMPANY
                                                                      ------------------  |  -------------------
                                                                       DECEMBER 31, 2003  |    DECEMBER 31, 2002
                                                                      ------------------  |  -------------------
                                                                                    |  
Operating PP&E, including pipelines, storage tanks, etc..........      $       268,866    |     $       477,834
Office PP&E buildings and leasehold improvements.................                1,717    |              52,621
Tractors and trailers and other vehicles.........................                1,248    |              10,739
Land.............................................................                6,893    |               5,216
                                                                       ---------------    |     ---------------
Property, Plant & Equipment......................................              278,724    |             546,410
Less:  Accumulated depreciation..................................              (16,214)   |            (205,351)
                                                                       ---------------    |     ---------------
Net Property, Plant & Equipment..................................      $       262,510    |     $       341,059
                                                                       ===============    |     ===============

8.    DISPOSITIONS OF ASSETS

Discontinued Operations - West Coast Assets

      Effective June 25, 2003, we signed a definitive agreement to sell all of
the assets comprising our natural gas gathering, processing, natural gas liquids
fractionation, storage and related trucking and distribution facilities located
on the West Coast. A sale of these assets to a third party had been one of the
options considered by us since we emerged from bankruptcy. The sales price for
the assets exclusive of inventory was $9.9 million. The proceeds from the sale
of the West Coast natural gas liquids assets could be increased by up to $1.4
million depending on the operating results of the West Coast natural gas liquids
assets during the twelve month period following closing. The closing occurred on
October 1, 2003, and $9.0 million of the net proceeds from the sale were used to
pay down amounts outstanding under the Commodity Repurchase Agreement.

      Effective June 1, 2002, we sold our West Coast refined products marketing
operations to Trammo Petroleum Inc. The sales price was not significant.

      Effective June 30, 2001, we sold our West Coast crude oil gathering and
blending operations to Pacific Marketing and Transportation LLC ("Pacific") for
$14.3 million. We could have been required to repay up to $1.5 million of the
sale price, subject to a two-year look-back provision regarding average
operating results during the period July 1, 2001 through June 30, 2003. Such
amount is reflected in Liabilities Subject to Compromise in the Consolidated
Balance Sheet at December 31, 2002. In addition, we also provided customary
indemnifications to Pacific with a maximum aggregate exposure of $3.7 million,
whose terms were due to expire between June 2002 through June 2006. In the third
quarter of 2003, we negotiated a settlement and release with Pacific of all
remaining obligations related to the sale for a payment of $0.2 million.

      Revenues and results of operations for the West Coast operating segment
for the ten months ended December 31, 2003, the two months ended February 28,
2003, and the years ended December 31, 2002 and 2001 are shown below (in

                                      F-25

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

(in thousands). We did not allocate any interest expense to the West Coast
discontinued operations for any of the periods presented below.

                                    SUCCESSOR COMPANY  |                         PREDECESSOR COMPANY
                                    -----------------  |  ---------------------------------------------------------------
                                       TEN MONTHS      |     TWO MONTHS
                                          ENDED        |         ENDED              YEAR ENDED             YEAR ENDED
                                    DECEMBER 31, 2003  |   FEBRUARY 28, 2003     DECEMBER 31, 2002     DECEMBER 31, 2001
                                    -----------------  |  ------------------     -----------------     ------------------
                                       (RESTATED)      |      (RESTATED)            (RESTATED)
                                                 |                                         
Revenues.......................     $          20,639  |  $            5,571     $          68,467     $          491,091
                                    =================  |  ==================     =================     ==================
                                                       |
Income (loss) from discontinued                        |
    operations..................    $             752  |  $              395     $         (25,246)    $           (4,679)
                                    =================  |  ==================     =================     ==================

      The income (loss) from the West Coast discontinued operations includes a
loss on disposal of $0.8 million for the ten months ended December 31, 2003, no
gain or loss recognized for the two months ended February 28, 2003, a gain on
disposal of $0.2 million and a loss on disposal of $1.3 million for the years
ended December 31, 2002 and 2001, respectively. At December 31, 2002, we
recorded an impairment charge of $22.9 million to reflect these assets at their
estimated fair values at December 31, 2002.

Discontinued Operations - Liquids Operations

      Effective December 31, 2003, we sold all of our remaining natural gas
liquids assets to a subsidiary of Valero Energy Corporation ("Valero") for
approximately $20 million, plus inventory value. The assets included our
underground salt dome storage facility and related pipeline grid near Mont
Belvieu, Texas as well as our processing facility and former methyl tertiary
butyl ether ("MTBE") plant at Morgan's Point, near La Porte, Texas. Net proceeds
of approximately $15 million from the sale were used to pay down amounts
outstanding under the Commodity Repurchase Agreement.

      Net proceeds from the sale of approximately $6 million were placed in
escrow for ad valorem tax liabilities associated with the assets sold,
reimbursement of any costs associated with potential title defects and
adjustments associated with the verification of actual inventory balances sold.

      In connection with the sale, we provided indemnifications to Valero for
(1) title defects for a period of two years up to a maximum amount of $2 million
and (2) preclosing environmental liabilities with an indefinite term and no
monetary limits. We recorded a $1.1 million liability at December 31, 2003,
reflecting the estimated fair value of these obligations.

      Revenues and results of operations for the Liquids Operations for the ten
months ended December 31, 2003, the two months ended February 28, 2003 and the
years ended December 31, 2002 and 2001 are shown below (in thousands). We did
not allocate any interest expense to the Liquids discontinued operations for any
periods presented below.

                                      F-26

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

                                    SUCCESSOR COMPANY                           PREDECESSOR COMPANY
                                    -----------------  | ---------------------------------------------------------------
                                       TEN MONTHS      |    TWO MONTHS
                                          ENDED        |        ENDED              YEAR ENDED             YEAR ENDED
                                    DECEMBER 31, 2003  |  FEBRUARY 28, 2003     DECEMBER 31, 2002     DECEMBER 31, 2001
                                    -----------------  | ------------------     -----------------     ------------------
                                       (RESTATED)      |     (RESTATED)            (RESTATED)
                                                 |                                        
Revenues.......................     $         128,684  | $           40,337     $         212,670     $           48,701
                                    =================  | ==================     =================     ==================
Income (loss) from discontinued                        |
  operations..................      $         (30,966) | $            124       $         (37,467)    $          (11,926)
                                    =================  | ==================     =================     ==================

      Income (loss) from the Liquids discontinued operations for the ten months
ended December 31, 2003 includes a loss on disposal of $8.4 million. At December
31, 2002, we recorded impairments of $33.0 million and $20.2 million related to
our Mont Belvieu and Morgan's Point facilities, respectively, to reflect these
assets at their estimated fair values at December 31, 2002.

      During the fourth quarter of 2003, pursuant to a previously announced plan
to reduce our Liquids Operations, we began to phase out our MTBE production at
the Morgan's Point Facility. The decision to cease production of MTBE and end
our financial exposure to the MTBE market was made after earlier attempts to
sell the Liquids Operations terminated unsuccessfully. In connection with the
phase out of MTBE production, we recorded charges in September 2003 for
severance costs of $1.8 million, asset impairments of $2.8 million and the
write-down of our materials and supplies inventory of $2.3 million. The
severance costs were accrued pursuant to our pre-existing severance plan in
accordance with SFAS No. 112, "Employers' Accounting for Post Employment
Benefits - an Amendment of FASB Statements No. 5 and 43". The impairment charges
reflect adjustments to the carrying values of long-lived assets used in the MTBE
manufacturing operations to reflect their fair values. The charge for materials
and supplies represents an adjustment to the carrying values of inventory items
to reflect their net realizable values. The market for surplus MTBE related
materials and supplies has been severely impacted by recent plant shut downs.

      Our Liquids Operations were originally acquired effective June 30, 2001.
We paid $117 million in cash to Enron and State Street Bank and Trust Company of
Connecticut, National Association, Trustee.

      Concurrently with the acquisition of the Liquids Operations, we entered
into a ten-year tolling agreement for the conversion of feedstocks into
products, on a take-or-pay basis ("Toll Conversion Agreement"), and a ten-year
storage and transportation agreement for the use of a significant portion of the
Mont Belvieu Facility and pipeline grid system, on a take-or-pay basis ("Storage
Agreement"). Both agreements were with Enron Gas Liquids, Inc. ("EGLI"), a
wholly-owned subsidiary of Enron, which is now in bankruptcy. Under these
agreements EGLI retained all existing third party commodity, transportation and
storage contracts associated with these facilities. These agreements were the
principle basis for determining the desirability of the transaction and the
purchase price of the Liquids assets.

      As more fully explained in Note 18, on December 3, 2001, EGLI was included
in Enron's bankruptcy filing. Due to the non-performance by EGLI under the Toll
Conversion Agreement in late November 2001, we began to operate the Morgan's
Point Facility as a merchant operation in the spot market. We were unable to
enter into third party spot or term contracts for storage until the Storage
Agreement was rejected by EGLI. On April 2, 2002, the Bankruptcy Court entered a
stipulation and agreed order rejecting the Toll Conversion and Storage
Agreements (the "Stipulation"), which order became final and non-appealable on
April 12, 2002. Rejection of the Storage Agreement with EGLI resulted in the
loss of the buyer of the fixed throughput and storage capacity at the Mont
Belvieu Facility. However, the rejection allowed us to directly seek new
customers and pursue long-term contracts for the Mont Belvieu Facility to
replace the long-term and continuous stream of revenue we expected under the
Storage Agreement with EGLI. As a result of EGLI's non-performance under these
contracts, we recorded a $29.1 million impairment in the fourth quarter of 2001.

                                      F-27

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

Sales of Other Assets

      On October 1, 2003, we sold certain crude oil marketing and transportation
assets in the Arkansas, Louisiana and Texas ("ArkLaTex") area to Plains
Marketing L.P. and Plains All American Pipeline, L.P., a wholly owned subsidiary
of Plains Resources, Inc. The sales price for these assets, including linefill,
was approximately $17 million. Subsequent to closing, $16.2 million of the net
proceeds from the sale were used to pay down amounts outstanding under the
Commodity Repurchase Agreement. The gain on the sale of these assets was $11.7
million. The long-lived assets disposed of were historically presented in the
North American Crude Oil and Pipeline Operations operating segments.

      In the fourth quarter of 2003, we entered into a Crude Oil Joint Marketing
Agreement with ChevronTexaco Global Trading, a division of Chevron U.S.A. Inc.
("ChevronTexaco"). The agreement was effective January 1, 2004 with a term of 10
years. Under the agreement, ChevronTexaco will market all of the Company's lease
crude oil in West Texas and Eastern New Mexico, with the Company handling the
transportation of the crude oil and related administrative functions. The
agreement contains various performance factors which must be met in order for
the agreement to remain in effect for the full term of the agreement and if
ChevronTexaco does not achieve certain performance targets during the first year
of the agreement, we have agreed to economic adjustments not to exceed $1
million. In addition, if this agreement is terminated prior to January, 2006, as
a result of us (1) divesting all or substantially all of our assets within the
West Texas and New Mexico area or (2) seeking the protection of bankruptcy and
are no longer able to perform our obligations under this agreement, then we will
owe ChevronTexaco a $1 million termination payment. No assets were sold pursuant
to this agreement, with the exception of linefill. In December 2003, the Company
sold approximately 370,000 barrels of linefill held in West Texas and New Mexico
to ChevronTexaco for approximately $10 million. The Company recognized a gain of
approximately $2.6 million related to the sale, which gain has been deferred
(included in Other Long-Term Liabilities on the Consolidated Balance Sheet), as
the agreement contains mandatory obligations for the Company to repurchase the
linefill from ChevronTexaco in the event that the agreement is terminated within
the first five years.

9.    CHANGE IN ESTIMATE OF CRUDE OIL LINEFILL

      Measuring the physical volumes of crude oil linefill in certain of the
pipelines we operate in the West Texas and New Mexico area is inherently
difficult. Because these pipelines are operated under very little pressure,
unlike the vast majority of our other pipelines, we cannot use traditional
engineering based methods to estimate the physical volumes in the system but
instead have utilized certain operational assumptions and topographical
information which take into consideration the measurement limitations.

      As a part of our pipeline integrity management program, we are in the
process of removing from service various pipelines we operate in this area, some
of which were acquired from Texas-New Mexico Pipe Line Company in 1999. The
actual physical volume of crude oil linefill we removed from the line we took
out of service during the third quarter of 2003 was less than our estimate of
linefill volume for the applicable pipeline. Following this discovery, we
initiated a thorough review of our estimates for all of our pipelines which are
operated under very little pressure. We also engaged the services of a third
party consultant to review our methodology of estimating linefill volumes. After
completing this review, we revised downward our estimates of the physical volume
of crude oil linefill in certain of our pipelines by approximately 170,000
barrels. As a result, we recorded a charge of $4.6 million to reflect our change
in estimate of physical linefill volumes based on September 30, 2003 market
prices. The charge was recorded in cost of sales in the Consolidated Statements
of Operations.

      We currently estimate that we will complete the program to remove these
pipelines from service in the first half of 2004. The amount of crude oil
linefill we ultimately remove from the affected pipelines could differ
materially from our current estimates. Therefore, additional charges could be
required in the near term.

                                      F-28

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

10.   RESTATEMENT OF FINANCIAL RESULTS.

      As reported in our initial Annual Report on Form 10-K for 2003, we
identified control deficiencies with inventory and accounts payable
reconciliation procedures in our pipelines and liquids operations. In order to
address these issues, we designed and implemented additional procedures to
provide reasonable assurance that these control deficiencies did not lead to a
further misstatement in our consolidated financial statements. Related to this
matter, we originally recorded charges in the third and fourth quarter of 2003
of $1.8 million and $0.9 million, respectively.

      We are restating prior year financial results to reflect the inventory and
accounts payable reconciliation adjustments in prior periods. The restatement
results in a decrease in our net loss for the ten months ended December 31, 2003
of $0.9 million, an increase in our net income for the two months ended February
28, 2003 of $0.9 million, and an increase in our net loss for the years ended
December 31, 2002 and 2001 of $1.5 million and $0.3 million respectively.

      A summary of the effects of the restatement on reported amounts for the
ten months ended December 31, 2003, the two months ended February 28, 2003, and
the years ended December 31,2002 and 2001 are presented below. The effects on
reported amounts for the quarterly periods in the years 2003 and 2002 are
presented in Note 22. (Amounts in thousands, except per share amounts).

