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TABLE OF CONTENTS

|                                                                                 |  Page                No. |   |
|--------------------------------------------------------------------------------------|-------------------------------|--------|
|                                                                                 |                          |   |
|  INDEPENDENT              AUDITORS' REPORT                                      |  1                       |   |
|                                                                                 |                          |   |
|  FINANCIAL              STATEMENTS                                              |                          |   |
|                                                                                 |                          |   |
|  Balance                Sheets                                             |  2                       |   |
|                                                                                 |                          |   |
|  Statements                of Income and Partners'                Capital  |  3                       |   |
|                                                                                 |                          |   |
|  Statements                of Cash Flows                                        |  4                       |   |
|                                                                                 |                          |   |
|  Notes                to Financial Statements                                   |  5                - 10   |   |

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Table          of Contents

REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM

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Table          of Contents

STILLWATER        HYDRO PARTNERS

| BALANCE                SHEETS                             |   |       |      |   |       |   |      |       |   |
|-----------------------------------------------------------|--------|------------|-----------|--------|------------|--------|-----------|------------|--------|
| December                31, 2005, 2004, and 2003          |   |       |      |   |       |   |      |       |   |
|                                                      |   |       |      |   |       |   |      |       |   |
|                                                      |   |       |      |   |       |   |      |       |   |
|                                                      |   |       |      |   |       |   |      |       |   |
|                                                      |   |       |      |   |       |   |      |       |   |
|                                                      |   | 2005       |      |   | 2004       |   |      | 2003       |   |
|                                                      |   | (Restated) |      |   | (Restated) |   |      | (Restated) |   |
|                                                      |   |       |      |   |       |   |      |       |   |
| ASSETS                                                    |   |       |      |   |       |   |      |       |   |
|                                                      |   |       |      |   |       |   |      |       |   |
| Cash                                                      |   | $          | 1,446     |   |       | $      | 76,830    |       |   | $ | 51,260 |   |
| Account                receivable                         |   |       | 142,939   |   |       |   | 119,646   |       |   |   | 101,785 |   |
| Prepaid                expenses                           |   |       | 141,027   |   |       |   | 124,117   |       |   |   | 116,969 |   |
| Deferred                financing costs, net of           |   |       |      |   |       |   |      |       |   |   |   |   |
| accumulated                amortization of $954,178       |   |       |      |   |       |   |      |       |   |   |   |   |
| in                2005, $878,124 in 2004, and $802,070    |   |       |      |   |       |   |      |       |   |   |   |   |
| in                2003                                    |   |       | 161,972   |   |       |   | 238,029   |       |   |   | 314,081 |   |
| Hydro                facility, net of accumulated         |   |       |      |   |       |   |      |       |   |   |   |   |
| depreciation                of $3,633,081 in 2005,        |   |       |      |   |       |   |      |       |   |   |   |   |
| $3,341,758                in 2004, and $2,707,153 in 2003 |   |       | 6,830,152 |   |       |   | 7,095,002 |       |   |   | 7,306,124 |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| TOTAL                ASSETS                               |   | $          | 7,277,536 |   |       | $      | 7,653,624 |       |   | $ | 7,890,219 |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| LIABILITIES                AND PARTNERS' CAPITAL          |   |       |      |   |       |   |      |       |   |   |   |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| Accounts                payable and accrued expenses      |   | $          | 175,147   |   |       | $      | 198,756   |       |   | $ | 187,793 |   |
| Accrued                interest                           |   |       | 1,730,014 |   |       |   | 1,560,318 |       |   |   | 1,397,953 |   |
| Bonds                payable                              |   |       | 3,424,190 |   |       |   | 4,021,054 |       |   |   | 4,554,898 |   |
| Due                to partners                            |   |       | 353,047   |   |       |   | 353,047   |       |   |   | 353,047 |   |
| Due                to withdrawing partner                 |   |       | 1,000,000 |   |       |   | 1,000,000 |       |   |   | 1,000,000 |   |
| Due                to related party                       |   |       | 42,020    |   |       |   | —   |       |   |   | — |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| TOTAL                LIABILITIES                          |   |       | 6,724,418 |   |       |   | 7,133,175 |       |   |   | 7,493,691 |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| COMMITMENTS                AND CONTINGENCIES              |   |       |      |   |       |   |      |       |   |   |   |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| PARTNERS'                CAPITAL                          |   |       | 553,118   |   |       |   | 520,449   |       |   |   | 396,528 |   |
|                                                      |   |       |      |   |       |   |      |       |   |   |   |   |
| TOTAL                LIABILITIES AND PARTNERS'            |   |       |      |   |       |   |      |       |   |   |   |   |
| CAPITAL                                                   |   | $          | 7,277,536 |   |       | $      | 7,653,624 |       |   | $ | 7,890,219 |   |

