UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-13603

TE Products Pipeline Company, Limited Partnership

(Exact name of Registrant as specified in its charter)

Delaware		76-0329620
(State of Incorporation or Organization)		(I.R.S. Employer Identification Number)

1100 Louisiana Street, 13th Floor
P.O. Box 2521
Houston, Texas 77252-2521

(Address of principal executive offices, including zip code)

(713) 381-3636

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x

EXPLANATORY NOTE

This Amended Quarterly Report (“Report”) on Form 10-Q includes restated financial statements as of and for the three months and nine months ended September 30, 2005 and 2004. The restated financial statements include the effect of correcting the accounting for our excess investment in Centennial Pipeline LLC from an intangible asset with an indefinite life to an intangible asset with a determinable life. The restatement caused a $1.2 million and $0.9 million reduction to net income as previously reported for the three months ended September 30, 2005 and 2004, respectively, and a $3.3 million and $2.4 million reduction to net income as previously reported for the nine months ended September 30, 2005 and 2004, respectively.

For further discussion of the effect of the restatement, see Note 12. Restatement of Consolidated Financial Statements in this Report and Note 19. Restatement of Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (“2005 Annual Report”).

In our 2005 Annual Report, we indicated in the introductory explanatory note that the restatement presented in this filing would be reported in our Quarterly Report on Form 10-Q for the quarterly period September 30, 2006. We also noted that we did not plan to file any other amendments to our previously filed Quarterly Reports on Form 10-Q since we had included restated financial data for the quarterly periods ended March 31, 2005 and 2004, June 30, 2005 and 2004, and September 30, 2005 and 2004 in our 2005 Annual Report. However, we are amending our Quarterly Report on Form 10-Q for the period ended September 30, 2005, in order to provide investors with a more convenient comparative presentation of the effects of the restatement for the quarterly periods ended September 30, 2005 and 2004.

As a result of the restatement described above, this Report amends the following sections of our Form 10-Q for the period ended September 30, 2005, which was filed with the Securities and Exchange Commission on November 1, 2005 (the “Initial Report”):

Part I—Item 1. Financial Statements

Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Except as specified with respect to certain aspects of the restatement, we have not updated the disclosures contained in this Report to reflect any events that occurred at a date subsequent to the filing of the Initial Report, and this Report continues to speak as of the date of the Initial Report. This Report does not affect the information originally set forth in the Initial Report that has not been amended as described above. However, we have included the remaining portions of the Initial Report that have not been amended herein for ease of reference.

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2005 (unaudited) (as restated) and December 31, 2004

Consolidated Statements of Income for the three months and nine months ended September 30, 2005 and 2004 (unaudited) (as restated)

Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004 (unaudited) (as restated)

Notes to the Consolidated Financial Statements (unaudited)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 6. Exhibits

Signatures

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS
(in thousands)

	September 30, 2005		December 31, 2004
	(as restated)
	(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	--	$	--
Accounts receivable, trade (net of allowance for doubtful accounts of $56 and $56)	20,559		21,090
Accounts receivable, related parties	1,868		2,379
Inventories	14,795		10,093
Other	16,838		12,143
Total current assets	54,060		45,705
Property, plant and equipment, at cost (net of accumulated depreciation and amortization of $331,347 and $311,197)	798,895		722,334
Equity investments	155,849		160,998
Other assets	18,529		16,156
Total assets	$	1,027,333	$	945,193

LIABILITIES AND PARTNERS’ CAPITAL

Current liabilities:
Accounts payable and accrued liabilities	$	8,879	$	10,211
Accounts payable, related parties	26,621		65,375
Accrued interest	7,014		17,063
Other accrued taxes	7,993		5,605
Other	12,178		9,339
Total current liabilities	62,685		107,593
Senior Notes	391,260		393,317
Note Payable, Parent Partnership	188,948		301,686
Other liabilities and deferred credits	14,780		9,980
Commitments and contingencies
Partners’ capital:
General partner’s interest	4		2
Limited partner’s interest	369,656		132,615
Total partners’ capital	369,660		132,617
Total liabilities and partners’ capital	$	1,027,033	$	945,193

See accompanying Notes to Consolidated Financial Statements.

