<SUBMISSION>
<ACCESSION-NUMBER>0000950134-03-004294
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>9
<PERIOD>20021231
<FILING-DATE>20030321
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>WILLIAMS ENERGY PARTNERS L P
<CIK>0001126975
<ASSIGNED-SIC>4610
<IRS-NUMBER>731599053
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-K
<ACT>34
<FILE-NUMBER>001-16335
<FILM-NUMBER>03611460
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE WILLIAMS CENTER
<CITY>TULSA
<STATE>OK
<ZIP>74172
<PHONE>9185732000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE WILLIAMS CENTER
<CITY>TULSA
<STATE>OK
<ZIP>74171
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>d04048e10vk.htm
<DESCRIPTION>FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
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</DIV>

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<HR size="1" width="100%" align="left" noshade>
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<P align="center">
<B><FONT size="4">UNITED STATES SECURITIES AND EXCHANGE
COMMISSION</FONT></B>

<DIV align="center">
<B>Washington,&nbsp;D.C. 20549</B>
</DIV>

<P align="center">
<B><FONT size="5">Form&nbsp;10-K</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Mark One)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2"><FONT face="wingdings">&#254;</FONT>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">ANNUAL REPORT PURSUANT TO SECTION&nbsp;13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">For the fiscal year ended December&nbsp;31,
    2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <B><FONT size="2">or</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">TRANSITION REPORT PURSUANT TO SECTION&nbsp;13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Commission file number 1-16335</FONT></B>

<P align="center">
<B><FONT size="6">Williams Energy Partners L.P.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Delaware</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">73-1599053</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or other jurisdiction of incorporation
    or organization)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer Identification No.)</FONT></I></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">WEG GP LLC</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">74121-2186</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">P.O. Box&nbsp;22186, Tulsa, Oklahoma</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(Zip Code)</FONT></I></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(Address of principal executive
    offices)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Registrant&#146;s telephone number, including
area code:</FONT></B>

<DIV align="center">
<B><FONT size="2">(877)&nbsp;934-6571</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Securities registered pursuant to
Section&nbsp;12(b) of the Act:</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Name of Each Exchange on Which Registered</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common Units representing limited
    partnership&nbsp;interests
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">New York Stock Exchange
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Securities registered Pursuant to
Section&nbsp;12(g) of the Act:</FONT></B>

<DIV align="center">
<B><FONT size="2">None</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark whether the registrant
(1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12&nbsp;months (or for such shorter period
that the registrant was required to file such reports), and
(2)&nbsp;has been subject to such filing requirements for the
past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark if disclosure of
delinquent filers pursuant to Item&nbsp;405 of
Regulation&nbsp;S-K is not contained herein, and will not be
contained, to the best of registrant&#146;s knowledge, in
definitive proxy or information statements incorporated by
reference in Part&nbsp;III of this Form&nbsp;10-K or any
amendment to this
Form&nbsp;10-K.&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark whether the registrant is
an accelerated filer (as defined in Exchange Act
Rule&nbsp;12b-2).&nbsp;<FONT face="wingdings">&#254;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate market value of the
registrant&#146;s voting and non-voting common units held by
non-affiliates computed by reference to the price at which the
units last sold as of June&nbsp;28, 2002, was
$420.7&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of February&nbsp;28, 2003, there were
outstanding 13,679,694 common units, 7,830,924 Class&nbsp;B
common units and 5,679,694 subordinated units.
</FONT>

<P align="center">
<B><FONT size="2">DOCUMENTS INCORPORATED BY REFERENCE</FONT></B>

<DIV align="center">
<FONT size="2">None
</FONT>
</DIV>

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<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
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<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
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	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PART I</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">Item 1. Business</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">WILLIAMS PIPE LINE SYSTEM</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">PETROLEUM PRODUCTS TERMINALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">AMMONIA PIPELINE SYSTEM</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">Item 2. Properties</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Item 3. Legal Proceedings</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item 4. Submission of Matters to a Vote of Security Holders</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009">Item 5. Market For Registrant&#146;s Common Equity and Related Stockholder Matters</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">Item 6.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">SELECTED FINANCIAL AND OPERATING DATA (In thousands, except operating statistics and per unit amounts)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#012">Item 7.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#014">Item 7A. Quantitative and Qualitative Disclosures about Market Risk</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015">Item 8. Financial Statements and Supplementary Data.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">REPORT OF INDEPENDENT AUDITORS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#017">Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure</A></TD></TR>
<TR><TD colspan="9"><A HREF="#018">PART III</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#019">Item 10. Partnership Management</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#020">Item 11. Executive Compensation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#021">Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#022">Item 13. Certain Relationships and Related Transactions</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#023">Item 14. Controls and Procedures</A></TD></TR>
<TR><TD colspan="9"><A HREF="#024">PART IV</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#025">Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K</A></TD></TR>
<TR><TD colspan="9"><A HREF="#026">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#027">CERTIFICATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv3wxcy.txt">EX-3.(C) Certificate of Limited Partnership</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv3wxhy.txt">EX-3.(H) Amendment to Limited Liability Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv10wxgy.txt">EX-10.(G) Amended Long-Term Incentive Plan</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv10wxny.txt">EX-10.(N) Credit Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv21.txt">EX-21 Subsidiaries</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv23.txt">EX-23 Consent of Independent Auditors</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv24.txt">EX-24 Power of Attorney</A></TD></TR>
<TR><TD colspan="9"><A HREF="d04048exv99.txt">EX-99 WEG GP LLC Consolidated Balance Sheet</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>

<P align="center">
<B><FONT size="2">FORM&nbsp;10-K</FONT></B>

<!-- link1 "PART I" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">PART&nbsp;I</FONT></B>

<!-- link2 "Item 1. Business" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Business</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General
Development of Business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were formed as a limited partnership under the
laws of the State of Delaware in August 2000. The principal
executive offices of WEG GP LLC, our General Partner, are
located at One Williams Center, Tulsa, Oklahoma 74172 (telephone
(877)&nbsp;934-6571).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;11, 2002, we acquired all of the
membership interests of Williams Pipe Line Company, LLC
(&#147;Williams Pipe Line&#148;) from a wholly owned subsidiary
of The Williams Companies, Inc. (&#147;Williams&#148;) for
approximately $1.0&nbsp;billion. Williams Pipe Line owns and
operates the Williams Pipe Line system. Because Williams Pipe
Line was an affiliate of ours at the time of the acquisition,
the transaction was between entities under common control and,
as such, was accounted for similarly to a pooling of interests.
Accordingly, we have restated our historical financial
statements to combine our results with those of Williams Pipe
Line. We financed the acquisition through a $700.0&nbsp;million
short-term loan and the issuance of 7,830,924 Class&nbsp;B
common units (&#147;Class&nbsp;B units&#148;) to Williams. As a
result, Williams and its subsidiaries&#146; ownership interest
in us increased from approximately 60% to approximately 77%,
including its general partner interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;23, 2002, we completed a public
offering of 8,000,000 common units from which we received net
proceeds of approximately $289.0&nbsp;million after considering
Williams&#146; contribution to maintain its 2% general partner
interest and payment of offering fees. As a result,
Williams&#146; ownership interest in us decreased to
approximately 55%, which includes its 53% limited partnership
interest and 2% general partner interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;15, 2002 we issued and sold
$420&nbsp;million of senior secured notes in a private
placement, which was used to repay the short-term loan incurred
at the time we acquired Williams Pipe Line and related fees. We
issued an additional $60&nbsp;million of senior secured notes on
December&nbsp;6, 2002, which was used primarily for repayment of
our other debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2002, Williams created a new general
partner, WEG GP LLC (&#147;General Partner&#148;). The new
general partner, which is owned by affiliates of Williams, has
all of the rights, privileges and responsibilities relative to
us previously held by the former general partner, Williams GP
LLC. Williams GP LLC will continue to own the Class&nbsp;B units
issued to it by us in April 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2003, Williams announced its
intention to divest its interest in our General Partner and all
of its limited partnership interests. It is uncertain what form
this potential transaction may take and management cannot
currently assess what impact such an acquisition would have on
the on-going operations of the Partnership.
</FONT>

<P align="left">
<B><FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Information About Segments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Part&nbsp;II, Item&nbsp;8&nbsp;&#151;
Financial Statements and Supplementary Data.
</FONT>

<P align="left">
<B><FONT size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Narrative
Description of Business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are principally engaged in the storage,
transportation and distribution of refined petroleum products
and ammonia. Our asset portfolio currently consists of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Williams Pipe Line system, a 6,700-mile
    refined petroleum products pipeline system, including 39
    petroleum products terminals, serving the mid-continent region
    of the United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">five petroleum products terminal facilities
    located along the Gulf Coast and near the New York harbor. We
    refer to these facilities as our marine terminals;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">23 petroleum products terminals (some of which
    are partially owned) located principally in the southeastern
    United States. We refer to these terminals as our inland
    terminals;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an ammonia pipeline system, which extends
    approximately 1,100&nbsp;miles from Texas and Oklahoma to
    Minnesota.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the closing of our initial public offering
in February 2001, four marine terminals, 24 inland terminals and
the ammonia pipeline system were transferred to us, including
related liabilities. We acquired an additional marine terminal
and two inland terminals and sold one inland terminal during
2001. In 2002, we acquired the Williams Pipe Line system and
sold two inland terminals.
</FONT>

<P align="left">
<B><FONT size="2">Refined Petroleum Products Transportation and
Distribution</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The United States refined petroleum products
transportation and distribution system links oil refineries to
end-users of gasoline and other refined petroleum products and
is comprised of a network of pipelines, terminals, storage
facilities, tankers, barges, rail cars and trucks. For
transportation of refined petroleum products, pipelines are
generally the lowest-cost alternative for intermediate and
long-haul movements between different markets. Throughout the
distribution system, terminals play a key role in moving
products to the end-user market by providing storage,
distribution, blending and other ancillary services. Products
transported, stored and distributed through the Williams Pipe
Line system and marine and inland terminals include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">refined petroleum
    products,</FONT></I><FONT size="2"> which are the output from
    refineries and are often used as fuels by consumers. Refined
    petroleum products include gasoline, diesel, jet fuel, kerosene
    and heating oil;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">liquefied petroleum gases, or
    LPGs,</FONT></I><FONT size="2"> which are produced as
    by-products of the crude oil refining process and in connection
    with natural gas production. LPGs include butane and propane;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">blendstocks,</FONT></I><FONT size="2"> which
    are blended with petroleum products to change or enhance their
    characteristics such as increasing a gasoline&#146;s octane or
    oxygen content. Blendstocks include alkylates and oxygenates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">heavy oils and
    feedstocks,</FONT></I><FONT size="2"> which are often used as
    burner fuels or feedstocks for further processing by refineries
    and petrochemical facilities. Heavy oils and feedstocks include
    #6 fuel oil and vacuum gas oil;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">crude oil and
    condensate,</FONT></I><FONT size="2"> which are used as
    feedstocks by refineries.
    </FONT></TD>
</TR>

</TABLE>

<!-- link1 "WILLIAMS PIPE LINE SYSTEM" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">WILLIAMS PIPE LINE SYSTEM</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system covers an 11-state
area extending from Oklahoma through the Midwest to North
Dakota, Minnesota and Illinois. The system transports refined
petroleum products and LPGs and includes a common carrier
pipeline and 39 terminals that provide transportation and
terminals services. The products transported on the Williams
Pipe Line system are largely transportation fuels, and in 2002
were comprised of 59% gasoline, 31% distillates (which includes
diesel fuels and heating oil) and 10% LPGs and aviation fuel.
Product originates on the system from direct connections to
refineries and interconnections with other interstate pipelines
for transportation and ultimate distribution to retail gasoline
stations, truck stops, railroads, airlines and other end-users.
Please read Note&nbsp;15 to the Consolidated Financial
Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system largely depends on
the demand for refined petroleum products and LPGs in the
markets it serves and the ability of refiners and marketers to
meet those needs through the pipeline system. According to
statistics provided by the Energy Information Administration,
the demand for refined petroleum products in the market area
served by Williams Pipe Line system, known as Petroleum
Administration for Defense District&nbsp;II, or PADD&nbsp;II, is
expected to grow at an average rate of approximately
1.9%&nbsp;per year over the next 10&nbsp;years. The total
production of refined petroleum products from refineries located
in PADD&nbsp;II is currently insufficient to meet the demand for
refined petroleum products in PADD&nbsp;II. The excess
PADD&nbsp;II demand has been and is expected to be met largely
by imports of refined petroleum products via pipelines from Gulf
Coast refineries that are located in PADD&nbsp;III.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system is well-connected
to the Gulf Coast refineries through interconnections with the
Explorer, Shell, and CITGO pipelines. These connections to Gulf
Coast refineries, together with the Williams Pipe Line
system&#146;s extensive network throughout PADD&nbsp;II and
connections to PADD&nbsp;II refineries, should allow it to
accommodate not only demand growth, but also major supply shifts
that may occur.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system has experienced
increased shipments over the last three years, with total
shipments increasing by 2.4% from 2000 to 2002. The volume
increases have come partly as a result of development projects
on the system and from incentive agreements with shippers
utilizing the system. In 2002, demand growth for refined
petroleum products in the markets served by the system was
slowed largely by generally less favorable economic conditions
in those markets. The operating statistics below reflect the
Williams Pipe Line system&#146;s operations for the periods
indicated:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shipments (thousands of barrels):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Refined products Gasoline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">139,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">137,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">130,580</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Distillates
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,299</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Aviation fuel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LPGs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,901</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,781</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capacity lease
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,671</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total shipments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">260,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">259,763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253,928</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Daily average (thousands of barrels)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">712</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barrel miles (billions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The maximum number of barrels that the system can
transport per day depends upon the operating balance achieved at
a given time between various segments on the system. This
balance is dependent upon the mix of petroleum products to be
shipped and the demand levels at the various delivery points. We
believe that we will be able to accommodate anticipated demand
increases in the markets we serve through expansions or
modifications of the Williams Pipe Line system, if necessary.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Operations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system is the fifth
largest common carrier pipeline of refined petroleum products
and LPGs in the United States based on barrel miles shipped.
Through direct refinery connections, and interconnections with
other interstate pipelines, the system can access approximately
44% of the refinery capacity in the continental United States.
In general, the system does not take title to the petroleum
products it transports.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system generates
approximately 80% of its revenue, excluding product sales
revenue, through transportation tariffs for the volumes it
ships. These tariffs vary depending upon where the product
originates, where ultimate delivery occurs and any applicable
discounts. All interstate transportation rates and discounts are
in published tariffs filed with the FERC. Such tariffs also
include charges for terminals and storage of products at the
Williams Pipe Line system&#146;s 39 terminals. Currently, the
tariffs we charge to shippers for transportation of products
generally do not vary according to the type of products
transported. Published tariffs serve as contracts and shippers
nominate the volume to be shipped on a monthly basis. In
addition, we enter into supplemental agreements with shippers
that commonly result in volume commitments by shippers in
exchange for capital expansion commitments. These agreements
have terms ranging from one to ten years. Nearly 60% of the
shipments in 2002 were subject to these supplemental agreements.
While many of these agreements do not represent guaranteed
volumes, they do reflect a significant level of shipper
commitment to the Williams Pipe Line system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The system generates the remaining 20% of its
revenues, excluding product sales revenues, from leasing
pipeline and storage tank capacity to shippers on a long-term
basis and from providing product and other
</FONT>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">services such as ethanol unloading and loading,
additive injection, laboratory testing, data services to
shippers and from blending, over and short and fractionation
activities. Product services such as ethanol unloading and
loading, additive injection, custom blending and laboratory
testing are performed under a mix of &#147;as needed,&#148;
monthly and long-term agreements. Data services provided to
shippers are covered by a standard agreement and are generally
performed on an as needed basis. In addition, Williams Pipe Line
began operating the Rio Grande Pipeline in 2003 and receives an
annual fee for those services.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Product sales revenues are generated as a result
of selling products generated in the butane blending, transmix
fractionation and over and short activities. While the revenues
generated from these activities were over $69.0&nbsp;million in
2002, the resulting margin was only $5.4&nbsp;million, which
illustrates that these activities comprise a small portion of
Williams Pipe Line&#146;s total net operating margin.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Blending activities involve the generation of
small volumes of gasoline by blending natural gas liquids with
gasoline already in the Williams Pipe Line system to produce
grades of gasoline that satisfy quality and regulatory
requirements for specific markets. We and an affiliate of
Williams agreed that we will perform these blending services for
ten years at an annual fee that will increase to approximately
$3.6&nbsp;million for 2003. As a result of this change, we no
longer purchase and sell products related to blending
activities. In addition, we will perform blending services at
our Little Rock, Arkansas inland terminals, which will generate
annual blending fees of approximately $0.6&nbsp;million.
Consequently, our total blending services revenues for 2003 will
be approximately $4.2&nbsp;million. Please read &#147;Customers
and Contracts&#148; below and &#147;Management Discussion and
Analysis&nbsp;&#151; Overview&nbsp;&#151; The Williams Pipe Line
System&#148; for additional discussion of our blending services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fractionation activities involve processing
transmix, a mixture of products resulting from the intermingling
of different product grades during normal operation of a
pipeline. Some of the transmix processed comes from the Williams
Pipe Line system and some is purchased from other parties that
do not have their own fractionation facilities. The transmix is
separated at our fractionator in Des Moines, Iowa, and the
recovered gasoline and fuel oil are sold to third parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Over and short activities involve our managing
imbalances that occur during normal operation of the system.
Generally, the physical volumes on our system will not match the
volumes recorded by our customers. These differences are either
product quality differences or absolute volume differences.
Quality differences result from the commingling of product on
the pipeline during times when we change the product type
shipped on our pipeline. When these differences occur, we
purchase and sell products at prevailing market prices to manage
the imbalance.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Facilities</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system consists of a
6,700-mile pipeline. The pipeline system includes
25.6&nbsp;million barrels of aggregate storage capacity at 38
terminals and at various pump stations. The terminals deliver
refined petroleum products primarily into tank trucks, although
two terminals can load into tank rail cars.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table contains information
regarding the Williams Pipe Line system&#146;s terminal
facilities:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Shell Storage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Delivery Points</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capacity</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Tanks</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Loading Spots</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousand barrels)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Arkansas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ft.&nbsp;Smith
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Illinois
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amboy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chicago
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Heyworth
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Menard County
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Shell Storage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Delivery Points</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capacity</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Tanks</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Loading Spots</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousand barrels)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iowa
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Des Moines
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dubuque
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ft.&nbsp;Dodge
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iowa City
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mason City
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Milford
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sioux City
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Waterloo
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">372</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kansas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kansas City
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,783</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Olathe
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">St. Joseph
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Topeka
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minnesota
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Alexandria
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mankato
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marshall
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minneapolis
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Rochester
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Missouri
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Carthage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Columbia
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Palmyra
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Springfield
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">312</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nebraska
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capehart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Doniphan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lincoln
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Omaha
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Dakota
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fargo
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Grand Forks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Oklahoma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Enid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Oklahoma City
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tulsa
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">South Dakota
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sioux Falls
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Watertown
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Shell Storage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Delivery Points</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capacity</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Tanks</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Loading Spots</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousand barrels)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wisconsin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wausau
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pump Stations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,585</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we have access agreements with both
El&nbsp;Paso Corporation and ConocoPhillips Corporation,
providing us the right to use their terminal facilities at
Wichita, Kansas.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Refined Petroleum Products
    Supply</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Refined petroleum products originate from both
refining and pipeline interconnection points along the Williams
Pipe Line system. In 2002, 60% of the refined petroleum products
transported on the Williams Pipe Line system originated from
direct refinery connections and 40% originated from
interconnections with other pipelines. As set forth in the table
below, the system is directly connected to, and receives product
from, ten operating refineries.
</FONT>

<P align="center">
<B><FONT size="2">Major Origins&nbsp;&#151; Refineries (Listed
Alphabetically)</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Refinery Location</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ConocoPhillips, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Ponca City, OK
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Farmland Industries, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Coffeyville, KS
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Flint Hills Resources (Koch)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pine Bend, MN
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Frontier Oil Corporation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">El Dorado, KS
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gary Williams Energy Corp.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Wynnewood, OK
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marathon Ashland Petroleum Company
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">St. Paul, MN
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Murphy Oil USA, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Superior, WI
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sinclair Oil Corp.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Tulsa, OK
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sunoco, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Tulsa, OK
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valero Energy Corp.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Ardmore, OK
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system receives product
from 12 other pipeline systems. The most significant of these
pipeline connections is to Explorer Pipeline in Glenpool,
Oklahoma, which transports product from the large refining
complexes located on the Texas and Louisiana Gulf Coast. Product
from Explorer can be transferred into the Williams Pipe Line
system for delivery into the mid-continent and northern-tier
states. Another significant connection is to the Phillips
Pipeline at Kansas City, Kansas, which transports product from
the ConocoPhillips refinery in Borger, Texas and the
U.S.&nbsp;Gulf Coast via the Seaway Products Pipeline. The
Williams Pipe Line system is also connected to all Chicago area
refineries through the West Shore Pipe Line.
</FONT>

<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Major Origins&nbsp;&#151; Pipeline Connections
(Listed Alphabetically)</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pipeline</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Connection Location</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Source of Product</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Manhattan, IL
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Whiting, IN refinery
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buckeye
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Mazon, IL
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">East Chicago, IL storage
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cenex
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Fargo, ND
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Laurel, MT refinery
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CITGO Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Drumright, OK
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Various Gulf Coast refineries
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Explorer Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Glenpool, OK; Mt. Vernon, MO
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Various Gulf Coast refineries
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kaneb Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">El Dorado, KS; Minneapolis, MN
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Various OK&nbsp;&#38; KS refineries; Mandan, ND
    refinery
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kinder Morgan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Plattsburg, MO; Des Moines, IA; Wayne, IL
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bushton, KS storage and Chicago area refineries
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mid-America Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Enterprise)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">El Dorado, KS
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Conway, KS storage
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Orion Pipeline (Equilon)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Duncan, OK
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Various Gulf Coast refineries
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Phillips Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Kansas City, KS
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Various Gulf Coast refineries (via Seaway/
    Standish Pipeline); Borger, TX refinery
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total (Valero)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Wynnewood, OK
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Ardmore, OK refinery
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">West Shore Pipe Line
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">East Chicago, IL
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Various Chicago, IL area refineries
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Customers and Contracts</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We ship refined petroleum products for several
different types of customers, including independent and
integrated oil companies, wholesalers, retailers, railroads,
airlines and regional farm cooperatives. End markets for these
deliveries are primarily retail gasoline stations, truck stops,
farm cooperatives, railroad fueling depots and military and
commercial jet fuel users. Propane shippers include wholesalers
and retailers who, in turn, sell to commercial, industrial,
agricultural and residential heating customers, as well as
utilities who use propane as a fuel source.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2002, the
pipeline system had approximately 50&nbsp;customers. The
principal shippers included six independent refining companies,
three integrated oil companies and one large farm cooperative.
Transportation revenues attributable to these top
10&nbsp;shippers for the year ended December&nbsp;31, 2002 were
$155.8&nbsp;million, representing 45% of the Williams Pipe Line
system&#146;s total revenues, and 57% of revenues excluding
product sales revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2002, affiliates of Williams accounted for
$42.0&nbsp;million or approximately 12% of the Williams Pipe
Line system&#146;s total revenues. Of these affiliate revenues,
approximately 60% were generated from products sales related to
blending, fractionation and over and short settlement
activities. As described above under &#147;Operations,&#148; we
have agreed to perform blending services on behalf of an
affiliate of Williams for an annual fee that will increase to
approximately $3.6&nbsp;million in 2003. As a result, we no
longer purchase and sell products related to blending
activities. In addition, we will perform blending services at
our Little Rock, Arkansas inland terminals which will generate
additional annual blending fees of approximately
$0.6&nbsp;million. Consequently, our total blending services
revenues for 2003 will be approximately $4.2&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Competition</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In certain markets, barges provide an alternative
source for transporting refined products; however, pipelines are
generally the lowest-cost alternative for refined petroleum
product movements between different markets. As a result, the
Williams Pipe Line system&#146;s most significant competitors
are other pipelines that serve the same markets. Three key
pipeline competitors include the Kaneb pipeline systems in the
western and
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<DIV align="left">
<FONT size="2">northern markets, the BP&nbsp;pipeline system in
the northern markets and the Conoco pipeline system in the
southern markets.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Kaneb&#146;s East Pipeline, which runs from
southern Kansas to North Dakota, operates approximately
100&nbsp;miles west of and parallel to the Williams Pipe Line
system. Kaneb&#146;s East Pipeline receives product from both
Gulf Coast and mid-continent refiners through connections to
pipelines such as the Conoco pipeline and through direct
refinery connections, including a direct connection to the
Frontier refinery in El&nbsp;Dorado, Kansas, to which the
Williams Pipe Line system is also connected. In December 2002,
Kaneb purchased a pipeline from Tesoro which receives product
from Tesoro&#146;s refinery in Mandan, North Dakota and runs to
the Minneapolis/ St.&nbsp;Paul, Minnesota area.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The portion of the BP&nbsp;pipeline system with
which the Williams Pipe Line system competes is a non-common
carrier pipeline system that is supplied by BP&#146;s refinery
in Whiting, Indiana. This system extends south to Kansas City,
Missouri and west through Iowa and Minnesota. If BP were to
convert its pipeline system to a common carrier system, it could
result in additional competition. The Conoco pipeline system and
its joint venture, Heartland Pipeline Company, are common
carrier systems that run through Oklahoma, north into Iowa and
east through Missouri to Wood River, Illinois. Conoco&#146;s
pipeline receives its product supply from mid-continent and Gulf
Coast refiners, some of which also supply the Williams Pipe Line
system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Competition with each of these pipeline systems
is based primarily on transportation charges, quality of
customer service, proximity to end-users and longstanding
customer relationships. However, given the different supply
sources on each pipeline, pricing at either the origin or
terminal point on a pipeline may outweigh transportation costs
when customers choose which line to use.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shippers on the Williams Pipe Line system can
reduce their transportation costs by entering into exchange
agreements with other shippers. Under these arrangements, a
shipper will agree to supply a market near its refinery in
exchange for receiving supply from another refinery in a more
distant market. These agreements allow the two parties to reduce
the average transportation rate paid to us. We have been able to
compete with these alternatives through price incentives and
through long-term commercial arrangements with potential
exchange partners. Nevertheless, a significant amount of
exchange activity has occurred historically and is likely to
continue.
</FONT>

<!-- link1 "PETROLEUM PRODUCTS TERMINALS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">PETROLEUM PRODUCTS TERMINALS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within our terminal network, we operate two types
of petroleum products terminals: marine terminals and inland
terminals. Our marine terminal facilities are located in close
proximity to refineries and are large storage and distribution
facilities that handle refined petroleum products, blendstocks,
heavy oils and feedstocks and crude oil and condensate. Our
inland terminals are located in the southeastern United States
and are primarily located along third party pipelines such as
Colonial, TEPPCO and Plantation. These facilities receive
products from pipelines and distribute them to third parties at
the terminals, which in turn deliver them to end-users such as
retail outlets. Because these terminals are unregulated, the
marketplace determines the prices we can charge for our services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2002, Williams Energy Marketing&nbsp;&#38;
Trading Company and Williams Refining&nbsp;&#38; Marketing,
L.L.C., subsidiaries of Williams, utilized our facilities to
support their business activities and were among our largest
terminal customers, representing approximately 15% and 5%,
respectively, of revenues at our petroleum products terminals.
In 2002, Williams began to significantly reduce their level of
marketing and trading activity. As a result, we expect that
Williams will comprise a significantly smaller portion of our
ongoing revenues as we replace their revenue with revenues from
third-party customers. Please read Note&nbsp;15 to the
Consolidated Financial Statements. For additional information
relating to our commercial agreements with Williams and its
affiliates, please read &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Related Party Transactions&#148;.
</FONT>

<P align="center"><FONT size="2">8
</FONT>
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<P align="left">
<B><FONT size="2">Marine Terminal Facilities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Gulf Coast region is a major hub for
petroleum refining, representing approximately 43% of total
U.S.&nbsp;daily refining capacity and 74% of U.S.&nbsp;refining
capacity expansion from 1990 to 2001. The growth in Gulf Coast
refining capacity has resulted in part from consolidation in the
petroleum industry to take advantage of economies of scale from
operating larger, concentrated refineries. We expect this trend
to continue in order to meet growing domestic and international
demand. From 1990 to 2001, the amount of petroleum products
exported from the Gulf Coast region increased by approximately
20%, or 220&nbsp;million barrels. The growth in refining
capacity and increased product flow attributable to the Gulf
Coast region has created a need for additional transportation,
storage and distribution facilities. In the future, the
competition resulting from the consolidation trend, combined
with continued environmental pressures, continuation of imports,
governmental regulations and market conditions, could result in
the closing of smaller, less economical inland refiners,
creating even greater demand for petroleum products refined in
the Gulf Coast region.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate five marine terminal
facilities, including four marine terminal facilities located
along the Gulf Coast and one terminal facility located in
Connecticut near the New York harbor. Our marine terminals are
large storage and distribution facilities that provide inventory
management, storage and distribution services for refiners and
other large end users of petroleum products. Our marine terminal
facilities have an aggregate storage capacity of approximately
17.6&nbsp;million barrels.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our marine terminal facilities primarily receive
petroleum products by ship and barge, short-haul pipeline
connections to neighboring refineries and common carrier
pipelines. We distribute petroleum products from our marine
terminals by all of those means as well as by truck and rail.
Once the product has reached our terminal facilities, we store
the product for a period of time ranging from a few days to
several months. Products that we store in our marine terminal
facilities include petroleum products, blendstocks and heavy
oils and feedstocks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to providing storage and distribution
services, our marine terminal facilities provide ancillary
services including heating, blending and mixing of stored
products and injection services. Many heavy oils require heating
to keep them in a liquid state. Further, in order to meet
government specifications, products often must be combined with
other products through the blending and mixing process. Blending
is the combination of products from different storage tanks.
Once the products are blended together, the mixing process
circulates the blended product through mixing lines and nozzles
to further combine the products. Finally, injection is the
process of injecting refined petroleum products with additives
and dyes to comply with governmental regulations and to meet our
customers&#146; marketing initiatives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our terminals generate fees primarily through
providing long-term or spot demand storage services and
inventory management for a variety of customers. Refiners and
chemical companies will typically use our facilities because
their facilities are inadequate, either because of size
constraints or the specialized handling requirements of the
stored product. We also provide storage services and inventory
management to various industrial end users, marketers and
traders that require access to large storage capacity.
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table outlines our marine terminal
locations, capacities, primary products handled and the
connections to and from these terminals:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Rated Storage</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Facility</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capacity</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Primary Products Handled</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Connections</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Thousand</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Barrels)</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Connecticut
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">New Haven
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,986</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Refined petroleum products, heavy oils,
    feedstocks and asphalt
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pipeline, barge, ship and truck
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Louisiana
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gibson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Crude oil and condensate
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pipeline, barge, and truck
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marrero
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Heavy oils and feedstocks
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Barge, ship, rail and truck
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Texas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Corpus Christi
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Blendstocks, heavy oils and feedstocks
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pipeline, barge, ship and truck
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Galena Park
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,884</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Refined petroleum products, blendstocks, heavy
    oils and feedstocks
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pipeline, barge, ship, rail and truck
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total storage capacity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,643</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Customers and Contracts.
</FONT></I><FONT size="2">We have long-standing relationships
with oil refiners, suppliers and traders at our facilities, and
most of our customers have consistently renewed their short-term
contracts. During 2002, approximately 97% of our marine terminal
working storage capacity was under contract. As of
December&nbsp;31, 2002, approximately 66% of the revenues that
we generated were from contracts with remaining terms in excess
of one year or that renew on an annual basis. Williams Energy
Marketing&nbsp;&#38; Trading Company represented approximately
19% of revenues at our marine terminals for the year ended
December&nbsp;31, 2002. For a further discussion of revenues
from major customers and concentration of risk, refer to
Note&nbsp;8 of the Consolidated Financial Statements. Also,
please read &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&nbsp;&#151;
Related Party Transactions&#148; for additional information
regarding affiliate revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Markets and Competition.
</FONT></I><FONT size="2">We believe that the strong demand for
our marine terminal facilities from our refining and chemical
customers resulting from our cost-effective distribution
services and key transportation links such as deep-water ports
will continue. We experience the greatest demand at our marine
terminals in a contango market, when customers tend to store
more product to take advantage of favorable pricing expected in
the future. When the opposite market condition (known as
backwardation) exists some companies choose not to store product
or are less willing to enter into long-term storage contracts.
The additional heating and blending services that we provide at
our marine terminals attract additional demand for our storage
services and result in increased revenue opportunities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Several major and integrated oil companies have
their own proprietary storage terminals along the Gulf Coast
that are currently being used in their refining operations. If
these companies choose to shut down their refining operations
and elect to store and distribute refined petroleum products
through their proprietary terminals, we would experience
increased competition for the services that we provide. In
addition, several companies have facilities in the Gulf Coast
region and offer competing storage and distribution services.
</FONT>

<P align="left">
<B><FONT size="2">Inland Terminals</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate a network of 23&nbsp;refined
petroleum products terminals located primarily in the
southeastern United States. These terminals have a combined
storage capacity of 4.6&nbsp;million barrels. Our customers
utilize these facilities to take delivery of refined petroleum
products transported on major common-
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV align="left">
<FONT size="2">carrier interstate pipelines. The majority of our
inland terminals connect to the Colonial, Plantation, TEPPCO or
Explorer pipelines, and some facilities have multiple pipeline
connections. In addition, our Dallas terminal connects to Dallas
Love Field airport via a 6-inch pipeline we purchased in April
2001. During 2002, gasoline represented approximately 60% of the
volume of product distributed through our inland terminals, with
the remaining 40% consisting of distillates.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our inland terminal facilities typically consist
of multiple storage tanks that are connected by a third-party
pipeline system. We load and unload products through an
automated system that allows products to move directly from the
common carrier pipeline to our storage tanks and directly from
our storage tanks to a truck or rail car loading rack.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are an independent provider of storage and
distribution services. Because we do not own the products moving
through our terminals, we are not exposed to the risks of
product ownership. We operate our inland terminals as
distribution terminals, and we primarily serve the retail,
industrial and commercial sales markets. We provide the
following services at our inland terminals:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">inventory and supply management;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">distribution;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other services such as injection of gasoline
    additives.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We generate revenues by charging our customers a
fee based on the amount of product that we deliver through our
terminals. We charge these fees when we deliver the product to
our customers and load it into a truck or rail car. In addition
to throughput fees, we generate revenues by charging our
customers a fee for injecting additives into gasoline, diesel
and jet fuel, and for filtering jet fuel. Our inland terminals
are equipped with automated loading facilities that are
available 24&nbsp;hours a day.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We wholly own 12 of these inland terminals and
our percentage ownership of the remaining 11&nbsp;inland
terminals ranges from 50% to 79%. The following table sets forth
our inland terminal locations, percentage ownership, capacities
and methods of supply:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Storage</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Facility</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capacity</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Connections</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Thousand</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Barrels)</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Alabama
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Montgomery
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Plantation Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Arkansas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Little Rock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">TEPPCO Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">South Little Rock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">179</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">TEPPCO Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Georgia
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Albany
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Doraville
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial and Plantation Pipelines
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Missouri
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">St. Charles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Explorer Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Carolina
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Charlotte
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Charlotte
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Greensboro
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Greensboro
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial and Plantation Pipelines
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Selma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">South Carolina
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Augusta
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Augusta
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Spartanburg
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tennessee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chattanooga
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Knoxville
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial and Plantation Pipelines
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nashville
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">252</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline and barge
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nashville
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nashville
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Texas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dallas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Explorer and Magtex Pipelines and our pipeline to
    Dallas Love Field
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Southlake
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Explorer, Koch and Valero Pipelines
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Virginia
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Montvale
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richmond
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">169</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Colonial Pipeline
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Customers and Contracts.
</FONT></I><FONT size="2">When we acquire terminals, we
generally enter into long-term throughput contracts with the
sellers under which they agree to continue to use the
facilities. These agreements typically last for two to ten years
from the beginning of the agreement, and must be renegotiated at
the end of the term. In addition to these agreements, we enter
into separate contracts with new customers that typically last
for one year with a continuing one year renewal provision. Most
of these contracts contain a minimum throughput
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV align="left">
<FONT size="2">provision that obligates the customer to move a
minimum amount of product through our terminals or pay for
terminal capacity reserved but not used. Our customers include:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">retailers that sell gasoline and other petroleum
    products through proprietary retail networks;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">wholesalers that sell petroleum products to
    retailers as well as to large commercial and industrial
    end-users;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">exchange transaction customers, where we act as
    an intermediary so that the parties to the transaction are able
    to exchange petroleum products;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">traders that arbitrage, trade and market products
    stored in our terminals.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2003, Williams completed the sale of its
Memphis, Tennessee refinery and operations and has also sold its
travel center operations. These sales have resulted in a reduced
amount of marketing and trading activities performed by Williams
Refining&nbsp;&#38; Marketing with our inland terminals. We are
in the process of replacing these revenues with other outside
parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2002,
Williams Refining&nbsp;&#38; Marketing accounted for
approximately 21% of our inland terminal revenues, with an
additional 4% attributable to Williams Energy
Marketing&nbsp;&#38; Trading, Williams Bio Energy and Williams
Petroleum Services collectively. For additional information
relating to our commercial agreements with Williams and its
affiliates, please read &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Related Party Transactions&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Markets and Competition.
</FONT></I><FONT size="2">We compete with other independent
terminal operators as well as integrated oil companies on the
basis of terminal location and versatility, services provided
and price. Our competition from independent operators primarily
comes from distribution companies with marketing and trading
arms, independent terminal operators and refining and marketing
companies.
</FONT>

<!-- link1 "AMMONIA PIPELINE SYSTEM" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">AMMONIA PIPELINE SYSTEM</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own a 1,100-mile ammonia pipeline system. Our
pipeline transports ammonia from production facilities in Texas
and Oklahoma to terminals in the Midwest for ultimate
distribution to end-users in Iowa, Kansas, Minnesota, Missouri,
Nebraska, Oklahoma and South Dakota. The ammonia we transport is
primarily used as a nitrogen fertilizer. Nitrogen is an
essential nutrient for plant growth and is the single most
important element for maintenance of high crop yields for all
grains. Unlike other primary nutrients, however, nitrogen must
be applied each year because virtually all of its nutritional
value is consumed during the growing season. Ammonia is the most
cost-effective source of nitrogen and the simplest nitrogen
fertilizer. It is also the primary feedstock for the production
of upgraded nitrogen fertilizers and chemicals. Please read
Note&nbsp;15 to the Consolidated Financial Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ammonia is produced by reacting natural gas with
air at high temperatures and pressures in the presence of
catalysts. Because natural gas is the primary feedstock for the
production of ammonia, ammonia is typically produced near
abundant sources of natural gas. Natural gas prices returned to
more historically normal levels for most of 2002, after having
been significantly higher between 1999 and the first six months
of 2001, during which period our customers substantially
curtailed their production of ammonia and shipped lower volumes
of ammonia on our pipeline. Natural gas prices returned to
higher levels in late 2002 and, during the first part of 2003,
have increased to unprecedented high levels; consequently,
shippers may again choose to lower their production of ammonia
and their shipments on our pipeline. However, our shippers have
committed to minimum shipping agreements of an aggregate of
700,000 tons per year through June 2005 (see &#147;Customers and
Contracts&#148; below).
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operations. </FONT></I><FONT size="2">We are a
common carrier transportation pipeline and terminals company. We
do not produce or trade ammonia, and we do not take title to the
ammonia we transport. Rather, we earn revenue from the following
sources:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">transportation tariffs for the use of our
    pipeline capacity;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">throughput fees at our six company-owned
    terminals.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We generate approximately 92% of our revenue
through transportation tariffs. These tariffs are postage stamp
tariffs, which means that each shipper pays a defined rate per
ton of ammonia shipped regardless of the distance that ton of
ammonia travels on our pipeline. In addition to transportation
tariffs, we also earn revenue by charging our customers for
services at the six terminals we own, including unloading
ammonia from our customers&#146; trucks to inject it into our
pipeline for shipment and removing ammonia from our pipeline to
load it into our customers&#146; trucks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed with Enterprise Products Partners
L.P. (&#147;Enterprise&#148;) that, beginning February 2003,
Enterprise will provide operating and general and administrative
services for our ammonia pipeline system. Our operating
agreement with Enterprise has an initial term of five years
beginning in February 2003. We can cancel this agreement at any
time by giving six-months written notice to Enterprise. This
agreement will increase our operating expenses by approximately
$0.5&nbsp;million annually. Also, Enterprise will charge us
$2.5&nbsp;million annually for general and administrative
expense associated with the operation of this pipeline.
Management expects that these general and administrative costs
will be subject to the expense limitation under our Omnibus
Agreement. Please read &#147;Item&nbsp;13. Certain Relationships
and Related Transactions&nbsp;&#151; Omnibus Agreement&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Facilities. </FONT></I><FONT size="2">Our
pipeline was the world&#146;s first common carrier pipeline for
ammonia. The main trunk line was completed in 1968. Today, it
represents one of two ammonia pipelines operating in the United
States and has a maximum annual delivery capacity of
approximately 900,000&nbsp;tons. Our ammonia pipeline system
originates at production facilities in Borger, Texas, Verdigris,
Oklahoma and Enid, Oklahoma and terminates in Mankato, Minnesota.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We transport ammonia to 13&nbsp;delivery points
along our pipeline system. The facilities at these points
provide our customers with the ability to deliver ammonia to
distributors who sell the ammonia to farmers and to store
ammonia for future use. These facilities also provide our
customers with the ability to remove ammonia from our pipeline
for distribution to upgrade facilities that produce complex
nitrogen compounds such as urea, ammonium nitrate, ammonium
phosphate and ammonium sulfate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Customers and Contracts.
</FONT></I><FONT size="2">We ship ammonia for three customers:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Farmland Industries, Inc., one of the largest
    farmer-owned cooperatives in the United States (see
    <I>Farmland</I> below);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Agrium U.S.&nbsp;Inc., a subsidiary of Agrium
    Inc., the largest producer of nitrogen fertilizers in North
    America;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Terra Nitrogen, L.P., a wholesaler of nitrogen
    fertilizer products.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of these companies has an ammonia production
facility connected to our pipeline as well as related storage
and distribution facilities along the pipeline. The
transportation contracts with our customers extend through June
2005. Our customers are obligated to ship an aggregate minimum
of 700,000&nbsp;tons per year (see <I>Farmland</I> discussion
below) and have historically shipped an amount in excess of the
required minimum. Our customers have been shipping ammonia
through our pipeline for an average of more than 20&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each transportation contract contains a ship or
pay mechanism, whereby each customer must ship a specific
minimum tonnage per year and an aggregate minimum tonnage over
the life of the contract. On July&nbsp;1 of each contract year,
each of our customers nominates a tonnage that it expects to
ship during the upcoming year. This annual commitment may be
equal to or greater than the contractual minimum tonnage.
Currently, our customers&#146; annual commitments represent 89%
of our pipeline&#146;s 900,000 ton per year capacity. If a
customer fails to ship its annual commitment, that customer must
pay for the pipeline capacity it did not use
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<DIV align="left">
<FONT size="2">(see <I>Farmland</I> discussion below). We allow
our customers to bank any ammonia shipped in excess of their
annual commitments. If a customer has previously shipped an
amount in excess of its annual commitment, the shipper may
offset subsequent annual shipment shortfalls against the excess
tonnage in its bank. There are approximately 230,000&nbsp;tons
in this combined bank that may be used to offset future ship or
pay obligations. Since July&nbsp;1, 2000, we have had the right
to adjust our tariff schedule on an annual basis pursuant to a
formula contained in the contracts. Any annual adjustment is
limited to a maximum increase or decrease of 5%&nbsp;measured
against the rate previously in effect.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Farmland. </FONT></I><FONT size="2">On
May&nbsp;31, 2002, Farmland Industries, Inc.
(&#147;Farmland&#148;) and several of its subsidiaries filed for
Chapter&nbsp;11 bankruptcy protection. Farmland, the largest
customer on the ammonia pipeline system, is also a customer of
the Williams Pipe Line system. Prior to Farmland&#146;s
bankruptcy filing, we placed Farmland on a pre-payment basis for
its ammonia shipments; consequently, our exposure to
uncollectable receivables from Farmland was small. We received
approximately $2.3&nbsp;million in payments from Farmland during
the preference period prior to Farmland&#146;s filing for
bankruptcy. Management believes that we will not be required to
reimburse these funds to the bankruptcy trustee because they
were received in the ordinary course of business with Farmland.
Farmland&#146;s ammonia pipeline agreement provided for the
right to terminate its shipment obligation by submitting
12&nbsp;month written notice to us, which they have done.
Farmland&#146;s notification will be effective December&nbsp;23,
2003. Farmland has announced that it is attempting to sell its
ammonia production facility connected to our pipeline to Koch
Nitrogen and has thus elected to exercise its termination right
effective December&nbsp;23, 2003. Farmland is expected to incur
a deficiency of approximately $2.0&nbsp;million to
$2.5&nbsp;million under its shipment obligation for the contract
year beginning July&nbsp;1, 2002 and ending June&nbsp;30, 2003.
On February&nbsp;18, 2003, we entered into a settlement
agreement with Farmland to resolve the deficiency. Under the
settlement agreement, Farmland will pay us $0.8&nbsp;million for
the deficiency it will incur under its shipment obligation for
the contract year ending June&nbsp;30, 2003. If Farmland assigns
its shipment obligation to a purchaser of its ammonia assets
pursuant to bankruptcy procedures, Farmland&#146;s termination
notice will be withdrawn, and the shipment obligation will be
reduced from 450,000&nbsp;tons annually to 200,000&nbsp;tons
annually.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The settlement agreement is subject to approval
by the bankruptcy court. If the bankruptcy court does not
approve the settlement agreement by June&nbsp;20, 2003, it will
be void unless we agree with Farmland to extend the time for
approval. If the settlement agreement is not approved and
Farmland rejects its shipment obligation pursuant to bankruptcy
procedures, we will have a general, unsecured creditor&#146;s
claim against Farmland for the deficiency it will incur under
its shipment obligation for the contract year ending
June&nbsp;30, 2003 and for any deficiency incurred under its
shipment obligation for the contract period beginning
July&nbsp;1, 2003 and ending December&nbsp;23, 2003. Demand for
anhydrous ammonia has not changed significantly, and we believe
that we will continue to meet this demand through shipments of
anhydrous ammonia produced by one of our other ammonia pipeline
customers or produced at Farmland&#146;s facility at Enid,
Oklahoma by a subsequent buyer. The failure to negotiate a
shipping agreement with the subsequent buyer of Farmland&#146;s
Enid facility would significantly reduce the aggregate minimum
tons shipped on our pipeline.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Markets and Competition.
</FONT></I><FONT size="2">Demand for nitrogen fertilizer has
typically followed a combination of weather patterns and growth
in population, acres planted and fertilizer application rates.
Because natural gas is the primary feedstock for the production
of ammonia, the profitability of our customers is impacted by
high natural gas prices. To the extent our customers are unable
to pass on higher costs to their customers, they may reduce
shipments through our pipeline.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We compete primarily with ammonia shipped by rail
carriers, but we believe we have a distinct advantage over rail
carriers because ammonia is a gas under normal atmospheric
conditions and must be either placed under pressure or cooled to
-33&nbsp;degrees Celsius to be shipped or stored. Because the
transportation and storage of ammonia requires specialized
handling, we believe that pipeline transportation is the safest
and most cost-effective method for transporting bulk quantities
of ammonia.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also compete to a limited extent in the areas
served by the far northern segment of our ammonia pipeline
system with Kaneb&#146;s ammonia pipeline, which originates on
the Gulf Coast and transports domestically produced and imported
ammonia.
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<P align="left">
<B><FONT size="2">Tariff Regulation</FONT></B>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Interstate Regulation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Williams Pipe Line system&#146;s interstate
common carrier pipeline operations are subject to rate
regulation by the Federal Energy Regulatory Commission, or FERC,
under the Interstate Commerce Act, the Energy Policy Act of 1992
and rules and orders promulgated pursuant thereto. FERC
regulation requires that interstate oil pipeline rates be posted
publicly and that these rates be &#147;just and reasonable&#148;
and nondiscriminatory. Rates of interstate oil pipeline
companies, like those charged by the Williams Pipe Line system,
are currently regulated by FERC primarily through an index
methodology, which in its initial form, allowed a pipeline to
change its rates based on the annual change in the producer
price index, or PPI, for finished goods less 1%. As required by
its own regulations, in July 2000, the FERC issued a Notice of
Inquiry seeking comment on whether to retain or to change the
existing rate indexing methodology. In December 2000, the FERC
issued an order concluding that the rate index reasonably
estimated the actual cost changes in the pipeline industry and
should be continued for another five-year period, subject to
review in July 2005. In February 2003, on remand of its December
2000 order from the D.C.&nbsp;Circuit, the FERC changed the rate
indexing methodology to the PPI for finished goods, but without
the subtraction of 1% as had been done previously. The FERC made
the change prospective only, but did allow oil pipelines to
recalculate their maximum ceiling rates as though the new rate
indexing methodology had been in effect since July&nbsp;1, 2001.
Under the indexing regulations, a pipeline can request a rate
increase that exceeds index levels for indexed rates using a
cost-of-service approach, but only after the pipeline
establishes that a substantial divergence exists between the
actual costs experienced by the pipeline and the rate resulting
from application of the PPI. Approximately one-third of the
Williams Pipe Line system is subject to this indexing
methodology. In addition to rate indexing and cost-of-service
filings, interstate oil pipeline companies may elect to support
rate filings by obtaining authority to charge market-based rates
or through an agreement between a shipper and the oil pipeline
company that a rate is acceptable. Two-thirds of the Williams
Pipe Line system&#146;s markets are deemed competitive by the
FERC, and we are allowed to charge market-based rates in these
markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In a June 1996 decision, the FERC disallowed the
inclusion of a full income tax allowance in the cost-of-service
tariff filing of Lakehead Pipe Line Company, L.P., an unrelated
oil pipeline limited partnership. The FERC held that Lakehead
was entitled to include an income tax allowance in its
cost-of-service for income attributable to corporate partners
but not on income attributable to individual partners. In 1997,
Lakehead reached an agreement with its shippers on all contested
rates, so there was no judicial review of the FERC&#146;s
decision. In January 1999, in a FERC proceeding involving
SFPP,&nbsp;L.P., another unrelated oil pipeline limited
partnership, the FERC followed its decision in Lakehead and held
that SFPP may not claim an income tax allowance with respect to
income attributable to non-corporate limited partners. Several
parties sought rehearing of the FERC&#146;s decision in SFPP and
of several FERC orders issued on rehearing in the SFPP case.
Several parties have also filed appeals of the FERC&#146;s
orders, which are currently being held in abeyance by the court
of appeals pending resolution by the FERC of the remaining
requests for rehearing. The FERC&#146;s decision in the Lakehead
and SFPP proceedings should have no effect on the market-based
rates Williams Pipe Line charges in its competitive markets.
However, the Lakehead and SFPP decisions might become relevant
to the pipeline system should it (1)&nbsp;elect in the future to
raise its indexed rates using the cost-of-service methodology,
(2)&nbsp;be required to use a cost-of-service methodology to
defend its indexed rates against a shipper protest alleging that
an indexed rate increase substantially exceeds actual cost
increases, or (3)&nbsp;be required to defend its indexed rates
against a shipper complaint alleging that the pipeline&#146;s
rates are not just and reasonable. In such case, a complainant
or protestant could assert that, in light of the decisions
regarding Lakehead and SFPP and our ownership of the Williams
Pipe Line system, we should be allowed to collect an income tax
allowance only with respect to the portion of our partnership
units held by corporations. We believe that most if not all of
the indexed rates can be supported on a cost-of-service basis,
even assuming a reduction in the income tax allowance.
Nevertheless, if the indexed rates were challenged, we cannot
give assurance that some or all of the indexed rates may not be
reduced. If indexed rates were reduced, the amount of available
cash could be materially reduced.
</FONT>

<P align="center"><FONT size="2">16
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Surface Transportation Board, a part of the
United States Department of Transportation, has jurisdiction
over interstate pipeline transportation of ammonia. The Surface
Transportation Board succeeded the Interstate Commerce
Commission which previously regulated pipeline transportation of
ammonia.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Surface Transportation Board is responsible
for rate regulation of pipeline transportation of commodities
other than water, gas or oil. These transportation rates must be
reasonable, and a pipeline carrier may not unreasonably
discriminate among its shippers. If the Surface Transportation
Board finds that a carrier&#146;s rates violate these statutory
commands, it may prescribe a reasonable rate. In determining a
reasonable rate, the Surface Transportation Board will consider,
among other factors, the effect of the rate on the volumes
transported by that carrier, the carrier&#146;s revenue needs
and the availability of other economic transportation
alternatives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Surface Transportation Board does not need to
provide rate relief unless shippers lack effective competitive
alternatives. If the Surface Transportation Board determines
that effective competitive alternatives are not available and a
pipeline holds market power, then it must determine whether the
pipeline rates are reasonable. The Board generally applies
constrained market pricing principles in its economic analysis.
Constrained market pricing provides two alternative
methodologies for examining the reasonableness of a
carrier&#146;s rates. The first approach examines a
carrier&#146;s existing system to determine whether the carrier
is already earning sufficient funds to cover its costs and
provide a sufficient return on investment, or would earn
sufficient funds after eliminating unnecessary costs from
specifically identified inefficiencies and cross-subsidies in
its operations. The second approach calculates the revenue
requirements that a hypothetical, new and optimally efficient
carrier would need to meet in order to serve the complaining
shippers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Customers that protest rates in Surface
Transportation Board proceedings may use any methodology they
choose that is consistent with constrained market pricing
principles. When addressing revenue adequacy, a complainant must
provide more than a single period snapshot of a carrier&#146;s
costs and revenues. The complainant must measure whether a
carrier earns adequate revenues over a period of time, as
measured by a multi-period discounted cash flow analysis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Surface Transportation Board has held that
unreasonable discrimination occurs when (1)&nbsp;there is a
disparity in rates, (2)&nbsp;the complaining party is
competitively injured, (3)&nbsp;the carrier is the common source
of both the allegedly prejudicial and preferential treatment and
(4)&nbsp;the disparity in rates is not justified by
transportation conditions.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Intrastate Regulation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some shipments on the Williams Pipe Line system
move within a single state and thus are considered to be
intrastate commerce. The Williams Pipe Line system is subject to
certain regulation with respect to such intrastate
transportation by state regulatory authorities in the states of
Illinois, Kansas and Oklahoma. However, in most instances, the
state commissions have not initiated investigations of the rates
or practices of refined products pipelines.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because in some instances we transport ammonia
between two terminals in the same state, our ammonia pipeline
operations are subject to regulation by the state regulatory
authorities in Iowa, Nebraska, Oklahoma and Texas. Although the
Oklahoma Corporation Commission and the Texas Railroad
Commission have the authority to regulate our rates, the state
commissions have generally not investigated the rates or
practices of ammonia pipelines in the absence of shipper
complaints.
</FONT>

<P align="left">
<B><FONT size="2">Maintenance and Safety Regulations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our pipeline systems have been constructed,
operated, maintained, repaired, tested and used in general
compliance with applicable federal, state and local laws and
regulations, American Petroleum Institute standards and other
generally accepted industry standards and practices. These
pipeline systems will continue to be operated, maintained and
inspected in accordance with governing regulations and industry
practices.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our pipeline systems are subject to regulation by
the United States Department of Transportation under the
Hazardous Liquid Pipeline Safety Act of 1979, or HLPSA as
amended, and comparable state statutes
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV align="left">
<FONT size="2">relating to the design, installation, testing,
construction, operation, replacement and management of its
pipeline facilities. HLPSA covers petroleum and petroleum
products and requires any entity that owns or operates pipeline
facilities to comply with such regulations, to permit access to
and copying of records and to make certain reports and provide
information as required by the Secretary of Transportation.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2000, the Department of
Transportation adopted new regulations requiring operators of
hazardous liquid interstate pipelines to develop and follow an
integrity management program that provides for assessment of the
integrity of all pipeline segments that could affect designated
&#147;high consequence areas,&#148; including high population
areas, drinking water and ecological resource areas that are
unusually sensitive to environmental damage from a pipeline
release, and commercially navigable waterways. Segments of our
pipeline systems are located in high consequence areas and/or
have the ability to impact high consequence areas. We believe we
are in material compliance with HLPSA requirements. Since this
rule went into effect, we have spent approximately
$14.5&nbsp;million relative to integrity assessment and
anticipate spending approximately $36.5&nbsp;million during the
next five years associated with system integrity assessments.
These cost estimates could increase in the future if additional
safety measures are required or if existing safety standards are
raised that exceed the current pipeline capabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our pipeline systems are also subject to the
requirements of the federal Occupational Safety and Health Act,
or OSHA, and comparable state statutes. We believe we are in
material compliance with OSHA and state requirements, including
general industry standards, record-keeping requirements and
monitoring of occupational exposures. The OSHA hazard
communication standard, the EPA community right-to-know
regulations under Title&nbsp;III of the federal Superfund
Amendment and Reauthorization Act and comparable state statutes
require us to organize and disclose information about the
hazardous materials used in our operations. Certain parts of
this information must be reported to employees, state and local
governmental authorities and local citizens upon request. In
general, we expect to increase our expenditures during the next
decade to comply with higher industry and regulatory safety
standards such as those described above. At qualifying
facilities, we are subject to OSHA Process Safety Management, or
PSM, regulations that are designed to prevent or minimize the
consequences of catastrophic releases of toxic, reactive,
flammable or explosive chemicals. We believe we are in material
compliance with the OSHA PSM&nbsp;regulations.
</FONT>

<P align="left">
<B><FONT size="2">Environmental</FONT></B>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">General</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The operation of our pipeline systems, terminals
and associated facilities in connection with the transportation,
storage and distribution of refined petroleum products, crude
oil and other liquid hydrocarbons is subject to stringent and
complex laws and regulations governing the discharge of
materials into the environment or otherwise related to
environmental protection. As an owner or lessee and operator of
these facilities, we must comply with these laws and regulations
at the federal, state and local levels. Compliance with existing
and anticipated laws and regulations increases the cost of
planning, constructing and operating pipelines, terminals and
other facilities. Included in our construction and operation
costs are capital cost items necessary to maintain or upgrade
our equipment and facilities. Failure to comply with these laws
and regulations may result in the assessment of administrative,
civil and criminal penalties, imposition of remedial actions and
the issuance of injunctions or construction bans or delays on
ongoing operations. We believe that our operations are in
material compliance with applicable environmental laws and
regulations. However, these laws and regulations are subject to
frequent change, and we cannot assure you that the cost to
comply with these laws and regulations in the future will not
have a material adverse effect on our financial position or
results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As described below, we will be indemnified
against certain environmental liabilities by Williams Energy
Services, Williams Natural Gas Liquids and by the entities from
which Williams originally acquired some of the assets owned by
us. Williams Energy Services and Williams Natural Gas Liquids
are affiliates of Williams. Recent divestitures by Williams have
significantly reduced the size and credit capacities of these
affiliates. However, Williams has provided a performance
guarantee with respect to the indemnifications made in
association with the Williams Pipe Line acquisition. We are also
a beneficiary of an environmental insurance
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<FONT size="2">policy related to our marine terminal facilities.
The terms and limitations of these indemnification agreements
and insurance policies are summarized below.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Environmental Liabilities Associated with
    Williams Terminal Holdings and the Ammonia Pipeline
    System</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For assets transferred to us from Williams at the
time of our initial public offering in February 2001, Williams
Energy Services agreed to indemnify us for up to
$15.0&nbsp;million for environmental liabilities that exceed the
amounts covered by the seller indemnities and/or insurance
coverage described below. The indemnity applies to environmental
liabilities arising from conduct prior to the closing of the
initial public offering and discovered within three years of
closing of the initial public offering. Liabilities resulting
from a change in law after the closing of our initial public
offering are excluded from this indemnity. As of
December&nbsp;31, 2002, we had collected $1.7&nbsp;million
against Williams Energy Services&#146; indemnity and had
recorded environmental liabilities of $3.3&nbsp;million,
substantially all of which were covered by Williams Energy
Services&#146; indemnification. Further, we expect to incur
$0.3&nbsp;million of environmental capital, which should also be
covered by this indemnification. Please read &#147;Management
Discussion and Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Other Known Trends and Events&nbsp;&#151;
Change of Control&#148; for additional discussion of possible
changes associated with Williams Energy Services&#146;
indemnifications to us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with our acquisition agreement with
Amerada Hess Corporation (&#147;Hess&#148;), Hess will indemnify
us for environmental and other liabilities related to the three
Gulf Coast marine terminal facilities acquired in August 1999,
including:
</FONT>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">indemnification for special cleanup actions of
    pre-acquisition releases of hazardous substances. This indemnity
    is capped at a maximum of $15.0&nbsp;million. Hess, however, has
    no liability until the aggregate amount of initial losses is in
    excess of a $2.5&nbsp;million deductible, and then Hess is
    liable only for the succeeding $12.5&nbsp;million in losses.
    This indemnity will remain in effect until July&nbsp;30, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">indemnification for already known and required
    cleanup actions at the Corpus Christi, Texas and Galena Park,
    Texas terminal facilities. This indemnity has no limit and will
    remain in effect until July&nbsp;30, 2014; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">indemnification for a variety of pre-acquisition
    fines and claims that may be imposed or asserted under the
    Superfund Law and federal Resource Conservation and Recovery Act
    (&#147;RCRA&#148;) or analogous state laws relative to
    pre-acquisition events. This indemnity is not subject to any
    limit or deductible amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to these indemnities, Hess retained
liability for the performance of corrective actions associated
with hydrocarbon recovery from ground water and a cooling tower
at the Corpus Christi, Texas terminal and a process safety
management compliance matter at the Galena Park, Texas terminal
facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have insurance against the first
$2.5&nbsp;million of environmental liabilities related to the
Hess terminal facilities that arose prior to closing of the
acquisition from Hess, with a deductible of $0.3&nbsp;million,
and any environmental liabilities in excess of
$15.0&nbsp;million up to an aggregate of $65.0&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisition of the New
Haven, Connecticut marine terminal facility acquired from Wyatt
Energy and the acquisition of our inland terminals, the sellers
of those terminals agreed to indemnify us against specified
environmental liabilities. We also have insurance for up to
$25.0&nbsp;million of environmental liabilities for the
New&nbsp;Haven marine terminal facility, with a deductible of
$0.3&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also have insurance for up to
$2.5&nbsp;million of environmental liabilities for our Gibson,
Louisiana marine terminal facility, with a deductible of
$0.1&nbsp;million. We assumed all of the environmental
liabilities of the Gibson terminal, which we estimated at
$0.1&nbsp;million, at the time we acquired this facility from
Geonet Gathering, Inc.
</FONT>

<P align="center"><FONT size="2">19
</FONT>

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<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Environmental Liability Associated with the
    Williams Pipe Line System</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Energy Services has agreed to indemnify
us for losses and damages related to breach of environmental
representations and warranties and the failure to comply with
environmental laws prior to the acquisition of Williams Pipe
Line Company in excess of $2.0&nbsp;million up to a maximum of
$125.0&nbsp;million. As of December&nbsp;31, 2002, we had
collected $3.3&nbsp;million against this indemnity and had
receivables under this indemnity of $19.9&nbsp;million. Claims
related to these environmental indemnities must be made prior to
April 2008. Consequently, the remedial programs, assessed
penalties and capital expenditures discussed below arising in
connection with a failure to comply with environmental laws
prior to the acquisition are subject to claims of
indemnification by us of Williams Energy Services, in accordance
with the stated deductible amounts, capped amounts and term
limits. Moreover, this $125.0&nbsp;million amount will also be
subject to indemnification claims made by us for breaches of
representations and warranties other than environmental.
Williams has provided a performance guarantee for the remaining
amount of these environmental indemnities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Potentially significant assessment, monitoring
and remediation projects related to events prior to our
acquisition of the Williams Pipe Line system, are being
performed at 45&nbsp;sites in Illinois, Iowa, Kansas, Minnesota,
Missouri, Nebraska, North Dakota, Oklahoma, South Dakota and
Wisconsin. We estimate, at December&nbsp;31, 2002, that the
total cost of performing the currently anticipated assessment,
monitoring and remediation at these 45 sites over the next
several years will be approximately $18.7&nbsp;million, all of
which is covered by our indemnification agreements with
Williams. The most significant remedial costs at these
45&nbsp;sites are costs attributed to cleanup at eight terminals
(Des&nbsp;Moines, Iowa City and Sioux City, all in Iowa, Kansas
City, Kansas, Lincoln, Nebraska, Alexandria and Mankato,
Minnesota, and Watertown, South Dakota) and two right of way
locations (Bartlemy Lane, Minnesota and Kansas City
Milepost&nbsp;1, Kansas) where we estimate that
$13.2&nbsp;million of the $18.7&nbsp;million in costs of
assessment, monitoring and remediation will be incurred. This
estimate assumes that we will be able to use common remedial and
monitoring methods or associated engineering or institutional
controls to demonstrate compliance with applicable regulatory
requirements. This estimate covers the cost of performing
assessment, remediation and/or monitoring of impacted soils,
groundwater and surface water conditions, but does not include
any costs for potential claims by others with respect to these
sites. While we do not expect any such potential claims by
others to be materially adverse to our operations, financial
position, or cash flows, we cannot assure you that the actual
remediation costs or associated remediation liabilities will not
exceed this $18.7&nbsp;million amount.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, there are several sites where
capital expenditures such as the installation of new loading
racks, new tank seals and/or secondary containment equipment
will be required in order to comply with or otherwise satisfy
applicable environmental requirements. In particular, we expect
to incur approximately $3.9&nbsp;million in capital
expenditures, including: an estimated $2.0&nbsp;million to
install a new loading rack at Palmyra, Missouri; an estimated
$1.6&nbsp;million to install dike linings at Alexandria,
Minnesota; and an estimated $0.3&nbsp;million to install
breakout tank linings at Sioux Falls, South Dakota. In addition,
we are considering several measures to address emissions
concerns at an existing loading rack at Enid, Oklahoma. These
costs are expected to be indemnified by Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with a liquid petroleum release
discovered in Menard County, Illinois, in July 1994, the state
of Illinois filed a suit against Williams Pipe Line Company in
July 1996 with respect to remediation of impacts arising from
the release. Two landowners adjacent to the release area
subsequently intervened in the suit. A consent order resolving
this matter was negotiated with the Illinois Attorney
General&#146;s office and resulted in payment of a $30,000 civil
penalty and a supplemental environmental project which cost
$72,000. The only outstanding requirement of the Consent Order
is smart pigging specified pipelines which we estimate will cost
approximately $0.8&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the 45&nbsp;sites/projects
discussed above, five releases have occurred since we acquired
the Williams Pipe Line system in April 2002, resulting in
approximately $0.8&nbsp;million in expenditures to date. We have
notified federal and state agencies of each of these incidents
and are currently evaluating appropriate measures required to
achieve regulatory closure of each incident. While the ultimate
costs associated with cleanup of these incidents cannot be
determined at this time, we have preliminarily estimated
additional cleanup costs of between $0.3&nbsp;million and
$0.8&nbsp;million, none of which is indemnified by Williams.
</FONT>

<P align="center"><FONT size="2">20
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may experience future releases of refined
petroleum products into the environment from the Williams Pipe
Line system and our other pipelines and terminals or discover
historical releases that were previously unidentified or not
assessed. While we maintain an extensive inspection and
self-audit program designed, as applicable, to prevent, detect
and address these releases promptly, damages and liabilities
incurred due to any future environmental releases from our
assets nevertheless have the potential to substantially affect
our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amendments to the federal Spill Prevention,
Control, and Countermeasure (SPCC)&nbsp;regulations that became
effective on August&nbsp;16, 2002 require revisions and/or
cross-references be made to all our SPCC plans, of which we have
more than 100, and may result in some of our facilities
implementing physical improvements to ensure compliance with the
regulation. At this time, the costs associated with complying
with the amended regulations cannot be determined.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;2, 2001, the EPA issued an
information request asking for information on oil releases and
discharges in any amount from Williams and its affiliates&#146;
pipelines, pipeline systems and pipeline facilities used in the
movement of oil or petroleum products during the period from
July&nbsp;1, 1998 through July&nbsp;2, 2001. In November 2001,
Williams furnished its response, which related primarily to the
Williams Pipe Line system. We have received no further
correspondence from the EPA related to this issue.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Hazardous Substances and
    Wastes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In most instances, the environmental laws and
regulations affecting our operations relate to the release of
hazardous substances or solid wastes into the water or soils,
and include measures to control pollution of the environment.
For instance, the Comprehensive Environmental Response,
Compensation and Liability Act, also known as the Superfund law,
and comparable state laws impose liability, without regard to
fault or the legality of the original conduct, on certain
classes of persons who are considered to be responsible for the
release of a hazardous substance into the environment. These
persons include the owner or operator of the disposal site or
sites where the release occurred and companies that disposed or
arranged for the disposal of the hazardous substances. Under the
Superfund law, these persons may be subject to joint and several
liability for the costs of cleaning up the hazardous substances
that have been released into the environment, for damages to
natural resources and for the costs of certain health studies.
The Superfund law also authorizes the Environmental Protection
Agency, or EPA, and in some instances, third parties to act in
response to threats to the public health or the environment and
to seek to recover from the responsible classes of persons the
costs they incur. It is not uncommon for neighboring landowners
and other third parties to file claims for personal injury and
property damage allegedly caused by hazardous substances or
other pollutants released into the environment. In the course of
our ordinary operations, we may generate waste that falls within
the Superfund law&#146;s definition of a hazardous substance and
as a result, we may be jointly and severally liable under the
Superfund law for all or part of the costs required to clean up
sites at which those hazardous substances have been released
into the environment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations also generate wastes, including
hazardous wastes, that are subject to the requirements of the
RCRA and comparable state statutes. We are not currently
required to comply with a substantial portion of the RCRA
requirements because our operations routinely generate only
small quantities of hazardous wastes, and we do not hold
ourselves out as a hazardous waste treatment, storage or
disposal facility operator that is required to obtain a RCRA
hazardous waste permit. While RCRA currently exempts a number of
wastes, including many oil and gas exploration and production
wastes, from being subject to hazardous waste requirements, the
EPA from time to time will consider the adoption of stricter
disposal standards for non-hazardous wastes. Moreover, it is
possible that additional wastes, which could include
non-hazardous wastes currently generated during operations, will
in the future be designated as hazardous wastes. Hazardous
wastes are subject to more rigorous and costly storage and
disposal requirements than are non-hazardous wastes. Changes in
the regulations could have a material adverse effect on our
capital expenditures or operating expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently own or lease properties where
hydrocarbons are being or have been handled for many years.
Although we have utilized operating and disposal practices that
were standard in the industry at the time,
</FONT>

<P align="center"><FONT size="2">21
</FONT>

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<DIV align="left">
<FONT size="2">hydrocarbons or other wastes may have been
disposed of or released on, under or from the properties owned
or leased by us or on or under other locations where these
wastes have been taken for disposal. In addition, many of these
properties have been operated by third parties whose treatment
and disposal or release of hydrocarbons or other wastes was not
under our control. These properties and wastes disposed thereon
may be subject to the Superfund law, RCRA and analogous state
laws. Under these laws, we could be required to remove or
remediate previously disposed wastes, including wastes disposed
of or released by prior owners or operators, to clean up
contaminated property, including groundwater contaminated by
prior owners or operators, or to make capital improvements to
prevent future contamination. We are currently evaluating soil
and groundwater conditions at a number of our properties where
historical operations conducted primarily by former site owners
or operators or more recent operations conducted by us may have
resulted in releases of hydrocarbons or other wastes. These
investigations and possible cleanup activities are either under
consideration or already have been or will be initiated at a
number of our locations.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Above Ground Storage Tanks</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">States in which we operate typically have laws
and regulations governing above ground tanks containing liquid
substances. Generally, these laws and regulations require that
these tanks include secondary containment systems or that the
operators take alternative precautions to ensure that no
contamination results from any leaks or spills from the tanks.
The Department of Transportation Office of Pipeline Safety has
incorporated API 653 to regulate above ground tanks subject to
their jurisdiction. We believe we are in material compliance
with all applicable above ground storage tank laws and
regulations. As part of our assessment of facility operations we
have identified some above ground tanks at our terminals that
either are, or are suspected of being, coated with lead-based
paints. The removal and disposal of any paints that are found to
be lead-based, whenever such activities are conducted in the
future as part of our day-to-day maintenance activities, will
require increased handling by us. However, we do not expect the
costs associated with this increased handling to be significant.
We believe that the future implementation of above ground
storage tank laws or regulations will not have a material
adverse effect on our financial condition or results of
operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Water Discharges</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations can result in the discharge of
pollutants, including oil. The Oil Pollution Act was enacted in
1990 and amends provisions of the Federal Water Pollution
Control Act of 1972 or the Water Pollution Control Act and other
statutes as they pertain to prevention and response to oil
spills. The Oil Pollution Act subjects owners of facilities to
strict, joint and potentially unlimited liability for removal
costs and certain other consequences of an oil spill such as
natural resource damages, where the spill is into navigable
waters, along shorelines or in the exclusive economic zone of
the United States. In the event of an oil spill from one of our
facilities into navigable waters, substantial liabilities could
be imposed upon us. States in which we operate have also enacted
similar laws. Regulations have been or are being developed under
the Oil Pollution Act and comparable state laws that may also
impose additional regulatory burdens on our operations. Although
the costs associated with complying with the amended regulations
cannot be determined at this time, we do not expect these
expenditures to have a material adverse effect on our financial
condition or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Federal Water Pollution Control Act imposes
restrictions and strict controls regarding the discharge of
pollutants into navigable waters. This law and comparable state
laws require that permits be obtained to discharge pollutants
into state and federal waters and impose substantial potential
liability for the costs of noncompliance and damages. Where
required, we hold discharge permits that were issued under the
Federal Water Pollution Control Act or a state-delegated
program, and we believe that we are in material compliance with
the terms of those permits. While we have experienced permit
discharge exceedances at some of our terminals we do not expect
our compliance with existing permits and foreseeable new permit
requirements to have a material adverse effect on our financial
position or results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Air Emissions</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations are subject to the federal Clean
Air Act and comparable state and local laws. Under such laws,
permits are typically required to emit pollutants into the
atmosphere. Amendments to the federal Clean
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<DIV align="left">
<FONT size="2">Air Act enacted in 1990, as well as recent or
soon to be proposed changes to state implementation plans, or
SIPs, for controlling air emissions in regional, non-attainment
areas require or will require most industrial operations in the
United States to incur capital expenditures in order to meet air
emission control standards developed by the EPA and state
environmental agencies. As a result of these amendments, our
facilities that emit volatile organic compounds or nitrogen
oxides are subject to increasingly stringent regulations,
including requirements that some sources install maximum or
reasonably available control technology. In addition, the
amendments include an operating permit for major sources of
volatile organic compounds, which applies to some of our
facilities. We believe that we currently hold or have applied
for all necessary air permits and that we are in material
compliance with applicable air laws and regulations. Although we
can give no assurances, we believe implementation of the 1990
federal Clean Air Act amendments and any changes to the SIPs
pertaining to air quality in regional non-attainment areas will
not have a material adverse effect on our financial condition or
results of operations.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Employee Safety</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to the requirements of the federal
OSHA and comparable state statutes that regulate the protection
of the health and safety of workers. In addition, the OSHA
hazard communication standard requires that certain information
be maintained about hazardous materials used or produced in
operations and that this information be provided to employees,
state and local government authorities and citizens. We believe
that our operations are in material compliance with OSHA
requirements, including general industry standards, record
keeping requirements and monitoring of occupational exposure to
regulated substances.
</FONT>

<P align="left">
<B><FONT size="2">Title to Properties</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Substantially all of our pipelines are
constructed on rights-of-way granted by the apparent record
owners of the property, and in some instances, these
rights-of-way are revocable at the election of the grantor.
Several rights-of-way for our pipelines and other real property
assets are shared with other pipelines and other assets owned by
affiliates of Williams and by third parties. In many instances,
lands over which rights-of-way have been obtained are subject to
prior liens which have not been subordinated to the
rights-of-way grants. We have obtained permits from public
authorities to cross over or under, or to lay facilities in or
along, water courses, county roads, municipal streets and state
highways, and in some instances, these permits are revocable at
the election of the grantor. We have also obtained permits from
railroad companies to cross over or under lands or
rights-of-way, many of which are also revocable at the
grantor&#146;s election. In some cases, property for pipeline
purposes was purchased in fee. In some states and under some
circumstances, we have the right of eminent domain to acquire
rights-of-way and lands necessary for our pipelines. The
previous owners of the applicable pipelines may not have
commenced or concluded eminent domain proceedings for some
rights-of-way.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some of the leases, easements, rights-of-way,
permits and licenses that have been transferred to us will
require the consent of the grantor to transfer these rights,
which in some instances is a governmental entity. We believe
that we have obtained or will obtain sufficient third-party
consents, permits and authorizations for the transfer of the
assets necessary for us to operate our business in all material
respects. We believe that a failure to obtain all consents,
permits or authorizations will not have a material adverse
effect on the operation of our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that we have satisfactory title to all
of our assets or are entitled to indemnification from affiliates
of Williams (1)&nbsp;for title defects to the ammonia pipeline
that arise within 15&nbsp;years after the closing of our initial
public offering and (2)&nbsp;for title defects related to the
Williams Pipe Line system that arise within ten years from its
acquisition. Although title to these properties is subject to
encumbrances in some cases, such as customary interests
generally retained in connection with acquisition of real
property, liens that can be imposed in some jurisdictions for
government-initiated action to clean up environmental
contamination, liens for current taxes and other burdens, and
easements, restrictions and other encumbrances to which the
underlying properties were subject at the time of acquisition by
us or our predecessor, we believe that none of these burdens
should materially detract from the value of our properties or
from our interest in them or should materially interfere with
their use in the operation of our business.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The assets of Williams Pipe Line have been
pledged as collateral against the Series&nbsp;A and
Series&nbsp;B notes issued by Williams Pipe Line (see
Note&nbsp;12&nbsp;&#151; Long-Term Debt for further information).
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To conduct our operations, our general partner or
its affiliates employ approximately 788&nbsp;employees, of which
538 conduct the operations of the Williams Pipe Line system, 192
conduct the operations of our petroleum products terminals and
58 spend 90% or more of their time providing general and
administrative services. Approximately 226 of the employees
assigned to the Williams Pipe Line system are represented by the
Paper, Allied-Industrial, Chemical and Energy Workers
International Union, or PACE. The employees represented by PACE
are subject to a contract that extends to January 2006. The
employees at our Galena Park marine terminal facility are
currently represented by a union, but indicated in 2000 their
unanimous desire to terminate their union affiliation.
Nevertheless, the National Labor Relations Board
(&#147;NLRB&#148;) has ordered us to bargain with the union as
the exclusive collective bargaining representative of the
employees at the facility. We appealed this decision to the
Fifth Circuit Court of Appeals. Subsequently, the NLRB indicated
the possibility that it would overturn its decision and
requested that the Court of Appeals return our and other matters
to the NLRB for further review and decision. No final decision
has been issued by the NLRB. Our general partner considers its
employee relations to be good.
</FONT>

<P align="left">
<B><FONT size="2">Forward-Looking Statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain matters discussed in this report include
forward-looking statements&nbsp;&#151; statements that discuss
our expected future results based on current and pending
business operations. We make these forward-looking statements in
reliance on the safe harbor protections provided under the
Private Securities Litigation Reform Act of 1995.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Forward-looking statements can be identified by
words such as anticipates, believes, expects, planned, scheduled
or similar expressions. Although we believe these
forward-looking statements are based on reasonable assumptions,
statements made regarding future results are subject to numerous
assumptions, uncertainties and risks that may cause future
results to be materially different from the results stated or
implied in this document.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following are among the important factors
that could cause actual results to differ materially from any
results projected, forecasted, estimated or budgeted:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">price trends and overall demand for natural gas
    liquids, refined petroleum products, natural gas, oil and
    ammonia in the United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">weather patterns materially different than
    historical trends;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">development of alternative energy sources;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in demand for storage in our petroleum
    products terminals;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in our tariff rates implemented by the
    Federal Energy Regulatory Commission and the United States
    Surface Transportation Board;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">shut-downs or cutbacks at major refineries,
    petrochemical plants, ammonia production facilities or other
    businesses that use or supply our services;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the throughput on petroleum products
    pipelines owned and operated by third parties and connected to
    our petroleum products terminals;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">loss of one or all of our three customers on our
    ammonia pipeline system;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the federal government&#146;s policy
    regarding farm subsidies, which negatively impact the demand for
    ammonia and reduce the amount of ammonia transported through our
    ammonia pipeline system;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in the competition our operations
    encounter;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">24
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the occurrence of an operational hazard or
    unforeseen interruption for which we are not adequately insured;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to integrate any acquired operations
    into our existing operations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to successfully identify and close
    strategic acquisitions and make cost saving changes in
    operations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in general economic conditions in the
    United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in laws and regulations to which we are
    subject, including tax, environmental and employment laws and
    regulations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the cost and effects of legal and administrative
    claims and proceedings against us or our subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the amount of our indebtedness, which could make
    us vulnerable to general adverse economic and industry
    conditions, limit our ability to borrow additional funds, place
    us at competitive disadvantages compared to our competitors that
    have less debt or have other adverse consequences;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the condition of the capital markets and equity
    markets in the United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the ability to raise capital in a cost-effective
    way;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effect of changes in accounting policies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the ability to manage rapid growth;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Williams&#146; ability to perform on its
    environmental and rights-of-way indemnifications to us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">supply disruption;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">global and domestic economic repercussions from
    terrorist activities and the government&#146;s response thereto.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">(d)&nbsp;Financial Information About
Geographical Areas</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have no revenue or segment profit or loss
attributable to international activities.
</FONT>