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STILLWATER        HYDRO PARTNERS

| STATEMENTS                OF INCOME AND PARTNERS' CAPITAL |   |       |      |   |       |   |      |
|-----------------------------------------------------------|--------|------------|-----------|--------|------------|--------|-----------|
| December                31, 2005, 2004, and 2003          |   |       |      |   |       |   |      |   |   |
|                                                      |   |       |      |   |       |   |      |   |   |
|                                                      |   |       |      |   |       |   |      |   |   |
|                                                      |   |       |      |   |       |   |      |   |   |
|                                                      |   |       |      |   |       |   |      |   |   |
|                                                      |   | 2005       |      |   | 2004       |   |      | 2003 |   |
|                                                      |   | (Restated) |      |   | (Restated) |   |      | (Restated) |   |
|                                                      |   |       |      |   |       |   |      |   |   |
| POWER                SALE REVENUE                         |   | $          | 1,290,017 |   |       | $      | 1,384,237 |   |   | $ | 1,310,630 |   |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| OPERATING                EXPENSES                         |   |       |      |   |       |   |      |   |   |   |   |   |
| Depreciation                and amortization              |   |       | 340,903   |   |       |   | 340,023   |   |   |   | 335,619 |   |
| Administration                and operations              |   |       | 104,193   |   |       |   | 87,995    |   |   |   | 87,367 |   |
| Insurance                                                 |   |       | 77,479    |   |       |   | 78,647    |   |   |   | 73,436 |   |
| Repairs                and maintenance                    |   |       | 29,207    |   |       |   | 24,546    |   |   |   | 15,130 |   |
| PILOT                and real estate taxes                |   |       | 106,211   |   |       |   | 91,955    |   |   |   | 86,415 |   |
| Professional                fees                          |   |       | 18,550    |   |       |   | 11,513    |   |   |   | 19,767 |   |
| Easement                and land payments                 |   |       | 28,802    |   |       |   | 30,967    |   |   |   | 29,733 |   |
| Miscellaneous                fees                         |   |       | 21,040    |   |       |   | 20,772    |   |   |   | 19,591 |   |
| Utilities                                                 |   |       | 3,989     |   |       |   | 3,932     |   |   |   | 3,200 |   |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| TOTAL                OPERATING EXPENSES                   |   |       | 730,374   |   |       |   | 690,350   |   |   |   | 670,258 |   |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| OPERATING                INCOME                           |   |       | 559,643   |   |       |   | 693,887   |   |   |   | 640,372 |   |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| OTHER                INCOME (EXPENSE)                     |   |       |      |   |       |   |      |   |   |   |   |   |
| Interest                income                            |   |       | —   |   |       |   | 49        |   |   |   | 83 |   |
| Interest                expense                           |   |       | (526,974  | )      |       |   | (570,015  | ) |   |   | (621,030 | ) |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| TOTAL                OTHER INCOME (EXPENSE)               |   |       | (526,974  | )      |       |   | (569,966  | ) |   |   | (620,947 | ) |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| NET                INCOME (LOSS)                          |   |       | 32,669    |   |       |   | 123,921   |   |   |   | 19,425 |   |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| PARTNERS'                CAPITAL, BEGINNING OF YEAR       |   |       | 520,449   |   |       |   | 396,528   |   |   |   | 377,103 |   |
|                                                      |   |       |      |   |       |   |      |   |   |   |   |   |
| PARTNERS'                CAPITAL, END OF YEAR             |   | $          | 553,118   |   |       | $      | 520,449   |   |   | $ | 396,528 |   |