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
	(as restated)			(as restated)			(as restated)			(as restated)
Operating revenues:
Transportation — Refined products	$	38,240		$	43,386		$	111,039		$	113,294
Transportation — LPGs	16,519			16,071			63,220			58,572
Other	10,107			7,908			30,144			30,378
Total operating revenues	64,866			67,365			204,403			202,244

Costs and expenses:
Operating, general and administrative	30,101			32,841			84,756			90,718
Operating fuel and power	8,142			8,465			23,697			23,706
Depreciation and amortization	9,818			12,756			28,653			30,392
Taxes — other than income taxes	3,014			1,979			8,362			7,314
Gains on sales of assets	(24		)	(472		)	(131		)	(587		)
Total costs and expenses	51,051			55,569			145,337			151,543

Operating income	13,815			11,796			59,066			50,701

Interest expense — net	(7,286		)	(6,979		)	(22,839		)	(20,469		)
Equity losses	(651		)	(1,234		)	(2,718		)	(4,477		)
Other income — net	306			203			576			648

Net income	$	6,184		$	3,786		$	34,085		$	26,403

See accompanying Notes to Consolidated Financial Statements.

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

	Nine Months Ended September 30,
	2005			2004
	(as restated)			(as restated)
Cash flows from operating activities:
Net income	$	34,085		$	26,403
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	28,653			30,392
Losses from equity investments, net of distributions	13,406			13,002
Non-cash portion of interest expense	199			22
Gains on sales of assets	(131		)	(587		)
Decrease in accounts receivable	531			7,210
(Increase) decrease in accounts receivable, related parties	511			(4,330		)
(Increase) decrease in inventories	(4,642		)	871
(Increase) decrease in other current assets	(4,695		)	2,049
Decrease in accounts payable and accrued expenses	(2,162		)	(11,237		)
Increase (decrease) in accounts payable, related parties	(38,754		)	44,470
Other	(7,351		)	(11,253		)
Net cash provided by operating activities	19,650			97,012

Cash flows from investing activities:
Proceeds from sale of assets	—			590
Investment in Mont Belvieu Storage Partners, L.P	(2,635		)	(20,161		)
Purchase of assets	(68,969		)	(1,962		)
Investment in Centennial Pipeline LLC	—			(1,500		)
Capital expenditures	(38,266		)	(51,275		)
Net cash used in investing activities	(109,870		)	(74,308		)

Cash flows from financing activities:
Proceeds from note payable, Parent Partnership	148,508			90,377
Repayments of note payable, Parent Partnership	(261,246		)	(24,993		)
Equity contributions — Parent Partnership	294,820			—
Distributions paid	(91,862		)	(88,276		)
Net cash provided by (used in) financing activities	90,220			(22,892		)

Net decrease in cash and cash equivalents	—			(188		)

Cash and cash equivalents at beginning of period	—			188
Cash and cash equivalents at end of period	$	—		$	—

Non-cash investing activities:
Net assets transferred to Mont Belvieu Storage Partners, L.P.	$	1,429		$	—

Supplemental disclosure of cash flows:
Cash paid for interest (net of amounts capitalized)	$	30,786		$	26,526

See accompanying Notes to Consolidated Financial Statements.

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

TE Products Pipeline Company, Limited Partnership (the “Partnership”), a Delaware limited partnership, was formed in March 1990. TEPPCO Partners, L.P. (the “Parent Partnership”) owns a 99.999% interest in us as the sole limited partner. TEPPCO GP, Inc. (“TEPPCO GP” or “General Partner”), a wholly owned subsidiary of the Parent Partnership, holds a 0.001% general partner interest in us. Texas Eastern Products Pipeline Company, LLC (the “Company”), a Delaware limited liability company, serves as the general partner of our Parent Partnership. Through February 23, 2005, the Company was an indirect wholly owned subsidiary of Duke Energy Field Services, LLC (“DEFS”), a joint venture between Duke Energy Corporation (“Duke Energy”) and ConocoPhillips. Through February 23, 2005, Duke Energy held an interest of approximately 70% in DEFS, and ConocoPhillips held the remaining interest of approximately 30%. On February 24, 2005, the Company was acquired by DFI GP Holdings L.P. (formerly Enterprise GP Holdings L.P.) (“DFI”), an affiliate of EPCO, Inc. (“EPCO”), a privately held company controlled by Dan L. Duncan, for approximately $1.1 billion. As a result of the transaction, DFI owns and controls the 2% general partner interest in our Parent Partnership and has the right to receive the incentive distribution rights associated with the general partner interest.