<P align="left">
<B><FONT size="2">(e)&nbsp;Available Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file annual, quarterly and other reports and
other information with the SEC. You may read and copy any
document we file at the SEC&#146;s public reference room at
450&nbsp;Fifth Street, N.W., Washington,&nbsp;D.C. 20549. Please
call the SEC at 1-800-732-0330 for further information on their
public reference room. Reports and other information that we
file with or furnish to the SEC electronically are also
available at the SEC&#146;s web site at http://www.sec.gov. You
can also obtain information about us at the offices of the New
York Stock Exchange, 20&nbsp;Broad Street, New York, New
York&nbsp;10005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Internet address is
www.williamsenergypartners.com. We did not make all reports
filed or furnished to the SEC pursuant to Section&nbsp;13(a) or
15(d) of the Exchange Act available on or through our Internet
website as of November&nbsp;15, 2002. However, as of
March&nbsp;6, 2003, we make available, free of charge on or
through our Internet website, our annual report on
Form&nbsp;10-K, quarterly reports on Form&nbsp;10-Q, current
reports on Form&nbsp;8-K, and amendments to those reports filed
or furnished pursuant to Section&nbsp;13(a) or 15(d) of the
Exchange Act as soon as reasonably practical after we
electronically file such material with, or furnish it to, the
United States Securities and Exchange Commission.
</FONT>

<P align="center"><FONT size="2">25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Item 2. Properties" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Properties</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Item&nbsp;1(c) for a description of the
locations and general character of our material properties.
</FONT>

<!-- link2 "Item 3. Legal Proceedings" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Legal Proceedings</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a party to various legal actions that have
arisen in the ordinary course of our business. We do not believe
that the resolution of these matters will have a material
adverse effect on our financial condition or results of
operations.
</FONT>

<!-- link2 "Item 4. Submission of Matters to a Vote of Security Holders" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Submission of Matters to a Vote of Security
    Holders</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No matters were submitted to a vote of the
unitholders during the fourth quarter of 2002.
</FONT>

<!-- link1 "PART II" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<!-- link2 "Item 5. Market For Registrant&#146;s Common Equity and Related Stockholder Matters" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Market For Registrant&#146;s Common Equity
    and Related Stockholder Matters</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We completed our initial public offering in
February 2001. Our common units are listed on the New York Stock
Exchange under the symbol &#147;WEG&#148;. At the close of
business on January&nbsp;31, 2003, we had 121&nbsp;registered
holders and 15,167&nbsp;beneficial holders of record of our
common units. The high and low closing sales price ranges and
distributions declared by quarter for 2002 and 2001 are as
follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Distribution*</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Distribution*</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1st
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.6125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.2920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2nd
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.6750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">3rd
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.7000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">4th
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.7250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents declared distributions associated with
    each respective quarter. Distributions were declared and paid
    within 45&nbsp;days following the close of each quarter. The
    distribution for the first quarter of 2001 was pro-rated for the
    period from February&nbsp;10, 2001 through March&nbsp;31, 2001
    due to the timing of our initial public offering.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to common units, we have also issued
subordinated and Class&nbsp;B units, for which there is no
established public trading market. All of the subordinated and
Class&nbsp;B units are held by affiliates of our General
Partner. The subordinated units were issued as part of our
initial public offering in February 2001 and receive a quarterly
distribution only after sufficient funds have been paid to the
common and Class&nbsp;B units, as described below. In addition,
the subordinated units generally have reduced voting rights
equal to one-half vote for each unit owned.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Class&nbsp;B units were issued as partial
payment for the April 2002 purchase of the Williams Pipe Line
system (see Note&nbsp;5&nbsp;&#151; Acquisitions and
Divestitures for additional information on the acquisition of
Williams Pipe Line). These units are equivalent to common units
except they only have voting rights with respect to matters that
would have a material impact on the holders of such units. Our
credit agreements contain provisions which prevent us from
redeeming or retiring the Class&nbsp;B units except with the
proceeds of an equity issuance. When the Class&nbsp;B units are
redeemed, the price will be based on the 20-day average closing
price of the common units prior to the redemption date. See
Note&nbsp;12 to the Consolidated Financial Statements. If the
Class&nbsp;B units are not redeemed by April&nbsp;11, 2003, then
upon the request of the holder of the Class&nbsp;B units and
approval of the holders of a majority of the common units voting
at a meeting of the unitholders, the Class&nbsp;B units will
convert into common units. If the approval of the conversion by
the common unitholders is not obtained within 120&nbsp;days of
this request, the holder of the Class&nbsp;B units will be
entitled to receive distributions with respect to its
Class&nbsp;B units, on a per unit basis, equal to 115% of the
amount of distributions paid on a common unit.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the subordination period, the holders of
our common and Class&nbsp;B units are entitled to receive each
quarter a minimum quarterly distribution of $0.525&nbsp;per unit
($2.10 annualized) prior to any distribution of available cash
to holders of our subordinated units. The subordination period
is defined generally as the period that will end on the first
day of any quarter beginning after December&nbsp;31, 2005 if
(1)&nbsp;we have distributed at least the minimum quarterly
distribution on all outstanding units with respect to each of
the immediately preceding three consecutive, non-overlapping
four-quarter periods and (2)&nbsp;our adjusted operating
surplus, as defined in our partnership agreement, during such
periods equals or exceeds the amount that would have been
sufficient to enable us to distribute the minimum quarterly
distribution on all outstanding units on a fully diluted basis
and the related distribution on the 2% general partner interest
during those periods. In addition, one-quarter of the
subordinated units may convert to common units on a one-for-one
basis after December&nbsp;31, 2003 and one-quarter of the
subordinated units may convert to common units on a one-for-one
basis after December&nbsp;31, 2004 if we meet the tests set
forth in our partnership agreement. If the subordination period
ends, the rights of the holders of subordinated units will no
longer be subordinated to the rights of the holders of common
and Class&nbsp;B units and the subordinated units may be
converted into common units. We currently anticipate meeting the
first early conversion test. The impact of meeting the test is
that after December&nbsp;31, 2003, one-quarter of our
outstanding subordinated units will convert to common units, the
existing common units will have less subordinated protection
with respect to distributions, and the subordinated units that
convert into common units will receive voting rights equivalent
to those of the common units.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the subordination period, our cash is
distributed first 98% to the holders of common and Class&nbsp;B
units and 2% to our General Partner until there has been
distributed to the holders of common and Class&nbsp;B units an
amount equal to the minimum quarterly distribution and
arrearages in the payment of the minimum quarterly distribution
on the common and Class&nbsp;B units for any prior quarter. Any
additional cash is distributed 98% to the holders of
subordinated units and 2% to our General Partner until there has
been distributed to the holders of subordinated units an amount
equal to the minimum quarterly distribution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our General Partner is entitled to incentive
distributions if the amount we distribute with respect to any
quarter exceeds specified target levels shown below:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Percentage of Distributions</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Quarterly Distribution Amount per Unit</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Limited Partners</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">General Partner</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Up to $.578
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Above $.578 up to $.656
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Above $.656 up to $.788
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Above $.788
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We must distribute all of our cash on hand at the
end of each quarter, less reserves established by our General
Partner. We refer to this cash as available cash, which is
defined in our partnership agreement. The amount of available
cash may be greater than or less than the minimum quarterly
distribution. We currently pay quarterly cash distributions of
$0.725&nbsp;per unit. In general, we intend to continue to
increase our cash distributions in the future assuming no
adverse change in our operations, economic conditions and other
factors. However, we cannot guarantee that future distributions
will continue at such levels.
</FONT>

<P align="center"><FONT size="2">27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Item 6." -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="left">
<B><FONT size="2">Item&nbsp;6.</FONT></B>

<!-- link1 "SELECTED FINANCIAL AND OPERATING DATA (In thousands, except operating statistics and per unit amounts)" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">SELECTED FINANCIAL AND OPERATING
DATA</FONT></B>

<DIV align="center">
<B><FONT size="2">(In thousands, except operating statistics and
per unit amounts)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have derived the summary selected historical
financial data as of December&nbsp;31, 2002 and 2001 and for
each of the years ended December&nbsp;31, 2002, 2001 and 2000
from our audited consolidated financial statements and related
notes. Due to the April 2002 acquisition of Williams Pipe Line,
we have restated our consolidated financial statements and notes
to reflect the results of operations, financial position and
cash flows of Williams Energy Partners L.P. and Williams Pipe
Line Company on a combined basis throughout the periods
presented. These financial data are an integral part of, and
should be read in conjunction with, the consolidated financial
statements and notes thereto. All other amounts have been
prepared from our financial records. Information concerning
significant trends in the financial condition and results of
operations is contained in Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The historical results for Williams Pipe Line
Company (&#147;Williams Pipe Line&#148;) included income and
expenses and assets and liabilities that were conveyed to and
assumed by an affiliate of Williams Pipe Line prior to our
acquisition of it. The assets principally included Williams Pipe
Line&#146;s interest in and agreement related to Longhorn
Partners Pipeline (&#147;Longhorn&#148;), an inactive refinery
site at Augusta, Kansas, a pipeline construction project, the
ATLAS&nbsp;2000 software system and the pension asset and
obligations associated with the non-contributory defined-benefit
pension plan that covered employees assigned to Williams Pipe
Line&#146;s operations. The liabilities principally included the
environmental liabilities associated with the inactive refinery
site in Augusta, Kansas and current and deferred income taxes
and affiliate note payable. The current and deferred income
taxes and the affiliate note payable were contributed to us in
the form of a capital contribution by an affiliate of Williams.
Also, because of an agreement we have with Williams, revenues
from Williams Pipe Line&#146;s blending operations, other than
an annual blending fee of approximately $3.0&nbsp;million, have
not been included in our financial results since April 2002. In
addition, general and administrative expenses related to the
Williams Pipe Line system that we have been reimbursing to our
General Partner have been limited to $30.0&nbsp;million per year
plus an annual escalator. See Note&nbsp;1 to the Consolidated
Financial Statements regarding recent changes to the General
Partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">EBITDA is defined as net income plus provision
for income taxes, debt placement fees, interest expense (net of
interest income) and depreciation and amortization. EBITDA
should not be considered an alternative to net income, operating
income, cash flow from operations or any other measure of
financial performance presented in accordance with generally
accepted accounting principles. EBITDA is not intended to
represent cash flow. Because EBITDA excludes some but not all
items that affect net income and these measures may vary among
other companies, the EBITDA data presented may not be comparable
to similarly titled measures of other companies. Our management
uses EBITDA as a performance measure to assess the viability of
projects and to determine overall rates of return on alternative
investment opportunities.
</FONT>

<P align="center"><FONT size="2">28
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income Statement Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation and terminals revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">363,740</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,412</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318,121</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">287,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product sales revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,527</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,169</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,873</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,331</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate construction and management fee revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">434,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">426,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">375,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">424,561</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses including environmental
    expenses net of indemnifications from Williams
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">144,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">121,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate construction expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101,924</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating margin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">192,451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186,781</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,439</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">167,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,670</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">General and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,365</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total costs and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">323,017</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">269,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">327,129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">137,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,829</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,998</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt placement fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (income) expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,112</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(431</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(816</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,511</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,220</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,121</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Working capital (deficit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,211</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,064</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net investment in direct financing leases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,143</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,116,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,104,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,050,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">973,939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">785,762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">570,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">139,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate long-term note payable(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">406,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">251,179</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Partners&#146; capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">388,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">284,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash Flow Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash distributions declared per unit(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Other Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating margin:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163,233</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">143,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,778</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,864</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,612</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating margin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">192,451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186,781</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,439</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">167,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">29
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income taxes(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,121</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt placement fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,998</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,670</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">174,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145,517</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">133,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating Statistics:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line System:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation revenue per barrel shipped (cents
    per barrel)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation barrels shipped (millions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">222.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">242.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barrel miles (billions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminals:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marine terminal average storage capacity utilized
    per month (million barrels)(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marine terminal throughput (million barrels)(e)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inland terminal throughput (million barrels)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Volume shipped (thousand tons)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">712</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Prior to our initial public offering on
    February&nbsp;9, 2001, our petroleum products terminals and
    ammonia pipeline system operations were subject to income taxes.
    Prior to our acquisition of Williams Pipe Line Company on
    April&nbsp;11, 2002, Williams Pipe Line Company was also subject
    to income taxes. Because we are a partnership, the petroleum
    products terminals and ammonia pipeline system were no longer
    subject to income taxes after our initial public offering, and
    Williams Pipe Line was no longer subject to income taxes
    following our acquisition of&nbsp;it.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">At the time of our initial public offering, the
    affiliate note payable associated with the petroleum products
    terminals operations was contributed to us as a capital
    contribution by an affiliate of Williams. At the closing of our
    acquisition of Williams Pipe Line Company, its affiliate note
    payable was contributed to us as a capital contribution by an
    affiliate of Williams.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Represents distributions declared associated with
    each respective calendar year. Distributions were declared and
    paid within 45&nbsp;days following the close of each quarter.
    Cash distributions declared for 2001 include a pro-rated
    distribution for the first quarter, which included the period
    from February&nbsp;10, 2001 through March&nbsp;31, 2001.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">For the year ended December&nbsp;31, 1999,
    represents the average storage capacity utilized per month for
    the Gulf Coast marine terminal facilities for the five months
    that we owned these assets in 1999. For the year ended
    December&nbsp;31, 2000, represents the average monthly storage
    capacity utilized for the Gulf Coast facilities
    (11.8&nbsp;million barrels) and the average monthly storage
    capacity utilized for the four months that we owned the New
    Haven marine terminal facility in 2000 (2.9&nbsp;million
    barrels). All of the above amounts exclude the Gibson facility,
    which is operated as a throughput facility.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(e)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">For the year ended December&nbsp;31, 2000,
    represents four months of activity at the New Haven facility,
    which was acquired in September 2000. For the year ended
    December&nbsp;31, 2001, represents a full year of activity for
    the New Haven facility (9.3&nbsp;million barrels) and two months
    of activity at the Gibson facility (2.2&nbsp;million barrels),
    which was acquired in October 2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">30
</FONT>

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<!-- link2 "Item 7." -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="left">
<B><FONT size="2">Item&nbsp;7.</FONT></B>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
OF</FONT></B>

<DIV align="center">
<B><FONT size="2">FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Introduction</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations should be read in
conjunction with the consolidated financial statements and notes
thereto. Williams Energy Partners L.P. is a publicly traded
limited partnership formed by The Williams Companies, Inc.
(&#147;Williams&#148;) to own, operate and acquire a diversified
portfolio of complementary energy assets. We are principally
engaged in the transportation, storage and distribution of
refined petroleum products and ammonia. Our current asset
portfolio consists&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Williams Pipe Line system;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">five marine terminal facilities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">23&nbsp;inland terminals (some of which are
    partially owned);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an ammonia pipeline system.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;11, 2002, we acquired for
approximately $1.0&nbsp;billion all of the membership interests
of Williams Pipe Line Company (&#147;Williams Pipe Line&#148;)
from a wholly owned subsidiary of Williams. Williams Pipe Line
owns and operates the Williams Pipe Line system. Because
Williams Pipe Line was an affiliate of ours at the time of the
acquisition, the transaction was between entities under common
control and, as such, was accounted for similar to a pooling of
interest. Accordingly, our consolidated financial statements and
notes have been restated to reflect the historical results of
operations, financial position and cash flows of Williams Energy
Partners and Williams Pipe Line on a combined basis throughout
the periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The historical results for the Williams Pipe Line
system include revenue and expenses and assets and liabilities
that were conveyed to and assumed by an affiliate of Williams
Pipe Line prior to our acquisition of it. These assets primarily
include Williams Pipe Line&#146;s interest in and agreements
related to Longhorn Partners Pipeline (&#147;Longhorn&#148;), an
inactive refinery at Augusta, Kansas, a pipeline construction
project, the ATLAS 2000 software system and the pension asset
and obligations associated with the non-contributory
defined-benefit pension plan that covered employees assigned to
Williams Pipe Line&#146;s operations. The results from these
assets have not been included in our financial results since our
acquisition of Williams Pipe Line in April 2002. In addition,
revenues from Williams Pipe Line&#146;s blending operations,
other than an annual blending fee of approximately
$3.0&nbsp;million, have not been included in our financial
results since April 2002. We report the Williams Pipe Line
system&#146;s operations as a separate operating segment.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Recent Developments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002, Williams began to experience
significant financial and liquidity difficulties and no longer
maintains an investment grade credit rating. In the event that
Williams&#146; financial condition does not improve or worsens
it may have to consider other options including the possibility
of filing for bankruptcy under the United States Bankruptcy
Code. Management believes that should Williams and its
affiliates file for bankruptcy protection that we would not
necessarily become a party to such bankruptcy filings. However,
we cannot assure you that Williams and its affiliates, or the
creditors of Williams and its affiliates, would not attempt to
utilize various remedies available in a bankruptcy (including
substantive consolidation), in an effort to make our assets
available to the creditors of Williams and its affiliates, or
how a bankruptcy court would resolve such issues. Likewise,
there can be no assurances as to the ultimate impact a
bankruptcy by Williams and its affiliates would have on their
ability to perform obligations owed to us, including our General
Partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WEG&nbsp;GP&nbsp;LLC, our general partner
(&#147;General Partner&#148;), is a wholly-owned subsidiary of
Williams. Combined with its limited partnership interest,
Williams owns approximately 55% of us. However, we operate our
business in a manner separate and distinct from Williams. Among
other things, (i)&nbsp;we either own or lease
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<DIV align="left">
<FONT size="2">the assets used in our business in our own name,
(ii)&nbsp;we have three independent board members who serve on a
conflicts committee that must approve any material transaction
between Williams or its affiliates and us, as well as approve
certain significant transactions (such as the filing of a
bankruptcy petition) and (iii)&nbsp;other than affiliate
receivables and payables generated from product sales and
services rendered in the normal course of business, we do not
provide any credit support to Williams or its affiliates and
Williams does not provide credit support to&nbsp;us.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provisions of the General Partner&#146;s limited
liability company agreement specifically provide that, decisions
regarding a voluntary bankruptcy filing of WEG&nbsp;GP&nbsp;LLC
or us must be approved by our conflicts committee. Our conflicts
committee is comprised of the independent board members of
WEG&nbsp;GP&nbsp;LLC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2003, Williams announced its
intention to divest its interest in our General Partner and all
of its limited partnership interests. It is uncertain what form
this potential transaction may take and management cannot
currently assess what impact such an acquisition would have on
our on-going operations. Please read &#147;Other Known Trends
and Events&nbsp;&#151; Change of Control&#148;.
</FONT>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The Williams Pipe Line
System.</FONT></I><FONT size="2"> The Williams Pipe Line system
is a common carrier transportation pipeline and terminals
network. The system generates approximately 80% of its revenues,
excluding the sale of petroleum products, through transportation
tariffs for volumes of petroleum products it ships. These
tariffs vary depending upon where the product originates, where
ultimate delivery occurs and any applicable discounts. All
transportation rates and discounts are in published tariffs
filed with the Federal Energy Regulatory Commission
(&#147;FERC&#148;). Williams Pipe Line also earns revenues from
non-tariff based activities, including leasing pipeline and
storage tank capacity to shippers on a long-term basis and by
providing data services and product services such as ethanol
unloading and loading, additive injection, custom blending and
laboratory testing for our customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to our acquisition of it in April 2002,
Williams Pipe Line generally did not produce or trade refined
petroleum products or liquid propane gases or take title to the
products it transported. The system generates small volumes of
product by blending natural gas liquids with gasoline and by
fractionating transmix, which is a mixture of products resulting
from the intermingling of different product grades during normal
operation of the pipeline. Williams Pipe Line purchased and took
title to the inventories associated with blending and
fractionation until the processed product has been sold. In
connection with the acquisition of Williams Pipe Line, we, and
an affiliate of Williams agreed that Williams Pipe Line would no
longer take title to the natural gas liquids it blends with
gasoline or the resulting product. We continue to perform these
blending services for affiliates of Williams under a ten-year
agreement for an annual fee that will increase to approximately
$3.6&nbsp;million in 2003. In addition, we perform blending
services at our Little Rock, Arkansas inland terminals, which
generate annual blending fees of approximately
$0.6&nbsp;million. As a result, total revenues generated from
blending services in 2003 will be approximately
$4.2&nbsp;million. We continue to purchase and fractionate
transmix and to sell the resulting separated products.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating costs and expenses incurred by the
Williams Pipe Line system are principally fixed costs related to
routine maintenance and system integrity as well as field and
support personnel. Other costs, including power, fluctuate with
volumes transported and stored on the system. Expenses resulting
from environmental remediation projects have historically
included costs from projects relating both to current and past
events. In connection with our acquisition of Williams Pipe
Line, Williams Energy Services generally agreed to indemnify us
for costs and expenses relating to environmental remediation for
events that occurred before April&nbsp;11, 2002 and are
discovered within six years from that date. Please read
&#147;Business&nbsp;&#151; Environmental.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Petroleum Products
Terminals.</FONT></I><FONT size="2"> Within our terminals
network, we operate two types of terminals: marine terminal
facilities and inland terminals. The marine terminal facilities
are large product storage facilities that generate revenues
primarily from fees that we charge customers for storage and
throughput services. The inland terminals earn revenues
primarily from fees that we charge based on the volumes of
refined petroleum products distributed from these terminals. The
inland terminals also earn ancillary revenues
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<DIV align="left">
<FONT size="2">from injecting additives into gasoline and jet
fuel, filtering jet fuel and delivering product to the Dallas
Love Field airport. Also included in ancillary revenues is the
gain or loss resulting from differences in
metered-versus-physical volumes of refined petroleum products
received at our terminals.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating costs and expenses that we incur in our
marine and inland terminals are principally fixed costs related
to routine maintenance as well as field and support personnel.
Other costs, including power, fluctuate with storage utilization
or throughput levels.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Ammonia Pipeline
System.</FONT></I><FONT size="2"> The ammonia pipeline system
earns the majority of its revenue from transportation tariffs
that we charge for transporting ammonia through the pipeline. We
have entered into a new agreement with Enterprise Products
Partners L.P. (&#147;Enterprise&#148;) to operate our ammonia
system, which will increase our operating expenses by
approximately $0.5&nbsp;million annually Also, Enterprise will
charge us $2.5&nbsp;million annually for general and
administrative expenses associated with their operation of this
pipeline. Management believes that the general and
administrative costs will be subject to the expense limitation
under our Omnibus Agreement. Please read
&#147;Item&nbsp;13&nbsp;&#151; Certain Relationships and Related
Transactions&nbsp;&#151; Omnibus Agreement.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and Administrative
Expenses.</FONT></I><FONT size="2"> General and administrative
expenses are provided by and paid to Williams as defined by the
Omnibus Agreement. General and administrative expenses include
functions such as commercial operations, engineering,
information technology, finance, accounting, human resources and
other corporate services. Through a change of control or with
90&nbsp;days written notice, Williams can terminate its
obligations to provide services to us, which would also
eliminate Williams&#146; obligations under the general and
administrative expense limitation included in the Omnibus
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our initial public offering,
and with respect solely to the petroleum products terminals and
ammonia pipeline assets we owned at the time of that offering,
we and our General Partner agreed with Williams that the general
and administrative expenses to be reimbursed to our General
Partner by us would not exceed $6.0&nbsp;million for 2001,
excluding expenses associated with our long-term incentive
plans. The reimbursement limitation will remain in place through
2011 and may increase by no more than the greater of 7%&nbsp;per
year or the percentage increase in the consumer price index for
that year. If we make an acquisition, general and administrative
expenses may also increase by the amount of these expenses
included in the valuation of the business acquired. For 2003,
the general and administrative limitation was increased 2.4% to
$6.9&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our acquisition of the
Williams Pipe Line system, we and our General Partner agreed
with Williams that the general and administrative expenses to be
reimbursed to our General Partner by us for charges related to
this asset would be $30.0&nbsp;million for 2002, pro rated for
the actual period that we owned Williams Pipe Line. In each year
after 2002, these expenses may increase by the lesser of
2.5%&nbsp;per year or the percentage increase in the consumer
price index for that year. For 2003, the general and
administrative limitation was increased 2.4% to
$30.7&nbsp;million. In addition, costs will increase by another
$0.3&nbsp;million for general and administrative costs
associated with the Rio Grande Pipeline, which we began
operating in February 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect the 2003 general and administrative
expenses paid to Williams to be $37.9&nbsp;million before
equity-based long-term incentive plans and adjustments for
additional acquisitions. Please read &#147;Risks Related to Our
Business&#148; for additional discussion of potential changes in
our general and administrative costs as a result of a sale by
Williams of their interest in us. Management estimates that the
actual general and administrative costs required for our
operations of the Partnership on a stand-alone basis could
significantly exceed this $37.9&nbsp;million amount, due in part
to significant increases in insurance premiums and increased
general and administrative costs on the ammonia pipeline system
associated with the new Enterprise operating contract, as well
as our new agreement to operate the Rio Grande Pipeline.
</FONT>

<P align="center"><FONT size="2">33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Acquisition History</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have materially increased our operations
through a series of transactions since our initial public
offering in February 2001 including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in April 2002, the acquisition of the Williams
    Pipe Line system from a subsidiary of Williams;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in December 2001, the acquisition of a natural
    gas liquids pipeline in Illinois from Aux Sable Liquid Products
    L.P.;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in October 2001, the acquisition of a marine
    crude oil terminal facility in Gibson, Louisiana from Geonet
    Gathering, Inc.;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in June 2001, the acquisition of two inland
    refined petroleum products terminals in Little Rock, Arkansas
    from TransMontaigne, Inc.; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in April 2001, the acquisition of a refined
    petroleum products pipeline in Dallas, Texas from Equilon
    Pipeline Company LLC.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Year Ended December&nbsp;31, 2002 Compared
    to Year Ended December&nbsp;31, 2001</FONT></I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financial Highlights (in thousands)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system transportation and
    related activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">272.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues excluding product sales and construction
    revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">363.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product sales and construction revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">434.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses including environmental
    expenses net of indemnifications from Williams:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system transportation and
    related activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses excluding product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total operating margin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">192.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating Statistics</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation revenue per barrel shipped (cents
    per barrel)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation barrels shipped (million barrels)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barrel miles (billions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminals:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marine terminal facilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average storage capacity utilized per month
    (barrels in millions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Throughput (barrels in millions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inland terminals:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Throughput (barrels in millions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Volume shipped (tons in thousands)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">712</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our revenues, excluding product sales and
construction revenues, for the year ended December&nbsp;31, 2002
were $363.7&nbsp;million compared to $339.4&nbsp;million for the
year ended December&nbsp;31, 2001, an increase of
$24.3&nbsp;million, or 7%. This increase was a result&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in Williams Pipe Line system&#146;s
    transportation and related activities revenues of
    $17.6&nbsp;million, or 7%. Transportation revenues increased
    between periods due to higher weighted-average tariffs that more
    than offset slightly lower shipments. The tariffs were higher
    due to a mid-year rate increase and our customers&#146;
    transporting products longer distances. These longer hauls
    resulted primarily from supply shifts within our pipeline system
    during the latter part of 2002 caused by temporary reductions of
    a refinery&#146;s production on our system. Further, increased
    rates for data services as well as higher ethanol loading and
    storage volumes resulted in additional revenue;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in petroleum products terminals
    revenues of $8.1&nbsp;million, or 12%, primarily due to the
    acquisitions of our Gibson marine terminal facility in October
    2001 and two Little Rock inland terminals in June 2001. An
    improved marketing environment resulted in higher utilization
    and rates at our Gulf Coast facilities, further increasing
    revenues during 2002;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a decrease in ammonia pipeline system revenues of
    $1.4&nbsp;million, or 10%, primarily due to a throughput
    deficiency billing in the prior year that resulted from a
    shipper&#146;s inability to meet its minimum annual throughput
    commitment for the contract year ended June 2001. In addition,
    revenue also declined due to significantly reduced volumes from
    one of our shippers following its filing for Chapter&nbsp;11
    bankruptcy during May 2002. Partially offsetting these decreases
    was a higher weighted-average tariff of $16.94 in 2002 compared
    to $16.21 during the prior year.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating expenses including environmental
expenses net of environmental indemnifications from Williams and
excluding product purchases were $155.1&nbsp;million for the
year ended December&nbsp;31, 2002, compared to
$160.9&nbsp;million for the year ended December&nbsp;31, 2001, a
decrease of $5.8&nbsp;million, or 4%. This decrease was a
result&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a decrease in Williams Pipe Line system expenses
    of $8.9&nbsp;million, or 7%, primarily due to lower
    environmental and maintenance expenses and reduced power costs.
    Environmental costs were lower due to the indemnification from
    an affiliate of Williams for environmental issues resulting from
    operations prior to our ownership of the pipeline. Maintenance
    expenses declined due to improved cost controls as a result of
    the implementation of a consistent and disciplined expense
    decision making process. Reduced power costs resulted from lower
    volumes transported coupled with reduced power rates. Partially
    offsetting these reductions was an increase in pipeline lease
    expenses, which represent
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">35
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">tariffs paid on connecting pipelines to move a
    customer&#146;s product to its ultimate destination. The
    customer reimburses us through the transportation tariff for
    this service which began in the current year, hence there are no
    associated pipeline lease expenses in the prior year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in petroleum products terminals
    expenses of $2.2&nbsp;million, or 7%, primarily due to the
    addition of the Gibson marine facility and the Little Rock
    inland terminals and increased maintenance expenses resulting
    from timing of tank cleaning and API&nbsp;653 inspections at the
    inland terminals;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in ammonia pipeline system expenses
    of $0.9&nbsp;million, or 23%, primarily due to the purchase in
    the current year of right-of-way easements that have
    historically been leased and higher property taxes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues from Williams Pipe Line product sales
were $69.2&nbsp;million for the year ended December&nbsp;31,
2002, while product purchases were $64.0&nbsp;million, resulting
in a net margin of $5.2&nbsp;million in 2002. The 2002&nbsp;net
margin represents a decrease of $6.2&nbsp;million compared to a
net margin in 2001 of $11.4&nbsp;million resulting from product
sales for the year ended December&nbsp;31, 2001 of
$106.7&nbsp;million and product purchases of $95.3&nbsp;million.
The margin decline in 2002 reflects our agreement with an
affiliate of Williams to provide blending services for them for
an annual fee of $3.0&nbsp;million. As a result of this
agreement, we no longer generate a commodity margin in butane
blending related activities. Revenues from petroleum products
terminal product sales were $1.4&nbsp;million in 2002 and
$1.5&nbsp;million in&nbsp;2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Affiliate construction and management fee
revenues for the year ended December&nbsp;31, 2002 were
$0.2&nbsp;million compared to $1.0&nbsp;million for the year
ended December&nbsp;31, 2001. Historically, Williams Pipe Line
received a fee to manage Longhorn and to provide consulting
services associated with the pipeline&#146;s construction and
start-up, as needed. Prior to our acquisition of Williams Pipe
Line, the obligation to provide this service for Longhorn was
transferred to a wholly-owned subsidiary of Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation and amortization expense for the
year ended December&nbsp;31, 2002 was $35.1&nbsp;million,
representing a $0.7&nbsp;million decrease from 2001 at
$35.8&nbsp;million. Additional depreciation associated with
acquisitions and capital improvements were more than offset by
the elimination of depreciation associated with assets we did
not acquire as part of the Williams Pipe Line acquisition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General and administrative expenses for the year
ended December&nbsp;31, 2002 were $43.2&nbsp;million compared to
$47.4&nbsp;million for the year ended December&nbsp;31, 2001, a
decrease of $4.2&nbsp;million, or 9%. General and administrative
expenses are paid to Williams as defined by the Omnibus
Agreement. For 2002, subsequent to the Williams Pipe Line
acquisition, general and administrative expenses were limited to
$9.2&nbsp;million per quarter plus equity-based incentive
compensation expenses. Incentive compensation costs associated
with our long-term incentive plan are specifically excluded from
the expense limitation and were $3.7&nbsp;million during 2002
and $2.0&nbsp;million during 2001. The 2002 incentive
compensation costs included $2.1&nbsp;million associated with
the early vesting of the phantom units issued to key employees
at the time of our initial public offering. The early vesting
was triggered as a result of meeting targets for our growth in
cash distributions paid to unitholders. Prior to our acquisition
of Williams Pipe Line, this operating unit was allocated general
and administrative costs from Williams based on a three-factor
formula that considers operating margin, payroll costs and
property, plant and equipment. The amount of general and
administrative costs we pay will continue to be adjusted in the
future to reflect additional general and administrative expenses
incurred in connection with acquisitions as well as the annual
adjustments allowed by the Omnibus Agreement. Through a change
of control or with 90&nbsp;days written notice, Williams can
terminate its obligations to provide services to us, which would
also eliminate Williams&#146; obligations under the general and
administrative expense limitation included in the Omnibus
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net interest expense for the year ended
December&nbsp;31, 2002 was $21.8&nbsp;million compared to
$12.1&nbsp;million for the year ended December&nbsp;31, 2001.
The increase in interest expense was primarily related to the
long-term debt financing of Williams Pipe Line. Although the
weighted average interest rates decreased from 5.0% in 2001 to
4.6% in 2002, the weighted average debt outstanding increased
from $113.3&nbsp;million in 2001 to $522.0&nbsp;million
in&nbsp;2002.
</FONT>

<P align="center"><FONT size="2">36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not pay income taxes because we are a
partnership. However, Williams Pipe Line was subject to income
taxes prior to our acquisition of it in April 2002, and our
pre-initial public offering earnings in 2001 were also taxable.
Taxes on these earnings were at income tax rates of 37% and 39%
for the year ended December&nbsp;31, 2002 and 2001,
respectively, based on the effective income tax rate for
Williams as a result of Williams&#146; tax-sharing arrangement
with its subsidiaries. The effective income tax rate exceeds the
U.S.&nbsp;federal statutory income tax rate primarily due to
state income taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net income for the year ended December&nbsp;31,
2002 was $99.2&nbsp;million compared to $67.9&nbsp;million for
the year ended December&nbsp;31, 2001, an increase of
$31.3&nbsp;million, or 46%. The operating margin increased by
$23.0&nbsp;million during the period, largely as a result of
increased revenues and reduced operating expenses including
environmental expenses net of indemnifications from Williams for
Williams Pipe Line, earnings from the acquisitions of the Little
Rock and Gibson terminal facilities and increased utilization
and rates at our Gulf Coast marine facilities. Depreciation
expense and general and administrative expenses decreased by
$0.7&nbsp;million and $4.2&nbsp;million, respectively, while net
interest expense increased by $9.7&nbsp;million. Debt placement
fee amortization expense increased $9.7&nbsp;million primarily
due to costs from debt financing associated with the Williams
Pipe Line acquisition. Other income increased $1.7&nbsp;million
primarily due to: (i)&nbsp;gain on the sale of assets and
(ii)&nbsp;an impairment charge recorded during 2001 related to
the inactive refinery site at Augusta, Kansas, the assets and
liabilities of which were not transferred to us as part of the
Williams Pipe Line acquisition. Income taxes decreased
$21.2&nbsp;million due to our partnership structure.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Year Ended December&nbsp;31, 2001 Compared
    to Year Ended December&nbsp;31, 2000</FONT></I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financial Highlights (in thousands)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system transportation and
    related activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">245.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues excluding product sales and construction
    revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product sales and construction revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">426.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses including environmental
    expenses net of indemnifications from Williams:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system transportation and
    related activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses excluding product purchases
    and construction expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">144.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system product purchases and
    construction expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total operating margin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">192.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating Statistics</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line system:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation revenue per barrel shipped (cents
    per barrel)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation barrels shipped (million barrels)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barrel miles (billions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Petroleum products terminals:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marine terminal facilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average storage capacity utilized per month
    (barrels in millions)(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Throughput (barrels in millions)(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inland terminals:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Throughput (barrels in millions)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ammonia pipeline system:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Volume shipped (tons in thousands)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">For the year ended December&nbsp;31, 2001,
    represents the average monthly storage capacity utilized for the
    Gulf Coast marine terminal facilities (12.7&nbsp;million
    barrels) and the New Haven marine terminal facility
    (3.0&nbsp;million barrels). For the year ended December&nbsp;31,
    2000, represents the average monthly storage capacity utilized
    for the Gulf Coast marine terminals facilities
    (11.8&nbsp;million barrels) and the average monthly storage
    capacity utilized for the four months that we owned the New
    Haven marine terminal facility (2.9&nbsp;million barrels), which
    we acquired in September 2000. All of the above amounts exclude
    the Gibson facility.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">For the year ended December&nbsp;31, 2001,
    represents a full year of activity at the New Haven marine
    terminal facility (9.3&nbsp;million barrels) and two months of
    activity at the Gibson marine terminal facility
    (2.2&nbsp;million barrels), which we acquired on
    October&nbsp;31, 2001. For the year ended December&nbsp;31,
    2000, represents four months of activity at the New Haven marine
    terminal facility, which we acquired in September 2000.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our revenues excluding product sales and
construction revenues for the year ended December&nbsp;31, 2001
were $339.4&nbsp;million compared to $318.1&nbsp;million for the
year ended December&nbsp;31, 2000, an increase of
$21.3&nbsp;million, or 7%. This increase was primarily a
result&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in Williams Pipe Line system&#146;s
    transportation and related revenues of $9.3&nbsp;million, or 4%,
    primarily due to higher transportation revenues, partially
    offset by a decrease in revenues from product services. The
    increase in transportation revenues resulted from increased
    volumes and mid-year tariff increases. Transportation volumes
    increased in part due to system expansions made to secure new
    volumes from customers. Volumes also increased as a result of
    additional volume incentive agreements and general demand
    increases for gasoline and distillates, slightly offset by a
    decrease in demand for aviation fuel resulting from the
    recession and consumer reaction to the terrorist attacks of
    September&nbsp;11, 2001. Product services decreased primarily
    due to a reduction in additive injection revenues resulting from
    lower prices for these services under new agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in the petroleum products terminals
    revenues of $9.2&nbsp;million, or 15%, primarily a result of the
    acquisitions of our New Haven marine terminal facility in
    September 2000, two Little Rock inland terminals in June 2001
    and the Gibson marine terminal facility in October 2001. An
    improved marketing environment resulted in higher utilization at
    our Gulf Coast marine facilities. These increases were slightly
    offset by a decrease in inland terminals revenues, primarily due
    to the December 2000 expiration of a customer&#146;s contractual
    commitment to utilize a specified amount of throughput
    capacity;&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">38
</FONT>
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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in ammonia pipeline system revenues
    of $2.8&nbsp;million, or 24%, partly due to a throughput
    deficiency billing that resulted from a shipper&#146;s inability
    to meet its minimum annual throughput commitment for the
    contract year ended June 2001. In addition, warm fall weather
    and a return to historically average prices for natural gas,
    which is the primary component for the production of ammonia,
    combined to create favorable conditions for the application of
    ammonia during the fourth quarter of 2001, resulting in a 50,000
    ton, or 7%, increase in volume shipped on the pipeline compared
    to 2000. The weighted-average tariff increased from $15.50 in
    2000 to $16.21 in&nbsp;2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating expenses including environmental
expenses net of indemnifications from Williams and excluding
product purchases and construction expenses for the year ended
December&nbsp;31, 2001 were $160.9&nbsp;million compared to
$144.9&nbsp;million for the year ended December&nbsp;31, 2000,
an increase of $16.0&nbsp;million, or 11%. This increase was a
result&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in Williams Pipe Line system&#146;s
    expenses of $12.2&nbsp;million, or 11%, primarily caused by
    increased maintenance and power expenses. Maintenance costs were
    higher due to increased expenditures associated with our System
    Integrity Program, which is designed to ensure compliance with
    increased safety regulations. This program includes increased
    emphasis on pipeline inspections and API&nbsp;653 tank
    inspections. Power expense increased due to higher
    transportation volumes and higher power rates. Partially
    offsetting these increases were lower environmental and less
    casualty loss expense. Environmental expenses were less due to
    higher costs recognized in 2000 related to the inactive refinery
    site at Augusta, Kansas, assets and liabilities of which were
    not transferred to us as part of the Williams Pipe Line
    acquisition. Casualty losses decreased due to higher costs
    recognized in 2000 associated with a groundwater contamination
    lawsuit that was settled in 2001;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in petroleum products terminals
    expenses of $3.8&nbsp;million, or 13%, due primarily to the
    acquisitions of the New Haven marine terminal facility in
    September 2000, the Little Rock inland terminals in June 2001
    and the Gibson marine terminal facility in October 2001.
    Expenses at the other Gulf Coast marine terminal facilities
    increased slightly due to higher utility costs, partially offset
    by lower environmental and maintenance expenses, while property
    taxes at some inland terminals increased.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues from product sales were
$108.2&nbsp;million for the year ended December&nbsp;31, 2001,
while product purchases were $95.3&nbsp;million, resulting in a
net margin of $12.9&nbsp;million in 2001. The 2001&nbsp;net
margin represents an increase of $0.3&nbsp;million compared to a
net margin in 2000 of $12.6&nbsp;million resulting from product
sales in 2000 of $106.8&nbsp;million and product purchases of
$94.2&nbsp;million. Revenues from petroleum products terminal
product sales were $1.5&nbsp;million in 2001 and
$2.4&nbsp;million in&nbsp;2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Affiliate construction and management fee
revenues were $1.0&nbsp;million for the year ended
December&nbsp;31, 2001, while there were no affiliate
construction expenses, resulting in a net margin of
$1.0&nbsp;million. The 2001&nbsp;net margin represents an
increase of $0.1&nbsp;million compared to a net margin in 2000
of $0.9&nbsp;million resulting from affiliate construction and
management fee revenues in 2000 of $1.9&nbsp;million and
affiliate construction expenses of $1.0&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation and amortization expense for the
year ended December&nbsp;31, 2001 was $35.8&nbsp;million
compared to $31.7&nbsp;million for the year ended
December&nbsp;31, 2000, an increase of $4.1&nbsp;million, or
13%. The increase was due primarily to the acquisitions of the
New Haven marine terminal facility, two Little Rock inland
terminals and Gibson marine terminal facility as well as
maintenance capital expenditures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General and administrative expenses for the year
ended December&nbsp;31, 2001 were $47.4&nbsp;million compared to
$51.2&nbsp;million for the year ended December&nbsp;31, 2000, a
decrease of $3.8&nbsp;million, or 7%. This decrease is primarily
the result of the general and administrative expense limit
provided for in the Omnibus Agreement. For 2001, general and
administrative expenses related to the petroleum products
terminals and ammonia pipeline system include the established
limit of $6.0&nbsp;million per year plus additional general and
administrative costs associated with businesses acquired during
2001 and $2.0&nbsp;million of expenses associated with our
long-term incentive compensation plan. For 2000, general and
administrative costs related to the petroleum
</FONT>

<P align="center"><FONT size="2">39
</FONT>
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<DIV align="left">
<FONT size="2">products terminals and ammonia pipeline system
were $12.0&nbsp;million. The general and administrative expenses
incurred by or allocated to Williams Pipe Line in 2001 were
$38.4&nbsp;million compared to $39.2&nbsp;million in 2000.
Williams allocates both direct and indirect general and
administrative expenses to its affiliates. Direct expenses
allocated by Williams are primarily salaries and benefits of
employees and officers associated with the business activities
of the affiliate. Indirect expenses include legal, accounting,
treasury, engineering, information technology and other
corporate services. We reimburse the General Partner and its
affiliates for direct and indirect expenses incurred by or
allocated to them on our behalf.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net interest expense for the year ended
December&nbsp;31, 2001 was $12.1&nbsp;million compared to
$25.3&nbsp;million for the year ended December&nbsp;31, 2000.
This decrease is primarily the result of a decline in affiliate
notes payable to Williams and lower interest rates. The
affiliate note payable associated with the Williams Pipe Line
system declined as a result of a partial repayment using cash
generated from operations in excess of capital expenditures. The
affiliate note payable associated with the petroleum products
terminals and ammonia pipeline system was partially repaid and
the balance was contributed to us as capital in connection with
our initial public offering in February 2001. At the end of
2001, we had $139.5&nbsp;million outstanding under a term loan
and revolving credit facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not pay income taxes because we are a
partnership. We primarily based our income tax rate of 39% for
our pre-initial public offering earnings from our petroleum
products terminals and ammonia pipeline businesses upon the
effective income tax rate for Williams as a result of
Williams&#146; tax-sharing arrangement with its subsidiaries. In
addition, Williams Pipe Line was taxed as a corporation prior to
our acquisition of the system on April&nbsp;11, 2002. Williams
Pipe Line&#146;s effective tax rates for the years ended
December&nbsp;31, 2001 and 2000 were 39% and 38%, respectively,
also based primarily on the effective income tax rates for
Williams for those periods. The effective income tax rates
exceeded the U.S.&nbsp;federal statutory income tax rate for
corporations primarily due to state income taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net income for the year ended December&nbsp;31,
2001 was $67.9&nbsp;million compared to $48.9&nbsp;million for
the year ended December&nbsp;31, 2000, an increase of
$19.0&nbsp;million, or 39%. The operating margin increased by
$5.7&nbsp;million during the period, primarily as a result of
increased transportation revenues on the Williams Pipe Line
system and the acquisition of the New Haven, Little Rock and
Gibson petroleum products terminals, partially offset by higher
operating costs associated with those acquisitions and higher
system integrity costs on the Williams Pipe Line system.
Depreciation and amortization increased by $4.1&nbsp;million,
whereas general and administrative expenses declined
$3.8&nbsp;million. Net interest expense decreased
$13.2&nbsp;million. Debt placement fee amortization increased
$0.3&nbsp;million and other income declined $0.4&nbsp;million.
Income taxes decreased $0.9&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Other Known Trends or Events</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have significant relationships with Williams,
the owner of our General Partner, Farmland Industries, Inc.
(&#147;Farmland&#148;) and other third-party entities that
impact our operating results. Williams has completed a number of
asset sales and entered into secured debt agreements to address
its liquidity needs, and Farmland has filed for bankruptcy. Our
relationships with these two entities are described below:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Williams</FONT></I><FONT size="2">&nbsp;&#151;
During the past year, Williams has experienced financial and
liquidity difficulties and currently does not have an investment
grade credit rating. These financial difficulties have raised
questions concerning Williams&#146; ability to meet its existing
financial obligations. However, Williams has not filed for
bankruptcy protection and neither Williams,
WEG&nbsp;GP&nbsp;LLC, nor any other Williams affiliate has
advised us of any intention by Williams, any Williams affiliate
or our General Partner to place Williams or our General Partner
into bankruptcy. We are engaged contractually with Williams on
several fronts, including commercial relationships, contracted
services and indemnities. The extent of these relationships
include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Williams is the owner of our General Partner and
    its ownership interest in us is approximately 55%, including its
    2%&nbsp;general partner interest;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">40
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Williams is a customer, representing
    approximately 13% of our 2002 revenues. We expect to replace a
    majority of these revenues without significant impact to our
    results of operations if Williams is unable to perform on its
    existing obligations.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Williams provides various services for us.
    Through these services, Williams operates our assets and
    provides general and administrative functions. All employees
    supporting our partnership are employees of Williams. We pay the
    cost for the operating expenses associated with our assets, and
    we incur an additional cost for general and administrative
    services, which are limited under the Omnibus Agreement to
    approximately $40.0&nbsp;million per year. Management estimates
    that actual general and administrative costs required for our
    operation could be significantly higher due in part to increases
    in insurance premiums and increased general and administrative
    costs for the ammonia pipeline associated with the new
    Enterprise operating contract. For the year ended 2002, Williams
    incurred $19.7&nbsp;million of general and administrative
    charges in excess of the amount specified under terms of the
    Omnibus Agreement. Some of the charges did not relate to
    services essential for our ongoing operations. Through a change
    of control or with 90&nbsp;days written notice, Williams can
    terminate its obligations to provide services to us, which would
    also eliminate Williams&#146; obligations under the general and
    administrative expense limitation included in the Omnibus
    Agreement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">for assets included in our initial public
    offering, Williams agreed to provide maintenance capital
    reimbursements for expenditures in excess of $4.9&nbsp;million
    during 2001 and 2002. We received total reimbursement of
    $14.9&nbsp;million for maintenance capital spent during the
    period of the agreement. In addition, Williams has agreed to pay
    maintenance capital associated with the Williams Pipe Line
    system in excess of $19.0&nbsp;million per year for 2002, 2003
    and 2004 up to a cumulative maximum of $15.0&nbsp;million. We
    expect to spend less than $19.0&nbsp;million annually for
    maintenance capital for the Williams Pipe Line system and do not
    expect any maintenance capital reimbursement from Williams
    associated with this asset.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Affiliates of Williams have provided various
indemnifications to us. Please read &#147;Critical Accounting
Estimates&nbsp;&#151; Environmental Liabilities&#148; and
&#147;Critical Accounting Estimates&nbsp;&#151; Affiliate
Receivables&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Change of
Control</FONT></I><FONT size="2">&nbsp;&#151; On
February&nbsp;20, 2003, Williams announced its intention to
divest its interest in our General Partner and all of its
limited partnership interests. Upon completion of this proposed
divestiture, the resulting change of control may lead to the
following results:
</FONT>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">termination of our Omnibus Agreement with
    Williams or termination of Williams&#146; obligation to provide
    general and administrative services for a fixed charge, which
    could result in higher general and administrative expenses and
    cessation of the environmental indemnification for the assets
    acquired at the time of our initial public offering;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">acceleration of principal payments on outstanding
    debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">initial increase in the allocation of taxable
    income to our unitholders;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">early vesting of phantom units issued as part of
    our long-term incentive compensation plan.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is uncertain what form the sale of
Williams&#146; interests may take and management is unable, at
this time, to determine what impact such a transaction will have
on our ongoing operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Farmland</FONT></I><FONT size="2">&nbsp;&#151;
Farmland filed for Chapter&nbsp;11 bankruptcy protection on
May&nbsp;31, 2002. Farmland is the largest customer on our
ammonia pipeline system. Farmland also owns and operates a
refinery in Coffeyville, Kansas, with its products marketed
primarily through a third party that ships on Williams Pipe
Line. This third party shipper is not affiliated with either
Farmland or Williams. Combined total revenues associated with
Farmland&#146;s ammonia shipments and the use of the Williams
Pipe Line system to transport products from the Farmland
refinery were $31.5&nbsp;million and $37.3&nbsp;million for the
year ended December&nbsp;31, 2002 and 2001, respectively, or 7%
and 8% of total revenues for 2002 and 2001, respectively. Demand
for products from Farmland&#146;s Coffeyville, Kansas refinery
have continued to be strong and we expect that this demand will
remain so for the foreseeable future. Also, we believe that
Farmland will either continue to operate its
</FONT>

<P align="center"><FONT size="2">41
</FONT>

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<DIV align="left">
<FONT size="2">Coffeyville, Kansas refinery or will sell it to a
third party who will continue its operation. Please read
&#147;Ammonia Pipeline System&nbsp;&#151; Customers and
Contracts&nbsp;&#151; Farmland&#148; for additional information.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Farmland&#146;s ammonia pipeline agreement
provided for the right to terminate its shipment obligation by
submitting 12&nbsp;month written notice to us, which they have
done. Farmland&#146;s notification will be effective
December&nbsp;23, 2003. Farmland has indicated that its ammonia
production facility connected to our pipeline is for sale and
has thus elected to exercise its termination right effective
December&nbsp;23, 2003. Farmland is expected to incur a
deficiency of approximately $2.0&nbsp;million to
$2.5&nbsp;million under its shipment obligation for the contract
year ending June&nbsp;30, 2003. On February&nbsp;18, 2003, we
entered into a settlement agreement with Farmland to resolve its
deficiency. Under the settlement agreement, Farmland will pay us
$0.8&nbsp;million for the deficiency it will incur under its
shipment obligation for the contract year ending June&nbsp;30,
2003. If Farmland assigns its shipment obligation to a purchaser
of its ammonia assets pursuant to bankruptcy procedures,
Farmland&#146;s termination notice will be withdrawn, and the
shipment obligation will be reduced from 450,000 tons annually
to 200,000 tons annually.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The settlement agreement is subject to approval
by the bankruptcy court. If the bankruptcy court does not
approve the settlement agreement by June&nbsp;20, 2003, it will
be void unless we agree with Farmland to extend the time for
approval. If the settlement agreement is not approved and
Farmland rejects its shipment obligation pursuant to bankruptcy
procedures, we will have a general, unsecured creditor&#146;s
claim against Farmland for the deficiency it will incur under
its shipment obligation for the contract year ending
June&nbsp;30, 2003 and for any deficiency incurred under its
shipment obligation for the contract period beginning
July&nbsp;1, 2003 and ending December&nbsp;23, 2003.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Cash Flows and Capital
    Expenditures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided by operating activities was
$161.0&nbsp;million for the year ended December&nbsp;31, 2002,
$135.3&nbsp;million for 2001 and $55.1&nbsp;million
for&nbsp;2000.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net income for 2002 benefited from higher
    revenues and reduced expenses for the Williams Pipe Line system
    and greater terminals profits due to the Little Rock and Gibson
    acquisitions and higher utilization at the Gulf Coast
    facilities. The reduction in income taxes more than offset the
    increased interest expense. Changes in operating assets and
    liabilities provided additional net cash. Inventories decreased
    during 2002 due to the elimination of butane blending
    inventories as we now perform butane blending as a service
    provider without carrying the relevant inventory. As part of our
    acquisition of the Williams Pipe Line system, Williams retained
    $15.0&nbsp;million of its accounts receivables and the affiliate
    payables. Therefore, accounts receivables and affiliate payables
    increased during 2002 as they were replaced as part of the
    ongoing operations of that business. Further, increases in
    affiliate receivables were primarily offset by increases in
    environmental liabilities due to the indemnification from
    Williams for environmental liabilities occurring prior to our
    ownership of the Williams Pipe Line system.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net income increased from 2000 to 2001 due to the
    acquisition of our New Haven, Little Rock and Gibson terminals
    and reduced interest expense. Changes in operating assets and
    liabilities also impacted cash from operations. Accounts
    receivable significantly declined due to the 2001 collection of
    receivables related to reimbursable construction projects. In
    addition, affiliate receivables declined due to the 2001
    collection of a large outstanding short-term affiliate
    receivable due from an affiliate of Williams. Inventories
    increased between periods due to higher commodity prices during
    2001. Further, changes to other current and noncurrent assets
    and liabilities resulted from collection of unbilled
    reimbursable construction projects at year-end 2000 and
    long-term affiliate receivables related to reimbursable Longhorn
    construction costs.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used by investing activities for the
years ended December&nbsp;31, 2002, 2001 and 2000 was
$727.0&nbsp;million, $87.5&nbsp;million and $74.4&nbsp;million,
respectively. During 2002, we acquired the Williams Pipe Line
system and the Aux Sable natural gas liquids pipeline. During
2001, we acquired our two Little Rock inland terminals and the
Gibson marine facility. During 2000, we acquired our interest in
the Southlake inland
</FONT>

<P align="center"><FONT size="2">42
</FONT>

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<DIV align="left">
<FONT size="2">terminal and the New Haven marine facility. We
also invested capital to maintain our existing assets.
Maintenance capital spending before reimbursements was
$26.4&nbsp;million, $24.4&nbsp;million and $25.9&nbsp;million in
2002, 2001 and 2000, respectively. Please see Capital
Requirements below for further discussion of capital
expenditures.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided (used)&nbsp;by financing
activities for the years ended December&nbsp;31, 2002, 2001 and
2000 was $627.3&nbsp;million, $(34.0)&nbsp;million and
$19.4&nbsp;million, respectively. The cash provided during 2002
principally included the debt and equity funding that were
completed in conjunction with our acquisition of Williams Pipe
Line. Cash was used in 2001 to repay affiliate notes associated
with our initial public offering assets as well as payments made
by Williams Pipe Line to decrease its affiliate note balance,
partially offset by proceeds from debt borrowings and equity
issued in our initial public offering and subsequent debt
borrowings for acquisitions. The 2000 cash inflow primarily
represents affiliate loans we received from Williams to fund our
terminal acquisitions, partially offset by repayments of the
affiliate note payable associated with Williams Pipe Line using
free cash flow generated by the system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Federal Energy Regulatory Commission Notice of
Proposed Rulemaking</FONT></I><FONT size="2">&nbsp;&#151; On
August&nbsp;1, 2002, the FERC issued a Notice of Proposed
Rulemaking that, if adopted, would amend its Uniform Systems of
Accounts for public utilities, natural gas companies and oil
pipeline companies by requiring specific written documentation
concerning the management of funds from a FERC-regulated
subsidiary by a non-FERC-regulated parent. Under the proposed
rule, as a condition for participating in a cash management or
money pool arrangement, the FERC-regulated entity would be
required to maintain a minimum proprietary capital balance
(stockholder&#146;s equity or partners&#146; capital) of 30%,
and the FERC-regulated entity and its parent would be required
to maintain investment grade credit ratings. If either of these
conditions is not met, the FERC-regulated entity would not be
eligible to participate in the cash management or money pool
arrangement. As of December&nbsp;31, 2002, all of our debt was
issued to private lenders and is not rated; therefore, we do not
currently meet the second requirement. The period for interested
companies to make comments to the FERC relative to this proposed
rule has ended, and the FERC is evaluating its position on the
issue. We do not know when or if the rule will be enacted.
However, we have established separate bank accounts for Williams
Pipe Line and we believe we could easily comply with the
proposed rule.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Capital Requirements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transportation, storage and distribution
business requires continual investment to upgrade or enhance
existing operations and to ensure compliance with safety and
environmental regulations. The capital requirements of our
businesses consist primarily&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">maintenance capital expenditures, such as those
    required to maintain equipment reliability and safety and to
    address environmental regulations; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">payout capital expenditures to acquire additional
    complementary assets to grow our business and to expand or
    upgrade our existing facilities, such as projects that increase
    storage or throughput volumes or develop pipeline connections to
    new supply sources.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams agreed to reimburse us for maintenance
capital expenditures incurred in 2001 and 2002 in excess of
$4.9&nbsp;million per year related to our initial public
offering assets. This reimbursement obligation was subject to a
maximum combined reimbursement for both years of
$15.0&nbsp;million. During 2001 and 2002, we recorded
reimbursements from Williams associated with these assets of
$3.9&nbsp;million and $11.0&nbsp;million, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our acquisition of Williams
Pipe Line, Williams has agreed to reimburse us for maintenance
capital expenditures incurred in 2002, 2003 and 2004 in excess
of $19.0&nbsp;million per year related to the Williams Pipe Line
system, subject to a maximum combined reimbursement for all
years of $15.0&nbsp;million. Our maintenance capital expenditure
expectations related to the Williams Pipe Line system are less
than $19.0&nbsp;million per year and we do not anticipate
reimbursement by Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002, our maintenance capital spending net
of reimbursements was $15.4&nbsp;million. We expect to incur
maintenance capital expenditures for 2003 for all of our
businesses of $22.0&nbsp;million.
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to maintenance capital expenditures,
we also incur payout capital expenditures at our existing
facilities for expansion and upgrade opportunities. During 2002,
we spent $11.3&nbsp;million of payout capital, excluding
acquisitions. Based on projects currently in process, we plan to
spend approximately $6.5&nbsp;million of payout capital in 2003.
This amount does not include capital expenditures made in
connection with any future acquisitions. We expect to fund our
payout capital expenditures, including any acquisitions, from:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">cash provided by operations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">borrowings under the revolving credit facility
    discussed below and other borrowings;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the issuance of additional common units.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If capital markets tighten and we are unable to
fund these expenditures, our business may be adversely affected
and we may not be able to acquire additional assets and
businesses.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Liquidity</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Williams Pipe Line Senior Secured Notes.
</FONT></I><FONT size="2">In connection with the financing of
the Williams Pipe Line system acquisition, we and our
subsidiary, Williams Pipe Line Company, entered into a note
purchase agreement on October&nbsp;1, 2002. The private
placement allowed for two separate borrowings:
(i)&nbsp;$420.0&nbsp;million to be used to repay the Williams
Pipe Line short-term loan and related debt placement fees and
(ii)&nbsp;$60.0&nbsp;million for general corporate purposes. We
borrowed a total of $480.0&nbsp;million under the debt
agreement. The incremental $60.0&nbsp;million was used primarily
to repay the outstanding acquisition sub-facility of the OLP
term loan and credit facility, described below. The Williams
Pipe Line borrowing included Series&nbsp;A and Series&nbsp;B
notes. The maturity date of both notes is October&nbsp;7, 2007,
with scheduled prepayments equal to 5% of the outstanding
balance due on both October&nbsp;7, 2005 and October&nbsp;7,
2006. The debt is secured by our membership interests in and the
assets of Williams Pipe Line. Payment of interest and principal
is guaranteed by Williams Energy Partners&nbsp;L.P.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Series&nbsp;A notes include
$178.0&nbsp;million of borrowings that incur interest based on
the six-month Eurodollar rate plus 4.3%. The Series&nbsp;B notes
include $302.0&nbsp;million of borrowings that incur interest at
a weighted-average fixed rate of 7.8%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The debt agreement contains various covenants
limiting Williams Pipe Line Company&#146;s ability to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">incur additional indebtedness;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">grant liens other than tax liens, mechanic&#146;s
    and materialman&#146;s liens and other liens and encumbrances
    incurred in the ordinary course of business;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make investments, other than investments in the
    Williams Pipe Line system, cash and short-term securities and
    acquisitions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">dispose of assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">engage in any business other than the
    transportation, storage and distribution of hydrocarbons;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">create obligations for some lease
    payments;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">engage in transactions with affiliates other than
    arm&#146;s-length transactions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the debt agreement prohibits us from
redeeming the Class&nbsp;B units except with proceeds from an
equity offering. It also prohibits our General Partner from
incurring any indebtedness. The Williams Pipe Line notes also
contain financial covenants, that apply to both Williams Pipe
Line and us, to maintain specified ratios of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA (as defined in the Williams Pipe Line
    Senior Secured debt agreement) to interest expense of not less
    than 2.5 to 1.0;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">total debt to EBITDA of not more than 4.5 to 1.0.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are in compliance with all of these covenants.
</FONT>

<P align="center"><FONT size="2">44
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a change in control of the
General Partner, each holder of the notes would have
30&nbsp;days within which they could exercise a right to put
their notes to Williams Pipe Line unless the new owner of the
General Partner has: (i)&nbsp;a net worth of at least
$500&nbsp;million and (ii)&nbsp;long-term unsecured debt rated
as investment grade by both Moody&#146;s Investor Service Inc.
and Standard&nbsp;&#38; Poor&#146;s Rating Service. A change of
control is an event in which Williams or its affiliates no
longer own 50% or more of the General Partner&#146;s interest in
us. If this put right were to be exercised, Williams Pipe Line
would be obligated to repurchase any such notes at par value and
repay any accrued interest within sixty days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">OLP term loan and revolving credit
facility.</FONT></I><FONT size="2"> Subsequent to the closing of
our initial public offering on February&nbsp;9, 2001, we relied
on cash generated from operations as our primary source of
funding, except for payout capital expenditures. Additional
funding requirements are met by a $175.0&nbsp;million credit
facility of one of our operating partnerships that expires on
February&nbsp;5, 2004. This credit facility is comprised of a
$90.0&nbsp;million term loan and an $85.0&nbsp;million revolving
credit facility. The revolving credit facility is comprised of a
$73.0&nbsp;million acquisition sub-facility and a
$12.0&nbsp;million working capital sub-facility. Indebtedness
under this credit facility bears interest at the Eurodollar rate
plus an applicable margin that ranges from 1.0% to 1.5%. We also
incur a commitment fee on the unused portions of the credit
facility. As of December&nbsp;31, 2002, the $90.0&nbsp;million
term loan is outstanding with the entire $85.0&nbsp;million
revolving credit facility available for future borrowings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Obligations under the credit facility are
unsecured but are guaranteed by all of the subsidiaries of the
operating partnership. Indebtedness under the credit facility
ranks equally with all the outstanding unsecured and
unsubordinated debt of our operating partnership. Williams Pipe
Line is a separate operating subsidiary of ours and is not a
borrower or guarantor under this credit facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The credit facility contains various operational
and financial covenants limiting our operating
partnership&#146;s ability to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">incur additional unsecured indebtedness of more
    than $75.0&nbsp;million, subordinated debt owed to affiliates of
    more than $50.0&nbsp;million and secured purchase money debt of
    more than $5.0&nbsp;million, including maintaining the ratios
    described below;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">grant liens other than tax liens, mechanic&#146;s
    and materialman&#146;s liens and other liens and encumbrances
    incurred in the ordinary course of the operating
    partnership&#146;s business;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make investments, other than investments in the
    operating partnership&#146;s subsidiaries, cash and short term
    securities and acquisitions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">merge or consolidate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">sell all of the operating partnership&#146;s
    assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make distributions other than from available cash;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">engage in any business other than the
    transportation, storage and distribution of hydrocarbons and
    ammonia;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">create obligations for some lease
    payments;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">engage in transactions with affiliates other than
    arm&#146;s-length transactions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The credit facility also contains covenants
requiring the operating partnership to maintain specified
ratios&nbsp;of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA (as defined in the credit facility), pro
    forma for any asset acquisitions, to interest expense of not
    less than 3.0 to 1.0;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">total debt to EBITDA, pro forma for any asset
    acquisitions, of not more than 4.0 to&nbsp;1.0.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are in compliance with all of these covenants.
</FONT>

<P align="center"><FONT size="2">45
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under terms of this facility, a change of control
whereby Williams and its affiliates no longer own 100% of the
General Partner&#146;s equity would result in an event of
default, in which case the maturity date of the outstanding
amounts under this facility may be accelerated by the lenders in
the facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the principal
payment schedule for each of our borrowings as of
December&nbsp;31, 2002:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Debt principal payments due by period</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&#60;1 year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1-3 years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">3-5 years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&#62;5 years</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">($ in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line Senior Secured Notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">480.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">456.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OLP term loan and revolving credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Debt-to-Total
Capitalization</FONT></I><FONT size="2">&nbsp;&#151; The ratio
of debt-to-total capitalization is a measure frequently used by
the financial community to assess the reasonableness of a
company&#146;s debt levels compared to total capitalization,
calculated by adding total debt and total partners&#146;
capital. Based on the figures shown in our balance sheet,
debt-to-total capitalization is 56% at December&nbsp;31, 2002.
Because accounting rules required the acquisition of the
Williams Pipe Line system to be recorded at historical book
value due to the affiliate nature of the transaction, the
$474.5&nbsp;million difference between the purchase price and
book value at the time of the acquisition was recorded as a
decrease to the General Partner&#146;s capital account, thus
lowering our overall partners&#146; capital. If Williams Pipe
Line had been purchased from a third party, the asset would have
been recorded at market value, resulting in a debt-to-total
capitalization of 38%, which is consistent with
management&#146;s indicated target level of 40%.
</FONT>

<P align="left">
<B><FONT size="2">Environmental</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations are subject to environmental laws
and regulations, adopted by various governmental authorities, in
the jurisdictions in which these operations are conducted. We
have accrued liabilities for estimated site restoration costs to
be incurred in the future at our facilities and properties,
including liabilities for environmental remediation obligations
at various sites where we have been identified as a possibly
responsible party. Under our accounting policies, liabilities
are recorded when site restoration and environmental remediation
and cleanup obligations are either known or considered probable
and can be reasonably estimated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In conjunction with our initial public offering,
and with respect solely to the petroleum products terminals and
ammonia pipeline system owned at the time of that offering, an
affiliate of Williams agreed to indemnify us against
environmental liabilities up to $15.0&nbsp;million resulting
from events that arose prior to February&nbsp;9, 2001, become
known within three years after February&nbsp;9, 2001 and exceed
all amounts recovered or recoverable by us under contractual
indemnities from third parties or under any applicable insurance
policies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2002, we had collected
$1.7&nbsp;million against Williams Energy Services&#146;
indemnity and had recorded $3.3&nbsp;million of environmental
liabilities associated with our petroleum products terminals and
ammonia systems, substantially all of which were covered by
Williams Energy Services&#146; indemnification. Of these
environmental liabilities, $3.2&nbsp;million is expected to be
recovered from Williams Energy Services. Further, we expect to
incur $0.3&nbsp;million of environmental capital, which could
also be covered by this indemnification. Management estimates
that these expenditures for environmental remediation
liabilities will be paid over the next five years. Please read
&#147;Management Discussion and Analysis of Financial Condition
and Results of Operations&nbsp;&#151; Other Known Trends and
Events&nbsp;&#151; Change of Control&#148; for additional
discussion of possible changes associated with Williams Energy
Services&#146; indemnification to&nbsp;us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our acquisition of the
Williams Pipe Line system on April&nbsp;11, 2002, Williams
Energy Services agreed to indemnify us for losses and damages
related to breach of environmental representations and
warranties and the failure to comply with environmental laws
prior to closing in excess of $2.0&nbsp;million up to a maximum
of $125.0&nbsp;million. This $125.0&nbsp;million will also cover
claims made by us for breaches of other Williams Energy
Services&#146; representations and warranties. The environmental
indemnification obligation applies to liabilities that resulted
from conduct prior to the closing of our acquisition of the
Williams Pipe Line
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<DIV align="left">
<FONT size="2">system and are discovered within six years of
closing. Williams has provided a performance guarantee for these
environmental indemnities. As of December&nbsp;31, 2002, we had
collected $3.3&nbsp;million against this indemnification.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2002, we had accrued
environmental remediation liabilities associated with the
Williams Pipe Line system of $19.0&nbsp;million. Management
estimates that these expenditures will be paid over the next
five years. Of these environmental liabilities,
$18.7&nbsp;million are expected to be recoverable from
affiliates. In addition, we are forecasting capital expenditures
associated with environmental projects of $3.9&nbsp;million,
which are expected to be indemnified but are not included in our
affiliate accounts receivable.
</FONT>

<P align="left">
<B><FONT size="2">Impact of Inflation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although inflation has slowed in recent years, it
is still a factor in the United States economy and may increase
the cost to acquire or replace property, plant and equipment and
may increase the costs of labor and supplies. To the extent
permitted by competition, regulation and our existing
agreements, we have and will continue to pass along increased
costs to our customers in the form of higher fees.
</FONT>

<P align="left">
<B><FONT size="2">Critical Accounting Estimates</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Goodwill Impairment</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2002, we began applying the new rules
established by Statement of Financial Accounting Standards
(&#147;SFAS&#148;) No.&nbsp;142, &#147;Goodwill and Other
Intangibles&#148;, relative to accounting for goodwill and other
intangible assets. Under this standard we no longer amortize
goodwill because it is an asset with an indefinite useful life
but test it for impairment annually, or more frequently if
events or changes in circumstances indicate that the asset might
be impaired. The first step of the impairment test is to
determine if the fair value of our reporting units exceed their
carrying amount. If the fair value of the reporting unit is less
than its carrying amount then the goodwill may be impaired. The
second step compares the implied fair value of goodwill to its
carrying amount. If the carrying amount of goodwill exceeds its
implied fair value, an impairment loss is recognized equal to
that excess. The implied fair value of goodwill should be
calculated in the same manner that goodwill is calculated in a
business combination.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We had recognized $22.3&nbsp;million of goodwill
on October&nbsp;1, 2002 and $22.3&nbsp;million of goodwill on
December&nbsp;31, 2002. All of the goodwill and other
intangibles recognized by us are associated with the petroleum
products terminals segment and were acquired as part of the
Gibson, Louisiana and Little Rock, Arkansas terminals
acquisitions (see Note&nbsp;5&nbsp;&#151; Acquisitions and
Divestitures). We performed our annual testing of goodwill, as
required by SFAS&nbsp;No.&nbsp;142 as of October&nbsp;1, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the accounting estimate related
to goodwill impairment is a &#147;critical accounting
estimate&#148; of our petroleum products terminals segment
because: (1)&nbsp;significant judgment is exercised during the
process of determining the petroleum products terminals segment
fair value and (2)&nbsp;because different assumptions could
result in material charges to our operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the 2002 test, fair value of the petroleum
products terminals was assessed using three approaches:
(1)&nbsp;a market value approach, (2)&nbsp;a discounted future
cash flows approach and (3)&nbsp;an EBITDA multiple approach.
Under the market value approach, we calculated the total
enterprise value on October&nbsp;1, 2002 and allocated that
total value between our three operating segments based on the
relative discounted future cash flows of all three operating
segments. The carrying value of the segment was allocated based
on our total partners&#146; capital. Under the discounted future
cash flows method, the cash flows of the petroleum products
terminals segment were estimated using our internal forecasts to
project revenues and costs in the short term and assumed
incremental revenues and costs for periods beyond based on
historical trends. The discounted future cash flows model
assumed a 9% discount rate based on an expected 10% return on
equity and a 7.5% cost of debt and a 60/40 debt to equity ratio.
Under the EBITDA multiple approach, we applied a multiple of
9&nbsp;times the adjusted EBITDA of the petroleum products
terminals segment to determine fair value. We define EBITDA as
income before income taxes plus interest expense (net of
interest income) and depreciation and amortization expense.
EBITDA multiples are used industry-wide in assessing values for
business assets similar
</FONT>

<P align="center"><FONT size="2">47
</FONT>

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<DIV align="left">
<FONT size="2">to those in our petroleum products terminals
segment. The EBITDA of the petroleum products terminals segment
was adjusted to exclude a portion of the general and
administrative expenses to take into consideration expected
synergies.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under each of the three methodologies the fair
value of the petroleum products terminals segment exceeded the
carrying value of the segment and therefore we did not recognize
an impairment in 2002. In reaching the conclusion above, more
confidence was placed on the EBITDA multiple approach because
management determined this approach more closely represented the
amount at which the petroleum products terminals segment could
be sold in a transaction between willing parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The critical factor in the EBITDA multiple
approach is the multiple itself. When valuing potential
acquisitions or assets to be disposed of, we generally use
multiples between 7 times EBITDA to 11 times EBITDA, depending
on factors such as the size of the transaction, the prospects
for revenue growth or cost reductions, the overall condition of
the assets, the age of facility, the location of the facility,
the reputation of the seller and the intended use of the
facility. For our goodwill impairment testing on October&nbsp;1,
2002, we used a multiple of 9 times EBITDA to determine the fair
value of the petroleum products segment. If that multiple were
reduced to 8.5 times EBITDA, the EBITDA multiple approach would
have suggested that we would need to recognize an impairment of
approximately $4.0&nbsp;million. If the multiple were further
decreased to 8.0 times EBITDA, the EBITDA multiple approach
would have suggested that the full carrying value of goodwill
was impaired and we would have been required to recognize an
impairment loss of $22.3&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The impact of an impairment under the latter
scenario would have increased our leverage ratio beyond the
maximum allowed in our OLP term loan and revolving credit
facility. Under this scenario, the lenders in the OLP facility
could choose to accelerate the repayment of the loan, which
would materially negatively impact our liquidity and cash flows.
In today&#146;s markets it is difficult to assess how lenders
would react to such a scenario; however, we currently do not
believe that, under this latter scenario, the OLP lenders would
choose this course of action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on our test of goodwill as of
October&nbsp;1, 2002, management concluded that there was no
impairment of goodwill required. Our management has discussed
the development and selection of this critical accounting
estimate with the Audit Committee of our General Partner&#146;s
Board of Directors and the Audit Committee has reviewed our
disclosure relating to it in this Management Discussion and
Analysis section of our Annual Report on Form&nbsp;10-K.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Asset Impairments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We evaluate our property, plant and equipment
(&#147;PP&#38;E&#148;) for impairment whenever indicators of
impairment exist. Accounting standards require that if the sum
of the future cash flows expected to result from a
company&#146;s assets, undiscounted and without interest
charges, is less than the reported value of the asset, an asset
impairment must be recognized in the financial statements. The
amount of impairment to recognize is calculated by subtracting
the fair value from the reported value of the asset.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We operate in three segments: Williams Pipe Line
system, petroleum products terminals and the ammonia pipeline
system. We reviewed our ammonia pipeline system for possible
impairment as of December&nbsp;31, 2002, because there are only
three customers transporting product on that system and
Farmland, the largest of the three, filed for protection under
the United States Bankruptcy Codes in May 2002. (Please read
Farmland discussion under &#147;Management Discussion and
Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Other Known Trends and Events)&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the accounting estimate related
to an impairment of our ammonia pipeline is a &#147;critical
accounting estimate&#148; because: (1)&nbsp;it is susceptible to
change from period to period because it requires management to
make assumptions about future sales and cost of sales, in
markets which have been highly volatile in certain periods
during the last few years, over the remaining depreciable life
of the ammonia pipeline system, which includes assets that are
depreciated over a period of 30&nbsp;years; (2)&nbsp;it is
susceptible to change because of the assumptions management made
relative to the future volume of shipments on our system; and
(3)&nbsp;of the impact that recognizing an impairment on the
ammonia assets would have on net
</FONT>

<P align="center"><FONT size="2">48
</FONT>

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<DIV align="left">
<FONT size="2">income. The ammonia pipeline system accounts for
only approximately 3% of our total assets so the impact of a
PP&#38;E impairment on the balance sheet, while significant,
would not be considered material.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management&#146;s assumptions about future
ammonia shipments and future operating costs require significant
judgment because: (1)&nbsp;Farmland&#146;s bankruptcy raises
concerns over their ability to continue to ship product on our
line and it is difficult to assess the impact that a sale of
Farmland&#146;s facilities to a third party might have on our
shipments or the impact that Farmland&#146;s bankruptcy might
have on the two other competing companies on our ammonia
pipeline system; (2)&nbsp;the primary feedstock for producing
ammonia is natural gas. As the price of natural gas increases,
production costs for anhydrous ammonia also increase. The impact
on our customers is that they generally experience a reduction
in the demand for their product and consequently ship fewer tons
of ammonia on our pipeline system. Natural gas prices have
fluctuated widely over the past several years and have increased
to unprecedented high levels during the first quarter of 2003;
and (3)&nbsp;possible increases in the operating costs of the
pipeline due to the loss of synergies due to Williams&#146; sale
of the Mid-America Pipeline Company, a former affiliate whose
pipeline ran parallel to our ammonia pipeline system in some
areas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our estimates of future cash flows evaluated four
separate scenarios involving the potential impact of
Farmland&#146;s bankruptcy on our operations, along with an
estimate of the probability of each scenario occurring. The
estimates cover a range from 25% of Farmland&#146;s future
shipment volumes being lost to all of Farmland&#146;s future
shipment volumes being lost. We used our internal forecasts to
project revenues and costs in the short term and assumed
incremental revenues and costs for periods beyond based on
historical trends. Probabilities were assigned to each scenario
based on management&#146;s best estimates applying existing
market conditions, historical trends and knowledge of our
customers, the anhydrous fertilizer markets and competitors. The
highest probability of occurrence was assigned to the scenario
of losing 25% of Farmland&#146;s volumes and the lowest
probability of occurrence was assigned to the scenario of losing
all of Farmland&#146;s volumes. Based on our model, the sum of
the expected future cash flows, undiscounted and without
interest charges, exceeded the reported value and therefore we
did not recognize an impairment in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2002, our investment in
the ammonia pipeline system&#146;s PP&#38;E was
$21.1&nbsp;million. Any increase in the estimated future cash
flows would have no impact on our recorded value of the ammonia
pipeline system. However, if we were to assign a 30% probability
to the scenario that all of Farmland&#146;s volumes are lost,
35% probability that 75% of Farmland&#146;s volumes are lost and
a 35% probability that 50% of Farmland&#146;s volumes would be
lost, we would have been required to recognize an impairment
loss of approximately $13.9&nbsp;million. Average tons shipped
under this scenario would be 440 thousand tons per year over
most of the 30-year period evaluated, which management views as
unlikely. If we further changed our assumptions such that the
increase in ammonia revenues beyond our short-term plan
assumptions were reduced from 5% growth to 4% growth per year,
that impairment loss would increase to $21.1&nbsp;million. The
impact of such an impairment would have increased our leverage
ratio beyond the maximum allowed in our term loan and revolving
credit facility which would materially negatively impact our
liquidity and cash flows. In this scenario, the lenders in the
OLP facility could choose to accelerate the repayment of the
loan. In today&#146;s markets it is difficult to assess how
lenders would react to such a scenario; however, management
currently does not believe that, under this scenario, the
lenders in the OLP facility would take this course of action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on our assessment of the ammonia pipeline
system at December&nbsp;31, 2002, management concluded that an
impairment of the system was not required. Our management has
discussed the development and selection of this critical
accounting estimate with the Audit Committee of our General
Partner&#146;s Board of Directors and the Audit Committee has
reviewed this disclosure.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Environmental Liabilities</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We estimate the liabilities associated with
environmental expenditures based on site-specific project plans
for remediation, taking into account prior remediation
experience. Experienced remediation project managers evaluate
each known case of environmental liability to determine what
phases and associated costs can be reasonably estimated and to
ensure compliance with all applicable federal and/or state
requirements. We
</FONT>