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STILLWATER        HYDRO PARTNERS

| STATEMENTS                OF CASH FLOWS                           |   |       |     |   |       |   |     |       |   |
|-------------------------------------------------------------------|--------|------------|----------|--------|------------|--------|----------|------------|--------|
| December                31, 2005, 2004, and 2003                  |   |       |     |   |       |   |     |       |   |
|                                                              |   |       |     |   |       |   |     |       |   |
|                                                              |   | 2005       |     |   | 2004       |   |     | 2003       |   |
|                                                              |   | (Restated) |     |   | (Restated) |   |     | (Restated) |   |
|                                                              |   |       |     |   |       |   |     |       |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES               |   |       |     |   |       |   |     |       |   |
| Net                income                                         |   | $          | 32,669   |   |       | $      | 123,921  |       |   | $ | 19,425 |   |
| Adjustments                to reconcile net income to net         |   |       |     |   |       |   |     |       |   |   |   |   |
|   cash                provided by operating activities: |   |       |     |   |       |   |     |       |   |   |   |   |
| Depreciation                and amortization                      |   |       | 340,903  |   |       |   | 340,023  |       |   |   | 335,619 |   |
| Changes                in operating assets and                    |   |       |     |   |       |   |     |       |   |   |   |   |
| Liabilities                                                       |   |       |     |   |       |   |     |       |   |   |   |   |
|  (Increase)                decrease in:                      |   |       |     |   |       |   |     |       |   |   |   |   |
| Account                receivable                                 |   |       | (23,293  | )      |       |   | (17,861  | )          |   |   | 24,387 |   |
| Prepaid                expenses                                   |   |       | (16,910  | )      |       |   | (7,148   | )          |   |   | (23,047 | ) |
|   Increase                (decrease) in:                |   |       |     |   |       |   |     |       |   |   |   |   |
| Accounts                payable and accrued expenses              |   |       | (23,609  | )      |       |   | 10,963   |       |   |   | 20,682 |   |
| Accrued                interest                                   |   |       | 169,700  |   |       |   | 162,365  |       |   |   | 158,708 |   |
| Due                to related party                               |   |       | 42,020   |   |       |   | —  |       |   |   | — |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| NET                CASH PROVIDED BY OPERATING                     |   |       |     |   |       |   |     |       |   |   |   |   |
|    ACTIVITIES                                      |   |       | 521,480  |   |       |   | 612,263  |       |   |   | 535,774 |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES               |   |       |     |   |       |   |     |       |   |   |   |   |
| Purchase                of hydro facility                         |   |       | —  |   |       |   | (52,849  | )          |   |   | — |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| NET                CASH USED BY INVESTING ACTIVITIES              |   |       | —  |   |       |   | (52,849  | )          |   |   | — |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES               |   |       |     |   |       |   |     |       |   |   |   |   |
| Payments                of bonds payable                          |   |       | (596,864 | )      |       |   | (533,844 | )          |   |   | (466,800 | ) |
| Decrease                in due to partners                        |   |       | —  |   |       |   | —  |       |   |   | (23,000 | ) |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| NET                CASH USED BY FINANCING ACTIVITIES              |   |       | (596,864 | )      |       |   | (533,844 | )          |   |   | (489,800 | ) |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| NET                (DECREASE) INCREASE IN CASH                    |   |       | (75,384  | )      |       |   | 25,570   |       |   |   | 45,974 |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| CASH                AT BEGINNING OF YEAR                          |   |       | 76,830   |   |       |   | 51,260   |       |   |   | 5,286 |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| CASH                AT END OF YEAR                                |   | $          | 1,446    |   |       | $      | 76,830   |       |   | $ | 51,260 |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| SUPPLEMENTAL                DISCLOSURE OF CASH FLOWS              |   |       |     |   |       |   |     |       |   |   |   |   |
| INFORMATION                                                       |   |       |     |   |       |   |     |       |   |   |   |   |
|                                                              |   |       |     |   |       |   |     |       |   |   |   |   |
| Cash                paid during the year for interest             |   | $          | 357,278  |   |       | $      | 407,650  |       |   | $ | 462,322 |   |

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Table          of Contents

STILLWATER      HYDRO PARTNERS L.P.