                            SUCCESSOR COMPANY                               PREDECESSOR COMPANY
                            -----------------        --------------------------------------------------------------
                               TEN MONTHS       |       TWO MONTHS
                                  ENDED         |          ENDED                 YEAR ENDED           YEAR ENDED
                            DECEMBER 31, 2003   |    FEBRUARY 28, 2003      DECEMBER 31, 2002     DECEMBER 31, 2001
                            -----------------   |    -----------------      -----------------     -----------------
                                          |                                          
REVENUE                                         |
  As Reported                $     152,678      |     $      31,979          $     182,942         $     250,573
  As Restated                      153,033      |            31,635                182,932               250,571
GROSS PROFIT                                    |
  As Reported                       41,440      |             9,681                 37,558                81,902
  As Restated                       41,929      |             9,971                 37,030                81,651
OPERATING INCOME                                |
  As Reported                        9,326      |             2,324                (27,067)               34,860
  As Restated                        9,815      |             2,614                (27,595)               34,609
NET INCOME (LOSS)                               |
  As Reported                      (53,829)     |            60,267               (101,731)              (15,233)
  As Restated                      (52,915)     |            61,127               (103,254)              (15,484)
DILUTED EARNINGS (LOSS) PER UNIT                |
  As Reported                        (4.37)     |              0.08                  (1.07)                (0.54)
  As Restated                        (4.29)     |              0.10                  (1.08)                (0.55)

11.   CAPITAL

      As part of the Restructuring Plan, EOTT's common units, subordinated units
and additional partnership interests were canceled and 14,475,321 new limited
liability company units ("LLC units") were authorized. Holders of common units
received 369,520 LLC units and 957,981 warrants to purchase additional LLC
units. The warrants have a five-year term, a strike price of $12.50, are
exercisable after June 30, 2003 and had an estimated fair value of $0.01 per
warrant as of the effective date of the Restructuring Plan. Holders of EOTT's
former 11% senior notes and general unsecured creditors with allowed claims
received a pro rata allocation of 11,947,820 LLC units. The Bank of New York,
the depositary agent, distributed approximately 90% of the LLC units in August
2003 and the final allocation of

                                      F-29

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

units was completed in December 2003. Additionally, 1.2 million LLC units were
reserved for a management incentive plan for issuance to certain key employees
and directors. See further discussion in Note 19.

The following is a rollforward of LLC units and warrants outstanding:

                                                            Common       Subordinated          LLC
                                                             Units          Units              Units      Warrants
                                                           ----------    ------------       ----------    --------
                                                                                              
Units Outstanding at December 31, 2002.................    18,476,011       9,000,000                -           -
Units Cancelled in Connection with Restructuring Plan..   (18,476,011)     (9,000,000)               -           -
Issuance of New LLC Units and Warrants.................             -               -       12,317,340     957,981
                                                           ----------    ------------       ----------    --------
LLC Units and Warrants Outstanding as of February 28,
2003...................................................             -               -       12,317,340     957,981
                                                           ----------    ------------       ----------    --------
Exercise of Warrants...................................             -               -           35,549     (35,549)
Restricted Units Outstanding...........................             -               -          830,000           -
                                                           ----------    ------------       ----------    --------
LLC Units and Warrants Outstanding at December 31, 2003             -               -       13,182,889     922,432
                                                           ==========    ============       ==========    ========

      The LLC units and the warrants were issued pursuant to an exemption from
the registration requirements of the Securities Act of 1933, as amended and
applicable state law, pursuant to the exemptions afforded under Section 1145,
Title 11 of the U.S. Bankruptcy Code. The LLC units and the warrants have been
registered pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") pursuant to Section 12(g) and we are therefore a reporting
company under the Exchange Act. Neither the LLC units nor the warrants are
traded on any national exchange or pursuant to an automated quotation system
administered by the National Association of Securities Dealers, Inc. ("NASD").

      The LLC units issued pursuant to the Restructuring Plan are subject to the
terms of a Registration Rights Agreement effective March 1, 2003 (the
"Registration Rights Agreement"). Following completion of the audit of our
financial statements for the year ending December 31, 2003, any holders of 10%
or more of the securities eligible for registration under the terms of the
Registration Rights Agreement will be entitled to demand registration of their
LLC units, subject to certain conditions. The Registration Rights Agreement also
provides for customary piggyback registration rights entitling holders of LLC
units to include their units in any registration in which we may engage, subject
to certain conditions. We will be required to pay all registration expenses in
connection with any such registrations.

      The LLC units are subject to the terms of an LLC Agreement, which
currently, among other things, restricts the issuance of additional equity
interests in Link without the approval of holders of at least two-thirds of the
outstanding units.

12.   EARNINGS PER UNIT

      Basic earnings per unit include the weighted average impact of outstanding
units (i.e., it excludes unit equivalents). Diluted earnings per unit consider
the impact of all potentially dilutive securities.

                                      F-30

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

Successor Company

      Basic and diluted net loss per unit for the Successor Company were $4.29
for the ten months ended December 31, 2003. Outstanding stock warrants and
contingently issuable restricted units were determined to be antidilutive and
are not included in the computation of fully diluted earnings per unit. Basic
and diluted net loss per unit from continuing operations were $1.84 for the ten
months ended December 31, 2003. Basic and diluted net loss per unit from
discontinued operations were $2.45 for the ten months ended December 31, 2003.

Predecessor Company

      Total and per unit information related to income (loss) from continuing
operations, discontinued operations, the cumulative effect of an accounting
change and net income (loss) for the Predecessor Company is shown in the tables
below. All amounts exclude amounts allocated to the General Partner (in
thousands, except per unit amounts):

                                                                    Two Months Ended February 28, 2003 (Restated)
                                                   ---------------------------------------------------------------------------
                                                                     Basic (1)
                                                   -----------------------------------------------
                                                           Common                Subordinated               Diluted (2)
                                                   ---------------------    ----------------------   -------------------------
                                                    Income        Per        Income         Per         Income         Per
                                                    (Loss)        Unit       (Loss)         Unit        (Loss)         Unit
                                                   --------     --------    ---------    ---------   -----------    ----------
                                                                                                  
Income (Loss) from Continuing Operations.......    $  2,133     $   0.11    $       -    $       -   $     2,133    $     0.08
Income (Loss) from Discontinued Operations(3)..         519         0.03            -            -           519          0.02
Cumulative Effect of Accounting Changes(4).....           -            -            -            -             -             -
                                                   --------     --------    ---------    ---------   -----------    ----------
Net Income (Loss)..............................    $  2,652     $   0.14    $       -    $       -   $     2,652    $     0.10
                                                   ========     ========    =========    =========   ===========    ==========
Weighted Average Units Outstanding.............                   18,476                     9,000                      27,476
                                                                ========                 =========                  ==========

                                                                       Year Ended December 31, 2002 (Restated)
                                                      ---------------------------------------------------------------------------
                                                                        Basic (1)
                                                      -----------------------------------------------
                                                              Common                Subordinated               Diluted (2)
                                                      ---------------------    ----------------------   -------------------------
                                                       Income        Per        Income         Per         Income         Per
                                                       (Loss)        Unit       (Loss)         Unit        (Loss)         Unit
                                                      --------     --------    ---------    ---------   -----------    ----------
                                                                                                     
Income (Loss) from Continuing Operations..........    $ (1,017)    $  (0.06)   $ (29,074)   $   (3.23)  $   (30,091)   $    (1.10)
Income (Loss) from Discontinued Operations (3)....         464         0.03            -            -           464          0.02
                                                      --------     --------    ---------    ---------   -----------    ----------
Net Income (Loss).................................    $   (553)    $  (0.03)   $ (29,074)   $   (3.23)  $   (29,627)   $    (1.08)
                                                      ========     ========    =========    =========   ===========    ==========
Weighted Average Units Outstanding................                   18,476                     9,000                      27,476
                                                                   ========                 =========                  ==========

                                      F-31

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

                                                                        Year Ended December 31, 2001 (Restated)
                                                   --------------------------------------------------------------------------------
                                                                        Basic (1)
                                                   ----------------------------------------------------
                                                            Common                   Subordinated                 Diluted (2)
                                                   ------------------------    ------------------------    ------------------------
                                                     Income          Per         Income          Per         Income         Per
                                                     (Loss)          Unit        (Loss)          Unit        (Loss)         Unit
                                                   ----------    ----------    ----------    ----------    ----------    ----------
                                                                                                       
Income (Loss) from Continuing Operations .......   $       31    $        -    $       14    $        -    $       45    $        -
Income (Loss) from Discontinued Operations (3)..      (10,945)        (0.59)       (5,331)        (0.59)      (16,276)        (0.59)
Cumulative Effect of Accounting Changes ........          707          0.04           344          0.04         1,051          0.04
                                                   ----------    ----------    ----------    ----------    ----------    ----------
Net Income (Loss) ..............................   $  (10,207)   $    (0.55)   $   (4,973)   $    (0.55)   $  (15,180)   $    (0.55)
                                                   ==========    ==========    ==========    ==========    ==========    ==========
Weighted Average Units Outstanding .............                     18,476                       9,000                      27,476
                                                                 ==========                  ==========                  ==========

(1)   Net income (loss), excluding the approximate two percent General Partner
      interest, has been apportioned to each class of unitholder based on the
      ownership of total units outstanding in accordance with the MLP's
      Partnership Agreement. Net losses are not allocated to the common and
      subordinated unitholders to the extent that such allocations would cause a
      deficit capital account balance or increase any existing deficit capital
      account balance. Any remaining losses are allocated to the General Partner
      as a result of the balances in the capital accounts of the common and
      subordinated unitholders. Effective with the third quarter of 2002, all
      losses were being allocated to the General Partner. The disproportionate
      allocation of 2002 net losses among the unitholders and the General
      Partner was recouped during the two months ended February 28, 2003.

(2)   The diluted earnings (loss) per unit calculation assumes the conversion of
      subordinated units into common units.

(3)   Earnings (loss) per unit from discontinued operations has been determined
      based on the difference between the amount of net income (loss) allocated
      to each class of unitholder and the amount of income (loss) from
      continuing operations allocated to each class of unitholder. Earnings
      (loss) per unit for the two months ended February 28, 2003, have been
      impacted by the disproportionate allocation of income and loss discussed
      above.

(4)   The cumulative effect of accounting changes was allocated to the General
      Partner and subsequently recouped by the General Partner during the two
      months ended February 28, 2003.

13.   OPERATING REVENUES

      In connection with adopting EITF Issue 02-03, revenues and cost of sales
related to our crude oil marketing and trading activities have been presented on
a net basis. Gross revenues and purchase costs that have been netted are as
follows (in thousands):

                                          SUCCESSOR COMPANY  |               PREDECESSOR COMPANY
                                          -----------------  |  --------------------------------------------
                                              TEN MONTHS     |      TWO MONTHS       YEAR ENDED DECEMBER 31,
                                                ENDED        |        ENDED          -----------------------
                                          DECEMBER 31, 2003  |  FEBRUARY 28, 2003       2002         2001
                                          -----------------  |  -----------------    ----------   ----------
                                             (RESTATED)      |     (RESTATED)        (RESTATED)   (RESTATED)
                                                       |                              
Gross revenue .........................   $       4,260,719  |  $         831,187    $4,541,591   $8,081,536
Purchase costs reclassified ...........           4,124,451  |            803,974     4,386,983    7,854,972
                                          -----------------  |  -----------------    ----------   ----------
Operating revenues for marketing                             |
     and trading operations, net ......             136,268  |             27,213       154,608      226,564
Gross revenue from other operations....              16,765  |              4,422        28,324       24,007
                                          -----------------  |  -----------------    ----------   ----------
Operating revenue .....................   $         153,033  |  $          31,635    $  182,932   $  250,571
                                          =================  |  =================    ==========   ==========

      Consistent with standard crude oil industry practice, we utilize
"buy/sell" contracts to facilitate our delivery obligations and to limit our
overall risk. We utilize buy/sell contracts to price the relative values of
crude oil that we seek to exchange between locations. The economic objective is
to exchange one barrel of crude oil for another barrel of crude oil that has a
different attribute such as, but not limited to, quality, location or delivery
period. The primary objective of

                                      F-32

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

pricing both sides of a buy/sell contract at prices reflective of the crude
oil's relative values is to allow for volume variances which occur between the
estimated scheduled volumes and actual deliveries. If all volumes on these crude
oil purchase contracts were exactly as forecast each month, such contracts could
be handled by exchange contracts, with simply a location and quality
differential. However, volumes are frequently (almost always in the case of
lease production) different than scheduled. Both parties to the transaction are
protected against volume variances by using the current month's market price for
each grade, location or delivery period associated with the different barrels of
crude oil.

      The following amounts have been recorded for buy/sell contracts in
Operating Revenue in the Consolidated Statements of Operations (in millions):

                                      F-33

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

                                                 SUCCESSOR COMPANY |               PREDECESSOR COMPANY
                                                 ----------------- |  ---------------------------------------------
                                                    TEN MONTHS     |     TWO MONTHS        YEAR ENDED DECEMBER 31,
                                                       ENDED       |       ENDED           ------------------------
                                                 DECEMBER 31, 2003 |  FEBRUARY 28, 2003       2002          2001
                                                 ----------------- |  -----------------    ----------    ----------
                                                             |                               
Gross revenues ..............................    $           2,735 |  $             502    $    2,568    $    5,075
Purchase costs ..............................                2,625 |                481         2,474         5,013
                                                 ----------------- |  -----------------    ----------    ----------
Net operating revenue .......................    $             110 |  $              21    $       94    $       62
                                                 ================= |  =================    ==========    ==========

14.   OTHER (INCOME) EXPENSE.

      The components of other (income) expense are as follows (in thousands):

                                                 SUCCESSOR COMPANY  |               PREDECESSOR COMPANY
                                                 -----------------  |  ---------------------------------------------
                                                    TEN MONTHS      |     TWO MONTHS        YEAR ENDED DECEMBER 31,
                                                       ENDED        |       ENDED           ------------------------
                                                 DECEMBER 31, 2003  |  FEBRUARY 28, 2003       2002          2001
                                                 -----------------  |  -----------------    ----------    ----------
                                                              |                               
(Gain) loss on disposal of fixed assets .....    $         (11,885) |  $               -    $    1,184    $   (1,108)
Litigation settlements and provisions .......               (1,171) |                  -         7,970           528
Gain on sale of NYMEX seats .................                    -  |                  -        (1,297)            -
Other income ................................                 (811) |                 (8)       (1,147)         (512)
                                                 -----------------  |  -----------------    ----------    ----------
     Total ..................................    $         (13,867) |  $              (8)   $    6,710    $   (1,092)
                                                 =================  |  =================    ==========    ==========

15.   COMMITMENTS AND CONTINGENCIES

      Operating Leases. We lease certain real property, equipment, and operating
facilities under various operating leases. Future non-cancelable commitments
related to these items at December 31, 2003, are as follows (in millions): years
ending December 31, 2004 - $5.3; 2005 - $4.2; 2006 - $3.3; 2007 - $1.0; 2008 -
$0.3; thereafter - $0.4.