<P align="center"><FONT size="2">49
</FONT>

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<DIV align="left">
<FONT size="2">believe the accounting estimate relative to
environmental remediation costs to be a &#147;critical
accounting estimate&#148; because: (1)&nbsp;estimated
expenditures, which will generally be made over the next
1&nbsp;to 10&nbsp;years, are subject to price fluctuations and
could change materially, (2)&nbsp;unanticipated third party
liabilities may arise, and/or (3)&nbsp;changes in federal, state
and local environmental regulations could also significantly
increase the amount of the liability. The estimate for
environmental liabilities is a critical accounting estimate for
all three of our operating segments.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A defined process for project reviews is
integrated into our System Integrity Plan. Specifically, our
remediation project managers meet once a year with accounting,
operations, legal and other personnel to evaluate, in detail,
the known environmental liabilities associated with each of our
operating units. The purpose of the annual project review is to
assess all aspects of each project, evaluating what will be
required to achieve regulatory compliance, estimating the costs
associated with executing the regulatory phases that can be
reasonably estimated and estimating the timing for those
expenditures. During the site-specific evaluations, all known
information is utilized in conjunction with professional
judgment and experience to determine the appropriate path
forward and assess liabilities. The general remediation process
to achieve regulatory compliance is: site
investigation/delineation, site remediation, and long-term
monitoring. Each of these phases can, and often do, include
unknown variables which complicate the task of evaluating the
estimated costs to complete. During 2002, the recommendations
that came from the annual review process resulted in our
increasing our environmental liabilities by $10.7&nbsp;million,
which was largely attributable to our quantifying the liability
(remediation and long-term monitoring) at six state-mandated
sites. Based on known liabilities, this large accrual adjustment
is not anticipated to be a recurring event.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each quarter, we reevaluate our environmental
estimates taking into account any new incidents that have
occurred since the last annual meeting of the remediation
project managers, any changes in the site situation and
additional findings and/or changes in federal or state
regulations. The estimated environmental liability accruals are
adjusted as necessary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming a 20% increase in our estimated
environmental liabilities and further assuming that 80% of those
additional liabilities would be indemnified by Williams, our
expenses would increase by $1.0&nbsp;million and operating
profit and net income would decrease by $1.0&nbsp;million, which
represented 1% of both our operating profit and net income for
2002. Such a change would result in less than a 1% increase in
our total liabilities and decrease our equity by less than 1%.
The impact of such an increase in environmental costs would
likely not have affected our liquidity and capital resources
because, even with the increased costs, we would still be within
the covenants of our long-term debt agreements as discussed
above under &#147;Liquidity and Capital Resources&nbsp;&#151;
Liquidity&#148; and in Note&nbsp;12 to the Consolidated
Financial Statements. The impact on our results is critically
dependent on our reliance on Williams&#146; performance related
to these indemnities&nbsp;&#151; See discussion of Affiliate
Receivables below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our management has discussed the development and
selection of this critical accounting estimate with the Audit
Committee of our General Partner&#146;s Board of Directors and
the Audit Committee has reviewed this disclosure.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Affiliate Receivables</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreements with Williams related to the
assets acquired at the time of our initial public offering in
February 2001 and to the Williams Pipe Line system acquired in
April 2002. These agreements indemnify us against environmental
losses up to $15.0&nbsp;million relating to the assets our
affiliates contributed to us at the time of our initial public
offering. In connection with the acquisition of the Williams
Pipe Line system, Williams agreed to indemnify us for
environmental losses up to $110.0&nbsp;million, after a
$2.0&nbsp;million deductible. Beyond the $110.0&nbsp;million
indemnity, Williams is responsible for one-half of all
environmental losses up to $140.0&nbsp;million, for a total
indemnity of $125.0&nbsp;million. When a site-specific
environmental liability is recognized, a determination is made
as to whether or not the liability is indemnified by Williams.
If so, an affiliate receivable for the amount of the indemnified
liability is also recognized. We do not require payment from
Williams until actual remediation work is performed on the site.
At that time, Williams is billed for the remediation work and
the cash received is used to reduce the affiliate environmental
receivable. As of
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">December&nbsp;31, 2002, we had recognized
affiliate receivables of $27.3&nbsp;million, of which
$22.9&nbsp;million were associated with environmental
indemnities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the accounting estimate related
to affiliate receivables is a &#147;critical accounting
estimate&#148; because: (1)&nbsp;its carrying amount is subject
to all of the same estimates as those used to develop the
underlying environmental liabilities (See Critical Accounting
Estimates&nbsp;&#151; Environmental Liabilities above); and
(2)&nbsp;given Williams&#146; current financial status it
requires our management&#146;s estimations involving our ability
to collect the receivable amount from Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In preparing our financial statements for the
year ended December&nbsp;31, 2002, management&#146;s assumptions
were that we would be able to collect the full amount of these
receivables from Williams. Should Williams be unable to perform
on its existing debt obligations, we may be unable to collect
part, or all, of our affiliate accounts receivable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we change our estimate of the amount of the
affiliate receivable we believe we can ultimately collect from
Williams, we would be required to take a charge against income
because we have not recorded any allowance for doubtful accounts
associated with this receivable. Assuming that none of the
receivable is collectable would require a charge against income
of $27.3&nbsp;million, which represents 28% of our net income
for the year. The impact of such an impairment would have
increased our leverage ratio beyond the maximum allowed in our
credit facility which would materially negatively impact our
liquidity and cash flows. In this scenario, the lenders in the
OLP facility could choose to accelerate the repayment of the
loan. In today&#146;s markets it is difficult to assess how
lenders would react to such a scenario; however, management
currently does not believe that, even under this scenario, the
lenders in the OLP facility would take that course of action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our management has discussed the development and
selection of this critical accounting estimate with the Audit
Committee of our General Partner&#146;s Board of Directors and
the Audit Committee has reviewed this disclosure.
</FONT>

<P align="left">
<B><FONT size="2">New Accounting Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2002, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued
SFAS&nbsp;No.&nbsp;148, &#147;Accounting for Stock-Based
Compensation&nbsp;&#151; Transition and Disclosure&nbsp;&#151;
an amendment of FASB Statement No.&nbsp;123&#148;. This
Statement amends FASB Statement No.&nbsp;123, &#147;Accounting
for Stock-Based Compensation&#148;, to provide alternative
methods of transition for a voluntary change to the fair value
based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures
in both annual and interim financial statements about the method
of accounting for stock-based employee compensation and the
effect of the method used on reported results. This Statement
improves the prominence and clarity of the pro forma disclosures
required by Statement&nbsp;123 by prescribing a specific tabular
format and by requiring disclosure in the &#147;Summary of
Significant Accounting Policies&#148; or its equivalent. The
standard is effective for fiscal periods ending after
December&nbsp;15, 2002. We account for stock-based compensation
under provisions of Accounting Principles Board Opinion
No.&nbsp;25, hence, adoption of this standard will have no
impact on our operations or financial position. We have adopted
the additional disclosure requirements of this standard in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2002, the FASB issued
SFAS&nbsp;No.&nbsp;146, &#147;Accounting for Costs Associated
with Exit or Disposal Activities&#148;. This Statement addresses
financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task
Force (&#147;EITF&#148;) Issue No.&nbsp;94-3, &#147;Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)&#148;. The provisions of this Statement are
effective for exit or disposal activities that are initiated
after December&nbsp;31, 2002, with early application encouraged.
We adopted this standard in January 2003, and it did not have a
material impact on our results of operations or financial
position.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the second quarter of 2002, the FASB issued
SFAS&nbsp;No.&nbsp;145, &#147;Rescission of FASB Statements
No.&nbsp;4, 44 and&nbsp;64, Amendment of FASB Statement&nbsp;13
and Technical Corrections&#148;. The rescission of
SFAS&nbsp;No.&nbsp;4 &#147;Reporting Gains and Losses from
Extinguishment of Debt,&#148; and SFAS&nbsp;No.&nbsp;64,
&#147;Extinguishment of Debt
</FONT>

<P align="center"><FONT size="2">51
</FONT>

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<DIV align="left">
<FONT size="2">Made to Satisfy Sinking-Fund Requirements,&#148;
requires that gains or losses from extinguishment of debt only
be classified as extraordinary items in the event they meet the
criteria in Accounting Principles Board Opinion
(&#147;APB&#148;) No.&nbsp;30, &#147;Reporting the Results of
Operations&nbsp;&#151; Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions&#148;.
SFAS&nbsp;No.&nbsp;44, &#147;Accounting for Intangible Assets of
Motor Carriers,&#148; established accounting requirements for
the effects of transition to the Motor Carriers Act of 1980 and
is no longer required now that the transitions have been
completed. Finally, the amendments to SFAS&nbsp;No.&nbsp;13
&#147;Accounting for Leases&#148; are effective for transactions
occurring after May&nbsp;15, 2002. All other provisions of this
Statement will be effective for financial statements issued on
or after May&nbsp;15, 2002. We adopted this standard in January
2003, and it did not have a material impact on our results of
operations or financial position. However, in subsequent
reporting periods, any gains and losses from debt
extinguishments will not be accounted for as extraordinary items.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, the FASB issued
SFAS&nbsp;No.&nbsp;144, &#147;Accounting for the Impairment or
Disposal of Long-Lived Assets&#148;. This Statement supersedes
SFAS&nbsp;No.&nbsp;121, &#147;Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
of&#148; and amends APB No.&nbsp;30. The Statement retains the
basic framework of SFAS&nbsp;No.&nbsp;121, resolves certain
implementation issues of SFAS&nbsp;No.&nbsp;121, extends
applicability to discontinued operations and broadens the
presentation of discontinued operations to include a component
of an entity. The Statement was to be applied prospectively and
was effective for financial statements issued for fiscal years
beginning after December&nbsp;15, 2001. There was no initial
impact on our results of operations or financial position upon
adoption of this standard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued
SFAS&nbsp;No.&nbsp;143 &#147;Accounting for Asset Retirement
Obligations,&#148; which is effective for fiscal years beginning
after June&nbsp;15, 2002. The Statement requires legal
obligations associated with the retirement of long-lived assets
to be recognized at their fair value at the time that the
obligations are incurred. Upon initial recognition of a
liability, that cost should be capitalized as a part of the
related long-lived asset and allocated to expense over the
useful life of the asset. We adopted the new rules on asset
retirement obligations on January&nbsp;1, 2003. Application of
the new rules did not have a material impact on our results of
operations or financial position as retirement obligations were
not recorded for assets for which the remaining life is not
currently determinable, including pipeline transmission and
terminals assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued
SFAS&nbsp;No.&nbsp;141, &#147;Business Combinations&#148;, and
SFAS&nbsp;No.&nbsp;142, &#147;Goodwill and Other Intangible
Assets&#148;. SFAS&nbsp;No.&nbsp;141 establishes accounting and
reporting standards for business combinations and requires all
business combinations to be accounted for by the purchase
method. The Statement is effective for all business combinations
for which the date of acquisition is July&nbsp;1, 2001 or later.
SFAS&nbsp;No.&nbsp;142 addresses accounting and reporting
standards for goodwill and other intangible assets. Under this
Statement, goodwill and intangible assets with indefinite useful
lives will no longer be amortized but will be tested annually
for impairment. The Statement became effective for all fiscal
years beginning after December&nbsp;15, 2001. We applied the new
rules on accounting for goodwill and other intangible assets
beginning January&nbsp;1, 2002. Based on the amount of goodwill
recorded as of December&nbsp;31, 2001, application of the
non-amortization provision of the Statement resulted in a
decrease to amortization expense in 2002 of approximately
$0.8&nbsp;million.
</FONT>

<P align="left">
<B><FONT size="2">Related Party Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into a number of commercial
agreements with affiliates, including Williams Energy
Marketing&nbsp;&#38; Trading, Williams Midstream
Marketing&nbsp;&#38; Risk Management, Williams
Refining&nbsp;&#38; Marketing, Williams Ethanol Services, Inc.
and Mid-America Pipeline Company. Each of these entities was a
subsidiary of Williams and an affiliate of ours and of our
General Partner during the periods presented. The principal
business of Williams Energy Marketing&nbsp;&#38; Trading is the
marketing and trading of energy commodities including natural
gas, natural gas liquids, power, crude oil and refined petroleum
products. Williams Refining&nbsp;&#38; Marketing primarily owned
and operated a refinery in Memphis, Tennessee and engaged in the
purchase and sale of crude and refined petroleum products
(Please read &#147;Petroleum Products Terminals&nbsp;&#151;
Inland Terminals&#148; for a discussion of the sale of the
Williams Refining&nbsp;&#38; Marketing&#146;s refinery in
Memphis, Tennessee). Williams Midstream Marketing&nbsp;&#38;
Risk Management manages sales, marketing and risk management for
Williams&#146; midstream business. Williams Ethanol Services
operates two ethanol plants and an
</FONT>

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<DIV align="left">
<FONT size="2">ethanol distribution system and also engages in
the purchase and sale of ethanol. Mid-America Pipeline is an
interstate common carrier pipeline company engaged in the
transportation and distribution of natural gas liquids. Williams
sold Mid-America Pipeline in August 2002. During 2003 Williams
Refining&nbsp;&#38; Marketing sold its refinery in Memphis,
Tennessee and its travel center operations. Also, Williams has
announced that it has an agreement to sell Williams Ethanol
Services, which it expects to complete in 2003.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreements with our affiliates vary depending
upon location and the types of services provided. Approximately
$16.6&nbsp;million and $15.9&nbsp;million of our revenues in
2002 and 2001, respectively, were generated from agreements with
affiliates at our petroleum products terminals while
approximately $42.0&nbsp;million and $78.4&nbsp;million of
revenue in 2002 and 2001, respectively, was generated from
agreements with affiliates on the Williams Pipe Line system. In
addition, approximately $22.3&nbsp;million and
$81.0&nbsp;million of expenses were incurred in 2002 and 2001,
respectively, from product purchases with our affiliates on the
Williams Pipe Line system. A summary of the significant
agreements follows:
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The Williams Pipe Line System</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Tariff-based shipments.
</FONT></I><FONT size="2">Williams Energy Marketing&nbsp;&#38;
Trading, Williams Refining&nbsp;&#38; Marketing and Williams
Midstream Marketing&nbsp;&#38; Risk Management ship refined
petroleum products on our pipeline system. We charge rates for
the shipments based upon tariffs filed with the FERC or the
applicable state agency that are the same rates we charge to
non-affiliated entities. These tariffs serve as individual
contractual agreements that commit our affiliate to pay for
volume transported on our system as long as we abide by the
terms of the tariff. As a result, contracts generally do not
exist that obligate our affiliates to ship volume or make
payments to us in the future. The principal exceptions to this
are: (i)&nbsp;our throughput and deficiency agreement with
Williams Energy Marketing and Trading for product movements
through a third-party capacity lease and (ii)&nbsp;for propane
movements from El Dorado, Kansas to Carthage, Missouri. The
throughput and deficiency agreement for the propane movements
from El Dorado, Kansas to Carthage, Missouri expires on
March&nbsp;31, 2003. The total revenues associated with
tariff-based shipments were approximately $6.6&nbsp;million and
$5.0&nbsp;million in 2002 and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">System lease storage agreements.
</FONT></I><FONT size="2">We have entered into several
agreements with Williams Energy Marketing&nbsp;&#38; Trading and
Williams Refining&nbsp;&#38; Marketing for the access and
utilization of storage along the Williams Pipe Line system. We
also have an agreement with Williams Energy Marketing&nbsp;&#38;
Trading, which expires on March&nbsp;31, 2003, for the lease of
our Carthage, Missouri cavern. These agreements provide for a
fixed monthly storage capacity on the pipeline system at a fixed
rate. The rates charged to our affiliates are consistent with
those charged to non-affiliated entities. Services provided
under these agreements include the receipt of refined petroleum
products into our system at any origin point on our system. Our
affiliates remain responsible for tariff charges related to the
actual shipment of product and delivery through our terminals.
These contracts have one-year terms and, as they expire, are
usually renewed for a one-year term. These agreements generated
approximately $2.6&nbsp;million and $2.2&nbsp;million of revenue
in 2002 and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Ethanol storage and throughput agreements.
</FONT></I><FONT size="2">We have entered into several
agreements with Williams Ethanol Services for the access and
utilization of storage along the Williams Pipe Line system.
These agreements provide for a fixed monthly ethanol storage
capacity at our terminals at a fixed storage rate. The rates
charged to our affiliates are consistent with those charged to
non-affiliated entities. In addition, we charge additional fees
ranging from $0.80&nbsp;per barrel to over $1.25&nbsp;per barrel
for blending services and handling fees at certain terminals. A
majority of these contracts have a term ranging from less than
one year and up to two years. These agreements generated
approximately $4.5&nbsp;million and $3.2&nbsp;million of revenue
in 2002 and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Facility rental agreement.
</FONT></I><FONT size="2">We have entered into an agreement to
lease to Mid-America Pipeline approximately 292&nbsp;miles of
pipeline, three active pump stations and a propane storage and
loading facility in Canton, South Dakota. Mid-America Pipeline
is responsible for utilities and other operating costs. The
agreement, entered into in 1998, was renewed yearly until 2002.
The rate charged for this lease has not changed from year to
year. This agreement generated approximately $0.3&nbsp;million
of revenue in 2001 and approximately $0.2&nbsp;million of
revenue in 2002 during that portion of the year that Mid-America
Pipeline was
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">still an affiliate of ours. In July 2002,
Mid-America Pipeline was sold by Williams; consequently, any
revenues associated with this agreement since that time has been
classified as third-party revenues.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">System services agreements.
</FONT></I><FONT size="2">We have entered into agreements with
Williams Energy Marketing&nbsp;&#38; Trading, Williams
Refining&nbsp;&#38; Marketing and Williams Ethanol Services
providing them with a non-exclusive and non-transferable
sublicense to use the ATLAS&nbsp;2000 software system. The
system can be utilized to access data for monitoring shipment
and inventory status and performing other functions related to
shipment activities. The agreements establish fixed rates at
which we provide certain services. These agreements generated
approximately $0.5&nbsp;million and $0.3&nbsp;million of revenue
in 2002 and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Over and short settlement and product
purchases and sales agreements.</FONT></I><FONT size="2"> During
part of 2002, we had agreements with Williams Energy
Marketing&nbsp;&#38; Trading and Williams Midstream
Marketing&nbsp;&#38; Risk Management to buy natural gas liquids
blendstocks and sell the refined petroleum products related to
our blending program. We also had agreements with Williams
Energy Marketing&nbsp;&#38; Trading to purchase from or sell to
us refined petroleum products needed to maintain inventory
balances on our pipeline system (which we refer to as over and
short settlements). These transactions were subject to master
purchase and sale agreements for refined petroleum products or a
master purchase agreement for natural gas liquids. Each
transaction with our affiliate was recorded on a confirmation
statement, which was subject to the general terms outlined in
the master agreements. These confirmation statements determined
the volume, price and timing associated with the product
purchases and sales. The revenue associated with these
agreements was approximately $25.1&nbsp;million and
$66.4&nbsp;million in 2002 and 2001, respectively, while the
expenses incurred to purchase products from our affiliates were
approximately $22.3&nbsp;million and $81.0&nbsp;million in 2002
and 2001, respectively. Additional details related to the
activities that produce the purchase and sale opportunities are
as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Blending.
    </FONT></I><FONT size="2">Historically, Williams Pipe Line
    Company purchased natural gas liquids from Williams Energy
    Marketing&nbsp;&#38; Trading at cost plus a fixed fee of
    $0.105&nbsp;per barrel. Williams Energy Marketing&nbsp;&#38;
    Trading purchased at prevailing market prices a majority of the
    finished gasoline that was produced from blending. In connection
    with the acquisition of the Williams Pipe Line system in April
    2002, we and Williams Energy Services agreed that the Williams
    Pipe Line system would no longer take title to the natural gas
    liquids it blends or the resulting product. We now perform these
    blending services for Williams Energy Services under a separate
    agreement (see below).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Over and short settlement.
    </FONT></I><FONT size="2">Generally, the physical volumes on our
    system will not match the balances recorded by our customers.
    These differences are either product quality differences or
    absolute volume differences. Quality differences usually result
    from the commingling of product on the pipeline during times
    when we change the product being shipped on our pipeline. When
    these differences occur, we purchase and sell product at
    prevailing market prices to manage the imbalances.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Butane blending agreement.
</FONT></I><FONT size="2">We perform blending services on the
Williams Pipe Line System for Williams Energy Services under a
ten-year agreement which provides for an annual fee of
approximately $4.2&nbsp;million, of which $0.6&nbsp;million is
attributable to blending services provided at one of our inland
petroleum products terminals not connected to the Williams Pipe
Line system. We do not take title to any of the product used in
or resulting from the blending process. This agreement, entered
into at the time of our acquisition of Williams Pipe Line in
April 2002, generated approximately $2.8&nbsp;million in 2002,
of which $2.3&nbsp;million was for services performed on the
Williams Pipe Line system and $0.5&nbsp;million was for services
performed at one of our inland petroleum products terminals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Longhorn Partners Pipeline Construction
Revenue Agreement.</FONT></I><FONT size="2"> Prior to its
acquisition by us in April of 2002, Williams Pipe Line Company
had agreements with Longhorn Partners Pipeline to provide
engineering, design, construction, start-up and pipeline
operating services. Under these agreements, Williams Pipe Line
Company was reimbursed for costs incurred and received
contractor and operating fees. The revenue associated with these
agreements was approximately $0.2&nbsp;million and
$1.0&nbsp;million in 2002 and 2001, respectively. In connection
with our acquisition of Williams Pipe Line Company, these
agreements were transferred to a wholly-owned subsidiary of
Williams and consequently we no longer provide these services
and receive these fees.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Natural gas and fuel oil supply agreements.
</FONT></I><FONT size="2">During part of 2002, we had agreements
with Williams Energy Marketing&nbsp;&#38; Trading and Williams
Refining&nbsp;&#38; Marketing for the supply of natural gas and
fuel oil used at pump stations throughout the Williams Pipe Line
system. We purchased fuel oil from Williams Refining&nbsp;&#38;
Marketing at the prevailing market price. These purchases were
identified on confirmation statements that were subject to the
master refined products purchase and sale agreements used in the
blending and over and short program. We purchased natural gas
from Williams Energy Marketing&nbsp;&#38; Trading either based
on indexed prices or at fixed prices. In 2002, we elected to
purchase a majority of our natural gas at fixed prices, which
required that we commit to a definite volume of natural gas
purchases. The natural gas purchase agreement for fixed price
natural gas expired in August 2002. These agreements generated
operating expenses of $2.6&nbsp;million and $4.2&nbsp;million in
2002 and 2001, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Petroleum Products Terminals</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Inland terminal use and access agreements.
</FONT></I><FONT size="2">We have entered into several
agreements with Williams Refining&nbsp;&#38; Marketing for the
access and utilization of our inland terminals. The services
provided under these agreements include the receipt and delivery
of refined petroleum products via connecting common carrier
pipelines. Additional services include product handling,
storage, inventory management, and additive injection. These
agreements establish a market-based fee at which these services
are provided at rates consistent with those charged to
non-affiliated entities. A majority of these contracts have a
term of one year and are renewed on an annual basis. The revenue
associated with these agreements was approximately
$4.0&nbsp;million and $6.5&nbsp;million in 2002 and 2001,
respectively. The sale of Williams Refining&nbsp;&#38;
Marketing&#146;s refinery in Memphis, Tennessee and their travel
center operations during the first quarter of 2003, will result
in significantly lower revenues from Williams
Refining&nbsp;&#38; Marketing during 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Products terminals and storage agreement for
the Galena Park, Texas marine terminal
facility.</FONT></I><FONT size="2"> We entered into an agreement
with Williams Energy Marketing&nbsp;&#38; Trading to provide
approximately 2.8&nbsp;million barrels of storage capacity and
to provide other ancillary services at our Galena Park, Texas
marine terminal facility. Because the storage fees are fixed and
the storage capacity is already committed, revenues fluctuate to
the extent other ancillary services are utilized and/or a tank
is out of service as part of our System Integrity Program. The
primary services provided include receipt and delivery of
refined petroleum products and blendstocks via marine vessel,
pipeline, tank truck or other transfers from customers within
the terminal facility. The prices charged under this agreement
are consistent with those charged to non-affiliated entities.
The agreement, which generated approximately $7.6&nbsp;million
and $7.4&nbsp;million of revenue in 2002 and 2001, respectively,
expires on September&nbsp;30, 2004. We have negotiated the
termination of this agreement with Williams Energy
Marketing&nbsp;&#38; Trading, effective in March 2003. We expect
to receive cash of approximately $3.0&nbsp;million from Williams
Energy Marketing&nbsp;&#38; Trading to terminate this agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Products terminalling agreement for the
Gibson, Louisiana marine terminal
facility.</FONT></I><FONT size="2"> We entered into an agreement
to provide Williams Energy Marketing&nbsp;&#38; Trading capacity
utilization rights to substantially all of the capacity of the
Gibson, Louisiana facility for nine years starting
November&nbsp;1, 2001. This agreement allows for the delivery of
crude oil and condensate to our facility by barge, truck and
pipeline where we then provide storage, blending and throughput
services. Williams Energy Marketing&nbsp;&#38; Trading has
committed to utilize substantially all of the capacity at our
facility at a fixed rate which is consistent with rates charged
by other service providers for similar services at other
locations. As a result, the revenues we receive should not
significantly vary as long as the services we provide do not
fall below certain performance standards. This contract
generated approximately $4.1&nbsp;million of revenue in 2002 and
approximately $0.6&nbsp;million of revenue for the two months we
owned the facility in 2001.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Other affiliate agreements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the expenses incurred under the
commercial agreements with our affiliates discussed above, we
also incur affiliate expenses for general and administrative,
operating and maintenance services under the terms of our
partnership agreement and our omnibus agreement, which governs
the relationship between us, our general partner and Williams.
</FONT>

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<P align="left">
<B><FONT size="2">Risks Related to our Business</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not be able to generate sufficient
    cash from operations to allow us to pay the minimum quarterly
    distribution following establishment of cash reserves and
    payment of fees and expenses, including payments to our General
    Partner.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount of cash we can distribute on our
common units principally depends upon the cash we generate from
our operations. Because the cash we generate from operations
will fluctuate from quarter to quarter, we may not be able to
pay the minimum quarterly distribution for each quarter. Our
ability to pay the minimum quarterly distribution each quarter
depends primarily on cash flow, including cash flow from
financial reserves and working capital borrowings, and not
solely on profitability, which is affected by non-cash items. As
a result, we may make cash distributions during periods when we
record losses and may not make cash distributions during periods
when we record net income.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Potential future acquisitions and
    expansions, if any, may affect our business by substantially
    increasing the level of our indebtedness and contingent
    liabilities and increasing our risk of being unable to
    effectively integrate these new operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, we evaluate and acquire assets
and businesses that we believe complement our existing assets
and businesses. Acquisitions may require substantial capital or
the incurrence of substantial indebtedness. If we consummate any
future acquisitions, our capitalization and results of
operations may change significantly, and you will not have the
opportunity to evaluate the economic, financial and other
relevant information that we will consider in determining the
application of these funds and other resources.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Acquisitions and business expansions involve
numerous risks, including difficulties in the assimilation of
the assets and operations of the acquired businesses,
inefficiencies and difficulties that arise because of
unfamiliarity with new assets and the businesses associated with
them and new geographic areas and the diversion of
management&#146;s attention from other business concerns.
Further, unexpected costs and challenges may arise whenever
businesses with different operations or management are combined,
and we may experience unanticipated delays in realizing the
benefits of an acquisition. Following an acquisition, we may
discover previously unknown liabilities associated with the
acquired business for which we have no recourse under applicable
indemnification provisions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our financial results depend on the demand
    for the refined petroleum products that we transport, store and
    distribute.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any sustained decrease in demand for refined
petroleum products in the markets served by our pipeline and
terminals could result in a significant reduction in the volume
of products that we transport in our pipeline, store at our
marine terminal facilities and distribute through our inland
terminals, and thereby reduce our cash flow and our ability to
pay cash distributions. Factors that could lead to a decrease in
market demand include:
</FONT>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in the market price of crude oil that
    leads to higher refined product prices, which may reduce demand
    for gasoline and other petroleum products. Market prices for
    refined petroleum products are subject to wide fluctuation in
    response to changes in global and regional supply over which we
    have no control;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a recession or other adverse economic condition
    that results in lower spending by consumers and businesses on
    transportation fuels such as gasoline, jet fuel and diesel;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">higher fuel taxes or other governmental or
    regulatory actions that increase the cost of gasoline;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in fuel economy, whether as a result
    of a shift by consumers to more fuel-efficient vehicles or
    technological advances by manufacturers;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the increased use of alternative fuel sources,
    such as fuel cells and solar, electric and battery-powered
    engines. Several state and federal initiatives mandate this
    increased use.
    </FONT></TD>
</TR>

</TABLE>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">When prices for the future delivery of
    petroleum products that we transport through our pipeline system
    or store in our marine terminals fall below current prices,
    customers are less likely to store these products, thereby
    reducing our storage revenues.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This market condition is commonly referred to as
&#147;backwardation.&#148; When the petroleum product market is
in backwardation, the demand for storage capacity at our
facilities may decrease. If the market becomes strongly
backwardated for an extended period of time, it may affect our
ability to meet our financial obligations and pay cash
distributions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We depend on petroleum products pipelines
    owned and operated by others to supply our
    terminals.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Most of our inland and marine terminal facilities
depend on connections with petroleum product pipelines owned and
operated by third parties. Reduced throughput on these pipelines
because of testing, line repair, damage to pipelines, reduced
operating pressures or other causes could result in our being
unable to deliver products to our customers from our terminals
or receive products for storage and could adversely affect our
ability to meet our financial obligations and pay cash
distributions.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Collectively, our affiliates Williams
    Energy Marketing&nbsp;&#38; Trading and Williams
    Refining&nbsp;&#38; Marketing have historically been our largest
    customer, and any reduction in their use of our services could
    reduce the amount of cash we generate.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2002 and
2001, our affiliates Williams Energy Marketing&nbsp;&#38;
Trading and Williams Refining&nbsp;&#38; Marketing collectively
accounted for approximately 11% and 18%, respectively, of our
revenues. Williams has begun the process of reducing its
marketing and trading activities. As a result, we have
experienced a reduction of revenues related to their activities.
We are currently in the process of replacing this affiliate
revenue with third party revenue. If we are unable to do so, it
could impact our ability to meet our financial obligations and
pay cash distributions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Terrorist attacks aimed at our facilities
    could adversely affect our business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;11, 2001, the United States was
the target of terrorist attacks of unprecedented scale. Since
the September&nbsp;11 attacks, the U.S.&nbsp;government has
issued warnings that energy assets, specifically our
nation&#146;s pipeline infrastructure, may be the future target
of terrorist organizations. These developments have subjected
our operations to increased risks. Any future terrorist attack
on our facilities, those of our customers and, in some cases,
those of other pipelines, could have a material adverse effect
on our business.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our business involves many hazards and
    operational risks, some of which may not be covered by
    insurance.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations are subject to many hazards
inherent in the transportation of refined petroleum products and
ammonia, including ruptures, leaks and fires. These risks could
result in substantial losses due to personal injury or loss of
life, severe damage to and destruction of property and equipment
and pollution or other environmental damage and may result in
curtailment or suspension of our related operations. We are not
fully insured against all risks incident to our business. In
addition, as a result of market conditions, premiums for our
insurance policies have increased substantially and could
escalate further. In some instances, insurance could become
unavailable or available only for reduced amounts of coverage.
For example, insurance carriers are now requiring broad
exclusions for losses due to war risk and terrorist and sabotage
acts. If a significant accident or event occurs that is not
fully insured, it could adversely affect our financial position
or results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Rate regulation or a successful challenge
    to the rates we charge on the Williams Pipe Line system may
    reduce the amount of cash we generate.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Federal Energy Regulatory Commission, or the
FERC, regulates the tariff rates for the Williams Pipe Line
system. Shippers may protest the pipeline system&#146;s tariffs,
and the FERC may investigate the
</FONT>

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<FONT size="2">lawfulness of new or changed tariff rates and
order refunds of amounts collected under rates ultimately found
to be unlawful. The FERC may also investigate tariff rates that
have become final and effective.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FERC&#146;s ratemaking methodologies may
limit our ability to set rates based on our true costs or may
delay the use of rates that reflect increased costs. The
FERC&#146;s primary ratemaking methodology is price indexing. We
use this methodology to establish our rates in approximately
one-third of our interstate markets. The indexing method allows
a pipeline to increase its rates by a percentage equal to the
change in the producer price index, or PPI. Please read
&#147;Narrative Description of Business&nbsp;&#151; Tariff
Regulation&#148; for further discussion of tariff rates and how
they have been impacted by the PPI. If the PPI rises by less
than 1% or falls, we could be required to reduce our rates that
are based on the FERC&#146;s price indexing methodology if they
exceed the new maximum allowable rate. In addition, changes in
the PPI might not be large enough to fully reflect actual
increases in the costs associated with the pipeline.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In recent decisions involving unrelated pipeline
limited partnerships, the FERC has ruled that these partnerships
may not claim an income tax allowance for income attributable to
non-corporate limited partners. A shipper could rely on these
decisions to challenge our indexed rates and claim that, because
we now own the Williams Pipe Line system, the Williams Pipe Line
system&#146;s income tax allowance should be reduced. If the
FERC were to disallow all or part of our income tax allowance,
it may be more difficult to justify our rates. If a challenge
were brought and the FERC found that some of the indexed rates
exceed levels justified by the cost of service, the FERC would
order a reduction in the indexed rates and could require
reparations for a period of up to two years prior to the filing
of a complaint. Any reduction in the indexed rates or payment of
reparations could have a material adverse effect on our
operations and reduce the amount of cash we generate.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Mergers among our customers and competitors
    could result in lower volumes being shipped on our pipelines
    and/or products stored in our terminals, thereby reducing the
    amount of cash we generate.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mergers between existing customers could provide
strong economic incentives for the combined entities to utilize
their existing systems instead of ours in those markets where
the systems compete. As a result, we could lose some or all of
the volumes and associated revenues from these customers and we
could experience difficulty in replacing those lost volumes and
revenues. Because most of our operating costs are fixed, a
reduction in volumes would result not only in a reduction of
revenues, but also a decline in net income and cash flow of a
similar magnitude, which would reduce our ability to meet our
financial obligations and pay cash distributions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The closure of mid-continent refineries
    that supply the Williams Pipe Line system could result in
    disruptions or reductions in the volumes transported on the
    Williams Pipe Line system and the amount of cash we
    generate.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The U.S.&nbsp;Environmental Protection Agency
recently adopted requirements that require refineries to install
equipment to lower the sulfur content of gasoline and some
diesel fuel they produce. The requirements relating to gasoline
will take effect and be implemented in 2004, and the
requirements relating to diesel fuel will take effect in 2006
and be implemented through 2010. If refinery owners that use the
Williams Pipe Line system determine that compliance with these
new requirements is too costly, they may close some of these
refineries, which could reduce the volumes transported on the
Williams Pipe Line system and the amount of cash we generate.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our business is subject to federal, state
    and local laws and regulations that govern the environmental and
    operational safety aspects of its operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of our operating segments are subject to the
risk of incurring substantial costs and liabilities under
environmental and safety laws. These costs and liabilities arise
under increasingly strict environmental and safety laws,
including regulations and governmental enforcement policies, and
as a result of claims for damages to property or persons arising
from our operations. Failure to comply with these laws and
regulations may result in assessment of administrative, civil
and criminal penalties, imposition of cleanup and site
restoration costs and liens and, to a lesser extent, issuance of
injunctions to limit or cease operations. If we
</FONT>

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<DIV align="left">
<FONT size="2">were unable to recover these costs through
increased revenues, our ability to meet our financial
obligations and pay cash distributions could be adversely
affected.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terminal and pipeline facilities that
comprise the Williams Pipe Line system have been used for many
years to transport, distribute or store petroleum products. Over
time, operations by us, our predecessors or third parties may
have resulted in the disposal or release of hydrocarbons or
solid wastes at or from these terminal properties and along such
pipeline rights-of-way. In addition, some of our terminals and
pipelines are located on or near current or former refining and
terminal sites, and there is a risk that contamination is
present on those sites. We may be held jointly and severally
liable under a number of these environmental laws and
regulations for such disposal and releases of hydrocarbons or
solid wastes or the existence of contamination, even in
circumstances where such activities or conditions were caused by
third parties not under our control or were otherwise lawful at
the time that they occurred.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we own a number of properties that
have been used for many years to distribute or store petroleum
products by third parties not under our control. In some cases,
owners, tenants or users of these properties have disposed of or
released hydrocarbons or solid wastes on or under these
properties. In addition, some of our terminals are located on or
near current or former refining and terminal operations, and
there is a risk that contamination is present on these sites.
The transportation of ammonia by our pipeline is hazardous and
may result in environmental damage, including accidental
releases that may cause death or injuries to humans and farm
animals and damage to crops.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Competition with respect to our operating
    segments could ultimately lead to lower levels of profits and
    reduce the amount of cash we generate.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We face competition from other pipelines and
terminals in the same markets as the Williams Pipe Line system,
as well as from other means of transporting, storing and
distributing petroleum products. For a description of the
competitive factors facing the Williams Pipe Line system, please
read &#147;Business&nbsp;&#151; Williams Pipe Line
System&nbsp;&#151; Competition.&#148; In addition, our marine
and inland terminals face competition from large, generally
well-financed companies that own many terminals, as well as from
small companies. Our marine and inland terminals also encounter
competition from integrated refining and marketing companies
that own their own terminal facilities. Our customers demand
delivery of products on tight time schedules and in a number of
geographic markets. If our quality of service declines or we
cannot meet the demands of our customers, they may use our
competitors. We compete primarily with rail carriers for the
transportation of ammonia. If our customers elect to transport
ammonia by rail rather than pipeline, we may realize lower
revenues and cash flows and our ability to pay cash
distributions may be adversely affected. Our ammonia pipeline
also competes with another ammonia pipeline in Iowa and Nebraska.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our tax treatment depends on our status as
    a partnership for federal income tax purposes, as well as our
    not being subject to entity-level taxation by states. If the IRS
    treats us as a corporation or we become subject to entity-level
    taxation for state tax purposes, it would reduce the amount of
    cash we generate.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The after-tax economic benefit of an investment
in the common units depends largely on our being treated as a
partnership for federal income tax purposes. If we were
classified as a corporation for federal income tax purposes, we
would pay federal income tax on our income at the corporate
rate. Some or all of the distributions made to unitholders would
be treated as dividend incomes, and no income, gains, losses or
deductions would flow through to unitholders. Treatment of us as
a corporation would cause a material reduction in the
anticipated cash flow, which would reduce our ability to meet
our financial obligations and pay cash distributions. Moreover,
treatment of us as a corporation would materially and adversely
affect our ability to make payments on our debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, because of widespread state budget
deficits, several states are evaluating ways to subject
partnerships to entity-level taxation through the imposition of
state income, franchise or other forms of taxation. If any state
were to impose a tax upon us as an entity, the cash available to
pay distributions would be reduced. The partnership agreement
provides that, if a law is enacted or existing law is modified
or interpreted in a manner that subjects us to taxation as a
corporation or otherwise subjects us to entity-level taxation for
</FONT>

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<DIV align="left">
<FONT size="2">federal, state or local income tax purposes, then
the minimum quarterly distribution and the target distribution
levels will be decreased to reflect that impact on us.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our ammonia pipeline system is dependent on
    three customers.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Three customers ship all of the ammonia on our
pipeline and utilize the six terminals that we own and operate
on the pipeline. We have contracts with Farmland Industries,
Inc., Agrium U.S.&nbsp;Inc. and Terra Nitrogen, L.P. through
June 2005 that obligate them to ship-or-pay for specified
minimum quantities of ammonia. Farmland Industries, Inc., the
largest of our three customers, filed for bankruptcy protection
in May 2002, has exercised its right to terminate its contract
with us effective December&nbsp;23, 2003 (Please read
&#147;Business&nbsp;&#151; Ammonia Pipeline System&nbsp;&#151;
<I>Farmland&#148;</I> and Note&nbsp;16 to the Consolidated
Financial Statements for further discussions of Farmland).
Another of these customers has a credit rating below investment
grade. The loss of any one of these three customers or their
failure or inability to pay us could adversely affect our
ability to meet our financial obligations and pay cash
distributions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">High natural gas prices can increase
    ammonia production costs and reduce the amount of ammonia
    transported through our ammonia pipeline system.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The profitability of our customers that produce
ammonia partially depends on the price of natural gas, which is
the principal raw material used in the production of ammonia.
Natural gas prices increased late in the fourth quarter of 2002
and have reached unprecedented levels in the first quarter of
2003. An extended period of high natural gas prices may cause
our customers to produce and ship lower volumes of ammonia,
which could adversely affect our ability to meet our financial
obligations and pay cash distributions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Williams has announced its intention to
    divest its interest in our General Partner. A sale of our
    General Partner could result in the acceleration of payment of
    our debt obligations. In addition, it could result in the
    termination of our Omnibus Agreement with Williams and our
    General Partner or the termination of Williams&#146; obligation
    to provide general and administrative services for a fixed
    charge, which could result in higher general and administrative
    expenses, increased maintenance capital expenditures and
    increased environmental expenditures, which could limit our
    ability to pay cash distributions.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2003, Williams announced its
intention to divest its interest in our General Partner and its
common, Class&nbsp;B and subordinated units. A sale of the
General Partner could result in the holders of our debt
obligations accelerating the payments due to them under those
agreements. Also, a change of control in the General Partner may
result in the termination of the general and administrative
expense limitation under the Omnibus Agreement, which could
result in higher general and administrative costs to us. The
termination of the Omnibus Agreement could also terminate the
agreements we have with Williams to reimburse us for maintenance
capital costs associated with Williams Pipe Line maintenance
capital over the next two years, which could increase our
maintenance capital costs which, in turn, could limit our
ability to pay cash distributions. Also, the environmental
indemnities associated with the assets acquired at the time of
our initial public offering could be terminated.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Williams provides a variety of services for
    us. A sale of Williams&#146; interests in our General Partner
    would require us to separate from Williams, which in turn, would
    require us to obtain these services from independent sources,
    which could increase our costs and limit our ability to pay cash
    distributions.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams provides a number of services to us that
are billed to the Partnership as general and administrative
expense. These costs include: accounting, building
administration, human resources, information technology, legal
and security, among others. In addition, Williams provides us
several key software applications critical to our business
including our general ledger, SCADA and accounts payable
systems, as well as our desktop and networking systems.
Separating ourselves from Williams will entail acquiring similar
services and systems, which could increase our costs and limit
our ability to pay cash distributions.
</FONT>

<P align="center"><FONT size="2">60
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our relationship with Williams subjects us
    to potential risks that are beyond our control.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to our relationship with Williams, adverse
developments or announcements concerning Williams, including
bankruptcy proceedings, could adversely affect our financial
condition, even if we have not suffered any similar development.
In addition, further downgrades by one or more credit rating
agencies of the outstanding indebtedness of Williams could
increase our borrowing costs or generally impede our access to
capital markets. We also have significant right-of-way and
environmental indemnities from Williams. Further adverse
developments could result in Williams being unable to perform on
its existing obligations, including their right-of-way and
environmental indemnities with us, which could adversely affect
our ability to finance acquisitions, refinance existing
indebtedness and pay cash distributions.
</FONT>

<!-- link2 "Item 7A. Quantitative and Qualitative Disclosures about Market Risk" -->
<DIV align="left"><A NAME="014"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;7A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Quantitative and Qualitative Disclosures
    about Market Risk</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently do not engage in interest rate,
foreign currency exchange rate or commodity price-hedging
transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Market risk is the risk of loss arising from
adverse changes in market rates and prices. The principal market
risk to which we are exposed is interest rate risk. Debt we
incur under our credit facility and our Floating Rate
Series&nbsp;A Senior Secured notes bear variable interest based
on the Eurodollar rate. If the LIBOR changed by 0.125%, our
annual interest obligations associated with the
$90.0&nbsp;million of outstanding borrowings under the term loan
and revolving credit facility at December&nbsp;31, 2002, and the
$178.0&nbsp;million of outstanding borrowings under the Floating
Rate Series&nbsp;A Senior Secured Notes would change by
approximately $0.3&nbsp;million. Unless interest rates change
significantly in the future, our exposure to interest rate
market risk is minimal.
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Item 8. Financial Statements and Supplementary Data." -->
<DIV align="left"><A NAME="015"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Financial Statements and Supplementary
    Data.</FONT></I></B></TD>
</TR>

</TABLE>

<!-- link1 "REPORT OF INDEPENDENT AUDITORS" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT AUDITORS</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors of WEG GP LLC
</FONT>

<DIV align="left">
<FONT size="2">General Partner of Williams Energy Partners L.P.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Williams Energy Partners L.P. as of
December&nbsp;31, 2002 and 2001, and the related consolidated
statements of income, cash flows and partners&#146; capital for
each of the three years in the period ended December&nbsp;31,
2002. These financial statements are the responsibility of the
Partnership&#146;s management. Our responsibility is to express
an opinion on these financial statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
auditing standards generally accepted in the 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. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of Williams Energy
Partners L.P. at December&nbsp;31, 2002 and 2001, and the
consolidated results of its operations and its cash flows for
each of the three years in the period ended December&nbsp;31,
2002 in conformity with accounting principles generally accepted
in the United States.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">ERNST&nbsp;&#38; YOUNG LLP
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Tulsa, Oklahoma
</FONT>

<DIV align="left">
<FONT size="2">March&nbsp;3, 2003
</FONT>
</DIV>

<P align="center"><FONT size="2">62
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF INCOME</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation and terminals revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">313,683</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product sales revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,523</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,024</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate construction and management fee revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">434,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">426,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Costs and expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132,809</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental indemnified by Williams
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,500</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,736</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate construction expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,365</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total costs and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">323,017</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">137,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,829</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">407</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,149</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,493</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,680</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt placement fee amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (income) expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,112</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(431</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(816</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allocation of net income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portion applicable to period after
    February&nbsp;9, 2001 (April&nbsp;11, 2002 as it relates to the
    operations of Williams Pipe Line):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Limited partners&#146; interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">General partner&#146;s interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,402</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portion applicable to partners&#146; interests
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portion applicable to non-partnership interests
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,429</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of limited partner units
    outstanding used for basic net income per unit calculation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of limited partner units
    outstanding used for diluted net income per unit calculation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,968</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">63
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable (less allowance for doubtful
    accounts of $457 and $510 at December&nbsp;31, 2002 and 2001,
    respectively)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,598</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes&nbsp;&#151; affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,690</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,584</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,066</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property, plant and equipment, at cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,334,527</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,338,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">401,396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">374,653</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">933,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963,740</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill (less amortization of $141 and $145 at
    December&nbsp;31, 2002 and 2001, respectively)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other intangibles (less amortization of $297 and
    $310 at December&nbsp;31, 2002 and 2001, respectively)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term affiliate receivables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term receivables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,809</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other noncurrent assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,727</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,116,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,104,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="11" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND PARTNERS&#146;
    CAPITAL</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash overdrafts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate income taxes payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued affiliate payroll and benefits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued taxes other than income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued interest payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued environmental liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued casualty losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">570,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">139,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term affiliate note payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term affiliate payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other deferred liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes&nbsp;&#151; affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,260</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commitments and contingencies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Partners&#146; capital:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common unitholders (13,680&nbsp;units and
    5,680&nbsp;units outstanding at December&nbsp;31, 2002 and 2001,
    respectively)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">399,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Subordinated unitholders (5,680&nbsp;units
    outstanding at both December&nbsp;31, 2002 and 2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131,194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">121,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Class&nbsp;B units (7,831&nbsp;units outstanding
    at December&nbsp;31, 2002)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">313,651</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">General partner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(391,954</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">367,297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(971</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total partners&#146; capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities and partners&#146; capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,116,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,104,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">64
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating Activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income to net cash
    provided by operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt issuance costs amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred compensation expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,641</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Gain)/loss on sale of assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,088</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities
    (Note&nbsp;4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(27,821</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,056</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investing Activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions to property, plant&nbsp;&#38; equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(37,248</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39,743</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43,346</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchases of businesses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(692,493</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(49,409</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31,100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash used by investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(727,035</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(87,502</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(74,446</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing Activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Distributions paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(53,373</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,599</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Borrowings under credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">139,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments under credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Borrowings under short-term note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">700,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments on short-term note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(700,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Borrowings under long-term note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">480,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital contributions by affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sales of Common Units to public (less
    underwriters&#146; commissions and payment of formation and
    offering costs)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">279,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt placement costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19,666</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(909</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of 600,000 Common Units from affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,060</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments on affiliate note payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(29,780</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235,090</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from affiliate note payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,069</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment of interest rate hedge
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(995</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">627,316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(34,004</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Change in cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,827</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents at beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents at end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Supplemental non-cash investing and financing
    transactions:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contributions by affiliate of long-term debt,
    deferred income tax liabilities, and other assets and
    liabilities to Partnership capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,671</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of business through the issuance of
    Class&nbsp;B equity securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of Aux Sable pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred equity offering costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,539</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">65
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENT OF PARTNERS&#146;
CAPITAL</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">General</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Comprehensive</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Partners&#146;</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subordinated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Partner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">(In thousands, except unit amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance, January&nbsp;1, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">272,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance, December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">388,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contribution of net assets of predecessor
    companies (1.7&nbsp;million common units and 5.7&nbsp;million
    subordinated units issued)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(49,362</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117,884</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of common units (0.6&nbsp;million)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,060</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,060</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issuance of common units to public
    (4.6&nbsp;million units)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate capital contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Distributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,134</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,134</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(331</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,599</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance, December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">121,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">367,297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comprehensive income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,434</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss on cash flow hedge
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(971</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(971</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Conversion of minority interest liability to
    partners&#146; capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Conversion of Williams Pipe Line equity to
    partnership equity and contribution by affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(789,910</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(789,910</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issuance of Class&nbsp;B units (7.8&nbsp;million
    units)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issuance of common units to public
    (8&nbsp;million units)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">279,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">279,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate capital contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,536</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,883</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Distributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,640</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,642</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,768</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,323</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(53,373</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(65</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance, December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">399,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131,194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">313,651</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(391,954</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(971</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">66
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">1.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Organization and Presentation</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Energy Partners L.P. (the
&#147;Partnership&#148;) is a Delaware limited partnership that
was formed in August 2000 to own, operate and acquire a
diversified portfolio of complementary energy assets. At the
time of the Partnership&#146;s initial public offering in
February 2001, the Partnership owned: (a)&nbsp;selected
petroleum products terminals previously owned by Williams Energy
Ventures, Inc., and (b)&nbsp;an ammonia pipeline system,
Williams Ammonia Pipeline Inc., previously owned by Williams
Natural Gas Liquids, Inc. (&#147;WNGL&#148;). Prior to the
closing of the Partnership&#146;s initial public offering in
February 2001, Williams Energy Ventures, Inc. was owned by
Williams Energy Services, LLC (&#147;Williams Energy
Services&#148;). Both Williams Energy Services and WNGL are
wholly owned subsidiaries of The Williams Companies, Inc.
(&#147;Williams&#148;). Williams GP LLC, a Delaware limited
liability company and wholly-owned subsidiary of Williams, was
also formed in August 2000, to serve as general partner for the
Partnership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;9, 2001, the Partnership
completed its initial public offering of 4&nbsp;million common
units representing limited partner interests in the Partnership
at a price of $21.50&nbsp;per unit. The proceeds of
$86.0&nbsp;million were used to pay underwriting discounts and
commissions of $5.6&nbsp;million and legal, professional fees
and costs associated with the initial public offering of
$3.1&nbsp;million, with the remainder used to reduce affiliate
note balances with Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the initial public offering, the
underwriters exercised their over-allotment option and purchased
600,000&nbsp;common units, also at a price of $21.50&nbsp;per
unit. The net proceeds of $12.1&nbsp;million, after underwriting
discounts and commissions of $0.8&nbsp;million, from this
over-allotment option were used to redeem 600,000 of the common
units held by Williams Energy Services to reimburse it for
capital expenditures related to the Partnership&#146;s assets.
The Partnership maintained the historical costs of the net
assets in connection with the initial public offering. Following
the exercise of the underwriters&#146; over-allotment option,
40% of the Partnership was owned by the public and 60%,
including the General Partner&#146;s ownership, was owned by
affiliates of the Partnership. Generally, the limited
partners&#146; liability in the Partnership is limited to their
investment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;11, 2002, the Partnership acquired
all of the membership interests of Williams Pipe Line Company
(&#147;Williams Pipe Line&#148;) for approximately
$1.0&nbsp;billion (see Note&nbsp;5&nbsp;&#151; Acquisitions and
Divestitures). Because Williams Pipe Line was an affiliate of
the Partnership at the time of the acquisition, the transaction
was between entities under common control and, as such, has been
accounted for similarly to a pooling of interests. Accordingly,
the consolidated financial statements and notes of the
Partnership have been restated to reflect the combined
historical results of operations, financial position and cash
flows of Williams Energy Partners and Williams Pipe Line
throughout the periods presented. Williams Pipe Line&#146;s
operations are presented as a separate operating segment of the
Partnership (see Note&nbsp;15&nbsp;&#151; Segment Disclosures).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The historical results for Williams Pipe Line
included income and expenses and assets and liabilities that
were conveyed to and assumed by an affiliate of Williams Pipe
Line prior to its acquisition by the Partnership. The assets
principally included Williams Pipe Line&#146;s interest in and
agreement related to Longhorn Partners Pipeline
(&#147;Longhorn&#148;), an inactive refinery site at Augusta,
Kansas, a pipeline construction project, the ATLAS&nbsp;2000
software system and the pension assets and obligations
associated with the non-contributory defined-benefit pension
plan which covered union employees assigned to Williams Pipe
Line&#146;s operations. The liabilities principally included the
environmental liabilities associated with the inactive refinery
site in Augusta, Kansas and current and deferred income taxes
and affiliate note payable. The current and deferred income
taxes and the affiliate note payable were contributed to the
Partnership in the form of a capital contribution by an
affiliate of Williams. The income and expenses associated with
Longhorn have not been included in the financial results of the
Partnership since the acquisition of Williams Pipe Line by the
Partnership in April 2002. Also, as agreed between the
Partnership and Williams, revenues from Williams Pipe
Line&#146;s blending operations, other than an annual blending
fee of approximately $3.0&nbsp;million, have not been included
in the financial results of the Partnership since April 2002. In
addition, general and
</FONT>

<P align="center"><FONT size="2">67
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">administrative expenses related to the Williams
Pipe Line system that the Partnership has been reimbursing to
its General Partner, have been limited to $30.0&nbsp;million on
an annual basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;11, 2002, the Partnership issued
7,830,924&nbsp;Class&nbsp;B units representing limited partner
interests to Williams GP LLC. The securities, valued at
$304.4&nbsp;million and along with $6.2&nbsp;million of
additional general partner equity interests were issued as
partial payment for the acquisition of Williams Pipe Line (See
Note&nbsp;5&nbsp;&#151; Acquisitions and Divestitures).
According to the provisions in the Williams Pipe Line private
placement debt agreement dated November&nbsp;15, 2002, the
Partnership can redeem the Class&nbsp;B units only with proceeds
from an equity offering. When the Class&nbsp;B units are
redeemed, the price will be based on the 20-day average closing
price of the common units prior to the redemption date. If the
Class&nbsp;B units are not redeemed by April&nbsp;11, 2003, then
upon the request of the holder of the Class&nbsp;B units and
approval of the holders of a majority of the common units voting
at a meeting of the unitholders, the Class&nbsp;B units will
convert into common units. If the approval of the conversion by
the common unitholders is not obtained within 120&nbsp;days of
this request, the holder of the Class&nbsp;B units will be
entitled to receive distributions with respect to its
Class&nbsp;B units, on a per unit basis, equal to 115% of the
amount of distributions paid on a common unit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2002, the Partnership issued
8,000,000&nbsp;common units representing limited partner
interests in the Partnership at a price of $37.15&nbsp;per unit
for total proceeds of $297.2&nbsp;million. Associated with this
offering, Williams contributed $6.1&nbsp;million to the
Partnership to maintain its 2% general partner interest. A
portion of the total proceeds was used to pay underwriting
discounts and commissions of $12.6&nbsp;million. Legal,
professional fees and costs associated with this offering were
approximately $5.3&nbsp;million. The remaining cash proceeds of
$289.0&nbsp;million were used to partially repay the
$700.0&nbsp;million short-term note assumed by the Partnership
to help finance the Williams Pipe Line acquisition (see
Note&nbsp;12&nbsp;&#151; Long-Term Debt).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During November 2002, amendments were made to the
Partnership&#146;s agreement of limited partnership and a
limited liability company agreement for WEG&nbsp;GP&nbsp;LLC
(see discussion of WEG&nbsp;GP&nbsp;LLC below) was adopted. The
first change requires the Partnership and the general partner to
maintain separateness from Williams including formalities on
interaction between the Partnership, the public and Williams.
Changes were also made to require the approval of the Conflicts
Committee (consisting of three independent directors) before the
general partner can make bankruptcy-related decisions for the
Partnership. In addition, adjustments were made to the voting
rights of units held by Williams. Williams&#146; Class&nbsp;B
units no longer have voting rights except with respect to
matters that would have a material impact on the holders of such
units, its subordinated units generally have one-half vote for
every one unit owned and all common units will be allowed to
vote in any subordinated class vote. Finally, election of the
board members of the general partner has been moved to a vote of
the common unitholders, with the first vote to be held in 2003.
The voting right changes and board member changes will be voided
and reversed in the event of a foreclosure in a Williams-related
bankruptcy proceeding. In addition, the Partnership eliminated
from its agreements the requirement that the Board of Directors
of the Partnership&#146;s General Partner approve any proposed
disposition of any membership interest of the General Partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During November 2002, Williams created a new
general partner, WEG&nbsp;GP&nbsp;LLC (&#147;General
Partner&#148;). The new General Partner, which is owned by
affiliates of Williams, has all of the rights, privileges and
responsibilities relative to the Partnership previously held by
the old general partner, Williams GP LLC. Williams GP LLC will
continue to own the Class&nbsp;B units issued by the Partnership
in April 2002.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Recent Developments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002, Williams began to experience
significant financial and liquidity difficulties and no longer
maintains an investment grade credit rating. In the event that
Williams&#146; financial condition does not improve, or becomes
worse, it may have to consider other options including the
possibility of filing for bankruptcy under the United States
Bankruptcy Code. Management has reviewed the situation with
outside counsel and believes that should Williams and its
affiliates file for bankruptcy protection that the Partnership
would not
</FONT>

<P align="center"><FONT size="2">68
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">necessarily become a party to such bankruptcy
filings. However, we cannot assure you that Williams and its
affiliates, or the creditors of Williams and its affiliates,
would not attempt to utilize various remedies available in a
bankruptcy (including substantive consolidation), in an effort
to make the assets of the Partnership available to the creditors
of Williams and its affiliates, or how a bankruptcy court would
resolve such issues. Likewise, there can be no assurances as to
the ultimate impact a bankruptcy by Williams and its affiliates
would have on Williams&#146; and its affiliates&#146; ability to
perform obligations owed to the Partnership and its affiliates,
including our General Partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WEG&nbsp;GP&nbsp;LLC is a wholly-owned subsidiary
of Williams. Williams owns approximately 55% of the Partnership,
including its 2% general partner interest. However, the
Partnership operates its business in a manner separate and
distinct from Williams. Among other things: (i)&nbsp;the
Partnership either owns or leases the assets used in its
business in its own name, (ii)&nbsp;the Partnership has three
independent board members who serve on a conflicts committee
that must approve any material transaction between the
Partnership and Williams or its affiliates, as well as approve
certain significant transactions (such as the filing of a
bankruptcy petition) and (iii)&nbsp;other than affiliate
receivables and payables generated from product sales and
services rendered in the normal course of business, the
Partnership does not provide any credit support to Williams or
its affiliates and Williams does not provide credit support to
us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provisions of the General Partner&#146;s limited
liability company agreement specifically provide that decisions
regarding a voluntary bankruptcy filing of WEG&nbsp;GP&nbsp;LLC
or the Partnership must be approved by the Conflicts Committee,
which is comprised of the independent board members of
WEG&nbsp;GP&nbsp;LLC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If WEG GP LLC were to file for bankruptcy relief
under Chapter&nbsp;7 of the United States Bankruptcy Code, the
filing would be an &#147;Event of Withdrawal&#148; under the
Partnership&#146;s Partnership Agreement and
WEG&nbsp;GP&nbsp;LLC will be deemed to have withdrawn. A
Chapter&nbsp;11 filing would not be considered an &#147;Event of
Withdrawal&#148; and the Partnership would continue to operate
under its existing agreements. Upon the occurrence of an Event
of Withdrawal, WEG&nbsp;GP&nbsp;LLC is required to give notice
to the Partnership&#146;s limited partners within 30&nbsp;days
after such occurrence. An Event of Withdrawal triggers
dissolution and winding up of the affairs of the Partnership
unless: (i)&nbsp;a successor general partner is elected and
admitted to the Partnership within 90&nbsp;days of receiving the
General Partner&#146;s withdrawal notice, (ii)&nbsp;a written
opinion of counsel is issued that such withdrawal would not
result in the loss of the limited liability of any limited
partner or of the limited partner of any of the
Partnership&#146;s operating limited partnerships or cause the
Partnership or any of the Partnership&#146;s operating limited
partnerships to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal
income tax purposes, and (iii)&nbsp;the new general partner
executes a new partnership agreement and executes and files a
new certificate of limited partnership. Election of a successor
general partner requires a vote of a majority of the outstanding
units to reconstitute the Partnership and approve the successor
general partner. Despite the provisions of the
Partnership&#146;s Partnership Agreement discussed in this
section, if WEG GP LLC were to file for bankruptcy protection,
the bankruptcy court may refuse to enforce these provisions or
may require different or additional procedures and consideration
to allow these provisions to be followed.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">2.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Description of Businesses</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership owns and operates a petroleum
products pipeline system, petroleum products terminals and an
ammonia pipeline system.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Williams Pipe Line System</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Pipe Line is a petroleum products
pipeline system that covers an 11-state area extending from
Oklahoma through the Midwest to North Dakota, Minnesota and
Illinois. The system includes a 6,700-mile pipeline and
39&nbsp;terminals that provide transportation, storage and
distribution services. The products transported on the Williams
Pipe Line system are largely petroleum products, including
gasoline, diesel fuels,
</FONT>

<P align="center"><FONT size="2">69
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">LPGs and aviation fuels. Product originates on
the system from direct connections to refineries and
interconnects with other interstate pipelines for transportation
and ultimate distribution to retail gasoline stations, truck
stops, railroads, airlines and other end-users.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Petroleum Products Terminals</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Most of the Partnership&#146;s 28 petroleum
products terminals are strategically located along or near third
party pipelines or petroleum refineries. The petroleum products
terminals provide a variety of services such as distribution,
storage, blending, inventory management and additive injection
to a diverse customer group including governmental customers and
end-users in the downstream refining, retail, commercial
trading, industrial and petrochemical industries. Products
stored in and distributed through the petroleum products
terminal network include refined petroleum products, blendstocks
and heavy oils and feedstocks. The terminal network consists of
marine terminal facilities and inland terminals. Four marine
terminal facilities are located along the Gulf Coast and one
marine terminal facility is located in Connecticut near the New
York harbor. The inland terminals are located primarily in the
southeastern United States.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Ammonia Pipeline System</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ammonia pipeline system consists of an
ammonia pipeline and six company-owned terminals. Shipments on
the pipeline primarily originate from ammonia production plants
located in Borger, Texas and Enid and Verdigris, Oklahoma for
transport to terminals throughout the Midwest for ultimate
distribution to end-users in Iowa, Kansas, Minnesota, Missouri,
Nebraska, Oklahoma, South Dakota and Texas. The ammonia
transported through the system is used primarily as nitrogen
fertilizer.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">3.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Summary of Significant Accounting
    Policies</FONT></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Basis of Presentation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements include
Williams Pipe Line, the petroleum products terminals and the
ammonia pipeline system. For 11 of these petroleum products
terminals, the Partnership owns varying undivided ownership
interests. From inception, ownership of these assets has been
structured as an ownership of an undivided interest in assets,
not as an ownership interest in a partnership, limited liability
company, joint venture or other form of entity. Marketing and
invoicing are controlled separately by each owner, and each
owner is responsible for any loss, damage or injury that may
occur to their own customers. As a result, the Partnership
applies proportionate consolidation for its interests in these
assets.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Reclassifications</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain previously reported balances have been
classified differently to conform with current year
presentation. Net income and total assets were not affected by
these reclassifications.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Use of Estimates</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results
could differ from those estimates.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Regulatory Reporting</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Pipe Line is regulated by the Federal
Energy Regulatory Commission (&#147;FERC&#148;), which
prescribes certain accounting principles and practices for the
annual Form&nbsp;6 Report filed with the FERC that differ from
those used in these financial statements. Such differences
relate primarily to capitalization of
</FONT>

<P align="center"><FONT size="2">70
</FONT>

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<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">interest, accounting for equity investments and
other adjustments and are not significant to the financial
statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Cash Equivalents</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents include demand and time
deposits and other marketable securities with maturities of
three months or less when acquired. The carrying amount of cash
and cash equivalents approximates fair value of those
instruments due to their short maturity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Inventory Valuation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventory is comprised primarily of refined
products and materials and supplies. Refined products and
natural gas liquids inventories are stated at the lower of
average cost or market. The average cost method is used for
materials and supplies.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Trade Receivables</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Trade receivables are recognized when products
are sold or services are rendered. An allowance for doubtful
accounts is established for all amounts deemed uncollectable and
reserves are evaluated no less than quarterly to determine their
adequacy.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Property, Plant and Equipment</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property, plant and equipment are stated at cost.
Expenditures for maintenance and repairs are charged to
operations in the period incurred. Depreciation of property,
plant and equipment is provided on the straight-line basis. For
petroleum products terminal and ammonia pipeline system assets,
the costs of property, plant and equipment sold or retired and
the related accumulated depreciation is removed from the
accounts, and any associated gains or losses are recorded in the
income statement, in the period of sale or disposition. For
Williams Pipe Line, gains or losses from the ordinary sale or
retirement of property, plant and equipment are credited or
charged to accumulated depreciation under FERC accounting
guidelines.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Goodwill and Other Intangible
    Assets</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2002, WEG GP LLC adopted Statement of
Financial Accounting Standard (&#147;SFAS&#148;) No.&nbsp;142,
&#147;Goodwill and Other Intangible Assets.&#148; In accordance
with this Statement, beginning on January&nbsp;1, 2002,
goodwill, which represents the excess of cost over fair value of
assets of businesses acquired, is no longer amortized but must
be evaluated periodically for impairment. The determination of
whether goodwill is impaired is based on management&#146;s
estimate of the fair value of the Partnership&#146;s operating
segments as compared to their carrying values. If an impairment
has occurred, the amount of the impairment recognized is
determined by subtracting the implied fair value of the
reporting unit goodwill from the carrying amount of the
goodwill. Other intangible assets are amortized on a
straight-line basis over a period of up to 25&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Judgments and assumptions are inherent in
management&#146;s estimates used to determine the fair value of
its operating segments. The use of alternate judgments and/or
assumptions could result in the recognition of different levels
of impairment charges in the financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Previously, goodwill was amortized on a
straight-line basis over a period of 20&nbsp;years for those
assets acquired prior to July&nbsp;1, 2001. Based on the amount
of goodwill recorded as of December&nbsp;31, 2001, application
of the non-amortization provision of SFAS&nbsp;No.&nbsp;142
resulted in a decrease to amortization expense in 2002 of
approximately $0.8&nbsp;million.
</FONT>

<P align="center"><FONT size="2">71
</FONT>

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<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Impairment of Long-Lived
    Assets</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2002, the Partnership adopted
SFAS&nbsp;No.&nbsp;144 &#147;Accounting for the Impairment or
Disposal of Long-Lived Assets.&#148; There was no initial impact
on the Partnership&#146;s results of operations or financial
position upon adoption of this standard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with this Statement, the
Partnership evaluates its long-lived assets of identifiable
business activities for impairment when events or changes in
circumstances indicate, in management&#146;s judgment, that the
carrying value of such assets may not be recoverable. The
determination of whether an impairment has occurred is based on
management&#146;s estimate of undiscounted future cash flows
attributable to the assets as compared to the carrying value of
the assets. If an impairment has occurred, the amount of the
impairment recognized is determined by estimating the fair value
for the assets and recording a provision for loss if the
carrying value is greater than fair value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For assets identified to be disposed of in the
future, the carrying value of these assets is compared to the
estimated fair value less the cost to sell to determine if an
impairment is required. Until the assets are disposed of, an
estimate of the fair value is redetermined when related events
or circumstances change.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Judgments and assumptions are inherent in
management&#146;s estimate of undiscounted future cash flows
used to determine recoverability of an asset and the estimate of
an asset&#146;s fair value used to calculate the amount of
impairment to recognize. The use of alternate judgments and/or
assumptions could result in the recognition of different levels
of impairment charges in the financial statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Capitalization of Interest</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on borrowed funds is capitalized on
projects during construction based on the approximate average
interest rate on debt owed by the Partnership. Capitalized
interest for the years ended December&nbsp;31, 2002, 2001 and
2000 were $0.2&nbsp;million, $0.8&nbsp;million and
$1.3&nbsp;million, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Revenue Recognition</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Pipe Line transportation revenues are
recognized when shipments are complete and estimated pipeline
revenues are deferred for shipments in transit. Ammonia pipeline
revenues are recognized when product is delivered to the
customer. Injection service fees associated with customer
proprietary additives are recognized upon injection to the
customer&#146;s product, which occurs at the time the product is
delivered. Leased tank storage, pipeline capacity leases,
terminalling, throughput, blending services, ethanol loading and
unloading services, laboratory testing and data services,
pipeline operating fees and other miscellaneous service-related
revenues are recognized upon completion of contract services.
Sales of products produced from fractionation activities and
other miscellaneous product sales, are recognized upon sale of
the product.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Income Taxes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to February&nbsp;9, 2001, the
Partnership&#146;s operations were included in Williams&#146;
consolidated federal income tax return. The Partnership&#146;s
income tax provisions were computed as though separate returns
were filed. Deferred income taxes were computed using the
liability method and were provided on all temporary differences
between the financial basis and tax basis of the
Partnership&#146;s assets and liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective with the closing of the
Partnership&#146;s initial public offering on February&nbsp;9,
2001 (See Note&nbsp;1), the Partnership was no longer a taxable
entity for federal and state income tax purposes. Accordingly,
for the petroleum products terminals and ammonia pipeline system
operations, after the initial public offering, no recognition
has been given to income taxes for financial reporting purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to its acquisition by the Partnership,
Williams Pipe Line was included in Williams&#146; consolidated
federal income tax return. Deferred income taxes were computed
using the liability method and were provided
</FONT>

<P align="center"><FONT size="2">72
</FONT>

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<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">on all temporary differences between the
financial basis and the tax basis of Williams Pipe Line&#146;s
assets and liabilities. Williams Pipe Line&#146;s federal
provision was computed at existing statutory rates as though a
separate federal tax return were filed. Williams Pipe Line paid
its tax liability to Williams as per its tax sharing arrangement
with Williams. No recognition has been given to income taxes
associated with Williams Pipe Line for financial reporting
purposes for periods subsequent to its acquisition by the
Partnership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tax on Partnership net income is borne by the
individual partners through the allocation of taxable income.
Net income for financial statement purposes may differ
significantly from taxable income of unitholders as a result of
differences between the tax basis and financial reporting basis
of assets and liabilities and the taxable income allocation
requirements under the Partnership&#146;s partnership agreement.
The aggregate difference in the basis of the Partnership&#146;s
net assets for financial and tax reporting purposes cannot be
readily determined because information regarding each
partner&#146;s tax attributes in the Partnership is not
available to the Partnership.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Employee Stock-Based Awards</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams&#146; employee stock-based awards are
accounted for under provisions of Accounting Principles Board
Opinion No.&nbsp;25, &#147;Accounting for Stock Issued to
Employees,&#148; and related interpretations. Williams&#146;
fixed plan common stock options do not result in compensation
expense because the exercise price of the stock options equals
the market price of the underlying stock on the date of grant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The General Partner has issued incentive awards
of phantom units of the Partnership to Williams employees
assigned to the Partnership. These awards are also accounted for
under provisions of Accounting Principles Board Opinion
No.&nbsp;25. Since the exercise price of the unit awards is less
than the market price of the underlying units on the date of
grant, compensation expense is recognized by the General Partner
and directly allocated to the Partnership.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Environmental</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Environmental expenditures that relate to current
or future revenues are expensed or capitalized based upon the
nature of the expenditures. Expenditures that relate to an
existing condition caused by past operations that do not
contribute to current or future revenue generation are expensed.
Environmental liabilities are recorded independently of any
potential claim for recovery. Receivables are recognized in
cases where the realization of reimbursements of remediation
costs are considered probable. Accruals related to environmental
matters are generally determined based on site-specific plans
for remediation, taking into account prior remediation
experience of the Partnership and Williams.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Earnings Per Unit</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic earnings per unit are based on the average
number of common, Class&nbsp;B and subordinated units
outstanding. Diluted earnings per unit include any dilutive
effect of phantom unit grants. Limited partners&#146; earnings
are determined after the net income allocation to the General
Partner consistent with its distribution under the incentive
distribution rights declared for each period presented.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Recent Accounting Standards</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2002, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued SFAS&nbsp;No.&nbsp;148
&#147;Accounting for Stock-Based Compensation&nbsp;&#151;
Transition and Disclosure&nbsp;&#151; an amendment of FASB
Statement No.&nbsp;123&#148;. This Statement amends FASB
Statement No.&nbsp;123, &#147;Accounting for Stock-Based
Compensation&#148;, to provide alternative methods of transition
for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition,
this Statement amends the disclosure requirements of
Statement&nbsp;123 to require prominent disclosures in both
annual and interim financial
</FONT>

<P align="center"><FONT size="2">73
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">statements about the method of accounting for
stock-based employee compensation and the effect of the method
used on reported results. This Statement improves the prominence
and clarity of the pro forma disclosures required by
Statement&nbsp;123 by prescribing a specific tabular format and
by requiring disclosure in the &#147;Summary of Significant
Accounting Policies&#148; or its equivalent. The standard is
effective for fiscal periods ending after December&nbsp;15,
2002. The Partnership accounts for stock-based compensation for
Williams employees assigned to the Partnership under provisions
of Accounting Principles Board Opinion No.&nbsp;25, hence,
adoption of this standard will have no impact on the
Partnership&#146;s operations or financial position. The
Partnership adopted the additional disclosure requirements of
this standard in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2002, the FASB issued
SFAS&nbsp;No.&nbsp;146, &#147;Accounting for Costs Associated
with Exit or Disposal Activities&#148;. This Statement addresses
financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task
Force (&#147;EITF&#148;) Issue No.&nbsp;94-3, &#147;Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring).&#148; The provisions of this Statement are
effective for exit or disposal activities that are initiated
after December&nbsp;31, 2002, with early application encouraged.
The Partnership adopted this standard in January 2003 and it did
not have a material impact on the Partnership&#146;s results of
operations or financial position.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the second quarter of 2002, the FASB issued
SFAS&nbsp;No.&nbsp;145, &#147;Rescission of FASB Statements
No.&nbsp;4, 44 and 64, Amendment of FASB Statement&nbsp;13 and
Technical Corrections&#148;. The rescission of
SFAS&nbsp;No.&nbsp;4 &#147;Reporting Gains and Losses from
Extinguishment of Debt,&#148; and SFAS&nbsp;No.&nbsp;64,
&#147;Extinguishment of Debt Made to Satisfy Sinking-Fund
Requirements,&#148; requires that gains or losses from
extinguishment of debt only be classified as extraordinary items
in the event they meet the criteria in Accounting Principle
Board Opinion (&#147;APB&#148;) No.&nbsp;30, &#147;Reporting the
Results of Operations&nbsp;&#151; Reporting the Effects of
Disposal of a Segment of a Business and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions&#148;.
SFAS&nbsp;No.&nbsp;44, &#147;Accounting for Intangible Assets of
Motor Carriers,&#148; established accounting requirements for
the effects of transition to the Motor Carriers Act of 1980 and
is no longer required now that the transitions have been
completed. Finally, the amendments to SFAS&nbsp;No.&nbsp;13
&#147;Accounting for Leases&#148; are effective for transactions
occurring after May&nbsp;15, 2002. All other provisions of this
Statement will be effective for financial statements issued on
or after May&nbsp;15, 2002. The Partnership adopted this
standard in January 2003, and it did not have a material impact
on our results of operations or financial position. However, in
subsequent reporting periods, any gains and losses from debt
extinguishments will not be accounted for as extraordinary items.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, the FASB issued
SFAS&nbsp;No.&nbsp;144, &#147;Accounting for the Impairment or
Disposal of Long-Lived Assets&#148;. This Statement supersedes
SFAS&nbsp;No.&nbsp;121, &#147;Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
of&#148; and amends APB&nbsp;No.&nbsp;30. The Statement retains
the basic framework of SFAS&nbsp;No.&nbsp;121, resolves certain
implementation issues of SFAS&nbsp;No.&nbsp;121, extends
applicability to discontinued operations and broadens the
presentation of discontinued operations to include a component
of an entity. The Statement was to be applied prospectively and
was effective for financial statements issued for fiscal years
beginning after December&nbsp;15, 2001. There was no initial
impact on our results of operations or financial position upon
adoption of this standard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued
SFAS&nbsp;No.&nbsp;143, &#147;Accounting for Asset Retirement
Obligations,&#148; which is effective for fiscal years beginning
after June&nbsp;15, 2002. The Statement requires legal
obligations associated with the retirement of long-lived assets
to be recognized at their fair value at the time that the
obligations are incurred. Upon initial recognition of a
liability, that cost should be capitalized as a part of the
related long-lived asset and allocated to expense over the
useful life of the asset. The Partnership adopted the new rules
on asset retirement obligations on January&nbsp;1, 2003.
Application of the new rules did not have a material impact on
the Partnership&#146;s results of operations or financial
position as retirement obligations were not recorded for assets
for which the remaining life is not currently determinable,
including pipeline transmission and terminal assets.
</FONT>

<P align="center"><FONT size="2">74
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued
SFAS&nbsp;No.&nbsp;141, &#147;Business Combinations&#148; and
SFAS&nbsp;No.&nbsp;142, &#147;Goodwill and Other Intangible
Assets&#148;. SFAS&nbsp;No.&nbsp;141 establishes accounting and
reporting standards for business combinations and requires all
business combinations to be accounted for by the purchase
method. The Statement is effective for all business combinations
for which the date of acquisition is July&nbsp;1, 2001 or later.
SFAS&nbsp;No.&nbsp;142 addresses accounting and reporting
standards for goodwill and other intangible assets. Under this
Statement, goodwill and intangible assets with indefinite useful
lives will no longer be amortized but will be tested annually
for impairment. The Statement became effective for all fiscal
years beginning after December&nbsp;15, 2001. The Partnership
applied the new rules on accounting for goodwill and other
intangible assets beginning January&nbsp;1, 2002. Based on the
amount of goodwill recorded as of December&nbsp;31, 2001,
application of the non-amortization provision of the Statement
resulted in a decrease to amortization expense in 2002 of
approximately $0.8&nbsp;million. Following are the historical
results of Williams Energy Partners on a consolidated basis
assuming goodwill amortization had not been recorded (in
thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Reported net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,017</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">For the year ended December&nbsp;31, 2001, basic
and diluted net income per limited partner unit would have
increased by $.01 assuming goodwill amortization had not been
recorded.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">4.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Consolidated Statements of Cash
    Flows</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Changes in the components of operating assets and
liabilities excluding certain assets and liabilities of Williams
Pipe Line which were not acquired by the Partnership (see
Note&nbsp;1&nbsp;&#151; Organization and Presentation) are as
follows (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable and other accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,007</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,726</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,876</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,943</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,919</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,331</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,636</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,634</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,146</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate income taxes payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,079</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,570</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued affiliate payroll and benefits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">315</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(822</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(169</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued taxes other than income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(364</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,756</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued interest payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(210</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current and noncurrent environmental liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other current and noncurrent assets and
    liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,553</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,532</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(27,821</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">5.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Acquisitions and Divestitures</FONT></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Williams Pipe Line</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;11, 2002, the Partnership acquired
all of the membership interests of Williams Pipe Line from
Williams Energy Services for approximately $1.0&nbsp;billion.
The Partnership remitted to WES consideration in
</FONT>

<P align="center"><FONT size="2">75
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">the amount of $674.4&nbsp;million and WES
retained $15.0&nbsp;million of Williams Pipe Line&#146;s
receivables. The $310.6&nbsp;million balance of the
consideration consisted of $304.4&nbsp;million of Class&nbsp;B
units representing limited partner interests in the Partnership
issued to Williams&nbsp;GP&nbsp;LLC and affiliates of WES and
Williams&#146; contribution to the Partnership of
$6.2&nbsp;million to maintain its 2%&nbsp;general partner
interest. The Partnership borrowed $700.0&nbsp;million from a
group of financial institutions, paid WES $674.4&nbsp;million
and used $10.6&nbsp;million of the funds to pay debt fees and
other transaction costs (see Note&nbsp;12&nbsp;&#151; Long-Term
Debt). The Partnership retained $15.0&nbsp;million of the funds
to meet working capital needs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Pipe Line primarily provides petroleum
products transportation, storage and distribution services and
is reported as a separate business segment of the Partnership.
Because of the Partnership&#146;s affiliate relationship with
Williams Pipe Line, the transaction was between entities under
common control and, as such, has been accounted for similarly to
a pooling of interest. Accordingly, the consolidated financial
statements and notes of the Partnership have been restated to
reflect the historical results of operations, financial position
and cash flows as if the companies had been combined throughout
the periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The results of operations for the separate
companies and the combined amounts presented in the Consolidated
Income Statement follow (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-acquisition:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86,054</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,492</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86,119</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">362,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">354,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Post-acquisition:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">434,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">426,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net Income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-acquisition:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,747</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Post-acquisition:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because Williams Pipe Line was an affiliate of
the Partnership at the time of the acquisition, the transaction
was between entities under common control. As such, generally
accepted accounting principles required that Williams Pipe
Line&#146;s assets and liabilities be recorded on the
Partnership&#146;s consolidated financial statements at their
historical values, despite their having been acquired at market
value. As a result, the General Partner&#146;s capital account
was decreased by $474.5&nbsp;million, which equaled the
difference between the historical and market values of Williams
Pipe Line. The effect of this treatment on the
Partnership&#146;s overall capital balance resulted in a
debt-to-total capitalization ratio at December&nbsp;31, 2002, of
56%.
</FONT>

