1. 19651970197519801985199019952000 15 10 5 0 Yearly Inflation Rate - 1960 to 2001 1960 Oil Price “Shocks” 1973-1974 Oil Price “Shocks” 1979-1980 Consumer Price Index

2. 19701971197219731974197519761977197819791980 3.2% 5.7% 4.4% 9.1% 5.8% 6.5% 7.6% 11.3% 13.5% Inflation Over Time 1979 Ford Mustang 1974 Ford Mustang 1971 Ford Mustang OIL PRICE “SHOCKS” 6.2% 11% OIL PRICE “SHOCKS” $1.32 $2,700$3,500$5,012 $1.39 $1.50 $42,500 $47,432$73,327 25¢ 28¢ 40¢ Natural Gas 91¢ Natural Gas $1.13 Natural Gas $2.31 1971 19741979 (5.3%) (12%) (24%) (13.6%) (60%) (154%)

3. 19701971197219731974197519761977197819791980 5.7% 1970 ARCO diversifies into coal. Core sampling showed Powder River Basin, in Wyoming, to be a strong resource ARCO SPS SPS decides to build an electric generation plant (Harrington Station) using coal vs. natural gas Powder River Basin Harrington Station

4. 197019711972197319741975197619771978197919801973 Powder River Basin Harrington StationARCO SPS Original Harrington Agreement $2.00 per ton 3.2% 5.7% 4.4%

5. 1973 Original Harrington Agreement Show Document $2.00/ton $2.00 per ton ___ yr. Contract

6. 197019711972197319741975197619771978197919801973 Original Harrington Agreement $2.00 per ton SPS ARCO 3.2% 5.7% 4.4% SPS begins construction of Harrington Station

7. 197019711972197319741975197619771978197919801973 Original Harrington Agreement $2.00 per ton SPS ARCO OIL PRICE “SHOCKS” 3.2% 5.7% 4.4% 6.2%

8. 197019711972197319741975197619771978197919801974 Original Harrington Agreement $2.00 per ton ARCO SPS OIL PRICE “SHOCKS” SPS creates TUCO, a wholly owned subsidiary 6.2% 3.2% 5.7% 4.4% TUCO

9. 197019711972197319741975197619771978197919801974 ARCO and SPS/TUCO reopen negotiations regarding Harrington Agreement Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” ARCO’s new core samples show lower quality Sierra Club Litigation begins ARCO recognizes Skyrocketing inflation Sierra Club lawsuit New regulations Lower coal quality 11% 3.2% 5.7% 4.4% TUCO

10. 197019711972197319741975197619771978197919801975 ARCO proposes frequent contract price reopeners to SPS/TUCO NEGOTIATIONS Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club X X SPS/TUCO rejects offer TUCO

11. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club 1975 TUCO NEGOTIATIONS

12. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club 1976 Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton TUCO NEGOTIATIONS Injunction prohibits mining on Federal land

13. 1976 Revised Harrington Agreement Show Document $2.698/ton $2.698 per ton ___ yr. Contract

14. 1976 State Agreement Show Document $6.50/ton $6.50 per ton ___ yr. Contract

15. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club NEGOTIATIONS Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1976 5.8% TUCO

16. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1977 5.8% Tolk Agreement $7.50 per ton TUCO Powder River Basin Harrington Station Tolk StationNEGOTIATIONS

17. 1977 Tolk Agreement Show Document $7.50/ton $7.50 per ton ___ yr. Contract

18. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1977 5.8% Tolk Agreement $7.50 per ton 6.5% ARCO starts delivering coal to TUCO from State landTUCO NEGOTIATIONS

19. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1978 5.8% 6.5% Tolk Agreement $7.50 per ton 7.6% TUCO STATE NEGOTIATIONS

20. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS TUCO 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1979 5.8% 6.5% Tolk Agreement $7.50 per ton 7.6% SPS sells TUCO to Cabot Corporation TUCO (Cabot) STATE NEGOTIATIONS

21. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS TUCO 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1979 5.8% 6.5% Tolk Agreement $7.50 per ton 7.6% TUCO (Cabot) 11.3% OIL PRICE “SHOCKS” STATE NEGOTIATIONS

22. 9.1%19701971197219731974197519761977197819791980 Original Harrington Agreement $2.00 per ton ARCO SPS TUCO 6.2% OIL PRICE “SHOCKS” 11% 3.2% 5.7% 4.4% Sierra Club Revised Harrington Agreement $2.698 per ton State Agreement $6.50 per ton 1980 5.8% 6.5% Tolk Agreement $7.50 per ton 7.6% TUCO (Cabot) 11.3% OIL PRICE “SHOCKS” 13.5%STATE NEGOTIATIONS

23. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO

24. 19801981198219831984198519861987198819891990 Sierra Club 1982 TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton ARCO starts delivering coal to TUCO under Tolk Agreement Sierra Club Litigation resolved

25. 19801981198219831984198519861987198819891990 Sierra Club 1982 TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton 6.2% Letter of Agreement - Labor and Fringe Benefits adjusted by indices Letter of Agreement Labor & Fringe Benefits TOLK

26. 19801981198219831984198519861987198819891990 Sierra Club 1983 TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton ARCO starts delivering coal to TUCO under Revised Harrington Agreement Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% TOLK

27. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% TOLK R. HAR.

28. 19801981198219831984198519861987198819891990 Sierra Club 1985 TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO & TUCO negotiate and agree on price reduction to Tolk Agreement ARCO Pays $300 Million TOLK R. HAR.

29. 19801981198219831984198519861987198819891990 Sierra Club 1985 TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO Pays $300 Million 3.6% TOLK R. HAR.

30. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO Pays $300 Million 3.6% 1.9% TOLK R. HAR.

31. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO Pays $300 Million 3.6% 1.9% 3.6% TOLK R. HAR.

32. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO Pays $300 Million 3.6% 1.9% 3.6% 4.1% TOLK R. HAR.

33. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO Pays $300 Million 3.6% 1.9% 3.6% 4.1% 4.8% TOLK R. HAR.

34. 19801981198219831984198519861987198819891990 Sierra Club TUCO (Cabot) 13.5%ARCO 10.3% Tolk Agreement $7.50 per ton Letter of Agreement Labor & Fringe Benefits 6.2% 3.2% 4.3% ARCO Pays $300 Million 3.6% 1.9% 3.6% 4.1% 4.8% 5.4% TOLK R. HAR.

35. 19901991199219931994199519961997199819991990 TUCO (Cabot) ARCO 5.4%

36. 19901991199219931994199519961997199819991990 TUCO (Cabot) ARCO 5.4% 4.2%

37. 19901991199219931994199519961997199819991990 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% ___? Million Tons of coal delivered between 1977 and 1993

38. 199019911992199319941995199619971998199919901993 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% TUCO refuses full deliveries of coal from ARCO X X ARCO sues TUCO for reneging on contract

39. 199019911992199319941995199619971998199919901993 TUCO (Cabot) ARCO 5.4% 3.0% 4.2% ARCO sues TUCO for reneging on contract Court Judgement in favor of ARCO - Contract Enforced Court orders TUCO to pay $20 Million to ARCO X X

40. 199019911992199319941995199619971998199919901993 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Court orders TUCO to pay $20 Million to ARCO

41. 199019911992199319941995199619971998199920001994 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% TUCO attends Jay Roman seminar Jay Roman Seminar Court orders TUCO to pay $20 Million to ARCO

42. 199019911992199319941995199619971998199920001994 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar TUCO sues ARCO- “Pricing Claims” TUCO sues ARCO Court orders TUCO to pay $20 Million to ARCO

43. 199019911992199319941995199619971998199920001994 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar 2.6% Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

44. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar 2.6% 2.8% Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

45. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar 2.6% 2.8% 2.9% Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

46. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar 2.6% 2.8% 2.9% 1997 Revised Harrington Agreement $2.698 per ton Revised Harrington Agreement ends TOLK Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

47. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar 2.6% 2.8% 2.9% 1997 Revised Harrington Agreement $2.698 per ton 2.3% TOLK Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

48. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% 2.6% 2.8% 2.9% Revised Harrington Agreement $2.698 per ton 2.3% 1.6% TOLK Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

49. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% 2.6% 2.8% 2.9% Revised Harrington Agreement $2.698 per ton 2.3% 1.6% 2.2% TOLK Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

50. 19901991199219931994199519961997199819992000 TUCO (Cabot) ARCO 5.4% 4.2% 3.0% Jay Roman Seminar 2.6% 2.8% 2.9% Revised Harrington Agreement $2.698 per ton 2.3% 1.6% 2.2% 3.4% TOLK Court orders TUCO to pay $20 Million to ARCO TUCO sues ARCO

51. 20002001200220032004200520062007200820092010 TUCO (Cabot) ARCO 3.4%

52. 20002001200220032004200520062007200820092010 TUCO (Cabot) ARCO 3.4% 2.8%

53. 20002001200220032004200520062007200820092010 TUCO (Cabot) ARCO 3.4% 2.8% TUCO asserts “True Up” theory