      Total lease expense incurred was $5.9 million for the ten months ended
December 31, 2003, $1.2 million for the two months ended February 28, 2003 and
$7.7 million and $8.3 million for the years ended December 31, 2002 and 2001,
respectively.

      Indemnities. In November 2002, the Financial Accounting Standards Board
("FASB") issued Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others" ("FIN 45"). FIN 45 requires disclosures to be made by a guarantor in its
financial statements about its obligations under certain guarantees it has
issued and that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation under the guarantee. We are a
party to various contracts entered into in the ordinary course of business that
contain indemnity provisions. Our obligations under the indemnities are
contingent upon the occurrence of events or circumstances specified in the
contracts. No such events or circumstances have occurred to date and we do not
consider our liability under the indemnities to be material to our financial
position or results of operations.

      Litigation. We are, in the ordinary course of business, a defendant in
various lawsuits, some of which are covered in whole or in part by insurance. We
believe that the ultimate resolution of litigation, individually and in the
aggregate, will not have a materially adverse impact on our financial position
or results of operations. Several litigation claims were settled during the
course of the bankruptcy proceedings or are still being negotiated post
confirmation. How each matter was or is being handled is set forth in the
summary of each case below. For matters where the parties negotiated a
settlement during our bankruptcy proceedings, the settlement amount was recorded
at December 31, 2002 as an allowed

                                      F-34

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

general unsecured claim in "Other Income (Expense)" in our Consolidated
Statement of Operations. In connection with our Restructuring Plan, general
unsecured creditors with allowed claims received a pro rata share of $104
million of 9% senior unsecured notes and a pro rata share of 11,947,820 Link LLC
units. See further discussion in Notes 4 and 11. Prior to and since the
commencement of our bankruptcy proceedings, various legal actions arose in the
ordinary course of business, of which the significant actions are discussed
below.

      John H. Roam, et al. vs. Texas-New Mexico Pipe Line Company and EOTT
Energy Pipeline Limited Partnership, Cause No. CV43296, In the District Court of
Midland County, Texas, 238th Judicial District (Kniffen Estates Suit). The
Kniffen Estates Suit was filed on March 2, 2001, by certain residents of the
Kniffen Estates, a residential subdivision located outside of Midland, Texas.
The allegations in the petition state that free crude oil products were
discovered in water wells in the Kniffen Estates area, on or about October 3,
2000. The plaintiffs claim that the crude oil products are from a 1992 release
from a pipeline then owned by the Texas-New Mexico Pipe Line Company ("Tex-New
Mex"). We purchased that pipeline from Tex-New Mex in 1999. The plaintiffs have
alleged that Tex-New Mex was negligent, grossly negligent, and malicious in
failing to accurately report and remediate the spill. With respect to us, the
plaintiffs were seeking damages arising from any contamination of the soil or
groundwater since we acquired the pipeline in question. No specific amount of
money damages was claimed in the Kniffen Estates Suit, but the plaintiffs did
file proofs of claim in our bankruptcy proceeding totaling $62 million. In
response to the Kniffen Estates Suit, we filed a cross-claim against Tex-New
Mex. In the cross-claim, we claimed that, in relation to the matters alleged by
the plaintiffs, Tex-New Mex breached the Purchase and Sale Agreement between the
parties dated May 1, 1999, by failing to disclose the 1992 release and by
failing to undertake the defense and handling of the toxic tort claims, fair
market value claims, and remediation claims arising from the release. On April
5, 2002, we filed an amended cross-claim which alleged that Tex-New Mex
defrauded us as part of Tex-New Mex's sale of the pipeline systems to us in
1999. The amended cross-claim also alleged that various practices employed by
Tex-New Mex in the operation of its pipelines constituted gross negligence and
willful misconduct and voided our obligation to indemnify Tex-New Mex for
remediation of releases that occurred prior to May 1, 1999. In the Purchase and
Sale Agreement, we agreed to indemnify Tex-New Mex only for certain remediation
obligations that arose before May 1, 1999, unless these obligations were the
result of the gross negligence or willful misconduct of Tex-New Mex prior to May
1, 1999. EOTT Energy Pipeline Limited Partnership ("PLP") and the plaintiffs
agreed to a settlement during our bankruptcy proceedings. The settlement
provides for the plaintiffs' release of their claims filed against PLP in this
proceeding and in the bankruptcy proceedings, in exchange for an allowed general
unsecured claim in our bankruptcy of $3,252,800 (as described above, the
plaintiffs filed proofs of claim in our bankruptcy proceedings totaling $62
million). The allowed general unsecured claim was accrued at December 31, 2002.
On April 1, 2003, we filed a second amended cross-claim in this matter. In
addition to the claims filed in the previous cross-claims, we requested (i)
injunctive relief for Tex-New Mex's refusal to honor its indemnity obligations;
(ii) injunctive relief requiring Tex-New Mex to identify, investigate and
remediate sites where the conduct alleged in our cross-claim occurred; and (iii)
restitution damages of over $125,000,000. Tex-New Mex filed a motion to compel
arbitration of these issues. The motion to compel arbitration was denied at a
hearing held on April 11, 2003. At the April 11, 2003 hearing, the court also
severed into a separate action EOTT's cross-claims against Tex-New Mex that
extend beyond the crude oil release and groundwater contamination in the Kniffen
Estates subdivision ("EOTT's Over-Arching Claim"). Developments in EOTT's
Over-Arching Claim are described immediately below. Prior to the trial of the
plaintiff's claims against Tex-New Mex and EOTT's original cross-claim against
Tex-New Mex arising from the crude oil release and groundwater contamination in
the Kniffen Estates subdivision ("EOTT's Kniffen Claims"), Tex-New Mex reached a
settlement with the plaintiffs that provided for the release of the plaintiffs'
claims. The trial of EOTT's Kniffen Claims commenced on June 16, 2003, and the
jury returned its verdict on July 2, 2003. The jury found that Tex-New Mex's
gross negligence and willful misconduct caused the contamination in the Kniffen
Estates. The jury also found that Tex-New Mex committed fraud against us with
respect to the Kniffen Estates site. The jury awarded us actual damages equal to
the expenses we have incurred to date in remediating the Kniffen Estates site
(approximately $6.1 million) and punitive damages in the amount of $50 million.
On November 28, 2003, the court entered an amended judgment based on the jury
verdict. The final judgment provides for the award to us of (i) actual damages
in the amount of $7,701,938, (ii) attorney's fees in the amount of $1,400,000,
(iii) prejudgment interest in the amount of $1,044,509 and (iv) punitive damages
in the amount of $18,203,876. The punitive damages were reduced

                                      F-35

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

from the jury's award of $50 million in accordance with Texas' statutory caps on
punitive damages awards. The final judgment also contains a finding that Tex-New
Mex is obligated to indemnify us for future remediation costs incurred at the
Kniffen Estates site. Tex-New Mex filed a motion for new trial that was
overruled by operation of law on February 11, 2004. Tex-New Mex has indicated
its intent to appeal the amended judgment by posting a supersedeas bond in the
amount of $10,665,419 on February 12, 2004. We cannot predict the outcome of
Tex-New Mex's appellate efforts.

      EOTT Energy Operating Limited Partnership vs. Texas-New Mexico Pipeline
Company, Cause No. CV-44, 099, In the District Court of Midland County, Texas,
238th Judicial District ("EOTT's Over-Arching Claim"). As described above, the
claims in this lawsuit were severed from EOTT's Kniffen Claims on April 11,
2003. In this lawsuit, we allege that various practices employed by Tex-New Mex
in the operation of its pipelines and handling of spills constitute gross
negligence and willful misconduct, thus triggering Tex-New Mex's obligation to
indemnify us for remediation of releases where such practices ("Non-Remediation
Practices") were employed. In addition to damages, we are seeking (a) injunctive
relief requiring Tex-New Mex to honor its indemnity obligations under the
Purchase and Sale Agreement and (b) injunctive relief requiring Tex-New Mex to
identify, investigate, and remediate sites where Tex-New Mex employed the
Non-Remediation Practices. Discovery opened in EOTT's Over-Arching Claim on
December 1, 2003. The court conducted a scheduling conference for this case on
January 12, 2004, and set a trial date of September 19, 2005. On March 3, 2004,
we amended our petition to specifically list more than 200 contamination sites
where Tex-New Mex employed the Non-Remediation Practices.

      Bankruptcy Issues related to Claims Made by Texas-New Mexico Pipeline
Company and its affiliates. Tex-New Mex, Shell Oil Company ("Shell") and Equilon
filed proofs of claim in our bankruptcy, each filing similar claims in the
amount of $112 million. In July of 2003, we entered into an agreement with
Shell, Tex-New Mex and Equilon whereby all of their claims were either
withdrawn, estimated or allowed, leaving the value of the claims estimated for
distribution purposes at $56,924.52. We are currently working to fully resolve
these claims in the bankruptcy claims resolution process.

      Jimmie T. Cooper and Betty P. Cooper vs. Texas-New Mexico Pipeline
Company, Inc., EOTT Energy Pipeline Limited Partnership, and EOTT Energy Corp.,
Case No. CIV-03-0035 JB/LAM, In the United States District Court for the
District of New Mexico. This lawsuit was filed on October 1, 2002. The
plaintiffs in this lawsuit are surface interest owners of certain property
located in Lea County, New Mexico. The plaintiffs alleged that aquifers
underlying their property and water wells located on their property were
contaminated as a result of spills and leaks from a pipeline running across
their property that is or was owned by Tex-New Mex and us. The plaintiffs did
not specify when the alleged spills and leaks occurred. The plaintiffs are
seeking payment of costs that would be incurred in investigating and remediating
the alleged crude oil releases and replacing water supplies from aquifers that
had allegedly been contaminated. The plaintiffs sought damages in an unspecified
amount arising from the plaintiffs' alleged fear of exposure to carcinogens and
the alleged interference with the plaintiffs' quiet enjoyment of their property.
The plaintiffs are also seeking an unspecified amount of punitive damages. EOTT
and the plaintiffs agreed to the terms of a settlement, whereby the plaintiffs
agreed to release their claims against us and received an allowed general
unsecured claim in our bankruptcy in the amount of $1,027,000. The allowed
general unsecured claim was accrued at December 31, 2002. The settlement
documents have been finalized. On October 21, 2003, the plaintiffs filed a
motion seeking our dismissal from this lawsuit. Tex-New Mex opposed this motion,
and on October 31, 2003, Tex-New Mex filed a motion for leave to file a
cross-claim against us. In the proposed cross-claim, Tex-New Mex is seeking a
declaratory judgment finding that we are contractually obligated to indemnify
Tex-New Mex for all costs Tex-New Mex has incurred or will incur related to the
defense of the plaintiffs' claims in this lawsuit. The proposed cross-claim also
alleges that we failed to assume Tex-New Mex's defense of this lawsuit and
failed to indemnify Tex-New Mex for the expenses Tex-New Mex has incurred in
this lawsuit, and that such actions by us constitute a breach of the Purchase
and Sale Agreement governing Tex-New Mex's sale of the subject pipeline to us.
On December 4, 2003, we filed a motion in our bankruptcy proceeding seeking a
determination that Tex-New Mex's proposed cross-claim had been waived, barred,
and discharged in our bankruptcy proceeding. A hearing on that motion (the "Zero
Claim Motion") was held on February 18, 2004 and the bankruptcy court took the
Zero Claim Motion under advisement. We have asked the court to delay ruling on
Tex-New Mex's

                                      F-36

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

motion for leave to file cross-claim until the bankruptcy court rules on our
Zero Claim Motion. At the settlement conference held on February 27, 2004, the
plaintiffs and Tex-New Mex reached a settlement. Tex-New Mex has agreed to pay
the plaintiffs $1,350,000 for a release of the plaintiffs' claims.

      In re EOTT Energy Partners, L.P., Case No. 02-21730, EOTT Energy Finance
Corp., Case No. 02-21731, EOTT Energy General Partner, L.L.C., Case No.
02-21732, EOTT Energy Operating Limited Partnership, Case No. 02-21733, EOTT
Energy Canada Limited Partnership, Case No. 02-21734, EOTT Energy Liquids, L.P.,
Case No. 02-21736, EOTT Energy Corp., Case No. 02-21788, Debtors (Jointly
Administered under Case No. 02-21730), In the United States Bankruptcy Court for
the Southern District of Texas, Corpus Christi Division. On October 8, 2002, we
and all of our subsidiaries filed voluntary petitions for relief under Chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Texas (the "EOTT Bankruptcy Court") to facilitate
reorganization of our business and financial affairs for the benefit of us, our
creditors and other interested parties. Additionally, the General Partner filed
its voluntary petition for reorganization under Chapter 11 on October 21, 2002
in the EOTT Bankruptcy Court. Our Restructuring Plan was confirmed on February
18, 2003 and became effective on March 1, 2003. The provisions of the
Restructuring Plan are further described in Note 5. Shell and Tex-New Mex filed
a notice of appeal to our plan confirmation on February 24, 2003. A hearing on
the appeal was held in the District Court on August 19, 2003, where the judge
ruled the appeal was moot. The ruling became final on October 24, 2003. The
bankruptcy remains open while we resolve all of the outstanding claims. We
expect to close the bankruptcy in early 2004.

      EPA Section 308 Request. In July 2001, Enron received a request for
information from the Environmental Protection Agency ("EPA") under Section 308
of the Clean Water Act, requesting information regarding certain spills and
releases from oil pipelines owned or operated by Enron and its affiliated
companies for the time period July 1, 1998 to July 11, 2001. Enron responded in
January of 2002 to the EPA's Section 308 request in its capacity as the operator
of the pipelines actually owned by us and on our behalf. Under the terms of the
Enron Settlement Agreement dated October 8, 2002, we would be required to
indemnify EOTT Energy Corp., as the prior general partner, and its affiliates
including Enron Pipeline Services Company, with regard to any environmental
remediation, except for claims of gross negligence and willful misconduct. While
we cannot predict the outcome of the EPA's Section 308 request, the EPA could
seek to impose liability for environmental cleanup on us with respect to the
matters being reviewed. The outcome of the EPA Section 308 request is not yet
known, and we are unaware of any potential liability of Enron, its affiliates,
or us. It is possible that our bankruptcy proceedings did not relieve us from
certain potential environmental remediation liability.

      Environmental. We are subject to extensive federal, state and local laws
and regulations covering the discharge of materials into the environment, or
otherwise relating to the protection of the environment, and which require
expenditures for remediation at various operating facilities and waste disposal
sites, as well as expenditures in connection with the construction of new
facilities. At the federal level, such laws include, among others, the Clean Air
Act, the Clean Water Act, the Oil Pollution Act, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, and the National Environmental Policy Act, as each may be amended
from time to time. Failure to comply with these laws and regulations may result
in the assessment of administrative, civil, and criminal penalties or the
imposition of injunctive relief.