<P align="center"><FONT size="2">76
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Other Acquisitions</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The assets identified below were acquired for
cash during the periods presented and are described below. All
acquisitions, except the Aux Sable transaction (described
below), were accounted for as purchases of businesses and the
results of operations of the acquired petroleum products
terminals are included with the combined results of operations
from their acquisition dates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;31, 2001, the Partnership
purchased an 8.5-mile, 8-inch natural gas liquids pipeline in
northeastern Illinois from Aux&nbsp;Sable Liquid
Products&nbsp;L.P. (&#147;Aux&nbsp;Sable&#148;) for
$8.9&nbsp;million. The Partnership then entered into a long-term
lease arrangement under which Aux&nbsp;Sable is the sole lessee
of these assets. The Partnership has accounted for this
transaction as a direct financing lease. The lease expires in
December 2016 and has a purchase option after the first year.
The minimum lease payments to be made by Aux&nbsp;Sable are
$18.1&nbsp;million in total over the remaining life of the lease
and $1.3&nbsp;million per year over each of the next five years.
Aux Sable has the right to re-acquire the pipeline at the end of
the lease for a de minimis amount. The fair value of the lease
at December&nbsp;31, 2002, approximates its carrying value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2001, the Partnership acquired the
crude oil storage and distribution assets of Geonet Gathering,
Inc. (&#147;Geonet&#148;) located in Gibson, Louisiana. The
Partnership acquired these assets with the intent to use the
facility as a crude storage and distribution facility with an
affiliate company as its primary customer. The purchase price
and allocation to assets acquired and liabilities assumed was as
follows (in thousands):
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase price:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash paid, including transaction costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Liabilities assumed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total purchase price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allocation of purchase price:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total allocation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Factors contributing to the recognition of
goodwill are the market in which the facility is located and the
opportunity to enter into a long-term throughput agreement with
an affiliate company. Of the amount allocated to intangible
assets, $2.0&nbsp;million represents the value of the leases
associated with this facility, which have amortization periods
of up to 25&nbsp;years. The remaining $0.7&nbsp;million
allocated to intangible assets represents covenants
not-to-compete and has an amortization period of five years. The
total weighted average amortization period of intangible assets
was approximately 16&nbsp;years at the time of the acquisition.
Of the consideration paid for the facility, $0.2&nbsp;million
was held in escrow at December&nbsp;31, 2002, pending final
evaluation of reimbursable repairs by the Partnership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the Partnership purchased two
petroleum products terminals located in Little Rock, Arkansas
from TransMontaigne, Inc. (&#147;TransMontaigne&#148;) at a cost
of $28.9&nbsp;million, of which $20.2&nbsp;million was allocated
to property, plant and equipment and $8.7&nbsp;million to
goodwill and other intangibles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, the Partnership purchased a 6-mile
pipeline for $0.3&nbsp;million from Equilon Pipeline Company
LLC, enabling connection of the Partnership&#146;s existing
Dallas, Texas area petroleum storage and distribution facility
to Dallas Love Field. The acquisition was made in conjunction
with an agreement for the Partnership to provide jet fuel
delivery services into Dallas Love Field for Southwest Airlines.
In December
</FONT>

<P align="center"><FONT size="2">77
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">2001, the Partnership completed construction of
additional jet fuel storage tanks at its distribution facility
in Dallas to support delivery of jet fuel to the airport. Total
cost of the pipeline and construction of the additional jet fuel
storage tanks totaled $5.5&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summarized unaudited pro forma
financial information for the year ended December&nbsp;31, 2001,
reflects the historical results of Williams Energy Partners on a
consolidated basis and assumes each other acquisition had
occurred on January 1 of each year presented (in thousands):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">426,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquired businesses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">454,151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquired businesses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma results include operating results
prior to the acquisitions and adjustments to interest expense,
depreciation expense and income taxes. The pro forma
consolidated results do not purport to be indicative of results
that would have occurred had the acquisitions been in effect for
the periods presented, nor do they purport to be indicative of
results that will be obtained in the future.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Divestitures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 2002, the
Partnership sold its Mobile, Alabama and Jacksonville, Florida
inland terminals. Total cash proceeds of approximately
$1.3&nbsp;million were received, with a gain of approximately
$1.1&nbsp;million recognized.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 2001, the
Partnership sold its Meridian, Mississippi inland terminal. Cash
proceeds of approximately $1.7&nbsp;million were received, with
a gain of approximately $1.1&nbsp;million recognized.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">6.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Inventories</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories at December&nbsp;31, 2002 and 2001
were as follows (in thousands):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Refined petroleum products
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,926</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Natural gas liquids
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additives
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The decrease in the natural gas liquids inventory
is the result of the Partnership&#146;s changing its butane
blending operations to that of a service provider only (see
Note&nbsp;1&nbsp;&#151; Organization and Presentation for more
</FONT>

<P align="center"><FONT size="2">78
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">information about activities associated with
Williams Pipe Line&#146;s operations that are not being
conducted by the Partnership.) The decrease in refined petroleum
products is the result of the Partnership selling inventories
due to favorable market conditions in 2002.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">7.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Property, Plant and Equipment</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property, plant and equipment consists of the
following (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Estimated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Depreciable</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Lives</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Construction work-in-progress
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,909</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Land and right-of-way
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Carrier property
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">898,829</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">905,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6 - 59 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Storage tanks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169,066</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pipeline and station equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,551</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30 - 67 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Processing equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,180</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124,945</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10 - 30 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,334,527</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,338,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Carrier property is defined as pipeline assets
regulated by the FERC. Other includes $18.6&nbsp;million of
capitalized interest at both December&nbsp;31, 2002 and 2001.
Depreciation expense for the years ended December&nbsp;31, 2002,
2001 and 2000 was $34.9&nbsp;million, $35.2&nbsp;million and
$31.7&nbsp;million, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">8.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Major Customers and Concentration of
    Risk</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No customer accounted for more than 10% of total
revenues during 2002. Williams Energy Marketing&nbsp;&#38;
Trading, an affiliate customer, and Customer&nbsp;A accounted
for more than 10% of total revenues during 2001 and 2000.
Williams Energy Marketing&nbsp;&#38; Trading and Customer&nbsp;A
are customers of the petroleum products terminals segment and
the Williams Pipe Line system segment. The percentage of
revenues derived by customer is provided below:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Customer A
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Marketing&nbsp;&#38; Trading
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts receivable from Williams Energy
Marketing&nbsp;&#38; Trading accounted for 7% and 9% of total
accounts and affiliate receivables at December&nbsp;31, 2002 and
2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Pipe Line transports refined petroleum
products for refiners and marketers in the petroleum industry.
The major concentration of Williams Pipe Line&#146;s revenues is
derived from activities conducted in the central United States.
The size and quality of the companies with which the Partnership
conducts its businesses hold our credit losses to a minimum.
Sales to our customers are generally unsecured and the financial
condition and creditworthiness of customers are routinely
evaluated. The Partnership has the ability with many of its
terminals contracts to sell stored customer products to recover
unpaid receivable balances, if necessary. The concentration of
ammonia revenues is derived from customers with plants in
Oklahoma and Texas and sales are generally unsecured. Any issues
impacting the petroleum refining and marketing and anhydrous
ammonia industries could impact the Partnership&#146;s overall
exposure to credit risk.
</FONT>

<P align="center"><FONT size="2">79
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Pipe Line&#146;s labor force of 538
employees is concentrated in the central United States. At
December&nbsp;31, 2002, 41% of the employees were represented by
a union and covered by collective bargaining agreements that
expire in February 2006. The petroleum products terminals
operation&#146;s labor force of 192&nbsp;people is concentrated
in the southeastern and Gulf Coast regions of the United States.
Other than at Galena Park, Texas marine terminal facility, none
of the terminal operations employees are represented by labor
unions. The employees at the Partnership&#146;s Galena Park
marine terminal facility are currently represented by a union,
but indicated in 2000 their unanimous desire to terminate their
union affiliation. Nevertheless, the National Labor Relations
Board (&#147;NLRB&#148;) ordered the Partnership to bargain with
the union as the exclusive collective bargaining representative
of the employees at the facility. The Partnership appealed this
decision to the Fifth Circuit Court of Appeals. Subsequently,
the NLRB indicated the possibility that it would overturn its
decision and requested that the Court of Appeals return the
Partnership&#146;s and other matters to the NLRB for further
review and decision. A final decision by the NLRB had not been
issued. Our General Partner considers its employee relations to
be good.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">9.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Employee Benefit Plans</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All employees dedicated to or otherwise
supporting the Partnership are employees of Williams and many
participate in Williams sponsored employee benefit plans.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership participates in a
non-contributory defined-benefit pension plan with Williams and
its affiliates that provides pension benefits for certain
employees of Williams that are dedicated to or support the
Partnership. Cash contributions to the plan are made by Williams
and are not specifically identifiable to the Partnership&#146;s
participation. Affiliate expense charges from Williams to the
Partnership related to the Partnership&#146;s participation in
the plan totaled $2.9&nbsp;million, $1.5&nbsp;million and
$1.2&nbsp;million in 2002, 2001 and 2000, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Employees dedicated to or supporting the
Partnership also participate in a Williams defined-contribution
plan. The Partnership provides for matching contribution within
specified limits of the defined-contribution plan. These
contributions are included in compensation expense totaling
$2.3&nbsp;million, $2.4&nbsp;million and $2.0&nbsp;million,
respectively in 2002, 2001 and 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The historical results for Williams Pipe Line
included certain pension assets and obligations associated with
a non-contributory defined-benefit pension plan for union
employees that are assigned to Williams Pipe Line&#146;s
operations. These pension assets and obligations were conveyed
to and assumed by an affiliate of Williams Pipe Line prior to
its acquisition by the Partnership. Subsequent to our
acquisition of Williams Pipe Line, the Partnership bears all
compensation costs associated with the plan.
</FONT>

<P align="center"><FONT size="2">80
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents the changes in
benefit obligations and plan assets for pension benefits for the
union plan for the years indicated. These assets and liabilities
are not included in the Partnership&#146;s consolidated balance
sheets for any periods presented but are included in the balance
sheets of our affiliate (in thousands):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Change in benefit obligation:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Benefit obligation at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,021</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Actuarial loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">905</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Benefits paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,041</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,082</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Benefit obligation at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Change in plan assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fair value of plan assets at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employer contribution
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on plan assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,267</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,640</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Benefits paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,041</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,082</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fair value of plan assets at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Funded status
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,539</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,897</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unrecognized net actuarial loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unrecognized prior service cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">368</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unrecognized transition asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid benefit cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net pension benefit cost for the union plan
consists of the following (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Components of net periodic pension expense:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,340</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected return on plan assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,715</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,182</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,075</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of transition asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(126</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(135</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of prior service cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recognized net actuarial loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net periodic pension expense (income)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(129</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Discount rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected return on plan assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Rate of compensation increase
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">81
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">10.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Related Party Transactions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership has entered into agreements with
various Williams affiliates. The Partnership has several
agreements with Williams Energy Marketing&nbsp;&#38; Trading,
which provide for: (i)&nbsp;approximately 2.5&nbsp;million
barrels of storage and other ancillary services at the
Partnership&#146;s marine terminal facilities,
(ii)&nbsp;capacity utilization rights to substantially all of
the capacity of the Gibson, Louisiana marine terminal facility,
(iii)&nbsp;the lease of the Carthage, Missouri propane storage
cavern and (iv)&nbsp;throughput and deficiency agreements for
product movements through a third-party capacity lease. Williams
Pipe Line has entered into agreements with Mid-America Pipeline
Company (&#147;MAPL&#148;) and Williams Bio Energy to provide
tank storage and pipeline system storage, respectively. Williams
Bio Energy is an affiliate entity and MAPL was an affiliate
entity until August&nbsp;1, 2002, when it was sold to Enterprise
Products Partners L.P. (&#147;Enterprise&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, Williams Pipe Line also has been a
party to an agreement with Williams Energy Marketing&nbsp;&#38;
Trading for sales of blended gasoline. (See
Note&nbsp;1&nbsp;&#151; Organization and Presentation for more
information about income and expenses associated with Williams
Pipe Line&#146;s historical operations). Also, both Williams
Energy Marketing&nbsp;&#38; Trading and Williams
Refining&nbsp;&#38; Marketing have agreements for the access and
utilization of storage on Williams Pipe Line system and for the
access and utilization of the inland terminals. The Partnership
also has agreements with Williams Energy Marketing&nbsp;&#38;
Trading, Williams Refining&nbsp;&#38; Marketing and Williams Bio
Energy for the non-exclusive and non-transferable sub-license to
use the ATLAS 2000 software system. Payment terms for affiliate
entities are generally the same as for third-party companies.
Generally, at each month-end, the Partnership is in a net
payable position with Williams. The Partnership deducts any
amounts owed to it by Williams before remitting the monthly cash
amounts owed to Williams. The following are revenues from
various Williams&#146; subsidiaries (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams 100%-Owned Affiliates:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Marketing&nbsp;&#38; Trading
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,119</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Refining&nbsp;&#38; Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Bio Energy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,842</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Midstream Marketing&nbsp;&#38; Risk Management
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mid-America Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Partially-Owned Affiliates:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Longhorn Pipeline Partners
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,301</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, Williams Pipe Line had an agreement
with Williams Energy Marketing&nbsp;&#38; Trading to purchase
transmix for fractionation activity and product to settle
shortages. MAPL, which was an affiliate entity until August
2002, provided operating and maintenance support, in the years
presented, to the ammonia
</FONT>

<P align="center"><FONT size="2">82
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">pipeline and leased storage space to Williams
Pipe Line. The following are costs and expenses from various
affiliate companies to Williams Pipe Line and the Partnership
(in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Services&nbsp;&#151; direct and
    directly allocable expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,242</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,826</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams&nbsp;&#151; allocated general corporate
    expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,951</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Marketing&nbsp;&#38;
    Trading&nbsp;&#151; product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,466</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mid-America Pipeline&nbsp;&#151; operating and
    maintenance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,730</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,060</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above costs are reflected in the cost and
expenses in the accompanying consolidated statements of income.
Management&#146;s estimates of actual general and administrative
costs required for the operation of the Partnership on a
stand-alone basis significantly exceed the actual amounts
charged to the Partnership due in part to significant increases
in insurance premiums and additional operating and general and
administrative expenses associated with the new operating
agreement with Enterprise (see discussion below). Amounts owed
to affiliate entities are paid on a monthly basis. Through a
change of control or with 90&nbsp;days written notice, Williams
can terminate its obligations to provide services to us, which
would also eliminate Williams&#146; obligations under the
general and administrative expense limitation included in the
Omnibus Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;1, 2002, Williams announced that
it had sold 98% of Mapletree LLC, which owns MAPL to Enterprise.
The Partnership and MAPL had an operating agreement whereby MAPL
operated the ammonia pipeline system for the Partnership for a
fee. The Partnership has entered into a new agreement with
Enterprise for the continued operation of the Partnership&#146;s
ammonia pipeline system. This new agreement, effective
February&nbsp;1, 2003, will increase the operating expenses of
the pipeline by approximately $0.5&nbsp;million annually and
general and administrative expenses by approximately
$1.5&nbsp;million annually. The incremental general and
administrative expenses to be incurred under this agreement will
be subject to the general and administrative expense limit under
the Partnership&#146;s Omnibus agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, Williams charged interest expense
to its affiliates based on their inter-company debt balances
(see Note&nbsp;12&nbsp;&#151; Long-Term Debt). The Partnership
entities also participate in employee benefit plans and
long-term incentive plans sponsored by Williams (see
Note&nbsp;9&nbsp;&#151; Employee Benefit Plans and
Note&nbsp;14&nbsp;&#151; Long-Term Incentive Plan).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams allocates both direct and indirect
general and administrative expenses to its affiliates. Direct
expenses allocated by Williams are primarily salaries and
benefits of employees and officers associated with the business
activities of the affiliate. Indirect expenses include legal,
accounting, treasury, engineering, information technology and
other corporate services. Williams allocates expenses to the
General Partner based on the expense limitation provided for in
the Omnibus Agreement. The Partnership reimburses the General
Partner and its affiliates for expenses charged to the
Partnership by the General Partner on a monthly basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with its initial public offering,
and with respect solely to the petroleum products terminals and
ammonia pipeline assets held at the time of that offering, the
Partnership and the General Partner agreed with Williams that
the general and administrative expenses to be reimbursed to the
General Partner by the Partnership would not exceed
$6.0&nbsp;million for 2001, excluding expenses associated with
the Partnership&#146;s long-term incentive plan, regardless of
the amount of the direct and indirect general and administrative
expenses actually incurred by Williams and its affiliates. The
reimbursement limitation will remain in place through 2011 and
may increase by no more than the greater of 7%&nbsp;per year or
the percentage increase in the consumer price index for that
year. If the Partnership makes an acquisition, general and
administrative expenses may also increase by the amount of these
expenses included in the valuation of the business acquired. As
a result of the acquisitions made during 2001, the annual amount
of general and administrative expense reimbursement limitation
increased to $6.3&nbsp;million, excluding expenses associated
with the long-term incentive plan. Based on
</FONT>

<P align="center"><FONT size="2">83
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">the 7% escalation, the Partnership&#146;s
reimbursement for general and administrative expenses in 2002
for the petroleum products terminals and ammonia pipeline system
operations was $6.7&nbsp;million before long-term incentive plan
charges.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisition of Williams
Pipe Line, the Partnership and the General Partner agreed with
Williams that the general and administrative expenses to be
reimbursed to the General Partner by the Partnership for charges
related to the Williams Pipe Line system would be
$30.0&nbsp;million for 2002, prorated for the actual period that
the Partnership owned Williams Pipe Line. In each year after
2002, these expenses may increase by the lesser of 2.5%&nbsp;per
year or the percentage increase in the consumer price index for
that year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The additional general and administrative costs
incurred, but not charged to the Partnership, totaled
$10.4&nbsp;million for the period February&nbsp;10, 2001 through
December&nbsp;31, 2001, and $19.7&nbsp;million for the twelve
months ended December&nbsp;31, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams agreed to reimburse the Partnership for
maintenance capital expenditures incurred in 2001 and 2002 in
excess of $4.9&nbsp;million per year related to our initial
public offering assets. This reimbursement obligation was
subject to a maximum combined reimbursement for both years of
$15.0&nbsp;million. During 2001 and 2002, the Partnership
recorded reimbursements from Williams associated with these
assets of $3.9&nbsp;million and $11.0&nbsp;million,
respectively. In connection with our acquisition of Williams
Pipe Line, Williams has agreed to reimburse the Partnership for
maintenance capital expenditures incurred in 2002, 2003 and 2004
in excess of $19.0&nbsp;million per year related to the Williams
Pipe Line system, subject to a maximum combined reimbursement
for all years of $15.0&nbsp;million. The Partnership&#146;s
maintenance capital expenditure expectations related to the
Williams Pipe Line system are less than $19.0&nbsp;million per
year and we do not anticipate reimbursement by Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams and certain of its affiliates have
indemnified the Partnership against certain environmental costs.
Receivables from Williams or its affiliates of
$22.9&nbsp;million and $5.1&nbsp;million at December&nbsp;31,
2002 and December&nbsp;31, 2001, respectively, associated with
these environmental costs have been recognized as affiliate
accounts receivable in the Consolidated Balance Sheet (see
Note&nbsp;16&nbsp;&#151; Commitments and Contingencies).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">11.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Income Taxes</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership does not currently pay income
taxes due to its legal structure. However, earnings generated
prior to the Partnership&#146;s initial public offering in 2001,
and earnings of Williams Pipe Line prior to the
Partnership&#146;s acquisition of it in April 2002, were subject
to income taxes. The provision for income taxes is as follows
(in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">State
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">987</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,743</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">State
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">841</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">84
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reconciliations from the provision for income
taxes at the U.S.&nbsp;federal statutory rate to the effective
tax rate for the provision for income taxes are as follows (in
thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income taxes at statutory rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,616</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,760</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: income taxes at statutory rate on income
    applicable to partners&#146; interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(29,790</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,504</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase resulting from:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">State taxes, net of federal income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Significant components of deferred tax
liabilities and assets as of December&nbsp;31, 2001 are as
follows (in thousands):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">841</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148,616</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net operating loss carryforward
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valuation allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership recognized a pre-initial public
offering federal net operating loss for income tax purposes of
$3.9&nbsp;million and $57.0&nbsp;million for the years 2001 and
2000, respectively. The $3.9&nbsp;million federal net operating
loss expires in 2021. The $57.0&nbsp;million federal net
operating loss carry-forward expires in 2020. As a result of the
initial public offering and the concurrent transactions on
February&nbsp;9, 2001, the net deferred tax liability on that
date was assumed by Williams in exchange for an additional
equity investment in the Partnership. The deferred tax assets
and liabilities of Williams Pipe Line at the time of its
acquisition by the Partnership on April&nbsp;11, 2002, were
contributed to the Partnership in the form of a capital
contribution by an affiliate of Williams (see
Note&nbsp;1&nbsp;&#151; Organization and Presentation for
further discussion of this matter).
</FONT>

<P align="center"><FONT size="2">85
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">12.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Long-Term Debt</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Long-term debt and long-term affiliate notes
payable for the Partnership at December&nbsp;31, 2002 and 2001
were as follows (in thousands):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OLP term loan and revolving credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">139,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Pipe Line Senior Secured Notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">480,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate note payable:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Williams Energy Services affiliate note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total long-term debt and affiliate note payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">570,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277,672</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Williams OLP L.P. term loan and revolving
credit facility</FONT></I><FONT size="2">&nbsp;&#151; At
December&nbsp;31, 2002, Williams OLP L.P. (&#147;OLP&#148;), an
operating subsidiary of the Partnership which operates our
petroleum products terminals and ammonia pipeline system
segments, had a $175.0&nbsp;million bank credit facility, led by
Bank of America. Long-term debt and available borrowing capacity
under this facility at December&nbsp;31, 2002, were
$90.0&nbsp;million and $85.0&nbsp;million, respectively. The
credit facility is comprised of a $90.0&nbsp;million term loan
facility and an $85.0&nbsp;million revolving credit facility,
which includes a $73.0&nbsp;million acquisition sub-facility and
a $12.0&nbsp;million working capital sub-facility. On
February&nbsp;9, 2001, the OLP borrowed $90.0&nbsp;million under
the term loan facility, which remained outstanding at
December&nbsp;31, 2002. All amounts previously borrowed under
the acquisition and working capital facility were repaid in full
during the fourth quarter of 2002. The credit facility&#146;s
term extends through February&nbsp;5, 2004, with all amounts due
at that time. Borrowings under the credit facility carry an
interest rate equal to the Eurodollar rate plus a spread from
1.0% to 1.5%, depending on the OLP&#146;s leverage ratio.
Interest is also assessed on the unused portion of the credit
facility at a rate from 0.2% to 0.4%, depending on the
OLP&#146;s leverage ratio. The OLP&#146;s leverage ratio is
defined as the ratio of consolidated total debt to consolidated
earnings before interest, income taxes, depreciation and
amortization for the period of the four fiscal quarters ending
on such date. Closing fees associated with the initiation of the
credit facility were $0.9&nbsp;million, which are being
amortized over the life of the facility. Weighted average
interest rates were 3.3% for the twelve months ended
December&nbsp;31, 2002 and 5.0% for the period February&nbsp;10,
2001 through December&nbsp;31, 2001. The interest rates for
amounts borrowed against this facility on December&nbsp;31, 2002
and 2001 were 2.8% and 3.2%, respectively. At both
December&nbsp;31, 2002 and 2001, the fair value of this debt
approximates its carrying value because of the floating interest
rate applied to the debt facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Williams Pipe Line Senior Secured
Notes</FONT></I><FONT size="2">&nbsp;&#151; In April 2002, the
Partnership borrowed $700.0&nbsp;million from a group of
financial institutions. This short-term loan was used to help
finance the Partnership&#146;s acquisition of Williams Pipe
Line. During the second quarter of 2002 the Partnership repaid
$289.0&nbsp;million of the short-term loan with net proceeds
from an equity offering. The weighted average interest rate on
this note was 5.1% for the period April&nbsp;11, 2002 through
November&nbsp;15, 2002. Debt placement fees associated with the
note were $7.1&nbsp;million and were amortized over the life of
the note. In October 2002, the Partnership negotiated an
extension to the maturity of this note from October&nbsp;8,
2002, to November&nbsp;27, 2002. The Partnership paid additional
fees of approximately $2.1&nbsp;million associated with this
maturity date extension.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During September 2002, in anticipation of a new
debt placement to replace the short-term debt assumed to acquire
Williams Pipe Line, the Partnership entered into an interest
rate hedge. The effect of this interest rate hedge was to set
the coupon rate on a portion of the fixed-rate debt at 7.75%
prior to actual execution of the debt agreement. The loss on the
hedge, approximately $1.0&nbsp;million, was recorded in
accumulated other
</FONT>

<P align="center"><FONT size="2">86
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">comprehensive loss and is being amortized over
the five-year life of the fixed-rate debt secured during October
2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During October 2002, Williams Pipe Line entered
into a private placement debt agreement with a group of
financial institutions for up to $200.0&nbsp;million aggregate
principal amount of Floating Rate Series&nbsp;A-1 and
Series&nbsp;A-2 Senior Secured Notes and up to
$340.0&nbsp;million aggregate principal amount of Fixed Rate
Series&nbsp;B-1 and Series&nbsp;B-2 Senior Secured Notes. Both
notes are secured with the Partnership&#146;s membership
interest in and assets of Williams Pipe Line Company. The
maturity date of both notes is October&nbsp;7, 2007; however,
the Partnership will be required on each of October&nbsp;7, 2005
and October&nbsp;7, 2006, to repay 5% of the then outstanding
principal amount of the Senior Secured Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Two borrowings have occurred in relation to these
notes. The first borrowing was completed in November 2002 and
was for $420.0&nbsp;million, of which $156.0&nbsp;million was
borrowed under the Series&nbsp;A-1 notes and $264.0&nbsp;million
under the Series&nbsp;B-1 notes. The proceeds from this initial
borrowing were used to repay Williams Pipe Line&#146;s
$411.0&nbsp;million short-term loan and pay related debt
placement fees. The second borrowing was completed in December
2002 for $60.0&nbsp;million, of which $22.0&nbsp;million was
borrowed under the Series&nbsp;A-2 notes and $38.0&nbsp;million
under the Series&nbsp;B-2 notes. $58.0&nbsp;million of the
proceeds from this second borrowing were used to repay the
acquisition sub-facility of the OLP and $2.0&nbsp;million were
used for general corporate purposes. The Series&nbsp;A-1 and
Series&nbsp;A-2 notes bear interest at a rate equal to the six
month Eurodollar Rate plus 4.25%. The rate on the
Series&nbsp;A-1 and Series&nbsp;A-2 notes is currently 5.7% and
will be reset on April&nbsp;7, 2003. The Series&nbsp;B-1 notes
bear interest at a fixed rate of 7.7%, while the Series&nbsp;B-2
notes bear interest at a fixed rate of 7.9%. The
weighted-average rate for the Williams Pipe Line Senior Secured
Notes at December&nbsp;31, 2002 was 7.0%. Debt placement fees
associated with these notes were $10.5&nbsp;million, and are
being amortized over the life of the notes. Payment of interest
and repayment of the principal is guaranteed by the Partnership.
The fair value of the long-term debt at December&nbsp;31, 2002,
approximated its carrying value, because of the floating
interest rate applied to the Series&nbsp;A-1 and Series&nbsp;A-2
notes and because the rates on the Series&nbsp;B-1 and B-2 notes
were near market rates at December&nbsp;31, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The new debt agreement imposes certain
restrictions on Williams Pipe Line and the Partnership.
Generally, the agreement restricts the amount of additional
indebtedness Williams Pipe Line can incur, prohibits Williams
Pipe Line from creating or incurring any liens on its property,
and restricts Williams Pipe Line from disposing of its property,
making any debt or equity investments, or making any loans or
advances of any kind. The agreement also requires transactions
between Williams Pipe Line and any of its affiliates to be on
terms no less favorable than those Williams Pipe Line would
receive in an arms-length transaction. As part of this
agreement, the Partnership agreed that it will not redeem or
retire the Partnership&#146;s Class&nbsp;B units except with
proceeds from equity issued by the Partnership (see
Note&nbsp;1&nbsp;&#151; Organization and Presentation). In the
event of a change in control of the General Partner, each holder
of the notes would have thirty days within which they could
exercise a right to put their notes to Williams Pipe Line unless
the new owner of the General Partner has (i)&nbsp;a net worth of
at least $500.0&nbsp;million and (ii)&nbsp;long-term unsecured
debt rated as investment grade by both Moody&#146;s Investor
Service Inc. and Standard&nbsp;&#38; Poor&#146;s Rating Service.
If this put right were exercised, Williams Pipe Line would be
obligated to repurchase any such notes and repay any accrued
interest within sixty days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">WES Affiliate
Note</FONT></I><FONT size="2">&nbsp;&#151; At December&nbsp;31,
2001, Williams Pipe Line had an affiliate note payable to
Williams. This note was contributed by our General Partner to
Williams Pipe Line in conjunction with the Partnership&#146;s
acquisition of Williams Pipe Line in April 2002. Interest was
calculated and paid monthly while the affiliate note was
outstanding. Interest rates varied with current market
conditions. At December&nbsp;31, 2001, the fair value of this
note approximated its carrying value because of the floating
interest rate applied to the note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the years ending December&nbsp;31, 2002,
2001 and 2000, total cash payments for interest on all
indebtedness, net of amounts capitalized, were
$22.9&nbsp;million, $13.7&nbsp;million and $11.3&nbsp;million,
respectively.
</FONT>

<P align="center"><FONT size="2">87
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">13.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Leases</FONT></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Leases&nbsp;&#151; Lessee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership leases land, office buildings,
tanks and terminal equipment at various locations to conduct its
on-going business operations. Future minimum annual rentals
under non-cancelable operating leases as of December&nbsp;31,
2002, are as follows (in thousands):
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="89%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">482</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,834</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Lease payments associated with the
Partnership&#146;s lease of land, tanks and related terminal
equipment at its Gibson, Louisiana facility can be canceled at
the Partnership&#146;s option after 2006 and include provisions
for renewal of the lease at five-year increments which can
extend the lease for a total of 25 years from their inception in
2001. The lease terms require the Partnership to return the
Gibson terminal facility property to substantially its same
condition at the time the lease was executed.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Leases&nbsp;&#151; Lessor</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;31, 2001, the Partnership
purchased an 8.5-mile, 8-inch natural gas liquids pipeline in
northeastern Illinois from Aux Sable for $8.9&nbsp;million. The
Partnership then entered into a long-term lease arrangement
under which Aux Sable is the sole lessee of these assets. The
Partnership has accounted for this transaction as a direct
financing lease. The lease expires in December 2016 and has a
purchase option after the first year. Aux Sable has the right to
re-acquire the pipeline at the end of the lease for a de minimis
amount. The Partnership also has two five-year pipeline capacity
leases with Farmland. The first agreement, which is accounted
for as a direct financing lease, will expire on
November&nbsp;30, 2005 and the second agreement, which is
accounted for as an operating lease, will expire on
April&nbsp;30, 2007. Both leases contain options to extend the
agreement for another five years. In addition, the Partnership
has eight other capacity operating leases with terms of four to
fifteen years. All of the agreements provide for negotiated
extensions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Future minimum lease payments receivable under
operating-type leasing arrangements as of December&nbsp;31,
2002, are as follows (in thousands):
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,377</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,191</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">88
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The net investment under direct financing leasing
arrangements as of December&nbsp;31, 2002 and 2001, are as
follows (in thousands):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total minimum lease payments receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: Unearned income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,923</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recorded net investment in direct financing leases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2002, the net investment
in direct financing leases is classified in the Consolidated
Balance Sheet as $1.0&nbsp;million current accounts receivable
and $9.2&nbsp;million noncurrent accounts receivable.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">14.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Long-Term Incentive Plan</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2001, the General Partner adopted the
Williams Energy Partners&#146; Long-Term Incentive Plan for
Williams&#146; employees who perform services for the
Partnership and directors of the General Partner. The General
Partner subsequently amended and restated the Long-Term
Incentive Plan in 2003. The Long-Term Incentive Plan permits the
granting of various types of awards, including units, options,
phantom units and bonus units but to-date only phantom units
have been granted. The Long-Term Incentive Plan allows the grant
of awards up to an aggregate of 700,000 common units. The
Long-Term Incentive Plan is administered by the Compensation
Committee of the General Partner&#146;s Board of Directors. In
addition to units, members of the General Partner&#146;s Board
of Directors may receive phantom units as compensation for their
director fees. Members of the General Partner&#146;s Board of
Directors received 873&nbsp;units and 870 phantom units in 2001
and 3,344&nbsp;units and 1,489 phantom units during 2002 as
partial compensation for their services as board members.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, the General Partner issued grants
of 92,500 phantom units to certain key employees associated with
the Partnership&#146;s initial public offering in February 2001.
These awards allowed for early vesting if established
performance measures were met prior to February&nbsp;9, 2004.
The Partnership met all of these performance measures and all of
the awards vested during 2002. The Partnership recognized
compensation expense of $2.1&nbsp;million and $0.7&nbsp;million
associated with these awards in 2002 and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, the General Partner issued grants
of 64,200 phantom units associated with the long-term incentive
compensation program. The actual number of units that will be
awarded under this grant will be determined by the Partnership
in early 2004. At that time, the Partnership will assess whether
certain performance criteria have been met as of the end of 2003
and determine the number of units that will be awarded, which
could range from zero units up to a total of 128,400&nbsp;units.
These units are subject to forfeiture if employment is
terminated prior to vesting. These awards do not have an early
vesting feature, except for a change in control of the
Partnership&#146;s General Partner or for specific participants
in the event of their death or disability. In the event of a
change of control of the General Partner, these awards will vest
and payout immediately at the number of units associated with
achieving the highest performance level under the plan. The
Partnership is expensing compensation costs associated with
these awards assuming the highest level of performance will be
achieved; accordingly, the Partnership recognized
$1.5&nbsp;million and $1.3&nbsp;million of compensation expense
in 2002 and 2001, respectively. The fair market value of the
phantom units associated with this grant was $4.2&nbsp;million
and $5.4&nbsp;million on December&nbsp;31, 2002 and 2001,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002, the Compensation Committee of the
Board of Directors of the Partnership&#146;s General Partner
approved 22,650 phantom units associated with the 2002 long-term
incentive compensation program. The actual number of units that
will be awarded under this grant will be determined by the
Partnership in early 2005. At that time, the Partnership will
assess whether certain performance criteria have been met and
determine the number of units that will be awarded, which could
range from zero units up to a total of
</FONT>

<P align="center"><FONT size="2">89
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">45,300&nbsp;units. These units are also subject
to forfeiture if employment is terminated prior to the vesting
date. These awards do not have an early vesting feature, except
in the event of a change in control of the Partnership&#146;s
General Partner or for specific participants in the event of
their death or disability. In the event of a change of control
of the General Partner, these awards will vest and payout
immediately at the number of units associated with achieving the
highest performance level under the plan. The Partnership is
expensing compensation costs associated with these awards
assuming 22,650&nbsp;units will vest; accordingly, the
Partnership recorded incentive compensation expense of
$0.2&nbsp;million during 2002. Based on the closing price of
$32.45&nbsp;per unit at December&nbsp;31, 2002, these units were
valued at $0.7&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2003, the Compensation Committee of
the Board of Directors of the Partnership&#146;s General Partner
approved 52,825 phantom units associated with the 2003 long-term
incentive compensation program. The actual number of units that
will be awarded under this grant will be determined by the
Partnership in early 2006. At that time, the Partnership will
assess whether certain performance criteria have been met and
determine the number of units that will be awarded, which could
range from zero units up to a total of 105,650&nbsp;units. These
units are also subject to forfeiture if employment is terminated
prior to the vesting date. These awards do not have an early
vesting feature, except for (i)&nbsp;specific participants in
the event of their death or disability or (ii)&nbsp;in the event
a change in control of the Partnership&#146;s General Partner
and the participant is terminated for reasons other than cause
within the two years following a change in control of the
General Partner, in which case the awards will vest and payout
immediately at the highest performance level under the plan. The
value of these units on the date of grant was $1.9&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain employees of Williams dedicated to or
otherwise supporting Williams Energy Partners L.P. also receive
stock-based compensation awards from Williams. Williams has
several programs providing for common-stock-based awards to
employees and to non-employee directors. The programs permit the
granting of various types of awards including, but not limited
to, stock options, stock-appreciation rights, restricted stock
and deferred stock. The purchase price per share for stock
options and the grant price for stock-appreciation rights may
not be less than the market price of the underlying stock on the
date of grant. Depending upon terms of the respective plans,
stock options generally become exercisable in one-third
increments each year from the date of the grant or after three
or five years, subject to accelerated vesting if certain future
Williams&#146; stock prices or specific Williams&#146; financial
performance targets are achieved. Stock options expire 10 years
after grant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary reflects Williams&#146;
stock option activity for 2002, 2001 and 2000, for those
employees principally supporting Williams Energy Partners L.P.
operations:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outstanding&nbsp;&#151; beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">501,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">405,813</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">329,181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Granted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">191,120</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Forfeited
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exercised
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17,583</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outstanding&nbsp;&#151; ending of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">692,945</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">501,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">405,813</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exercisable at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">356,513</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">363,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">90
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary provides information about
outstanding and exercisable Williams&#146; stock options, held
by employees principally supporting Williams Energy Partners
L.P. operations, at December&nbsp;31, 2002:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Range of Exercise Prices</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Life</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">$&nbsp;2.27 to $&nbsp;2.57
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.9 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">$12.22 to $17.31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,119</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">$20.83 to $30.00
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.1 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">$31.56 to $46.06
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">352,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.1 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">692,945</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.2 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The estimated fair value at the date of grant of
options for Williams&#146; common stock granted in 2002, 2001
and 2000, using the Black-Scholes option pricing model, is as
follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average grant date fair value of options
    for Williams&#146; common stock granted during the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assumptions:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend yield
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Volatility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Risk-free interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected life (years)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pro forma net income, assuming Williams Energy
Partners L.P. had applied the fair-value method of
SFAS&nbsp;No.&nbsp;123, &#147;Accounting for Stock-Based
Compensation&#148; in measuring compensation costs beginning
with 2000 employee stock-based awards, are as follows (in
thousands, except per unit amounts):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income, as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock-based employee compensation expense
    determined under fair-value method for all awards, net of
    related tax effects
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(313</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(180</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(903</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98,840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">As reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pro forma amounts for 2000 include the total
compensation expense from the awards made in 2000, as these
awards fully vested in 2000 as a result of the accelerated
vesting provisions. Pro forma amounts for 2001 include
compensation expense from Williams&#146; awards made in 2001.
Pro forma amounts for 2002 include compensation expense from
Williams&#146; awards made in 2001 and 2002. Because
compensation expense from stock options is recognized over the
future years&#146; vesting period for pro forma disclosure
purposes, and additional awards generally are made each year,
pro forma amounts may not be representative of future
years&#146; amounts.
</FONT>

<P align="center"><FONT size="2">91
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">15.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Segment Disclosures</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management evaluates performance based upon
segment profit or loss from operations, which includes revenues
from affiliate and external customers, operating expenses,
depreciation and affiliate general and administrative expenses.
The accounting policies of the segments are the same as those
described in Note&nbsp;3&nbsp;&#151; Summary of Significant
Accounting Policies. Affiliate revenues are accounted for as if
the sales were to unaffiliated third parties. Affiliate general
and administrative costs associated with the assets owned at the
time of our initial public offering, other than equity-based
incentive compensation, are based on the expense limitations
provided for in the Omnibus Agreement, and are allocated to the
petroleum products terminals and ammonia pipeline system
segments based on their proportional percentage of revenues.
Affiliate general and administrative costs charged to Williams
Pipe Line, other than equity-based incentive compensation, are
based on the expense limitations included in the Omnibus
Agreement. Equity-based incentive compensation expense was
charged to the petroleum products terminals and ammonia pipeline
system segments based on proportional revenues. The Williams
Pipe Line segment was not charged equity-based incentive
compensation expense in 2002 or prior periods because it was not
acquired by the Partnership until 2002, and consequently its
employees did not participate in the Partnership&#146;s
equity-based incentive compensation plan until 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership&#146;s reportable segments are
strategic business units that offer different products and
services. The segments are managed separately because each
segment requires different marketing strategies and business
knowledge.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Twelve Months Ended December&nbsp;31, 2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Petroleum</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ammonia</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Williams</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Products</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pipeline</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pipe Line</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Terminals</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">System</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third party customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">299,875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">375,884</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,024</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,569</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">341,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">434,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(788</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental indemnified by Williams
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,176</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">768</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,500</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,992</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate general and administrative expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,482</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Segment profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,462</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">137,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">643,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">434,942</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,116,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions to long-lived assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,013</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">92
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Twelve Months Ended December&nbsp;31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Petroleum</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ammonia</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Williams</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Products</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pipeline</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pipe Line</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Terminals</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">System</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third party customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">284,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">354,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78,371</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">362,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental indemnified by Williams
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,377</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(359</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,736</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate general and administrative expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,641</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,365</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Segment profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">705,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">368,409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,104,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions to long-lived assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,232</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Twelve Months Ended December&nbsp;31, 2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Petroleum</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ammonia</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Williams</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Products</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pipeline</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pipe Line</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Terminals</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">System</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third party customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,389</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">310,466</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98,965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">354,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">426,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,993</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132,809</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental indemnified by Williams
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Product purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate construction expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Affiliate general and administrative expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,612</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Segment profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,460</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,829</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">731,654</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">296,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,050,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions to long-lived assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,446</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Non-cash charges for incentive compensation
costs, included in 2002 and 2001 affiliate general and
administrative expenses, were $3.1&nbsp;million for the
petroleum products terminal operations and $0.5&nbsp;million for
the ammonia pipeline operations during 2002 and
$1.7&nbsp;million for the petroleum products terminal operations
and $0.3&nbsp;million for the ammonia pipeline operations during
2001.
</FONT>

<P align="center"><FONT size="2">93
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">16.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Commitments and Contingencies</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WES has agreed to indemnify the Partnership
against any covered environmental losses up to
$15.0&nbsp;million relating to assets it contributed to the
Partnership at the time of the initial public offering that
arose prior to February&nbsp;9, 2001, that become known within
three years after February&nbsp;9, 2001, and that exceed all
amounts recovered or recoverable by the Partnership under
contractual indemnities from third parties or under any
applicable insurance policies. Covered environmental losses are
those non-contingent terminal and ammonia system environmental
losses, costs, damages and expenses suffered or incurred by the
Partnership arising from correction of violations of, or
performance of remediation required by, environmental laws in
effect at February&nbsp;9, 2001, due to events and conditions
associated with the operation of the assets and occurring before
February&nbsp;9, 2001. Reimbursements from Williams relative to
their environmental indemnities are received as remediation is
performed. See Note&nbsp;1&nbsp;&#151; Organization and
Presentation&nbsp;&#151; Recent Developments relative to
Williams. Changes in Williams&#146; ability to perform on their
indemnities could result in the Partnership materially
increasing its related affiliate receivable reserves.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisition of Williams
Pipe Line, WES agreed to indemnify the Partnership for any
breach of a representation or warranty that results in losses
and damages of up to $110.0&nbsp;million after the payment of a
$2.0&nbsp;million deductible. With respect to any amount
exceeding $110.0&nbsp;million, WES will be responsible for
one-half of that amount up to $140.0&nbsp;million. In no event
will WES&#146; liability under these indemnities exceed
$125.0&nbsp;million. These indemnification obligations will
survive for one year, except that those relating to employees
and employee benefits will survive for the applicable statute of
limitations and those relating to real property, including title
to WES&#146; assets, will survive for ten years. This indemnity
also provides that the Partnership will be indemnified for an
unlimited amount of losses and damages related to tax
liabilities. In addition, any losses and damages related to
environmental liabilities that arose prior to the acquisition
will be subject only to a $2.0&nbsp;million deductible, which
was met during 2002, for claims made within six years of our
acquisition of Williams Pipe Line in April 2002. Williams has
provided a performance guarantee for the remaining amount of
these environmental indemnities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Estimated liabilities for environmental costs
were $22.3&nbsp;million and $16.9&nbsp;million at
December&nbsp;31, 2002 and December&nbsp;31, 2001, respectively.
These estimates, provided on an undiscounted basis, were
determined based primarily on data provided by a third-party
environmental evaluation service and Williams&#146; internal
environmental engineers. These liabilities have been classified
as current or non-current based on management&#146;s estimates
regarding the timing of actual payments. Management estimates
that expenditures associated with these environmental
remediation liabilities will be paid over the next five years.
Receivables from Williams or its affiliates of
$22.9&nbsp;million and $5.1&nbsp;million at December&nbsp;31,
2002 and December&nbsp;31, 2001, respectively, associated with
indemnified environmental costs have been recognized as
affiliate accounts receivable in the Consolidated Balance Sheet.
Reimbursements from Williams and its affiliates relative to
their environmental indemnities are received as remediation is
performed. See Note&nbsp;1&nbsp;&#151; Organization and
Presentation&nbsp;&#151; Recent Developments relative to
Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In conjunction with the 1999 acquisition of the
Gulf Coast marine terminals from Amerada Hess Corporation
(&#147;Hess&#148;), Hess has disclosed to the Partnership all
suits, actions, claims, arbitrations, administrative,
governmental investigation or other legal proceedings pending or
threatened, against or related to the assets acquired by the
Partnership, which arise under environmental law. In the event
that any pre-acquisition releases of hazardous substances at the
Partnership&#146;s Corpus Christi and Galena Park, Texas and
Marrero, Louisiana marine terminal facilities were unknown at
closing but subsequently identified by the Partnership prior to
July&nbsp;30, 2004, the Partnership will be liable for the first
$2.5&nbsp;million of environmental liabilities, Hess will be
liable for the next $12.5&nbsp;million of losses and the
Partnership will assume responsibility for any losses in excess
of $15.0&nbsp;million. Also, Hess agreed to indemnify the
Partnership through July&nbsp;30, 2014, against all known and
required environmental remediation costs at the Corpus Christi
and Galena Park, Texas marine terminal facilities from any
matters related to pre-acquisition actions. Hess has indemnified
the Partnership
</FONT>

<P align="center"><FONT size="2">94
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">for a variety of pre-acquisition fines and claims
that may be imposed or asserted against the Partnership under
certain environmental laws. At December&nbsp;31, 2002 and 2001,
the Partnership had accrued $0.6&nbsp;million for costs that may
not be recoverable under Hess&#146; indemnification.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Partnership recorded an
environmental liability of $2.3&nbsp;million at its New Haven,
Connecticut facility, which was acquired in September 2000. This
liability was based on third-party environmental engineering
estimates completed as part of a Phase&nbsp;II environmental
assessment, routinely required by the State of Connecticut to be
conducted by the purchaser following the acquisition of a
petroleum storage facility. The Partnership completed a
Phase&nbsp;III environmental assessment at this facility during
2002 and the results of that assessment are being evaluated. The
environmental liabilities at the New Haven facility are not
expected to change materially once the evaluation of the
assessment is completed, which should be by the end of the first
quarter of 2003. The seller of these assets agreed to indemnify
the Partnership for certain of these environmental liabilities.
In addition, the Partnership purchased insurance for up to
$25.0&nbsp;million of environmental liabilities associated with
these assets, which carries a deductible of $0.3&nbsp;million.
Any environmental liabilities at this location not covered by
the seller&#146;s indemnity and not covered by insurance are
covered by the WES environmental indemnifications to the
Partnership, subject to the $15.0&nbsp;million limitation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Environmental Protection Agency
(&#147;EPA&#148;), pursuant to Section&nbsp;308 of the Clean
Water Act, preliminarily determined that Williams may have
systemic problems with petroleum discharges from pipeline
operations. The inquiry primarily focused on Williams Pipe Line,
which was subsequently acquired by the Partnership. The response
to the EPA&#146;s information request was submitted during
November 2001. Any claims the EPA may assert relative to this
inquiry would be covered by the Partnership&#146;s environmental
indemnifications from Williams.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WNGL will indemnify the Partnership for
right-of-way defects or failures in the ammonia pipeline
easements for 15&nbsp;years after the initial public offering
closing date. WES has also indemnified the Partnership for
right-of-way defects or failures associated with the marine
terminal facilities at Galena Park and Corpus Christi, Texas and
Marrero, Louisiana for 15&nbsp;years after the initial public
offering closing date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;31, 2002, Farmland and several of its
subsidiaries filed for Chapter&nbsp;11 bankruptcy protection.
Farmland, the largest customer on the ammonia pipeline system,
is also a customer of Williams Pipe Line. The Partnership
received approximately $2.3&nbsp;million in payments from
Farmland during the preference period prior to Farmland&#146;s
filing for bankruptcy. Management believes that the Partnership
will not be required to reimburse these funds to the bankruptcy
trustee because they were received in the ordinary course of
business with Farmland. The Partnership&#146;s receivable
balance from Farmland at December&nbsp;31, 2002, was
$30&nbsp;thousand. The Partnership also has two five-year
petroleum pipeline lease capacity agreements with Farmland. The
first of these agreements, which expires on November&nbsp;30,
2005, requires an annual payment by Farmland of
$1.2&nbsp;million on each November&nbsp;30th during the contract
period. The second agreement, which expires on April&nbsp;30,
2007, is for $0.5&nbsp;million annually and is invoiced to
Farmland on a monthly basis. Farmland has remained current on
both of these lease capacity agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership is party to various other claims,
legal actions and complaints arising in the ordinary course of
business. In the opinion of management, the ultimate resolution
of all claims, legal actions and complaints after consideration
of amounts accrued, insurance coverage or other indemnification
arrangements will not have a material adverse effect upon the
Partnership&#146;s future financial position, results of
operations or cash flows.
</FONT>

<P align="center"><FONT size="2">95
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">17.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Quarterly Financial Data (Unaudited)</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Summarized quarterly financial data is as follows
(in thousands, except per unit amounts).
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Second</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Third</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Quarter</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102,648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104,124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total costs and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">118,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total costs and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84,818</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,871</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic and diluted net income per limited partner
    unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic and diluted net income for the second,
third and fourth quarters of 2002 include the impact of the
Partnership&#146;s ownership of Williams Pipe Line. Fourth
quarter 2002 net income included a gain of $1.1&nbsp;million on
the sale of the inland terminals. Second, third and fourth
quarter net income for 2002 was impacted by the amortization of
debt placement costs of $7.1&nbsp;million associated with the
short-term note assumed at the time of the Williams Pipe Line
acquisition by the Partnership and interest expense associated
with that note. Fourth quarter results were impacted by the
amortization of the $2.1&nbsp;million debt placement costs
associated with the extension of the maturity date of the
Williams Pipe Line short-term note and interest expense on the
new $480.0&nbsp;million borrowings by Williams Pipe Line.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic and diluted net income for the first
quarter of 2001 is calculated on the Limited Partners&#146;
interest in net income applicable for the period after
February&nbsp;9, 2001, through the end of the quarter. Revenues
and expenses in 2001 were impacted by the acquisition of two
terminals from TransMontaigne in June 2001 and the Gibson
terminal from Geonet in October 2001. See
Note&nbsp;5&nbsp;&#151; Acquisitions and Divestitures. Second
quarter 2001 revenues were impacted by a $1.0&nbsp;million
throughput deficiency billing to an ammonia pipeline customer.
Fourth quarter net income included a gain of $1.1&nbsp;million
on the sale of the Meridian, Mississippi terminal. Interest
expense for 2001 reflects the payment and forgiveness of the
predecessor company&#146;s affiliate debt and new borrowings by
the Partnership. Net income was also impacted by incentive
compensation costs of $2.0&nbsp;million during&nbsp;2001.
</FONT>

<P align="center"><FONT size="2">96
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">18.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Distributions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Distributions paid by the Partnership during 2002
and 2001 are as follows (in&nbsp;thousands, except per unit
amounts):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Unit Cash</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Distribution</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Cash</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Date Cash Distribution Paid</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Distribution</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">02/14/02
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.5900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">05/15/02
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.6125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">08/14/02
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.6750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,222</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">11/14/02
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.7000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total cash distributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.5775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="9"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">05/15/01(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.2920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,385</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">08/14/01
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.5625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">11/14/01
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.5775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total cash distributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.4320</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">This distribution represented the prorated
    minimum quarterly distribution for the 50-day period following
    the initial public offering closing date, which included
    February&nbsp;10, 2001 through March&nbsp;31, 2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;14, 2003, the Partnership paid
cash distributions of $0.725&nbsp;per unit on its outstanding
common, subordinated and Class&nbsp;B units to unitholders of
record at the close of business on January&nbsp;31, 2003. The
total distribution, including distributions paid to the General
Partner on its equivalent units, was $21.0&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">19.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Net Income Per Unit</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides details of the basic
and diluted net income per unit computations (in thousands,
except per unit amounts):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">For the Year Ended December&nbsp;31, 2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Unit</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Numerator)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Denominator)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Limited partners&#146; interest in income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of dilutive restrictive unit grants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,968</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">For the Year Ended December&nbsp;31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Unit</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Numerator)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Denominator)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Limited partners&#146; interest in income
    applicable to the period after February&nbsp;9, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of dilutive restrictive unit grants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted net income per limited partner unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">97
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Units reported as dilutive securities are related
to restricted unit grants associated with the one-time initial
public offering award (see Note&nbsp;14&nbsp;&#151; Long-Term
Incentive Plan).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">20.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Partners&#146; Capital</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Of the 13,679,694 common units outstanding at
December&nbsp;31, 2002, 12,600,000 are held by the public, with
the remaining 1,079,694 held by affiliates of the Partnership.
All of the 5,679,694 subordinated units and 7,830,924
Class&nbsp;B units are held by affiliates of the Partnership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the subordination period, the Partnership
can issue up to 2,839,847 additional common units without
obtaining unitholder approval. In addition, the General Partner
can issue an unlimited number of common units as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">upon exercise of the underwriters&#146;
    over-allotment option;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">upon conversion of the subordinated units;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">under employee benefit plans;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">upon conversion of the general partner interest
    and incentive distribution rights as a result of a withdrawal of
    the General Partner;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in the event of a combination or subdivision of
    common units;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in connection with an acquisition or a capital
    improvement that increases cash flow from operations per unit on
    a pro forma basis;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the proceeds of the issuance are used
    exclusively to repay up to $40.0&nbsp;million of our
    indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The subordination period will end when the
Partnership meets certain financial tests provided for in the
Partnership agreement but it generally cannot end before
December&nbsp;31, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The limited partners holding common units of the
Partnership have the following rights, among others:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to receive distributions of the
    Partnership&#146;s available cash within 45&nbsp;days after the
    end of each quarter;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to elect the board members of the
    Partnership&#146;s General Partner;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to remove Williams as the General Partner
    upon a 66.7% majority vote of outstanding unitholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to transfer common unit ownership to
    substitute limited partners;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to receive an annual report, containing
    audited financial statements and a report on those financial
    statements by our independent public accountants within
    120&nbsp;days after the close of the fiscal year end;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to receive information reasonably required
    for tax reporting purposes within 90&nbsp;days after the close
    of the calendar year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to vote according to the limited
    partners&#146; percentage interest in the Partnership on any
    meeting that may be called by the General Partner;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">right to inspect our books and records at the
    unitholders&#146; own expense.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The voting rights associated with the election of
the board members of the Partnership&#146;s General Partner and
the right to remove Williams as the General Partner will be
voided in the event of a foreclosure in a Williams-related
bankruptcy proceeding.
</FONT>

<P align="center"><FONT size="2">98
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WILLIAMS ENERGY PARTNERS L.P.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net income is allocated to the General Partner
and limited partners based on their proportionate share of cash
distributions for the period. Cash distributions to the General
Partner and limited partners are made based on the following
table:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Percentage of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Distributions</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Limited</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">General</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Quarterly Distribution Amount (per&nbsp;unit)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Partners</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Partner</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Up to $0.578
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Above $0.578 up to $0.656
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Above $0.656 up to $0.788
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Above $0.788
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a liquidation, all property and
cash in excess of that required to discharge all liabilities
will be distributed to the partners in proportion to the
positive balances in their respective tax-basis capital accounts.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">21.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Registration Statement (Unaudited)</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002 the Partnership filed a shelf
registration statement with the Securities and Exchange
Commission to register common units representing limited partner
interests and debt securities, including guarantees. The
Partnership, exclusive of its investment in all of its
wholly-owned operating limited partnerships and subsidiaries,
has no independent assets or operations. If a series of debt
securities is guaranteed, such series will be guaranteed by all
of the Partnership&#146;s operating limited partnerships and
subsidiaries on a full and unconditional and joint and several
basis.
</FONT>

<P align="left">
<B><FONT size="2">22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
Events</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;14, 2003, the Partnership paid
cash distributions of $0.725&nbsp;per unit on its outstanding
common, subordinated and Class&nbsp;B units to unitholders of
record at the close of business on January&nbsp;31, 2003. The
total distribution, including distributions paid to the General
Partner on its equivalent units, was $21.0&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2003, Williams announced its
intention to divest its interest in our General Partner and all
of its limited partnership interests. It is uncertain what form
this potential transaction may take and management cannot
currently determine what impact this sale may have on the
on-going operations of the Partnership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2003, the Partnership reached an
agreement with Williams Energy Marketing&nbsp;&#38; Trading to
terminate their storage capacity contract, which extended
through September&nbsp;30, 2004, at the Galena Park, Texas
marine terminal facility. The Partnership will receive
$3.0&nbsp;million from Williams Energy Marketing&nbsp;&#38;
Trading, which will be under no further obligation under this
long-term agreement to pay for tank storage or any other
ancillary services at the Galena Park, Texas facility.
</FONT>

<P align="center"><FONT size="2">99
</FONT>

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<!-- link2 "Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure" -->
<DIV align="left"><A NAME="017"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Changes in and Disagreement with
    Accountants on Accounting and Financial Disclosure</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None.
</FONT>

<!-- link1 "PART III" -->
<DIV align="left"><A NAME="018"></A></DIV>

<P align="center">
<B><FONT size="2">PART&nbsp;III</FONT></B>

<!-- link2 "Item 10. Partnership Management" -->
<DIV align="left"><A NAME="019"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Partnership Management</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our General Partner manages our operations and
activities. Unitholders do not directly or indirectly
participate in our management or operations. Our General Partner
is liable, as a general partner, for all of our debts (to the
extent not paid from our assets), except for specific
non-recourse indebtedness or other obligations. Whenever
possible, our General Partner intends to cause us to incur
indebtedness or other obligations that are non-recourse.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Three members of the Board of Directors of our
General Partner serve on a Conflicts Committee to review
specific material matters that the Board of Directors believes
may involve conflicts of interest including bankruptcy-related
decisions involving us and our General Partner or as specified
in our agreement of limited partnership or the General
Partner&#146;s limited liability company agreement. When a
potential conflict arises, the Conflicts Committee will
determine if the involved transaction is fair and reasonable to
us. The members of the Conflicts Committee are not officers or
employees of our General Partner or directors, officers or
employees of its affiliates. Any matters approved by the
Conflicts Committee are conclusively deemed to be fair and
reasonable to us, approved by all of our partners, and not a
breach by our General Partner of any duties it may owe us or our
unitholders. In addition, the members of the Conflicts Committee
also serve on the Audit Committee and the Compensation
Committee. The Audit Committee, among other things, reviews our
external financial reporting, retains our independent auditors,
approves services provided by the independent auditors and
reviews procedures for internal auditing and the adequacy of our
internal accounting controls. The Compensation Committee
oversees long-term incentive compensation decisions for the
officers and key employees of WEG GP LLC as well as compensation
plans adopted by the General Partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As is commonly the case with publicly-traded
limited partnerships, we are managed and operated by the
officers of, and are subject to the oversight of the directors
of, our General Partner. All of our personnel are employees of
Williams or its subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some officers of our General Partner may spend a
substantial amount of time managing the business and affairs of
Williams and its affiliates. These officers may face a conflict
regarding the allocation of their time between our business and
the other business interests of Williams. Our General Partner
causes its officers to devote as much time as is necessary for
the proper conduct of our business and affairs. Don R.
Wellendorf currently devotes approximately 100% of his time to
our operations. John D. Chandler currently devotes&nbsp;100% of
his time to us. Phillip D. Wright currently devotes
approximately 2% of his time to us and Craig R. Rich currently
devotes approximately 90% of his time to our operations. Jay A.
Wiese currently devotes approximately 100% of his time to our
operations, Michael N. Mears currently devotes approximately 90%
of his time to our operations, and Richard A. Olson currently
devotes approximately 80% of his time to us. The Board of
Directors of the General Partner is presently composed of seven
directors.
</FONT>

<P align="left">
<B><FONT size="2">Directors and Executive Officers of
WEG&nbsp;GP&nbsp;LLC</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain
information with respect to the executive officers and members
of the Board of Directors of our General Partner. Executive
officers are elected for one-year terms. Our General
Partner&#146;s limited liability company agreement provides for
three classes of directors. Keith E. Bailey and William W. Hanna
are the initial members of Class&nbsp;I, whose terms will expire
at the 2003 annual meeting of limited partners and on each third
succeeding year thereafter. Phillip D. Wright and Don J. Gunther
are the initial members of Class&nbsp;II, whose terms will
expire at the 2004 annual meeting of limited partners and on
each third succeeding year thereafter. Steven J. Malcolm, Don R.
Wellendorf, and William A. Bruckmann&nbsp;III
</FONT>

<P align="center"><FONT size="2">100
</FONT>

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<DIV align="left">
<FONT size="2">are the initial members of Class&nbsp;III, whose
terms will expire at the 2005 annual meeting of limited partners
and on each third succeeding year thereafter.
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Position with General Partner</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Phillip D. Wright
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board, Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President and Chief Executive Officer, Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chief Financial Officer and Treasurer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President, Transportation
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President, Pipeline Operations
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President, Terminal Services and Development
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Craig R. Rich
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">General Counsel
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Keith E. Bailey
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William A. Bruckmann,&nbsp;III
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don J. Gunther
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William W. Hanna
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Phillip D. Wright has served as a director and
the Chairman of the Board of Directors of our General Partner
since November&nbsp;15, 2002. He served as Chairman of the Board
of Directors of our former general partner from May&nbsp;13,
2002 to November&nbsp;15, 2002 and served as a director of the
former general partner from February&nbsp;9, 2001 to
November&nbsp;15, 2002. From January&nbsp;7, 2001 to
May&nbsp;13, 2002 he served as President and Chief Operating
Officer of our former general partner. Mr.&nbsp;Wright is
currently the Chief Restructuring Officer and a Senior Vice
President of Williams and has served in that capacity since
November&nbsp;21, 2002. From September 2001 until March 2003,
Mr.&nbsp;Wright served as President and Chief Executive Officer
of Williams Energy Services, LLC (&#147;Williams Energy
Services&#148;). He also served as Senior Vice President of
Enterprise Development and Planning for Williams Energy Services
from November 1996 to September 2001. From 1989 to 1996 he held
various senior management positions with Williams Pipe Line
Company and Williams Energy Ventures, Inc. Prior to 1989, he
spent 13&nbsp;years working for Conoco, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Don R. Wellendorf has served as a director and
the President and Chief Executive Officer of our General Partner
since November&nbsp;15, 2002. Mr.&nbsp;Wellendorf also served as
President and Chief Executive Officer of our former general
partner from May&nbsp;13, 2002 until November&nbsp;15, 2002, and
served as a director from February&nbsp;9, 2001 until
November&nbsp;15, 2002. He served as Treasurer and Chief
Financial Officer of our former general partner from
January&nbsp;7, 2001 to July&nbsp;24, 2002 and as Senior Vice
President of our former general partner from January&nbsp;7,
2001 until May&nbsp;13, 2002. From 1998 to March 2003, he served
as Vice President of Strategic Development and Planning for
Williams Energy Services. Prior to Williams&#146; merger with
MAPCO Inc. in 1998, he was Vice President and Treasurer for
MAPCO from 1995 to 1998. From 1994 to 1995, he served as Vice
President and Corporate Controller for MAPCO. He began his
career in 1979 as an accountant with MAPCO and held various
accounting positions with MAPCO from 1979 to 1994.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">John D. Chandler has served as the Chief
Financial Officer and Treasurer of our General Partner since
November&nbsp;15, 2002, and served in that capacity for our
former general partner from July&nbsp;24, 2002 until
November&nbsp;15, 2002. He was Director of Financial Planning
and Analysis for Williams Energy Services and served in that
capacity from September 2000 to July 2002. He also served as
Director of Strategic Development for Williams Energy Services
from 1999 to 2000 and served as Manager of Strategic Analysis
from 1998 to 1999. Prior to Williams&#146; merger with MAPCO
Inc. in 1998, he was a Manager of Business Development for
MAPCO. He began his career in 1992 as an accountant with MAPCO
in a professional development rotational program and held
various accounting and finance positions with MAPCO from 1992 to
1998.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Michael N. Mears has served as the Vice
President, Transportation of our General Partner since
November&nbsp;15, 2002 and served in that capacity for our
former general partner from April&nbsp;22, 2002 until
November&nbsp;15, 2002. He is currently Vice President of
Williams Petroleum Services, LLC and has served in
</FONT>

<P align="center"><FONT size="2">101
</FONT>

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<DIV align="left">
<FONT size="2">that capacity since March 2002. Mr.&nbsp;Mears
served as Vice President of Transportation and Terminals for
Williams Pipe Line Company from 1998 to 2002. He also served as
Vice President, Petroleum Development for Williams Energy
Services from 1996 to 1998. Prior to 1996, Mr.&nbsp;Mears served
as Director of Operations Control and Business Development for
Williams Pipe Line Company from 1993 to 1996. From 1985 to 1993
he worked in various engineering, project analysis, and
operations control positions for Williams Pipe Line Company.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Richard A. Olson has served as the Vice
President, Pipeline Operations of our General Partner since
November&nbsp;15, 2002 and served in that capacity for our
former general partner from April&nbsp;22, 2002 until
November&nbsp;15, 2002. He is currently Vice President of Mid
Continent Operations for Williams Energy Services and has served
in that capacity since 1996. Mr.&nbsp;Olson was Vice President
of Operations and Terminal Marketing for Williams Pipe Line
Company from 1996 to 1998, Director of Southern Operations from
1992 to 1996, Director of Product Movements from 1991 to 1992,
and Central Division Manager from 1990 to 1991. From 1981 to
1990, Mr.&nbsp;Olson held various positions with Williams Pipe
Line Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Jay A. Wiese has served as the Vice President,
Terminal Services and Development of our General Partner since
November&nbsp;15, 2002, and served in that capacity for our
former general partner from January&nbsp;7, 2001 until
November&nbsp;15, 2002. He was Managing Director, Terminal
Services and Commercial Development for Williams Energy Services
and has served in that capacity from 2000 to January 2001. From
1995 to 2000, he served as Director, Terminal Services and
Commercial Development of Williams&#146; terminal distribution
business. Prior to 1995, Mr.&nbsp;Wiese held various operations,
marketing and business development positions with Williams Pipe
Line Company, Williams Energy Ventures, Inc. and Williams Energy
Services. He joined Williams Pipe Line Company in 1982.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Craig R. Rich has served as the General Counsel
of our General Partner since November&nbsp;15, 2002 and served
in that capacity for our former general partner from
January&nbsp;7, 2001 until November&nbsp;15, 2002. Since 1996,
he has also served as Associate General Counsel of Williams
Energy Services. From 1993 to 1996, he served as General Counsel
of Williams&#146; midstream gas and liquids division. Prior to
that time, Mr.&nbsp;Rich was a Senior Attorney representing
Williams Gas Pipeline-West. He joined Williams in 1985.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Keith E. Bailey has served as a director of our
General Partner since November&nbsp;15, 2002 and served as a
director of our former general partner from February&nbsp;9,
2001 until November&nbsp;15, 2002. Since 2001, Mr.&nbsp;Bailey
has also served as a Director for Aegis Insurance Services Inc.
He served as Chairman of the Board of Directors and Chief
Executive Officer of Williams from 1994 to 2002. He served as
President of Williams from 1992 to 1994 and as Executive Vice
President of Williams from 1986 to 1992.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">William A. Bruckmann,&nbsp;III has served as a
director of our General Partner since November&nbsp;15, 2002 and
served as a director of our former general partner from
May&nbsp;9, 2001 until November&nbsp;15, 2002.
Mr.&nbsp;Bruckmann also serves as a member of the Board&#146;s
Audit Committee, the Compensation Committee and is the Chairman
of the Conflicts Committee. Since September&nbsp;9, 2002,
Mr.&nbsp;Bruckmann has been employed with UBS Paine Webber as a
Financial Advisor. He is a former managing director at Chase
Securities, Inc. and has more than 25&nbsp;years of banking
experience, starting with Manufacturers Hanover Trust Company,
where he became a senior officer in 1985. Mr.&nbsp;Bruckmann
later served as managing director, sector head of the
Manufacturers Hanover&#146;s gas pipeline and midstream
practices through the acquisition of Manufacturers Hanover by
Chemical Bank and the acquisition of Chemical Bank by Chase Bank.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Don J. Gunther has served as a director of our
General Partner since November&nbsp;15, 2002 and served as a
director of our former general partner from May&nbsp;9, 2001
until November&nbsp;15, 2002. Mr.&nbsp;Gunther also serves as a
member of the Board&#146;s Audit Committee, the Conflicts
Committee and is the Chairman of the Compensation Committee. He
is a retired vice chairman of Bechtel Group Inc. He began his
career with Bechtel in 1961 and was promoted to a variety of
positions, including Bechtel&#146;s executive committee in 1989;
president of Bechtel Petroleum in 1984; president of Europe,
Africa, Middle East and southwest Asia operations in 1992; and
president of Bechtel Americas in 1995. He was named vice
chairman in July 1997, retiring from the position in 1998.
</FONT>

<P align="center"><FONT size="2">102
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">William W. Hanna has served as a director of our
General Partner since November&nbsp;15, 2002 and served as a
director of our former general partner from January&nbsp;18,
2002 until November&nbsp;15, 2002. Mr.&nbsp;Hanna also serves as
a member of the Board&#146;s Compensation Committee, the
Conflicts Committee and is the Chairman of the Audit Committee.
He is a retired vice chairman of Koch Industries where he held
management and leadership positions since he commenced
employment in 1968. In 1981, he became executive vice president
of energy products for Koch. In 1984, he was elected to the
board of directors, and in 1987, was named president and chief
operating officer. In 1999, he was named vice chairman.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Steven J. Malcolm has served as a director of our
General Partner since November&nbsp;15, 2002 and served as a
director of our former general partner from February&nbsp;9,
2001 until November&nbsp;15, 2002. He served as the Chief
Executive Officer and Chairman of the Board of Directors of our
former general partner from January&nbsp;7, 2001 until
May&nbsp;13, 2002. He is currently President and Chief Executive
Officer of Williams and has served in the capacity as President
since September 2001, and as Chief Executive Officer since
January 2002. He has also served as the Chairman of
Williams&#146; Board of Directors since May 2002. From 1998 to
September 2001, he served as President and Chief Executive
Officer of Williams Energy Services. From 1994 to 1998, he
served as Senior Vice President for Williams&#146; midstream gas
and liquids division, and from 1993 to 1994, worked as Senior
Vice President of the mid-continent region for Williams Field
Services. From 1984 to 1993, he held various positions with
Williams Natural Gas Company, including director of business
development, director of gas management and vice president of
gas management and supply.
</FONT>

<P align="left">
<B><FONT size="2">Annual Meeting of Limited Partners</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership&#146;s agreement of limited
partnership, as amended, provides for an annual meeting of the
limited partners for the election of directors to the Board of
Directors of our General Partner. Our General Partner has not
yet announced the date and location of the 2003 annual meeting.
</FONT>

<P align="left">
<B><FONT size="2">Compliance with Section&nbsp;16(a) of the
Securities Exchange Act of 1934</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;16(a) of the Securities Exchange Act
of 1934 requires directors, executive officers and persons who
beneficially own more than 10% of our units to file certain
reports with the Securities and Exchange Commission and the New
York Stock Exchange concerning their beneficial ownership of our
equity securities. The Securities and Exchange Commission
regulations also require that a copy of all such
Section&nbsp;16(a) forms filed must be furnished to us by the
executive officers, directors and greater than 10% unitholders.
Based on a review of the copies of such forms and amendments
thereto with respect to 2002, we have determined that, due to an
administrative oversight, one transaction involving Keith E.
Bailey that should have been reported on a Form&nbsp;4 was not
timely reported. The transaction was reported on a Form&nbsp;5
shortly after discovery of the oversight.
</FONT>

<!-- link2 "Item 11. Executive Compensation" -->
<DIV align="left"><A NAME="020"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Executive Compensation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have no employees. We are managed by the
officers of our General Partner. Subject to maximum
reimbursement obligations that were met in 2002, we reimburse
Williams for direct and indirect general and administrative
expenses incurred on our behalf, as discussed in
Management&#146;s Discussion and Analysis of Financial Condition
and Results of Operations. Following are the approximate
percentages of the direct and indirect compensation expense of
each named executive officer allocated to us by Williams:
Mr.&nbsp;Wellendorf, 80% for 2002 and 75% for 2001;
Mr.&nbsp;Malcolm, 2% for 2002 and 3% for 2001;
Mr.&nbsp;Chandler, 100% for 2002; Mr.&nbsp;Mears, 80% for 2002;
Mr.&nbsp;Olson, 72% for 2002; and Mr.&nbsp;Wiese, 100% for 2002
and 95% for 2001. The following table represents compensation
expense allocated to our General Partner by Williams for the
fiscal
</FONT>

<P align="center"><FONT size="2">103
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">year ended December&nbsp;31, 2002, for the Chief
Executive Officer, former Chief Executive Officer and each of
the four other most highly compensated executive officers of our
General Partner.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Allocated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Long-Term</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><B><FONT size="1">Allocated Annual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Long-Term</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">WMB Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Incentive Plan</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Salary(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Option Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Payouts(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation(3)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">187,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">86,458</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">439,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8,604</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">President and Chief Executive Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2001
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">149,004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">86,964</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,585</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">17,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">-0-</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13,500</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">439,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Former Chief Executive Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2001
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">15,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">19,089</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">117,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">53,984</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">169,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chief Financial Officer and Treasurer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">143,251</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">51,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10,372</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vice President, Transportation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">123,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7,560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">9,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vice President, Pipeline Operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">154,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">55,743</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">523,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">11,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vice President, Terminal Services and Development
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2001
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">139,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">66,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3,881</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents salary and bonus expense allocated to
    us by Williams.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents vesting of phantom units granted on
    April&nbsp;19, 2001 in association with our initial public
    offering. These units were subject to early vesting if certain
    performance measures were met. These measures were met,
    resulting in one-half of the units vesting on February&nbsp;14,
    2002 and the remaining one-half vesting on November&nbsp;15,
    2002. The payout of these awards are valued as follows:
    (i)&nbsp;one-half at $36.55, the closing common unit price on
    the vesting date February&nbsp;14, 2002 and (ii)&nbsp;one-half
    at $31.05, the closing common unit price on the vesting date
    November&nbsp;15, 2002.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents expense allocated to us by Williams
    for contributions made to the Investment Plus Plan, a defined
    contribution plan subject to the Employee Retirement Income
    Security Act of 1974 on behalf of each named executive officer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents options granted in both February and
    November 2002. The November 2002 grant was an acceleration of
    the 2003 grant.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">104
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Williams Stock Option Grants in the Last
Fiscal Year</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides certain information
concerning the grant by Williams of Williams&#146; stock options
during the last fiscal year to the named executive officers. The
number of options granted, percent of total options granted and
the grant date present values reported below reflect the portion
allocated to us by Williams according to the approximate
allocation percentages as described in the Summary Compensation
Table.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Individual Grants(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Granted to</FONT></B></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">WMB</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Williams</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Grant Date</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Employees in</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price (per</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Present</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">share)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value(2)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11/27/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.06</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11/27/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,060</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.09</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">09/18/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">09/18/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.05</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.05</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,473</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.02</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">02/11/12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Options granted in 2002 are subject to
    accelerated vesting if certain future Williams&#146; stock
    prices or specific Williams&#146; financial performance targets
    are achieved. Williams granted these options under its 1996
    Stock Plan, its Stock Plan for Non-officer Employees and its
    2002 Incentive Plan.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The grant date present value is determined using
    the Black-Scholes option pricing model and is based on
    assumptions about future stock price volatility, risk-free rate
    of return and dividend yield over the life of the options. The
    following weighted average values were determined based on the
    above grants. The weighted average volatility of the expected
    market price of Williams&#146; Common Stock is 36.7%. The
    weighted average risk-free rate of return is 5.2%. The model
    assumes a dividend yield of 1% and an exercise date at the end
    of the contractual term in 2012. The model does not take into
    account that the stock options are subject to vesting
    restrictions and that executives cannot sell their options. The
    actual value, if any, that may be realized by an executive will
    depend on the market price of Williams&#146; Common Stock on the
    date of exercise. The dollar amounts shown are not intended to
    forecast possible future appreciation in Williams&#146; Common
    Stock price.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">105
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Option Exercises and Fiscal Year-End
Values</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides certain information
on exercises of Williams&#146; stock options during the last
fiscal year by the named executive officers and the value of
such officers&#146; unexercised options at December&nbsp;31,
2002. The number of unexercised options and the value of
unexercised in-the-money options below reflect the portion
allocated to us by Williams according to the approximate
allocation percentages as described in the Summary Compensation
Table.
</FONT>

<P align="center">
<B><FONT size="2">Option Exercises of Williams&#146; Stock in
Last Fiscal Year</FONT></B>

<DIV align="center">
<B><FONT size="2">and Fiscal Year-End Option Values</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Value of Unexercised In-the-</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Number of Unexercised</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Money Options at Fiscal</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Options at Fiscal Year-End</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year-End(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Acquired</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">On Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Realized</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Based on the closing price of Williams&#146;
    Common Stock reported in the table entitled &#147;New York Stock
    Exchange Composite Transactions&#148; contained in The Wall
    Street Journal for December&nbsp;31, 2002 ($2.70&nbsp;per
    share), less the exercise price. The values shown reflect the
    value of options accumulated over periods of up to ten years.
    Such values had not been realized as of December&nbsp;31, 2002
    and may not be realized. In the event the options are exercised,
    their value will depend on the market price of Williams&#146;
    Common Stock on the date of exercise.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Long-Term Incentive Plan-Awards in Last Fiscal
Year</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides certain information
concerning the grant of phantom units under the Williams Energy
Partners&#146; Long-Term Incentive Plan during the last fiscal
year to the named executive officers:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Estimated Future Payouts under</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Performance or</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Non-Unit Price-Based Plans</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other Period Until</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Maturation or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Threshold</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Target</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Maximum</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Payout</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1"># Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1"># Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1"># Units</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26 months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26 months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26 months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents phantom units of deferred limited
    interest granted on October&nbsp;23, 2002 (Market values at date
    of grant are noted as follows): Mr.&nbsp;Wellendorf,
    6,000&nbsp;units valued at $198,960; Mr.&nbsp;Chandler,
    2,500&nbsp;units valued at $82,900; and Mr.&nbsp;Wiese,
    2,000&nbsp;units valued at $66,320. At the end of the vesting
    period, the number of units awarded under this grant will be
    determined based on an assessment of whether certain performance
    criteria have been met. The number of units could range from
    zero to two times the number of units granted.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">106
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Retirement Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Partnership participates in Williams&#146;
pension plan, which is a noncontributory, tax-qualified defined
benefit plan subject to the Employee Retirement Income Security
Act of 1974. The pension plan generally includes salaried
employees who have completed one year of service. Our named
executive officers participate in the pension plan on the same
terms as other full-time employees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective April&nbsp;1, 1998, Williams converted
its pension plan from a final average pay plan to a cash balance
pension plan. Each participant&#146;s accrued benefit as of that
date was converted to a beginning account balance. Account
balances are credited with an annual Williams contribution and
quarterly interest allocations. Each year, Williams credits an
employee&#146;s pension account an amount equal to the sum of a
percentage of eligible pay and a percentage of eligible pay
greater than the Social Security wage base. We reimburse
Williams for these contributions according to the approximate
allocation percentages described in the Summary Compensation
Table, subject to maximum reimbursement obligations as discussed
in Part&nbsp;II, Item&nbsp;7&nbsp;&#151; &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations&#148;. According to the plan, eligible pay is the sum
of salary and certain bonuses. Interest is credited to account
balances quarterly at a rate determined annually in accordance
with the terms of the plan. The percentage used in the
calculation of the annual contribution is based upon the
employee&#146;s age according to the following table:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of Eligible</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pay Greater than the</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of All</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Social Security</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eligible Pay(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Wage Base</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less than 30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">30-39
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">40-49
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">50 or over
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For employees, including the named executive
    officers, who were active employees and plan participants on
    March&nbsp;31,1998, and April&nbsp;1, 1998, the percentage of
    all eligible pay is increased by an amount equal to 0.3%
    multiplied by the participant&#146;s total years of benefit
    service prior to March&nbsp;31, 1998.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The normal retirement benefit is a monthly
annuity based on a participant&#146;s account balance as of
benefit commencement. Normal retirement age is 65. Early
retirement may commence as early as age&nbsp;55. At retirement,
employees are entitled to receive a single-life annuity or one
of several optional forms of payment having an equivalent
actuarial value to the single-life annuity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Participants who were age&nbsp;50 or older as of
March&nbsp;31, 1998, were grandfathered under a transitional
provision that gives them the greater of the benefit payable
under the cash balance formula or the final average pay formula
based on all years of service and compensation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Internal Revenue Code of 1986, as amended,
currently limits the pension benefits that can be paid from a
tax-qualified defined benefit plan, such as the pension plan, to
highly compensated individuals. These limits prevent such
individuals from receiving the full pension benefit based on the
same formula as is applicable to other employees. As a result,
Williams has adopted an unfunded supplemental retirement plan to
provide a supplemental retirement benefit equal to the amount of
such reduction to eligible executives, including the named
executive officers, whose benefit payable under the pension plan
is reduced by Internal Revenue Code limitations.
</FONT>