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Table          of Contents

|                                                                                                                                                                                                                                                                                                     |   | 2005   |      |   | 2004   |   |      | 2003   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                                                                                                                                                                                                                                                     |   |   |      |   |   |   |      |   |   |
| Fixed                rate term bond with variable quarterly principal payments plus                interest at 10.42%                                                                                                                                                                                    |   | $      | 2,367,600 |   |   | $      | 3,036,000 |   |   | $ | 3,648,000 |   |
|                                                                                                                                                                                                                                                                                                     |   |   |      |   |   |   |      |   |   |   |   |   |
| Floating                rate term bond with variablequarterly principal payments plus interest                atprime plus 1.25% or LIBOR plus 3.5% atthe option of the                Partnership.  The interestrate in effect at December 31,                2005 wasLIBOR (1.51%) plus 3.5% |   |   | 1,056,590 |   |   |   | 985,054   |   |   |   | 906,898 |   |
|                                                                                                                                                                                                                                                                                                     |   |   |      |   |   |   |      |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                     |   | $      | 3,424,190 |   |   | $      | 4,021,054 |   |   | $ | 4,554,898 |   |

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| 2006   |   | $      | 816,144   |   |
|--------|--------|--------|-----------|--------|
| 2007   |   |   | 891,680   |   |
| 2008   |   |   | 1,716,366 |   |
|   |   |   |      |   |
|   |   | $      | 3,424,190 |   |

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Table          of Contents

|                                                           |   | 2005   |   |   | 2004   |   |   | 2003   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                           |   |   |   |   |   |   |   |   |   |
| Purchase                of operations and maintenance services |   | $      | 29,067 |   |   | $      | 28,223 |   |   | $ | 27,400 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                payable and expenses                   |   | $      | 63,027 |   |   | $      | 85,257 |   |   | $ | 57,035 |   |

|                                                         |   | December                31, 2005 |      |
|--------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                         |   | PreviouslyReported               |      |   | Adjustments |   |   |   | Restated |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| Balance                Sheet                                 |   |                             |      |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| ASSETS                                                       |   |                             |      |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| Total                Assets                                  |   | $                                | 7,791,773 |   |   | $ | (514,237 | ) | (A) |   | $ | 7,277,536 |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND MEMBERS’ DEFICIT        |   |                             |      |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Liabilities                             |   | $                                | 6,724,418 |   |   | $ | — |   |   |   | $ | 6,724,418 |   |
| Partners’                Capital                       |   |                             | 1,067,355 |   |   |   | (514,237 | ) | (A) |   |   | 553,118 |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Liabilities and Partners’ Capital |   | $                                | 7,791,773 |   |   | $ | (514,237 | ) | (A) |   | $ | 7,277,536 |   |

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Table          of Contents

|                                       |   | Year                ended December 31, 2005 |      |
|--------------------------------------------|--------|---------------------------------------------|-----------|
|                                       |   | PreviouslyReported                          |      |   | Adjustments |   |   |   | Restated |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |
| Statement                of Operations     |   |                                        |      |   |   |   |   |   |   |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |
| Revenues                                   |   | $                                           | 1,290,017 |   |   | $ | — |   |   |   | $ | 1,290,017 |   |
| Operating                expenses          |   |                                        | 756,848   |   |   |   | (26,474 | ) | (B) |   |   | 730,374 |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |   |   |   |
| Operating                income            |   |                                        | 533,169   |   |   |   | 26,474 |   | (B) |   |   | 559,643 |   |
| Other                (expense) income, net |   |                                        | (526,974  | ) |   |   | — |   |   |   |   | (526,974 | ) |
|                                       |   |                                        |      |   |   |   |   |   |   |   |   |   |   |
| Net                income                  |   | $                                           | 6,195     |   |   | $ | 26,474 |   | (B) |   | $ | 32,669 |   |

| (A) | The                Company could not account for certain pre-development costs for periods                prior to March 1991. |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| (B) | Decrease                in depreciation expense relating to the pre-development                costs. |
|-----|-------------------------------------------------------------------------------------------------------|