      Prior to the sale of our Liquids Operations discussed further in Note 8,
we produced MTBE at our Morgan's Point Facility. MTBE is used as an additive in
gasoline. Due to health concerns around MTBE, there have been lawsuits filed
against companies involved in the production of MTBE. We have not been named in
any such actions, nor do we anticipate being included in any such actions.
However, we can provide no assurances that we may not be included in such
actions due to our past production of MTBE.

      In 2001, expenses incurred for spill clean up and remediation costs
related to the assets purchased from Tex-New Mex increased significantly. Based
on our experience with these assets, we filed an amended cross-claim against
Tex-New Mex alleging contingent claims for potential remediation issues not yet
known to us. We allege that Tex-New Mex failed to report spills, underreported
spills, failed to properly respond to leaks in the pipeline and engaged in other

                                      F-37

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

activities with regard to the pipeline that may result in future remediation
liabilities. We obtained $20 million in insurance coverage in connection with
the acquisition from Tex-New Mex believing that amount would be sufficient to
cover our remediation requirements along the pipeline for a ten-year period.
However, after four years into the term of the insurance policy, we have made
claims in excess of the amount of insurance coverage.

      In addition to costs associated with the assets acquired from Tex-New Mex,
we have also incurred spill clean up and remediation costs in connection with
other properties we own in various locations throughout the United States. We
also have insurance covering clean up and remediation costs that may be incurred
in connection with properties not acquired from Tex-New Mex. However, no
assurance can be given that the insurance will be adequate to cover any such
cleanup and remediation costs.

      The following are summaries of environmental remediation expense,
estimated environmental liabilities, and amounts receivable under insurance
policies for the indicated periods (in thousands):

                                                 SUCCESSOR COMPANY  |                     PREDECESSOR COMPANY
                                                 -----------------  | -----------------------------------------------------------
                                                     TEN MONTHS     |    TWO MONTHS          TWELVE MONTHS        TWELVE MONTHS
                                                       ENDED        |      ENDED                 ENDED                ENDED
                                                 DECEMBER 31, 2003  | FEBRUARY 28, 2003    DECEMBER 31, 2002    DECEMBER 31, 2001
                                                 -----------------  | -----------------    -----------------    -----------------
                                                              |                                     
Remediation expense .........................    $           9,107  | $           1,979    $          14,819    $          25,372
Estimated insurance recoveries ..............               (1,325) |               (79)              (1,316)             (13,576)
                                                 -----------------  | -----------------    -----------------    -----------------
Net remediation expense .....................    $           7,782  | $           1,900    $          13,503    $          11,796
                                                 =================  | =================    =================    =================

                                                     SUCCESSOR COMPANY  |            PREDECESSOR COMPANY
                                                     -----------------  |  --------------------------------------
                                                        TEN MONTHS      |     TWO MONTHS             YEAR
                                                          ENDED         |        ENDED               ENDED
                                                     DECEMBER 31, 2003  |  FEBRUARY 28, 2003    DECEMBER 31, 2002
                                                     -----------------  |  -----------------    -----------------
                                                                  |                    
Environmental liability at beginning of period ...   $          13,440  |  $          13,440    $          12,075
Remediation expense ..............................               9,107  |              1,979               14,819
Cash expenditures ................................             (10,331) |             (1,979)             (13,454)
                                                     -----------------  |  -----------------    -----------------
Environmental liability at end of period .........   $          12,216  |  $          13,440    $          13,440
                                                     =================  | =================    =================

                                                     SUCCESSOR COMPANY  |            PREDECESSOR COMPANY
                                                     -----------------  |  --------------------------------------
                                                        TEN MONTHS      |     TWO MONTHS             YEAR
                                                          ENDED         |        ENDED               ENDED
                                                     DECEMBER 31, 2003  |  FEBRUARY 28, 2003    DECEMBER 31, 2002
                                                     -----------------  |  -----------------    -----------------
                                                                  |                    
Environmental insurance receivable at                                   |
      beginning of period ........................   $           8,837  |  $           8,803    $          14,344
Estimated recoveries .............................               1,325  |                 79                1,316
Cash receipts ....................................              (7,073) |                (45)              (6,857)
                                                     -----------------  |  -----------------    -----------------
Environmental insurance receivable at end of                            |
       period ....................................   $           3,089  | $           8,837    $           8,803
                                                     =================  | =================    =================

      The environmental liability was classified in Other Current ($6.4 million)
and Other Long-Term Liabilities ($5.8 million) and the insurance receivable was
classified in Trade and Other Receivables ($2.5 million) and Other Assets ($0.5
million) at December 31, 2003.

      We may experience future releases of crude oil into the environment or
discover releases that were previously unidentified. While an inspection program
is maintained on our pipelines to prevent and detect such releases, and
operational safeguards and contingency plans are in place for the operation of
our processing facilities, damages and liabilities incurred due to any future
environmental releases could affect our business. We believe that our operations
and facilities are in substantial compliance with applicable environmental laws
and regulations and that there are no

                                      F-38

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

outstanding potential liabilities or claims relating to safety and environmental
matters of which we are currently aware, the resolution of which, individually
or in the aggregate, would have a materially adverse effect on our financial
position or results of operations. However, we could be significantly adversely
impacted by additional repair or remediation costs related to the pipeline
assets we acquired from Tex-New Mex if the need for any additional repairs or
remediation arises and we do not obtain reimbursement for any such costs as a
result of the pending litigation concerning those assets. Our environmental
expenditures include amounts spent on permitting, compliance and response plans,
monitoring and spill cleanup and other remediation costs. In addition, we could
be required to spend substantial sums to ensure the integrity of our pipeline
systems, and in some cases, we may take pipelines out of service if we believe
the costs of upgrades will exceed the value of the pipelines.

      No assurance can be given as to the amount or timing of future
expenditures for environmental remediation or compliance, and actual future
expenditures may be different from the amounts currently estimated. In the event
of future increases in costs, we may be unable to pass on those increases to our
customers.

Tax Status

      For information regarding our continued qualification as a partnership for
federal income tax purposes, see Note 1.

16.   FAIR VALUE OF FINANCIAL INSTRUMENTS

      Fair Value. Fair value represents the amount at which a financial
instrument could be exchanged in a current transaction between willing parties.
We have determined the estimated fair value amounts using available market data
and valuation methodologies. Judgment is required in interpreting market data
and the use of different market assumptions or estimation methodologies may
affect the estimated fair value amounts.

      As of December 31, 2003 and 2002, the carrying amounts of items comprising
current assets and current liabilities approximate fair value due to the
short-term maturities of these instruments. The carrying amounts of the variable
rate instruments in our credit facilities approximate fair value because the
interest rates fluctuate with prevailing market rates. The carrying amount of
our derivative instruments and energy trading activities approximate fair value
as these contracts are recorded on the balance sheet at their fair value.

                                      F-39

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

     The carrying amount and fair values of our financial instruments are as
follows (in millions):

                                    SUCCESSOR COMPANY   |   PREDECESSOR COMPANY
                                    DECEMBER 31, 2003   |    DECEMBER 31, 2002
                                    -----------------   |    -----------------
                                     Carrying    Fair   |   Carrying    Fair
                                      Amount     Value  |    Amount     Value
                                      ------     -----  |    ------     -----
                                               |           
NYMEX futures................        $     -    $     - |   $   0.2    $   0.2
Forward contracts............        $   0.5    $   0.5 |   $  (1.0)   $  (1.0)
Short-term debt..............        $  45.0    $  45.0 |   $ 125.0    $ 125.0
Term loans...................        $  75.0    $  75.0 |   $  75.0    $  75.0
Enron Note...................        $   6.4    $   6.5 |   $   6.2    $   7.2
Long-term                                               |
   9% Notes..................        $ 104.5    $ 101.4 |   $   6.2    $   7.2
  11% Notes..................        $     -    $     - |   $ 235.0    $   N/A
Long-term debt - other.......        $   2.3    $   2.4 |   $   2.7    $   2.4

      As of December 31, 2002, it was not practicable to determine the fair
value of our 11% senior unsecured notes since we were not yet able to determine
the fair value of the consideration the senior unsecured noteholders would
receive under the Restructuring Plan. Under the terms of our Restructuring Plan,
we cancelled our 11% senior notes and the former senior unsecured noteholders
and holders of allowed general unsecured claims received a pro rata share of
$104 million of 9% senior unsecured notes and a pro rata share of 11,947,820
Link LLC units. Excluding amounts included in Liabilities Subject to Compromise
at December 31, 2002, we believe that the carrying amounts of other financial
instruments are a reasonable estimate of their fair value, unless otherwise
noted.

      Generally, as we purchase crude oil, we enter into corresponding sales
transactions involving physical delivery of crude oil to third party users or
corresponding sales transactions on the NYMEX. This process enables us to
minimize our exposure to price risk until we take physical delivery of the crude
oil. In 2002, substantially all of our crude oil marketing and trading
operations are accounted for on a fair value basis pursuant to SFAS No. 133 or
EITF Issue 98-10. Effective January 1, 2003, energy trading contracts that are
not derivative instruments pursuant to SFAS No. 133 are no longer accounted for
at fair value. See further discussion of our accounting policies in Note 2.

      The following table indicates fair values and changes in fair value of our
energy trading and derivative transactions (in thousands):

                                                          SUCCESSOR COMPANY               PREDECESSOR COMPANY
                                                          -----------------  |   ---------------------------------------
                                                           TEN MONTHS ENDED  |    TWO MONTHS ENDED        YEAR ENDED
                                                          DECEMBER 31, 2003  |   FEBRUARY 28, 2003     DECEMBER 31, 2002
                                                          -----------------  |   -----------------     -----------------
                                                                       |                      
Fair value of contracts at beginning of period.......      $           1,254 |     $          (844)    $          (5,597)
Cumulative effect of accounting change...............                      - |              (2,389)                    -
Change in realized and unrealized value..............                 (2,401)|               4,114                 3,814
Fair value of new contracts entered into during year.                  1,673 |                 373                   939
                                                           ----------------- |     ---------------    ------------------
Fair value of contracts at end of period.............      $             526 |     $         1,254    $             (844)
                                                           ================= |     ===============    ==================

                                      F-40

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      Fair Value of Contracts at December 31, 2003

                                                                                 MATURITY GREATER
                                                           MATURITY OF 90        THAN 90 DAYS BUT
             SOURCE OF FAIR VALUE                           DAYS OR LESS        LESS THAN ONE YEAR      TOTAL FAIR VALUE
             --------------------                           ------------        ------------------      ----------------
                                                                                               
Prices Actively Quoted...............                      $          677         $         (162)       $            515
*Prices Provided by Other
   External Source...................                                  13                     (2)                     11
                                                           --------------         --------------        ----------------
   Total.............................                      $          690         $         (164)       $            526
                                                           ==============         ==============        ================

      *In determining the fair value of certain contracts, adjustments may be
made to published posting data, for location differentials and quality basis
adjustments.

      Credit Risk. In the normal course of business, we extend credit to various
companies in the energy industry. Within this industry, certain elements of
credit risk exist and may, to varying degrees, exceed amounts recognized in the
accompanying consolidated financial statements, which may be affected by changes
in economic or other external conditions and may accordingly impact our overall
exposure to credit risk. Our exposure to credit loss in the event of
nonperformance is limited to the book value of the trade commitments included in
the accompanying Consolidated Balance Sheets. We manage our exposure to credit
risk through credit analysis, credit approvals, credit limits and monitoring
procedures. Further, we believe that our portfolio of receivables is well
diversified and that the allowance for doubtful accounts is adequate to absorb
any potential losses. We require collateral in the form of letters of credit for
certain of our receivables.

      During the ten months ended December 31, 2003, the two months ended
February 28, 2003 and the years ended December 31, 2002, and 2001 sales to Koch
Supply & Trading L.P. accounted for approximately 19%, 19%, 17%, and 12% of our
consolidated gross revenues, respectively.

      Market Risk. Our trading and non-trading transactions give rise to market
risk, which represents the potential loss that can be caused by a change in the
market value of a particular commitment. We closely monitor and manage our
exposure to market risk to ensure compliance with our stated risk management
policies which are regularly assessed to ensure their appropriateness given our
objectives, strategies and current market conditions.

      We enter into forward, futures and other contracts to hedge the impact of
market fluctuations on assets, lease crude oil purchases or other contractual
commitments. Changes in the market value of transactions designated as energy
trading activities (prior to the rescission of EITF Issue 98-10) or derivatives
under SFAS 133 are recorded every period as mark-to-market gains or losses.

17.   SUMMARY OF OUR SETTLEMENT AGREEMENT WITH ENRON

      The General Partner and EOTT entered into a settlement agreement dated
October 8, 2002 (the "Enron Settlement Agreement") with Enron, Enron North
America Corp., Enron Energy Services, Inc., Enron Pipeline Services Company
("EPSC"), EGP Fuels Company ("EGP Fuels") and Enron Gas Liquids, Inc. ("EGLI")
(collectively, the "Enron Parties"). As part of the Settlement Agreement, Enron
consented to the filing of our bankruptcy in the Southern District of Texas, and
Enron waived its rights of first refusal with respect to the sale of the
Morgan's Point Facility, Mont Belvieu Facility and other assets we purchased
pursuant to the Purchase and Sale Agreement dated June 29, 2001 between Enron
and us. The EOTT Bankruptcy Court approved the Enron Settlement Agreement on
November 22, 2002, and the Enron Bankruptcy Court approved the Enron Settlement
Agreement on December 5, 2002. The Enron Settlement Agreement was consummated on
December 31, 2002. The following is a summary of the significant terms of the
settlement:

                                      F-41

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      -     We entered into an Employee Transition Agreement with EPSC, which
            provided for the transfer to us of certain employees of subsidiaries
            of Enron which performed pipeline operations services for us,
            effective January 1, 2003.

      -     The Enron Parties and us entered into a Termination Agreement on
            October 8, 2002, which provided for the termination of various
            agreements among the parties.

      -     At December 31, 2002, we executed a promissory note payable to Enron
            in the initial principal amount of $6.2 million that is guaranteed
            by our subsidiaries. The Enron Note is secured by an irrevocable
            letter of credit and bears interest at 10% per annum.

      -     As additional consideration and as a compromise of certain claims,
            we paid Enron $1,250,000 (the "Cash Payment") on the effective date
            of our Restructuring Plan.

      -     We agreed, among other things, to assume obligations in our
            bankruptcy cases and cure defaults under the Operation and Service
            Agreement with EPSC whereby EPSC provided certain pipeline operation
            services to us. We also agreed to indemnify EPSC against claims
            arising from the General Partner's failure to perform its duties
            under the Operation and Services Agreement or the General Partner's
            refusal to approve EPSC recommended items or modifications in the
            budgets.