<P align="center"><FONT size="2">107
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total unallocated estimated annual retirement
benefits payable at normal retirement age under the cash balance
formula from both the tax qualified pension plan and the
supplemental retirement plan are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Estimated Annual</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Benefits Payable at</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name of Individual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Normal Retirement&nbsp;Age</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">142,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">338,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,942</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Director Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Directors who are employees of Williams or its
affiliates receive no additional compensation for service on our
general partner&#146;s Board of Directors or committees of the
Board. In 2002, non-management directors, including directors
who are not employees of Williams or its affiliates, received an
annual retainer of $10,000 and 400&nbsp;common units; and the
Chairmen of the Audit Committee, Compensation Committee and
Conflicts Committee received an annual retainer of $1,000.
Non-management directors also received $1,000 for each Board
meeting attended and $500 for each Audit Committee, Compensation
Committee or Conflicts Committee meeting attended. Effective
October 2002, the meeting fee for each Audit Committee,
Compensation Committee and Conflicts Committee meeting attended
increased to $1,000. Effective January&nbsp;1, 2003,
non-management directors receive an annual retainer of $16,000
and common units valued at $16,000 on the grant date and the
Chairmen of the Audit Committee, Compensation Committee and
Conflicts Committee each receive an annual retainer of $2,000.
Non-management directors also receive $1,000 for each Board,
Audit Committee, Compensation Committee and Conflicts Committee
meeting attended. In lieu of individual meeting fees for
Committee meetings related to the acquisition of Williams Pipe
Line and in recognition of the extensive time investment related
to the acquisition, members of the Conflicts Committee also
received $25,000 in 2002 in addition to their annual retainer,
meeting fee received for each Board and Committee meeting
attended (other than Conflicts Committee meetings related to the
acquisition) and the annual retainer for the Chairmen of the
Committees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Non-management directors may elect to receive all
or any part of cash fees in the form of common units or phantom
units. Phantom units may be deferred to any subsequent year or
until such individual ceases to be a director. Non-management
directors may also elect to defer receipt of their annual unit
retainer to any subsequent year or until such individual ceases
to be a director. Distribution equivalents are paid on phantom
units and may be received in cash or reinvested in additional
phantom units. One director elected to defer fees under this
plan in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, each non-management director will be
reimbursed for out-of-pocket expenses in connection with
attending meetings of the Board of Directors or its committees.
Each director will be fully indemnified by us for actions
associated with being a director to the extent permitted under
Delaware law.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Employment Agreements and Executive
    Severance Program</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither we nor Williams has any separate
employment agreements with the named executive officers.
However, Williams provides severance benefits for
Messrs.&nbsp;Wellendorf, Mears and Olson through Williams&#146;
executive severance program. The program provides severance
benefits if one of these officers is terminated involuntarily
other than for cause, disability or the sale of a business. The
benefits include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">severance pay equal to one month of the
    officer&#146;s then current monthly base salary for each full,
    completed year of service with Williams, with a minimum of six
    months and a maximum of twelve months, payable in bi-weekly
    payments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">six months of outplacement services;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">continuation of health and welfare benefits at
    active employee rates for the covered severance period, if
    officer elects COBRA.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">108
</FONT>

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<P align="left">
<FONT size="2">Amounts payable under this program are in lieu of
any payments that may otherwise be payable under any other
severance plan. Subject to maximum reimbursement obligations
that were met in 2002, we reimburse Williams for direct and
indirect general and administrative expenses incurred on our
behalf, as discussed in Part&nbsp;II, Item&nbsp;7&nbsp;&#151;
&#147;Managements Discussion and Analysis of Financial Condition
and Results of Operations&#148;. As such, amounts payable under
this program could be allocated to us by Williams according to
the percentage of time these persons devote to our matters.
</FONT>

<!-- link2 "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" -->
<DIV align="left"><A NAME="021"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder
    Matters</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Securities Authorized for Issuance under
Equity Compensation Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides information
concerning the various types of awards that may be issued from
the Williams Energy Partners&#146; Long-Term Incentive Plan,
including units, options, phantom units and bonus units as of
December&nbsp;31, 2002.
</FONT>

<P align="center">
<B><FONT size="2">Equity Compensation Plan Information</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Available&nbsp;for&nbsp;Future</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">to be Issued upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuance&nbsp;Under&nbsp;Equity</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise/Vesting of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-Average Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation Plans</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding Options,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price of Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Excluding Securities</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Warrants and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options, Warrants and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Reflected in the</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Plan Category</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Rights(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Rights(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1st&nbsp;Column&nbsp;of&nbsp;this&nbsp;Table)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity Compensation plans approved by security
    holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123,748</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">518,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity Compensation plans not approved by
    security holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">518,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Units delivered pursuant to an award consist, in
    whole or in part, of units acquired on the open market, from any
    affiliate, the Partnership, any other person, or any combination
    of the foregoing. We have the right to issue new units as part
    of the Long-Term Incentive Plan.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Units awarded pursuant to the William Energy
    Partners&#146; Long-Term Incentive Plan are granted without
    payment by the participant. Taxes are withheld from the award to
    cover the participant&#146;s mandatory tax withholdings.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 36,898&nbsp;units that have vested but
    for which participants elected to defer issuance until a future
    date.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">109
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Security Ownership of Certain Beneficial
Owners and Management</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the number of
units beneficially owned by each person who is known to us to
beneficially own 5% or more of a class of units, by directors
and named executive officers of our General Partner, and by all
directors and executive officers as a group as of
February&nbsp;28, 2003. We obtained certain information in the
table from filings made with the Securities and Exchange
Commission.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subordinated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subordinated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Total</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name of Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B Units</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Williams Energy Services, LLC(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">757,193</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,589,193</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">80.0%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Williams Natural Gas Liquids, Inc.(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">322,501</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,090,501</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">20.0%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Williams GP LLC(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,830,924</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">100.0%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">28.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Goldman Sachs Group Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">833,850</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(3)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Keith E. Bailey
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,540</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">William A. Bruckmann,&nbsp;III
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,251</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Don J. Gunther
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,485</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(4)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">William W. Hanna
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,648</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,893</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(5)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,196</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,801</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,203</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">All Directors and Executive Officers as a Group
    (12&nbsp;persons)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">45,452</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">(4)(5)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">represents less than 1%
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Williams Energy Services, LLC, Williams Natural
    Gas Liquids, Inc., and Williams GP LLC are direct or indirect
    subsidiaries of Williams and Williams may be deemed the
    beneficial owner of units held by such subsidiaries. The address
    of each of each of these entities is One Williams Center, Tulsa,
    Oklahoma, 74104.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Except for the right to vote on a matter that
    would have a material adverse effect on the rights of holders of
    Class&nbsp;B units, such units do not have any voting rights.
    Under the terms of the Partnership&#146;s agreement of limited
    partnership, Williams Energy Services, LLC and Williams Natural
    Gas Liquids, Inc. are permitted in the aggregate to vote not
    more than 20% of the total number of outstanding units entitled
    to vote at a meeting of the limited partners for the election of
    directors to the Board of Directors of our General Partner. For
    this purpose, each subordinated unit held by those parties will
    count as 0.5 of a vote and 0.5 of a unit. As of
    February&nbsp;28, 2003, Williams Energy Services and Williams
    Natural Gas Liquids would be entitled to collectively cast
    approximately 3,303,908 votes at such a meeting out of the
    approximately 16,519,541 votes that would be deemed outstanding
    for purposes of the meeting. Our limited partnership agreement
    also provides for other limitations on the voting rights of
    subordinated units.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">A filing with the Securities and Exchange
    Commission on February&nbsp;10, 2003, indicates that Goldman
    Sachs Group, Inc. and Goldman, Sachs&nbsp;&#38; Co., a direct
    and indirect wholly-owned subsidiary of Goldman Sachs Group,
    Inc., a broker or dealer registered under Section&nbsp;15 of the
    Securities Exchange Act of 1934, and an investment advisor
    registered under Section&nbsp;203 of the Investment Advisors Act
    of 1940, are or may be deemed to be the beneficial owners of the
    number of Common Units indicated in the table. The address of
    Goldman Sachs Group, Inc. and Goldman, Sachs&nbsp;&#38; Co. is
    85&nbsp;Broad Street, New York, New York 10004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 2,359 Common Units which represent
    deferred compensation granted pursuant to the Williams Energy
    Partners&#146; Long-Term Compensation Plan subject to the right
    of conversion within 60&nbsp;days. The deferred units subject to
    conversion cannot be voted or invested.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">110
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Does not include any units owned by Williams
    Energy Services, LLC, Williams Natural Gas Liquids, Inc., and
    Williams GP LLC, which may be deemed to be beneficially owned by
    Mr.&nbsp;Malcolm in his capacity as Chairman of the Board,
    President and Chief Executive Officer for Williams.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth, as of
February&nbsp;28, 2003, the amount of shares of Common Stock of
Williams, the corporate parent of the sole member of our General
Partner, beneficially owned by each of the General
Partner&#146;s directors, each of the General Partner&#146;s
executive officers named in the Summary Compensation Table, and
by all directors, nominees for director and executive officers
of the General Partner as a&nbsp;group.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name of Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of Common Stock</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Keith E. Bailey
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,085,480</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Don R. Wellendorf
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,682</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven J. Malcolm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">469,455</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John D. Chandler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,051</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael N. Mears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82,273</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85,911</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jay A. Wiese
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,183</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All Directors and Executive officers as a group
    (12&nbsp;persons)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,342,651</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents less than 1%
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes the following shares which represent
    stock options granted under the Williams&#146; stock option
    plans which are exercisable within 60&nbsp;days and thus deemed
    to be beneficially owned by the following individuals:
    Mr.&nbsp;Bailey, 381,243&nbsp;shares; Mr.&nbsp;Wellendorf,
    39,891&nbsp;shares; Mr.&nbsp;Malcolm, 399,772&nbsp;shares;
    Mr.&nbsp;Chandler, 12,210; Mr.&nbsp;Mears, 71,363;
    Mr.&nbsp;Olson, 68,311; and Mr.&nbsp;Wiese, 33,183. The shares
    subject to option cannot be voted or invested.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Changes in Control</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams GP LLC, Williams Energy Services, LLC
and Williams Natural Gas Liquids, Inc. have pledged all of their
units in us to a collateral trustee under debt instruments to
which Williams and certain of its affiliates are debtor parties.
In addition, Williams Energy Services and Williams Natural Gas
Liquids have pledged all of their respective membership
interests in the General Partner and Williams GP LLC, the former
general partner, to the collateral trustee and Williams pledged
its membership interest in Williams Energy Services and all of
its stock in Williams Natural Gas Liquids to the trustee. If the
Partnership units and the membership interests in Williams
Energy Services and Williams Natural Gas Liquids are transferred
to these lenders as a result of a default with respect to such
debt instruments, these holders would be able to elect all of
the members of the General Partners&#146; Board of Directors. In
addition, changes made to the partnership agreement that limited
the voting rights of the subordinated units and Class&nbsp;B
units would be of no further force and effect and the voting
rights of such units would revert back to those in place prior
to such changes. Also, on February&nbsp;20, 2003, Williams
announced its intention to divest its interest in our General
Partner and all of its limited partnership interests.
</FONT>

<!-- link2 "Item 13. Certain Relationships and Related Transactions" -->
<DIV align="left"><A NAME="022"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Certain Relationships and Related
    Transactions</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Steve Malcolm, Phil Wright, and Don Wellendorf
serve or have served in various capacities as executive officers
of Williams, Williams Energy Services and Williams Natural Gas
Liquids. For more information with respect to each
individual&#146;s roles with these affiliated entities, please
read &#147;Item&nbsp;10. Partnership Management&nbsp;&#151;
Directors and Executive Officers of WEG&nbsp;GP&nbsp;LLC.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Energy Marketing&nbsp;&#38; Trading
Company and Williams Refining&nbsp;&#38; Marketing, Williams
Midstream Marketing&nbsp;&#38; Risk Management, subsidiaries of
Williams and affiliates of ours, are significant customers,
representing 9%, 2% and less than 1%, respectively, of our total
revenues for the year ended
</FONT>

<P align="center"><FONT size="2">111
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">December&nbsp;31, 2002. The services we provide
them are conducted pursuant to various contracts. For additional
information relating to our commercial agreements with Williams
and its affiliates, please read &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Related Party Transactions.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Affiliates of Williams own 1,079,694 common
units, 7,830,924 Class&nbsp;B units and 5,679,694 subordinated
units representing an approximate aggregate ownership interest
in us of 55%, including their 2% general partner interest. The
General Partner&#146;s ability, as general partner, to manage
and operate us effectively gives the General Partner the right
to veto some actions of ours and to control our management. For
more information about the limited partnership interest in us
held by affiliates, please read &#147;Item&nbsp;12. Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters&nbsp;&#151; Security Ownership of
Certain Beneficial Owners and Management.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Distributions and Payments to the General
Partner and its Affiliates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the distributions
and payments to be made by us to our General Partner and its
affiliates in connection with our formation, ongoing operation
and liquidation of Williams Energy Partners. These distributions
and payments were determined by and among affiliated entities
and are not the result of arm&#146;s length negotiations.
</FONT>

<P align="left">
<B><FONT size="2">Formation Stage</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">The consideration received by our General Partner
    and its affiliates, Williams Energy Services and Williams
    Natural Gas Liquids, Inc., for the transfer of the
    affiliates&#146; interests in the subsidiaries and a capital
    contribution
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">1,679,694 common units and 5,679,694 subordinated
    units;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">a combined 2% general partner interest in
    Williams Energy Partners L.P. and Williams OLP, L.P.;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the incentive distribution rights; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$166.5&nbsp;million of the net proceeds of our
    initial public offering of the common units and the borrowings
    under the credit facility. In addition, the net proceeds of
    $12.1&nbsp;million from the exercise of the underwriters&#146;
    over-allotment option in our initial public offering were used
    to redeem 600,000 common units from Williams Energy Services, an
    affiliate of the General Partner, as partial reimbursement for
    capital expenditures incurred by Williams Energy Services for
    assets we own after the initial public offering.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Williams Energy Services and Williams Natural Gas
    Liquids, Inc., affiliates of Williams, transferred to us their
    interests in the entities that became our subsidiaries in
    exchange for 1,679,694 common units, 5,679,694 subordinated
    units, the incentive distribution rights and the combined 2%
    general partner interest described above. The common units and
    subordinated units received by Williams Energy Services and
    Williams Natural Gas Liquids, Inc. were valued at the $21.50
    initial public offering price. In addition, the over-allotment
    was exercised for 600,000 common units. Those units were
    redeemed from the 1,357,193 common units initially owned by
    Williams Energy Services. After the redemption of these units,
    affiliates of the Partnership owned 1,079,694 common units.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">112
</FONT>

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<P align="left">
<B><FONT size="2">Operational Stage</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Distributions of available cash to our General
    Partner and its affiliates
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Cash distributions will generally be made 98% to
    the unitholders, including to affiliates of the General Partner
    as holders of common units and subordinated units, and 2% to the
    General Partner. However, distributions that exceed the
    specified target levels will result in our General Partner
    receiving increasing percentages of the distributions, up to 50%
    of the distributions above the highest target level.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Assuming we have sufficient available cash to
    continue to pay distributions on all of our outstanding units
    for four quarters at our current distribution level of
    $0.725&nbsp;per unit per quarter, our General Partner and its
    affiliates would receive annual distributions of approximately
    $1.6&nbsp;million on the combined 2% general partner interest,
    $3.7&nbsp;million of incentive distributions and a distribution
    of approximately $42.3&nbsp;million on their common,
    Class&nbsp;B and subordinated units.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Payments to our General Partner and its affiliates
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Our general partner and its affiliates will not
    receive any management fee or other compensation for the
    management of our operations. Our general partner and its
    affiliates will be reimbursed, however, for direct and indirect
    expenses incurred on our behalf. Per the Omnibus Agreement, in
    2002 we were charged $6.7&nbsp;million, for general and
    administrative expenses, for those assets associated with our
    initial public offering and $21.7&nbsp;million for those assets
    associated with Williams Pipe Line ($30.0&nbsp;million on an
    annualized basis), excluding expenses associated with the
    long-term incentive compensation plans.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Withdrawal or removal of our general partner
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If our general partner withdraws in violation of
    the partnership agreement or is removed for cause, a successor
    general partner has the option to buy the General Partner
    interests and incentive distribution rights for a cash price
    equal to fair market value. If our General Partner withdraws or
    is removed under any other circumstances, the departing general
    partner has the option to require the successor general partner
    to buy the departing general partner&#146;s interests and its
    incentive distribution rights for a cash price equal to fair
    market value.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If either of these options is not exercised, the
    departing general partner&#146;s interests and incentive
    distribution rights will automatically convert into common units
    equal to the fair market value of those interests. In addition,
    we will be required to pay the departing general partner for
    expense reimbursements.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Liquidation Stage</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Liquidation
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Upon our liquidation, the partners, including our
    General Partner, will be entitled to receive liquidating
    distributions according to their particular capital account
    balances.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">113
</FONT>

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<P align="left">
<B><FONT size="2">Rights of Our General Partner</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our General Partner and its affiliates own
1,079,694 common units, 7,830,924 Class&nbsp;B units and
5,679,694 subordinated units, representing a 55% ownership
interest in us, including their 2% general partner interest.
Through the General Partner&#146;s ability, as general partner,
to manage and operate our business and Williams affiliates&#146;
ownership of 1,079,694&nbsp;common units and all of the
outstanding Class&nbsp;B and subordinated units, the General
Partner controls the management of our business.
</FONT>

<P align="left">
<B><FONT size="2">Omnibus Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into an agreement in February 2001
with Williams and its affiliates and our General Partner, that
governs:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">potential competition among us and the other
    parties to the agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">reimbursement of general and administrative
    expenses;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">indemnification for environmental liabilities and
    right-of-way defects or failures;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the grant of a license for use of the ATLAS 2000
    software system and other intellectual property;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">reimbursement of maintenance capital expenditures.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This agreement was amended on three separate
occasions in 2002 to: (i)&nbsp;clarify general and
administrative expenses and rights to software, (ii)&nbsp;add
Williams Pipe Line to certain provisions of the agreement as a
result of the Williams Pipe Line acquisition in April 2002 and
(iii)&nbsp;further clarify license rights and restrictions for
software use. Through a change of control or with 90&nbsp;days
written notice, Williams can terminate its obligations to
provide services to us, which would also eliminate
Williams&#146; obligations under the general and administrative
expense limitation included in the Omnibus Agreement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Competition</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams and its affiliates have agreed that they
will not own or operate assets that are used to transport, store
or distribute ammonia in the United States or terminal and store
refined petroleum products in the continental United States. In
addition, Williams and its affiliates agreed that they will be
prohibited from engaging in or acquiring any business
transporting refined products to a delivery point within a
50-mile radius of any of our refined product delivery points
before April 2005 or transport refinery grade butane from
several refineries on the northern most part of the Williams
Pipe Line system. We refer to these assets below as restricted
assets. Williams will not be prohibited from owning or operating
the following restricted assets:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any restricted assets owned, leased or operated
    by Williams at the closing of our initial public offering on
    February&nbsp;9, 2001;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any restricted assets acquired after
    February&nbsp;9, 2001 with a fair market value not greater than
    $20.0&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any restricted assets constructed by Williams
    after February&nbsp;9, 2001 with construction costs not greater
    than $20.0&nbsp;million;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any restricted assets constructed or acquired by
    Williams after February&nbsp;9, 2001 that are connected to
    assets owned by Williams or are primarily related to and located
    within 50&nbsp;miles of Williams&#146; refinery in Memphis,
    Tennessee.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In return, we agreed that until April 2005, we
would not engage in NGL transportation to a delivery point
within a 50-mile radius of a NGL delivery point owned or
supplied by Williams as of April 2002 and we agreed to use
Mid-America Pipeline for propane and NGL blendstocks into
certain markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If either Williams or we acquire or construct
restricted assets other than those identified above and with a
cost in excess of $20&nbsp;million, the party in breach of the
agreement shall offer to sell such asset to the other party
within six months of acquiring or completing construction. If we
and Williams are unable to agree on the
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">terms of the sale, we and Williams will appoint a
mutually-agreed-upon, nationally-recognized investment banking
firm to determine the fair market value of the restricted
assets. Once the investment bank submits its valuation of the
restricted assets to Williams and us, the party not in breach of
the Omnibus Agreement will have the right, but not the
obligation, to purchase the business in accordance with the
following process:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the valuation of the investment bank is in the
    range between the proposed sale and purchase values of Williams
    and us, the party not in breach will have the right to purchase
    the business at the valuation submitted by the investment bank.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the valuation of the investment bank is less
    than the proposed purchase value submitted by the party not in
    breach, that party we will have the right to purchase the
    business for the amount they submit.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the valuation of the investment bank is
    greater than the proposed sale value submitted by the party in
    breach, the party not in breach will have the right to purchase
    the business for the amount submitted by the party
    in&nbsp;breach.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If either party elects not to purchase any
restricted assets, the other party will be permitted to own or
operate such assets without limitation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">General and Administrative
    Expenses</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2003, we will reimburse the General Partner or
Williams for general and administrative expenses of not more
than $6.9&nbsp;million associated with assets at the time of our
initial public offering and $31.0&nbsp;million associated with
Williams Pipe Line&#146;s operations, excluding expenses
associated with our Long-Term Incentive Plan. Management
estimates that actual general and administrative costs required
for our operation could be significantly higher due in part to
increases in insurance premiums, increased general and
administrative costs for the ammonia pipeline associated with
the new Enterprise operating contract and the $0.3&nbsp;million
of increased general and administrative expense associated with
the Rio Grande contract. The amount associated with the assets
at the time of our initial public offering may increase during
the next eight years as&nbsp;follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in each year after 2003, the amount of general
    and administrative expenses, excluding expenses associated with
    the Long-Term Incentive Plan, allocated to us by Williams and
    the General Partner may increase by no more than the greater of
    7% or the percentage increase in the consumer price index for
    that year.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if we make an acquisition, our general and
    administrative expense allocation may increase by the amount of
    these expenses included in our valuation of the business we
    acquire.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount of general and administrative expense
associated with assets acquired from Williams Pipe Line may
increase during the next nine years as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in each year after 2003, the amount of general
    and administrative expenses, excluding expenses associated with
    the Long-Term Incentive Plan, allocated to us by Williams and
    the General Partner may increase by no more than the lesser of
    2.5% or the percentage increase in the consumer price index for
    that year.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if we make an acquisition, our general and
    administrative expense allocation may increase by the amount of
    these expenses included in our valuation of the business we
    acquire.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Through a change of control or with 90&nbsp;days
written notice, Williams can terminate its obligations to
provide services to us, which would also eliminate
Williams&#146; obligations under the general and administrative
expense limitation included in the Omnibus Agreement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Indemnification</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams Energy Services and Williams Natural Gas
Liquids, Inc. have agreed to indemnify us for up to
$15.0&nbsp;million for environmental liabilities that exceed the
amounts covered by the seller indemnities and insurance
coverage. The indemnity applies to environmental liabilities
arising from conduct prior to February&nbsp;9, 2001 and
discovered within three years of February&nbsp;9, 2001.
Liabilities resulting from a change in
</FONT>

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<DIV align="left">
<FONT size="2">law after February&nbsp;9, 2001 are excluded from
this indemnity. Williams Natural Gas Liquids, Inc. will
indemnify us for right-of-way defects or failures in our ammonia
pipeline for 15&nbsp;years after the date of February&nbsp;9,
2001. Williams Energy Services will indemnify us for
right-of-way defects or failures associated with our marine
terminal facilities at Galena Park and Corpus Christi, Texas and
Marrero, Louisiana for 15&nbsp;years after February&nbsp;9, 2001.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisition of Williams
Pipe Line, Williams Energy Services agreed to indemnify us for
any breach of a representation or warranty that results in
losses and damages of up to $110.0&nbsp;million after the
payment of a $2.0&nbsp;million deductible. With respect to any
amount exceeding $110.0&nbsp;million, WES will be responsible
for one-half of that amount up to $140.0&nbsp;million. In no
event will WES&#146; liability under these indemnities exceed
$125.0&nbsp;million. These indemnification obligations will
survive for one year, except that those relating to employees
and employee benefits will survive for the applicable statute of
limitations and those relating to real property, including title
to WES&#146; assets, will survive for ten years. This indemnity
also provides that we will be indemnified for an unlimited
amount of losses and damages related to tax liabilities. In
addition, any losses and damages related to environmental
liabilities that arose prior to the acquisition will be subject
only to a $2.0&nbsp;million deductible, which was met during
2002, for claims made within six years of our acquisition of
Williams Pipe Line in April 2002. Williams has provided a
performance guarantee for the remaining amount of these
environmental indemnities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">ATLAS 2000 License</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Williams and its affiliates have granted a
license to us for the use of the ATLAS 2000 software system (and
to permit customers to use the system to track inventories) and
other intellectual property, including our logo, for as long as
Williams controls our General Partner, at no charge. In the
event of a termination of the Omnibus Agreement, we may, at our
option, require Williams to transfer all right, title and
interest in the ATLAS system to Williams Pipe Line at no cost.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Maintenance Capital
    Expenditures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2003 and 2004, Williams has agreed to
reimburse us for maintenance capital expenditures associated
with Williams Pipe Line&#146;s operations in excess of
$19.0&nbsp;million per year, subject to a maximum aggregate
reimbursement of $15.0&nbsp;million over this two year period.
At our current projected maintenance capital expenditure plans,
we do not anticipate any reimbursements from Williams under this
agreement.
</FONT>

<!-- link2 "Item 14. Controls and Procedures" -->
<DIV align="left"><A NAME="023"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Controls and Procedures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures (as
defined in rule&nbsp;13a-14(c) of the Securities Exchange Act)
was performed within the 90&nbsp;days prior to the filing date
of this report. This evaluation was performed under the
supervision and with the participation of our management,
including the General Partner&#146;s Chief Executive Officer and
Chief Financial Officer. Based upon that evaluation, the General
Partner&#146;s Chief Executive Officer and Chief Financial
Officer concluded that these disclosure controls and practices
are effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A self-evaluation of our internal controls was
performed during January and February 2003. We concluded that
there were no significant deficiencies or material weaknesses in
its internal controls. There have been no significant changes in
our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
the certifying officers&#146; most recent evaluation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have furnished as a correspondence filing to
the Securities and Exchange Commission the certifications of
this report by the General Partner&#146;s Chief Executive
Officer and Chief Financial Officer as required pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of&nbsp;2002.
</FONT>

<P align="center"><FONT size="2">116
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PART IV" -->
<DIV align="left"><A NAME="024"></A></DIV>

<P align="center">
<B><FONT size="2">PART&nbsp;IV</FONT></B>

<!-- link2 "Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K" -->
<DIV align="left"><A NAME="025"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Exhibits, Financial Statement Schedules,
    and Reports on Form&nbsp;8-K</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;1 and 2.
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Covered by reports of independent auditors:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated statements of income for the three
    years ended December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated balance sheets at December&nbsp;31,
    2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated statements of cash flows for the
    three years ended December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated statement of partners&#146; capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes&nbsp;1 through 22 to Consolidated financial
    statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Not covered by reports of independent auditors:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarterly financial data (unaudited)&nbsp;&#151;
    See Note&nbsp;17 to consolidated financial statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Registration statement&nbsp;&#151; See
    Note&nbsp;21
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">All other schedules have been omitted since the
    required information is not present or is not present in amounts
    sufficient to require submission of the schedule, or because the
    information required is included in the financial statements and
    notes thereto.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a) 3 and (c).&nbsp;<I>The exhibits listed below
are filed as part of this annual report.</I>
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(a)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Agreement of Limited
    Partnership of Williams OLP, L.P. dated February&nbsp;9, 2001
    (filed as Exhibit&nbsp;3(b) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(b)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Reorganization Agreement dated March&nbsp;4,
    2002, among Williams Energy Partners L.P., Williams OLP, L.P.,
    Williams GP LLC, and Williams GP Inc. (filed as
    Exhibit&nbsp;3(d) to Form&nbsp;10-K filed March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Limited Partnership of Williams
    Energy Partners L.P. dated August&nbsp;30, 2000 and Amendment to
    the Certificate of Limited Partnership of Williams Energy
    Partners L.P. dated November&nbsp;15, 2002.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(d)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amended and Restated Agreement of Limited
    Partnership of Williams Energy Partners L.P. dated
    September&nbsp;30, 2002 (filed as Exhibit&nbsp;10.3 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(e)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Second Amended and
    Restated Agreement of Limited Partnership of Williams Energy
    Partners L.P. dated November&nbsp;15, 2002 (filed as
    Exhibit&nbsp;3.1 to Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(f)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to Second Amended and
    Restated Agreement of Limited Partnership of Williams Energy
    Partners L.P. dated November&nbsp;15, 2002 (filed as
    Exhibit&nbsp;3.2 to Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(g)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Limited Liability Company Agreement of WEG GP LLC
    dated November&nbsp;15, 2002 (filed as Exhibit&nbsp;3.3 to
    Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(h)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to Limited Liability Company
    Agreement of WEG GP LLC dated March&nbsp;3, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(i)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Contribution Agreement dated April&nbsp;11, 2002
    between Williams Energy Partners L.P., Williams GP LLC, and
    Williams Energy Services, LLC (filed as Exhibit&nbsp;10 to
    Form&nbsp;8-K filed April&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(a)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Credit Agreement dated February&nbsp;6, 2001,
    between Williams OLP, L.P., Bank of America, N.A., Lehman
    Commercial Paper, Inc., and Suntrust Bank, including Amendment
    No.&nbsp;1 dated July&nbsp;31, 2001, and Amendment No.&nbsp;2
    dated July&nbsp;31, 2001 (filed as Exhibit&nbsp;10(a) to
    Form&nbsp;10-K filed March&nbsp;7, 2002).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">117
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(b)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Contribution, Conveyance and Assumption Agreement
    dated February&nbsp;9, 2001, between Williams Energy Partners
    L.P.; Williams OLP, L.P.; Williams GP LLC; Williams Energy
    Services, LLC; Williams Natural Gas Liquids, Inc.; Williams NGL,
    LLC; Williams Terminal Holdings, L.P.; Williams Terminal
    Holdings, L.L.C.; Williams Ammonia Pipeline, L.P. and Williams
    Bio-Energy, LLC (filed as Exhibit&nbsp;10(b) to Form&nbsp;10-K
    filed March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(c)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Omnibus Agreement dated February&nbsp;9, 2001,
    between Williams Companies, Inc.; Williams Energy Services, LLC;
    Williams Natural Gas Liquids, Inc.; Williams Pipe Line Company,
    LLC; Williams Information Services Corporation; Williams Energy
    Partners L.P.; Williams OLP, L.P. and Williams GP LLC, and
    Amendment&nbsp;1 to the Omnibus Agreement dated January&nbsp;28,
    2002 (filed as Exhibit&nbsp;10(c) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(d)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase and Sale Agreement dated
    October&nbsp;18, 2001, between Geonet Gathering, Inc. and
    Williams Terminals Holdings, L.P., including Exhibits&nbsp;A, B,
    C and D (filed as Exhibit&nbsp;10(d) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(e)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Products Terminalling Agreement dated
    November&nbsp;1, 2001, between Williams Terminals Holdings, L.P.
    and Williams Energy Marketing&nbsp;&#38; Trading Company (filed
    as Exhibit&nbsp;10(e) to Form&nbsp;10-K filed March&nbsp;7,
    2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(f)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Facilities Sale Agreement dated June&nbsp;30,
    2001, between Transmontaigne, Inc. and Williams Terminals
    Holdings, L.P., including Schedules&nbsp;2.1(a) and 2.1(b) and
    (c) (filed as Exhibit&nbsp;10(f) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(g)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amended and Restated Williams Energy
    Partners Long-Term Incentive Plan.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(h)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Services Agreement dated September&nbsp;30, 2002,
    between Williams Energy Partners L.P., Williams GP LLC, a
    Delaware limited liability company, Williams Petroleum Services,
    L.L.C., and Williams Energy Services, LLC (filed as
    Exhibit&nbsp;10.1 to Form&nbsp;10-Q filed November&nbsp;14,
    2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(i)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Third Amendment to Omnibus Agreement dated
    September&nbsp;30, 2002, between The Williams Companies, Inc.,
    Williams Energy Services, LLC, Williams Natural Gas Liquids,
    Inc., Williams Pipe Line Company, LLC, Williams Information
    Technology, Inc. (formerly Williams Information Services
    Corporation), Williams Energy Partners L.P., Williams GP LLC,
    and Williams OLP, L.P. (filed as Exhibit&nbsp;10.2 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(j)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Note Purchase Agreement dated October&nbsp;31,
    2002 (filed as Exhibit&nbsp;10.6 to Form&nbsp;10-Q filed
    November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(k)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Security Agreement dated as of October&nbsp;31,
    2002 (filed as Exhibit&nbsp;10.7 to Form&nbsp;10-Q filed
    November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(l)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Collateral Agency Agreement dated
    October&nbsp;31, 2002 (filed as Exhibit&nbsp;10.8 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(m)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Assignment, Assumption and Amendment Agreement
    dated November&nbsp;15, 2002, between Williams GP LLC, WEG GP
    LLC, Williams Energy Partners L.P., Williams Energy Services,
    LLC, and Williams Natural Gas Liquids, Inc. (filed as
    Exhibit&nbsp;10 to Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(n)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Credit Agreement dated April&nbsp;11, 2002, among
    Williams Pipe Line Company, LLC, Williams Energy Partners L.P.,
    the lenders thereto, and Bank of America, N.A., as
    administrative agent (the &#147;Credit Agreement&#148;).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(o)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to Credit Agreement dated
    October&nbsp;8, 2002 (filed as Exhibit&nbsp;10.5 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of WEG GP LLC and Williams Energy
    Partners L.P.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Independent Auditor.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney together with certified
    resolution.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">WEG GP LLC consolidated balance sheet at
    December&nbsp;31, 2002 and notes thereto.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Each such exhibit has heretofore been filed with
    the Securities and Exchange Commission as part of the filing
    indicated and is incorporated herein by reference.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">118
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;<I>Reports on Form&nbsp;8-K.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">On October&nbsp;24, 2002, we filed a report on
    Form&nbsp;8-K under Item&nbsp;5 reporting that we had extended
    the maturity of our short-term loan associated with the
    acquisition of Williams Pipe Line Company, LLC until
    November&nbsp;27, 2002, and were negotiating long-term debt
    financing to retire the short-term loan within the timeframe of
    the extension. We also filed as an exhibit under Item&nbsp;7 a
    press release announcing the information reported under
    Item&nbsp;5.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">On November&nbsp;19, 2002, we filed a report on
    Form&nbsp;8-K under Item&nbsp;5 reporting amendments to our
    partnership agreement, the establishment of a new general
    partner and matters regarding the configuration of the new
    General Partner&#146;s board of directors. We also filed as
    exhibits under Item&nbsp;7 Amendment No.&nbsp;1 to Second
    Amended and Restated Agreement of Limited Partnership of
    Williams Energy Partners L.P., Amendment No.&nbsp;2 to Second
    Amended and Restated Agreement of Limited Partnership of
    Williams Energy Partners L.P., the Limited Liability Company
    Agreement of WEG GP LLC, and an Assignment, Assumption and
    Amendment Agreement dated as of November&nbsp;15, 2002, entered
    into by and between Williams GP LLC, WEG GP LLC, Williams Energy
    Services, LLC, Williams Natural Gas Liquids, Inc. and us.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">On October&nbsp;29, 2002; November&nbsp;4, 2002;
    November&nbsp;15, 2002; November&nbsp;25, 2002; and
    December&nbsp;6, 2002; we furnished reports on Form&nbsp;8-K
    under Item&nbsp;9.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;<I>We do not own any partially-owned
companies.</I>
</FONT>

<P align="left">
<B><FONT size="2">Changes in Securities and Use of
Proceeds</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;11, 2002, we issued 7,830,924
Class&nbsp;B units representing limited partner interests to
Williams GP LLC. The securities, valued at $304.4&nbsp;million,
were issued as partial payment for the acquisition of Williams
Pipe Line. We have the right to redeem the Class&nbsp;B units
for cash based on the 15-day average closing price of the common
units prior to the redemption date. If the Class&nbsp;B units
are not redeemed by April&nbsp;11, 2003, upon the request of the
holders of the Class&nbsp;B units and approval of the holders of
a majority of the common units voting at a meeting of the
unitholders, the Class&nbsp;B units will convert into common
units. If the approval of the conversion by the common
unitholders is not obtained within 120&nbsp;days of this
request, the holders of the Class&nbsp;B units will be entitled
to receive distributions with respect to its Class&nbsp;B units,
on a per unit basis, equal to 115% of the amount of
distributions paid on a common unit. These securities are exempt
from registration pursuant to Section&nbsp;4(2) of the
Securities Act of 1933.
</FONT>

<P align="center"><FONT size="2">119
</FONT>

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<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="026"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of Section&nbsp;13
or 15(d) of the Securities Exchange Act of 1934, we have duly
caused this report to be signed on our behalf by the
undersigned, thereunto duly authorized.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">WILLIAMS ENERGY PARTNERS L.P.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(Registrant)
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">WEG GP LLC, its General Partner
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ CRAIG R. RICH
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Craig R. Rich
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Attorney-in-fact</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: March&nbsp;21, 2003
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on our behalf and in the capacities and on the
dates indicated.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="36%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ DON R. WELLENDORF*<BR>
    <HR size="1" noshade>Don R. Wellendorf
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">President, Chief Executive Officer<BR>
    and Director of WEG GP LLC, General Partner of Williams Energy
    Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ JOHN D. CHANDLER*<BR>
    <HR size="1" noshade>John D. Chandler
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Treasurer and Chief Financial Officer of WEG GP
    LLC, General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ PHILLIP D. WRIGHT*<BR>
    <HR size="1" noshade>Phillip D. Wright
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Chairman of the Board and Director of WEG GP LLC,
    General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ STEVEN J. MALCOLM*<BR>
    <HR size="1" noshade>Steven J. Malcolm
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Director of WEG GP LLC,<BR>
    General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ KEITH E. BAILEY*<BR>
    <HR size="1" noshade>Keith E. Bailey
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Director of WEG GP LLC,<BR>
    General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ WILLIAM A. BRUCKMANN,&nbsp;III*<BR>
    <HR size="1" noshade>William A. Bruckmann,&nbsp;III
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Director of WEG GP LLC,<BR>
    General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ DON J. GUNTHER*<BR>
    <HR size="1" noshade>Don J. Gunther
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Director of WEG GP LLC,<BR>
    General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">120
</FONT>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="36%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="1">/s/ WILLIAM W. HANNA*<BR>
    <HR size="1" noshade>William W. Hanna
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">Director of WEG GP LLC,<BR>
    General Partner of Williams Energy Partners L.P.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="1">*By:
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">/s/ CRAIG R. RICH<BR>
    <HR size="1" noshade>Craig R. Rich<BR>
     <I>Attorney-in-fact</I>
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="1">March&nbsp;21, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">121
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "CERTIFICATIONS" -->
<DIV align="left"><A NAME="027"></A></DIV>

<P align="center">
<B><FONT size="2">CERTIFICATIONS</FONT></B>

<P align="left">
<FONT size="2">I, Don R. Wellendorf, President and Chief
Executive Officer of WEG GP LLC, the General Partner of Williams
Energy Partners L.P., certify that:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;I have reviewed this annual report on
Form&nbsp;10-K of Williams Energy Partners L.P.;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
annual report;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;Based on my knowledge, the financial
statements, and other financial information included in this
annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual
report;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;The registrant&#146;s other certifying
officers and&nbsp;I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in
Exchange Act Rules&nbsp;13a-14 and 15d-14) for the registrant
and have:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;evaluated the effectiveness of the
    registrant&#146;s disclosure controls and procedures as of a
    date within 90&nbsp;days prior to the filing date of this annual
    report (the &#147;Evaluation Date&#148;);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c)&nbsp;presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;The registrant&#146;s other certifying
officers and&nbsp;I have disclosed, based on our most recent
evaluation, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons
performing the equivalent functions):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrant&#146;s ability to record, process,
    summarize and report financial data and have identified for the
    registrant&#146;s auditors any material weaknesses in internal
    controls;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrant&#146;s internal controls; and
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;The registrant&#146;s other certifying
officers and&nbsp;I have indicated in this annual report whether
there were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies
and material weaknesses.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ DON R. WELLENDORF
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Don R. Wellendorf
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">President and Chief Executive Officer
    of</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">WEG GP LLC, General Partner of</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Williams Energy Partners L.P.</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: March&nbsp;21, 2003
</FONT>

<P align="center"><FONT size="2">122
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<FONT size="2">I, John D. Chandler, Treasurer and Chief
Financial Officer of WEG GP LLC, the General Partner of Williams
Energy Partners L.P., certify that:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;I have reviewed this annual report on
Form&nbsp;10-K of Williams Energy Partners L.P.;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
annual report;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;Based on my knowledge, the financial
statements, and other financial information included in this
annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual
report;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;The registrant&#146;s other certifying
officers and&nbsp;I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in
Exchange Act Rules&nbsp;13a-14 and 15d-14) for the registrant
and have:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;evaluated the effectiveness of the
    registrant&#146;s disclosure controls and procedures as of a
    date within 90&nbsp;days prior to the filing date of this annual
    report (the &#147;Evaluation Date&#148;);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c)&nbsp;presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;The registrant&#146;s other certifying
officers and&nbsp;I have disclosed, based on our most recent
evaluation, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons
performing the equivalent functions):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrant&#146;s ability to record, process,
    summarize and report financial data and have identified for the
    registrant&#146;s auditors any material weaknesses in internal
    controls;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrant&#146;s internal controls; and
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;The registrant&#146;s other certifying
officers and&nbsp;I have indicated in this annual report whether
there were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies
and material weaknesses.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ JOHN D. CHANDLER
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">John D. Chandler
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Treasurer and Chief Financial Officer
    of</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">WEG GP LLC, General Partner of</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Williams Energy Partners L.P.</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: March&nbsp;21, 2003
</FONT>

<P align="center"><FONT size="2">123
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INDEX TO EXHIBITS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(a)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Agreement of Limited
    Partnership of Williams OLP, L.P. dated February&nbsp;9, 2001
    (filed as Exhibit&nbsp;3(b) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(b)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Reorganization Agreement dated March&nbsp;4,
    2002, among Williams Energy Partners L.P., Williams OLP, L.P.,
    Williams GP LLC, and Williams GP Inc. (filed as
    Exhibit&nbsp;3(d) to Form&nbsp;10-K filed March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Limited Partnership of Williams
    Energy Partners L.P. dated August&nbsp;30, 2000 and Amendment to
    the Certificate of Limited Partnership of Williams Energy
    Partners L.P. dated November&nbsp;15, 2002.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(d)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amended and Restated Agreement of Limited
    Partnership of Williams Energy Partners L.P. dated
    September&nbsp;30, 2002 (filed as Exhibit&nbsp;10.3 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(e)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Second Amended and
    Restated Agreement of Limited Partnership of Williams Energy
    Partners L.P. dated November&nbsp;15, 2002 (filed as
    Exhibit&nbsp;3.1 to Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(f)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to Second Amended and
    Restated Agreement of Limited Partnership of Williams Energy
    Partners L.P. dated November&nbsp;15, 2002 (filed as
    Exhibit&nbsp;3.2 to Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(g)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Limited Liability Company Agreement of WEG GP LLC
    dated November&nbsp;15, 2002 (filed as Exhibit&nbsp;3.3 to
    Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(h)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to Limited Liability Company
    Agreement of WEG GP LLC dated March&nbsp;3, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3(i)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Contribution Agreement dated April&nbsp;11, 2002
    between Williams Energy Partners L.P., Williams GP LLC, and
    Williams Energy Services, LLC (filed as Exhibit&nbsp;10 to
    Form&nbsp;8-K filed April&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(a)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Credit Agreement dated February&nbsp;6, 2001,
    between Williams OLP, L.P., Bank of America, N.A., Lehman
    Commercial Paper, Inc., and Suntrust Bank, including Amendment
    No.&nbsp;1 dated July&nbsp;31, 2001, and Amendment No.&nbsp;2
    dated July&nbsp;31, 2001 (filed as Exhibit&nbsp;10(a) to
    Form&nbsp;10-K filed March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(b)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Contribution, Conveyance and Assumption Agreement
    dated February&nbsp;9, 2001, between Williams Energy Partners
    L.P.; Williams OLP, L.P.; Williams GP LLC; Williams Energy
    Services, LLC; Williams Natural Gas Liquids, Inc.; Williams NGL,
    LLC; Williams Terminal Holdings, L.P.; Williams Terminal
    Holdings, L.L.C.; Williams Ammonia Pipeline, L.P. and Williams
    Bio-Energy, LLC (filed as Exhibit&nbsp;10(b) to Form&nbsp;10-K
    filed March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(c)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Omnibus Agreement dated February&nbsp;9, 2001,
    between Williams Companies, Inc.; Williams Energy Services, LLC;
    Williams Natural Gas Liquids, Inc.; Williams Pipe Line Company,
    LLC; Williams Information Services Corporation; Williams Energy
    Partners L.P.; Williams OLP, L.P. and Williams GP LLC, and
    Amendment&nbsp;1 to the Omnibus Agreement dated January&nbsp;28,
    2002 (filed as Exhibit&nbsp;10(c) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(d)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase and Sale Agreement dated
    October&nbsp;18, 2001, between Geonet Gathering, Inc. and
    Williams Terminals Holdings, L.P., including Exhibits&nbsp;A, B,
    C and D (filed as Exhibit&nbsp;10(d) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(e)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Products Terminalling Agreement dated
    November&nbsp;1, 2001, between Williams Terminals Holdings, L.P.
    and Williams Energy Marketing&nbsp;&#38; Trading Company (filed
    as Exhibit&nbsp;10(e) to Form&nbsp;10-K filed March&nbsp;7,
    2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(f)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Facilities Sale Agreement dated June&nbsp;30,
    2001, between Transmontaigne, Inc. and Williams Terminals
    Holdings, L.P., including Schedules&nbsp;2.1(a) and 2.1(b) and
    (c) (filed as Exhibit&nbsp;10(f) to Form&nbsp;10-K filed
    March&nbsp;7, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(g)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amended and Restated Williams Energy
    Partners Long-Term Incentive Plan.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(h)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Services Agreement dated September&nbsp;30, 2002,
    between Williams Energy Partners L.P., Williams GP LLC, a
    Delaware limited liability company, Williams Petroleum Services,
    L.L.C., and Williams Energy Services, LLC (filed as
    Exhibit&nbsp;10.1 to Form&nbsp;10-Q filed November&nbsp;14,
    2002).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(i)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Third Amendment to Omnibus Agreement dated
    September&nbsp;30, 2002, between The Williams Companies, Inc.,
    Williams Energy Services, LLC, Williams Natural Gas Liquids,
    Inc., Williams Pipe Line Company, LLC, Williams Information
    Technology, Inc. (formerly Williams Information Services
    Corporation), Williams Energy Partners L.P., Williams GP LLC,
    and Williams OLP, L.P. (filed as Exhibit&nbsp;10.2 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(j)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Note Purchase Agreement dated October&nbsp;31,
    2002 (filed as Exhibit&nbsp;10.6 to Form&nbsp;10-Q filed
    November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(k)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Security Agreement dated as of October&nbsp;31,
    2002 (filed as Exhibit&nbsp;10.7 to Form&nbsp;10-Q filed
    November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(l)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Collateral Agency Agreement dated
    October&nbsp;31, 2002 (filed as Exhibit&nbsp;10.8 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(m)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Assignment, Assumption and Amendment Agreement
    dated November&nbsp;15, 2002, between Williams GP LLC, WEG GP
    LLC, Williams Energy Partners L.P., Williams Energy Services,
    LLC, and Williams Natural Gas Liquids, Inc. (filed as
    Exhibit&nbsp;10 to Form&nbsp;8-K filed November&nbsp;19, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(n)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Credit Agreement dated April&nbsp;11, 2002, among
    Williams Pipe Line Company, LLC, Williams Energy Partners L.P.,
    the lenders thereto, and Bank of America, N.A., as
    administrative agent (the &#147;Credit Agreement&#148;).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10(o)</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to Credit Agreement dated
    October&nbsp;8, 2002 (filed as Exhibit&nbsp;10.5 to
    Form&nbsp;10-Q filed November&nbsp;14, 2002).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of WEG GP LLC and Williams Energy
    Partners L.P.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Independent Auditor.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney together with certified
    resolution.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">WEG GP LLC consolidated balance sheet at
    December&nbsp;31, 2002 and notes thereto.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Each such exhibit has heretofore been filed with
    the Securities and Exchange Commission as part of the filing
    indicated and is incorporated herein by reference.
    </FONT></TD>
</TR>

</TABLE>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(C)
<SEQUENCE>3
<FILENAME>d04048exv3wxcy.txt
<DESCRIPTION>EX-3.(C) CERTIFICATE OF LIMITED PARTNERSHIP
<TEXT>
<PAGE>
                                                                    EXHIBIT 3(c)

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                          WILLIAMS ENERGY PARTNERS L.P.

      The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter 17,
do hereby certify as follows:

      I.    The name of the limited partnership is:

                          WILLIAMS ENERGY PARTNERS L.P.

      II.   The address of the Partnership's registered office in the State of
            Delaware is Corporation Trust Center, 1209 Orange Street,
            Wilmington, County of New Castle. The name of the Partnership's
            registered agent for service of process in the State of Delaware at
            such address is The Corporation Trust Company.

      III.  The name and mailing address of each partner is as follows:

            Williams Energy Services           Williams GP LLC
            One Williams Center                One Williams Center
            Tulsa, OK  74172                   Tulsa, OK  74172

      IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Limited Partnership of WILLIAMS ENERGY PARTNERS L.P. this 30th day of August,
2000.

                                            WILLIAMS ENERGY SERVICES
                                            Limited Partner

                                            By: /s/ Steven J. Malcolm
                                               -------------------------------
                                                Authorized Person


                                            WILLIAMS GP LLC
                                            General Partner

                                            By: /s/ Steven J. Malcolm
                                               -------------------------------
                                                Authorized Person

<PAGE>

                         AMENDMENT TO THE CERTIFICATE OF
                               LIMITED PARTNERSHIP
                                       OF
                          WILLIAMS ENERGY PARTNERS L.P.

      The undersigned, desiring to amend the Certificate of Limited Partnership
of WILLIAMS ENERGY PARTNERS L.P., pursuant to the provisions of Section 17-202
of the Revised Uniform Limited Partnership Act of the State of Delaware, does
hereby certify as follows:

      FIRST: The name of the Limited Partnership is WILLIAMS ENERGY PARTNERS
L.P.

      SECOND: Article III of the Certificate of Limited Partnership shall be
amended as follows: WILLIAMS GP LLC withdraws as general partner of WILLIAMS
ENERGY PARTNERS L.P. WEG GP LLC is admitted as the new general partner of
WILLIAMS ENERGY PARTNERS L.P. The mailing address of WEG GP LLC is as follows:

                               One Williams Center
                              Tulsa, Oklahoma 74172
                        Attn: Craig Rich, General Counsel

      IN WITNESS WHEREOF, the undersigned executed this Amendment to the
Certificate of Limited Partnership on this 15 day of November, A.D. 2002.

                                             WEG GP LLC
                                             General Partner


                                             By: /s/ Craig R. Rich
                                                 -------------------------------
                                                 Craig R. Rich
                                                 Authorized Person

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(H)
<SEQUENCE>4
<FILENAME>d04048exv3wxhy.txt
<DESCRIPTION>EX-3.(H) AMENDMENT TO LIMITED LIABILITY AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 3(h)

                               FIRST AMENDMENT TO
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                                   WEG GP LLC

      This First Amendment (this "Amendment") to Limited Liability Company
Agreement (the "Agreement") of WEG GP LLC (the "Company"), a Delaware limited
liability company, dated as of March 3, 2003, is adopted, executed and agreed to
by Williams Energy Services, LLC, a Delaware Limited Liability Company, and
Williams Natural Gas Liquids, Inc., a Delaware corporation, as the sole members
("Members") of the Company, pursuant to authority granted in Article XIII of the
Agreement. Capitalized terms used but not defined herein are used as defined in
the Agreement.

      WHEREAS, Section 13.05 of the Agreement provides that the Agreement may
only be amended by a written instrument executed by the Members (except in the
case of amendments to certain provisions contained in Article VII that must be
approved by the Board and are otherwise subject to the restrictions on amendment
contained in such Article); and

      WHEREAS, the Members deem it to be in the best interest of the Company to
delete subsection (a) of Section 4.03 of the Agreement ("Section 4.03"), so as
to eliminate from the Agreement any requirement that documents relating to a
proposed disposition by a Member of its Membership Interest be submitted to, or
approved by, Board prior to or in connection with any such disposition.

      NOW, THEREFORE, the Agreement is hereby amended as follows:

      1. The first paragraph of Section 4.03 is hereby amended and restated to
read in its entirety as follows:

            "Any Disposition of Membership Interests and any admission of an
      Assignee as a Member shall also be subject to the following requirements,
      and such Disposition (and admission, if applicable) shall not be effective
      unless such requirements are complied with:"

      2. Subsection (a) of Section 4.03 is hereby amended and restated to read
in its entirety as follows:

            "(a) Payment of Expenses. The Disposing Member and its Assignee
      shall pay, or reimburse the Company for, all reasonable costs and expenses
      incurred by the Company in connection with the Disposition and admission
      of the Assignee as a member."

      3. Subsection (b) of Section 4.03 is hereby amended and restated to read
in its entirety as follows:

            "(b) No Release. No Disposition of Membership Interests shall effect
      a release of the Disposing Member from any liabilities to the Company or
      the other Members arising from events occurring prior to the Disposition,
      except as

<PAGE>

      otherwise may be provided in any instrument or agreement pursuant to which
      a Disposition of Membership Interests is effected."

      4. Subsection (c) of Section 4.03 is hereby deleted in its entirety.

      5. Except as hereby amended, the Agreement shall remain in full force and
effect.

      6. This Amendment shall be governed by, and interpreted in accordance
with, the laws of the State of Delaware, all rights and remedies being governed
by such laws without regard to principles of conflicts of laws.

      7. Each provision of this Amendment shall be considered severable and if
for any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of or affect those
portions of this Amendment that are valid, enforceable and legal.

IN WITNESS WHEREOF, this Amendment has been executed as of the date first
written above.

                                              Williams Energy Services, LLC
                                              Member

                                              By: /s/ Alan S. Armstrong
                                                 -------------------------------
                                              Name: Alan S. Armstrong
                                              Title: Senior Vice President


                                              Williams Natural Gas Liquids, Inc.
                                              Member


                                              By: /s/ Alan S. Armstrong
                                                 -------------------------------
                                              Name: Alan S. Armstrong
                                              Title: Senior Vice President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(G)
<SEQUENCE>5
<FILENAME>d04048exv10wxgy.txt
<DESCRIPTION>EX-10.(G) AMENDED LONG-TERM INCENTIVE PLAN
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(g)

                           SECOND AMENDED AND RESTATED
                            WILLIAMS ENERGY PARTNERS
                            LONG-TERM INCENTIVE PLAN
                                February 3, 2003

      SECTION 1. Purpose of the Plan.

      The Williams Energy Partners Long-Term Incentive Plan (the "Plan") is
intended to promote the interests of Williams Energy Partners, L.P., a Delaware
limited partnership (the "Partnership"), by providing to employees and directors
of WEG GP LLC, a Delaware limited liability company (the "Company"), the general
partner of the Partnership (and the successor to Williams GP LLC, the former
general partner) and its Affiliates who perform services for the Partnership
incentive compensation awards for superior performance that are based on Units.
Solely for the purposes of determining those employees eligible for
participation in the Plan, The Williams Companies, Inc. ("Williams") and its
Affiliates shall be deemed to be Affiliates of the Company for so long as
Williams and/or its Affiliates own a membership interest in the Company. The
Plan is also contemplated to enhance the ability of the Company and its
Affiliates to attract and retain the services of individuals who are essential
for the growth and profitability of the Partnership and to encourage them to
devote their best efforts to the business of the Partnership, thereby advancing
the interests of the Partnership and its partners.

      SECTION 2. Definitions.

      As used in the Plan, the following terms shall have the meanings set forth
below:

      "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

      "Award" means an Option, Phantom Unit or Performance Award granted under
the Plan, and shall include any tandem DERs granted with respect to a Phantom
Unit.

      "Award Agreement" means the written agreement by which an Award shall be
evidenced.

      "Board" means the Board of Directors of the Company.

      "Committee" means the Compensation Committee of the Board or such other
committee of the Board appointed by the Board to administer the Plan.

      "DER" means a contingent right, granted in tandem with a specific Phantom
Unit, to receive an amount in cash equal to the cash distributions made by the
Partnership with respect to a Unit during the period such Phantom Unit is
outstanding.

<PAGE>

      "Director" means a member of the Board who is not an Employee.

      "Disability" shall have the meaning ascribed to such term in the Company's
governing long-term disability plan, or if no such plan is applicable to the
Participant, at the discretion of the Board.

      "Employee" means any employee of the Company or an Affiliate who performs
services for the Partnership, as determined by the Committee.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Fair Market Value" means the closing sales price of a Unit on the
applicable date (or if there is no trading in the Units on such date, on the
next preceding date on which there was trading) as reported in The Wall Street
Journal (or other reporting service approved by the Committee). In the event
Units are not publicly traded at the time a determination of fair market value
is required to be made hereunder, the determination of fair market value shall
be made in good faith by the Committee.

      "Option" means an option to purchase Units granted under the Plan.

      "Participant" means any Employee or Director granted an Award under the
Plan.

      "Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of Williams Energy Partners, L.P, as it may be amended or
amended and restated from time to time.

      "Performance Award" means a right, granted under Section 6(c) hereof, to
receive Awards based upon performance criteria specified by the Committee.

      "Person" means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

      "Phantom Unit" means a phantom (notional) Unit granted under the Plan
which upon vesting entitles the Participant to receive a Unit or an amount of
cash equal to the Fair Market Value of a Unit, whichever is determined by the
Committee.

      "Restricted Period" means the period established by the Committee with
respect to an Award during which the Award remains subject to forfeiture and is
not exercisable by or payable to the Participant.

      "Retirement" shall have the meaning ascribed to such term in the Company's
governing tax-qualified retirement plan applicable to the Participant, or if no
such plan is applicable to the Participant, at the discretion of the Board.


                                      -2-
<PAGE>

      "Rule 16b-3" means Rule 16b-3 promulgated by the SEC under the Exchange
Act, or any successor rule or regulation thereto as in effect from time to time.

      "SEC" means the Securities and Exchange Commission, or any successor
thereto.

      "Unit" means a Common Unit of the Partnership.

      "Williams" means The Williams Companies, Inc.

      SECTION 3. Administration.

      The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following and any applicable law,
the Committee, in its sole discretion, may delegate any or all of its powers and
duties under the Plan, including the power to grant Awards under the Plan, to
the Chief Executive Officer of the Company, subject to such limitations on such
delegated powers and duties as the Committee may impose, if any. Upon any such
delegation all references in the Plan to the "Committee", other than in Section
7, shall be deemed to include the Chief Executive Officer; provided, however,
that such delegation shall not limit the Chief Executive Officer's right to
receive Awards under the Plan. Notwithstanding the foregoing, the Chief
Executive Officer may not grant Awards to, or take any action with respect to
any Award previously granted to, a person who is an officer subject to Rule
16b-3 or a member of the Board. Subject to the terms of the Plan and applicable
law, and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to a Participant; (iii) determine the number of Units to be covered by Awards;
(iv) determine the terms and conditions of any Award; (v) determine whether, to
what extent, and under what circumstances Awards may be settled, exercised,
canceled, or forfeited; (vi) interpret and administer the Plan and any
instrument or agreement relating to an Award made under the Plan; (vii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (viii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, the Partnership, any Affiliate, any Participant,
and any beneficiary of any Award.

      SECTION 4. Units

      (a) Units Available. Subject to adjustment as provided in Section 4(c),
the number of Units with respect to which Awards may be granted under the Plan
is 700,000. If any Option or Phantom Unit is forfeited or otherwise terminates
or is canceled without the delivery of Units, then


                                      -3-
<PAGE>

the Units covered by such Award, to the extent of such forfeiture, termination
or cancellation, shall again be Units with respect to which Awards may be
granted.

      (b) Sources of Units Deliverable Under Awards. Any Units delivered
pursuant to an Award shall consist, in whole or in part, of Units acquired in
the open market, from any Affiliate, the Partnership or any other Person, or any
combination of the foregoing.

      (c) Adjustments. In the event that the Committee determines that any
distribution (whether in the form of cash, Units, other securities, or other
property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Units
or other securities of the Partnership, issuance of warrants or other rights to
purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Units (or other securities or property) with
respect to which Awards may be granted, (ii) the number and type of Units (or
other securities or property) subject to outstanding Awards, and (iii) the grant
or exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; provided,
that the number of Units subject to any Award shall always be a whole number.

      SECTION 5. Eligibility.

      Any Employee or Director shall be eligible to be designated a Participant
and receive an Award under the Plan.

      SECTION 6. Awards.

      (a) Options. The Committee shall have the authority to determine the
Employees and Directors to whom Options shall be granted, the number of Units to
be covered by each Option, the purchase price therefor and the conditions and
limitations applicable to the exercise of the Option, including the following
terms and conditions and such additional terms and conditions, as the Committee
shall determine, that are not inconsistent with the provisions of the Plan.

            (i) Exercise Price. The purchase price per Unit purchasable under an
      Option shall be determined by the Committee at the time the Option is
      granted and may be more or less than its Fair Market Value as of the date
      of grant.

            (ii) Time and Method of Exercise. The Committee shall determine the
      Restricted Period, i.e., the time or times at which an Option may be
      exercised in whole or in part, which may include, without limitation,
      accelerated vesting upon the achievement of specified performance goals,
      and the method or methods by which payment of the exercise price with
      respect thereto may be made or deemed to have been made, which may
      include, without limitation, cash, check acceptable to the Company, a
      "cashless-broker" exercise through


                                      -4-
<PAGE>

      procedures approved by the Company, other securities or other property, or
      any combination thereof, having a Fair Market Value on the exercise date
      equal to the relevant exercise price.

            (iii) Forfeiture. Except as otherwise provided in the terms of the
      Option grant, upon termination of a Participant's employment with the
      Company and its Affiliates or membership on the Board, whichever is
      applicable, for any reason during the applicable Restricted Period, all
      Options shall be forfeited by the Participant. The Committee may, in its
      discretion, waive in whole or in part such forfeiture with respect to a
      Participant's Options.

      (b) Phantom Units. The Committee shall have the authority to determine the
Employees and Directors to whom Phantom Units shall be granted, the number of
Phantom Units to be granted to each such Participant, the Restricted Period, the
conditions under which the Phantom Units may become vested or forfeited, which
may include, without limitation, the accelerated vesting upon the achievement of
specified performance goals, and such other terms and conditions as the
Committee may establish with respect to such Awards, including whether DERs are
granted with respect to such Phantom Units.

            (i) DERs. To the extent provided by the Committee, in its
      discretion, a grant of Phantom Units may include a tandem DER grant, which
      may provide that such DERs shall be paid directly to the Participant, be
      credited to a bookkeeping account (with or without interest in the
      discretion of the Committee) subject to the same vesting restrictions as
      the tandem Award, or be subject to such other provisions or restrictions
      as determined by the Committee in its discretion.

            (ii) Forfeiture. Except as otherwise provided in the terms of the
      Phantom Units grant, upon termination of a Participant's employment with
      the Company and its Affiliates or membership on the Board, whichever is
      applicable, for any reason during the applicable Restricted Period, all
      Phantom Units shall be forfeited by the Participant. The Committee may, in
      its discretion, waive in whole or in part such forfeiture with respect to
      a Participant's Phantom Units.

            (iii) Lapse of Restrictions. Upon or as soon as reasonably practical
      following the vesting of each Phantom Unit, subject to the provisions of
      Section 8(b), the Participant shall be entitled to receive from the
      Company one Unit or cash equal to the Fair Market Value of a Unit, as
      determined by the Committee in its discretion.

      (c)   Performance Awards. The Committee is authorized to grant Performance
            Awards to Participants on the following terms and conditions:

            (i)   Right to Payment. A Performance Award shall confer upon
                  Participant rights, valued as determined by the Committee, and
                  payable to, or exercisable by, the Participant to whom the
                  Performance Award is granted, in whole or in part, as the
                  Committee shall establish at grant or thereafter. The
                  performance criteria and all other terms and conditions of the
                  Performance Award shall be


                                      -5-
<PAGE>

                  determined by the Committee upon the grant of each Performance
                  Award or thereafter.

            (ii)  Other Terms. A Performance Award may be denominated or payable
                  in cash, deferred cash, Units, other Awards or other property,
                  and other terms of Performance Awards shall be, as determined
                  by the Committee.

      (d)   General.

            (i)   Awards May Be Granted Separately or Together. Awards may, in
                  the discretion of the Committee, be granted either alone or in
                  addition to, in tandem with, or in substitution for any other
                  Award granted under the Plan or any award granted under any
                  other plan of the Company or any Affiliate. Awards granted in
                  addition to or in tandem with other Awards or awards granted
                  under any other plan of the Company or any Affiliate may be
                  granted either at the same time as or at a different time from
                  the grant of such other Awards or awards.

            (ii)  Limits on Transfer of Awards.

                  (A) Except as provided in (C) below, each Option shall be
            exercisable only by the Participant during the Participant's
            lifetime, or by the person to whom the Participant's rights shall
            pass by will or the laws of descent and distribution.

                  (B) Except as provided in (C) below, no Award and no right
            under any such Award may be assigned, alienated, pledged, attached,
            sold or otherwise transferred or encumbered by a Participant and any
            such purported assignment, alienation, pledge, attachment, sale,
            transfer or encumbrance shall be void and unenforceable against the
            Company or any Affiliate.

                  (C) To the extent specifically provided by the Committee with
            respect to an Option grant, an Option may be transferred by a
            Participant without consideration to immediate family members or
            related family trusts, limited partnerships or similar entities or
            on such terms and conditions as the Committee may from time to time
            establish. In addition, Awards may be transferred by will and the
            laws of descent and distribution.

            (iii) Term of Awards. The term of each Award shall be for such
      period as may be determined by the Committee.

            (iv) Unit Certificates. All certificates for Units or other
      securities of the Partnership delivered under the Plan pursuant to any
      Award or the exercise thereof shall be subject to such stop transfer
      orders and other restrictions as the Committee may deem advisable under
      the Plan or the rules, regulations, and other requirements of the SEC, any
      stock exchange upon which such Units or other securities are then listed,
      and any applicable


                                      -6-
<PAGE>

      federal or state laws, and the Committee may cause a legend or legends to
      be put on any such certificates to make appropriate reference to such
      restrictions.

            (v) Consideration for Grants. Awards may be granted for such
      consideration, including services, as the Committee determines.

            (vi) Delivery of Units or other Securities and Payment by
      Participant of Consideration. Notwithstanding anything in the Plan or any
      grant agreement to the contrary, delivery of Units pursuant to the
      exercise or vesting of an Award may be deferred for any period during
      which, in the good faith determination of the Committee, the Company is
      not reasonably able to obtain Units to deliver pursuant to such Award
      without violating the rules or regulations of any applicable law or
      securities exchange. No Units or other securities shall be delivered
      pursuant to any Award until payment in full of any amount required to be
      paid pursuant to the Plan or the applicable Award grant agreement
      (including, without limitation, any exercise price or tax withholding) is
      received by the Company. Such payment may be made by such method or
      methods and in such form or forms as the Committee shall determine,
      including, without limitation, cash, cashless-broker exercises with
      simultaneous sale, or any combination thereof; provided that the combined
      value, as determined by the Committee, of all cash and cash equivalents
      and the Fair Market Value of any such Units or other property so tendered
      to the Company, as of the date of such tender, is at least equal to the
      full amount required to be paid to the Company pursuant to the Plan or the
      applicable Award Agreement.

            SECTION 6A. Change in Control.

      (a) Awards Granted Prior to February 3, 2003. Upon a Change in Control or
such period prior thereto as may be established by the Committee, all Awards
granted prior to February 3, 2003 shall automatically vest and become payable or
exercisable, as the case may be, in full and all Restricted Periods shall
terminate and all performance criteria, if any, shall be deemed to have been
achieved at the maximum level with respect to such Awards.

      (b) Awards Granted On or After February 3, 2003. If, within two (2) years
following a Change in Control, a Participant has a Termination of Affiliation
(excluding any transfer to an Affiliate of the Company) voluntarily for Good
Reason, or involuntarily (other than due to Cause) Awards granted on or after
February 3, 2003, shall automatically vest and become payable or exercisable, as
the case may be, in full, and all Restricted Periods shall terminate and all
performance criteria, if any, shall be deemed to have been achieved at the
maximum level with respect to such Awards. To the extent an Option granted on or
after February 3, 2003, is not exercised upon a Change in Control, the Committee
may, in its discretion, cancel such Award without payment or provide for a
replacement grant with respect to such property and on such terms as it deems
appropriate.

      (c) Definitions. For purposes of this Section 6A only, the following terms
shall have the meanings set forth below:


                                      -7-
<PAGE>

            (i) "Cause" means, unless otherwise defined in an Award Agreement,
      the occurrence of any one or more of the following, as determined in the
      good faith and reasonable judgment of the Committee: (i) willful failure
      by a Participant to substantially perform his or her duties (as they
      existed immediately prior to a Change of Control), other than any such
      failure resulting from a Disability, or (ii) gross negligence or willful
      misconduct of the Participant which results in a significantly adverse
      effect upon the Company, the Partnership, or an Affiliate thereof, or
      (iii) willful violation or disregard of the code of business conduct or
      other published policy of the Company, the Partnership, or an Affiliate
      thereof by the Participant, or (iv) Participant's conviction of a crime
      involving an act of fraud, embezzlement, theft, or any other act
      constituting a felony or causing material harm, financial or otherwise, to
      the Company, the Partnership, or an Affiliate thereof.

            (ii) "Change in Control" shall be deemed to have occurred upon the
      occurrence of one or more of the following events: (i) any sale, lease,
      exchange or other transfer (in one transaction or a series of related
      transactions) of all or substantially all of the assets of the Partnership
      or the Company to any Person or its Affiliates, other than to Williams
      and/or its Affiliates; (ii) the consolidation, reorganization, merger or
      other transaction pursuant to which more than 50% of the combined voting
      power of the outstanding equity interests in the Company cease to be owned
      by Williams and its Affiliates; or (iii) a "Change in Control" of Williams
      as defined in the Williams stock plans from time to time; or (iv) the
      general partner (whether the Company or any other Person) of the
      Partnership ceases to be an Affiliate of Williams.

            (iii) "Termination of Affiliation" occurs on the first day on which
      an individual is for any reason no longer providing services to the
      Company, the Partnership, or an Affiliate thereof.

            (iv) "Good Reason" means, unless otherwise defined in an Award
      Agreement, the occurrence, within two years following a Change of Control
      and without a Participant's prior written consent, of any one or more of
      the following:

            (1) a material change in the Participant's duties from those
            assigned to the Participant immediately prior to a Change of
            Control, unless associated with a bona fide promotion of the
            Participant and a commensurate increase in the Participant's
            compensation, in which case the Participant shall be deemed to
            consent;

            (2) a significant reduction in the authority and responsibility
            assigned to the Participant;

            (3) the removal of the Participant from, or failure to reelect the
            Participant to, any corporate or similar office of the Company, the
            Partnership, or an Affiliate thereof to which the Participant may
            have been elected and was occupying immediately prior to a Change of
            Control, unless associated with a bona fide promotion of the
            Participant and a commensurate increase in the Participant's
            compensation or in connection with the election or appointment of
            the Participant to a corresponding or


                                      -8-
<PAGE>

            higher office of the Company or any Affiliate, in each which case
            the Participant shall be deemed to consent;

            (4) reduction of a Participant's base salary;

            (5) termination of any of the incentive compensation plans of the
            Partnership or the Company in which the Participant shall be
            participating at the time of a Change of Control, unless such plan
            is replaced by a successor plan providing incentive opportunities
            and awards at least as favorable to the Participant as those
            provided in the plan being terminated;

            (6) amendment of any of the incentive compensation plans of the
            Partnership or the Company in which the Participant shall be
            participating at the time of a Change of Control so as to provide
            for incentive opportunities and awards less favorable to the
            Participant than those provided in the plan being amended;

            (7) failure by the Company, the Partnership, or an Affiliate thereof
            to continue the Participant as a participant in any of the Company's
            or Partnership's incentive compensation plans in which the
            Participant is participating immediately prior to a Change of
            Control on a basis comparable to the basis on which other similarly
            situated employees participate in such plan;

            (8) except in relation to a wage freeze applicable to all employees
            of the Company, the Partnership, or an Affiliate thereof,
            modification of the administration of any of the incentive
            compensation plans so as to adversely affect the level of incentive
            opportunities or awards actually received by the Participant; or

            (9) a requirement by the Company, the Partnership, or an Affiliate
            thereof that the Participant's principal duties be performed at a
            location more than fifty (50) miles from the location where the
            Participant was employed immediately preceding the Change of
            Control, except for travel reasonably required in the performance of
            the Participant's duties.

      SECTION 7. Amendment and Termination.

      Except to the extent prohibited by applicable law:

            (a) Amendments to the Plan. Except as required by the rules of the
      principal securities exchange on which the Units are traded and subject to
      Section 7(b) below, the Board or the Committee may amend, alter, suspend,
      discontinue, or terminate the Plan in any manner, including increasing the
      number of Units available for Awards under the Plan, without the consent
      of any partner, Participant, other holder or beneficiary of an Award, or
      other Person; provided, however, that no amendment to the Plan may be made
      without the approval of a Unit Majority (as defined in the Partnership
      Agreement) that would permit DERs to be granted prior to the end of the
      Subordination Period (as defined in the Partnership Agreement).


                                      -9-
<PAGE>

            (b) Amendments to Awards. Subject to Section 7(a), the Committee may
      waive any conditions or rights under, amend any terms of, or alter any
      Award theretofore granted, provided no change, other than pursuant to
      Section 7(c), in any Award shall materially reduce the benefit to
      Participant without the consent of such Participant.

            (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
      Nonrecurring Events. The Committee is hereby authorized to make
      adjustments in the terms and conditions of, and the criteria included in,
      Awards in recognition of unusual or nonrecurring events (including,
      without limitation, the events described in Section 4(c) of the Plan)
      affecting the Partnership or the financial statements of the Partnership,
      or of changes in applicable laws, regulations, or accounting principles,
      whenever the Committee determines that such adjustments are appropriate in
      order to prevent dilution or enlargement of the benefits or potential
      benefits intended to be made available under the Plan.

      SECTION 8. General Provisions.

      (a) No Rights to Award. No Person shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment of
Participants. The terms and conditions of Awards need not be the same with
respect to each recipient.

      (b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or from
any compensation or other amount owing to a Participant the amount (in cash,
Units, other securities, Units that would otherwise be issued pursuant to such
Award or other property) of any applicable taxes payable in respect of the grant
of an Award, its exercise, the lapse of restrictions thereon, or any payment or
transfer under an Award or under the Plan and to take such other action as may
be necessary in the opinion of the Company to satisfy its withholding
obligations for the payment of such taxes. In no event shall the withholding for
taxes exceed that which is necessary to satisfy the employer's minimum
withholding requirements.

      (c) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Affiliate or to remain on the Board, as applicable. Further, the Company or
an Affiliate may at any time dismiss a Participant from employment, free from
any liability or any claim under the Plan, unless otherwise expressly provided
in the Plan or in any Award agreement.

      (d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware law without regard to its conflict of
laws principles.

      (e) Severability. If any provision of the Plan or any award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any award under any law
deemed applicable by the Compensation Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it


                                      -10-
<PAGE>

cannot be construed or deemed amended without, in the determination of the
Compensation Committee, materially altering the intent of the Plan or the Award,
such provision shall be stricken as to such jurisdiction, person or award and
the remainder of the Plan and any such Award shall remain in full force and
effect.

      (f) Other Laws. The Committee may refuse to issue or transfer any Units or
other consideration under an Award if, in its sole discretion, it determines
that the issuance or transfer or such Units or such other consideration might
violate any applicable law or regulation, the rules of the principal securities
exchange on which the Units are then traded, or entitle the Partnership or an
Affiliate to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.

      (g) No Trust or Fund Created. Neither the Plan nor any award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any participating Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any participating Affiliate pursuant to
an award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.

      (h) No Fractional Units. No fractional Units shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Units or whether such fractional Units or any rights thereto
shall be canceled, terminated, or otherwise eliminated.

      (i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

      (j) Facility Payment. Any amounts payable hereunder to any person under
legal disability or who, in the judgment of the Committee, is unable to properly
manage his financial affairs, may be paid to the legal representative of such
person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability
for payment of such amounts.

      (k) Gender and Number. Words in the masculine gender shall include the
feminine gender, the plural shall include the singular and the singular shall
include the plural.

      SECTION 9. Term of the Plan.

      The Plan shall be effective on the date of its approval by the Board and
shall continue until the date terminated by the Board or Units are no longer
available for the payment of Awards under the Plan, whichever occurs first.
However, unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award granted prior to such termination, and the authority
of the


                                      -11-
<PAGE>

Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under such Award,
shall extend beyond such termination date.