|                                                         |   | December                31, 2004 |      |
|--------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                         |   | PreviouslyReported               |      |   | Adjustments |   |   |   | Restated |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| Balance                Sheet                                 |   |                             |      |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| ASSETS                                                       |   |                             |      |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| Total                Assets                                  |   | $                                | 8,194,335 |   |   | $ | (540,711 | ) | (A) |   | $ | 7,653,624 |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND MEMBERS’ DEFICIT        |   |                             |      |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Liabilities                             |   | $                                | 7,133,175 |   |   | $ | — |   |   |   | $ | 7,133,175 |   |
| Partners’                Capital                       |   |                             | 1,061,160 |   |   |   | (540,711 | ) | (A) |   |   | 520,449 |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Liabilities and Partners’ Capital |   | $                                | 8,194,335 |   |   | $ | (540,711 | ) | (A) |   | $ | 7,653,624 |   |

|                                       |   | Year                ended December 31, 2004 |      |
|--------------------------------------------|--------|---------------------------------------------|-----------|
|                                       |   | PreviouslyReported                          |      |   | Adjustments |   |   |   | Restated |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |
| Statement                of Operations     |   |                                        |      |   |   |   |   |   |   |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |
| Revenues                                   |   | $                                           | 1,384,237 |   |   | $ | — |   |   |   | $ | 1,384,237 |   |
| Operating                expenses          |   |                                        | 716,824   |   |   |   | (26,474 | ) | (B) |   |   | 690,350 |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |   |   |   |
| Operating                income            |   |                                        | 667,413   |   |   |   | 26,474 |   | (B) |   |   | 693,887 |   |
| Other                (expense) income, net |   |                                        | (569,966  | ) |   |   | — |   |   |   |   | (569,966 | ) |
|                                       |   |                                        |      |   |   |   |   |   |   |   |   |   |   |
| Net                income                  |   | $                                           | 97,447    |   |   | $ | 26,474 |   | (B) |   | $ | 123,921 |   |

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Table          of Contents

| (A) | The                Company could not account for certain pre-development costs for periods                prior to March 1991. |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| (B) | Decrease                in depreciation expense relating to the pre-development                costs. |
|-----|-------------------------------------------------------------------------------------------------------|

|                                                         |   | December                31, 2003 |      |
|--------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                         |   | PreviouslyReported               |      |   | Adjustments |   |   |   | Restated |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| Balance                Sheet                                 |   |                             |      |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| ASSETS                                                       |   |                             |      |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |
| Total                Assets                                  |   | $                                | 8,457,404 |   |   | $ | (567,185 | ) | (A) |   | $ | 7,890,219 |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND MEMBERS’ DEFICIT        |   |                             |      |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Liabilities                             |   | $                                | 7,493,691 |   |   | $ | — |   |   |   | $ | 7,493,691 |   |
| Partners’                Capital                       |   |                             | 963,713   |   |   |   | (567,185 | ) | (A) |   |   | 396,528 |   |
|                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Liabilities and Partners’ Capital |   | $                                | 8,457,404 |   |   | $ | (567,185 | ) | (A) |   | $ | 7,890,219 |   |

|                                       |   | Year                ended December 31, 2003 |      |
|--------------------------------------------|--------|---------------------------------------------|-----------|
|                                       |   | PreviouslyReported                          |      |   | Adjustments |   |   |   | Restated |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |
| Statement                of Operations     |   |                                        |      |   |   |   |   |   |   |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |
| Revenues                                   |   | $                                           | 1,310,630 |   |   | $ | — |   |   |   | $ | 1,310,630 |   |
| Operating                expenses          |   |                                        | 696,732   |   |   |   | (26,474 | ) | (B) |   |   | 670,258 |   |
|                                       |   |                                        |      |   |   |   |   |   |   |   |   |   |   |
| Operating                income            |   |                                        | 613,898   |   |   |   | 26,474 |   | (B) |   |   | 640,372 |   |
| Other                (expense) income, net |   |                                        | (620,947  | ) |   |   | — |   |   |   |   | (620,947 | ) |
|                                       |   |                                        |      |   |   |   |   |   |   |   |   |   |   |
| Net                income                  |   | $                                           | (7,049    | ) |   | $ | 26,474 |   | (B) |   | $ | 19,425 |   |

| (A) | The                Company could not account for certain pre-development costs for periods                prior to March 1991. |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| (B) | Decrease                in depreciation expense relating to the pre-development                costs. |
|-----|-------------------------------------------------------------------------------------------------------|

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