      -     We and the Enron Parties also mutually released each other for any
            and all claims except those expressly reserved in the Enron
            Settlement Agreement.

      The following is a summary of the net Enron Settlement amount recorded in
Reorganization Items in the Consolidated Statement of Operations (in millions)
as discussed in Note 5:

                                                             
Forgiveness of payable to Enron and affiliates.............     $ 38.5
Forgiveness of performance collateral from Enron...........       15.8
Note issued to Enron.......................................       (6.2)
Cash Payment to Enron for certain claims...................       (1.2)
Final contribution to Enron Cash Balance Plan..............       (1.4)
                                                                ------
   Total...................................................     $ 45.5
                                                                ======

18.   IMPACT OF ENRON BANKRUPTCY AND TRANSACTIONS WITH ENRON AND RELATED PARTIES

IMPACT OF ENRON BANKRUPTCY

      Beginning on December 2, 2001, Enron, along with certain of its
subsidiaries, filed bankruptcy proceedings under Chapter 11 of the Federal
Bankruptcy Code. Because of our contractual relationships with Enron and certain
of its subsidiaries, the bankruptcy significantly impacted us in various ways.
In connection with the Enron Settlement Agreement discussed above, the following
claims were released:

      Rejection of Agreements; Claims Against Enron's Bankruptcy Estate. We were
adversely impacted as a result of the inclusion of EGLI in Enron's bankruptcy.
We had in place ten-year Toll Conversion and Storage Agreements with EGLI. As a
result of EGLI's non-performance under these agreements, we recorded a $29.1
million non-cash impairment, which was our remaining investment in these
long-term contracts, at December 31, 2001. We had a monetary damage claim
against EGLI and Enron as a result of the rejection of the agreements under the
Stipulation. Accordingly, we filed claims against EGLI in the Enron Bankruptcy
Court on May 12, 2002, resulting from EGLI's rejection of the Toll Conversion
and Storage Agreements, in the amount of $540.5 million. In addition, Enron
guaranteed EGLI's performance under the EGLI agreements; however, its guarantee
was limited to $50 million under the

                                      F-42

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

Toll Conversion Agreement and $25 million under the Storage Agreement.
Accordingly, we filed a claim against Enron in the Enron Bankruptcy Court
resulting from EGLI's rejection of the agreements in the amount of $75 million.
We filed additional claims against numerous Enron affiliates on October 15, 2002
totaling $213.5 million. Under the terms of the Enron Settlement Agreement, we
withdrew all claims filed by us in the Enron Bankruptcy Court upon the effective
date of our Restructuring Plan.

      Performance Collateral from Enron. As discussed above, Enron guaranteed
payments under the Toll Conversion and Storage Agreements. In addition, EGLI
owed us approximately $9 million under the Toll Conversion and Storage
Agreements prior to filing for bankruptcy. Pursuant to the Toll Conversion and
Storage Agreements, if Enron's credit rating dropped below certain defined
levels specified in these agreements, we could request within five days of this
occurrence for EGLI to post letters of credit. The letters of credit could be
drawn upon if EGLI failed to pay any amount owed to us under these agreements.
The Toll Conversion Agreement provided that the letter of credit would be in an
amount reasonably requested by us, not to exceed $25 million. The Storage
Agreement provided that the letter of credit would be in an amount as reasonably
requested, but no amount is specified. In late November 2001, Enron's credit
rating fell below the ratings specified in these agreements. Accordingly, on
November 27, 2001, we requested that EGLI post two $25 million letters of
credit. In lieu of posting letters of credit, we received a $25 million
deposit/performance collateral from EGLI/Enron, against which we recouped the $9
million of outstanding invoices. We applied the remaining sum, approximately $16
million, to recoup or offset a portion of our damages as a result of EGLI's
rejection of the Toll Conversion and Storage Agreements. Our Restructuring Plan
resulted in a release by Enron of any claim to the $25 million
deposit/performance collateral.

      Tax and Environmental Indemnities. We also had indemnities from Enron for
certain ad valorem taxes, possible environmental expenditures and title defects
relating to the Morgan's Point Facility and the Mont Belvieu Facility. The total
indemnity amount provided for under the Purchase Agreement was $25 million and
we had made no claims under the indemnities through December 31, 2002. Under the
terms of the Enron Settlement Agreement, we released Enron from these
indemnities.

      Pension Plan Underfunding Issues. The Enron Settlement Agreement provided
that we withdraw from the defined benefit pension plan known as the Enron Corp.
Cash Balance Plan (the "Cash Balance Plan") on December 31, 2002. The PBGC filed
proofs of claim in our bankruptcy proceedings to address concerns about the Cash
Balance Plan, and also an objection to our Restructuring Plan ("PBGC Claim").

      To address the issues raised by the PBGC, as well as the objections we
filed to the PBGC's proofs of claim, a Stipulation and Order Regarding EOTT
Chapter 11 Proceedings and Settlement Among the Enron Parties, us and the PBGC
(the "PBGC Stipulation") was executed and entered by the Enron Bankruptcy Court
on February 27, 2003.

      The PBGC Stipulation set forth that Enron will continue to hold, subject
to the terms of the PBGC Stipulation, the Enron Note, the letter of credit
securing the Enron Note, any payments thereunder, and the Cash Payment
(collectively, the "Settlement Proceeds") on behalf of the Enron Parties. Any
claim of the PBGC against us for liabilities (if any) arising from the Cash
Balance Plan will attach to the Settlement Proceeds with the same effect (if
any) that such claim (if any) now has as against us and such claim will be
subject to the claims and defenses of the Enron Parties and the Enron Creditors'
Committee with respect thereto. The PBGC's rights regarding the Settlement
Proceeds will constitute the sole basis for the PBGC to seek to enforce its
claims (if any) against us for the PBGC Claims.

TRANSACTIONS WITH ENRON AND RELATED PARTIES

      At December 31, 2002, we had current payables to Enron of $3.6 million,
which was primarily comprised of certain amounts owed to Enron under the Enron
Settlement Agreement. In addition, we had $5.2 million of long-term liabilities

                                      F-43

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

owed to Enron at December 31, 2002, which is the long-term portion of the note
issued in connection with the Enron Settlement Agreement.

      The agreements described below were terminated and the amounts due under
these agreements were forgiven effective December 31, 2002 under the terms of
the Enron Settlement Agreement. See further discussion in Note 17.

      Operations and General and Administrative Services. As is commonly the
case with publicly traded partnerships, we did not directly employ any persons
responsible for managing or operating EOTT or for providing services relating to
day-to-day business affairs prior to January 1, 2003. The General Partner
provided such services or obtained such services from third parties and we were
responsible for reimbursing the General Partner for substantially all of its
direct and indirect costs and expenses. The General Partner, through the MLP
Partnership Agreement, provided services to us under a Corporate Services
Agreement which included liability and casualty insurance and certain data
processing services and employee benefits. Those costs were $1.9 million, and
$2.5 million, for the years ended December 31, 2002 and 2001, respectively.

      Operation and Services Agreement with EPSC. EPSC agreed to provide certain
operating and administrative services to the General Partner, effective October
1, 2000 and the agreement provided that the General Partner would reimburse EPSC
for its costs and expenses in rendering the services. The General Partner would
in turn be reimbursed by us. EOTT LLC took over these services effective January
1, 2003. The costs incurred related to these services for the years ended
December 31, 2002 and 2001 were $24.6 million, and $56.7 million respectively.

      Transition Services Agreement with EGP Fuels. The General Partner entered
into an agreement for EGP Fuels to provide transition services through December
31, 2001 for the processing of invoices and payments to third parties related to
the Morgan's Point Facility and Mont Belvieu Facility. The agreement provided
that the General Partner would reimburse EGP Fuels for these direct costs and we
would reimburse the General Partner. Costs related to these services were $12.3
million for the six months ended December 31, 2001.

      Credit Facility. We had a credit facility with Enron to provide credit
support in the form of guarantees, letters of credit and working capital loans
through December 31, 2001.

      Purchase and Sale Agreement. We acquired certain liquids processing,
storage and transportation assets in June 2001 from Enron. See further
discussion in Note 8.

      Additional Partnership Interests. On May 14, 1999 and February 14, 2000,
Enron paid $2.5 million and $6.8 million, respectively, in support of our first
and fourth quarter 1999 distributions to our common unitholders and received
APIs. APIs have no voting rights and do not receive distributions. In connection
with the Restructuring Plan, the API's were cancelled.

19.   EMPLOYEE BENEFIT AND RETIREMENT PLANS

Successor Company

      We adopted welfare benefit plans providing medical, dental, life,
accidental death and dismemberment and long-term disability coverage to
employees, with all related premiums and costs not offset by employee
contributions being incurred by us. Link Energy implemented a Savings Plan in
March 2003 for all employees. Total benefit costs for the ten months ended
December 31, 2003 were $4.6 million, including $4.3 million in costs
attributable to health and welfare benefit plans.

      In 2003, we adopted the Link Energy Annual Incentive Plan, a variable pay
plan, based on our earnings before depreciation adjusted for restructuring
costs. No bonuses were paid out under this plan for 2003.

                                      F-44

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      We provide no postretirement medical, life insurance and dental benefits
to employees who retire. The Company provides unemployment, severance and
disability-related benefits or continuation of benefits such as health care and
life insurance and other postemployment benefits. SFAS No. 112 requires the cost
of those benefits to be accrued over the service lives of the employees expected
to receive such benefits. At December 31, 2003, the liability accrued was $0.9
million.

      The Compensation Committee recommended to the Board of Directors the
adoption of the Link Energy Equity Incentive Plan ("Incentive Plan") effective
June 2003. The Incentive Plan is designed to promote individual performance by
relating executive compensation directly to the creation of unitholder wealth.
Under the Incentive Plan, the Committee is authorized to grant awards of
restricted units to executive officers and other key employees. In June 2003,
1.2 million restricted stock units were authorized to be issued to certain key
employees and directors. The Incentive Plan has a ten-year term and restricted
unit awards granted thereunder typically vest over a three-year period.
Outstanding awards have a vesting schedule of 50% vested on June 1, 2004; 25%
vested on June 1, 2005 and 25% vested on June 1, 2006. We have recorded
compensation expense of $2.3 million for the ten months ended December 31, 2003.

      The following table sets forth the Equity Incentive Plan activity for the
ten months ended December 31, 2003:

                                                                          Number
                                                                    of Restricted Units
                                                                    -------------------
                                                                 
Outstanding at March 1, 2003                                                         -
     Granted                                                                   875,000
     Forfeited                                                                 (45,000)
                                                                     -----------------
Outstanding at December 31, 2003                                               830,000
                                                                     =================

Available for grant at December 31, 2003                                       370,000
                                                                     =================

Predecessor Company

      We adopted welfare benefit plans providing medical, dental, life,
accidental death and dismemberment and long-term disability coverage to
employees, with all related premiums and costs not offset by employee
contributions being incurred by us. Total benefit costs for the two months ended
February 28, 2003 were $1.3 million, including $1.1 million in costs
attributable to health and welfare benefit plans. Total benefit costs for 2002
were $8.9 million, including $6.3 million in costs attributable to health and
welfare benefit plans. Total benefit costs for 2001 were $6.7 million, including
$4.6 million in cost attributable to health and welfare benefit plans. Through
December 31, 2002, employees of the Company were covered by various retirement,
stock purchase and other benefit plans of Enron.

      In 2002, we accrued $2.1 million in connection with guaranteed bonuses and
retention payments. In 2001, the Company maintained a variable pay plan based on
our earnings before interest and depreciation and amortization pursuant to which
$3.6 million was recorded.

      As discussed in Note 18, we were a participating employer in the Cash
Balance Plan until the consummation of the Enron Settlement Agreement on
December 31, 2002. See Note 18 for further discussion regarding issues raised by
the PBGC concerning this plan and an agreed stipulation executed between the
PBGC, the Enron Parties and us.

      Prior to December 31, 2002, we provided certain postretirement medical,
life insurance and dental benefits to eligible employees who retired after
January 1, 1994. Benefits were provided under the provisions of contributory
defined dollar benefit plans for eligible employees and their dependents. We
terminated our participation in this plan effective December 31, 2002. These
postretirement benefit costs were accrued over the service lives of employees
expected to be eligible to receive such benefits. Enron retained liability for
former employees of the Company who

                                      F-45

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

retired prior to January 1, 1994. In connection with the termination,
curtailment and settlement gains of $1.5 million were recorded in 2002.

      The following table sets forth information related to changes in the
benefit obligations, changes in plan assets, and components of the expense
recognized related to postretirement benefits provided by the Company (in
thousands):

                                                                          2002
                                                                    ---------------
                                                                 
CHANGE IN BENEFIT OBLIGATION
     Benefit obligation at January 1............................    $         1,103
     Service cost...............................................                144
     Interest cost..............................................                137
     Plan participants' contributions...........................                 76
     Plan amendments............................................                  7
     Actuarial loss (gain)......................................                895
     Effect of curtailments.....................................             (1,815)
     Effect of settlements......................................               (380)
     Benefits paid..............................................               (167)
                                                                    ---------------

     Benefit obligation at December 31..........................    $             -
                                                                    ===============
CHANGE IN PLAN ASSETS
     Fair value of plan assets at January 1.....................    $             -
     Company contributions......................................                 91
     Plan participants' contributions...........................                 76
     Benefits paid..............................................               (167)
                                                                    ---------------

     Fair value of plan assets at December 31...................    $             -
                                                                    ===============

COMPONENTS OF NET PERIODIC BENEFIT COST                  2002              2001
                                                     ------------      ------------
                                                                 
     Service cost...............................     $        144      $         99
     Interest cost..............................              137                73
     Amortization of prior service cost.........               24                24
     Recognized net actuarial gain..............                5               (29)
                                                     ------------      ------------
     Net periodic postretirement benefit cost...              310               167
     Effect of curtailments.....................           (1,160)                -
     Effect of settlements......................             (380)                -
                                                     ------------      ------------
         Total benefit cost (credit)............     $     (1,230)     $        167
                                                     ============      ============

      We provided unemployment, severance and disability-related benefits or
continuation of benefits such as health care and life insurance and other
postemployment benefits. SFAS No. 112 requires the cost of those benefits to be
accrued over the service lives of the employees expected to receive such
benefits. At December 31, 2002, the liability accrued was $1.2 million.

      EOTT Energy Corp. Unit Option Plan. In February 1994, the Board of
Directors adopted the 1994 EOTT Energy Corp. Unit Option Plan (the "Unit Option
Plan"), which was a variable compensatory plan. To date, no compensation expense
has been recognized under the Unit Option Plan. Under the Unit Option Plan,
selected employees were granted options to purchase subordinate units at a price
of $15.00 per unit as determined by the Compensation Committee of the Board of
Directors. Options granted under the Unit Option Plan vested to the employees
over a five-year period and expired on the tenth anniversary of the date of
grant. Under the Restructuring Plan, the Unit Option Plan was terminated on
February 28, 2003.