                                      -12-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(N)
<SEQUENCE>6
<FILENAME>d04048exv10wxny.txt
<DESCRIPTION>EX-10.(N) CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(n)

                                CREDIT AGREEMENT

                                      among

                         WILLIAMS PIPE LINE COMPANY, LLC
                                       and
                         WILLIAMS ENERGY PARTNERS L.P.,
                                 as Co-Borrowers

                             BANK OF AMERICA, N.A.,
                             as Administrative Agent

                              LEHMAN BROTHERS INC.
                                       and
                                 CITIBANK, N.A.
                              as Syndication Agents

                              MERRILL LYNCH & CO.,
                             as Documentation Agent

                                       and

                            The Lenders Party Hereto

                                  $700,000,000

                             SENIOR CREDIT FACILITY

                         BANC OF AMERICA SECURITIES LLC
                                       AND
                          J.P. MORGAN SECURITIES, INC.,
                 as Joint Lead Arrangers and Joint Book Managers

                           Dated as of April 11, 2002


                                       i
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
        Section                                                                                                        Page
        -------                                                                                                        ----
<S>                                                                                                                    <C>
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS......................................................................        1
         1.01         Defined Terms..............................................................................        1
         1.02         Other Interpretive Provisions..............................................................       16
         1.03         Accounting Terms...........................................................................       16
         1.04         Rounding...................................................................................       16
         1.05         References to Agreements and Laws..........................................................       17

ARTICLE II. THE COMMITMENTS AND BORROWINGS.......................................................................       17
         2.01         Senior Loan Facility.......................................................................       17
         2.02         Borrowings, Conversions and Continuations of Loans.........................................       17
         2.03         Prepayments................................................................................       18
         2.04         Intentionally Omitted......................................................................       19
         2.05         Repayment of Loans.........................................................................       19
         2.06         Interest...................................................................................       19
         2.07         Fees.......................................................................................       20
         2.08         Computation of Interest and Fees...........................................................       20
         2.09         Evidence of Debt...........................................................................       20
         2.10         Payments Generally.........................................................................       21
         2.11         Sharing of Payments........................................................................       22
         2.12         Order of Application.......................................................................       23

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY..............................................................       24
         3.01         Taxes......................................................................................       24
         3.02         Illegality.................................................................................       25
         3.03         Inability to Determine Rates...............................................................       26
         3.04         Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.....       26
         3.05         Funding Losses.............................................................................       27
         3.06         Matters Applicable to all Requests for Compensation........................................       27
         3.07         Survival...................................................................................       27

ARTICLE IV. CONDITIONS PRECEDENT TO BORROWING....................................................................       27
         4.01         Conditions of Borrowing....................................................................       27
         4.02         Conditions to all Loans....................................................................       29

ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................       30
         5.01         Existence; Qualification and Power; Compliance with Laws...................................       30
         5.02         Authorization; No Contravention............................................................       30
         5.03         Third Party Approvals......................................................................       30
         5.04         Binding Effect.............................................................................       30
         5.05         Financial Statements; No Material Adverse Effect...........................................       31
         5.06         Litigation.................................................................................       31
         5.07         No Default.................................................................................       31
         5.08         Ownership of Property; Liens...............................................................       31
         5.09         Environmental Compliance...................................................................       31
         5.10         Insurance..................................................................................       31
         5.11         Taxes......................................................................................       32
</TABLE>


                                       ii
<PAGE>

<TABLE>
<S>                                                                                                                    <C>
         5.12         ERISA Compliance...........................................................................       32
         5.13         Subsidiaries...............................................................................       32
         5.14         Margin Regulations; Investment Company Act; Public Utility Holding
                      Company Act; Use of Proceeds...............................................................       32
         5.15         Disclosure.................................................................................       33
         5.16         Labor Matters..............................................................................       33
         5.17         Compliance with Laws.......................................................................       33
         5.18         Solvency...................................................................................       33
         5.19         Fairness Opinions..........................................................................       33

ARTICLE VI. AFFIRMATIVE COVENANTS................................................................................       34
         6.01         Financial Statements.......................................................................       34
         6.02         Certificates; Other Information............................................................       35
         6.03         Notices....................................................................................       35
         6.04         Payment of Obligations.....................................................................       36
         6.05         Preservation of Existence, Etc.............................................................       36
         6.06         Maintenance of Assets and Business.........................................................       36
         6.07         Maintenance of Insurance...................................................................       36
         6.08         Compliance with Laws.......................................................................       36
         6.09         Books and Records..........................................................................       36
         6.10         Inspection Rights..........................................................................       36
         6.11         Compliance with ERISA......................................................................       37
         6.12         Use of Proceeds............................................................................       37
         6.13         Guaranties.................................................................................       37
         6.14         Material Agreements........................................................................       37

ARTICLE VII. NEGATIVE COVENANTS..................................................................................       37
         7.01         Liens......................................................................................       37
         7.02         Investments................................................................................       38
         7.03         Indebtedness, Synthetic Leases and Swap Obligations........................................       38
         7.04         Fundamental Changes........................................................................       39
         7.05         Dispositions...............................................................................       39
         7.06         Lease Obligations..........................................................................       40
         7.07         Restricted Payments........................................................................       40
         7.08         ERISA......................................................................................       40
         7.09         Nature of Business; Capital Expenditures...................................................       40
         7.10         Transactions with Affiliates...............................................................       40
         7.11         Burdensome Agreements......................................................................       41
         7.12         Use of Proceeds............................................................................       41
         7.13         Material Agreements........................................................................       41
         7.14         Financial Covenants........................................................................       41

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES.....................................................................       41
         8.01         Events of Default..........................................................................       41
         8.02         Remedies Upon Event of Default.............................................................       43

ARTICLE IX. ADMINISTRATIVE AGENT.................................................................................       43
         9.01         Appointment and Authorization of Administrative Agent......................................       43
         9.02         Delegation of Duties.......................................................................       44
         9.03         Liability of Administrative Agent..........................................................       44
         9.04         Reliance by Administrative Agent...........................................................       44
</TABLE>


                                       iii
<PAGE>

<TABLE>
<S>                                                                                                                    <C>
         9.05         Notice of Default..........................................................................       45
         9.06         Credit Decision; Disclosure of Information by Administrative Agent.........................       45
         9.07         Indemnification of Administrative Agent....................................................       45
         9.08         Administrative Agent in its Individual Capacity............................................       46
         9.09         Successor Administrative Agent.............................................................       46
         9.10         Other Agents; Lead Managers................................................................       47

ARTICLE X. MISCELLANEOUS.........................................................................................       47
         10.01        Amendments, Etc............................................................................       47
         10.02        Notices and Other Communications; Facsimile Copies.........................................       48
         10.03        No Waiver; Cumulative Remedies.............................................................       49
         10.04        Attorney Costs; Expenses and Taxes.........................................................       49
         10.05        Indemnification............................................................................       49
         10.06        Payments Set Aside.........................................................................       50
         10.07        Successors and Assigns.....................................................................       50
         10.08        Confidentiality............................................................................       52
         10.09        Set-off....................................................................................       53
         10.10        Interest Rate Limitation...................................................................       53
         10.11        Counterparts...............................................................................       53
         10.12        Integration................................................................................       53
         10.13        Survival of Representations and Warranties.................................................       54
         10.14        Severability...............................................................................       54
         10.15        Foreign Lenders............................................................................       54
         10.16        Governing Law..............................................................................       54
         10.17        Waiver of Right to Trial by Jury...........................................................       55
         10.18        No General Partner's Liability.............................................................       55
         10.19        Entire Agreement...........................................................................       56

         SIGNATURES..............................................................................................       S-1
</TABLE>


                                       iv
<PAGE>

SCHEDULES

      2.01   Commitments
      5.13   Subsidiaries and Other Equity Investments
      10.02  Addresses for Notices to Borrower, Guarantors and Administrative
             Agent

EXHIBITS
             Form of

      A-1               Borrowing Notice
      A-2               Conversion/Continuation Notice
      B                 Note
      C                 Compliance Certificate pursuant to SECTION 6.02(a)
      D                 Assignment and Acceptance
      E                 Subsidiary Guaranty
      F-1 and F-2       Opinions of Counsel


                                       v
<PAGE>

                                CREDIT AGREEMENT

      This CREDIT AGREEMENT ("AGREEMENT") is entered into as of April 11, 2002,
among WILLIAMS PIPE LINE COMPANY, LLC, a Delaware limited liability company, and
WILLIAMS ENERGY PARTNERS L.P., a Delaware limited partnership (each a "BORROWER"
and collectively, the "BORROWERS"), jointly and severally, each lender from time
to time party hereto (collectively, the "LENDERS" and individually, a "LENDER"),
BANK OF AMERICA, N.A., as Administrative Agent, LEHMAN BROTHERS INC. and
CITIBANK, N.A., as Syndication Agents, and MERRILL LYNCH & CO., as Documentation
Agent.

      The Borrowers have requested that the Lenders provide a term loan
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.

      In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS

      1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:

      ACCEPTABLE INDEMNITY means, with respect to a judgment, an agreement
between the Borrowers or other Borrower Affiliate as indemnitee (the
"INDEMNITEE") and a third party as indemnitor (the "INDEMNITOR") pursuant to
which the Borrowers or such other Borrower Affiliate are )or is, as the case may
be) entitled to be indemnified against and reimbursed for any and all losses,
liabilities, and expenses arising in connection with such judgment, provided
that (i) the Indemnitor shall be reasonably acceptable to the Required Lenders,
(ii) the Indemnitor shall have accepted liability pursuant to a written
undertaking that is satisfactory to the Required Lenders, and (iii) unless
otherwise agreed by the Required Lenders, the Indemnitor's obligations shall be
secured, pursuant to arrangements that are reasonably satisfactory to the
Required Lenders, by cash collateral pledged to the Indemnitee or by a letter of
credit, guaranty, bond or other credit support issued for the benefit of the
Indemnitee.

      ADMINISTRATIVE AGENT means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

      ADMINISTRATIVE AGENT'S OFFICE means the Administrative Agent's address
and, as appropriate, account as set forth on SCHEDULE 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

      ADMINISTRATIVE DETAILS FORM means the Administrative Details Reply Form
furnished by a Lender to the Administrative Agent in connection with this
Agreement.

      AFFILIATE means, as to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person. A Person shall be deemed to be controlled by any other Person if
such other Person possesses, directly or indirectly, power (a) to vote 50% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors or managing general partners; or (b) to direct or
cause the direction of the management and policies of such Person whether by
contract or otherwise.


                                       1
<PAGE>

      AGENT-RELATED PERSONS means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, Banc of
America Securities LLC), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

      AGGREGATE COMMITMENTS has the meaning set forth in the definition of
"COMMITMENT."

      AGGREGATE COMMITTED SUM means, on any date of determination, the sum of
all Committed Sums then in effect for all Lenders (as the same may have been
reduced or canceled as provided in the Loan Documents), not to exceed
$700,000,000.

      AGREEMENT means this Credit Agreement.

      APPLICABLE MARGIN means (a) from the Closing Date until the day that is
120 days after the Closing Date, a percentage per annum equal to: (i) two and
one-half percent (2.50%), with respect to Eurodollar Rate Loans, and (ii) one
and one-half percent (1.50%), with respect to Base Rate Loans; and (b)
commencing on the date that is 120 days after the Closing Date and continuing
thereafter until the Loans are repaid in full, a percentage per annum equal to:
(i) four percent (4.0%), with respect to Eurodollar Rate Loans, and (ii) three
percent (3.0%), with respect to Base Rate Loans.

      APPROVED FUND means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

      ARRANGERS means Banc of America Securities LLC and J.P. Morgan Securities,
Inc., in their capacities as joint lead arrangers and joint book managers, and
ARRANGER means either one of them.

      ASSIGNMENT AND ACCEPTANCE means an Assignment and Acceptance substantially
in the form of EXHIBIT D.

      ATTORNEY COSTS means and includes all reasonable fees and disbursements of
any law firm or other external counsel and the reasonable allocated cost of
internal legal services and all reasonable disbursements of internal counsel.

      ATTRIBUTABLE INDEBTEDNESS means, on any date, in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP.

      ATTRIBUTABLE PRINCIPAL means, on any date, in respect of any Synthetic
Lease Obligation, the capitalized amount of the remaining lease payments under
the relevant lease that would appear on a balance sheet of such Person prepared
as of such date in accordance with GAAP if such lease were accounted for as a
capital lease.

      AUTHORIZATIONS means all filings, recordings, and registrations with, and
all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.

      BANK GUARANTIES means guaranties or other agreements or instruments
serving a similar function issued by a bank or other financial institution.

      BANK OF AMERICA means Bank of America, N.A.


                                       2
<PAGE>

      BASE RATE means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

      BASE RATE LOAN means a Loan that bears interest based on the Base Rate.

      BOARD means the Board of Governors of the Federal Reserve System of the
United States of America.

      BORROWER and BORROWERS has the meaning set forth in the introductory
paragraph hereto.

      BORROWER AFFILIATE has the meaning set forth in SECTION 8.01(e).

      BORROWER OPERATING AGREEMENTS has the meaning set forth in SECTION
4.01(a)(viii).

      BORROWING means a borrowing consisting of simultaneous Loans of the same
Type and having the same Interest Period made by each of the Lenders pursuant to
SECTION 2.01.

      BORROWING NOTICE means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Loans as the same
Type, pursuant to SECTION 2.02(a), which, if in writing, shall be substantially
in the form of EXHIBIT A-1 or A-2, as applicable.

      BUSINESS DAY means any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the applicable
offshore Dollar interbank market.

      CAPITAL EXPENDITURE by a Person means an expenditure (determined in
accordance with GAAP) for any fixed asset owned by such Person for use in the
operations of such Person having a useful life of more than one year, or any
improvements or additions thereto.

      CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.

      CASH EQUIVALENTS means:

            (a) United States Dollars;

            (b) direct general obligations, or obligations of, or obligations
      fully and unconditionally guaranteed as to the timely payment of principal
      and interest by, the United States or any agency or instrumentality
      thereof having maturities of not more than 13 months, but excluding any
      such securities whose terms do not provide for payment of a fixed dollar
      amount upon maturity or call for redemptions;


                                       3
<PAGE>

            (c) certificates of deposit and eurodollar time deposits with
      maturities of 13 months or less, bankers acceptances with maturities not
      exceeding 180 days, overnight bank deposits and other similar short term
      instruments, in each case with any domestic commercial bank having capital
      and surplus in excess of $500,000,000 and having a rating of at least "A2"
      by Moody's Investors Service and at least "A" by Standard & Poor's
      Corporation;

            (d) repurchase obligations with a term of not more than 13 months
      for underlying securities of the types described in (b) and (c) above
      entered into with any financial institution meeting the qualifications in
      (c) above;

            (e) commercial paper (having original maturities of not more than
      270 days) of any person rated "P-1" or better by Moody's Investors Service
      or "A-1" or the equivalent by Standard & Poor's Corporation; and

            (f) money market mutual or similar funds having assets in excess of
      $100,000,000, at least 95% of the assets of which comprise assets
      specified in clause (a) through (e) above.

      CHANGE OF CONTROL means (a) the failure of TWC to own, directly or
indirectly, free of all Liens, 100% of the general partner interests in the MLP,
(b) the failure of TWC to control the management of both the MLP and Williams
LLC, or (c) the failure of the MLP to own all of the member interests in
Williams LLC.

      CHANGE IN LAW means (a) the adoption of any Law after the date of this
Agreement, (b) any change in any Law or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement, or (c)
compliance by any Lender (or, for purposes of SECTION 3.04(b), by any lending
office of such Lender or by such Lender's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

      CLOSING DATE means the date on which all conditions precedent in SECTION
4.01 and 4.02 are satisfied or waived in accordance with SECTION 4.01 and 4.02
(or, in the case of SECTIONS 4.01(b) and (c), waived by the Person entitled to
receive the applicable payment).

      CODE means the Internal Revenue Code of 1986.

      COMMITMENT means, as to each Lender, its obligation to lend to the
Borrower on the Closing Date pursuant to SECTION 2.01, in an amount not to
exceed its Committed Sum, as such amount may be reduced or adjusted from time to
time in accordance with this Agreement (collectively, the "AGGREGATE
COMMITMENTS").

      COMMITTED SUM means, for any Lender, at any date of determination
occurring prior to the date of the initial Borrowing, the amount stated beside
such Lender's name under the heading for the Senior Credit Facility on the
most-recently amended SCHEDULE 2.01 to this Agreement (which amount is subject
to increase, reduction, or cancellation in accordance with the Loan Documents).

      COMPANY and COMPANIES means, on any date of determination thereof, the
Borrowers and each of their respective Subsidiaries.

      COMPLIANCE CERTIFICATE means a certificate substantially in the form of
EXHIBIT C.


                                       4
<PAGE>

      CONSOLIDATED EBITDA means, for any period, for Williams LLC and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of
taxes, based on or measured by income, used or included in the determination of
such Consolidated Net Income, and (d) the amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income.

      CONSOLIDATED INTEREST CHARGES means, for any period, for Williams LLC and
its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, fees, charges and related expenses of Williams LLC and its
Subsidiaries in connection with Indebtedness (including capitalized interest),
in each case to the extent treated as interest in accordance with GAAP, and (b)
the portion of rent expense of Williams LLC and its Subsidiaries with respect to
such period under Capital Leases that is treated as interest in accordance with
GAAP.

      CONSOLIDATED NET INCOME means, for any period, for Williams LLC and its
Subsidiaries on a consolidated basis, the net income or net loss of Williams LLC
and its Subsidiaries from continuing operations, provided that there shall be
excluded from such net income (to the extent otherwise included therein): (a)
the income (or loss) of any entity other than a Subsidiary in which Williams LLC
or any Subsidiary has an ownership interest, except to the extent that any such
income has been actually received by Williams LLC or such Subsidiary in the form
of cash dividends or similar cash distributions, (b) net extraordinary gains and
losses (other than, in the case of losses, losses resulting from charges against
net income to establish or increase reserves for potential environmental
liabilities and reserves for exposure under rate cases), (c) any gains or losses
attributable to non-cash write-ups or write-downs of assets, and (d) proceeds of
any insurance on property, plant or equipment other than business interruption
insurance.

      CONTRACTUAL OBLIGATION means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

      CONTRIBUTION AGREEMENT means that certain Contribution Agreement dated
April 11, 2002 by and among the MLP, the General Partner and Williams Energy
Services, LLC, a Delaware limited partnership, and related documents and
instruments, providing for, inter alia, (i) the contribution by Williams Energy
Services, LLC to the General Partner of 100% of the member interests in Williams
LLC in exchange for additional interests in the General Partner, (ii) the
contribution by the General Partner to the MLP of 100% of the member interests
in Williams LLC in exchange for 7.830 million redeemable, class B units issued
by the MLP and the right to receive the net proceeds (after transaction costs)
of the Loans and satisfaction of its obligation to contribute two percent (2%)
of total contributions to the MLP, and (iii) the distribution of the net
proceeds (after transaction costs) of the Loans by the MLP and Williams LLC to
the General Partner in satisfaction of the right of the General Partner to
receive that amount.

      CONTRIBUTED INTERESTS means 100% of the member interests in Williams LLC,
to be contributed to the MLP in accordance with the Contribution Agreement.

      DEBT ISSUANCE means the issuance, incurrence or assumption of
Indebtedness, a Synthetic Lease, other similar instruments, and other
off-balance sheet financings) by the Borrowers or any of their respective
Subsidiaries (other than Debt Issuance by OLP No. 1 under the OLP No. 1 Credit
Agreement and any additional Debt Issuance by OLP No. 1 to the extent permitted
by the OLP No. 1 Credit Agreement), after the Closing Date, other than
Indebtedness arising under the Loan Documents.


                                       5
<PAGE>

      DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

      DEFAULT means any event that, with the giving of any notice, the passage
of time, or both, would be an Event of Default.

      DEFAULT RATE means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Margin applicable to Base Rate Loans plus (c) two percent (2%)
per annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Margin) otherwise applicable to such Loan plus two percent (2%) per
annum, in each case to the fullest extent permitted by applicable Laws.

      DISPOSITION or DISPOSE means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property
(including stock, partnership and other equity interests) by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

      DOCUMENTATION AGENT means Merrill Lynch & Co., in its capacity as
documentation agent.

      DOLLAR and $ means lawful money of the United States of America.

      EDGAR means the Electronic Data Gathering and Retrieval System of the
United States Securities and Exchange Commission.

      ELIGIBLE ASSIGNEE means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund, and (d) any other Person (other than a natural Person) approved
by the Administrative Agent and, unless an Event of Default has occurred and is
continuing, the Borrowers (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall
not include the Borrowers or any of their Affiliates or Subsidiaries.

      ENVIRONMENTAL LAW means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Federal Water Pollution Control Act, as
amended by the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. Section
11001 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.), the National Environmental Policy Act of 1969 (42 U.S.C. Section
4321 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Rivers and Harbors Act (33 U.S.C. Section 401 et seq.), the Safe Drinking Water
Act (42 U.S.C. Section 201 and Section 300f et seq.), the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976 and the
Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. Section 6901 et seq.),
the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), and analogous
state and local Laws, as any of the foregoing may have been and may be amended
or supplemented from time to time, and any analogous future enacted or adopted
Law, or (d) the Release or threatened Release of Hazardous Substances.


                                       6
<PAGE>

      EQUITY ISSUANCE means the issuance of any class of equity interests by the
MLP or any of its Subsidiaries (other than equity interests issued to the MLP or
a Wholly-Owned Subsidiary of the MLP) after the Closing Date.

      ERISA means the Employee Retirement Income Security Act of 1974 and any
regulations issued pursuant thereto.

      ERISA AFFILIATE means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions of this Agreement relating to obligations imposed under Section 412
of the Code).

      ERISA EVENT means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.

      EURODOLLAR RATE means for any Interest Period with respect to any
Eurodollar Rate Loan:

            (a) the rate per annum equal to the rate determined by the
      Administrative Agent to be the offered rate that appears on the page (such
      page currently being page 3750) of the Telerate screen (or any successor
      thereto) that displays an average British Bankers Association Interest
      Settlement Rate for deposits in Dollars (for delivery on the first day of
      such Interest Period) with a term equivalent to such Interest Period,
      determined as of approximately 11:00 a.m. (London time) two Business Days
      prior to the first day of such Interest Period, or

            (b) if the rate referenced in the preceding subsection (a) does not
      appear on such page or service or such page or service shall cease to be
      available, the rate per annum equal to the rate determined by the
      Administrative Agent to be the offered rate on such other page or other
      service that displays an average British Bankers Association Interest
      Settlement Rate for deposits in Dollars (for delivery on the first day of
      such Interest Period) with a term equivalent to such Interest Period,
      determined as of approximately 11:00 a.m. (London time) two Business Days
      prior to the first day of such Interest Period, or

            (c) if the rates referenced in the preceding subsections (a) and (b)
      are not available, the rate per annum determined by the Administrative
      Agent as the rate of interest (rounded upward to the next 1/100th of 1%)
      at which deposits in Dollars for delivery on the first day of such
      Interest Period in same day funds in the approximate amount of the
      Eurodollar Rate Loan being made, continued or converted by Bank of America
      and with a term equivalent to such Interest Period would be offered by
      Bank of America's London Branch to major banks in the offshore Dollar
      market at their request at approximately 11:00 a.m. (London time) two
      Business Days prior to the first day of such Interest Period.


                                       7
<PAGE>

      EURODOLLAR RATE LOAN means a Loan that bears interest at a rate based on
the Eurodollar Rate.

      EVENT OF DEFAULT means any of the events or circumstances specified in
ARTICLE VIII.

      FACILITY means the senior loan facility as described in and subject to the
limitations set forth in SECTION 2.01.

      FAIRNESS OPINION and SELLER FAIRNESS OPINION have the meanings set forth
in SECTION 5.19.

      FEE LETTER and FEE LETTERS have the meaning set forth in SECTION 2.07.

      FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded upwards
to the nearest 1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.

      FOREIGN LENDER has the meaning specified in SECTION 10.15.

      FOREIGN SUBSIDIARY of any Person means a Subsidiary of such Person that is
organized or incorporated under the Laws of a jurisdiction other than a
jurisdiction of the United States.

      FUND means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of business.

      GAAP means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrowers or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrowers shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (a) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (b) the Borrowers shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

      GENERAL PARTNER means Williams GP LLC, a Delaware limited liability
company, a Wholly-Owned Subsidiary of TWC and the general partner of the MLP.

      GOVERNMENTAL AUTHORITY means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative


                                       8
<PAGE>

tribunal, central bank or other legal entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

      GUARANTORS means any Person, including every Subsidiary of Williams LLC,
which undertakes to be liable for all or any part of the Obligations by
execution of a Guaranty, or otherwise.

      GUARANTY means a Guaranty now or hereafter made by any Guarantor in favor
of the Administrative Agent on behalf of the Lenders, substantially in the form
of EXHIBIT E, as may be amended from time to time.

      GUARANTY OBLIGATION means, as to any Person, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other payment obligation of another
Person (the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other payment obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other payment obligation of the payment of such
Indebtedness or other payment obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other payment obligation, or (iv) entered into for the purpose of assuring in
any other manner the obligees in respect of such Indebtedness or other payment
obligation of the payment thereof or to protect such obligees against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other payment obligation of any other
Person, whether or not such Indebtedness or other payment obligation is assumed
by such Person; provided, however, that the term "Guaranty Obligation" shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guaranty Obligation shall be deemed to be
the lesser of (a) an amount equal to the stated or determinable outstanding
amount of the related primary obligation and (b) the maximum amount for which
such guarantying Person may be liable pursuant to the terms of the instrument
embodying such Guaranty Obligation, unless the outstanding amount of such
primary obligation and the maximum amount for which such guarantying Person may
be liable are not stated or determinable, in which case the amount of such
Guaranty Obligation shall be the maximum reasonably anticipated liability in
respect thereof as determined by the guarantying Person in good faith.

      HAZARDOUS SUBSTANCE means (a) any substance that is designated, defined,
or classified as a hazardous waste, hazardous material, pollutant, contaminant,
or toxic or hazardous substance, or that is otherwise regulated, under any
Environmental Law, including without limitation any hazardous substance within
the meaning of Section 101(14) of CERCLA, and (b) petroleum, oil, gasoline,
natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other
refined petroleum hydrocarbons.

      INDEBTEDNESS means, as to any Person at a particular time, all of the
following:

            (a) all obligations of such Person for borrowed money and all
      obligations of such Person evidenced by bonds, debentures, notes, loan
      agreements or other similar instruments;

            (b) the face amount of all letters of credit (including standby and
      commercial), banker's acceptances, Bank Guaranties, surety bonds, and
      similar instruments issued for the account of such Person, and, without
      duplication, all drafts drawn and unpaid thereunder;

            (c) whether or not so included as liabilities in accordance with
      GAAP, all obligations of such Person to pay the deferred purchase price of
      property or services, other than trade accounts payable in the ordinary
      course of business not overdue by more than 60 days, and


                                       9
<PAGE>

      indebtedness (excluding prepaid interest thereon) secured by a Lien on
      property owned or being purchased by such Person (including indebtedness
      arising under conditional sales or other title retention agreements),
      whether or not such indebtedness shall have been assumed by such Person or
      is limited in recourse;

            (d) Capital Leases; and

            (e) all Guaranty Obligations of such Person in respect of any of the
      foregoing.

      For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner, unless such Indebtedness is expressly made non-recourse to such
Person except for customary exceptions acceptable to the Required Lenders. The
amount of any Capital Lease as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

      INDEMNIFIED LIABILITIES has the meaning set forth in SECTION 10.05.

      INDEMNITEES has the meaning set forth in SECTION 10.05.

      INITIAL FINANCIAL STATEMENTS means the financial statements delivered
pursuant to clauses (B) and (D) of SECTION 4.01(a)(vii).

      INITIAL PRO FORMAS means the balance sheets and projections delivered
pursuant to clauses (A) and (C) of SECTION 4.01(a)(vii).

      INTEREST PAYMENT DATE means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Maturity Date.

      INTEREST PERIOD means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Borrowing Notice;
provided that:

            (i) any Interest Period that would otherwise end on a day that is
      not a Business Day shall be extended to the next succeeding Business Day
      unless, in the case of a Eurodollar Rate Loan, such Business Day falls in
      another calendar month, in which case such Interest Period shall end on
      the next preceding Business Day;

            (ii) any Interest Period pertaining to a Eurodollar Rate Loan that
      begins on the last Business Day of a calendar month (or on a day for which
      there is no numerically corresponding day in the calendar month at the end
      of such Interest Period) shall end on the last Business Day of the
      calendar month at the end of such Interest Period; and

            (iii) no Interest Period shall extend beyond the Maturity Date.

      INVESTMENT means, as to any Person, any acquisition or investment by such
Person, whether by means of (a) the purchase or other acquisition of capital
stock or other securities of another Person, (b) a


                                       10
<PAGE>

loan, advance or capital contribution to, guaranty of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person, or (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business
unit. For purposes of covenant compliance, the amount of any Investment shall be
the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

      IRS means the United States Internal Revenue Service.

      LAWS means, collectively, all applicable international, foreign, federal,
state and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, any Governmental Authority.

      LENDER has the meaning specified in the introductory paragraph hereto.

      LENDING OFFICE means, as to any Lender, the office or offices of such
Lender set forth on its Administrative Details Form, or such other office or
offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

      LIEN means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever to secure or provide for payment of any obligation of any
Person, (including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable Laws of any jurisdiction), including the interest
of a purchaser of accounts receivable.

      LIMITED LIABILITY COMPANY AGREEMENT (WILLIAMS) means the Certificate of
Conversion and Certificate of Formation filed with the Secretary of State of
Delaware on December 27, 2000, and the Amended and Restated Limited Liability
Company Agreement of Williams Pipe Line Company, LLC dated April 11, 2002.

      LOAN means an extension of credit by a Lender to the Borrowers under
ARTICLE II.

      LOAN DOCUMENTS means this Agreement, each Note, each Borrowing Notice,
each Compliance Certificate, and the Guaranties.

      LOAN PARTIES means, collectively, the Borrowers and each Guarantor.

      MATERIAL ADVERSE EFFECT means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of Williams LLC or Williams LLC and its Subsidiaries
taken as a whole, or the MLP or the MLP and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of Williams LLC, the MLP, or any other
Loan Party, collectively, to perform their obligations under the Loan Documents;
or (c) a material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrowers or any other Loan Party, collectively, of
any Loan Documents.


                                       11
<PAGE>

      MATERIAL AGREEMENT means (a) each Borrower Operating Agreement, and (b)
any other contract material to the business of the Borrowers and their
Subsidiaries, taken as a whole.

      MATURITY DATE means the earlier of (a) the Stated Maturity Date, or (b)
such earlier effective date of any other termination, cancellation, or
acceleration of all Commitment to lend under this Agreement.

      MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve, or receive on the Obligations.

      MLP means Williams Energy Partners L.P., a Delaware limited partnership,
one of the Borrowers under this Agreement.

      MULTIEMPLOYER PLAN means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding three
calendar years, has made or been obligated to make contributions.

      NET CASH PROCEEDS means (a) with respect to any Disposition, cash
(including any cash received by way of deferred payment pursuant to a promissory
note or otherwise, as and when received) received by the Borrowers or any of
their Subsidiaries (other than OLP No. 1), in connection with and as
consideration therefor, on or after the date of consummation of such
transaction, after (i) deduction of Taxes payable in connection with or as a
result of such transaction, (ii) payment of all usual and customary brokerage
commissions and all other reasonable fees and expenses related to such
transaction (including, without limitation, reasonable attorneys' fees and
closing costs incurred in connection with such transaction), and (iii) deduction
of appropriate amounts required to be reserved (in accordance with GAAP) for
post-closing adjustments by the Borrowers or any of their Subsidiaries in
connection with such transaction, against any liabilities retained by the
Borrowers or any of their Subsidiaries after such transaction, which liabilities
are associated with the asset or assets being sold, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction; (b) with respect to any Debt
Issuance, cash received, on or after the date of incurrence of such
Indebtedness, by the Borrowers or any of their Subsidiaries, from the incurrence
of such Indebtedness after payment of all reasonable attorneys' fees and usual
and customary underwriting commissions, closing costs, and other reasonable
expenses associated with such Debt Issuance; and (c) with respect to any Equity
Issuance, cash received, on or after the date of incurrence of such Equity
Issuance, by the MLP or any of its Subsidiaries from the Equity Issuance after
payment of all reasonable attorneys' fees and usual and customary underwriting
commissions, closing costs, and other reasonable expenses associated with such
Equity Issuance; provided, however, in the case of Taxes that are deductible
under clause (a)(i) preceding or post-closing adjustments under clause (a)(iii)
preceding, but which Taxes or post-closing adjustments have not actually been
paid or are not yet payable, the Borrowers or any of their Subsidiaries selling
such assets may deduct from the cash proceeds an amount (the "RESERVED AMOUNT")
equal to the amount reserved in accordance with GAAP as a reasonable estimate
for such Taxes or post-closing adjustments, so long as, at the time such Taxes
or post-closing adjustments are actually paid, the amount, if any, by which the
Reserved Amount exceeds the Taxes or post-closing adjustments actually paid
shall constitute additional "NET CASH PROCEEDS" of such Disposition.

      NOTES means promissory notes of the Borrowers, substantially in the form
of EXHIBIT B hereto, evidencing the joint and several obligation of Borrowers to
repay the Loans, and "NOTE" means any one of such promissory notes issued
hereunder, and all renewals and extensions of all or any part thereof.


                                       12
<PAGE>

      OBLIGATIONS means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest that accrues after the commencement by or against any Loan
Party or any other Borrower Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding; provided that,
all references to the "Obligations" in each Guaranty and in SECTIONS 2.10(c) and
10.09 of this Agreement shall, in addition to the foregoing, also include all
present and future indebtedness, liabilities, and obligations (and all renewals
and extensions thereof or any part thereof) now or hereafter owed to any Lender
or any Affiliate of a Lender arising from or pursuant to any Swap Contract
entered into by the Borrower or any of its Subsidiaries.

      OLP NO. 1 means Williams OLP, L.P., a Delaware limited partnership.

      OLP NO. 1 CREDIT AGREEMENT means that certain Credit Agreement dated as of
February 6, 2001 by and among OLP No. 1, Bank of America, N.A., as
Administrative Agent, and others, as presently in effect or as the same may be
hereafter amended or restated.

      ORGANIZATION DOCUMENTS means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the certificate of formation and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect thereto
filed in connection with its formation with the secretary of state or other
department in the state of its formation, in each case as amended from time to
time.

      OTHER TAXES has the meaning specified in SECTION 3.01(b).

      OUTSTANDING AMOUNT means on any date, the aggregate principal amount of
Loans after giving effect to any Borrowings and prepayments or repayments
occurring on such date.

      PARTICIPANT has the meaning specified in SECTION 10.07(d).

      PARTNERSHIP AGREEMENT (MLP) means the Amended and Restated Agreement of
Limited Partnership of Williams Energy Partners L.P. dated as of February 9,
2001, as amended by Amendment No. 1 to Amended and Restated Agreement of Limited
Partnership dated April 11, 2002.

      PBGC means the Pension Benefit Guaranty Corporation.

      PENSION PLAN means any "employee pension benefit plan" (as such term is
defined in Section 3(2)(A) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.

      PERMITTED LIENS means Liens permitted under SECTION 7.01 as described in
such Section.

      PERSON means any individual, trustee, corporation, general partnership,
limited partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture or
Governmental Authority.


                                       13
<PAGE>

      PIPELINE ASSETS means the petroleum products pipeline system and related
properties and assets owned by Williams LLC.

      PLAN means any "employee benefit plan" (as such term is defined in Section
3(3) of ERISA) established by the Borrower or any ERISA Affiliate.

      PRESENT AND RELATED BUSINESSES means (i) as to Williams LLC, the operation
of the Pipeline Assets, and businesses closely related thereto; (ii) as to the
MLP, ownership of the shares of capital stock, member interests, or limited
partner interests, as applicable, of OLP No. 1 and Williams LLC; and (iii) as to
OLP No. 1, the storage, transportation and distribution of hydrocarbons and
ammonia, and businesses related thereto.

      PRINCIPAL DEBT means, on any date of determination, the aggregate unpaid
principal balance of all Borrowings hereunder.

      PRINCIPAL PAYMENT means a payment of principal (or, in the case of a
Synthetic Lease, Attributable Principal), whether pursuant to an amortization
schedule, at maturity, or otherwise.

      PRO RATA SHARE means, at any date of determination, for any Lender, the
percentage (carried out to the ninth decimal place) that its Committed Sum bears
to the Aggregate Committed Sum.

      QUARTERLY DISTRIBUTIONS means, as applicable, (i) the distributions by
Williams LLC of Available Cash (as defined in the Limited Liability Company
Agreement (Williams)) or (ii) the distributions by the MLP of Available Cash (as
defined in the Partnership Agreement (MLP)).

      REGISTER has the meaning set forth in SECTION 10.07(c).

      RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposal, deposit,
dispersal, migrating, or other movement into the air, ground, or surface water,
or soil in violation of any Environmental Law.

      REPORTABLE EVENT means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

      REQUIRED LENDERS means (a) on any date of determination on and after the
Closing Date and prior to the date of the Borrowing, those Lenders holding more
than 50% of the Aggregate Commitments, and (b) on any date of determination on
and after the date of the Borrowing, Lenders holding more than 50% of the
Principal Debt.

      RESPONSIBLE OFFICER means the president, chief executive officer, chief
financial officer, treasurer or assistant treasurer of a Loan Party or other
Person, as applicable. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

      RESTRICTED PAYMENT means any dividend or other distribution (whether in
cash, securities or other property) with respect to any equity interest in the
Borrowers or any of their Subsidiaries, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such equity interest or of any option, warrant or other right
to acquire any such equity interest.


                                       14
<PAGE>

      RIGHTS means rights, remedies, powers, privileges, and benefits.

      SOLVENCY OPINION has the meaning set forth in SECTION 4.01(a)(xi).

      STATED MATURITY DATE means October 8, 2002.

      SUBSIDIARY of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrowers.

      SWAP CONTRACT means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

      SWAP TERMINATION VALUE means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

      SYNDICATION AGENTS means Lehman Brothers Inc. and Citibank, N.A., in their
capacities as syndication agents, and SYNDICATION AGENT means either one of
them.

      SYNTHETIC LEASE OBLIGATION means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment). The amount of any Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Principal in respect thereof as of such date.

      TAXES has the meaning set forth in SECTION 3.01.

      TWC means The Williams Companies, Inc.


                                       15
<PAGE>

      TYPE means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

      UNFUNDED PENSION LIABILITY means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

      VOTING STOCK means the capital stock (or equivalent thereof) of any class
or kind, of a Person, the holders of which are entitled to vote for the election
of directors, managers, or other voting members of the governing body of such
Person.

      WHOLLY-OWNED when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by Parent or one
or more of its Wholly-owned Subsidiaries.

      WILLIAMS LLC means Williams Pipe Line Company, LLC, a Delaware limited
liability company, a Borrower under this Agreement.

      1.02 OTHER INTERPRETIVE PROVISIONS.

      (a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.

      (b)   (i) The words "HEREIN" and "HEREUNDER" and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and
not to any particular provision thereof.

            (ii) Unless otherwise specified herein, Article, Section, Exhibit
      and Schedule references are to this Agreement.

            (iii) The term "INCLUDING" is by way of example and not limitation.

            (iv) The term "DOCUMENTS" includes any and all instruments,
      documents, agreements, certificates, notices, reports, financial
      statements and other writings, however evidenced.

      (c) In the computation of periods of time from a specified date to a later
specified date, the word "FROM" means "FROM AND INCLUDING;" the words "TO" and
"UNTIL" each mean "TO BUT EXCLUDING;" and the word "THROUGH" means "TO AND
INCLUDING."

      (d) Section headings herein and the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

      1.03 ACCOUNTING TERMS. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

      1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component,


                                       16
<PAGE>

carrying the result to one place more than the number of places by which such
ratio is expressed herein and rounding the result up or down to the nearest
number (with a rounding-up if there is no nearest number).

      1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.

                                  ARTICLE II.
                         THE COMMITMENTS AND BORROWINGS

      2.01 SENIOR LOAN FACILITY. Subject to and in reliance upon the terms,
conditions, representations, and warranties in the Loan Documents, each Lender
severally, but not jointly, agrees to lend to the Borrowers in a single
disbursement on the Closing Date such Lender's Pro Rata Share of the Aggregate
Committed Sum. If all or a portion of the Principal Debt is paid or prepaid,
then the amount so paid or prepaid may not be reborrowed. Any portion of the
Aggregate Commitments that remains undisbursed after the initial disbursement
hereunder shall be reduced to zero and cancelled on the date of such initial
disbursement.

      2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.

      (a) Each Borrowing, each conversion of Loans from one Type to the other,
and each continuation of Loans as the same Type shall be made upon the
Borrowers' irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m., New York time, (i) three Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Loans, (ii) one Business Day prior to the conversion of Eurodollar Rate
Loans to Base Rate Loans, and (iii) on the requested date of any Borrowing of
Base Rate Loans. Each such telephonic notice must be confirmed promptly by
delivery to the Administrative Agent of a written Borrowing Notice,
appropriately completed and signed by an authorized officer of the Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall
be in a principal amount of $500,000 or a whole multiple of $500,000 in excess
thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Borrowing Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a Borrowing, a conversion of Loans from one Type to
the other, or a continuation of Loans as the same Type, (ii) the requested date
of the Borrowing, conversion or continuation, as the case may be (which shall be
a Business Day), (iii) the principal amount of Loans to be borrowed, converted
or continued, (iv) the Type of Loans to be borrowed or to which existing Loans
are to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto. If the Borrowers fail to specify a Type of Loan in a
Borrowing Notice or if the Borrowers fail to give a timely notice requesting a
conversion or continuation, then the applicable Loans shall be made or continued
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If the Borrowers
request a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans
in any such Borrowing Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one month.


                                       17
<PAGE>

      (b) Following receipt of a Borrowing Notice, the Administrative Agent
shall promptly notify each Lender of its Pro Rata Share of the Loans, and if no
timely notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in the preceding subsection. In the case
of a Borrowing, each Lender shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m., New York time, on the Business Day
specified in the applicable Borrowing Notice. Upon satisfaction of the
applicable conditions set forth in SECTIONS 4.01 AND 4.02, the Administrative
Agent shall make all funds so received available to the Borrower in like funds
as received by the Administrative Agent either by (i) crediting the account of
the Borrower on the books of Bank of America with the amount of such funds or
(ii) wire transfer of such funds, in each case in accordance with instructions
provided to the Administrative Agent by the Borrower.

      (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of the Interest Period for such
Eurodollar Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders, and the Required Lenders may demand
that any or all of the then outstanding Eurodollar Rate Loans be converted
immediately to Base Rate Loans.

      (d) The Administrative Agent shall promptly notify the Borrowers and the
Lenders of the interest rate applicable to any Eurodollar Rate Loan upon
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.

      (e) After giving effect to all Borrowings, all conversions of Loans from
one Type to the other, and all continuations of Loans as the same Type, there
shall not be more than ten (10) Interest Periods in effect at any given time
with respect to Loans.

      2.03 PREPAYMENTS.

      (a) Optional Prepayments. The Borrowers may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay in
whole or in part the Loans without premium or penalty; provided that (i) such
notice must be received by the Administrative Agent not later than 11:00 a.m.,
New York time, (A) three Business Days prior to any date of prepayment of
Eurodollar Rate Loans, and (B) on the date of prepayment of Base Rate Loans;
(ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $500,000 in excess thereof; and (iii) any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts required
pursuant to SECTION 3.05. Each such prepayment shall be applied to the Loans of
the Lenders in accordance with their respective Pro Rata Shares.

      (b) Mandatory Prepayments from Net Cash Proceeds. Until such time as the
Outstanding Amount has been repaid in full, the Outstanding Amount shall be
permanently prepaid in the amounts and upon the occurrence of any of the
following events:


                                       18
<PAGE>

            (i) Debt Issuance. In the event of any Debt Issuance by the
      Borrowers or any of their Subsidiaries (other than Debt Issuance by OLP
      No. 1 under the OLP No. 1 Credit Agreement and any additional Debt
      Issuance by OLP No. 1 to the extent permitted by the OLP No. 1 Credit
      Agreement), then concurrently with such Debt Issuance, the Loans shall be
      prepaid by an amount equal to 100% of the Net Cash Proceeds of such Debt
      Issuance.

            (ii) Dispositions. If any portion of the Net Cash Proceeds realized
      by the Borrowers or any of their Subsidiaries (other than OLP No. 1), from
      any Disposition (including any deferred purchase price therefor and any
      Net Cash Proceeds of any Disposition) has not been reinvested in assets
      used in the Present and Related Businesses of Williams LLC or its
      Subsidiaries within ninety (90) days from the receipt by Borrowers or such
      Subsidiary of such Net Cash Proceeds (including receipt of any deferred
      payments for any such Disposition or portion thereof, if and when
      received), then on the day following the ninetieth day after receipt of
      such Net Cash Proceeds, the Loans shall be prepaid by an amount equal to
      100% of all such Net Cash Proceeds not so reinvested.

            (iii) Equity Issuance. In the event of any Equity Issuance by the
      MLP or any of its Subsidiaries (other than (A) equity interests issued to
      the MLP or a Wholly-Owned Subsidiary of the MLP, and (B) non-registered
      Class B units issued by the MLP in connection with the contribution of the
      Contributed Interests), then concurrently with such Equity Issuance, the
      Loans shall be prepaid by an amount equal to 100% of the Net Cash Proceeds
      of such Equity Issuance

      The prepayments under SECTIONS 2.03(b)(i), (ii) and (iii) shall be applied
as a prepayment of the Principal Debt until Principal Debt is paid in full,
unless a Default or Event of Default has occurred and is continuing or would
arise as a result thereof (whereupon the provisions of SECTION 2.12(b) shall
apply). All mandatory prepayments of the Principal Debt shall be allocated Pro
Rata to each Lender.

      (c) Mandatory Prepayments: Interest/Consequential Loss. All prepayments
under this SECTION 2.03 shall be made together with accrued interest to the date
of such prepayment on the principal amount prepaid and any amounts due under
SECTION 3.05.

      2.04 INTENTIONALLY OMITTED.

      2.05 REPAYMENT OF LOANS. The Borrowers shall repay to the Lenders on the
Maturity Date the Principal Debt outstanding on such date.

      2.06 INTEREST.

      (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Margin and (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Margin.

      (b) While any Event of Default exists or after acceleration, (i) the
Borrowers shall pay interest on the principal amount of all outstanding
Obligations at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Law, and (ii) accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.


                                       19
<PAGE>

      (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

      (d) If the designated rate applicable to any Borrowing exceeds the Maximum
Rate, the rate of interest on such Borrowing shall be limited to the Maximum
Rate, but any subsequent reductions in such designated rate shall not reduce the
rate of interest thereon below the Maximum Rate until the total amount of
interest accrued thereon equals the amount of interest which would have accrued
thereon if such designated rate had at all times been in effect. In the event
that at maturity (stated or by acceleration), or at final payment of the
Outstanding Amount, the total amount of interest paid or accrued is less than
the amount of interest which would have accrued if such designated rates had at
all times been in effect, then, at such time and to the extent permitted by Law,
the Borrower shall pay an amount equal to the difference between (a) the lesser
of the amount of interest which would have accrued if such designated rates had
at all times been in effect and the amount of interest which would have accrued
if the Maximum Rate had at all times been in effect, and (b) the amount of
interest actually paid or accrued on such Outstanding Amount.

      2.07 FEES. On the Closing Date, the Borrowers shall pay to the
Administrative Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, the fees in the agreed amounts in accordance with
those certain letter agreements dated of even date herewith (the "FEE LETTERS")
between the Borrowers and the Lenders. Such fees are for the credit facility by
the Lenders under this Agreement and are fully earned on the date paid. The fees
paid to each Lender pursuant to its respective Fee Letter are solely for its own
account and are nonrefundable for any reason whatsoever.

      2.08 COMPUTATION OF INTEREST AND FEES. Computation of interest on Base
Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. Computation of all other
types of interest and all fees shall be calculated on the basis of a year of 360
days and the actual number of days elapsed, which results in a higher yield to
the payee thereof than a method based on a year of 365 or 366 days. Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day on which
it is made shall bear interest for one day.

      2.09 EVIDENCE OF DEBT. The Loans made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Loans made by the Lenders to the
Borrowers and the interest and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrowers hereunder to pay any amount owing with respect to the Loans. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of such Lender shall control. Upon the
request of any Lender made through the Administrative Agent, such Lender's Loans
may be evidenced by a Note (with respect to the Principal Debt). Each Lender may
attach schedules to its Note(s) and endorse thereon the date, Type (if
applicable), amount and maturity of the applicable Loans and payments with
respect thereto.


                                       20
<PAGE>

      2.10 PAYMENTS GENERALLY.

      (a) All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrowers
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 12:00 noon,
New York time, on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Pro Rata Share (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 12:00 noon, New York time, shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.

      (b) Subject to the definition of "Interest Period," if any payment to be
made by the Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.

      (c) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully the Obligations, such funds shall be applied
(i) first, toward costs and expenses (including Attorney Costs and amounts
payable under ARTICLE III) incurred by the Administrative Agent and each Lender,
(ii) second, toward repayment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, (iii) third, toward repayment of principal
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of principal then due to such parties, and (iv) fourth, toward
the repayment of all other Obligations.

      (d) Unless the Borrowers or any Lender has notified the Administrative
Agent prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrowers or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrowers or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:

            (i) if the Borrowers failed to make such payment, each Lender shall
      forthwith on demand repay to the Administrative Agent the portion of such
      assumed payment that was made available to such Lender in immediately
      available funds, together with interest thereon in respect of each day
      from and including the date such amount was made available by the
      Administrative Agent to such Lender to the date such amount is repaid to
      the Administrative Agent in immediately available funds, at the Federal
      Funds Rate from time to time in effect; and

            (ii) if any Lender failed to make such payment, such Lender shall
      forthwith on demand pay to the Administrative Agent the amount thereof in
      immediately available funds, together with interest thereon for the period
      from the date such amount was made available by the Administrative Agent
      to the Borrowers to the date such amount is recovered by the
      Administrative Agent (the "COMPENSATION PERIOD") at a rate per annum equal
      to the Federal Funds Rate from time to time in effect. If such Lender pays
      such amount to the Administrative Agent, then such amount shall constitute
      such Lender's Loan, included in the applicable Borrowing. If such Lender
      does not pay such amount forthwith upon the Administrative Agent's


                                       21
<PAGE>

      demand therefor, the Administrative Agent may make a demand therefor upon
      the Borrowers, and the Borrowers shall pay such amount to the
      Administrative Agent, together with interest thereon for the Compensation
      Period at a rate per annum equal to the rate of interest applicable to the
      applicable Borrowing. Nothing herein shall be deemed to relieve any Lender
      from its obligation to fulfill its Commitment or to prejudice any rights
      which the Administrative Agent or the Borrowers may have against any
      Lender as a result of any default by such Lender hereunder.

      A notice of the Administrative Agent to any Lender with respect to any
amount owing under this subsection (d) shall be conclusive, absent manifest
error.

      (e) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this ARTICLE II, and the conditions to the applicable Borrowing set forth in
ARTICLE IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

      (f) The obligations of the Lenders hereunder to make Loans are several and
not joint. The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan or purchase its participation.

      (g) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

      2.11 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Loans made by it, any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them, as shall be necessary to cause such purchasing Lender
to share the excess payment in respect of such Loan or such participations, as
the case may be, pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to SECTION 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.


                                       22
<PAGE>

      2.12 ORDER OF APPLICATION.

      (a) No Default. If no Default or Event of Default exists and if no order
of application is otherwise specified in the Loan Documents, payments and
prepayments of the Obligations shall be applied first to fees, second to accrued
interest then due and payable on the Outstanding Amount, and then to the
remaining Obligations in the order and manner as the Borrowers may direct.

      (b) Default. If a Default or Event of Default exists (or if the Borrowers
fail to give directions as permitted under SECTION 2.12(a)), any payment or
prepayment (including proceeds from the exercise of any Rights) shall be applied
to the Obligations in the following order: (i) to the payment of enforcement
expenses incurred by the Administrative Agent, including Attorney Costs; (ii) to
the ratable payment of all other fees, expenses, and indemnities for which the
Administrative Agent or Lenders have not been paid or reimbursed in accordance
with the Loan Documents (as used in this SECTION 2.12(b)(ii), a "RATABLE
PAYMENT" for any Lender or the Administrative Agent shall be, on any date of
determination, that proportion which the portion of the total fees, expenses,
and indemnities owed to such Lender or the Administrative Agent bears to the
total aggregate fees and indemnities owed to all Lenders and the Administrative
Agent on such date of determination); (iii) to the ratable payment of accrued
and unpaid interest on the Outstanding Amount (as used in this SECTION
2.12(b)(iii), "RATABLE PAYMENT" means, for any Lender, on any date of
determination, that proportion which the accrued and unpaid interest on the
Outstanding Amount owed to such Lender bears to the total accrued and unpaid
interest on the Outstanding Amount owed to all Lenders); (iv) to the ratable
payment of the Outstanding Amount (as used in this SECTION 2.12(b)(iv), "RATABLE
PAYMENT" means for any Lender, on any date of determination, that proportion
which the Outstanding Amount owed to such Lender bears to the Outstanding Amount
owed to all Lenders); and (v) to the payment of the remaining Obligations, if
any, in the order and manner Required Lenders deem appropriate.

      Subject to the provisions of ARTICLE IX and provided that Administrative
Agent shall not in any event be bound to inquire into or to determine the
validity, scope, or priority of any interest or entitlement of any Lender and
may suspend all payments or seek appropriate relief (including, without
limitation, instructions from Required Lenders or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby, Administrative Agent shall promptly distribute
such amounts to each Lender in accordance with the Agreement and the related
Loan Documents.

      2.13 OBLIGATIONS JOINT AND SEVERAL. All Obligations (including indemnity
Obligations) of the Borrowers under this Agreement and the Notes shall
constitute joint and several obligations of the Borrowers. Each Borrower
expressly represents and acknowledges that it is part of a single business
enterprise formed to own and operate the Pipeline Assets with the other Borrower
and that any Loans by the Lenders to the other Borrower hereunder will be of
direct and indirect interest, benefit and advantage of both of the Borrowers.
Each Borrower acknowledges that any Borrowing Notice, Conversion/Continuation
Notice or other notice given by either of the Borrowers to the Administrative
Agent or any Lender shall bind both of the Borrowers, and that any notice given
by the Administrative Agent or any Lender to either of the Borrowers shall be
effective with respect to all Borrowers. Each Borrower acknowledges and agrees
that each Borrower shall be liable not merely as a surety but as a co-debtor, on
a joint and several basis, for all of the Loans, regardless of which Borrower
may actually have received the proceeds of any of the Loans or the amount of
such Loans received or the manner in which the Administrative Agent or any
Lender accounts for such Loans on its books and records, and further
acknowledges and agrees that Loans to either Borrower inure to the mutual
benefit of both Borrowers and that the Administrative Agent and the Lenders are
relying on the joint and several liability of the Borrowers in extending the
Loans hereunder. Each Borrower hereby waives, to the fullest extent


                                       23
<PAGE>

permitted by applicable Law, all surety defenses, whether at law or in equity;
without limitation of the foregoing, each Borrower assents to, and waives notice
of, any extension or postponement of the time for the payment or performance of
all or any part of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the
Administrative Agent or the Lenders at any time or times in respect of any
default by any Borrower in the payment or performance of any of the Obligations,
any and all other indulgences whatsoever by the Administrative Agent or the
Lenders in respect of all or any part of the Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time or times, of
any security for all or any part of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower or any Guarantor
or other Person now or hereafter liable for payment or performance of the
Obligations. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
the Administrative Agent or the Lenders, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might, but for
the provisions of this SECTION 2.13, afford grounds for terminating, discharging
or relieving such Borrower, in whole or in part, from any of its obligations
under this SECTION 2.13, it being the intention of each Borrower that, so long
as all or any part of the Obligations remains unsatisfied, the obligations of
such Borrower under this SECTION 2.13 shall not be discharged except by payment
or performance and then only to the extent of such payment or performance. A
separate action or actions may be brought and prosecuted against either Borrower
in respect of the Obligations, and it shall not be necessary to join the other
Borrower in any such action or actions, any right to require such joinder being
hereby waived to the fullest permitted by applicable Law. The obligations of
each Borrower under this SECTION 2.13 shall not be diminished or rendered
unenforceable by any unenforceability or invalidity of the Obligations as to the
other Borrower, or by any bankruptcy, insolvency, winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any reconstruction or similar proceeding with respect to any Borrower. The joint
and several liability of the Borrowers hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place of formation of
any Borrower. Each Borrower shall be entitled to subrogation and contribution
rights from and against the other Borrower to the extent such Borrower is
required to pay to the Administrative Agent or any Lender any principal,
interest or other amount attributable to the Loans advanced hereunder to the
other Borrower or as otherwise available under applicable Law; provided, no
Borrower shall exercise any rights of subrogation or contribution prior to the
indefeasible payment in full in cash of all of the Obligations. The provisions
of this SECTION 2.13 shall remain in effect until all of the Obligations shall
have been indefeasibly paid in full in cash. If at any time, any payment, or any
part thereof, made in respect of all or any part of the Obligations, is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any of the Lenders upon the insolvency, bankruptcy or reorganization of the
Borrowers, or either of them,, or otherwise, the provisions of this SECTION 2.13
will forthwith be reinstated in effect, as though such payment had not been
made.

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

      3.01 TAXES.

      (a) Any and all payments by the Borrowers to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of


                                       24
<PAGE>

which the Administrative Agent or such Lender, as the case may be, is organized
or maintains its Lending Office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to the Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), each of the Administrative Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions, (iii) the Borrowers shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrowers shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.

      (b) In addition, the Borrowers agree to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").

      (c) If the Borrowers shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrowers shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would have
received if such Taxes or Other Taxes had not been imposed.

      (d) The Borrowers agree to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under SECTION 3.01(c) and (iii) any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. Payment under
this subsection (d) shall be made within 30 days after the date the Lender or
the Administrative Agent makes a demand therefor.

      3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrowers shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period thereof, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrowers shall also pay interest on
the amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the reasonable judgment of such Lender, otherwise be materially
disadvantageous to such Lender.


                                       25
<PAGE>

      3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent determines
in connection with any request for a Eurodollar Rate Loan or a conversion to or
continuation thereof that (a) Dollar deposits are not being offered to banks in
the applicable offshore Dollar market for the applicable amount and Interest
Period of such Eurodollar Rate Loan, or adequate and reasonable means do not
exist for determining the Eurodollar Rate for such Eurodollar Rate Loan, or (b)
if the Required Lenders determine and notify the Administrative Agent that the
Eurodollar Rate for such Eurodollar Rate Loan does not adequately and fairly
reflect the cost to the Lenders of funding such Eurodollar Rate Loan, then the
Administrative Agent will promptly notify the Borrowers and all Lenders.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent revokes such notice.
Upon receipt of such notice, the Borrowers may revoke any pending request for a
Borrowing, conversion or continuation of Eurodollar Rate Loans or, failing that,
will be deemed to have converted such request into a request for a Borrowing of
Base Rate Loans in the amount specified therein.

      3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.

      (a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans, or a reduction in
the amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which SECTION 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements contemplated by SECTION 3.04(c) utilized, as to Eurodollar Rate
Loans, in the determination of the Eurodollar Rate), then from time to time upon
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrowers shall pay to such Lender such additional amounts as will
compensate such Lender for such increased cost or reduction. No Lender shall
have the right to recover such additional amounts for any period more than 90
days prior to the date such Lender notified the Borrowers thereof.

      (b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrowers shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction. No Lender shall have the right to recover such
additional amounts for any period more than 90 days prior to the date such
Lender notified the Borrowers thereof.

      (c) The Borrowers shall pay to each Lender, as long as such Lender shall
be required under regulations of the Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as "Eurocurrency liabilities"), additional costs on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan, provided the
Borrowers shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give


                                       26
<PAGE>

notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 15 days from receipt of such notice.

      3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

      (a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or

      (b) any failure by the Borrowers (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

      For purposes of calculating amounts payable by the Borrower to the Lenders
under this SECTION 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the applicable offshore Dollar interbank
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

      3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A certificate of
the Administrative Agent or any Lender claiming compensation under this ARTICLE
III and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.

      3.07 SURVIVAL. All of the Borrowers' obligations under this ARTICLE III
shall survive termination of the Commitments and payment in full of all the
other Obligations.

                                  ARTICLE IV.
                        CONDITIONS PRECEDENT TO BORROWING

      4.01 CONDITIONS OF BORROWING. The obligation of each Lender to make its
Loan hereunder is subject to satisfaction of the following conditions precedent:

      (a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) and unless
otherwise specified, each properly executed by an authorized officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance reasonably satisfactory to the Lenders and their legal
counsel:

            (i) executed counterparts of this Agreement;


                                       27
<PAGE>

            (ii) Notes executed by the Borrowers in favor of each Lender
      requesting such Notes, each in a principal amount equal to such Lender's
      Committed Sum;

            (iii) such certificates of resolutions or other action, incumbency
      certificates and/or other certificates of officers of each Loan Party as
      the Administrative Agent may require to establish the identities of and
      verify the authority and capacity of each officer thereof authorized to
      act in connection with this Agreement and the other Loan Documents to
      which such Loan Party is a party;

            (iv) such evidence as the Administrative Agent may reasonably
      require to verify that each Loan Party and the General Partner is duly
      organized or formed, validly existing, in good standing and qualified to
      engage in business in the jurisdiction of its organization and in each
      other jurisdiction in which it is required to be qualified to engage in
      business, except where such failure would not have a Material Adverse
      Effect;

            (v) a certificate signed by a Responsible Officer of each Borrower
      certifying (A) that the representations and warranties contained in
      ARTICLE V are true and correct in all respects on and as of such date, (B)
      no Default or Event of Default has occurred and is continuing as of such
      date, (C) since December 31, 2001 there has occurred no material adverse
      change in the business, assets, liabilities (actual or contingent),
      operations, condition (financial or otherwise) or prospects of the
      Borrowers, any Guarantor, TWC, or any other material Subsidiary of TWC, or
      any of the businesses, assets or liabilities acquired or assumed or being
      acquired or assumed by the Borrowers or any of their Subsidiaries, (D) the
      Borrowers and their Subsidiaries own the assets and businesses reflected
      on the Initial Pro Formas, including without limitation the Contributed
      Interests and the Pipeline Assets, free and clear of all Liens other than
      Permitted Liens and subject to no Indebtedness, and (E) no action, suit,
      investigation or proceeding is pending or threatened in any court or
      before any arbitrator or governmental authority by or against the
      Borrowers or any of their Subsidiaries, that in the opinion of the Lenders
      (x) could reasonably be expected to materially and adversely affect the
      Borrowers, any Guarantor or any material Subsidiary of TWC, or (y) seeks
      to affect or pertain to any transaction contemplated hereby or the ability
      of the Borrowers or any Guarantor to perform its obligations under the
      Loan Documents;

            (vi) opinions from (A) Vinson &Elkins L.L.P., counsel to each Loan
      Party and the General Partner, substantially in the form of EXHIBIT F-1
      hereto, and (B) William G. von Glahn, counsel to each Loan Party and the
      General Partner, substantially in the form of EXHIBIT F-2 hereto;

            (vii) receipt of the following, in each case in form and substance
      satisfactory to the Lenders in their sole discretion: (A) an unaudited pro
      forma opening balance sheet and income statement of Williams LLC and the
      MLP, in each case both individually and consolidated for the Company and
      its Subsidiaries; (B) audited consolidated and consolidating balance
      sheets, income statements and statements of cash flows of the MLP for the
      period ended December 31, 2001; (C) one-year projections for Williams LLC
      and the MLP; (D) unaudited balance sheets of Williams LLC as of December
      31, 2001, and unaudited income statements and statements of cash flows for
      Williams LLC for the period ended December 31, 2001; and (E) such other
      financial information as the Administrative Agent may reasonably request;

            (viii) copies of the following, in each case in form and substance
      reasonably satisfactory to the Lenders: (A) the Contribution Agreement and
      related agreements; (B) all


                                       28
<PAGE>

      agreements between Williams LLC and the MLP, and all agreements between
      Williams LLC or the MLP and TWC or a TWC Affiliate relating to Williams
      LLC, (C) Williams LLC's Organization Documents, and (D) the MLP's
      Organization Documents (collectively, the "BORROWER OPERATING
      AGREEMENTS");

            (ix) a letter from CT Corporation System, Inc., to accept service of
      process in the State of New York on behalf of the Borrowers and each
      Guarantor;

            (x) such other assurances, certificates, documents, consents or
      opinions as the Administrative Agent or the Required Lenders reasonably
      may require;

            (xi) an opinion (a "SOLVENCY OPINION") that Williams LLC is and,
      after giving effect to the Borrowing and the transactions contemplated by
      this Agreement, and to the transactions applicable to Williams LLC
      contemplated by the Contribution Agreement, will be "solvent" as such term
      is defined in SECTION 5.18, determined on a stand-alone basis for Williams
      LLC and not on a consolidated basis. The Solvency Opinion shall be
      rendered to or for the Administrative Agent and the Lenders; shall be
      prepared by an independent third party who is reasonably satisfactory to
      the Lenders, and shall be in form and substance satisfactory to the
      Lenders in their sole discretion; and

            (xii) a certificate signed by a Responsible Officer of each Borrower
      that the transactions contemplated by the Contribution Agreement including
      the contribution of the Contributed Interests to the MLP and the issuance
      by the MLP of its redeemable class B units to GP LLC have occurred or are
      occurring concurrently with the funding of the Loans.

      (b) All fees required to be paid on or before the Closing Date (including
the fees set forth in the Fee Letters) shall have been paid.

      (c) The Borrowers shall have paid or reimbursed all reasonable
out-of-pocket costs and expenses of the Administrative Agent and the Lenders
including, without limitation, Attorney Costs of the Administrative Agent to the
extent invoiced prior to or on the Closing Date.

      4.02 CONDITIONS TO ALL LOANS. The obligation of each Lender to honor any
Borrowing Notice (other than a Borrowing Notice requesting only a conversion of
Loans to the other Type, or a continuation of Loans as the same Type) is subject
to the following conditions precedent:

      (a) The representations and warranties of the Borrowers contained in
ARTICLE V, or which are contained in any document furnished at any time under or
in connection herewith, shall be true and correct on and as of the date of such
Borrowing, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.

      (b) No Default or Event of Default shall exist or would result from such
proposed Borrowing.

      (c) The Administrative Agent shall have received a Borrowing Notice in
accordance with the requirements hereof.


                                       29
<PAGE>

      (d) The Administrative Agent shall have received, in form and substance
reasonably satisfactory to it, such other assurances, certificates, documents or
consents related to the foregoing as the Administrative Agent or the Required
Lenders reasonably may require.

      Each Borrowing Notice (other than a Borrowing Notice requesting only a
conversion of Loans to the other Type or a continuation of Loans as the same
Type) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in SECTIONS 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Borrowing.

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

      Each of the Borrowers, and each Guarantor by its execution of a Guaranty,
represents and warrants to the Administrative Agent and the Lenders that:

      5.01 EXISTENCE; QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. The General
Partner is the sole general partner of the MLP. All of the member interests in
Williams LLC are owned by the MLP. The General Partner and each Loan Party (a)
is a corporation, partnership or limited liability company duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
and all governmental licenses, authorizations, consents and approvals to own its
assets, carry on its business and to execute, deliver, and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws, except in each case referred to in clause (c) or this
clause (d), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.

      5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or (c) violate any Law.

      5.03 THIRD PARTY APPROVALS. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any Person that is not a party to this Agreement is
necessary or required in connection with (i) the consummation of the
transactions contemplated by the Contribution Agreement or (ii) the execution,
delivery or performance by, or enforcement against, any Loan Party of this
Agreement or any other Loan Document except where obtained or where the failure
to receive such approval, consent, exemption, authorization, or the failure to
do such other action by, or provide notice could not reasonably be expected to
have a Material Adverse Effect.

      5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.


                                       30
<PAGE>

      5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

      (a) The Initial Financial Statements were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein. The Initial Pro Formas and the Initial Financial
Statements (i) fairly present the financial condition of the entities therein
named and their respective Subsidiaries as of the date thereof and their results
of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (ii) show all material Indebtedness and other
liabilities, direct or contingent, of the entities therein named and their
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness in accordance with GAAP consistently applied
throughout the period covered thereby.

      (b) Since December 31, 2001, there has been no event or circumstance that
has or could reasonably be expected to have a Material Adverse Effect.

      5.06 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrowers after due and diligent
investigation, overtly threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against any Loan Party
or any of their respective Subsidiaries or against any of their properties
including the Pipeline Assets, or revenues which (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) if determined adversely, could reasonably be
expected to have a Material Adverse Effect.

      5.07 NO DEFAULT. There is no failure of any Material Agreement to be in
effect, and there is no default by the Borrowers or any of their Subsidiaries
under any Material Agreement, if such failure to remain in effect, or such
default, could reasonably be expected to have a Material Adverse Effect.

      5.08 OWNERSHIP OF PROPERTY; LIENS. (a) Each Loan Party and its
Subsidiaries have good and marketable title to, or valid leasehold interests in,
all its real and personal property necessary or used in the ordinary conduct of
its business, including the Pipeline Assets, except for such defects in title as
would not, individually or in the aggregate, have a Material Adverse Effect, and
(b) the property of the Borrower and its Subsidiaries, including the Pipeline
Assets, is subject to no Liens, other than Permitted Liens.

      5.09 ENVIRONMENTAL COMPLIANCE. The Borrowers have reasonably concluded
that (a) there are no claims alleging potential liability under or
responsibility for violation of any Environmental Law except any such claims
that would not, individually or in the aggregate, have a Material Adverse
Effect, (b) there is no environmental condition or circumstance, such as the
presence or Release of any Hazardous Substance, on any property owned, operated
or used by any Loan Party or any of their Subsidiaries including the Pipeline
Assets, that could reasonably be expected to have a Material Adverse Effect, and
(c) there is no violation of or by any Loan Party or any of their Subsidiaries
of any Environmental Law, except for such violations as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

      5.10 INSURANCE. The Companies and their properties including the Pipeline
Assets are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Companies operate.


                                       31
<PAGE>

      5.11 TAXES. The Borrowers and their respective Subsidiaries have filed all
federal, state and other material tax returns and reports required to be filed,
and have paid all federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against any Loan Party or any of their respective Subsidiaries that
would, if made, have a Material Adverse Effect.

      5.12 ERISA COMPLIANCE.

      (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Laws except
to the extent that noncompliance could not reasonably be expected to have a
Material Adverse Effect. Each Plan that is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS or
an application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrowers, nothing has
occurred which would prevent, or cause the loss of, such qualification. The
Borrowers and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

      (b) There are no pending or, to the best knowledge of the Borrowers,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. Neither the Borrowers nor any ERISA Affiliate has engaged in or
knowingly permitted to occur and, to the Borrowers' knowledge, no other party
has engaged in or permitted to occur any prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan that has resulted or
could be reasonably expected to result in a Material Adverse Effect.

      (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability that (when aggregated
with any other Unfunded Pension Liability) has resulted or could reasonably be
expected to result in a Material Adverse Effect; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA) which could reasonably be
expected to result in a Material Adverse Effect; (iv) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan which could reasonably be expected to
result in a Material Adverse Effect; and (v) neither the Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA.

      5.13 SUBSIDIARIES. The Borrowers have no Subsidiaries other than those
specifically disclosed in Schedule 5.13, and has no equity investment in any
other corporation or other entity other than those specifically disclosed in
Schedule 5.13.

      5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT; USE OF PROCEEDS.

      (a) No Loan Party is engaged, principally or as one of their important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board), or extending credit for the
purpose of purchasing or carrying margin stock. Margin Stock


                                       32
<PAGE>

constitutes less than 25% of those assets of each Loan Party which are subject
to any limitation on a sale, pledge, or other restrictions hereunder.

      (b) No Loan Party, no Person controlling any Loan Party, or any Subsidiary
of any Loan Party (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.

      5.15 DISCLOSURE. No statement, information, report, representation, or
warranty made by any Loan Party in any Loan Document or furnished to the
Administrative Agent or any Lender by or on behalf of any Loan Party in
connection with any Loan Document contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

      5.16 LABOR MATTERS. To the Borrowers' knowledge, there are no pending or
threatened strikes, labor disputes, slowdowns, walkouts, or other concerted
interruptions of operations by the employees of any Loan Party or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of Loan Parties and their
Subsidiaries have not been in violation of the Fair Labor Standards Act of 1938
or any other applicable Law dealing with such matters, other than any such
violations, individually or collectively, which could not reasonably be expected
to have a Material Adverse Effect. All payments due from any Loan Party or any
of its Subsidiaries on account of employee health and welfare insurance have
been paid or accrued as a liability on its books, other than any such
nonpayments which could not, individually or collectively, reasonably be
expected to have a Material Adverse Effect.

      5.17 COMPLIANCE WITH LAWS. No Loan Party or any of its Subsidiaries are in
violation of any Laws, other than such violations which could not, individually
or collectively, reasonably be expected to have a Material Adverse Effect. No
Loan Party has received notice alleging any noncompliance with any Laws, except
for such noncompliance which no longer exists, or which noncompliance could not
reasonably be expected to have a Material Adverse Effect.

      5.18 SOLVENCY. At the time of the Borrowing hereunder, each Loan Party is
and, after giving effect to the Borrowing and the transactions contemplated by
this Agreement, and to the transactions applicable to the Loan Parties
contemplated by the Contribution Agreement, will be solvent. As used herein,
"solvent" means, as to a Person, that (i) the aggregate fair market value of
such Person's assets exceeds such Person's debts, (ii) such Person has
sufficient cash flow to enable it to pay its debts as they mature, and (iii)
such Person does not have unreasonably small capital to engage in such Person's
businesses; and "debt" means liability on a claim (whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed,
legal or equitable, secured or unsecured, or otherwise) and shall include the
Obligations. The representation and warranty as to solvency has been determined
on a stand-alone basis for each Loan Party and not on a consolidated basis.

      5.19 FAIRNESS OPINIONS. The Conflicts Committee of the General Partner has
received an opinion (the "FAIRNESS OPINION") to the effect that the
consideration (as defined in the Fairness Opinion) to be paid by the MLP
pursuant to the Contribution Agreement is fair, from a financial point of view,
to the MLP. Williams Energy Services, LLC, as seller under the Contribution
Agreement, has received an opinion (the "SELLER FAIRNESS OPINION") to the effect
that the consideration (as defined in the Seller Fairness Opinion) to be
received by the Seller pursuant to the Contribution Agreement is fair, from a
financial point of view, to the Seller.


                                       33
<PAGE>

                                  ARTICLE VI.
                              AFFIRMATIVE COVENANTS

      So long as any Lender shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, the Borrowers shall, and
shall (except in the case of the covenants set forth in SECTIONS 6.01, 6.02,
6.03 and 6.12) cause each of their Subsidiaries to:

      6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each
Lender, in form and detail reasonably satisfactory to the Administrative Agent
and the Required Lenders:

      (a) as soon as available, but in any event within 105 days after the end
of each fiscal year of Williams LLC, a consolidated balance sheet of Williams
LLC and its Subsidiaries as at the end of such fiscal year, and the related
statements of income and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail, and certified by a Responsible Officer of Williams LLC as
fairly presenting the financial condition, results of operations and cash flows
of Williams LLC and its Subsidiaries in accordance with GAAP; and

      (b) as soon as available, but in any event within 60 days after the end of
each of the first three fiscal quarters of each fiscal year of Williams LLC, a
consolidated balance sheet of Williams LLC and its Subsidiaries as at the end of
such fiscal quarter, and the related statements of income and cash flows for
such fiscal quarter and for the portion of Williams LLC's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of Williams LLC as fairly presenting the financial
condition, results of operations and cash flows of Williams LLC and its
Subsidiaries in accordance with GAAP; and

      (c) as soon as available, but in any event within 105 days after the end
of each fiscal year of the MLP, consolidated balance sheets of the MLP and its
Subsidiaries as at the end of such fiscal year, and the related statements of
income and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail, audited and accompanied by a report and opinion of Ernst & Young LLP or
other independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with GAAP and shall not be subject to any qualifications
or exceptions as to the scope of the audit nor to any qualifications and
exceptions not reasonably acceptable to the Required Lenders; provided, that, if
any financial statement referred to in this clause (c) is readily available
on-line through EDGAR, the MLP shall not be obligated to furnish copies of such
financial statement; and

      (d) as soon as available, but in any event within 60 days after the end of
each of the first three fiscal quarters of each fiscal year of the MLP, a
consolidated balance sheet of the MLP and its Subsidiaries as at the end of such
fiscal quarter, and the related statements of income and cash flows for such
fiscal quarter and for the portion of the MLP's fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of the MLP as fairly presenting the financial condition, results of
operations and cash flows of the MLP and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes; provided, that, if any financial statement referred to in this clause
(d) is readily available on-line through EDGAR, the MLP shall not be obligated
to furnish copies of such financial statement.


                                       34
<PAGE>

      6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:

      (a) concurrently with the delivery of the financial statements referred to
in SECTION 6.01, a duly completed Compliance Certificate in form of EXHIBIT C
signed by a Responsible Officer of Williams LLC and a Responsible Officer of the
MLP;

      (b) promptly after requested by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors or equivalent governing body (or the audit
committee thereof) of the Borrowers or any of their Subsidiaries by independent
accountants in connection with the accounts or books of the Borrowers or any of
their Subsidiaries, or any audit of any of them;

      (c) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the equity
owners of the MLP, and copies of all annual, regular, periodic and special
reports and registration statements which the MLP may file or be required to
file with the Securities and Exchange Commission under Section 13 or 15(d) of
the Securities Exchange Act of 1934, and not otherwise required to be delivered
to the Administrative Agent pursuant hereto; provided, that, if such report,
proxy, financial statement or other report or communication is readily available
on-line through EDGAR, the MLP shall not be obligated to furnish copies thereof;

      (d) promptly after execution thereof, copies of Material Agreements and
any material amendment thereto; and

      (d) promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party as the Administrative Agent, at
the request of any Lender, may from time to time reasonably request.

      6.03 NOTICES. Promptly notify the Administrative Agent and each Lender:

      (a) of the occurrence of any Default or Event of Default, as soon as
possible but in any event within ten days after the occurrence thereof;

      (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including any of the following events if
such has resulted or could reasonably be expected to result in a Material
Adverse Effect: (i) breach or non-performance of, or any default under, a
Contractual Obligation of any Loan Party; (ii) any litigation, investigation by
or required by a Governmental Authority, proceeding or suspension between any
Loan Party and any Governmental Authority which could reasonably be expected to
have a Material Adverse Effect; or (iii) any litigation, investigation or
proceeding involving any Loan Party related to any Environmental Law;

      (c) of any litigation, investigation or proceeding affecting the Borrowers
or any other Borrower Affiliate on in which (i) the amount involved exceeds
(individually or collectively) $20,000,000, or (ii) injunctive relief or similar
relief is sought, which could be reasonably expected to have a Material Adverse
Effect; and

      (d) of any material change in accounting policies or financial reporting
practices by the Borrowers.


                                       35
<PAGE>

      Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer of Williams LLC or a Responsible Officer of the MLP
setting forth details of the occurrence referred to therein and stating what
action the Borrowers have taken and proposes to take with respect thereto. Each
notice pursuant to SECTION 6.03(a) shall describe with particularity any and all
provisions of this Agreement or other Loan Document that have been breached.

      6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets and (b) all lawful claims which, if unpaid, would by law
become a Lien upon its property, except, in the case of clause (a) or clause
(b), where (x) the validity of same are being contested in good faith by
appropriate proceedings and (y) adequate reserves in accordance with GAAP are
being maintained by the appropriate Loan Party.

      6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain in
full force and effect their legal existence and good standing under the Laws of
their jurisdiction of organization, except in a transaction permitted by Section
7.04 and 7.05, (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except in a transaction permitted by Section
7.04 and 7.05, and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

      6.06 MAINTENANCE OF ASSETS AND BUSINESS. (a) Maintain all material
licenses, permits, and franchises necessary for the normal business; (b) keep
all of its assets which are useful in and necessary to its business in good
working order and condition (ordinary wear and tear excepted) and make all
necessary repairs thereto and replacements thereof; and (c) do all things
necessary to obtain, renew, extend, and continue in effect all Authorizations
which may at any time and from time to time be necessary for the Borrowers and
their Subsidiaries to operate their businesses in compliance with applicable
Law; except where the failure to so maintain, renew, extend, or continue in
effect could not reasonably be expected to have a Material Adverse Effect.

      6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrowers, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.

      6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws applicable to it or to its business or property, except
in such instances in which (i) such requirement of Law is being contested in
good faith or a bona fide dispute exists with respect thereto; or (ii) the
failure to comply therewith could not be reasonably expected to have a Material
Adverse Effect.

      6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving its
assets and business; and (b) maintain such books of record and account in
material conformity with all applicable requirements of any Governmental
Authority having regulatory jurisdiction over it.

      6.10 INSPECTION RIGHTS. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs,


                                       36
<PAGE>

finances and accounts with its directors, officers, and independent public
accountants, at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Borrower;
provided, however, that when an Event of Default exists the Administrative Agent
or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.

      6.11 COMPLIANCE WITH ERISA. With respect to each Plan maintained by a
Company, do each of the following: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state Laws; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code

      6.12 USE OF PROCEEDS. Use the proceeds of the Loans to make distributions
to the General Partner in satisfaction of the General Partner's right to receive
net proceeds thereof (after transaction costs).

      6.13 GUARANTIES. Promptly after the formation or acquisition of any new
entity that is (or becomes) a Subsidiary of Williams LLC, cause such new entity
to execute and deliver to Administrative Agent a Guaranty substantially in the
form and upon the terms of EXHIBIT E, providing for the guaranty of payment and
performance of the Obligations, together with certified copies of such
Subsidiary's Organization Documents and opinions of counsel with respect to such
Subsidiary and such Guaranty, in substantially the forms of EXHIBIT F-1 and F-2
hereto.

      6.14 MATERIAL AGREEMENTS. Perform its obligations under the Material
Agreements, except where failure to do so could not reasonably be expected to
have a Material Adverse Effect.

                                  ARTICLE VII.
                               NEGATIVE COVENANTS

      So long as any Lender shall have any Commitment hereunder, or any Loan or
other Obligations shall remain unpaid or unsatisfied, the Borrowers agree that
they shall not, nor shall they permit any of their respective Subsidiaries to,
directly or indirectly:

      7.01 LIENS. Create, incur, assume or suffer to exist, any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

      (a) Liens pursuant to any Loan Document;

      (b) Liens upon property, assets and revenues of OLP No. 1 to secure
Indebtedness permitted by SECTION 7.03(b);

      (c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;

      (d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or


                                       37
<PAGE>

which are being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person;

      (e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

      (f) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each case
incurred in the ordinary course of business;

      (g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person; and

      (h) judgment Liens not giving rise to an Event of Default.

      7.02 INVESTMENTS. Make or own any Investments, except:

      (a) Investments held by the Borrowers or their Subsidiaries in Cash
Equivalents;

      (b) Investments by the MLP in Williams LLC;

      (c) Investments by the MLP in OLP No. 1 not to exceed the amount invested
as of the Closing Date;

      (d) Investments by OLP No. 1 which are permitted Investments and/or
Permitted Acquisitions (as such terms is defined in the OLP No. 1 Credit
Agreement) under the terms of the OLP No. 1 Credit Agreement, subject to the
limitations and restrictions contained therein; and

      (e) trade accounts receivable which are for goods furnished or services
rendered in the ordinary course of business.

      7.03 INDEBTEDNESS, SYNTHETIC LEASES AND SWAP OBLIGATIONS. Create, incur,
assume or suffer to exist any Indebtedness, Synthetic Leases or obligations
under Swap Contracts, except:

      (a) Indebtedness under the Loan Documents and Guaranty Obligations under a
Guaranty executed pursuant to this Agreement;

      (b) Indebtedness of OLP No. 1 now existing or hereafter arising under the
OLP No. 1 Credit Agreement and any additional Indebtedness of OLP No. 1 to the
extent permitted by the OLP No. 1 Credit Agreement;

      (c) Obligations (contingent or otherwise) of the Borrowers existing or
arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risk and not for purposes of speculation or
taking a "market view;" and (ii) such Swap Contract does not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party; and

      (d) Indebtedness the Net Cash Proceeds of which are used to prepay the
Loans in full.


                                       38
<PAGE>

      7.04 FUNDAMENTAL CHANGES. Merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default or Event of Default exists or would result therefrom:

      (a) any Subsidiary of Williams LLC may merge with (i) Williams LLC,
provided that Williams LLC shall be the continuing or surviving Person, or (ii)
any one or more Subsidiaries of Williams LLC, provided that when any
Wholly-Owned Subsidiary is merging with another Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving Person;

      (b) any Subsidiary of Williams LLC may sell all or substantially all of
its assets (upon voluntary liquidation or otherwise), to Williams LLC or to
another Subsidiary of Williams LLC; provided that if the seller in such a
transaction is a wholly-owned Subsidiary, then the purchaser must also be a
Wholly-Owned Subsidiary;

      (c) any Subsidiary of OLP No. 1 may merge with (i) OLP No. 1, provided
that OLP No. 1 shall be the continuing or surviving Person, or (ii) any one or
more Subsidiaries of OLP No. 1, provided that when any Wholly-Owned Subsidiary
is merging with another Subsidiary, the Wholly-Owned Subsidiary shall be the
continuing or surviving Person;

      (d) any Subsidiary of OLP No. 1 may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to OLP No. 1 or to another
Subsidiary of OLP No. 1; provided that if the seller in such a transaction is a
wholly-owned Subsidiary, then the purchaser must also be a Wholly-Owned
Subsidiary; and

      (e) OLP No. 1 may enter into mergers and consolidations constituting
Permitted Acquisitions (as such term is defined in the OLP No. 1 Credit
Agreement), subject to the restrictions and limitations contained in the OLP No.
1 Credit Agreement.

      7.05 DISPOSITIONS. Make any Disposition or enter into any agreement to
make any Disposition, except:

      (a) Dispositions by Williams LLC and OLP No. 1 or their respective
Subsidiaries of inventory in the ordinary course of business;

      (b) Dispositions by Williams LLC and OLP No. 1 or their Subsidiaries of
obsolete or worn out property, whether now owned or hereafter acquired, in the
ordinary course of business; and

      (c) Dispositions of property (i) by any Subsidiary of Williams LLC to
Williams LLC or to a Wholly-Owned Subsidiary of Williams LLC, and (ii) by any
Subsidiary of OLP No. 1 to OLP No. 1 or to a Wholly-Owned Subsidiary of OLP No.
1;

      (d) Other dispositions of property of OLP No. 1 permitted by the OLP No. 1
Credit Agreement, subject to the restrictions and limitations contained therein

      (e) If no Default or Event of Default then exists or arises as a result
thereof, Dispositions not in excess of $5,000,000 for fair market value for cash
in the aggregate as to all such Dispositions, provided that the Borrower or the
MLP shall make the prepayment required by SECTION 2.04(b)(II) concurrently with
such Disposition; and


                                       39
<PAGE>

      (f) Dispositions the Net Cash Proceeds of which are used to prepay the
Loans in full.

      7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except
operating leases (other than those constituting Synthetic Lease Obligations)
entered into or assumed by the Borrowers or any of their respective Subsidiaries
in the ordinary course of business.

      7.07 RESTRICTED PAYMENTS.

      (a) Declare or make, directly or indirectly, any Restricted Payment in
respect of Williams LLC, or make any other payment or distribution (whether or
not same would constitute a Restricted Payment) to the MLP, or incur any
obligation (contingent or otherwise) to do so, except that: (i) each Subsidiary
of Williams LLC may make Restricted Payments to Williams LLC and to Wholly-Owned
Subsidiaries of Williams LLC; and (ii) Williams LLC may (A) reimburse the MLP
for operating expenses, maintenance capital, and general and administrative
expenses paid by the MLP on behalf of Williams LLC and (B) make Quarterly
Distributions to the MLP not to exceed $7,500,000 per quarter in accordance with
the Limited Liability Company Agreement (Williams); provided, in each of the
foregoing instances, that at the time of such distribution no Default or Event
of Default exists or would result therefrom.

      (b) Declare or make, directly or indirectly, any Restricted Payment in
respect of the MLP, or incur any obligation (contingent or otherwise) to do so,
except that the MLP may (i) make Quarterly Distributions in accordance with the
Partnership Agreement (MLP) to holders of common units (excluding for this
purpose, for the sake of clarity, holders of non-registered Class B units and
holders of subordinated units (however denominated)), and (ii) declare (but not
make) distributions to holders of non-registered Class B units that by the
express terms thereof are not payable prior to the indefeasible payment in full
in cash of the Obligations; provided, in each of the foregoing instances, that
at the time of such declaration or distribution no Default or Event of Default
exists or would result therefrom.

      7.08 ERISA. At any time engage in a transaction which could be subject to
Section 4069 or 4212(c) of ERISA, or permit any Plan maintained by a Company to
(a) engage in any non-exempt "prohibited transaction" (as defined in Section
4975 of the Code); (b) fail to comply with ERISA or any other applicable Laws;
or (c) incur any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), which, with respect to each event listed above, could be
reasonably expected to have a Material Adverse Effect.

      7.09 NATURE OF BUSINESS; CAPITAL EXPENDITURES.

      (a) Engage in any line of business other than Present and Related
Businesses, or make any Capital Expenditures except in connection with Present
and Related Businesses; provided, that OLP No. 1 may make Capital Expenditures
on the terms, and subject to the restrictions and limitations, contained in the
OLP No. 1 Credit Agreement.

      (b) At any time permit Margin Stock owned by any Loan Party to constitute
25% or more of those assets of such Loan Party which are subject to any
limitation on a sale, pledge, or other restrictions hereunder.

      7.10 TRANSACTIONS WITH AFFILIATES. Make any sale to, make any purchase
from, extend credit to, make payment for services rendered by, or enter into any
other transaction with, any Affiliate of the Borrowers unless as a whole such
sales, purchases, extensions of credit, rendition of services and other


                                       40
<PAGE>

transactions are (at the time such sale, purchase, extension of credit,
rendition of services or other transaction is entered into) on terms and
conditions reasonably fair in all material respects to the Borrowers or the
applicable Subsidiary in the good faith judgment of the Borrower.

      7.11 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation (other
than the OLP No. 1 Credit Agreement) that limits the ability (a) of any
Subsidiary to make Restricted Payments to the Borrowers or to otherwise transfer
property to the Borrowers or (b) of the Borrowers or any Subsidiary to create,
incur, assume or suffer to exist Liens on property of such Person.

      7.12 USE OF PROCEEDS. Use the proceeds of any Loan for purposes other than
those permitted by SECTION 6.12, or use the proceeds of any Loan, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the Board)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.

      7.13 MATERIAL AGREEMENTS. Cancel or terminate any Material Agreement, or
consent to or accept any such cancellation or termination; permit any amendment
to any Material Agreement or the Partnership Agreement (MLP) if such amendment
could reasonably be expected to materially adversely affect the Lenders; or
permit any assignment of any Material Agreement if such assignment could
reasonably be expected to materially adversely affect the Lenders.

      7.14 FINANCIAL COVENANT. Permit Consolidated EBITDA of Williams LLC and
its Subsidiaries to be less than $20,000,000 per fiscal quarter, beginning with
the quarter ending June 30, 2002.

                                 ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

      8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default:

      (a) Non-Payment. The Borrowers fail to pay (i) when and as required to be
paid herein, any amount of principal of any Loan or (ii) within ten days after
the same becomes due, any interest on any Loan, any commitment or other fee due
hereunder, or any other amount payable hereunder or under any other Loan
Document; or

      (b) Specific Covenants. The Borrowers fail to perform or observe any term,
covenant or agreement contained in any of SECTION 6.03(a), 6.05 (with respect to
a Borrower's existence), 6.12 or 6.13 or ARTICLE VII;

      (c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for ten Business Days after the earlier of the date notice thereof
shall have been given to the Borrowers by the Administrative Agent or any Lender
or the date the Borrowers have knowledge of such failure; or

      (d) Representations and Warranties. Any representation or warranty made or
deemed made by the Borrowers or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
proves to have been incorrect in any material respect when made or deemed made;
or


                                       41
<PAGE>

      (e) Cross-Default. (i) A Borrower, the General Partner or any of their
respective Subsidiaries (each, a "BORROWER AFFILIATE") (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness, Guaranty
Obligation or Synthetic Lease Obligation having an aggregate principal amount
(or, in the case of a Synthetic Lease Obligation, Attributable Principal)
(including undrawn or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
(individually or collectively) $20,000,000, or (B) fails to observe or perform
any other agreement or condition relating to any such Indebtedness, Guaranty
Obligation or Synthetic Lease or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness, the lessor under such Synthetic Lease Obligation or the
beneficiary or beneficiaries of such Guaranty Obligation (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness or Synthetic Lease
Obligation to be demanded or to become due or to be repurchased or redeemed
(automatically or otherwise) prior to its stated maturity, or such Guaranty
Obligation to become payable or cash collateral in respect thereof to be
demanded; or (ii) (A) there occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from any event of default
under such Swap Contract as to which the Borrower or any other Borrower
Affiliate is the Defaulting Party (as defined in such Swap Contract) and the
Swap Termination Value owed by a Borrower or any other Borrower Affiliate as a
result thereof is greater than (individually or collectively) $20,000,000, or
(B) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from any Termination Event (as so defined)
under such Swap Contract as to which a Borrower or any other Borrower Affiliate
is an Affected Party (as so defined) and the Swap Termination Value owed by a
Borrower or any other Borrower Affiliate as a result thereof is greater than
(individually or collectively) $20,000,000 and such amount is not paid when due
under such Swap Contract; or

      (f) Insolvency Proceedings, Etc. (i) A Borrower or any other Borrower
Affiliate institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or (ii) any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

      (g) Inability to Pay Debts; Attachment. (i) A Borrower or any other
Borrower Affiliate becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against property
which is a material part of the property of a Borrower and its Subsidiaries
taken as a whole, or of the other Borrower Affiliate and its Subsidiaries taken
as a whole, and is not released, vacated or fully bonded within 45 days after
its issue or levy; or

      (h) Judgments. There is entered against a Borrower or any other Borrower
Affiliate (i) a final judgment or order for the payment of money in an aggregate
amount exceeding (individually or collectively) $20,000,000 (to the extent not
covered by (x) independent third-party insurance as to which the insurer does
not dispute coverage or (y) an Acceptable Indemnity), or (ii) any non-monetary
final judgment that has, or would reasonably be expected to have, a Material
Adverse Effect and, in either case, (A) enforcement proceedings are commenced by
any creditor upon such judgment or order, or (B)


                                       42
<PAGE>

there is a period of 30 consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect; or

      (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower or any Subsidiary under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$20,000,000, or (ii) if there is any Multiemployer Plan, the Borrower or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $20,000,000; or

      (j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than the agreement of all the
Lenders or satisfaction in full of all the Obligations, ceases to be in full
force and effect, or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any material respect; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

      (k) Change of Control. There occurs any Change of Control; or

      (l) Dissolution. Any Loan Party shall dissolve, liquidate, or otherwise
terminate its existence, except as permitted in SECTION 7.04.

      8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the consent of the
Required Lenders:

      (a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;

      (b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby expressly
waived by the Borrower; and

      (c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

provided, however, that upon the occurrence of any event specified in subsection
(f) of SECTION 8.01, the obligation of each Lender to make Loans shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, in each case without further act of the Administrative Agent or any
Lender.

                                   ARTICLE IX.
                              ADMINISTRATIVE AGENT

      9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. Each Lender
hereby irrevocably (subject to Section 9.09) appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this


                                       43
<PAGE>

Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

      9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

      9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.

      9.04 RELIANCE BY ADMINISTRATIVE AGENT.

      (a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any Loan Party), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under any
Loan Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders or all the Lenders, if required hereunder, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and participants. Where this Agreement expressly permits or prohibits an
action unless the Required Lenders otherwise determine, the


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<PAGE>

Administrative Agent shall, and in all other instances, the Administrative Agent
may, but shall not be required to, initiate any solicitation for the consent or
a vote of the Lenders.

      (b) For purposes of determining compliance with the conditions to
Borrowing specified in SECTION 4.01, each Lender that has funded its Pro Rata
Share of the Borrowing on the Closing Date shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
either sent by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required hereunder to be consented to or approved
by or acceptable or satisfactory to a Lender.

      9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
ARTICLE VIII; provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.

      9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

      9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and


                                       45
<PAGE>

against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Commitments, the
payment of all Obligations hereunder and the resignation or replacement of the
Administrative Agent.

      9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America and
its Affiliates may make loans to, accept deposits from, acquire equity interests
in and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with each of the Loan Parties and their
respective Affiliates as though Bank of America were not the Administrative
Agent hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding any Loan Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Loan Party or such Affiliate) and acknowledge that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.

      9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign
as Administrative Agent upon 30 days' notice to the Lenders and the Borrower. If
the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders which successor administrative agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor administrative agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this ARTICLE IX and SECTIONS 10.03 and
10.13 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.


                                       46
<PAGE>

      9.10 OTHER AGENTS; LEAD MANAGERS. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
"syndication agent," as a "documentation agent," any other type of agent (other
than the Administrative Agent), "joint lead arranger," "joint book manager" or
"lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

                                   ARTICLE X.
                                  MISCELLANEOUS

      10.01 AMENDMENTS, ETC.

      (a) No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrowers or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall,
unless in writing and signed by each of the Lenders directly affected thereby
and by the Borrowers, and acknowledged by the Administrative Agent, do any of
the following:

            (i) extend or increase the Commitment of any Lender (or reinstate
      any Commitment terminated pursuant to SECTION 8.02);

            (ii) postpone any date fixed by this Agreement or any other Loan
      Document for any payment or mandatory prepayment of principal, interest,
      fees or other amounts due to the Lenders (or any of them) hereunder or
      under any other Loan Document;

            (iii) reduce the principal of, or the rate of interest specified
      herein on, any Loan or (subject to clause (B) of the proviso below) any
      fees or other amounts payable hereunder or under any other Loan Document,
      or change the manner of computation of any financial covenant used in
      determining the Applicable Rate that would result in a reduction of any
      interest rate on any Loan; provided, however, that only the consent of the
      Required Lenders shall be necessary to amend the definition of "Default
      Rate" or to waive any obligation of the Borrower to pay interest at the
      Default Rate; or

            (iv) amend this Section, or SECTION 2.11, or any provision herein
      providing for unanimous consent or other action by all the Lenders;

and, provided further, that (A) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; and
(B) the Agent/Arranger Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, any Lender that has failed to
fund any portion of the Loans required to be funded by it hereunder shall not
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Pro Rata Share of such Lender may not be increased
without the consent of such Lender.


                                       47
<PAGE>

      (b) Any amendment to any Loan Document which purports to (i) decrease the
amount of any mandatory prepayment or commitment reduction required by SECTION
2.04 or (ii) change this SECTION 10.01(b), must be by an instrument in writing
executed by Borrower, the Administrative Agent and by the Required Lenders.

      10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

      (a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder and under the other Loan Documents
shall be in writing (including by facsimile transmission) and mailed, faxed or
delivered, to the address, facsimile number or (subject to subsection (c) below)
electronic mail address specified for notices on SCHEDULE 10.02 (for the
Borrowers, each Guarantor and the Administrative Agent) or the signature pages
hereto (for the other Lenders); or, in the case of the Borrowers, the Guarantors
or the Administrative Agent, to such other address as shall be designated by
such party in a notice to the other parties, and in the case of any other party,
to such other address as shall be designated by such party in a notice to the
Borrower and the Administrative Agent. All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of (i) actual
receipt by the intended recipient and (ii) (A) if delivered by hand or by
courier, when signed for by the intended recipient; (B) if delivered by mail,
four Business Days after deposit in the mails, postage prepaid; (C) if delivered
by facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail (which form of delivery is subject to the
provisions of subsection (c) below), when delivered; provided, however, that
notices and other communications to the Administrative Agent pursuant to ARTICLE
II shall not be effective until actually received by such Person. Any notice or
other communication permitted to be given, made or confirmed by telephone
hereunder shall be given, made or confirmed by means of a telephone call to the
intended recipient at the number specified on SCHEDULE 10.02 or such Person's
signature page, as applicable, it being understood and agreed that a voicemail
message shall in no event be effective as a notice, communication or
confirmation hereunder.

      (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

      (c) Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.

      (d) Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Borrowing Notices) purportedly given by or on behalf of the Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative


                                       48
<PAGE>

Agent, and each of the parties hereto hereby consents to such recording.

      10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

      10.04 ATTORNEY COSTS; EXPENSES AND TAXES. The Borrowers agree (a) to pay
or reimburse (i) the Administrative Agent for all Attorney Costs, and (ii) the
Administrative Agent and the Lenders for all other reasonable costs and expenses
(other than Attorney Costs), incurred in connection with the preparation,
negotiation, syndication, administration and execution of this Agreement and the
other Loan Documents and any amendment, waiver, consent or other modification of
the provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs
and out-of-pocket expenses, and (b) to pay or reimburse the Administrative Agent
and each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any workout or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include the cost of independent public accountants and other
outside experts retained by the Administrative Agent or any Lender. The
Borrowers shall pay all fees and expenses of valuation experts, investment
bankers and other outside experts engaged in the preparation of the Solvency
Opinion. The agreements in this Section shall survive the termination of the
Commitments and repayment of all the other Obligations.

      10.05 INDEMNIFICATION. Whether or not the transactions contemplated hereby
are consummated, the Borrowers and each Guarantor (by execution of a Guaranty),
jointly and severally, agree to indemnify, save and hold harmless each
Agent-Related Person, the other Agents, each Arranger, each Documentation Agent,
each Lender, each Syndication Agent and their respective Affiliates, directors,
officers, employees, counsel, agents and attorneys-in-fact (collectively the
"INDEMNITEES") from and against: (a) any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Loan Party, any Affiliate of any Loan Party or any of their
respective officers or directors, arising out of or relating to, the Loan
Documents, the Solvency Opinion, the Commitments, the use or contemplated use of
the proceeds of any Loans, or the relationship of any Loan Party, the
Administrative Agent and the Lenders under this Agreement or any other Loan
Document; (b) any and all claims, demands, actions or causes of action that may
at any time (including at any time following repayment of the Obligations and
the resignation of the Administrative Agent or the replacement of any Lender) be
asserted or imposed against any Indemnitee, arising out of or relating to, the
Loan Documents, the Solvency Opinion, the Commitments, the use or contemplated
use of the proceeds of any Loans, or the relationship of any Loan Party, the
Administrative Agent and the Lenders under this Agreement or any other Loan
Document; (c) without limiting the foregoing, any and all claims, demands,
actions or causes of action that are asserted or imposed against any Indemnitee,
(i) under the application of any Environmental Law applicable to the Borrower or
any of its Subsidiaries or any of their properties or assets, including the
treatment or disposal of Hazardous Substances on any of their properties or
assets, including without limitation the Pipeline Assets (ii) as a result of the
breach or non-compliance by a Borrower or any


                                       49
<PAGE>

Subsidiary with any Environmental Law applicable to the Borrower or any
Subsidiary, (iii) due to past ownership by a Borrower or any Subsidiary of any
of their properties or assets or past activity on any of their properties or
assets including, without limitation, the Pipeline Assets which, though lawful
and fully permissible at the time, could result in present liability, (iv) due
to the presence, use, storage, treatment or disposal of Hazardous Substances on
or under, or the escape, seepage, leakage, spillage, discharge, emission or
release from, any of the properties owned or operated by a Borrower or any
Subsidiary (including any liability asserted or arising under any Environmental
Law), regardless of whether caused by, or within the control of, a Borrower or
such Subsidiary, or (v) due to any other environmental, health or safety
condition in connection with the Loan Documents; (d) any administrative or
investigative proceeding by any Governmental Authority arising out of or related
to a claim, demand, action or cause of action described in subsection (a), (b)
or (c) above; and (e) any and all liabilities (including liabilities under
indemnities), losses, costs or expenses (including Attorney Costs) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim, demand,
action, cause of action or proceeding, in all cases, WHETHER OR NOT ARISING OUT
OF THE NEGLIGENCE OF AN INDEMNITEE, and whether or not an Indemnitee is a party
to such claim, demand, action, cause of action or proceeding (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that no Indemnitee shall
be entitled to indemnification for any claim caused by its own gross negligence
or willful misconduct. The agreements in this Section shall survive the
termination of the Commitments and repayment of all the other Obligations.

      10.06 PAYMENTS SET ASIDE. To the extent that the Borrowers makes a payment
to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.

      10.07 SUCCESSORS AND ASSIGNS.

            (a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrowers may not assign or otherwise transfer
any of their rights or obligations hereunder without the prior written consent
of each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

      (b) At any time after the sooner of (x) the occurrence of an Event of
Default or (y) 120 days after the Closing Date, any Lender may assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that (i) except in the case of an assignment of
the entire remaining amount of the assigning Lender's Commitment and the Loans
at the time owing to it or in the case of an


                                       50
<PAGE>

assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) of the assigning Lender subject
to each such assignment, determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent, shall
not be less than $5,000,000, unless each of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed), (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned, except that
this clause (ii) shall not prohibit the assignment of a proportionate part of
all the assigning Lender's rights and obligations in respect of the Facility,
and (iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of SECTIONS
3.07, 10.04 and 10.05). Upon request, the Borrower (at its expense) shall
execute and deliver new or replacement Notes to the assigning Lender and the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.

      (c) The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Administrative Agent's Office a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

      (d) Any Lender may, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification that would (i) postpone any date upon which any
payment of money is scheduled to be paid to such Participant, (ii) reduce the
principal, interest, fees or other amounts payable to such Participant, or (iii)
release any Guarantor from the Guaranty. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be


                                       51
<PAGE>

entitled to the benefits of SECTIONS 3.01, 3.04 and 3.05 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of SECTION 10.09 as though it were a
Lender, provided such Participant agrees to be subject to SECTION 2.11 as though
it were a Lender.

      (e) A Participant shall not be entitled to receive any greater payment
under SECTION 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of SECTION 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with SECTION 10.15 as though
it were a Lender.

      (f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

      (g) If the consent of the Borrowers to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of SECTION 10.07(b)), the Borrowers shall be deemed to
have given their consent five Business Days after the date notice thereof has
been delivered by the assigning Lender (through the Administrative Agent) unless
such consent is expressly refused by the Borrowers prior to such fifth Business
Day.

      10.08 CONFIDENTIALITY. Each Lender agrees that it will not disclose
without the prior consent of the Borrowers (other than to directors, officers,
employees, auditors, accountants, counsel or other professional advisors of the
Administrative Agent or any Lender) any information with respect to the Borrower
or its Subsidiaries, which is furnished pursuant to this Agreement and which (i)
the Borrower in good faith considers to be confidential and (ii) is either
clearly marked confidential or is designated by the Borrower to the
Administrative Agent or the Lenders in writing as confidential, provided that
any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to or required by any municipal, state or
federal regulatory body having or claiming to have jurisdiction over such Lender
or submitted to or required by the Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States of America or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) to any Eligible Assignee of or Participant in, or any prospective
Eligible Assignee of or Participant in, any of its rights or obligations under
this Agreement, provided that such Eligible Assignee or Participant or
prospective Eligible Assignee or Participant executes an agreement containing
provisions substantially similar to those contained in this SECTION 10.08, (f)
in connection with the exercise of any remedy by such Lender following an Event
of Default pertaining to the Loan Documents, (g) in connection with any
litigation involving such Lender pertaining to the Loan Documents, (h) to any
Lender or the Administrative Agent, or (i) to any Affiliate of any Lender (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such information and instructed to keep
such information confidential).


                                       52
<PAGE>

      10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrowers or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to the Administrative Agent and the Lenders, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Borrowers and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.

      10.10 INTEREST RATE LIMITATION. Regardless of any provision contained in
any Loan Document, neither the Administrative Agent nor any Lender shall ever be
entitled to contract for, charge, take, reserve, receive, or apply, as interest
on all or any part of the Obligations, any amount in excess of the Maximum Rate,
and, if any Lender ever does so, then such excess shall be deemed a partial
prepayment of principal and treated hereunder as such and any remaining excess
shall be refunded to the Borrowers. In determining if the interest paid or
payable exceeds the Maximum Rate, the Borrower and the Lenders shall, to the
maximum extent permitted under applicable Law, (a) treat all Borrowings as but a
single extension of credit (and the Lenders and the Borrower agree that such is
the case and that provision herein for multiple Borrowings is for convenience
only), (b) characterize any nonprincipal payment as an expense, fee, or premium
rather than as interest, (c) exclude voluntary prepayments and the effects
thereof, and (d) amortize, prorate, allocate, and spread the total amount of
interest throughout the entire contemplated term of the Obligations. However, if
the Obligations are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Amount, the Lenders shall refund such
excess, and, in such event, the Lenders shall not, to the extent permitted by
Law, be subject to any penalties provided by any Laws for contracting for,
charging, taking, reserving, or receiving interest in excess of the Maximum
Amount. If, contrary to the parties' intent expressed in SECTION 10.16(a), the
Laws of the State of Texas are applicable for purposes of determining the
"Maximum Rate" or the "Maximum Amount," then those terms mean the "weekly
ceiling" from time to time in effect under Texas Finance Code Section 303.001,
as limited by Texas Finance Code Section 303.009. The Borrower agrees that
Chapter 346 of the Texas Finance Code, as amended (which regulates certain
revolving credit loan accounts and revolving tri-party accounts), does not apply
to the Obligations.

      10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      10.12 INTEGRATION. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.


                                       53
<PAGE>

      10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or Event of Default at the time of any Borrowing, and shall continue
in full force and effect as long as any Loan or any other Obligation shall
remain unpaid or unsatisfied.

      10.14 SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which the Borrower is a party that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      10.15 FOREIGN LENDERS. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code (a "Foreign Lender") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Administrative Agent that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax. Thereafter and from time to time, each
such Person shall (a) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Person by the Borrower pursuant to this Agreement, (b) promptly
notify the Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (c) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws that the Borrower make any
deduction or withholding for taxes from amounts payable to such Person. If such
Person fails to deliver the above forms or other documentation, then the
Administrative Agent may withhold from any interest payment to such Person an
amount equivalent to the applicable withholding tax imposed by Sections 1441 and
1442 of the Code, without reduction. If any Governmental Authority asserts that
the Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of such Person, such Person shall indemnify the
Administrative Agent therefor, including all penalties and interest, any taxes
imposed by any jurisdiction on the amounts payable to the Agent under this
Section, and costs and expenses (including Attorney Costs) of the Administrative
Agent. The obligation of the Lenders under this Section shall survive the
payment of all Obligations and the resignation or replacement of the
Administrative Agent.

      10.16 GOVERNING LAW.

      (A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE;


                                       54
<PAGE>

PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

      (b) EACH COMPANY AND OTHER PARTY HERETO, AND EACH GUARANTOR, BY EXECUTION
OF A GUARANTY, AGREES AS TO THIS SECTION 10.16(b). ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE
Agent AND EACH LENDER CONSENTS, AND BY EXECUTION OF A GUARANTY, EACH GUARANTOR
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE BORROWERS, EACH GUARANTOR, THE ADMINISTRATIVE
Agent AND EACH LENDER (1) IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO, AND (2) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, AT ITS ADDRESS FOR NOTICES DESIGNATED HEREIN. THE BORROWERS, EACH
GUARANTOR, THE ADMINISTRATIVE Agent AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE. THE BORROWERS AND EACH GUARANTOR, BY ITS
EXECUTION OF A GUARANTY, AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE
OF PROCESS IN NEW YORK IN CONNECTION WITH ACTIONS AND PROCEEDINGS UNDER THE LOAN
DOCUMENTS AND TO DELIVER TO THE ADMINISTRATIVE AGENT EVIDENCE THEREOF.

      10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT AND
EACH GUARANTOR, BY EXECUTION OF A GUARANTY, HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY
LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES TO THE LOAN DOCUMENTS OR ANY OF THEM WITH RESPECT TO ANY
LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
COMPANIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

      10.18 NO GENERAL PARTNER'S LIABILITY. The Lenders agree for themselves and
their respective successors and assigns, including any subsequent holder of any
Note, that, for so long as the sole asset of the General Partner is the general
partner interest in the MLP, any claim against the Borrowers which may arise
under any Loan Document shall be made only against and shall be limited to the
assets of the Borrower and the Guarantors, and that no judgment, order or
execution entered in any suit, action or proceeding, whether legal or equitable,
on this Agreement, such Note or any of the other Loan


                                       55
<PAGE>

Documents shall be obtained or enforced against the General Partner or its
assets for the purpose of obtaining satisfaction and payment of such Note, the
Indebtedness evidenced thereby or any claims arising thereunder or under this
Agreement or any other Loan Document, any right to proceed against the General
Partner individually or its respective assets being hereby expressly waived,
renounced and remitted by the Lenders for themselves and their respective
successors and assigns. Nothing in this SECTION 10.18, however, shall be
construed so as to prevent the Administrative Agent, any Lender or any other
holder of any Note from commencing any action, suit or proceeding with respect
to or causing legal papers to be served upon the General Partner for the purpose
of obtaining jurisdiction over the Borrowers.

      10.19 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.

               [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURES
                               BEGIN ON NEXT PAGE]


                                       56
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                               WILLIAMS PIPE LINE COMPANY, LLC

                               By: WILLIAMS ENERGY PARTNERS L.P.,
                                   its Sole Member
                               By: Williams GP LLC,
                                   its General Partner

                                   By:    /s/ Don R. Wellendorf
                                   Name:  Don R. Wellendorf
                                   Title: Senior Vice President, Chief Financial
                                          Officer and Treasurer

                               WILLIAMS ENERGY PARTNERS L.P.

                               By: WILLIAMS GP LLC,
                                   its General Partner

                                   By:    /s/ Don R. Wellendorf
                                   Name:  Don R. Wellendorf
                                   Title: Senior Vice President, Chief Financial
                                          Officer and Treasurer

                        [THIS IS A SIGNATURE PAGE TO THE
                         WILLIAMS LLC CREDIT AGREEMENT]

<PAGE>

                                  BANK OF AMERICA, N.A., as Administrative Agent

                                  By:    /s/ Claire M. Liu
                                     -------------------------------------------
                                  Name:  Claire M. Liu
                                  Title: Managing Director


                                  BANK OF AMERICA, N.A., as a Lender

                                  By:    /s/ Claire M. Liu
                                     -------------------------------------------
                                  Name:  Claire M. Liu
                                  Title: Managing Director

                        [THIS IS A SIGNATURE PAGE TO THE
                         WILLIAMS LLC CREDIT AGREEMENT]

<PAGE>

                          SYNDICATED LOAN FUNDING TRUST

                          By Lehman Commercial Paper Inc., not in its individual
                          capacity but solely as Asset Manager, as a Lender


                               By:    /s/ Michele Swanson
                                  ----------------------------------------------
                               Name:  Michele Swanson
                               Title: Authorized Signatory

                        [THIS IS A SIGNATURE PAGE TO THE
                         WILLIAMS LLC CREDIT AGREEMENT]

<PAGE>

                                     SYNDICATED LOAN FUNDING TRUST

                                     Address for payments and Borrowing Notices

                                     Syndicated Loan Funding Trust
                                     c/o Lehman Commercial Paper Inc.
                                     745 7TH Avenue, 16th Floor
                                     New York, New York 10019

                                     Telephone: (212) 526-6560
                                     Facsimile: (212) 526-6653
                                     Attn: Nancy Wong

                                     Other notices as a Lender

                                     Syndicated Loan Funding Trust
                                     c/o Lehman Commercial Paper Inc.
                                     745 7TH Avenue, 19th Floor
                                     New York, New York 10019

                                     Telephone: (212) 526-0330
                                     Facsimile: (212) 526-0242
                                     Attn: Michele Swanson

<PAGE>

                            CITIBANK, N.A., as Syndication Agent and as a Lender


                               By:    /s/Todd J. Mogil
                                  ----------------------------------------------
                               Name:  Todd J. Mogil
                                    --------------------------------------------
                               Title: Attorney-in-Fact
                                     -------------------------------------------

                        [THIS IS A SIGNATURE PAGE TO THE
                         WILLIAMS LLC CREDIT AGREEMENT]

<PAGE>

                                         CITIBANK, N.A.

                                         Address for Notices:

                                         Citibank, N.A.
                                         c/o Citicorp North America, Inc.
                                         1200 Smith Street, Suite 2000
                                         Houston, Texas 77002

                                         Telephone: (713) 654-3559
                                         Facsimile: (713) 654-2849
                                         Attn: Todd J. Mogil

<PAGE>

                                   MERRILL LYNCH CREDIT CORPORATION, as a Lender


                                        By:    /s/ Carol J.E. Feeley
                                               ---------------------------------
                                        Name:  Carol J.E. Feeley
                                               ---------------------------------
                                        Title: Vice President
                                               ---------------------------------
                                               Merrill Lyunch Capital Corp.
                                               ---------------------------------

                        [THIS IS A SIGNATURE PAGE TO THE
                         WILLIAMS LLC CREDIT AGREEMENT]

<PAGE>

                                     MERRILL LYNCH CREDIT CORPORATION

                                     Address for Notices:

                                     Merrill Lynch Credit Corporation
                                     4 World Financial Center - 16th Floor
                                     New York, NY 10080

                                     Telephone: (212) 449-6996
                                     Facsimile: (212) 738-1719
                                     Attn:  Mark Campbell

<PAGE>

                                      JPMORGAN CHASE BANK, as a Lender


                                           By:    /s/ Steven Wood
                                                 -------------------------------
                                           Name:  Steven Wood
                                                 -------------------------------
                                           Title: Vice President
                                                 -------------------------------

                        [THIS IS A SIGNATURE PAGE TO THE
                         WILLIAMS LLC CREDIT AGREEMENT]

<PAGE>

                                          JPMORGAN CHASE BANK

                                          Address for Notices:

                                          JPMorgan Chase Bank
                                          1 CMP - 8th Floor
                                          New York, New York

                                          Telephone: (212) 552-7692
                                          Facsimile: (212) 552-5777
                                          Attn:  Lynette Lang

<PAGE>

                                                                   SCHEDULE 2.01

                                   COMMITMENTS

<TABLE>
<CAPTION>
                       LENDER                     SENIOR CREDIT FACILITY
                       ------                     ----------------------
<S>                                               <C>
           Bank of America, N.A.                       $140,000,000

           Syndicated Loan Funding Trust               $140,000,000

           Citibank, N.A.                              $140,000,000

           Merrill Lynch Credit Corporation            $140,000,000

           JPMorgan Chase Bank                         $140,000,000

                         Total:                        $700,000,000
</TABLE>


                                       1
<PAGE>

                                                                   SCHEDULE 5.13

                                  SUBSIDIARIES
                          AND OTHER EQUITY INVESTMENTS

Williams LLC

<TABLE>
<CAPTION>
                  Name                       Jurisdiction of Organization                   Ownership
                  ----                       ----------------------------                   ---------
<S>                                          <C>                                            <C>
                  None                                   N/A                                   N/A
</TABLE>

MLP

<TABLE>
<CAPTION>
                  Name                       Jurisdiction of Organization                   Ownership
                  ----                       ----------------------------                   ---------
<S>                                          <C>                              <C>
     Williams Pipe Line Company, LLC                   Delaware               Williams Energy Partners L.P. ("MLP")
                                                                                              (100%)

            Williams GP Inc.                           Delaware                             MLP (100%)

           Williams OLP, L.P.                          Delaware                   Limited Partner: MLP (99.999%)
                                                                                General Partner: Williams GP Inc.
                                                                                             (.001%)

    Williams Natural Gas Liquids, LLC                  Delaware                 Williams OLP, L.P. ("OLP") (100%)
               ("WNG LLC")

    Williams Terminals Holding, L.P.                   Delaware                     Limited Partner: OLP (99%)
                                                                                  General Partner: WNG LLC (1%)

    Williams Pipelines Holdings, L.P.                  Delaware                     Limited Partner: OLP (99%)
                                                                                  General Partner: WNG LLC (1%)

     Williams Ammonia Pipeline, L.P.                   Delaware                     Limited Partner: OLP (99%)
                                                                                  General Partner: WNG LLC (1%)
</TABLE>


                                       2
<PAGE>

                                                                  SCHEDULE 10.02

                       ADDRESSES FOR NOTICES TO BORROWER,
                       GUARANTORS AND ADMINISTRATIVE AGENT

ADDRESS FOR NOTICES TO BORROWERS

WILLIAMS ENERGY PARTNERS L.P.
c/o Williams GP LLC
One Williams Center
Tulsa, Oklahoma 74172
Attn: Mr. Don R. Wellendorf
Telephone: (918) 573-4119
Facsimile: (918) 573-3864
Electronic Mail: don.wellendorf@williams.com

WILLIAMS PIPE LINE COMPANY, LLC
c/o Williams GP LLC
One Williams Center
Tulsa, Oklahoma 74172
Attn: Mr. Don R. Wellendorf
Telephone: (918) 573-4119
Facsimile: (918) 573-3864
Electronic Mail: don.wellendorf@williams.com

ADDRESSES FOR BANK OF AMERICA

Administrative Agent's Office and Bank of America's Lending Office
(for payments and Borrowing Notices):
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, TX 75202
Attention: Ben Cosgrove
Telephone: 214-209-9254
Facsimile: 214-290-9439
Electronic Mail: ben.cosgrove@bankofamerica.com
Account No.: 1292000883
Ref: Williams Pipe Line Company, LLC
ABA# 111000012


                                       1
<PAGE>

Other Notices as Administrative Agent:
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, TX 75202
Attention: Renita M. Cummings
Telephone: 214-209-4130
Facsimile: 214-290-8371
Electronic Mail: renita.m.cummings@bankofamerica.com

Other Notices as a Lender:
Bank of America, N.A.
333 Clay Street, Suite #4550
Houston, TX 77002
Attention: Claire Liu, Managing Director
Telephone: 713-651-4855
Facsimile: 713-651-4841
Electronic Mail: claire.liu@bankofamerica.com


                                       2
<PAGE>

                                                                     EXHIBIT A-1

                            FORM OF BORROWING NOTICE

                                                         Date: ___________, 2002

To:   Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

      Reference is made to that certain Credit Agreement, dated as of April ___,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined), among Williams Pipe Line Company, LLC, a Delaware
limited liability company, Williams Energy Partners L.P., a Delaware limited
partnership (collectively, the "BORROWERS"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.

      The undersigned hereby requests the following:

      1.    Amount of Borrowing: $___________

      2.    Requested date of Borrowing: _________________, 2002.

      3.    Requested Type of Loan and applicable Dollar amount:

            (a)   Base Rate Loan for $________________________.

            (b)   Eurodollar Rate Loan with Interest Period of:

                  (i)   one month for       $_______________

                  (ii)  two months for      $_______________

                  (iii) three months for    $_______________

                  (iv)  six months for      $_______________

      The undersigned hereby certifies that the following statements will be
true on the date of the proposed Borrowing(s) after giving effect thereto and to
the application of the proceeds therefrom:

            (a) the representations and warranties of the Borrower contained in
ARTICLE V of the Agreement are true and correct as though made on and as of such
date (except such representations and warranties which expressly refer to an
earlier date, which are true and correct as of such earlier date); and

            (b) no Default or Event of Default has occurred and is continuing,
or would result from such proposed Borrowing(s).

      The Borrowing requested herein complies with SECTIONS 2.01 and 2.02 of the
Agreement.


                                   Exhibit A-1
                                     Page 1
                            Form of Borrowing Notice
<PAGE>

                                             WILLIAMS PIPE LINE COMPANY, LLC

                                             By:  WILLIAMS ENERGY PARTNERS L.P.,
                                                  its Sole Member
                                             By:  Williams GP LLC,
                                                  its General Partner

                                                  By:___________________________
                                                  Name:_________________________
                                                  Title:________________________


                                             WILLIAMS ENERGY PARTNERS L.P.

                                             By:  Williams GP LLC, its
                                                  General Partner

                                                  By:___________________________
                                                  Name:_________________________
                                                  Title:________________________


                                   Exhibit A-1
                                     Page 2
                            Form of Borrowing Notice
<PAGE>

                                                                     EXHIBIT A-2

                     FORM OF CONVERSION/CONTINUATION NOTICE

                                                       Date: _____________, 2002

TO:   Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

      Reference is made to that certain Credit Agreement, dated as of April ___,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT"; the terms defined therein being used
herein as herein defined), among Williams Pipe Line Company, LLC, a Delaware
limited liability company, Williams Energy Partners L.P., a Delaware limited
partnership (collectively, the "BORROWERS"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.

      The undersigned hereby requests a [conversion] [continuation] of Loans as
follows:

      1.    Amount of [conversion] [continuation]: $___________

      2.    Existing rate: Check applicable blank

            (a)   Base Rate ______________

            (b)   Eurodollar Rate Loan with Interest Period of:

                  (i)   one month _______________

                  (ii)  two months _______________

                  (iii) three months _______________

                  (iv)  six months _______________

      3.    If a Eurodollar Rate Loan, date of the last day of the Interest
            Period for such Loan: ______________, 200_.

      The Loan described above is to be [converted] [continued] as follows:

      4.    Requested date of [conversion] [continuation]: _________________,
            200_.

      5.    Requested Type of Loan and applicable Dollar amount:

            (a)   Base Rate Loan for $________________________.

            (b)   Eurodollar Rate Loan with Interest Period of:

                  (i)   one month for      $_______________

                  (ii)  two months for     $_______________

                  (iii) three months for   $_______________


                                  Exhibit A-2
                                     Page 1
                     Form of Conversion Continuation Notice
<PAGE>

                  (iv)  six months for     $_______________

      The [conversion] [continuation] requested herein complies with SECTIONS
2.01 and 2.02 of the Agreement.

                                            WILLIAMS PIPE LINE COMPANY, LLC

                                            By:  WILLIAMS ENERGY PARTNERS L.P.,
                                                 its Sole Member
                                            By:  Williams GP LLC,
                                                 its General Partner

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________


                                            WILLIAMS ENERGY PARTNERS L.P.

                                            By   Williams GP LLC, its
                                                 General Partner

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________


                                  Exhibit A-2
                                     Page 2
                     Form of Conversion Continuation Notice
<PAGE>

                                                                       EXHIBIT B

                                  FORM OF NOTE

$_____________________                                           April ___, 2002

      FOR VALUE RECEIVED, the undersigned (the "BORROWERS"), jointly and
severally, hereby promise to pay to the order of _____________________________
(the "LENDER"), on the Maturity Date (as defined in the Credit Agreement
referred to below) the principal amount of __________________Dollars
($____________), or such lesser principal amount of Loans (as defined in such
Credit Agreement) due and payable by the Borrowers to the Lender on the Maturity
Date under that certain Credit Agreement, dated as of even date herewith (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "AGREEMENT;" the terms defined therein being used herein as
therein defined), among the Borrowers, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.

      The Borrowers promise to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates, and at such times as are specified in the
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

      This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and is subject to optional and mandatory prepayment in
whole or in part as provided therein. This Note is also entitled to the benefits
of each Guaranty. Upon the occurrence of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable all as provided in
the Agreement. Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business.
The Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.

      This Note is a Loan Document and is subject to SECTION 10.10 of the Credit
Agreement, which is incorporated herein by reference the same as if set forth
herein verbatim.

      The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, notice of
intent to accelerate, notice of acceleration, demand, dishonor and non-payment
of this Note.


                                   Exhibit B
                                     Page 1
                                  Form of Note
<PAGE>

      THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

                                           WILLIAMS PIPE LINE COMPANY, LLC

                                           By:  WILLIAMS ENERGY PARTNERS L.P.,
                                                its Sole Member
                                           By:  Williams GP LLC,
                                                its General Partner

                                           By:__________________________________
                                           Name:________________________________
                                           Title:_______________________________


                                           WILLIAMS ENERGY PARTNERS L.P.

                                           By:   Williams GP LLC, its
                                                 General Partner

                                           By:__________________________________
                                           Name:________________________________
                                           Title:_______________________________


                                   Exhibit B
                                     Page 2
                                  Form of Note
<PAGE>

                     LOANS AND PAYMENTS WITH RESPECT THERETO

<TABLE>
<CAPTION>
                                                                               Amount of
                                                                             Principal or
                       Type of Loan     Amount of Loan   End of Interest    Interest Paid     Principal Debt
       Date                Made              Made             Period          This Date         This Date      Notation Made By
-----------------      -------------    --------------   ----------------   --------------    --------------   ----------------
<S>                    <C>              <C>              <C>                <C>               <C>              <C>
-----------------      -------------    --------------   ----------------   --------------    --------------   ----------------

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

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

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

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

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

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

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

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

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

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

-----------------      -------------    --------------   ----------------   --------------    --------------   ----------------
</TABLE>


                                   Exhibit B
                                     Page 3
                                  Form of Note
<PAGE>

                                                                       EXHIBIT C

                         FORM OF COMPLIANCE CERTIFICATE
                   (Pursuant to SECTION 6.02 of the Agreement)

      Financial Statement Date: ___________, ____

To:   Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

      Reference is made to that certain Credit Agreement, dated as of April ___,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined), among Williams Pipe Line Company, LLC, a Delaware
limited liability company ("WILLIAMS LLC"), Williams Energy Partners L.P., a
Delaware limited partnership (the "MLP" and, together with Williams LLC, the
"BORROWERS"), the Lenders from time to time party thereto, and Bank of America,
N.A., as Administrative Agent. Capitalized terms used herein but not defined
herein shall have the meaning set forth in the Agreement.

      The undersigned Responsible Officer hereby certifies as of the date hereof
that he/she is the ______________ of Williams LCC and the _______________ of the
MLP, respectively, and that, as such, each is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of Williams LLC and
the MLP, respectively, and that:

[Use following for fiscal year-end financial statements]

      1. Attached hereto as SCHEDULE 1 are the year-end unaudited financial
statements required by SECTION 6.01(a) of the Agreement for the fiscal year of
Williams LLC ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of
Williams LLC and its Subsidiaries in accordance with GAAP as at such date and
for such period, subject only to normal year-end audit adjustments and the
absence of footnotes.

      2. Attached hereto as SCHEDULE 3 are the year-end audited financial
statements required by SECTION 6.01(c) of the Agreement for the fiscal year of
the MLP ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following for fiscal quarter-end financial statements]

      1. Attached hereto as SCHEDULE 1 are the unaudited financial statements
required by SECTION 6.01(c) of the Agreement for the fiscal quarter of Williams
LLC ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of Williams LLC and
its Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

      2. Attached hereto as SCHEDULE 3 are the unaudited financial statements
required by SECTION 6.01(d) of the Agreement for the fiscal quarter of the MLP
ended as of the above date, together with a certificate of a Responsible Officer
of the MLP stating that such financial statements fairly present the financial
condition, results of operations and cash flows of the MLP and its Subsidiaries
in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.


                                   Exhibit C
                                     Page 1
                         Form of Compliance Certificate
<PAGE>

[Use the following for both fiscal year-end and quarter-end financial
statements]

      3. The undersigned have reviewed and are familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrowers during the accounting period covered by the attached financial
statements.

      4. A review of the activities of the Borrowers during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrowers performed and
observed all their respective Obligations under the Loan Documents, and no
Default or Event of Default has occurred and is continuing except as follows
(list of each such Default or Event of Default and include the information
required by SECTION 6.03 of the Credit Agreement):

      5. The covenant analyses and information set forth on SCHEDULE 2 attached
hereto are true and accurate on and as of the date of this Certificate.

      IN WITNESS WHEREOF, the undersigned have executed this Certificate as of
______________, ________.

                                       WILLIAMS PIPE LINE COMPANY, LLC

                                       By:  WILLIAMS ENERGY PARTNERS L.P.,
                                            its Sole Member
                                       By:  Williams GP LLC,
                                            its General Partner

                                       By:_____________________________________
                                       Name:___________________________________
                                       Title:__________________________________


                                       WILLIAMS ENERGY PARTNERS L.P.

                                       By:   Williams GP LLC, its
                                             General Partner

                                       By:_____________________________________
                                       Name:___________________________________
                                       Title:__________________________________


                                   Exhibit C
                                     Page 2
                         Form of Compliance Certificate
<PAGE>

                                           For the Quarter/Year ended
                                           ___________________("STATEMENT DATE")

                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

I.    SECTION 7.14 -Minimum Consolidated EBITDA

      A.    Consolidated EBITDA for four consecutive fiscal
            quarters ending on above date ("SUBJECT
            PERIOD"):

            1.    Consolidated Net Income for Subject Period:          $________

            2.    Consolidated Interest Charges for Subject Period:    $________

            3.    Provision for income taxes for Subject Period:       $________

            4.    Depreciation expenses for Subject Period:            $________

            5.    Amortization expenses for Subject Period:            $________

            6.    Consolidated EBITDA (Lines I.A.1 + I.A.2 + I.A.3 +
                  I.A.4 + I.A.5):                                      $________

            Minimum required: $20,000,000


                                   Exhibit C
                                     Page 3
                         Form of Compliance Certificate
<PAGE>

                                                                       EXHIBIT D

                        FORM OF ASSIGNMENT AND ACCEPTANCE

      Reference is made to that certain Credit Agreement, dated as of April ___,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined), among Williams Pipe Line Company, LLC, a Delaware
limited liability company, and Williams Energy Partners L.P., a Delaware limited
partnership (collectively, the "BORROWERS"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.

      The assignor identified on the signature page hereto (the "ASSIGNOR") and
the assignee identified on the signature page hereto (the "ASSIGNEE") agree as
follows:

      1. (a) Subject to paragraph 11, effective as of the date specified on
SCHEDULE 1 hereto (the "EFFECTIVE DATE"), the Assignor hereby irrevocably sells
and assigns to the Assignee without recourse to the Assignor, and the Assignee
hereby irrevocably purchases and assumes from the Assignor without recourse to
the Assignor, the interest under the Credit Agreement described on SCHEDULE 1
hereto (the "ASSIGNED INTEREST") in and to the Assignor's rights and obligations
under the Agreement.

      (b) From and after the Effective Date, (i) the Assignee shall be a party
under the Agreement and will have all the rights and obligations of a Lender for
all purposes under the Loan Documents to the extent of the Assigned Interest and
be bound by the provisions thereof, and (ii) to the extent of the Assigned
Interest, the Assignor shall relinquish its rights and be released from its
obligations under the Agreement. The Assignor and/or the Assignee, as agreed by
the Assignor and the Assignee, shall deliver, in immediately available funds,
any applicable assignment fee required under SECTION 10.07(b) of the Agreement.

      2. On the Effective Date, the Assignee shall pay to the Assignor, in
immediately available funds, an amount equal to the purchase price of the
Assigned Interest as agreed upon by the Assignor and the Assignee.

      3. From and after the Effective Date, the Administrative Agent shall make
all payments under the Agreement and the Notes, if any, in respect of the
Assigned Interest (including all payments of principal, interest and fees with
respect thereto) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Agreement and such Notes, if any,
for periods prior to the Effective Date directly between themselves.

      4. The Assignor represents and warrants to the Assignee that:

            (a) The Assignor is the legal and beneficial owner of the Assigned
      Interest, and the Assigned Interest is free and clear of any adverse
      claim;

            (b) the Assigned Interest listed on SCHEDULE 1 accurately and
      completely sets forth the Outstanding Amount of all Loans relating to the
      Assigned Interest as of the Effective Date;

            (c) it has the power and authority and the legal right to make,
      deliver and perform, and has taken all necessary action, to authorize the
      execution, delivery and performance of this Assignment and Acceptance, and
      any and all other documents delivered by it in connection herewith and to
      fulfill its obligations under, and to consummate the transactions
      contemplated


                                    Exhibit D
                                     Page 1
                        Form of Assignment and Acceptance
<PAGE>

      by, this Assignment and Acceptance and the Loan Documents, and no consent
      or authorization of, filing with, or other act by or in respect of any
      Governmental Authority, is required in connection in connection herewith
      or therewith; and

            (d) this Assignment and Acceptance constitutes the legal, valid and
      binding obligation of the Assignor.

      The Assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or any
of their Affiliates or the performance by the Borrowers or any of their
Affiliates of their respective obligations under the Loan Documents, and assumes
no responsibility with respect to any statements, warranties or representations
made under or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
other than as expressly set forth above.

      5. The Assignee represents and warrants to the Assignor and the
Administrative Agent that:

            (a) it is an Eligible Assignee;

            (b) it has the full power and authority and the legal right to make,
      deliver and perform, and has taken all necessary action, to authorize the
      execution, delivery and performance of this Assignment and Acceptance, and
      any and all other documents delivered by it in connection herewith and to
      fulfill its obligations under, and to consummate the transactions
      contemplated by, this Assignment and Acceptance and the Loan Documents,
      and no consent or authorization of, filing with, or other act by or in
      respect of any Governmental Authority, is required in connection in
      connection herewith or therewith;

            (c) this Assignment and Acceptance constitutes the legal, valid and
      binding obligation of the Assignee;

            (d) under applicable Laws no tax will be required to be withheld by
      the Administrative Agent or the Borrowers with respect to any payments to
      be made to the Assignee hereunder or under any Loan Document, and unless
      otherwise indicated in the space opposite the Assignee's signature below,
      no tax forms described in SECTION 10.15 of the Agreement are required to
      be delivered by the Assignee; and

            (e) the Assignee has received a copy of the Agreement, together with
      copies of the most recent financial statements of the Borrowers delivered
      pursuant thereto, and such other documents and information as it has
      deemed appropriate to make its own credit analysis and decision to enter
      into this Assignment and Acceptance. The Assignee has independently and
      without reliance upon the Assignor or the Administrative Agent and based
      on such information as the Assignee has deemed appropriate, made its own
      credit analysis and decision to enter into this Assignment and Acceptance.
      The Assignee will, independently and without reliance upon the
      Administrative Agent or any Lender, and based upon such documents and
      information as it shall deem appropriate at the time, continue to make its
      own credit decisions in taking or not taking action under the Agreement.

      6. The Assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Agreement, the other Loan


                                    Exhibit D
                                     Page 2
                        Form of Assignment and Acceptance
<PAGE>

Documents or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto.

      7. If either the Assignee or the Assignor desires one or more Notes to
evidence its Loans, it shall request the Administrative Agent to procure such
Notes from the Borrowers.

      8. The Assignor and the Assignee agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Assignment and
Acceptance.

      9. This Assignment and Acceptance shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided,
however, that the Assignee shall not assign its rights or obligations hereunder
without the prior written consent of the Assignor and any purported assignment,
absent such consent, shall be void.

      10. This Assignment and Acceptance may be executed by facsimile signatures
with the same force and effect as if manually signed and may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Assignment and
Acceptance shall be governed by and construed in accordance with the laws of the
state specified in SECTION 10.16 of the Agreement entitled "Governing Law."

      11. The effectiveness of the assignment described herein is subject to:

      (a) if such consent is required by the Agreement, receipt by the Assignor
and the Assignee of the consent of the Administrative Agent and/or the Borrowers
to the assignment described herein. By delivering a duly executed and delivered
copy of this Assignment and Acceptance to the Administrative Agent, the Assignor
and the Assignee hereby request any such required consent and request that the
Administrative Agent register the Assignee as a Lender under the Agreement
effective as of the Effective Date; and

      (b) receipt by the Administrative Agent of (or other arrangements
acceptable to the Administrative Agent with respect to) any applicable
assignment fee referred to in SECTION 10.07(b) of the Agreement and any tax
forms required by SECTION 10.15 of the Agreement.

      By signing below, the Administrative Agent agrees to register the Assignee
as a Lender under the Agreement, effective as of the Effective Date with respect
to the Assigned Interest, and will adjust the registered Pro Rata Share of the
Assignor under the Agreement to reflect the assignment of the Assigned Interest.

      12. Attached hereto as SCHEDULE 2 is all contact, address, account and
other administrative information relating to the Assignee.


                                    Exhibit D
                                     Page 3
                        Form of Assignment and Acceptance
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers.

                                                 Assignor:

                                                 [Name of Assignor]

                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________


                                                 Assignee:
                                                 [Name of Assignee]

                                                 By:____________________________
|_|  Tax forms required by                       Name:__________________________
     SECTION 10.15 of the Agreement included     Title:_________________________

(Signatures continue)


                                    Exhibit D
                                     Page 4
                        Form of Assignment and Acceptance
<PAGE>

      In accordance with and subject to SECTION 10.07 of the Credit Agreement,
the undersigned consent to the foregoing assignment as of the Effective Date:

Williams Pipe Line Company, LLC

By:    WILLIAMS ENERGY PARTNERS L.P.,
       its Sole Member
By:    Williams GP LLC,
       its General Partner

By:___________________________________
Name:_________________________________
Title:________________________________


Williams Energy Partners L.P.
By:    Williams GP LLC, its
       General Partner

By:___________________________________
Name:_________________________________
Title:________________________________

BANK OF AMERICA, N.A.,
as Administrative Agent

By:___________________________________
    Title:


                                    Exhibit D
                                      Page 5
                        Form of Assignment and Acceptance
<PAGE>

                                         SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE

                              THE ASSIGNED INTEREST

Effective Date: ______________________

<TABLE>
<CAPTION>
                                                                        Commitment Percentage
                                                      (i.e. the proportion that Assignee's Committed Sum to be
                                                    acquired bears to the Aggregate Committed Sum or Percentage
                            Committed Sum or        of Outstanding Amount assigned (i.e. the proportion that the
                           Outstanding Amount        Outstanding Amount to be acquired by Assignee bears to the
                                Assigned            aggregate Outstanding Amount under the respective Facility)
Assigned Facility            (as applicable)                  (set forth to at least 8 decimal points)
-----------------          ------------------       ------------------------------------------------------------
<S>                        <C>                      <C>
ASSIGNED INTEREST              ___________                                     __________ %
</TABLE>


                                   Schedule 1
                                     Page 1
                        Form of Assignment and Acceptance
<PAGE>

                                         SCHEDULE 2 TO ASSIGNMENT AND ACCEPTANCE

                             ADMINISTRATIVE DETAILS

   (Assignee to list names of credit contacts, addresses, phone and facsimile
    numbers, electronic mail addresses and account and payment information)

                                   Schedule 2
                                     Page 1
                        Form of Assignment and Acceptance
<PAGE>

                                                                       EXHIBIT E

                          FORM OF SUBSIDIARY GUARANTY

      THIS GUARANTY is executed as of ___________, 2002, jointly and severally
by the undersigned (each a "GUARANTOR" and collectively the "GUARANTORS"), for
the benefit of BANK OF AMERICA, N.A., a national banking association (in its
capacity as Administrative Agent for the benefit of Lenders).

                                    RECITALS

      A. Williams Pipe Line Company, LLC, a Delaware limited liability company,
and Williams Energy Partners L.P., a Delaware limited partnership (collectively,
the "BORROWERS"), Bank of America, N.A., as Administrative Agent (including its
permitted successors and assigns in such capacity, "ADMINISTRATIVE AGENT"), and
the Lenders now or hereafter party to the Credit Agreement (including their
respective permitted successors and assigns, "LENDERS") have entered into a
Credit Agreement, dated as of April ___, 2002 (as amended, modified,
supplemented, or restated from time to time, the "CREDIT AGREEMENT");

      B. Provisions of the Credit Agreement permit Guarantors to directly or
indirectly receive proceeds of Borrowings made pursuant thereto; and

      C. This Guaranty is integral to the transactions contemplated by the Loan
Documents and the execution and delivery hereof, is a condition precedent to
Lenders' obligations to extend credit under the Loan Documents.

      ACCORDINGLY, for adequate and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, each Guarantor, jointly and
severally, guarantees to Administrative Agent and Lenders the prompt payment of
the Guaranteed Debt (defined below) as follows:

      1. DEFINITIONS. Terms defined in the Credit Agreement have the same
meanings when used, unless otherwise defined, in this Guaranty. As used in this
Guaranty:

      BORROWER and BORROWERS means each of the Persons defined in the preamble
to this Guaranty as Borrowers and includes Borrowers, or either of them, as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party appointed for Borrowers or for all or substantially
all of a Borrower's assets under any Debtor Relief Law.

      CREDIT AGREEMENT is defined in the recitals to this Guaranty.

      GUARANTEED DEBT means, collectively, (a) the Obligations and (b) all
present and future costs, attorneys' fees, and expenses reasonably incurred by
Administrative Agent or any Lender to enforce Borrowers', any Guarantor's, or
any other obligor's payment of any of the Guaranteed Debt, including, without
limitation (to the extent lawful), all present and future amounts that would
become due but for the operation of Sections 502 or 506 or any other provision
of Title 11 of the United States Code and all present and future accrued and
unpaid interest (including, without limitation, all post-maturity interest and
any post-petition interest in any proceeding under Debtor Relief Laws to which
Borrowers or any Guarantor becomes subject).


                                   Exhibit E
                                     Page 1
                           Form of Subsidiary Guaranty
<PAGE>

      GUARANTOR and GUARANTORS is defined in the preamble to this Guaranty.

      LENDER means, individually, or LENDERS means, collectively, on any date of
determination, the Lenders and their permitted successors and assigns.

      SUBORDINATED DEBT means, for each Guarantor, all present and future
obligations of any Company to such Guarantor, whether those obligations are (a)
direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several, (b) due or to become due to such Guarantor, (c) held by or
are to be held by such Guarantor, (d) created directly or acquired by assignment
or otherwise, or (e) evidenced in writing.

      2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty of
payment, not collection, and the circumstance that at any time or from time to
time the Guaranteed Debt may be paid in full does not affect the obligation of
any Guarantor with respect to the Guaranteed Debt incurred after that. This
Guaranty remains in effect until the Guaranteed Debt is fully paid and
performed, and all commitments to extend any credit under the Loan Documents
have terminated. No Guarantor may rescind or revoke its obligations with respect
to the Guaranteed Debt. Notwithstanding any contrary provision, it is the
intention of Guarantors, Lenders, and Administrative Agent that the amount of
the Guaranteed Debt guaranteed by each Guarantor by this Guaranty shall be in,
but not in excess of, the maximum amount permitted by fraudulent conveyance,
fraudulent transfer, or similar Laws applicable to each such Guarantor.
Accordingly, notwithstanding anything to the contrary contained in this Guaranty
or any other agreement or instrument executed in connection with the payment of
any of the Guaranteed Debt, the amount of the Guaranteed Debt guaranteed by any
Guarantor under this Guaranty shall be limited to an aggregate amount equal to
the largest amount that would not render such Guarantor's obligations hereunder
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provision of any applicable state Law.

      3. CONSIDERATION. Each Guarantor represents and warrants that its
liability under this Guaranty may reasonably be expected to directly or
indirectly benefit it.

      4. CUMULATIVE RIGHTS. If any Guarantor becomes liable for any indebtedness
owing by Borrowers to Administrative Agent or any Lender, other than under this
Guaranty, that liability may not be in any manner impaired or affected by this
Guaranty. The Rights of Administrative Agent or Lenders under this Guaranty are
cumulative of any and all other Rights that Administrative Agent or Lenders may
ever have against any Guarantor. The exercise by Administrative Agent or Lenders
of any Right under this Guaranty or otherwise does not preclude the concurrent
or subsequent exercise of any other Right.

      5. PAYMENT UPON DEMAND. If an Event of Default exists, each Guarantor
shall, on demand and without further notice of dishonor and without any notice
having been given to any Guarantor previous to that demand of either the
acceptance by Administrative Agent or Lenders of this Guaranty or the creation
or incurrence of any Guaranteed Debt, pay the amount of the Guaranteed Debt then
due and payable to Administrative Agent and Lenders; provided that, if an Event
of Default exists and Administrative Agent or Lenders cannot, for any reason,
accelerate the Obligations, then the Guaranteed Debt shall be, as among
Guarantors, Administrative Agent, and Lenders, a fully matured, due, and payable
obligation of Guarantors to Administrative Agent and Lenders. It is not
necessary for Administrative Agent or Lenders, in order to enforce that payment
by any Guarantor, first or contemporaneously to institute suit or exhaust
remedies against Borrowers or others liable on any Guaranteed Debt.


                                   Exhibit E
                                     Page 2
                           Form of Subsidiary Guaranty
<PAGE>

      6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the
full and final payment of the Obligations. Upon the occurrence and during the
continuation of an Event of Default, each Guarantor agrees not to accept any
payment of any Subordinated Debt from any Company. In the event of (i) any
insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment,
composition or other similar proceeding relating to any Company, its creditors
as such or its property, (ii) any proceeding for the liquidation, dissolution or
other winding-up of any Company, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings, (iii) any assignment by any
Company for the benefit of creditors, or (iv) any other marshalling of the
assets of a Company, the Obligations (including any interest thereon accruing at
the legal rate after the commencement of any such proceedings and any additional
interest that would have accrued thereon but for the commencement of such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any holder of
any Subordinated Debt. If any Guarantor receives any payment of any Subordinated
Debt in violation of the terms of this Section, such Guarantor shall hold that
payment in trust for Administrative Agent and Lenders and promptly turn it over
to Administrative Agent, in the form received (with any necessary endorsements),
to be applied to the Obligations.

      7. SUBROGATION AND CONTRIBUTION. Until payment in full of the Guaranteed
Debt and the termination of the Obligations of Lenders to extend credit under
the Loan Documents, (a) no Guarantor may assert, enforce, or otherwise exercise
any Right of subrogation to any of the Rights or Liens of Administrative Agent
or Lenders or any other beneficiary against Borrowers or any other obligor on
the Guaranteed Debt or any collateral or other security or any Right of
recourse, reimbursement, subrogation, contribution, indemnification, or similar
Right against Borrowers or any other obligor on any Guaranteed Debt or any
Guarantor of it, and (b) each Guarantor defers all of the foregoing Rights
(whether they arise in equity, under contract, by statute, under common Law, or
otherwise). Upon payment in full of the Guaranteed Debt and the termination of
the obligations of Lenders to extend credit under the Loan Documents, each
Guarantor shall be subrogated to the rights of the Administrative Agent and
Lenders against Borrowers and the other obligors.

      8. NO RELEASE. Each Guarantor agrees that its obligations under this
Guaranty may not be released, diminished, or affected by the occurrence of any
one or more of the following events: (a) any taking or accepting of any
additional guaranty or any other security or assurance for any Guaranteed Debt;
(b) any release, surrender, exchange, subordination, impairment, or loss of any
collateral securing any Guaranteed Debt; (c) any full or partial release of the
liability of any other obligor on the Obligations, except for any final release
resulting from payment in full of such Obligations; (d) the modification of, or
waiver of compliance with, any terms of any other Loan Document; (e) the
insolvency, bankruptcy, or lack of corporate or partnership power of any other
obligor at any time liable for any Guaranteed Debt, whether now existing or
occurring in the future; (f) any renewal, extension, or rearrangement of any
Guaranteed Debt or any adjustment, indulgence, forbearance, or compromise that
may be granted or given by Administrative Agent or any Lender to any other
obligor on the Obligations; (g) any neglect, delay, omission, failure, or
refusal of Administrative Agent or any Lender to take or prosecute any action in
connection with the Guaranteed Debt or to foreclose, take, or prosecute any
action in connection with any Loan Document; (h) any failure of Administrative
Agent or any Lender to notify any Guarantor of any renewal, extension, or
assignment of any Guaranteed Debt, or the release of any security or of any
other action taken or refrained from being taken by Administrative Agent or any
Lender against Borrowers or any new agreement between Administrative Agent, any
Lender, and Borrower; it being understood that neither Administrative Agent nor
any Lender is required to give any Guarantor any notice of any kind under any
circumstances whatsoever with respect to or in connection


                                   Exhibit E
                                     Page 3
                           Form of Subsidiary Guaranty
<PAGE>

with any Guaranteed Debt, other than any notice required to be given in this
Guaranty; (i) the unenforceability of any Guaranteed Debt against any other
obligor or any security securing same because it exceeds the amount permitted by
Law, the act of creating it is ultra vires, the officers creating it exceeded
their authority or violated their fiduciary duties in connection with it, or
otherwise; (j) any payment of the Obligations to Administrative Agent or any
Lender is held to constitute a preference under any Debtor Relief Law or for any
other reason Administrative Agent or any Lender is required to refund that
payment or make payment to someone else (and in each such instance this Guaranty
will be reinstated in an amount equal to that payment); or (k) any other
circumstance which might otherwise constitute a defense available to, or a legal
or equitable discharge of, Borrowers or any Guarantor.

      9. WAIVERS. By execution hereof, each Guarantor waives presentment and
demand for payment, protest, notice of intention to accelerate, notice of
acceleration, and notice of protest and nonpayment, and agrees that its
liability with respect to the Guaranteed Debt (or any part thereof) shall not be
affected by any renewal or extension in the time of payment of the Obligations
(or any part thereof). To the maximum extent lawful, each Guarantor waives all
Rights by which it might be entitled to require suit on an accrued Right of
action in respect of any Guaranteed Debt or require suit against Borrowers or
others.

      10. LOAN DOCUMENTS. By execution hereof, each Guarantor covenants and
agrees that certain representations, warranties, terms, covenants, and
conditions set forth in the Loan Documents are applicable to Guarantors by their
terms and shall be imposed upon Guarantors, and each Guarantor reaffirms that
each such representation and warranty is true and correct and covenants and
agrees to promptly and properly perform, observe, and comply with each such
term, covenant, or condition. Moreover, each Guarantor acknowledges and agrees
that this Guaranty is subject to the offset provisions of the Loan Documents in
favor of Administrative Agent and Lenders. In the event the Credit Agreement or
any other Loan Document shall cease to remain in effect for any reason
whatsoever during any period when any part of the Guaranteed Debt remains
unpaid, the terms, covenants, and agreements of the Credit Agreement or such
other Loan Document incorporated herein by reference shall nevertheless continue
in full force and effect as obligations of Guarantors under this Guaranty.

      11. RELIANCE AND DUTY TO REMAIN INFORMED. Each Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Each Guarantor confirms that it has made its own
independent investigation with respect to Borrower's creditworthiness and is not
executing and delivering this Guaranty in reliance on any representation or
warranty by Administrative Agent or any Lender as to that creditworthiness. Each
Guarantor expressly assumes all responsibilities to remain informed of the
financial condition of Borrowers and any circumstances affecting Borrower's
ability to perform under the Loan Documents to which it is a party.

      12. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject to the
applicable provisions of ARTICLES 1 and 10 of the Credit Agreement, including,
without limitation, the provisions relating to GOVERNING LAW, AND WAIVER OF
RIGHT TO JURY TRIAL, both of which are incorporated into this Guaranty by
reference the same as if set forth in this Guaranty verbatim.

      13. NOTICES. All notices required or permitted under this Guaranty, if
any, shall be given in the manner set forth in Section 10.02 of the Credit
Agreement.


                                   Exhibit E
                                     Page 4
                           Form of Subsidiary Guaranty

<PAGE>

      14. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
Guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 10.01 of the Credit Agreement.

      15. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is
Administrative Agent for each Lender under the Credit Agreement. All Rights
granted to Administrative Agent under or in connection with this Guaranty are
for each Lender's ratable benefit. Administrative Agent may, without the joinder
of any Lender, exercise any Rights in Administrative Agent's or Lenders' favor
under or in connection with this Guaranty. Administrative Agent's and each
Lender's Rights and obligations vis-a-vis each other may be subject to one or
more separate agreements between those parties. However, no Guarantor is
required to inquire about any such agreement or is subject to any of its terms
unless such Guarantor specifically joins such agreement Therefore, neither
Guarantor nor its successors or assigns is entitled to any benefits or
provisions of any such separate agreement or is entitled to rely upon or raise
as a defense any party's failure or refusal to comply with the provisions of
such agreement.

      16. ADDITIONAL GUARANTORS. From time to time subsequent to the time
hereof, additional Persons may execute and deliver guaranties to the
Administrative Agent. Each Guarantor hereunder expressly agrees that its
obligations arising hereunder shall not be affected or diminished by any such
additional guaranties. Each Guarantor agrees that it shall not be necessary or
required that the Administrative Agent or any Lender exercise any right, assert
any claim or demand or enforce any remedy against any Borrowers, the other
Guarantors, or any other Person who has guaranteed the Guaranteed Debt before or
as a condition to the obligations of any Guarantor hereunder.

      17. PARTIES. This Guaranty benefits Administrative Agent, Lenders, and
their respective successors and assigns and binds Guarantors and their
respective successors and assigns. Upon appointment of any successor
Administrative Agent under the Credit Agreement, all of the Rights of
Administrative Agent under this Guaranty automatically vest in that new
Administrative Agent as successor Administrative Agent on behalf of Lenders
without any further act, deed, conveyance, or other formality other than that
appointment. The Rights of Administrative Agent and Lenders under this Guaranty
may be transferred with any assignment of the Guaranteed Debt pursuant to and in
accordance with the terms of the Credit Agreement. The Credit Agreement contains
provisions governing assignments of the Guaranteed Debt and of Rights and
obligations under this Guaranty.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.
                          SIGNATURE PAGE(S) TO FOLLOW.


                                   Exhibit E
                                     Page 5
                           Form of Subsidiary Guaranty
<PAGE>

EXECUTED as of the date first stated in this Guaranty.

                               GUARANTORS:

                               [Subsidiaries of Williams Pipe Line Company, LLC]


                               By:___________________________________

                               Name:_________________________________

                               Title:________________________________


                                   Exhibit E
                                     Page 6
                           Form of Subsidiary Guaranty
<PAGE>

                                                                     EXHIBIT F-1

                           FORM OF OPINION OF COUNSEL

                                 April ___, 2002

To each of the Lenders parties to the Credit
Agreement referred to below, and
Bank of America, N.A., as
Administrative Agent for the Lenders

Ladies and Gentlemen:

      We have acted as special counsel to (i) Williams Pipe Line Company, LLC
and Williams Energy Partners L.P. (collectively, the "BORROWERS"), and (ii)
Williams GP LLC (the "GENERAL PARTNER") in connection with the Credit Agreement
dated as of April ___, 2002, by and among the Borrowers, the Lenders party
thereto, Bank of America, N.A., as Administrative Agent for the Lenders, and the
other agents and lenders named therein (the "CREDIT AGREEMENT").

      This opinion is furnished to you at the request of the Borrower pursuant
to Section 4.01(a)(vi)(A) of the Credit Agreement. Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.

A.    BASIS OF OPINION

      In rendering the opinion set forth herein, we have examined and relied on
originals or copies, certified or otherwise identified to our satisfaction of
the following (the "LOAN DOCUMENTS"):

      (a)   the Credit Agreement;

      (b)   the Notes;

      (c)   [INCLUDE THE FOLLOWING IF APPLICABLE...the Guaranties executed by
            the Guarantors;...]

      (d)   a copy of the opinion letter of William G. von Glahn, General
            Counsel of The Williams Companies, Inc., addressed to you and dated
            the date hereof or the date of the Credit Agreement, as the case may
            be;

      (e)   copies of such corporate documents and records of the Loan Parties,
            certificates of officers and representatives of certain of the Loan
            Parties, and such other agreements, documents, instruments and
            certificates of public officials and other Persons as we have deemed
            necessary or appropriate for the purposes of rendering the opinion
            expressed herein; and

      (f)   such matters of law as we have deemed necessary or appropriate as a
            basis for the opinion expressed herein.


                                  Exhibit F-1
                                     Page 1
                           Form of Opinion of Counsel
<PAGE>

      B.    ASSUMPTIONS

      In rendering the opinion expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the due
authorization, execution and delivery of the Loan Documents by all parties to
such documents (other than the Loan Parties) and that the Loan Documents are
valid, binding and enforceable (subject to the limitations on enforceability of
the types referred to in the qualifications below) against the parties thereto
(other than the Loan Parties), (b) the legal capacity of natural persons, (c)
the genuineness of all signatures on all documents that we examined, (d) the
authenticity of all documents submitted to us as originals, and (e) the
conformity to authentic originals of all documents submitted to us as certified,
conformed or photostatic copies.

      As to questions of fact material to the opinion hereinafter expressed, we
have relied without investigation upon the representations and warranties of the
Borrower and the Guarantors made in the Loan Documents. We have made no
examination or investigation to verify the accuracy or completeness of any
financial, accounting, or statistical information set forth in the Loan
Documents or otherwise furnished to you and, accordingly, express no opinion
with respect thereto.

      Insofar as our opinion expressed below relates to the matters set forth in
the above-mentioned opinion letter, we have assumed without independent
investigation the correctness of the matters set forth in such opinion, and our
opinion is subject to the assumptions, qualifications and limitations set forth
in such opinion letter.

C.    OPINIONS

      Based upon our examination and review as set forth in Section A hereof,
and subject to the assumptions, exceptions, qualifications, and limitations set
forth in Sections B and D hereof, we are of the opinion that:

      1. The Credit Agreement and each of the Notes constitute valid and binding
obligations of the Borrowers enforceable against the Borrowers in accordance
with their respective terms, and that each Guaranty constitutes valid and
binding obligations of each of the Guarantors enforceable against each of the
Guarantors in accordance with its terms.

D.    QUALIFICATIONS AND EXCEPTIONS

      The opinion rendered above is subject in all respects to the following
qualifications and comments:

      1.    Our opinion above is subject to the effect of any applicable
            bankruptcy, insolvency, fraudulent conveyance, reorganization,
            moratorium and other similar laws relating to or affecting
            creditors' rights generally.

      2.    Our opinion above is subject to the effect of general principles of
            equity (whether considered in a proceeding in equity or at law). In
            rendering our opinion, we have assumed that the parties to the Loan
            Documents will perform their obligations and exercise their rights
            under such documents within the standards of reasonableness, good
            faith and fair dealing imposed by applicable law.

      3.    We express no opinion with respect to the legality, validity,
            binding nature, or enforceability of any of the following provisions
            found in the Loan Documents, if any:


                                  Exhibit F-1
                                     Page 2
                           Form of Opinion of Counsel
<PAGE>

            (i) provisions relating to waivers, precluding a party from
            asserting certain claims or defenses or from obtaining or exercising
            certain rights, releases, and remedies, or excusing a party from
            damages, liability, or obligations to the extent such provisions may
            violate public policy or otherwise violate applicable law; (ii)
            provisions relating to subrogation rights, delay or omission of
            enforcement of rights or remedies, severability, or set offs that
            violate applicable law; (iii) provisions obligating a party to
            submit to the jurisdiction or venue of any court; (iv) provisions
            purporting to establish evidentiary standards for suits or
            proceedings to enforce the Loan Documents; (v) provisions that
            decisions by a party are conclusive; and (vi) provisions purporting
            to effect the automatic service of process on any person.

      4.    We are members of the bar of the States of New York and Texas and we
            express no opinion as to the laws of any jurisdiction other than the
            laws of the States of New York and Texas, the General Corporate Law
            of the State of Delaware and the Federal laws of the United States
            of America.

      5.    This opinion letter is limited to the matters stated herein and no
            opinions may be implied or inferred beyond the matters expressly
            stated herein.

      6.    The opinion expressed herein is as of the date hereof, and we assume
            no obligation to update or supplement such opinions to reflect any
            facts or circumstances that may hereafter come to our attention or
            any changes in law that may hereafter occur.

      7.    This opinion is being furnished only to the addressees named above,
            and has been rendered solely for your benefit in connection with the
            Credit Agreement and the transactions contemplated thereby and may
            not be used, circulated, quoted, relied upon or otherwise referred
            to for any other purpose without our prior written consent;
            provided, however, that any Person that becomes a Lender or
            successor Administrative Agent pursuant to the terms of the Credit
            Agreement may rely on this opinion as if it were addressed to such
            Person and delivered on the date hereof.

                                                Very truly yours,


                                  Exhibit F-1
                                     Page 3
                           Form of Opinion of Counsel
<PAGE>

                                                                     EXHIBIT F-2

                           FORM OF OPINION OF COUNSEL

April ___, 2002

To each of the Lenders parties to the Credit
Agreement referred to below, and
BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders

Ladies and Gentlemen:

      I am General Counsel of The Williams Companies, Inc. and have acted as
counsel to (i) Williams Pipe Line Company, LLC, a Delaware limited liability
company ("WILLIAMS LLC"), (ii) Williams Energy Partners, L.P. (the "MLP" and,
together with Williams LLC, the "BORROWERS"), and (iii) Williams GP, LLC (the
"GENERAL PARTNER," and together with the Borrowers and the Guarantors, the
"TRANSACTION PARTIES") in connection with the Credit Agreement dated as of April
__, 2002, by and among the Borrowers, the Lenders party thereto, Bank of
America, N.A., as Administrative Agent for the Lenders, and the other agents and
lenders therein named (the "AGREEMENT"). This opinion is furnished to you at the
request of the Borrowers pursuant to Section 4.01(a)(vi) of the Agreement. Terms
defined in the Agreement not otherwise defined herein are used herein as therein
defined.

      In connection with the opinions expressed herein, I, or attorneys
reporting to me, have examined and relied upon copies of the following
documents:

      (a)   the Agreement, including all exhibits, schedules, and attachments
            thereto, and any Notes issued pursuant thereto (the "NOTES");

      (b)   [INCLUDE THE FOLLOWING IF APPLICABLE...the Guaranties dated as of
            even date with the Agreement executed by each of the Guarantors (the
            "GUARANTY")...];

      (c)   Certificates of the Secretary of State of the State of Delaware
            dated ___________, 2002, attesting to the continued existence and
            good standing of the Transaction Parties in Delaware; and

      (d)   the Organization Documents of the Transaction Parties and all
            amendments thereto.