      Unit Option Plan activity for the years ended December 31, 2001 and 2002,
and the two months ended February 28, 2003, consisted of forfeitures of 5,000
shares, 240,000 shares and 215,000 shares, respectively. No shares were
outstanding or available for grant at February 28, 2003.

                                      F-46

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

      EOTT Energy Corp. Long-Term Incentive Plan. In October 1997, the Board of
Directors adopted the EOTT Energy Corp. Long-Term Incentive Plan ("Plan"), which
was a variable compensatory plan. Under the Plan, selected key employees were
awarded Phantom Appreciation Rights ("PAR"). Each PAR was a right to receive
cash based on our performance prior to the time the PAR was redeemed. Our
performance was measured primarily by calculating the change in the average of
Earnings Before Interest on Debt related to acquisitions, Depreciation and
Amortization ("EBIDA"), for each of the three consecutive fiscal years
immediately preceding the grant date of the PAR and the exercise date of the
PAR. The Plan had a five-year term beginning January 1, 1997, and PAR awards
vested in 25% increments in the four-year period following the grant year. Under
the Restructuring Plan, the Long-Term Incentive Plan was terminated on February
28, 2003.

      The following table sets forth the Long-Term Incentive Plan activity for
the two months ended February 28, 2003 and the years ended December 31, 2002 and
2001:

                                                                    NUMBER OF PARs
                                                   -------------------------------------------------
                                                       TWO MONTHS          YEAR ENDED DECEMBER 31,
                                                          ENDED         ----------------------------
                                                   FEBRUARY 28, 2003        2002             2001
                                                   -----------------    -----------     ------------
                                                                               
Outstanding beginning of period.................            274,394       1,067,375          939,975
     Granted....................................                  -               -          332,000
     Exercised..................................                  -         684,831          106,250
     Forfeited..................................            274,394         108,150           98,350
                                                    ---------------    ------------     ------------
Outstanding at end of period....................                  -         274,394        1,067,375
                                                    ===============    ============     ============
Available for grant at end of period............                  -               -                -
                                                    ===============    ============     ============

      Note: PARs were not available for grant after December 31, 2001 as the
term of the plan expired December 31, 2001.

20.   NEW ACCOUNTING STANDARDS

Accounting Standards Adopted

      In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This statement requires entities to record the fair
value of a liability for legal obligations associated with the retirement
obligations of tangible long-lived assets in the period in which it is incurred.
When the liability is initially recorded, a corresponding increase in the
carrying value of the related long-lived asset would be recorded. Over time,
accretion of the liability is recognized each period, and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss on settlement. We adopted the accounting principle
required by the new statement effective January 1, 2003. Determination of the
fair value of the retirement obligation is based on numerous estimates and
assumptions including estimated future third-party costs, future inflation rates
and the future timing of settlement of the obligations.

      At the time of adoption of the new standard, our long-lived assets
consisted primarily of our crude oil gathering and transmission pipelines and
associated field storage tanks, our liquids processing and handling facilities
at Morgan's Point, our underground storage facility and associated pipeline grid
system, and transportation facilities at Mont Belvieu and our gas processing and
fractionation plant and related storage and distribution facilities on the West
Coast. Since our initial adoption of this standard, a number of these assets
have been sold.

      We identified asset retirement obligations that are within the scope of
the new statement, including contractual obligations included in certain
right-of-way agreements, easements and surface leases associated with our crude
oil

                                      F-47

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

gathering, transportation and storage assets and obligations pertaining to
closure and/or removal of facilities and other assets associated with our
Morgan's Point, Mont Belvieu and West Coast facilities. We have estimated the
fair value of asset retirement obligations based on contractual requirements
where the settlement date is reasonably determinable. We could not make
reasonable estimates of the fair values of certain retirement obligations,
principally those associated with certain right-of-way agreements and easements
for our pipelines, our Morgan's Point, Mont Belvieu and West Coast facilities,
because the settlement dates for the retirement obligations cannot be reasonably
determined. We will record retirement obligations associated with these assets
in the period in which sufficient information exists to reasonably estimate the
settlement dates of the respective retirement obligations.

      As a result of the adoption of SFAS 143 on January 1, 2003, we recorded a
liability of $1.7 million, property, plant and equipment, net of accumulated
depreciation of $0.1 million and a cumulative effect of a change in accounting
principle of $1.6 million. The effect of adoption of the new accounting
principle was not material to the results of operations for the two months ended
February 28, 2003, nor would it have had a material impact on our net income for
the years ended December 31, 2002 or 2001. The asset retirement obligation as of
January 1, 2002 was not material.

      In September 2003, we recorded additional asset retirement obligations
resulting from the planned reduction in our operations at the Morgan's Point
Facility to phase out the production of MTBE. Such obligations have been settled
at December 31, 2003. The following is a roll-forward of our asset retirement
obligations for the two months ended February 28, 2003 and for the ten months
ended December 31,2003:

                                                               SUCCESSOR COMPANY   |   PREDECESSOR COMPANY
                                                               -----------------   |   -------------------
                                                                   TEN MONTHS      |       TWO MONTHS
                                                                     ENDED         |          ENDED
                                                               DECEMBER 31, 2003   |    FEBRUARY 28, 2003
                                                               -----------------   |    -----------------
                                                                             |    
Balance at beginning of period...........................      $           1,678   |    $               -
Additions to liability...................................                  1,525   |                1,675
Accretion expense........................................                     13   |                    3
Liabilities settled......................................                 (1,403)  |                    -
Revisions to estimates...................................                      -   |                    -
                                                               -----------------   |   ------------------
Balance at end of period.................................      $           1,813   |   $            1,678
                                                               =================   |   ==================

      In October 2002, the EITF reached a consensus in EITF Issue 02-03 to
rescind Issue EITF 98-10, and related interpretive guidance, and preclude mark
to market accounting for energy trading contracts that are not derivative
instruments pursuant to SFAS 133. The consensus requires that gains and losses
(realized and unrealized) on all derivative instruments held for trading
purposes be shown net in the income statement, whether or not the instrument is
settled physically. The consensus to rescind EITF Issue 98-10 eliminated our
basis for recognizing physical inventories at fair value. The consensus to
rescind EITF Issue 98-10 was effective for all new contracts entered into (and
physical inventory purchased) after October 25, 2002. For energy trading
contracts and physical inventories that existed on or before October 25, 2002,
that remained at December 31, 2002, the consensus was effective January 1, 2003
and was reported as a cumulative effect of a change in accounting principle. The
cumulative effect of the accounting change on January 1, 2003 was a loss of $2.4
million. With the rescission of EITF Issue 98-10, inventories purchased after
October 25, 2002 have been valued at average cost.

      In January 2003, the FASB issued FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities - an Interpretation of ARB No. 51"
("FIN 46"). FIN 46 is an interpretation of Accounting Research Bulletin 51,
"Consolidated Financial Statements", and addresses consolidation by business
enterprises of variable interest entities ("VIE"). FIN 46 requires an enterprise
to consolidate a VIE if that enterprise has a variable interest that will absorb
a majority of the entity's expected losses if they occur, receive a majority of
the entity's expected residual returns if they occur, or both. This

                                      F-48

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

guidance applies immediately to VIE's created after January 31, 2003, and to
VIE's in which an enterprise obtains an interest after that date. We implemented
FIN 46 effective with the adoption of fresh start reporting on March 1, 2003.
This statement did not have any impact on our financial statements.

      In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instrument and Hedging Activities." The statement amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
133. The new statement is effective for contracts entered into or modified after
June 30, 2003 (with certain exceptions) and for hedging relationships designated
after June 30, 2003. The accounting guidance in the new statement is to be
applied prospectively. We implemented SFAS 149 effective with the adoption of
fresh start reporting on March 1, 2003. This statement did not have any impact
on our financial statements.

      In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This statement
establishes standards for how a company classifies and measures certain
financial instruments with characteristics of both liabilities and equity. This
statement is effective for financial instruments entered into or modified after
May 31, 2003 and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. The statement will be implemented by
reporting the cumulative effect of a change in accounting principle for
financial instruments created before the issuance date of the statement and
still existing at the beginning of the period of adoption. We implemented SFAS
150 effective with the adoption of fresh start reporting on March 1, 2003. The
adoption of this statement did not have any impact on our financial statements.

Accounting Standards Not Yet Adopted

      In December 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003), "Consolidation of Variable Interest Entities - an Interpretation
of ARB No.51" ("FIN 46R"). FIN 46R replaces FIN 46 (discussed above) which we
implemented effective with the adoption of fresh start reporting on March 1,
2003. FIN 46R is required to be implemented by the end of the first reporting
period beginning after December 15, 2003. We plan to adopt FIN 46R effective
January 1, 2004. Adoption of FIN 46R will not have an impact on our financial
statements.

21.   BUSINESS SEGMENT INFORMATION

      We have two reportable segments, which management reviews in order to make
decisions about resources to be allocated and assess performance: North American
Crude Oil and Pipeline Operations. The North American Crude Oil segment
primarily purchases, gathers, transports and markets crude oil. The Pipeline
Operations segment operates approximately 6,900 miles of active common carrier
pipelines in 12 states. Effective December 31, 2003, we sold our Liquids
Operations and therefore the results of operations related to these assets have
been reclassified to discontinued operations for all periods presented herein.
Effective June 30, 2001, we sold our West Coast crude oil gathering and
marketing operations. Effective June 1, 2002, we sold our West Coast refined
products marketing operations. Effective June 25, 2003, we signed a definitive
agreement to sell all of our natural gas liquids assets on the West Coast, which
subsequently closed on October 1, 2003. The results of operations related to
these assets previously included in the West Coast Operations segment have been
reclassified to discontinued operations for all periods presented herein.

      The accounting policies of the segments are the same as those described in
the summary of significant accounting policies as discussed in Note 2. We
evaluate performance based on operating income (loss).

      We account for intersegment revenue for our North American Crude Oil
Operations as if the sales were to third parties, that is, at current market
prices. Intersegment revenues for Pipeline Operations are based on published
pipeline tariffs.

                                      F-49

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (AS RESTATED)

FINANCIAL INFORMATION BY BUSINESS SEGMENT
(IN THOUSANDS)

                                                 NORTH                        CORPORATE
                                               AMERICAN        PIPELINE          AND
                                               CRUDE OIL      OPERATIONS       OTHER (A)      CONSOLIDATED
                                              -----------    -----------     -----------      ------------
                                                                                  
TEN MONTHS ENDED DECEMBER 31, 2003
(SUCCESSOR COMPANY) (RESTATED)

Revenue from external customers............   $   136,268    $    16,765    $          -      $    153,033
Intersegment revenue (b)...................       (17,731)        71,605         (53,874)                -
                                              -----------    -----------     -----------       -----------
  Total operating revenue (c)..............       118,537         88,370         (53,874)          153,033
                                              -----------    -----------     -----------      ------------
Gross profit (loss)........................        13,231         28,698               -            41,929
                                              -----------    -----------    ------------      ------------
Operating income (loss)....................         5,001         30,504         (25,690)            9,815
Other expenses, net .......................             -              -         (32,516)          (32,516)
                                              -----------    -----------     -----------       -----------
Income (loss) from continuing operations...         5,001         30,504         (58,206)          (22,701)
                                              -----------    -----------     -----------       -----------
Long-lived assets of continuing operations.        62,530        199,719             261           262,510
                                              -----------    -----------     -----------       -----------
Total assets...............................       516,849        206,773          15,022           738,644
                                              -----------    -----------    ------------      ------------
Additions to long-lived assets-continuing
operations. ...............................           858          7,265             175             8,298
                                              -----------    -----------    ------------      ------------
Depreciation and amortization..............         2,150         14,989              22            17,161
                                              -----------    -----------     -----------      ------------

- --------------------------------------------------------------------------------

                                                 NORTH                       CORPORATE
                                               AMERICAN        PIPELINE          AND
                                               CRUDE OIL      OPERATIONS       OTHER (A)      CONSOLIDATED
                                              -----------    -----------     -----------      ------------
                                                                                  
TWO MONTHS ENDED FEBRUARY 28, 2003
(PREDECESSOR COMPANY) (RESTATED)
Revenue from external customers.............  $    27,213    $     4,422     $         -      $     31,635
Intersegment revenue (b)....................       (1,768)        11,828         (10,060)                -
                                              -----------    -----------     -----------      ------------
  Total operating revenue (c)...............       25,445         16,250         (10,060)           31,635
                                              -----------    -----------     -----------      ------------
Gross profit (loss) ........................        3,752          6,219               -             9,971
                                              -----------    -----------    ------------      ------------
Operating income (loss).....................        2,365          4,261          (4,012)            2,614
Other income, net ..........................            -              -          (5,489)           (5,489)
Reorganization items, net gain on
  discharge of debt and fresh start
  adjustments (d)...........................            -              -          67,459            67,459
                                              -----------    -----------    ------------      ------------
Income (loss) from continuing operations....        2,365          4,261          57,958            64,584
                                              -----------    -----------    ------------      ------------
Long-lived assets of continuing operations..       75,046        209,476             476           284,998
                                              -----------    -----------    ------------      ------------
Total assets................................      505,965        226,646         123,511           856,122
                                              -----------    -----------    ------------      ------------
Additions to long-lived assets-continuing
operations..................................            8            108               -               116
                                              -----------    -----------    ------------      ------------
Depreciation and amortization...............          837          3,286             519             4,642
                                              -----------    -----------     -----------      ------------

                                      F-50

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (AS RESTATED)

                                                   NORTH                         CORPORATE
                                                  AMERICAN        PIPELINE          AND
                                                 CRUDE OIL       OPERATIONS       OTHER (A)     CONSOLIDATED
                                                ------------    ------------    ------------    ------------
                                                                                    
YEAR ENDED DECEMBER 31, 2002
 (PREDECESSOR COMPANY) (RESTATED)
Revenue from external customers .............   $    154,608    $     28,324    $          -    $    182,932
Intersegment revenue (b) ....................        (11,320)         79,008         (67,688)              -
                                                ------------    ------------    ------------    ------------
   Total operating revenue (c) ..............        143,288         107,332         (67,688)        182,932
                                                ------------    ------------    ------------    ------------
Gross profits ...............................          3,396          33,634               -          37,030
                                                ------------    ------------    ------------    ------------
Operating income (loss) .....................        (13,861)         14,797         (28,531)        (27,595)
Other expense ...............................              -               -         (45,793)        (45,793)
Reorganization items (d) ....................              -               -          32,847          32,847
                                                ------------    ------------    ------------    ------------
Income (loss) from continuing operations
 before cumulative effect of accounting
 changes (d).................................        (13,861)         14,797         (41,477)        (40,541)
                                                ------------    ------------    ------------    ------------
Long-lived assets of continuing
operations ..................................         71,282         261,975           7,802         341,059
                                                ------------    ------------    ------------    ------------
Total assets ................................        475,889         285,990         110,360         872,239
                                                ------------    ------------    ------------    ------------
Additions to long-lived assets-continuing
 operations..................................          1,158          15,494             136          16,788
                                                ------------    ------------    ------------    ------------
Depreciation and amortization ...............          5,740          20,881           3,267          29,888
                                                ------------    ------------    ------------    ------------

- --------------------------------------------------------------------------------

                                                   NORTH                         CORPORATE
                                                  AMERICAN        PIPELINE          AND
                                                 CRUDE OIL       OPERATIONS       OTHER (A)     CONSOLIDATED
                                                ------------    ------------    ------------    ------------
                                                                                    
YEAR ENDED DECEMBER 31, 2001
 (PREDECESSOR COMPANY) (RESTATED)
Revenue from external customers .............   $    226,564    $     24,007    $          -    $    250,571
Intersegment revenue (b) ....................        (15,673)        103,515         (87,842)              -
                                                ------------    ------------    ------------    ------------
   Total operating revenue (c) ..............        210,891         127,522         (87,842)        250,571
                                                ------------    ------------    ------------    ------------
Gross profits ...............................         25,213          56,438               -          81,651
                                                ------------    ------------    ------------    ------------
Operating income (loss) .....................          9,742          49,715         (24,848)         34,609
Other expense ...............................              -               -         (34,561)        (34,561)
                                                ------------    ------------    ------------    ------------
Income (loss) from continuing
 operations before cumulative effect of
 accounting changes (d) .....................          9,742          49,715         (59,409)             48
                                                ------------    ------------    ------------    ------------
Long-lived assets of continuing operations ..         75,703         266,806          11,544         354,053
                                                ------------    ------------    ------------    ------------
Total assets ................................        629,199         295,793         180,506       1,105,498
                                                ------------    ------------    ------------    ------------
Additions to long-lived assets-continuing
 operations .................................          3,844          16,500           2,140          22,484
                                                ------------    ------------    ------------    ------------
Depreciation and amortization ...............          6,010          21,792           3,083          30,885
                                                ------------    ------------    ------------    ------------

- -----------------
(a)   Corporate and Other also includes intersegment eliminations.

(b)   Intersegment sales for North American Crude Oil are made at prices
      comparable to those received from external customers. Intersegment sales
      for Pipeline Operations are based on published pipeline tariffs.

(c)   In connection with the adoption of EITF Issue 02-03, we have presented all
      purchase and sale transactions related to our crude oil marketing and
      trading activities on a net basis.

(d)   The two months ended February 28, 2003 include a gain from reorganization
      items of $7.3 million, a gain on discharge of debt of $131.6 million and a
      loss related to fresh start adjustments of $56.8 million. See Notes 5 and
      6. 2002 includes a net gain from reorganization items of $32.8 million

                                      F-51

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (AS RESTATED)

22.   QUARTERLY FINANCIAL DATA (UNAUDITED)
      (In Thousands, Except Per Unit Amounts)

      As discussed in Note 10, the following quarterly financial data has been
restated.

                                                  FIRST         SECOND        THIRD        FOURTH
            SUCCESSOR COMPANY                   QUARTER(1)     QUARTER       QUARTER       QUARTER        TOTAL
            -----------------                   ----------    ----------    ----------    ----------    ----------
                                                                                         
2003 (RESTATED)
Operating revenue ...........................   $   17,733    $   44,477    $   44,759    $   46,064    $  153,033
Gross profit ................................        8,068        15,804         7,316        10,741        41,929
Operating income (loss) .....................        4,320         2,972        (4,609)        7,132         9,815
Net income (loss) from continuing operations.        1,043        (6,704)      (14,163)       (2,877)      (22,701)
Basic net income (loss) per Unit ............         0.09         (0.54)        (1.15)        (0.23)        (1.84)
Diluted net income (loss) per Unit ..........         0.09         (0.54)        (1.15)        (0.23)        (1.84)
Cash distributions per Unit .................            -             -             -             -             -

                                                  FIRST         SECOND        THIRD         FOURTH
                                                QUARTER(1)     QUARTER       QUARTER        QUARTER       TOTAL
                                                ----------    ----------    ----------    ----------    ----------
                                                                                         
2003 (REPORTED)
Operating revenue ...........................   $   17,315    $   43,956    $   45,341    $   46,064    $  152,676
Gross profit ................................        8,077        15,732         7,792         9,839        41,440
Operating income (loss) .....................        4,329         2,900        (4,133)        6,230         9,326
Net income (loss) from continuing operations.        1,052        (6,776)      (13,687)       (3,779)      (23,190)
Basic net income (loss) per Unit ............         0.09         (0.55)        (1.11)        (0.31)        (1.88)
Diluted net income (loss) per Unit ..........         0.09         (0.55)        (1.11)        (0.31)        (1.88)
Cash distributions per Unit .................            -             -             -             -             -

                                                  FIRST         SECOND         THIRD        FOURTH
           PREDECESSOR COMPANY                  QUARTER(2)      QUARTER       QUARTER       QUARTER       TOTAL
           -------------------                  ----------    ----------    ----------    ----------    ----------
                                                                                         
2003 (RESTATED)
Operating revenue ...........................   $   31,635    $        -    $        -    $        -    $   31,635
Gross profit ................................        9,971             -             -             -         9,971
Operating income ............................        2,614             -             -             -         2,614
Net income (loss) from continuing
 operations(3) ..............................       64,584             -             -             -        64,584
Basic net income (loss) per Unit (4)
   Common ...................................         0.11             -             -             -          0.11
   Subordinated .............................            -             -             -             -             -
Diluted net income (loss) per Unit ..........         0.08             -             -             -          0.08
Cash distributions per Common Unit ..........            -             -             -             -             -

                                                  FIRST         SECOND         THIRD        FOURTH
                                                QUARTER(2)      QUARTER       QUARTER       QUARTER       TOTAL
                                                ----------    ----------    ----------    ----------    ----------
                                                                                         
2003 (REPORTED)
Operating revenue ...........................   $   31,979    $        -    $        -    $        -    $   31,979
Gross profit ................................        9,681             -             -             -         9,681
Operating income ............................        2,324             -             -             -         2,324
Net income (loss) from continuing
 operations(3) ..............................       64,294             -             -             -        64,294
Basic net income (loss) per Unit (4)
   Common ...................................         0.16             -             -             -          0.16
   Subordinated .............................            -             -             -             -             -
Diluted net income (loss) per Unit ..........         0.11             -             -             -          0.11
Cash distributions per Common Unit ..........            -             -             -             -             -

                                      F-52

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (AS RESTATED)

                                                  FIRST         SECOND        THIRD         FOURTH
                                                 QUARTER        QUARTER      QUARTER        QUARTER       TOTAL
                                                ----------    ----------    ----------    ----------    ----------
                                                                                         
2002 (RESTATED)
Operating revenue ...........................   $   54,960    $   47,630    $   42,776   $   37,566    $  182,932
Gross profit ................................       16,993        12,515         4,321         3,201        37,030
Operating income (loss) .....................        5,293        (1,350)      (12,327)      (19,211)      (27,595)
Net income (loss) from continuing
 operations (3) .............................       (5,856)      (13,579)      (25,372)        4,266       (40,541)
Basic net income (loss) per Unit (4)
   Common ...................................        (0.06)            -             -             -         (0.06)
   Subordinated .............................        (0.51)        (1.42)        (1.30)            -         (3.23)
Diluted net income (loss) per Unit ..........        (0.20)        (0.46)        (0.44)            -         (1.10)
Cash distributions per Common Unit (5) ......         0.25             -             -             -          0.25

                                                  FIRST         SECOND        THIRD         FOURTH
                                                 QUARTER        QUARTER      QUARTER        QUARTER       TOTAL
                                                ----------    ----------    ----------    ----------    ----------
                                                                                         
2002 (REPORTED)
Operating revenue ...........................   $   54,960    $   47,630    $   42,814    $   37,538    $  182,942
Gross profit ................................       17,131        12,484         3,579         4,364        37,558
Operating income (loss) .....................        5,431        (1,381)      (13,069)      (18,048)      (27,067)
Net income (loss) from continuing
 operations (3) .............................       (5,718)      (13,610)      (26,114)        5,429       (40,013)
Basic net income (loss) per Unit (4)
   Common ...................................        (0.05)            -             -             -         (0.05)
   Subordinated .............................        (0.49)        (1.43)        (1.32)            -         (3.24)
Diluted net income (loss) per Unit ..........        (0.20)        (0.46)        (0.44)            -         (1.10)
Cash distributions per Common Unit (5) ......         0.25             -             -             -          0.25

(1)   For the period March 1, 2003 through March 31, 2003.

(2)   For the period January 1, 2003 through February 28, 2003.

(3)   The two months ended February 28, 2003 include a $7.3 million gain on
      reorganization items, a $131.6 million gain on the discharge of debt and a
      $56.8 million loss from fresh start adjustments. Fourth quarter 2002
      amounts include a net gain on reorganization items of $32.8 million.

(4)   See Note 12 for discussion regarding the allocation of net income (loss)
      to unitholders.

(5)   Cash distributions are shown in the quarter paid and are based on the
      prior quarter's earnings.

                                      F-53

                                 LINK ENERGY LLC
                          (A LIMITED LIABILITY COMPANY)
                                   SCHEDULE II
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
             FOR THE TEN MONTHS ENDED DECEMBER 31, 2003, TWO MONTHS
                          ENDED FEBRUARY 28, 2003, AND
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                                 (In Thousands)

                                           Balance at    Charges to                  Balance at
                                            Beginning    Costs and     Deductions       End
                                           of Period      Expenses     and Other     of Period
                                           ----------    ----------    ----------    ----------
                                                                         
         Successor Company

Ten Months Ended December 31, 2003
     Allowance for Doubtful Accounts ...   $    1,210    $        -    $        -    $    1,210
     Litigation Provisions .............   $    1,605    $        -    $   (1,146)   $      459
     Safety and Environmental ..........   $   13,440    $    9,107    $  (10,331)   $   12,216
- -----------------------------------------------------------------------------------------------
         Predecessor Company

Two Months Ended February 28, 2003
     Allowance for Doubtful Accounts ...   $    1,210    $        -    $        -    $    1,210
     Litigation Provisions .............   $    8,376    $        -    $   (6,771)   $    1,605
     Safety and Environmental ..........   $   13,440    $    1,979    $   (1,979)   $   13,440

Year ended December 31, 2002
     Allowance for Doubtful Accounts ...   $    1,225    $        -    $      (15)   $    1,210
     Litigation Provisions .............   $      315    $    8,163    $     (102)   $    8,376
     Safety and Environmental ..........   $   12,075    $   14,819    $  (13,454)   $   13,440

Year ended December 31, 2001
     Allowance for Doubtful Accounts ...   $    1,827    $        -    $     (602)   $    1,225
     Litigation Provisions .............   $    1,000    $      315    $   (1,000)   $      315
     Safety and Environmental ..........   $    6,412    $   25,372    $  (19,709)   $   12,075

                                       S-1

 
EXHIBIT 99.3 
PLAINS ALL AMERICAN PIPELINE, L.P. 
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 
As of and for the Three Months Ended March 31, 2004 and for the Year Ended December 31, 2003 

PLAINS ALL AMERICAN PIPELINE, L.P. 
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 
      Plains All American Pipeline, L.P. (“PAA”) is a publicly traded Delaware limited partnership engaged in interstate and intrastate crude oil transportation, and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products. The following unaudited pro forma financial statements are presented to give effect to the transaction described below: 
		
 	      The acquisition of the North American crude oil and pipeline operations (which accounts for substantially all of the historical consolidated operations) of Link Energy LLC (“Link Energy” and the “Link Energy acquisition”). The acquisition price of approximately $331 million includes the assumption of liabilities and net working capital items and third-party transaction, integration and other costs. The acquisition closed and was effective on April 1, 2004 and will be accounted for using the purchase method of accounting. 	
      The unaudited pro forma combined balance sheet as of March 31, 2004 and the unaudited pro forma combined statement of operations for the three months ended March 31, 2004 and the year ended December 31, 2003 are based upon the following, respectively: 
		
 	      (1) The historical balance sheet of PAA at March 31, 2004 and of Link Energy at March 31, 2004. 	
 		
 	      (2) The historical consolidated statements of operations of PAA for the three months ended March 31, 2004 and the year ended December 31, 2003 and the historical consolidated statements of operations of Link Energy for the same periods. 	
      The unaudited pro forma combined financial statements are not necessarily indicative of the results of the actual or future operations or financial condition that would have been achieved had the transactions occurred at the dates assumed (as noted below). The unaudited pro forma combined financial statements should be read in conjunction with the notes thereto, the historical unaudited financial statements of PAA for the three months ended March 31, 2004 and the audited financial statements of PAA for the year ended December 31, 2003, as well as those of Link Energy for the same periods. 
      The following unaudited pro forma combined statements of operations for the three months ended March 31, 2004 and the year ended December 31, 2003 have been prepared as if the transaction described above had taken place on January 1, 2003. The unaudited pro forma combined balance sheet at March 31, 2004 assumes the transaction was consummated on that date. 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES 
UNAUDITED PRO FORMA COMBINED BALANCE SHEET 
March 31, 2004 
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
						Pro Forma			
		Plains		Link		Link Energy		Plains	
		All American		Energy		Acquisition		All American	
		Historical		Historical		Adjustments		Pro Forma	