      Those documents identified in items (a) and (b) above are collectively
referred to herein as the "CREDIT DOCUMENTS." In connection with this opinion, I
or other attorneys acting under my supervision have (i) investigated such
questions of law, (ii) examined such partnership and company documents and
records of the Transaction Parties and certificates of public officials, and
(iii) received such information from officers and representatives of the
Transaction Parties and made such investigations as I or other attorneys under
my supervision have deemed necessary or appropriate for the purposes of this
opinion. I have not, nor have other attorneys under my supervision, conducted
independent investigations or inquiries to determine the existence of matters,
actions, proceedings, items, documents, facts, judgments, decrees, franchises,
certificates, permits, or the like and have made no independent search of the
records of any court, arbitrator, or governmental authority affecting any
Person, and no inference as to my knowledge thereof shall be drawn from the fact
of my representation of any party or otherwise.


                                  Exhibit F-2
                                     Page 1
                           Form of Opinion of Counsel
<PAGE>

      In rendering the opinions herein, I have assumed without independent
verification (i) the genuineness of all signatures of the Lenders and the
Administrative Agent, (ii) the capacity of the signing officers of each of the
Lenders and the Administrative Agent, (iii) the authenticity of all documents
submitted to me as original and the conformity with the authentic originals of
all documents submitted to me as copies, and (iv) the due execution and
delivery, pursuant to due authorization, of the Agreement by the Lenders and the
Administrative Agent and the enforceability of the Agreement against the Lenders
and the Administrative Agent.

      Based upon and subject to the foregoing and the other qualifications,
limitations, and assumptions set forth below and upon such other matters as I
have deemed appropriate, I am of the opinion that:

      1.    The MLP is a limited partnership duly organized, validly existing,
            and in good standing under the laws of the State of Delaware;
            Williams LLC is a limited liability company duly organized, validly
            existing, and in good standing under the laws of the State of
            Delaware; and the General Partner is a limited liability company
            duly organized, validly existing, and in good standing under the
            laws of the State of Delaware.

      2.    Each Transaction Party has the partnership or company power and
            authority to own and lease its property and to conduct the business
            in which it is currently engaged. The execution, delivery, and
            performance by each of the Transaction Parties of the Credit
            Documents and the consummation of the transactions contemplated by
            the Credit Documents are (a) within its partnership or company
            powers, (b) will not contravene (i) the Organization Documents of
            any Transaction Party, (ii) any law, rule, or regulation applicable
            to any Transaction Party (including, without limitation, Regulation
            X of the Board of Governors of the Federal Reserve System), or (iii)
            any contractual or legal restriction, and (c) will not result in or
            require the creation or imposition of any Lien prohibited by the
            Credit Documents.

      3.    The Agreement has been duly authorized, executed, and delivered to
            the Administrative Agent by the Borrowers, and the Guaranty has been
            duly authorized, executed, and delivered to the Administrative Agent
            by each of the Guarantors.

      4.    No authorization, approval, or other action by, and no notice to or
            filing with, any governmental authority or regulatory body is
            required for the due execution, delivery, and performance by any
            Transaction Party of the Credit Documents to which it is a party or
            the consummation of the transactions contemplated by the Credit
            Documents, except, in the case of such performance, for such
            authorizations, approvals, actions, notices, and filings which have
            been made or obtained.

      5.    To my knowledge there are no pending or overtly threatened actions
            or proceedings against any Transaction Party before any court,
            governmental agency, or arbitrator that purport to affect the
            legality, validity, binding effect, or enforceability of the Credit
            Documents, or that would reasonably be expected to have a materially
            adverse effect upon the financial condition or operations of any
            Transaction Party, taken as a whole.

      6.    No Transaction Party is an "investment company" or a company
            "controlled" by an "investment company" within the meaning of the
            Investment Company Act of 1940, as amended. No Transaction Party is
            a "holding company," or a "subsidiary company" of a "holding
            company," or an "affiliate" of a "holding company" or of a
            "subsidiary


                                  Exhibit F-2
                                     Page 2
                           Form of Opinion of Counsel
<PAGE>

            company" of a "holding company," or a "public utility" within the
            meaning of the Public Utility Holding Company Act of 1935, as
            amended.

      7.    In any action or proceeding arising out of or relating to the Credit
            Documents in any court of the State of Oklahoma or in any Federal
            court sitting in the State of Oklahoma, assuming (i) proper venue,
            jurisdiction, and a full and proper presentation of the issues and
            the law to the court, (ii) such action or proceeding is not
            dismissed on the basis of an inconvenient forum, and (iii) that the
            court properly applies Oklahoma law, such court would (a) recognize
            and give effect to the provisions of the Credit Documents that set
            forth the governing law, and (b) construe the Credit Documents in
            accordance with the internal laws of the State of New York. Subject
            to the foregoing and without limiting the generality thereof, a
            court of the State of Oklahoma or a Federal court sitting in the
            State of Oklahoma would apply the usury law of the State of New
            York, and would not apply the usury law of the State of Oklahoma, to
            the Credit Documents. However, if a court were to hold that the
            Credit Documents are governed by or are to be construed in
            accordance with the laws of the State of Oklahoma, the Agreement,
            when executed and delivered by the parties thereto, would be, under
            the laws of the State of Oklahoma, legal, valid, and binding
            obligations of the Borrower, enforceable against the Borrower in
            accordance with its terms, and the Guaranty would be, under the laws
            of the State of Oklahoma, legal, valid and binding obligations of
            each Guarantor, enforceable against each Guarantor in accordance
            with its terms.

      The opinions expressed in this letter are subject to the following
additional qualifications and limitations:

      A.    My opinion in paragraph 1 with respect to the organization and good
            standing of the Borrowers, the Guarantor and the General Partner is
            based solely on Certificates, dated as of ___________, 2002, from
            the Secretary of State of the State of Delaware, certifying as to
            such matters.

      B.    My opinion in the last sentence of paragraph 7 above is subject,
            insofar as enforceability is concerned, to the effect of any
            applicable bankruptcy, insolvency, reorganization, fraudulent
            conveyance, moratorium, or similar law affecting creditors' rights
            and remedies generally.

      C.    My opinion in the last sentence of paragraph 7 above is subject,
            insofar as enforceability is concerned, to the effect of general
            principles of equity including principles of commercial
            reasonableness, good faith, and fair dealing (regardless of whether
            considered in a proceeding in equity or at law).

      D.    I express no opinion with respect to the enforceability of any of
            the following: (i) indemnification provisions to the extent the same
            are violative of federal or state securities laws, rules, or
            regulations, or of public policy, (ii) clauses waiving right to
            trial by jury, exculpation clauses, or clauses granting offset
            rights to the Banks or against any deposits or in respect of matured
            claims, (iii) clauses relating to recovery of attorneys' fees in
            connection with the enforcement of obligations, (iv) clauses
            relating to release of unmatured claims and integration clauses to
            the effect that no representation was made other than as appears in
            the Agreement, (v) clauses purporting to waive unmatured rights,
            representations, warranties, or affirmative or negative covenants to
            the extent such representations, warranties, or covenants can be
            construed to be independent clauses


                                  Exhibit F-2
                                     Page 3
                           Form of Opinion of Counsel
<PAGE>

            which purport to be legal, valid, binding, and enforceable by
            themselves, as distinguished from being clauses that trigger an
            event of default, and severability and similar clauses, and (vi)
            clauses that incorporate by reference a document or instrument or
            agreement not in existence on the date hereof to the extent that any
            such document, instrument, or agreement is the basis of an effort to
            enforce the Agreement, insofar as any of the foregoing are contained
            in the Agreement.

      E.    I express no opinion as to the effect on the opinions herein stated
            of compliance or non-compliance by any Lender with any applicable
            state, federal, or other laws or regulations applying only to banks,
            or the legal or regulatory status of any Lender.

      F.    My opinion in paragraph 7 above assumes (i) application of New York
            law would not be found to be contrary to a fundamental policy of a
            state with a materially greater interest in determining the question
            presented and the laws of which would govern in absence of an
            effective choice of law, and (ii) [one of] the Syndication Agents,
            [one of] the Joint Lead Arrangers and Joint Book Managers, and one
            or more Lenders, each have their principal place of business located
            in the State of New York, and one or more Lenders has a place of
            business located in the State of New York.

      G.    Qualification of any statement or opinion herein by the use of the
            words "to my knowledge" means that during the course of
            representation in connection with the transactions contemplated by
            the Agreement, no information has come to the attention of me or
            attorneys reporting to me that would give me or such attorneys
            current actual knowledge of the existence of facts or matters so
            qualified. I have not undertaken any investigation to determine the
            existence of facts, and no inference as to my knowledge thereof
            shall be drawn from the fact of the representation by me or
            attorneys reporting to me of any party or otherwise.

      I am admitted to practice law in the States of Oklahoma and New York, and,
accordingly, the opinions expressed herein are based upon and limited
exclusively to the laws of the States of Oklahoma and New York, the General
Corporation Law of the State of Delaware and the laws of the United States of
America insofar as any of such laws are applicable. I render no opinion with
respect to any other laws.

      This opinion letter is solely for the benefit of the Lenders and the
Administrative Agent, their respective successors, assigns, participants, and
other transferees and counsel for the Persons referred to in this sentence, in
consummating the transaction contemplated by the Credit Documents, and may not
be used or relied upon by, quoted, transmitted to, or filed with any other
Person or for any other purpose whatsoever without in each instance my prior
written consent. This opinion speaks as of its date, and I undertake no, and
hereby expressly disclaim any, duty to advise you as to any changes of fact or
law coming to my attention after the date hereof.


                                            Very truly yours,


                                            William G. von Glahn


                                  Exhibit F-2
                                     Page 4
                           Form of Opinion of Counsel

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>7
<FILENAME>d04048exv21.txt
<DESCRIPTION>EX-21 SUBSIDIARIES
<TEXT>
<PAGE>
                                                                      EXHIBIT 21

                  LIST OF SUBSIDIARIES AS OF DECEMBER 31, 2002

WEG GP LLC, a Delaware limited liability company, and general partner of
Registrant

Williams Energy Partners L.P., a Delaware limited partnership

Williams Pipe Line Company, LLC, a Delaware limited liability company

Williams GP Inc., a Delaware corporation

Williams OLP, L.P., a Delaware limited partnership

Williams NGL, LLC, a Delaware limited liability company

Williams Terminals Holdings, L.P., a Delaware limited partnership

Williams Pipelines Holdings, L.P., a Delaware limited partnership

Williams Ammonia Pipeline, L.P., a Delaware limited partnership

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>8
<FILENAME>d04048exv23.txt
<DESCRIPTION>EX-23 CONSENT OF INDEPENDENT AUDITORS
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1



                         Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form
S-8 File No. 333-71670) pertaining to the Williams Energy Partners Long-Term
Incentive Plan and in the Registration Statement (Form S-3 File No. 333-83952)
of Williams Energy Partners L.P. of our report dated March 3, 2003, with respect
to the consolidated financial statements of Williams Energy Partners L.P., and
of our report dated March 3, 2003, with respect to the consolidated balance
sheet of WEG GP LLC, both of which are included in the Annual Report (Form 10-K)
for the year ended December 31, 2002.

                                                              Ernst & Young LLP

Tulsa, Oklahoma
March 19, 2003


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>9
<FILENAME>d04048exv24.txt
<DESCRIPTION>EX-24 POWER OF ATTORNEY
<TEXT>
<PAGE>
                                                                      EXHIBIT 24

                                   WEG GP LLC

                                POWER OF ATTORNEY

            KNOW ALL MEN BY THESE PRESENTS that each of the undersigned
individuals, in their capacity as a director or officer, or both, as hereinafter
set forth below their signature, of WEG GP LLC, a Delaware limited liability
company, as general partner of Williams Energy Partners L.P. ("WEG GP"), does
hereby constitute and appoint CRAIG R. RICH, BRIAN K. SHORE and WILLIAM H. GAULT
as their true and lawful attorneys and each of them (with full power to act
without the other) their true and lawful attorneys for them and in their name
and in their capacity as a director or officer, or both, of WEG GP, as
hereinafter set forth below their signature, to sign Williams Energy Partners
L.P.'s Annual Report to the Securities and Exchange Commission on Form 10-K for
the fiscal year ended December 31, 2002, and any and all amendments thereto or
all instruments necessary or incidental in connection therewith; and

            THAT the undersigned WEG GP does hereby constitute and appoint CRAIG
R. RICH, BRIAN K. SHORE and WILLIAM H. GAULT its true and lawful attorneys and
each of them (with full power to act without the other) its true and lawful
attorney for it and in its name and on its behalf to sign said Form 10-K and any
and all amendments thereto and any and all instruments necessary or incidental
in connection therewith.

            Each of said attorneys shall have full power of substitution and
resubstitution, and said attorneys or any of them or any substitute appointed by
any of them hereunder shall have full power and authority to do and perform in
the name and on behalf of each of the undersigned, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises, as fully
to all intents and purposes as each of the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts of said
attorneys or any of them or of any such substitute pursuant hereto.

            IN WITNESS WHEREOF, the undersigned have executed this instrument,
all as of the 21st day of January , 2003.


  /s/ Steven J. Malcolm                             /s/ Phillip D. Wright
--------------------------------               ---------------------------------
     Steven J. Malcolm                                 Phillip D. Wright
         Director                                    Chairman of the Board
                                                          and Director

<PAGE>

  /s/ Don R. Wellendorf                               /s/ Keith E. Bailey
--------------------------------               ---------------------------------
      Don R. Wellendorf                               Keith E. Bailey
          Director                                       Director


  /s/ William A. Bruckmann, III                      /s/ Don J. Gunther
--------------------------------               ---------------------------------
    William A. Bruckmann, III                           Don J. Gunther
             Director                                      Director


  /s/ William W. Hanna
--------------------------------
      William W. Hanna
          Director

                                 WEG GP LLC, as General Partner of
                                 Williams Energy Partners L.P.


                                 By       /s/ Don R. Wellendorf
                                   ---------------------------------------------
                                                Don R. Wellendorf
                                      President and Chief Executive Officer
                                           (Principal Executive Officer)


                                 By       /s/ John D. Chandler
                                   ---------------------------------------------
                                                John D. Chandler
                                    Chief Financial Officer and Treasurer
                                 (Principal Financial and Accounting Officer)

ATTEST:


   /s/ Brian K. Shore
---------------------------
      Brian K. Shore
         Secretary

<PAGE>

                                                                      EXHIBIT 24

                                   WEG GP LLC

      I, the undersigned, Brian K. Shore, Secretary of WEG GP LLC, a Delaware
limited liability company, as general partner of Williams Energy Partners L.P.
(hereinafter called the "Company"), do hereby certify that at a meeting of the
Board of Directors of the Company, duly convened and held on January 21, 2003,
at which a quorum of said Board was present and acting throughout, the following
resolutions were duly adopted:

                  RESOLVED that the Chief Executive Officer and Chief Financial
            Officer of the Company, acting in its capacity as the general
            partner of Williams Energy Partners L.P. (the "Partnership"), be,
            and each of them hereby is, authorized and empowered to execute a
            Power of Attorney for use in connection with the execution and
            filing for and on behalf of the Partnership, under the Securities
            Exchange Act of 1934, of the Partnership's Annual Report on Form
            10-K for the fiscal year ended December 31, 2002.

      I further certify that the foregoing resolution has not been modified,
revoked or rescinded and is in full force and effect.

      IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal of WEG GP LLC this 14th day of March, 2003.


                                                        /S/ Brian K. Shore
                                                     ---------------------------
                                                            Brian K. Shore
                                                               Secretary

[CORPORATE SEAL]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>10
<FILENAME>d04048exv99.txt
<DESCRIPTION>EX-99 WEG GP LLC CONSOLIDATED BALANCE SHEET
<TEXT>
<PAGE>
                                                                      EXHIBIT 99



                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors of WEG GP LLC
General Partner of Williams Energy Partners L.P.

     We have audited the accompanying consolidated balance sheet of WEG GP LLC
as of December 31, 2002. The consolidated balance sheet is the responsibility of
the Company's management. Our responsibility is to express an opinion on the
consolidated balance sheet based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated balance
sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit of the consolidated
balance sheet provides a reasonable basis for our opinion.

     In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the consolidated financial position of WEG GP
LLC at December 31, 2002 in conformity with accounting principles generally
accepted in the United States.



                                        ERNST & YOUNG LLP

Tulsa, Oklahoma
March 3, 2003


<PAGE>

                                   WEG GP LLC

                           CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                     DECEMBER 31,
                                                                         2002
                                                                     ------------
<S>                                                                  <C>
                                 ASSETS
Current assets:
  Cash and cash equivalents ....................................     $     75,738
  Accounts receivable (less allowance for doubtful
    accounts of $457 and $510 at December 31, 2002
    and 2001, respectively) ....................................           18,038
  Other accounts receivable ....................................            6,619
  Affiliate accounts receivable ................................           15,608
  Inventory ....................................................            5,224
  Other current assets .........................................            5,393
                                                                     ------------
    Total current assets .......................................          126,620
Property, plant and equipment, at cost .........................        1,334,527
  Less: accumulated depreciation ...............................          401,396
                                                                     ------------
    Net property, plant and equipment ..........................          933,131
Goodwill (less amortization of $141 and $145 at December
  31, 2002 and 2001, respectively) .............................           22,295
Other intangibles (less amortization of $297 and $310 at
  December 31, 2002 and 2001, respectively) ....................            2,432
Long-term affiliate receivables ................................           11,656
Long-term receivables ..........................................            9,268
Other noncurrent assets ........................................           12,416
                                                                     ------------
    Total assets ...............................................     $  1,117,818
                                                                     ============

                     LIABILITIES AND OWNERS' EQUITY

Current liabilities:
  Accounts payable .............................................     $     17,024
  Affiliate accounts payable ...................................           28,555
  Cash overdrafts ..............................................            1,967
  Accrued affiliate payroll and benefits .......................            7,065
  Accrued taxes other than income ..............................           13,698
  Accrued interest payable .....................................               67
  Accrued environmental liabilities ............................           10,359
  Deferred revenue .............................................           11,550
  Accrued product purchases ....................................            2,924
  Accrued casualty losses ......................................              655
  Other current liabilities ....................................            3,880
                                                                     ------------
    Total current liabilities ..................................           97,744
Long-term debt .................................................          570,000
Long-term affiliate payable ....................................              450
Deferred compensation ..........................................            4,028
Other deferred liabilities .....................................              488
Environmental liabilities ......................................           11,927
Minority interest ..............................................          340,023
Commitments and contingencies
Owners' equity .................................................           94,129
Accumulated other comprehensive loss ...........................             (971)
                                                                     ------------
  Total liabilities and owners' equity .........................     $  1,117,818
                                                                     ============
</Table>


                             See accompanying notes.


                                       2
<PAGE>


                                   WEG GP LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   ORGANIZATION AND PRESENTATION

     Williams Energy Partners L.P. ("the Partnership") is a Delaware limited
partnership that was formed in August 2000 to own, operate and acquire a
diversified portfolio of complementary energy assets. At the time of the
Partnership's initial public offering in February 2001, the Partnership owned:
(a) selected petroleum products terminals previously owned by Williams Energy
Ventures, Inc., and (b) an ammonia pipeline system, Williams Ammonia Pipeline
Inc., previously owned by Williams Natural Gas Liquids, Inc. ("WNGL"). Prior to
the closing of the Partnership's initial public offering in February 2001,
Williams Energy Ventures, Inc. was owned by Williams Energy Services, LLC
("WES"). Both WES and WNGL are wholly owned subsidiaries of The Williams
Companies, Inc ("Williams"). Williams GP LLC, a Delaware limited liability
company, was also formed in August 2000, to serve as general partner for the
Partnership.

    During November 2002, Williams created a new general partner, WEG GP LLC
("General Partner"). WEG GP LLC, which is owned by affiliates of Williams, has
all of the rights, privileges and responsibilities relative to the Partnership
previously held by the old general partner, Williams GP LLC. Williams GP LLC
will continue to own the Class B units issued by the Partnership in April 2002
as discussed below.

    These financial statements present the consolidated financial position of
WEG GP LLC and the Partnership. Minority interest represents the limited partner
interest held in the Partnership by non-Williams affiliated limited partners.

     On February 9, 2001, the Partnership completed its initial public offering
of 4 million common units representing limited partner interests in the
Partnership at a price of $21.50 per unit. The proceeds of $86.0 million were
used to pay underwriting discounts and commissions of $5.6 million and legal,
professional fees and costs associated with the initial public offering of $3.1
million, with the remainder used to reduce affiliate note balances with
Williams.

     As part of the initial public offering, the underwriters exercised their
over-allotment option and purchased 600,000 common units, also at a price of
$21.50 per unit. The net proceeds of $12.1 million, after underwriting discounts
and commissions of $0.8 million, from this over-allotment option were used to
redeem 600,000 of the common units held by WES to reimburse it for capital
expenditures related to the Partnership's assets. The Partnership maintained the
historical costs of the net assets in connection with the initial public
offering. Following the exercise of the underwriters' over-allotment option, 40%
of the Partnership was owned by the public and 60%, including the General
Partner's ownership, was owned by affiliates of the Partnership. Generally, the
limited partners' liability in the Partnership is limited to their investment.

     On April 11, 2002, the Partnership acquired all of the membership interests
of Williams Pipe Line Company ("Williams Pipe Line") for approximately $1.0
billion (see Note 4 - Acquisitions and Divestitures). Because Williams Pipe Line
was an affiliate of the Partnership at the time of the acquisition, the
transaction was between entities under common control and, as such, has been
accounted for similarly to a pooling of interests. Accordingly, the consolidated
balance sheet and notes of WEG GP LLC have been restated to reflect the combined
historical financial position of WEG GP LLC, the Partnership and Williams Pipe
Line for 2002.

     On April 11, 2002, the Partnership issued 7,830,924 Class B units
representing limited partner interests to Williams GP LLC. The securities,
valued at $304.4 million and along with $6.2 million of additional general
partner equity interests were issued as partial payment for the acquisition of
Williams Pipe Line (See Note 4 - Acquisitions and Divestitures). According to
the provisions in the Williams Pipe Line private placement debt agreement dated
November 15, 2002, the Partnership can redeem the Class B units only with
proceeds from an equity offering. When the Class B units are redeemed, the price
will be based on the 20-day average closing price of the common units prior to
the redemption date. If the Class B units are not redeemed by April 11, 2003,
then upon the request of the holders of the Class B units and approval of the
holders of a majority of the common units voting at a meeting of the
unitholders, the Class B units will convert into common units. If the approval
of the conversion by the common unitholders is not obtained within 120 days of
this request, the holder of the Class B units will be entitled to receive
distributions with respect to its Class B units, on a per unit basis, equal to
115% of the amount of distributions paid on a common unit.

     In May 2002, the Partnership issued 8,000,000 common units representing
limited partner interests in the Partnership at a price of $37.15 per unit for
total proceeds of $297.2 million. Associated with this offering, Williams
contributed $6.1 million to the Partnership to maintain its 2% general partner
interest. A portion of the total proceeds was used to pay underwriting discounts
and commissions of $12.6 million. Legal, professional fees and costs associated
with this offering were approximately $5.3 million. The remaining cash proceeds
of $289.0 million were used to partially repay the $700.0 million short-term
note assumed by the Partnership to help finance the Williams Pipe Line
acquisition (see Note 10 - Long-Term Debt).


                                       3
<PAGE>


    During November 2002, amendments were made to the Partnership's agreement of
limited partnership and a limited liability company agreement for WEG GP LLC was
adopted. The first change requires the Partnership and the general partner to
maintain separateness from Williams including formalities on interaction between
the Partnership, the public and Williams. Changes were also made to require the
approval of the Conflicts Committee (consisting of three independent directors)
before the general partner can make bankruptcy-related decisions for the
Partnership. In addition, adjustments were made to the voting rights of units
held by Williams. Williams' Class B units no longer have voting rights except
with respect to matters that would have a material impact on the holders of such
units, its subordinated units generally have one-half vote for every one unit
owned and all common units will be allowed to vote in any subordinated class
vote. Finally, election of the board members of the general partner has been
moved to a vote of the common unitholders, with the first vote to be held in
2003. The voting right changes and board member changes will be voided and
reversed in the event of a foreclosure in a Williams-related bankruptcy
proceeding. In addition, the Partnership eliminated from its agreements the
requirement that the Board of Directors of the Partnership's General Partner
approve any proposed disposition of any membership interest of the General
Partner.


     Recent Developments

      During 2002, Williams began to experience significant financial and
liquidity difficulties and no longer maintains an investment grade credit
rating. In the event that Williams' financial condition does not improve, or
becomes worse, it may have to consider other options including the possibility
of filing for bankruptcy under the United States Bankruptcy Code. Management has
reviewed the situation with outside counsel and believes that should Williams
and its affiliates file for bankruptcy protection that the Partnership would not
necessarily become a party to such bankruptcy filings. However, we cannot assure
you that Williams and its affiliates, or the creditors of Williams and its
affiliates, would not attempt to utilize various remedies available in a
bankruptcy (including substantive consolidation), in an effort to make the
assets of the Partnership available to the creditors of Williams and its
affiliates, or how a bankruptcy court would resolve such issues. Likewise, there
can be no assurances as to the ultimate impact a bankruptcy by Williams and its
affiliates would have on Williams' and its affiliates' ability to perform
obligations owed to the Partnership and its affiliates, including WEG GP LLC.

     Provisions of the General Partner's limited liability company agreement
specifically provide that decisions regarding a voluntary bankruptcy filing of
WEG GP LLC or the Partnership must be approved by the Conflicts Committee, which
is comprised of the independent board members of WEG GP LLC.

     If WEG GP LLC were to file for bankruptcy relief under Chapter 7 of the
United States Bankruptcy Code, the filing would be an "Event of Withdrawal"
under the Partnership's Partnership Agreement and WEG GP LLC will be deemed to
have withdrawn. A Chapter 11 filing would not be considered an "Event of
Withdrawal" and the Partnership would continue to operate under its existing
agreements. Upon the occurrence of an Event of Withdrawal, WEG GP LLC is
required to give notice to the Partnership's limited partners within 30 days
after such occurrence. An Event of Withdrawal triggers dissolution and winding
up of the affairs of the Partnership unless: (i) a successor general partner is
elected and admitted to the Partnership within 90 days of receiving the General
Partner's withdrawal notice, (ii) a written opinion of counsel is issued that
such withdrawal would not result in the loss of the limited liability of any
limited partner or of the limited partner of any of the Partnership's operating
limited partnerships or cause the Partnership or any of the Partnership's
operating limited partnerships to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
purposes, and (iii) the new general partner executes a new partnership agreement
and executes and files a new certificate of limited partnership. Election of a
successor general partner requires a vote of a majority of the outstanding units
to reconstitute the Partnership and approve the successor general partner.


2.   DESCRIPTION OF BUSINESSES

     WEG GP LLC serves as managing general partner for the Partnership. The
Partnership owns and operates a petroleum products pipeline system, petroleum
products terminals and an ammonia pipeline system.

     WILLIAMS PIPE LINE SYSTEM

     Williams Pipe Line is a petroleum products pipeline system that covers an
11-state area extending from Oklahoma through the Midwest to North Dakota,
Minnesota and Illinois. The system includes a 6,700-mile pipeline and 39
terminals that provide transportation, storage and distribution services. The
products transported on the Williams Pipe Line system are largely petroleum
products, including gasoline, diesel fuels, LPGs and aviation fuels. Product
originates on the system from direct connections to refineries and interconnects
with other interstate pipelines for transportation and ultimate distribution to
retail gasoline stations, truck stops, railroads, airlines and other end-users.


                                       4
<PAGE>


   PETROLEUM PRODUCTS TERMINALS

     Most of the Partnership's 28 petroleum products terminals are strategically
located along or near third party pipelines or petroleum refineries. The
petroleum products terminals provide a variety of services such as distribution,
storage, blending, inventory management and additive injection to a diverse
customer group including governmental customers and end-users in the downstream
refining, retail, commercial trading, industrial and petrochemical industries.
Products stored in and distributed through the petroleum products terminal
network include refined petroleum products, blendstocks and heavy oils and
feedstocks. The terminal network consists of marine terminal facilities and
inland terminals. Four marine terminal facilities are located along the Gulf
Coast and one marine terminal facility is located in Connecticut near the New
York harbor. The inland terminals are located primarily in the southeastern
United States.

   AMMONIA PIPELINE SYSTEM

     The ammonia pipeline system consists of an ammonia pipeline and six
company-owned terminals. Shipments on the pipeline primarily originate from
ammonia production plants located in Borger, Texas and Enid and Verdigris,
Oklahoma for transport to terminals throughout the Midwest for ultimate
distribution to end-users in Iowa, Kansas, Minnesota, Missouri, Nebraska,
Oklahoma, South Dakota and Texas. The ammonia transported through the system is
used primarily as nitrogen fertilizer.


3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  BASIS OF PRESENTATION

     WEG GP LLC has an effective ownership in the Partnership of 54.5%. This
effective ownership is derived through its 2.0% general partner ownership, which
gives it control of the Partnership, and its affiliates, who own 52.5% of the
limited partnership interests. The Partnership is fully consolidated in WEG GP
LLC's balance sheet.

     The consolidated balance sheet includes Williams Pipe Line, the petroleum
products terminals and the ammonia pipeline system. For 11 of these petroleum
products terminals, the Partnership owns varying undivided ownership interests.
From inception, ownership of these assets has been structured as an ownership of
an undivided interest in assets, not as an ownership interest in a partnership,
limited liability company, joint venture or other form of entity. Marketing and
invoicing are controlled separately by each owner, and each owner is responsible
for any loss, damage or injury that may occur to their own customers. As a
result, the Partnership applies proportionate consolidation for its interests in
these assets.

  USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.

  REGULATORY REPORTING

       Williams Pipe Line is regulated by the Federal Energy Regulatory
Commission ("FERC"), which prescribes certain accounting principles and
practices for the annual Form 6 Report filed with the FERC that differ from
those used in these financial statements. Such differences relate primarily to
capitalization of interest, accounting for equity investments and other
adjustments and are not significant to the financial statements.

   CASH EQUIVALENTS

     Cash and cash equivalents include demand and time deposits and other
marketable securities with maturities of three months or less when acquired. The
carrying amount of cash and cash equivalents approximates fair value of those
instruments due to their short maturity.

   INVENTORY VALUATION

       Inventory is comprised primarily of refined products and materials and
supplies. Refined products and natural gas liquids inventories are stated at the
lower of average cost or market. The average cost method is used for materials
and supplies.


                                       5
<PAGE>


  TRADE RECEIVABLES

        Trade receivables are recognized when products are sold or services are
rendered. An allowance for doubtful accounts is established for all amounts
deemed uncollectable and reserves are evaluated no less than quarterly to
determine their adequacy.

   PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost. Expenditures for
maintenance and repairs are charged to operations in the period incurred.
Depreciation of property, plant and equipment is provided on the straight-line
basis. For petroleum products terminal and ammonia pipeline system assets, the
costs of property, plant and equipment sold or retired and the related
accumulated depreciation is removed from the accounts, and any associated gains
or losses are recorded in the income statement, in the period of sale or
disposition. For Williams Pipe Line, gains or losses from the ordinary sale or
retirement of property, plant and equipment are credited or charged to
accumulated depreciation under FERC accounting guidelines.

   GOODWILL AND OTHER INTANGIBLE ASSETS

     In January 2002, WEG GP LLC adopted Statement of Financial Accounting
Standard ("SFAS") No. 142, "Goodwill and Other Intangible Assets." In accordance
with this Statement, beginning on January 1, 2002, goodwill, which represents
the excess of cost over fair value of assets of businesses acquired, is no
longer amortized but must be evaluated periodically for impairment. The
determination of whether goodwill is impaired is based on management's estimate
of the fair value of the Partnership's operating segments as compared to their
carrying values. If an impairment has occurred, the amount of the impairment
recognized is determined by subtracting the implied fair value of the reporting
unit goodwill from the carrying amount of the goodwill. Other intangible assets
are amortized on a straight-line basis over a period of up to 25 years.

     Judgments and assumptions are inherent in management's estimates used to
determine the fair value of its operating segments. The use of alternate
judgments and/or assumptions could result in the recognition of different levels
of impairment charges in the financial statements.

     Previously, goodwill was amortized on a straight-line basis over a period
of 20 years for those assets acquired prior to July 1, 2001. Based on the amount
of goodwill recorded as of December 31, 2001, application of the
non-amortization provision of SFAS No. 142 resulted in a decrease to
amortization expense in 2002 of approximately $0.8 million.

   IMPAIRMENT OF LONG-LIVED ASSETS

     In January 2002, WEG GP LLC adopted SFAS No.144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." There was no initial impact to WEG
GP LLC's financial position upon adoption of this standard.

     In accordance with this Statement, WEG GP LLC evaluates its long-lived
assets of identifiable business activities for impairment when events or changes
in circumstances indicate, in management's judgment, that the carrying value of
such assets may not be recoverable. The determination of whether an impairment
has occurred is based on management's estimate of undiscounted future cash flows
attributable to the assets as compared to the carrying value of the assets. If
an impairment has occurred, the amount of the impairment recognized is
determined by estimating the fair value for the assets and recording a provision
for loss if the carrying value is greater than fair value.

     For assets identified to be disposed of in the future, the carrying value
of these assets is compared to the estimated fair value less the cost to sell to
determine if an impairment is required. Until the assets are disposed of, an
estimate of the fair value is redetermined when related events or circumstances
change.

     Judgments and assumptions are inherent in management's estimate of
undiscounted future cash flows used to determine recoverability of an asset and
the estimate of an asset's fair value used to calculate the amount of impairment
to recognize. The use of alternate judgments and/or assumptions could result in
the recognition of different levels of impairment charges in the financial
statements.

   INCOME TAXES

     WEG GP LLC is a partnership for income tax purposes and therefore is not
subject to federal or state income taxes. Income taxes for WEG GP LLC are the
responsibility of the owners of this partnership, which are affiliates of WEG GP
LLC.


                                       6
<PAGE>


   EMPLOYEE STOCK-BASED AWARDS

     Williams' employee stock-based awards are accounted for under provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Williams' fixed plan common stock
options do not result in compensation expense because the exercise price of the
stock options equals the market price of the underlying stock on the date of
grant.

     WEG GP LLC has issued incentive awards of phantom units to Williams
employees assigned to the Partnership. These awards are also accounted for under
provisions of Accounting Principles Board Opinion No. 25. Since the exercise
price of the unit awards is less than the market price of the underlying units
on the date of grant, compensation expense is recognized by the General Partner
and directly allocated to the Partnership.

   ENVIRONMENTAL

     Environmental expenditures that relate to current or future revenues are
expensed or capitalized based upon the nature of the expenditures. Expenditures
that relate to an existing condition caused by past operations that do not
contribute to current or future revenue generation are expensed. Environmental
liabilities are recorded independently of any potential claim for recovery.
Receivables are recognized in cases where the realization of reimbursements of
remediation costs are considered probable. Accruals related to environmental
matters are generally determined based on site-specific plans for remediation,
taking into account prior remediation experience of the Partnership and
Williams.

   RECENT ACCOUNTING STANDARDS


     In December 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS 148, "Accounting for Stock-Based Compensation -- Transition and Disclosure
-- an amendment of FASB Statement No. 123". This Statement amends FASB Statement
No. 123, "Accounting for Stock-Based Compensation", to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. This Statement improves the prominence and clarity of
the pro forma disclosures required by Statement 123 by prescribing a specific
tabular format and by requiring disclosure in the "Summary of Significant
Accounting Policies" or its equivalent. The standard is effective for fiscal
periods ending after December 15, 2002. The Partnership accounts for stock-based
compensation for Williams employees assigned to the Partnership under provisions
of Accounting Principles Board Opinion No. 25, hence, adoption of this standard
will have no impact on WEG GP LLC's financial position. WEG GP LLC adopted the
additional disclosure requirements of this standard in 2002.


     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This Statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." The provisions
of this Statement are effective for exit or disposal activities that are
initiated after December 31, 2002, with early application encouraged. WEG GP LLC
adopted this standard in January 2003 and it did not have a material impact on
its financial position.

     In the second quarter of 2002, the FASB issued SFAS No. 145, "Rescission of
FASB Statements No. 4, 44 and 64, Amendment of FASB Statement 13 and Technical
Corrections". The rescission of SFAS No. 4 "Reporting Gains and Losses from
Extinguishment of Debt," and SFAS No. 64, "Extinguishment of Debt Made to
Satisfy Sinking-Fund Requirements," requires that gains or losses from
extinguishment of debt only be classified as extraordinary items in the event
they meet the criteria in Accounting Principle Board Opinion ("APB") No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions". SFAS No. 44, "Accounting for Intangible Assets of
Motor Carriers," established accounting requirements for the effects of
transition to the Motor Carriers Act of 1980 and is no longer required now that
the transitions have been completed. Finally, the amendments to SFAS No. 13
"Accounting for Leases" are effective for transactions occurring after May 15,
2002. All other provisions of this Statement will be effective for financial
statements issued on or after May 15, 2002. WEG GP LLC adopted this standard in
January 2003, and it did not have a material impact on its financial position.
However, in subsequent reporting periods, any gains and losses from debt
extinguishments will not be accounted for as extraordinary items.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This Statement supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and amends APB No. 30. The Statement retains the basic
framework of SFAS No. 121, resolves certain implementation issues of SFAS No.
121, extends applicability to discontinued operations and broadens the
presentation of discontinued operations to include a component of an entity. The
Statement was to be applied prospectively and was effective for financial
statements issued for fiscal years beginning after December 15, 2001. There was
no initial impact on WEG GP LLC's financial position upon adoption of this
standard.


                                       7
<PAGE>


      In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which is effective for fiscal years beginning after
June 15, 2002. The Statement requires legal obligations associated with the
retirement of long-lived assets to be recognized at their fair value at the time
that the obligations are incurred. Upon initial recognition of a liability, that
cost should be capitalized as a part of the related long-lived asset and
allocated to expense over the useful life of the asset. WEG GP LLC adopted the
new rules on asset retirement obligations on January 1, 2003. Application of the
new rules did not have a material impact on WEG GP LLC's financial position as
retirement obligations were not recorded for assets for which the remaining life
is not currently determinable, including pipeline transmission and terminal
assets.

     In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 establishes
accounting and reporting standards for business combinations and requires all
business combinations to be accounted for by the purchase method. The Statement
is effective for all business combinations for which the date of acquisition is
July 1, 2001 or later. SFAS No. 142 addresses accounting and reporting standards
for goodwill and other intangible assets. Under this Statement, goodwill and
intangible assets with indefinite useful lives will no longer be amortized but
will be tested annually for impairment. The Statement became effective for all
fiscal years beginning after December 15, 2001. WEG GP LLC applied the new rules
on accounting for goodwill and other intangible assets beginning January 1,
2002. Based on the amount of goodwill recorded as of December 31, 2001,
application of the non-amortization provision of the Statement resulted in a
decrease to amortization expense in 2002 of approximately $0.8 million.


4.   ACQUISITIONS AND DIVESTITURES

     WILLIAMS PIPE LINE

     On April 11, 2002, the Partnership acquired all of the membership interests
of Williams Pipe Line from WES for approximately $1.0 billion. The Partnership
remitted to WES consideration in the amount of $674.4 million and WES retained
$15.0 million of Williams Pipe Line's receivables. The $310.6 million balance of
the consideration consisted of $304.4 million of Class B units representing
limited partner interests in the Partnership issued to Williams GP LLC and
affiliates of WES and Williams' contribution to the Partnership of $6.2 million
to maintain its 2% general partner interest. The Partnership borrowed $700.0
million from a group of financial institutions, paid WES $674.4 million and used
$10.6 million of the funds to pay debt fees and other transaction costs (see
Note 10 - Long-Term Debt). The Partnership retained $15.0 million of the funds
to meet working capital needs.

       Williams Pipe Line primarily provides petroleum products transportation,
storage and distribution services and is reported as a separate business segment
of the Partnership. Because of the Partnership's affiliate relationship with
Williams Pipe Line, the transaction was between entities under common control
and, as such, has been accounted for similarly to a pooling of interest.
Accordingly, the consolidated balance sheet and notes of WEG GP LLC have been
restated to reflect the historical results as if the companies had been combined
throughout 2002.

     OTHER ACQUISITIONS

     The assets identified below were acquired for cash during the periods
presented and are described below. All acquisitions, except the Aux Sable
transaction, were accounted for as purchases of businesses and the results of
operations of the acquired petroleum products terminals are included with the
combined results of operations from their acquisition dates.

     On December 31, 2001, the Partnership purchased an 8.5-mile, 8-inch natural
gas liquids pipeline in northeastern Illinois from Aux Sable Liquid Products
L.P. ("Aux Sable") for $8.9 million. The Partnership then entered into a
long-term lease arrangement under which Aux Sable is the sole lessee of these
assets. The Partnership has accounted for this transaction as a direct financing
lease. The lease expires in December 2016 and has a purchase option after the
first year. The minimum lease payments to be made by Aux Sable are $18.1 million
in total over the remaining life of the lease and $1.3 million per year over
each of the next five years. Aux Sable has the right to re-acquire the pipeline
at the end of the lease for a de minimis amount.

     In October 2001, the Partnership acquired the crude oil storage and
distribution assets of Geonet Gathering, Inc. ("Geonet") located in Gibson,
Louisiana. The Partnership acquired these assets with the intent to use the
facility as a crude storage and distribution facility with an affiliate company
as its primary customer. The purchase price and allocation to assets acquired
and liabilities assumed was as follows (in thousands):

<Table>
<S>                                                          <C>
Purchase price:
    Cash paid, including transaction costs ................. $20,261
    Liabilities assumed ....................................     856
                                                             -------
    Total purchase price ................................... $21,117
                                                             =======
</Table>


                                       8
<PAGE>

Allocation of purchase price:

<Table>
<S>                                                       <C>
                  Current assets .......................  $     62
                  Property, plant and equipment ........     4,607
                  Goodwill .............................    13,719
                  Intangible assets ....................     2,729
                                                          --------
                  Total allocation .....................  $ 21,117
                                                          ========
</Table>

     Factors contributing to the recognition of goodwill are the market in which
the facility is located and the opportunity to enter into a long-term throughput
agreement with an affiliate company. Of the amount allocated to intangible
assets, $2.0 million represents the value of the leases associated with this
facility, which have amortization periods of up to 25 years. The remaining $0.7
million allocated to intangible assets represents covenants not-to-compete and
has an amortization period of five years. The total weighted average
amortization period of intangible assets was approximately 16 years at the time
of the acquisition. Of the consideration paid for the facility, $0.2 million is
held in escrow at December 31, 2002, pending final evaluation of reimbursable
repairs by the Partnership.

     In June 2001, the Partnership purchased two petroleum products terminals
located in Little Rock, Arkansas from TransMontaigne, Inc. ("TransMontaigne") at
a cost of $28.9 million, of which $20.2 million was allocated to property, plant
and equipment and $8.7 million to goodwill and other intangibles.

     In April 2001, the Partnership purchased a 6-mile pipeline for $0.3 million
from Equilon Pipeline Company LLC, enabling connection of the Partnership's
existing Dallas, Texas area petroleum storage and distribution facility to
Dallas Love Field. The acquisition was made in conjunction with an agreement for
the Partnership to provide jet fuel delivery services into Dallas Love Field for
Southwest Airlines. In December 2001, the Partnership completed construction of
additional jet fuel storage tanks at its distribution facility in Dallas to
support delivery of jet fuel to the airport. Total cost of the pipeline and
construction of the additional jet fuel storage tanks totaled $5.5 million.

     DIVESTITURES

     During the fourth quarter of 2002, the Partnership sold its Mobile, Alabama
and Jacksonville, Florida inland terminals. Total cash proceeds of approximately
$1.3 million were received, with a gain of approximately $1.1 million
recognized.

    During the fourth quarter of 2001, the Partnership sold its Meridian,
Mississippi inland terminal. Cash proceeds of approximately $1.7 million were
received, with a gain of approximately $1.1 million recognized.



5.       INVENTORIES

     Inventories at December 31, 2002 were as follows (in thousands):

<Table>
<Caption>
                                                      2002
                                                    --------
<S>                                                 <C>
          Refined petroleum products .............. $  3,863
          Additives ...............................      897
          Other ...................................      464
                                                    --------
               Total inventories .................. $  5,224
                                                    ========
</Table>



6.       PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment at December 31, 2002 consisted of the
following (in thousands):

<Table>
<Caption>
                                                                                 ESTIMATED
                                                                                DEPRECIABLE
                                                                     2002          LIVES
                                                                  ----------  ---------------
<S>                                                               <C>         <C>
            Construction work-in-progress                         $    4,909
            Land and right-of-way                                     30,199
            Carrier property                                         898,829     6 - 59 years
            Buildings                                                  8,281         30 years
            Storage tanks                                            172,865         30 years
            Pipeline and station equipment                            57,551    30 - 67 years
            Processing equipment                                     138,180         30 years
            Other                                                     23,713    10 - 30 years
                                                                  ----------
                 Total                                            $1,334,527
                                                                  ==========
</Table>


                                       9
<PAGE>


     Carrier property is defined as pipeline assets regulated by the FERC. Other
includes $18.6 million of capitalized interest at December 31, 2002.


7.       CONCENTRATION OF RISK

     Any issues impacting the petroleum refining and marketing and anhydrous
ammonia industries could impact WEG GP LLC's overall exposure to credit risk.

     Williams Pipe Line transports refined petroleum products for refiners and
marketers in the petroleum industry. The major concentration of Williams Pipe
Line's revenues is derived from activities conducted in the central United
States. The size and quality of the companies with which the Partnership
conducts its businesses hold its credit losses to a minimum. Sales to customers
are generally unsecured and the financial condition and creditworthiness of
customers are routinely evaluated. The Partnership has the ability with many of
its terminals contracts to sell stored customer products to recover unpaid
receivable balances, if necessary. The concentration of ammonia revenues is
derived from customers with plants in Oklahoma and Texas and sales are generally
unsecured. Any issues impacting the petroleum refining and marketing and
anhydrous ammonia industries could impact the Partnership's overall exposure to
credit risk.

     The accounts receivable balance of Williams Energy Marketing & Trading
accounted for 7% of total accounts and affiliate receivables at December 31,
2002.

    Williams Pipe Line's labor force of 538 employees is concentrated in the
central United States. At December 31, 2002, 41% of the employees were
represented by a union and covered by collective bargaining agreements that
expire in February 2006. The petroleum products terminals operation's labor
force of 192 people is concentrated in the southeastern and Gulf Coast regions
of the United States. Other than at Galena Park, Texas marine terminal facility,
none of the terminal operations employees are represented by labor unions. The
employees at the Partnership's Galena Park marine terminal facility are
currently represented by a union, but indicated in 2000 their unanimous desire
to terminate their union affiliation. Nevertheless, the National Labor Relations
Board ("NLRB") ordered the Partnership to bargain with the union as the
exclusive collective bargaining representative of the employees at the facility.
The Partnership appealed this decision to the Fifth Circuit Court of Appeals.
Subsequently, the NLRB indicated the possibility that it would overturn its
decision and requested that the Court of Appeals return the Partnership's and
other matters to the NLRB for further review and decision. A final decision by
the NLRB had not been issued. Our General Partner considers its employee
relations to be good.


8.       EMPLOYEE BENEFIT PLANS

     The historical results for Williams Pipe Line included certain assets and
liabilities that were conveyed to and assumed by an affiliate of Williams Pipe
Line prior to its acquisition by the Partnership. The pension assets and
obligations associated with the non-contributory defined-benefit pension plan
which covered union employees assigned to Williams Pipe Line's operations were
part of the assets and liabilities that were conveyed to and assumed by an
affiliate of the Partnership.

     The following table presents the changes in benefit obligations and plan
assets for pension benefits for the union plan for the year indicated. These
assets and liabilities are not included in WEG GP LLC's consolidated balance
sheet for the period presented but are included in the balance sheet of our
affiliate (in thousands):

<Table>
<Caption>
                                                                 2002
                                                               --------
<S>                                                            <C>
Change in benefit obligation:
  Benefit obligation at beginning of year ................     $ 21,597
  Service cost ...........................................          939
  Interest cost ..........................................        1,531
  Actuarial loss .........................................          905
  Benefits paid ..........................................       (1,041)
                                                               --------
  Benefit obligation at end of year ......................       23,931
Change in plan assets:
  Fair value of plan assets at beginning of year .........       18,700
  Employer contribution ..................................        1,000
  Loss on plan assets ....................................       (2,267)
  Benefits paid ..........................................       (1,041)
                                                               --------
  Fair value of plan assets at end of year ...............       16,392
                                                               --------
Funded status ............................................       (7,539
Unrecognized net actuarial loss ..........................       10,236
Unrecognized prior service cost ..........................          368
Unrecognized transition asset ............................           --
                                                               --------
Prepaid benefit cost .....................................     $  3,065
                                                               ========
</Table>


                                       10
<PAGE>


     Net pension benefit cost for the union plan consists of the following (in
thousands):

<Table>
<Caption>
                                                            2002
                                                          --------
<S>                                                       <C>
Components of net periodic pension expense:
 Service cost .......................................     $    939
 Interest cost ......................................        1,531
 Expected return on plan assets .....................       (1,715)
 Amortization of transition asset ...................           --
 Amortization of prior service cost .................           53
 Recognized net actuarial loss ......................           50
                                                          --------
 Net periodic pension expense (income) ..............     $    858
                                                          ========
</Table>

<Table>
<Caption>
                                                            2002
                                                          --------
<S>                                                       <C>
Discount rate.........................................         7.5%
Expected return on plan assets........................         8.5%
Rate of compensation increase.........................         5.0%
</Table>



9.  RELATED PARTY TRANSACTIONS

    Current and long-term affiliate accounts receivable are primarily associated
with environmental liabilities, which have been indemnified by Williams and its
affiliates. Affiliate accounts payable primarily represent amounts owed to
affiliates for operational and general and administrative services provided on
behalf of WEG GP LLC and the Partnership. Accrued affiliate payroll and benefits
are amounts due to affiliate companies for salary and wages and associated
charges for employees directly assigned to the Partnership. Long-term affiliate
payables represent amounts associated with non-compete agreements and for
amounts associated with long-term incentive compensation.

    The Partnership has entered into agreements with various Williams
affiliates. The Partnership has several agreements with Williams Energy
Marketing & Trading, which provide for: (i) approximately 2.5 million barrels of
storage and other ancillary services at the Partnership's marine terminal
facilities, (ii) capacity utilization rights to substantially all of the
capacity of the Gibson, Louisiana marine terminal facility, (iii) the lease of
the Carthage, Missouri propane storage cavern and (iv) throughput and deficiency
agreements for product movements through a third-party capacity lease. Williams
Pipe Line has entered into agreements with Mid-America Pipeline Company ("MAPL")
and Williams Bio Energy to provide tank storage and pipeline system storage,
respectively. Williams Bio Energy is an affiliate entity and MAPL was an
affiliate entity until August 1, 2002, when it was sold to Enterprise Products
Partners L.P. ("Enterprise").

    Historically, Williams Pipe Line also has been a party to an agreement with
Williams Energy Marketing & Trading for sales of blended gasoline. Also, both
Williams Energy Marketing & Trading and Williams Refining & Marketing have
agreements for the access and utilization of storage on Williams Pipe Line
system and for the access and utilization of the inland terminals. The
Partnership also has agreements with Williams Energy Marketing & Trading,
Williams Refining & Marketing and Williams Bio Energy for the non-exclusive and
non-transferable sub-license to use the ATLAS 2000 software system. Payment
terms for affiliate entities are generally the same as for third-party
companies. Generally, at each month-end, the Partnership is in a net payable
position with Williams. The Partnership deducts any amounts owed to it by
Williams before remitting the monthly cash amounts owed to Williams. The
following table provides the percentage of total revenues that the Partnership
derived from various Williams' subsidiaries during 2002:

<Table>
<Caption>
                                                                2002
                                                               ------
<S>                                                            <C>
Williams 100%-Owned Affiliates:
 Williams Energy Marketing & Trading .....................        9.2%
 Williams Refining & Marketing ...........................        1.9%
 Williams Bio Energy .....................................        1.1%
 Williams Energy Services ................................        0.6%
 Midstream Marketing & Risk Management ...................        0.4%
 Mid-America Pipeline ....................................        0.1%
 Other ...................................................        0.1%
Williams Partially-Owned Affiliates:
 Longhorn Pipeline Partners ..............................        0.1%
                                                               ------
 Total ...................................................       13.5%
                                                               ======
</Table>

                                       11
<PAGE>


    Williams allocates both direct and indirect general and administrative
expenses to its affiliates. Direct expenses allocated by Williams are primarily
salaries and benefits of employees and officers associated with the business
activities of the affiliate. Indirect expenses include legal, accounting,
treasury, engineering, information technology and other corporate services. The
Partnership reimburses the General Partner and its affiliates for expenses
charged to the Partnership by the General Partner on a monthly basis based on
the expense limitations provided in the Omnibus Agreement. Generally, at each
month-end, the Partnership is in a net payable position with Williams. The
Partnership deducts any amounts owed to it by Williams before issuing its
monthly cash remittance for amounts owed to Williams.


10.  LONG-TERM DEBT

     Long-term debt for WEG GP LLC at December 31, 2002 was as follows (in
thousands):

<Table>
<S>                                                               <C>
           OLP term loan and revolving credit facility ........   $   90,000
           Williams Pipe Line Senior Secured Notes ............      480,000
                                                                     -------
             Total long-term debt .............................   $  570,000
                                                                     =======
</Table>


     WILLIAMS OLP L.P. TERM LOAN AND REVOLVING CREDIT FACILITY - At December 31,
2002, Williams OLP L.P. ("OLP"), an operating subsidiary of the Partnership
which operates the petroleum products terminals and ammonia pipeline system
segments, had a $175.0 million bank credit facility, led by Bank of America.
Long-term debt and available borrowing capacity under this facility at December
31, 2002, were $90.0 million and $85.0 million, respectively. The credit
facility is comprised of a $90.0 million term loan facility and an $85.0 million
revolving credit facility, which includes a $73.0 million acquisition
sub-facility and a $12.0 million working capital sub-facility. On February 9,
2001, the OLP borrowed $90.0 million under the term loan facility, which
remained outstanding at December 31, 2002. All amounts previously borrowed under
the acquisition and working capital facility were repaid in full during the
fourth quarter of 2002. The credit facility's term extends through February 5,
2004, with all amounts due at that time. Borrowings under the credit facility
carry an interest rate equal to the Eurodollar rate plus a spread from 1.0% to
1.5%, depending on the OLP's leverage ratio. Interest is also assessed on the
unused portion of the credit facility at a rate from 0.2% to 0.4%, depending on
the OLP's leverage ratio. The OLP's leverage ratio is defined as the ratio of
consolidated total debt to consolidated earnings before interest, income taxes,
depreciation and amortization for the period of the four fiscal quarters ending
on such date. Closing fees associated with the initiation of the credit facility
were $0.9 million, which are being amortized over the life of the facility.
Weighted average interest rates were 3.3% for the twelve months ended December
31, 2002 and 5.0% for the period February 10, 2001 through December 31, 2001.
The interest rates for amounts borrowed against this facility on December 31,
2002 and 2001 were 2.8% and 3.2%, respectively. At December 31, 2002, the fair
value of this debt approximates its carrying value because of the floating
interest rate applied to the debt facility.

     Under terms of this facility, a change of control whereby Williams and its
affiliates no longer own 100% of the General Partner's equity would result in an
event of default, in which case the maturity date of the outstanding amounts
under this facility may be accelerated by the lenders in the facility.

    WILLIAMS PIPE LINE SENIOR SECURED NOTES - In April 2002, the Partnership
borrowed $700.0 million from a group of financial institutions. This short-term
loan was used to help finance the Partnership's acquisition of Williams Pipe
Line. During the second quarter of 2002 the Partnership repaid $289.0 million of
the short-term loan with net proceeds from an equity offering. The weighted
average interest rate on this note was 5.1% for the period April 11, 2002
through November 15, 2002. Debt placement fees associated with the note were
$7.1 million and were amortized over the life of the note. In October 2002, the
Partnership negotiated an extension to the maturity of this note from October 8,
2002, to November 27, 2002. The Partnership paid additional fees of
approximately $2.1 million associated with this maturity date extension.

    During September 2002, in anticipation of a new debt placement to replace
the short-term debt assumed to acquire Williams Pipe Line, the Partnership
entered into an interest rate hedge. The effect of this interest rate hedge was
to set the coupon rate on a portion of the fixed-rate debt at 7.75% prior to
actual execution of the debt agreement. The loss on the hedge, approximately
$1.0 million, was recorded in accumulated other comprehensive loss and is being
amortized over the five-year life of the fixed-rate debt secured during October
2002.

    During October 2002, Williams Pipe Line entered into a private placement
debt agreement with a group of financial institutions for up to $200.0 million
aggregate principal amount of Floating Rate Series A-1 and Series A-2 Senior
Secured Notes and up to $340.0 million aggregate principal amount of Fixed Rate
Series B-1 and Series B-2 Senior Secured Notes. Both notes are secured with the
Partnership's membership interest in and assets of Williams Pipe Line Company.
The maturity date of both notes is October 7, 2007;


                                       12
<PAGE>


however, the Partnership will be required on each of October 7, 2005 and October
7, 2006, to repay 5% of the then outstanding principal amount of the Senior
Secured Notes.

     Two borrowings have occurred in relation to these notes. The first
borrowing was completed in November 2002 and was for $420.0 million, of which
$156.0 million was borrowed under the Series A-1 notes and $264.0 million under
the Series B-1 notes. The proceeds from this initial borrowing were used to
repay Williams Pipe Line's $411.0 million short-term loan and pay related debt
placement fees. The second borrowing was completed in December 2002 for $60.0
million, of which $22.0 million was borrowed under the Series A-2 notes and
$38.0 million under the Series B-2 notes. $58.0 million of the proceeds from
this second borrowing were used to repay the acquisition sub-facility of the OLP
and $2.0 million were used for general corporate purposes. The Series A-1 and
Series A-2 notes bear interest at a rate equal to the six month Eurodollar Rate
plus 4.25%. The rate on the Series A-1 and Series A-2 notes is currently 5.7%
and will be reset on April 7, 2003. The Series B-1 notes bear interest at a
fixed rate of 7.7%, while the Series B-2 notes bear interest at a fixed rate of
7.9%. The weighted-average rate for the Williams Pipe Line Senior Secured Notes
at December 31, 2002 was 7.0%. Debt placement fees associated with these notes
were $10.5 million, and are being amortized over the life of the notes. Payment
of interest and repayment of the principal is guaranteed by the Partnership. The
fair value of the long-term debt at December 31, 2002, approximated its carrying
value, because of the floating interest rate applied to the Series A-1 and
Series A-2 notes and because the rates on the Series B-1 and B-2 notes were near
market rates at December 31, 2002.

    The new debt agreement imposes certain restrictions on Williams Pipe Line
and the Partnership. Generally, the agreement restricts the amount of additional
indebtedness Williams Pipe Line can incur, prohibits Williams Pipe Line from
creating or incurring any liens on its property, and restricts Williams Pipe
Line from disposing of its property, making any debt or equity investments, or
making any loans or advances of any kind. The agreement also requires
transactions between Williams Pipe Line and any of its affiliates to be on terms
no less favorable than those Williams Pipe Line would receive in an arms-length
transaction. In addition, the agreement prohibits WEG GP LLC from assuming any
indebtedness of any kind. Also as part of this agreement, the Partnership agreed
that it will not redeem or retire the Partnership's Class B units except with
proceeds from equity issued by the Partnership (see Note 1 - Organization and
Presentation). In the event of a change in control of WEG GP LLC, each holder of
the notes would have thirty days within which they could exercise a right to put
their notes to Williams Pipe Line unless the new owner of the General Partner
has (i) a net worth of at least $500.0 million and (ii) long-term unsecured debt
rated as investment grade by both Moody's Investor Service Inc. and Standard &
Poor's Rating Service. If this put right were exercised, Williams Pipe Line
would be obligated to repurchase any such notes and repay any accrued interest
within sixty days.


11.  LEASES

     LEASES - LESSEE

     The Partnership leases land, office buildings, tanks and terminal equipment
at various locations to conduct its on-going business operations. Future minimum
annual rental under noncancelable operating leases as of December 31, 2002, are
as follows (in thousands):

<Table>
<S>                                                          <C>
           2003............................................. $    478
           2004.............................................      480
           2005.............................................      482
           2006.............................................      236
           2007.............................................      158
           Thereafter.......................................        -
                                                             --------
           Total                                             $  1,834
                                                             ========
</Table>

    Lease payments associated with the Partnership's lease of land, tanks and
related terminal equipment at its Gibson, Louisiana facility can be canceled at
the Partnership's option after 2006 and include provisions for renewal of the
lease at five-year increments which can extend the lease for a total of 25 years
from their inception in 2001. The lease terms require the Partnership to return
the Gibson terminal facility property to substantially its same condition at the
time the lease was executed.

     LEASES - LESSOR

     On December 31, 2001, the Partnership purchased an 8.5-mile, 8-inch natural
gas liquids pipeline in northeastern Illinois from Aux Sable for $8.9 million.
The Partnership then entered into a long-term lease arrangement under which Aux
Sable is the sole lessee of these assets. The Partnership has accounted for this
transaction as a direct financing lease. The lease expires in December 2016 and
has a purchase option after the first year. Aux Sable has the right to
re-acquire the pipeline at the end of the lease for a de minimis amount. The
Partnership also has two five-year pipeline capacity leases with Farmland. The
first agreement, which is accounted for as a direct financing lease, will expire
on November 30, 2005 and the second agreement, which is accounted for as an
operating lease,


                                       13
<PAGE>


will expire on April 30, 2007. Both leases contain options to extend the
agreement for another five years. In addition, the Partnership has eight other
capacity operating leases with terms of four to fifteen years. All of the
agreements provide for negotiated extensions.

     Future minimum lease payments receivable under operating-type leasing
arrangements as of December 31, 2002, are as follows (in thousands):


<Table>
<S>                                                              <C>
               2003............................................. $  8,925
               2004.............................................    8,395
               2005.............................................    6,377
               2006.............................................    3,333
               2007.............................................    3,023
               Thereafter.......................................   17,138
                                                                 --------
               Total............................................ $ 47,191
                                                                 ========
</Table>

     The net investment under direct financing leasing arrangements as of
December 31, 2002, is as follows (in thousands):


<Table>
<S>                                                              <C>
               Total minimum lease payments receivable.......... $ 20,154
               Less: Unearned income............................    9,923
                                                                 --------
               Recorded net investment in direct financing
               leases........................................... $ 10,231
                                                                 ========
</Table>


     As of December 31, 2002, the net investment in direct financing leases is
     classified in the Consolidated Balance Sheet as $1.0 million current
     accounts receivable and $9.2 million noncurrent accounts receivable.

12.  LONG-TERM INCENTIVE PLAN

     In February 2001, the General Partner adopted the Williams Energy Partners'
Long-Term Incentive Plan for Williams' employees who perform services for the
Partnership and directors of the General Partner. The General Partner
subsequently amended and restated the Long-Term Incentive Plan in 2003. The
Long-Term Incentive Plan permits the granting of various types of awards,
including units, options, phantom units and bonus units but to-date only phantom
units have been granted. The Long-Term Incentive Plan allows the grant of awards
up to an aggregate of 700,000 common units. The Long-Term Incentive Plan is
administered by the Compensation Committee of WEG GP LLC's Board of Directors.
In addition to units, members of the WEG GP LLC's Board of Directors may receive
phantom units as compensation for their director fees. Members of the WEG GP
LLC's Board of Directors received 3,344 units and 1,489 phantom units during
2002 as partial compensation for their services as board members.

     In April 2001, the General Partner issued grants of 92,500 phantom units to
certain key employees associated with the Partnership's initial public offering
in February 2001. These awards allowed for early vesting if established
performance measures were met prior to February 9, 2004. The Partnership met all
of these performance measures and all of the awards vested during 2002. The
Partnership recognized compensation expense of $2.1 million and $0.7 million
associated with these awards in 2002 and 2001, respectively.

     In April 2001, the General Partner issued grants of 64,200 phantom units
associated with the long-term incentive compensation program. The actual number
of units that will be awarded under this grant will be determined by the
Partnership in early 2004. At that time, the Partnership will assess whether
certain performance criteria have been met as of the end of 2003 and determine
the number of units that will be awarded, which could range from zero units up
to a total of 128,400 units. These units are subject to forfeiture if employment
is terminated prior to vesting. These awards do not have an early vesting
feature, except for a change in control of WEG GP LLC or for specific
participants in the event of their death or disability. In the event of a change
of control of WEG GP LLC, these awards will vest and payout immediately at the
number of units associated with achieving the highest performance level under
the plan. The Partnership is expensing compensation costs associated with these
awards assuming the highest level of performance will be achieved; accordingly,
the Partnership recognized $1.5 million and $1.3 million of compensation expense
in 2002 and 2001, respectively. The fair market value of the phantom units
associated with this grant was $4.2 million and $5.4 million on December 31,
2002 and 2001, respectively.

     During 2002, the Compensation Committee of the Board of Directors of WEG GP
LLC approved 22,650 phantom units associated with the 2002 long-term incentive
compensation program. The actual number of units that will be awarded under this
grant will be determined by the Partnership in early 2005. At that time, the
Partnership will assess whether certain performance criteria have been met and
determine the number of units that will be awarded, which could range from zero
units up to a total of 45,300 units. These units are also subject to forfeiture
if employment is terminated prior to the vesting date. These awards do not have
an early vesting feature, except in the event of a change in control of WEG GP
LLC or for specific participants in the event of their death or disability. In
the event of a change of control of WEG GP LLC, these awards will vest and
payout immediately at the number of units


                                       14
<PAGE>


associated with achieving the highest performance level under the plan. The
Partnership is expensing compensation costs associated with these awards
assuming 22,650 units will vest; accordingly, the Partnership recorded incentive
compensation expense of $0.2 million during 2002. Based on the closing price of
$32.45 per unit at December 31, 2002, these units were valued at $0.7 million.

     In February 2003, the Compensation Committee of the Board of Directors of
WEG GP LLC approved 52,825 phantom units associated with the 2003 long-term
incentive compensation program. The actual number of units that will be awarded
under this grant will be determined by the Partnership in early 2006. At that
time, the Partnership will assess whether certain performance criteria have been
met and determine the number of units that will be awarded, which could range
from zero units up to a total of 105,650 units. These units are also subject to
forfeiture if employment is terminated prior to the vesting date. These awards
do not have an early vesting feature, except for (i) specific participants in
the event of their death or disability or (ii) in the event a change in control
of the Partnership's General Partner and the participant is terminated for
reasons other than cause within the two years following a change in control of
the General Partner, in which case the awards will vest and payout immediately
at the highest performance level under the plan. The value of these units on the
date of grant was $1.9 million.

     Certain employees of Williams dedicated to or otherwise supporting the
Partnership also receive stock-based compensation awards from Williams. Williams
has several programs providing for common-stock-based awards to employees and to
non-employee directors. The programs permit the granting of various types of
awards including, but not limited to, stock options, stock-appreciation rights,
restricted stock and deferred stock. The purchase price per share for stock
options and the grant price for stock-appreciation rights may not be less than
the market price of the underlying stock on the date of grant. Depending upon
terms of the respective plans, stock options generally become exercisable in
one-third increments each year from the date of the grant or after three or five
years, subject to accelerated vesting if certain future Williams' stock prices
or specific Williams' financial performance targets are achieved. Stock options
expire 10 years after grant.

     The following summary reflects Williams' stock option activity for 2002 for
those employees principally supporting the Partnership's operations:

<Table>
<Caption>
                                                            2002
                                                    ----------------------
                                                                  WEIGHTED-
                                                                  AVERAGE
                                                                  EXERCISE
                                                     OPTIONS       PRICE
                                                    ---------     --------
<S>                                                 <C>           <C>
              Outstanding - beginning of year .....   501,825     $  33.04
              Granted .............................   191,120        10.53
              Forfeited ...........................        --           --
              Exercised ...........................        --           --
                                                    ---------
              Outstanding - ending of year ........   692,945        26.83
                                                    =========
              Exercisable at end of year ..........   435,206        35.89
                                                    =========
</Table>


     The following summary provides information about outstanding and
exercisable Williams' stock options, held by employees principally supporting
Williams Energy Partners L.P. operations, at December 31, 2002:

<Table>
<Caption>
                                                                            WEIGHTED-
                                                              WEIGHTED-     AVERAGE
                                                              AVERAGE       REMAINING
                                                              EXERCISE      CONTRACTUAL
RANGE OF EXERCISE PRICES                      OPTIONS         PRICE         LIFE
------------------------                     ---------        ---------     -----------
<S>                                          <C>              <C>           <C>
$2.27 to $2.57 .............................    76,600        $    2.57       9.9 years
$12.22 to $17.31 ...........................   153,119            15.69       7.7 years
$20.83 to $30.00 ...........................   110,328            25.35       5.1 years
$31.56 to $46.06 ...........................   352,898            37.40       7.1 years
                                             ---------
Total ......................................   692,945            26.83       7.2 years
                                             =========
</Table>


     The estimated fair value at the date of grant of options for Williams'
common stock granted in 2002 using the Black-Scholes option pricing model, is as
follows:

<Table>
<Caption>
                                                                      2002
                                                                     ------
<S>                                                                  <C>
Weighted-average grant date fair value of options for
  Williams' common stock granted during the year ..................  $  2.77

Assumptions:
  Dividend yield ..................................................      1.0%
  Volatility ......................................................     56.3%
  Risk-free interest rate .........................................      3.6%
  Expected life (years) ...........................................      5.0
</Table>


                                       15
<PAGE>


13.  COMMITMENTS AND CONTINGENCIES

     WES has agreed to indemnify the Partnership against any covered
environmental losses, up to $15.0 million, relating to assets it contributed to
the Partnership at the time of the initial public offering that arose prior to
February 9, 2001, that become known within three years after February 9, 2001,
and that exceed all amounts recovered or recoverable by the Partnership under
contractual indemnities from third parties or under any applicable insurance
policies. Covered environmental losses are those non-contingent terminal and
ammonia system environmental losses, costs, damages and expenses suffered or
incurred by the Partnership arising from correction of violations of, or
performance of remediation required by, environmental laws in effect at February
9, 2001, due to events and conditions associated with the operation of the
assets and occurring before February 9, 2001. Reimbursements from Williams
relative to their environmental indemnities are received as remediation is
performed. See Note 1 - Organization and Presentation - Recent Developments
relative to Williams. Changes in Williams' ability to perform on their
indemnities could result in the Partnership materially increasing its related
affiliate receivable reserves.


     In connection with the acquisition of Williams Pipe Line, WES agreed to
indemnify the Partnership for any breach of a representation or warranty that
results in losses and damages of up to $110.0 million after the payment of a
$2.0 million deductible. With respect to any amount exceeding $110.0 million,
WES will be responsible for one-half of that amount up to $140.0 million. In no
event will WES' liability under these indemnities exceed $125.0 million. These
indemnification obligations will survive for one year, except that those
relating to employees and employee benefits will survive for the applicable
statute of limitations and those relating to real property, including title to
WES' assets, will survive for ten years. This indemnity also provides that the
Partnership will be indemnified for an unlimited amount of losses and damages
related to tax liabilities. In addition, any losses and damages related to
environmental liabilities that arose prior to the acquisition will be subject
only to a $2.0 million deductible, which was met during 2002, for claims made
within six years of our acquisition of Williams Pipe Line in April 2002.
Williams has provided a performance guarantee for the remaining amount of these
environmental indemnities.

     Estimated liabilities for environmental costs were $22.3 million at
December 31, 2002. These estimates, provided on an undiscounted basis, were
determined based primarily on data provided by a third-party environmental
evaluation service and Williams' internal environmental engineers. These
liabilities have been classified as current or non-current based on management's
estimates regarding the timing of actual payments. Management estimates that
expenditures associated with these environmental remediation liabilities will be
paid over the next five years. Receivables from Williams or its affiliates
associated of $22.9 million at December 31, 2002 associated with indemnified
environmental costs have been recognized as affiliate accounts receivable in the
Consolidated Balance Sheet.

     In conjunction with the 1999 acquisition of the Gulf Coast marine terminals
from Amerada Hess Corporation ("Hess"), Hess has disclosed to the Partnership
all suits, actions, claims, arbitrations, administrative, governmental
investigation or other legal proceedings pending or threatened, against or
related to the assets acquired by the Partnership, which arise under
environmental law. In the event that any pre-acquisition releases of hazardous
substances at the Partnership's Corpus Christi and Galena Park, Texas and
Marrero, Louisiana marine terminal facilities were unknown at closing but
subsequently identified by the Partnership prior to July 30, 2004, the
Partnership will be liable for the first $2.5 million of environmental
liabilities, Hess will be liable for the next $12.5 million of losses and the
Partnership will assume responsibility for any losses in excess of $15.0
million. Also, Hess agreed to indemnify the Partnership through July 30, 2014,
against all known and required environmental remediation costs at the Corpus
Christi and Galena Park, Texas marine terminal facilities from any matters
related to pre-acquisition actions. Hess has indemnified the Partnership for a
variety of pre-acquisition fines and claims that may be imposed or asserted
against the Partnership under certain environmental laws. At December 31, 2002
the Partnership had accrued $0.6 million for costs that may not be recoverable
under Hess' indemnification.

     During 2001, the Partnership recorded an environmental liability of $2.3
million at its New Haven, Connecticut facility, which was acquired in September
2000. This liability was based on third-party environmental engineering
estimates completed as part of a Phase II environmental assessment, routinely
required by the State of Connecticut to be conducted by the purchaser following
the acquisition of a petroleum storage facility. The Partnership completed a
Phase III environmental assessment at this facility during 2002 and the results
of that assessment are being evaluated. The environmental liabilities at the New
Haven facility are not expected to change materially once the evaluation of the
assessment is completed, which should be by the end of the first quarter of
2003. The seller of these assets agreed to indemnify the Partnership for certain
of these environmental liabilities. In addition, the Partnership purchased
insurance for up to $25.0 million of environmental liabilities associated with
these assets, which carries a deductible of $0.3 million. Any environmental
liabilities at this location not covered by the seller's indemnity and not
covered by insurance are covered by the WES environmental indemnifications to
the Partnership, subject to the $15.0 million limitation.

     During 2001, the Environmental Protection Agency ("EPA"), pursuant to
Section 308 of the Clean Water Act, preliminarily determined that Williams may
have systemic problems with petroleum discharges from pipeline operations. The
inquiry primarily


                                       16
<PAGE>


focused on Williams Pipe Line, which was subsequently acquired by the
Partnership. The response to the EPA's information request was submitted during
November 2001. Any claims the EPA may assert relative to this inquiry would be
covered by the Partnership's environmental indemnifications from Williams.

     WNGL will indemnify the Partnership for right-of-way defects or failures in
the ammonia pipeline easements for 15 years after the initial public offering
closing date. WES has also indemnified the Partnership for right-of-way defects
or failures associated with the marine terminal facilities at Galena Park and
Corpus Christi, Texas and Marrero, Louisiana for 15 years after the initial
public offering closing date.

     On May 31, 2002, Farmland and several of its subsidiaries filed for Chapter
11 bankruptcy protection. Farmland, the largest customer on the ammonia pipeline
system, is also a customer of Williams Pipe Line. The Partnership received
approximately $2.3 million in payments from Farmland during the preference
period prior to Farmland's filing for bankruptcy. Management believes that the
Partnership will not be required to reimburse these funds to the bankruptcy
trustee because they were received in the ordinary course of business with
Farmland. The Partnership's receivable balance from Farmland at December 31,
2002, was $30 thousand. The Partnership also has two five-year petroleum
pipeline lease capacity agreements with Farmland. The first of these agreements,
which expires on November 30, 2005, requires an annual payment by Farmland of
$1.2 million on each November 30th during the contract period. The second
agreement, which expires on April 30, 2007, is for $0.5 million annually and is
invoiced to Farmland on a monthly basis. Farmland has remained current on both
of these lease capacity agreements.

     The Partnership is party to various other claims, legal actions and
complaints arising in the ordinary course of business. In the opinion of
management, the ultimate resolution of all claims, legal actions and complaints
after consideration of amounts accrued, insurance coverage or other
indemnification arrangements will not have a material adverse effect upon the
Partnership's future financial position, results of operations or cash flows.



14. DISTRIBUTIONS

    Distributions paid by the Partnership during 2002 are as follows (in
thousands):

<Table>
<Caption>
                    DATE
                    CASH                    PER UNIT CASH             TOTAL
                DISTRIBUTION                 DISTRIBUTION             CASH
                    PAID                       AMOUNT             DISTRIBUTION
              -------------------           -------------         ------------
<S>                                         <C>                   <C>
                  02/14/02                     $0.5900              $ 6,861
                  05/15/02                      0.6125                7,162
                  08/14/02                      0.6750               19,222
                  11/14/02                      0.7000               20,128
                                           ----------------         -------
             Total cash distributions          $2.5775              $53,373
                                           ================         =======
</Table>


     On February 14, 2003, the Partnership paid cash distributions of $0.725 per
unit on its outstanding common, subordinated and Class B units to unitholders of
record at the close of business on January 31, 2003. The total distribution,
including distributions paid to WEG GP LLC on its equivalent units, was $21.0
million.


15.  OWNERS' EQUITY

     Owners' equity is comprised of the following interests in the Partnership
(in thousands):

<Table>
<S>                                                                      <C>
         General Partner interest held by WEG GP LLC ..................  $(410,530)
         Common units held by affiliates ..............................     59,814
         Subordinated units held by affiliates ........................    131,194
         Class B units held by affiliates .............................    313,651
                                                                         ---------
         Balance - December 31, 2002 ..................................  $  94,129
                                                                         =========
</Table>


     Of the Partnership's 13,679,694 common units outstanding at December 31,
2002, 12,600,000 were held by the public, with the remaining 1,079,694 held by
affiliates of WEG GP LLC. All of the Partnership's 5,679,694 subordinated units
and 7,830,924 Class B units are held by affiliates of WEG GP LLC.


                                       17
<PAGE>


     During the subordination period, the Partnership can issue up to 2,839,847
additional common units without obtaining unitholder approval. In addition, the
General Partner can issue an unlimited number of common units as follows:

         o   upon exercise of the underwriters' over-allotment option;
         o   upon conversion of the subordinated units;
         o   under employee benefit plans;
         o   upon conversion of the general  partner  interest and incentive
             distribution rights as a result of a withdrawal of the General
             Partner;
         o   in the event of a combination or subdivision of common units;
         o   in connection with an acquisition or a capital improvement that
             increases cash flow from operations per unit on a pro forma basis;
             or
         o   if the proceeds of the issuance are used exclusively to repay up to
             $40.0 million of our indebtedness.

     The subordination period will end when the Partnership meets certain
financial tests provided for in the Partnership agreement but it generally
cannot end before December 31, 2005.

     The limited partners holding common units of the Partnership have the
following rights, among others:

         o  right to receive distributions of the Partnership's available cash
            within 45 days after the end of each quarter;
         o  right to elect the board members of the Partnership's General
            Partner;
         o  right to remove Williams as the General Partner upon a 66.7%
            majority vote of outstanding unitholders;
         o  right to transfer common unit ownership to substitute limited
            partners;
         o  right to receive an annual report, containing audited financial
            statements and a report on those financial statements by our
            independent public accountants within 120 days after the close of
            the fiscal year end;
         o  right to receive information reasonably required for tax reporting
            purposes within 90 days after the close of the calendar year;
         o  right to vote according to the limited partners' percentage interest
            in the Partnership on any meeting that may be called by the General
            Partner; and
         o  right to inspect our books and records at the unitholders' own
            expense.

      The voting rights associated with the election of the board members of the
Partnership's General Partner and the right to remove Williams as the General
Partner will be voided in the event of a foreclosure in a Williams-related
bankruptcy proceeding.

      Net income is allocated to the General Partner and limited partners based
on their proportionate share of cash distributions for the period. Cash
distributions to the General Partner and limited partners are made based on the
following table:

<Table>
<Caption>
                                                              PERCENTAGE OF DISTRIBUTIONS
                                                            -------------------------------
                           QUARTERLY DISTRIBUTION             LIMITED          GENERAL
                              AMOUNT (PER UNIT)              PARTNERS          PARTNER
                       --------------------------------     ------------    ---------------
<S>                                                         <C>             <C>
                       Up to $0.578 ..................           98                 2
                       Above $0.578 up to $0.656......           85                15
                       Above $0.656 up to $0.788......           75                25
                       Above $0.788 ..................           50                50
</Table>

      In the event of a liquidation, all property and cash in excess of that
required to discharge all liabilities will be distributed to the partners in
proportion to the positive balances in their respective tax-basis capital
accounts.


16.   OTHER EVENTS

      On February 14, 2003, the Partnership paid cash distributions of $0.725
per unit on its outstanding common, subordinated and Class B units to
unitholders of record at the close of business on January 31, 2003. The total
distribution, including distributions paid to the General Partner on its
equivalent units, was $21.0 million.

      On February 20, 2003, Williams announced its intention to divest its
interest in our General Partner and all of its limited partnership interests. It
is uncertain what form this potential transaction may take and management cannot
currently determine what impact this sale may have on the on-going operations of
the Partnership.

      In March 2003, the Partnership reached an agreement with Williams Energy
Marketing & Trading to terminate their storage capacity contract, which extended
through September 30, 2004, at the Galena Park, Texas marine terminal facility.
The Partnership


                                       18
<PAGE>


will receive $3.0 million from Williams Energy Marketing & Trading, which will
be under no further obligation under this long-term agreement to pay for tank
storage or any other ancillary services at the Galena Park, Texas facility.



                                       19

</TEXT>
</DOCUMENT>
</SUBMISSION>