		(In thousands)	
CURRENT ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents 	 	$	2,037	 	 	$	2,929	 	 	$	(2,929	)(a)	 	$	2,037	 	
 	 	 	 	 	 	 	 	 	 	 	273,500	(c)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(273,500	)(d)	 	 	 	 	
Restricted cash 	 	 	—	 	 	 	3,581	 	 	 	(3,581	)(a)	 	 	—	 	
Accounts receivable, net 	 	 	554,405	 	 	 	406,512	 	 	 	(612	)(a)	 	 	958,233	 	
 	 	 	 	 	 	 	 	 	 	 	(2,072	)(e)	 	 	 	 	
Inventory 	 	 	73,843	 	 	 	7,838	 	 	 	800	(d)	 	 	82,481	 	
Other current assets 	 	 	23,471	 	 	 	6,682	 	 	 	(4,859	)(a)	 	 	25,294	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total current assets 	 	 	653,756	 	 	 	427,542	 	 	 	(13,253	)	 	 	1,068,045	 	
PROPERTY AND EQUIPMENT, net	 	 	1,308,712	 	 	 	256,366	 	 	 	(31,741	)(b)	 	 	1,570,553	 	
 	 	 	 	 	 	 	 	 	 	 	37,216	(d)	 	 	 	 	
OTHER ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pipeline linefill 	 	 	123,266	 	 	 	—	 	 	 	37,209	(b)	 	 	177,731	 	
 	 	 	 	 	 	 	 	 	 	 	17,256	(d)	 	 	 	 	
Other, net 	 	 	79,339	 	 	 	5,907	 	 	 	(439	)(a)	 	 	85,454	 	
 	 	 	 	 	 	 	 	 	 	 	(5,468	)(b)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	6,115	(d)	 	 	 	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total assets 	 	$	2,165,073	 	 	$	689,815	 	 	$	46,895	 	 	$	2,901,783	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
CURRENT LIABILITIES	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accrued liabilities 	 	$	645,322	 	 	$	435,562	 	 	$	(6,167	)(a)	 	$	1,089,945	 	
 	 	 	 	 	 	 	 	 	 	 	17,300	(d)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(2,072	)(e)	 	 	 	 	
Due to related parties 	 	 	26,539	 	 	 	—	 	 	 	—	 	 	 	26,539	 	
Short-term debt 	 	 	14,689	 	 	 	137,360	 	 	 	(137,360	)(a)	 	 	14,689	 	
Other current liabilities 	 	 	39,726	 	 	 	24,668	 	 	 	(17,803	)(a)	 	 	47,305	 	
 	 	 	 	 	 	 	 	 	 	 	714	(d)	 	 	 	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total current liabilities 	 	 	726,276	 	 	 	597,590	 	 	 	(145,388	)	 	 	1,178,478	 	
LONG-TERM LIABILITIES	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt under credit facilities 	 	 	238,737	 	 	 	 	 	 	 	273,500	(c)	 	 	512,237	 	
Senior notes 	 	 	449,017	 	 	 	110,052	 	 	 	(110,052	)(a)	 	 	449,017	 	
Other long-term liabilities and deferred credits 	 	 	14,865	 	 	 	15,607	 	 	 	(6,151	)(a)	 	 	25,873	 	
 	 	 	 	 	 	 	 	 	 	 	1,552	(d)	 	 	 	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total liabilities 	 	 	1,428,895	 	 	 	723,249	 	 	 	13,461	 	 	 	2,165,605	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
COMMITMENTS AND CONTINGENCIES	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
PARTNERS’ CAPITAL	 	 	736,178	 	 	 	(33,434	)	 	 	33,434	(a)	 	 	736,178	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total Liabilities and Partners’ Capital	 	$	2,165,073	 	 	$	689,815	 	 	$	46,895	 	 	$	2,901,783	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
See notes to unaudited pro forma combined financial statements 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES 
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS 
For the Three Months Ended March 31, 2004 
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
						Pro Forma			
		Plains		Link		Link Energy		Plains	
		All American		Energy		Acquisition		All American	
		Historical		Historical		Adjustments		Pro Forma	

		(In thousands, except per unit data)	
REVENUES	 	$	3,804,644	 	 	$	40,682	 	 	$	(465	)(f)	 	$	3,844,861	 	
COSTS AND EXPENSES	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchases and related costs 	 	 	3,693,521	 	 	 	8,081	 	 	 	(465	)(f)	 	 	3,701,137	 	
Field Operating costs (excluding LTIP charge) 	 	 	37,816	 	 	 	20,725	 	 	 	—	 	 	 	58,541	 	
LTIP charge — field operating costs 	 	 	567	 	 	 	—	 	 	 	—	 	 	 	567	 	
General and administrative expenses (excluding LTIP charge) 	 	 	15,478	 	 	 	18,514	 	 	 	—	 	 	 	33,992	 	
LTIP charge — general and administrative 	 	 	3,661	 	 	 	—	 	 	 	—	 	 	 	3,661	 	
Depreciation and amortization 	 	 	13,120	 	 	 	5,060	 	 	 	(5,060	)(g)	 	 	15,028	 	
 	 	 	 	 	 	 	 	 	 	 	1,908	(h)	 	 	 	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total costs and expenses 	 	 	3,764,163	 	 	 	52,380	 	 	 	(3,617	)	 	 	3,812,926	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
Other, net 	 	 	—	 	 	 	(20	)	 	 	—	 	 	 	(20	)	
Gains on sales of assets 	 	 	—	 	 	 	730	(j)	 	 	—	 	 	 	730	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
OPERATING INCOME	 	 	40,481	 	 	 	(10,988	)	 	 	3,152	 	 	 	32,645	 	
OTHER INCOME/(EXPENSE)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense 	 	 	(9,532	)	 	 	(11,531	)	 	 	(2,120	)(i)	 	 	(23,183	)	
Interest and other income (expense), net 	 	 	41	 	 	 	(24	)	 	 	—	 	 	 	17	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	 	$	30,990	 	 	$	(22,543	)	 	$	1,032	 	 	$	9,479	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	
NET INCOME FROM CONTINUING OPERATIONS — LIMITED PARTNERS	 	$	28,759	 	 	 	 	 	 	 	 	 	 	$	7,678	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 		 	
NET INCOME FROM CONTINUING OPERATIONS — GENERAL PARTNER	 	$	2,231	 	 	 	 	 	 	 	 	 	 	$	1,801	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 		 	
BASIC NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT	 	$	0.49	 	 	 	 	 	 	 	 	 	 	$	0.13	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 		 	
DILUTED NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT	 	$	0.49	 	 	 	 	 	 	 	 	 	 	$	0.13	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 		 	
BASIC WEIGHTED AVERAGE UNITS OUTSTANDING	 	 	58,414	 	 	 	 	 	 	 	 	 	 	 	58,414	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 		 	
DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING	 	 	59,017	 	 	 	 	 	 	 	 	 	 	 	59,017	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 		 	
See notes to unaudited pro forma combined financial statements 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES 
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS 
For the Twelve Months Ended December 31, 2003 

				Link Energy Historical					
									
				Successor		Predecessor					
				Company		Company					
											
				Ten Months		Two Months		Pro Forma			
		Plains		Ended		Ended		Link Energy		Plains	
		All American		December 31,		February 28,		Acquisition		All American	
		Historical		2003		2003		Adjustments		Pro Forma	

		(In thousands, except per unit data)	
REVENUES	 	$	12,589,849	 	 	$	153,033	 	 	$	31,635	 	 	$	(2,828	)(f)	 	$	12,771,689	 	
COSTS AND EXPENSES	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchases and related costs 	 	 	12,232,536	 	 	 	23,863	 	 	 	4,521	 	 	 	(2,828	)(f)	 	 	12,258,092	 	
Field Operating costs (excluding LTIP charge) 	 	 	134,177	 	 	 	70,102	 	 	 	13,020	 	 	 	—	 	 	 	217,299	 	
LTIP charge — field operating costs 	 	 	5,727	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5,727	 	
General and administrative expenses (excluding LTIP charge) 	 	 	49,969	 	 	 	45,959	 	 	 	6,846	 	 	 	—	 	 	 	102,774	 	
LTIP charge — general and administrative 	 	 	23,063	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	23,063	 	
Depreciation and amortization 	 	 	46,821	 	 	 	17,161	 	 	 	4,642	 	 	 	(21,803	)(g)	 	 	54,452	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7,631	(h)	 	 	 	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	 	 		 	
 	Total costs and expenses 	 	 	12,492,293	 	 	 	157,085	 	 	 	29,029	 	 	 	(17,000	)	 	 	12,661,407	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	 	 		 	
Other, net 	 	 	—	 	 	 	1,982	 	 	 	8	 	 	 	—	 	 	 	1,990	 	
Gains on sales of assets 	 	 	648	 	 	 	11,885	(j)	 	 	—	 	 	 	(11,700	)(k)	 	 	833	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	 	 		 	
OPERATING INCOME	 	 	98,204	 	 	 	9,815	 	 	 	2,614	 	 	 	2,472	 	 	 	113,105	 	
OTHER INCOME/(EXPENSE)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense 	 	 	(35,226	)	 	 	(32,708	)	 	 	(5,645	)	 	 	(8,479	)(i)	 	 	(82,058	)	
Interest and other income (expense), net 	 	 	(3,530	)	 	 	192	 	 	 	156	 	 	 	—	 	 	 	(3,182	)	
 	 	 		 	 	 		 	 	 		 	 	 		 	 	 		 	
Income (Loss) from Continuing Operations Before Reorganization Items, Net Gain on Discharge of Debt and Fresh Start Adjustments 	 	 	59,448	 	 	 	(22,701	)	 	 	(2,875	)	 	 	(6,007	)	 	 	27,865	 	
Reorganization Items 	 	 	—	 	 	 	—	 	 	 	(7,330	)	 	 	—	 	 	 	(7,330	)	
Net Gain on Discharge of Debt 	 	 	—	 	 	 	—	 	 	 	131,560	 	 	 	—	 	 	 	131,560	 	
Fresh Start Adjustments 	 	 	—	 	 	 	—	 	 	 	(56,771	)	 	 	—	 	 	 	(56,771	)	
 	 	 		 	 	 		 	 	 		 	 	 		 	 	 		 	
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	 	$	59,448	 	 	$	(22,701	)	 	$	64,584	 	 	$	(6,007	)	 	$	95,324	 	
 	 	 		 	 	 		 	 	 		 	 	 		 	 	 		 	
NET INCOME FROM CONTINUING OPERATIONS — LIMITED PARTNERS	 	$	53,473	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	88,631	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
NET INCOME FROM CONTINUING OPERATIONS — GENERAL PARTNER	 	$	5,975	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	6,693	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
BASIC NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT	 	$	1.01	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1.68	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
DILUTED NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT	 	$	1.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1.66	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
BASIC WEIGHTED AVERAGE UNITS OUTSTANDING	 	 	52,743	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	52,743	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING	 	 	53,400	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	53,400	 	
 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
See notes to unaudited pro forma combined financial statements 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES 
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 

Note 1 —	Pro Forma Adjustments	
      The pro forma adjustments are as follows: 

a. 		Reflects the elimination of assets and liabilities of Link Energy that were not acquired, as described in the purchase and sale agreement. This relates primarily to corporate debt and equity and the assets and liabilities of the discontinued operations. 	
 		
b. 		Reflects the reclass of crude oil linefill to a separate balance sheet line to be consistent with PAA historical presentation. 	
 		
c. 		Reflects borrowings under our revolving credit facilities to fund the Link Energy acquisition at closing. 	
 		
d. 		Records the cash paid, additional obligations assumed and adjustments to fair value of the assets purchased and liabilities assumed in the Link Energy acquisition based on the purchase method of accounting. The purchase price consists of approximately $331 million including the assumption of certain liabilities, net working capital and transaction and closing costs (See Note 2). 	
 		
e. 		Reflects the elimination of accounts receivable and accounts payable balances related to transactions between PAA and Link Energy. 	
 		
f. 		Reflects the elimination of purchases and sales related to transactions between PAA and Link Energy. 	
 		
g. 		To reverse historical depreciation as recorded by Link Energy. 	
 		
h. 		Reflects depreciation on the acquired assets based on the straight-line method of depreciation over average useful lives ranging from 5 to 50 years. 	
 		
i. 		Reflects the adjustment to interest expense for the increase in long-term debt of $273.5 million from a draw down on our revolving credit facilities using an average interest rate of 3.1% for the periods ended December 31, 2003 and March 31, 2004. The impact to interest expense of a 1/8% change in interest rates would be approximately $0.3 million per year. 	
 		
j. 		Gain on sale of assets has been reclassified from Other (Income) Expense as shown in Link Energy’s historical financial statements to conform to PAA’s presentation. 	
 		
k. 		Reflects the elimination of the gain on sale of asset in October 2003 from Link Energy to PAA, which is included in Link Energy’s historical financial statements. 	

Note 2 —	Purchase Price Allocation	
      The Link acquisition presented in these pro forma statements has been accounted for using the purchase method of accounting and the purchase price has been allocated in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” The acquisition consists of the North American crude oil and pipeline operations (which accounts for substantially all of the historical consolidated operations) of Link Energy. The purchase price of approximately $331 million includes (i) cash paid of approximately $273.5 million, (ii) assumption of $50.0 million of liabilities and net working capital items and (iii) third party transaction and closing costs of approximately $7.5 million. The acquisition closed and was effective on April 1, 2004. The total purchase price and the related allocation are preliminary as the amount of inventory acquired, transaction costs, certain working capital balances and 

other obligations are based on estimates at this time. The purchase price allocation is set forth in the table below (in thousands): 
 	 	 	 	 	 	 	 	 	 	 	 	 	
Description		Fair Value		Book Value(1)		Adjustment	
							
Accounts receivable 	 	$	405,900	 	 	$	405,900	 	 	$	—	 	
Inventory 	 	 	8,638	 	 	 	7,838	 	 	 	800	(2)	
Other current assets 	 	 	1,823	 	 	 	1,823	 	 	 	—	 	
Property and equipment 	 	 	261,841	 	 	 	224,625	 	 	 	37,216	(2)	
Crude oil linefill 	 	 	54,465	 	 	 	37,209	 	 	 	17,256	(2)	
Goodwill 	 	 	5,845	 	 	 	—	 	 	 	5,845	(2)	
Other 	 	 	270	 	 	 	—	 	 	 	270	(2)	
 	 	 		 	 	 		 	 	 		 	
Assets acquired	 	$	738,782	 	 	$	677,395	 	 	$	61,387	 	
 	 	 		 	 	 		 	 	 		 	
Accounts payable 	 	$	(446,695	)	 	$	(429,395	)	 	$	(17,300	)(3)	
Other current liabilities 	 	 	(7,579	)	 	 	(6,865	)	 	 	(714	)(2)	
Other long-term liabilities and deferred credits 	 	 	(11,008	)	 	 	(9,456	)	 	 	(1,552	)(2)	
 	 	 		 	 	 		 	 	 		 	
Liabilities assumed	 	$	(465,282	)	 	$	(445,716	)	 	$	(19,566	)	
 	 	 		 	 	 		 	 	 		 	
Net cash paid	 	$	273,500	 	 	 	 	 	 	 	 	 	

		
(1) 	Book value subsequent to pro forma adjustments a and b as described in Note 1. 	
 		
(2) 	Adjusted to fair value of assets acquired and liabilities assumed based on Statement of Financial Accounting Standards (“SFAS”) No. 141 “Business Combinations.” 	
 		
(3) 	Accrued transaction costs recorded in accordance with SFAS No. 141 and acquisition related liabilities primarily associated with involuntary employee termination costs and exit costs for certain leases recorded in accordance with Emerging Issues Task Force Issue No. 95-03 “Recognition of Liabilities in Connection with a Purchase Business Combination.”