TEPPCO GP, as our general partner, performs all of the management and operating functions required for us in accordance with the Agreement of Limited Partnership of TE Products Pipeline Company, Limited Partnership. We reimburse our General Partner and the Company for all reasonable direct and indirect expenses that they incur in managing us.

On May 18, 2005, we formed TEPPCO Terminals, L.P. (“TEPPCO Terminals”), a Delaware limited partnership, and we own a 99.999% interest in TEPPCO Terminals as the sole limited partner. TEPPCO GP serves as the general partner and holds a 0.001% general partner interest in TEPPCO Terminals. On July 12, 2005, TEPPCO Terminals purchased a refined products terminal and two-bay truck loading rack in North Little Rock, Arkansas, for $6.8 million from Exxon Mobil Corporation (see Note 5. Acquisitions).

On May 9, 2005, we formed TEPPCO Interests, LLC (“TEPPCO Interests”), a Delaware limited liability company, of which we own 100% of the member interests. On July 15, 2005, TEPPCO Interests acquired from Texas Genco LLC (i) 100% of its member interests in TG Pipeline GP, LLC, a Delaware limited liability company, which is the owner of 100% of the general partner interests in TG Pipeline, L.P. (“Pipeline LP”), a Texas limited partnership, and (ii) 100% of the membership interests in TG Pipeline LP, LLC, a Delaware limited liability company, which is the owner of 100% of the limited partner interests in Pipeline LP (see Note 5. Acquisitions).

As used in this Report, “we,” “us,” and “our” means TE Products Pipeline Company, Limited Partnership and, where the context requires, include our consolidated subsidiaries.

The accompanying unaudited consolidated financial statements reflect all adjustments that are, in the opinion of our management, of a normal and recurring nature and necessary for a fair statement of our financial position as of September 30, 2005, and the results of our operations and cash flows for the periods presented. The results of operations for the three months and nine months ended September 30, 2005, are not necessarily indicative of results of our operations for the full year 2005. You should read these interim financial statements in conjunction with our consolidated financial statements and notes thereto presented in the TE Products Pipeline Company, Limited Partnership Annual Report on Form 10-K for the year ended December 31, 2004. We have reclassified certain amounts from prior periods to conform to the current presentation.

We restated our consolidated financial statements and related financial information for the three months and nine months ended September 30, 2005 and 2004, for an accounting correction. See Note 12. Restatement of Consolidated Financial Statements for a discussion of the restatement adjustment and the impact on previously issued financial statements.

We operate and report in one business segment: transportation and storage of refined products, liquefied petroleum gases (“LPGs”) and petrochemicals. Our interstate transportation operations, including rates charged to customers, are subject to regulations prescribed by the Federal Energy Regulatory Commission (“FERC”). We refer to refined products, LPGs and petrochemicals in this Report, collectively, as “petroleum products” or “products.”

At September 30, 2005, and December 31, 2004, we had working capital deficits of $8.6 million and $61.9 million, respectively. Our primary sources of liquidity are cash generated from operations and from our Parent Partnership’s credit facilities and debt and equity offerings. Working capital deficits occur primarily from the timing of operating cash receipts from customers, payment of cash distributions and the payment of normal operating expenses and capital expenditures. Our Parent Partnership has historically made capital contributions, loans or otherwise provided liquidity to us as needed, but the Parent Partnership has no contractual obligation to do so. At September 30, 2005, our Parent Partnership had $139.5 million in available borrowing capacity under its revolving credit facility and agreed to cover any of our working capital needs, if required.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123(R), Share-Based Payment. SFAS 123(R) requires compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of the compensation cost is to be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards are to be re-measured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. SFAS 123(R) is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure and supersedes Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123(R) is effective for public companies as of the first interim or annual reporting period of the first fiscal year beginning after June 15, 2005. The Securities and Exchange Commission amended the implementation date of SFAS 123(R) to begin with the first interim or annual reporting period of the company’s first fiscal year beginning on or after June 15, 2005. As such, we will adopt SFAS 123(R) in the first quarter of 2006. Companies are permitted to adopt SFAS 123(R) prior to the extended date. All public companies that adopted the fair-value-based method of accounting must use the modified prospective transition method and may elect to use the modified retrospective transition method. We do not believe that the adoption of SFAS 123(R) will have a material effect on our financial position, results of operations or cash flows.

In November 2004, the Emerging Issues Task Force (“EITF”) reached consensus in EITF 03-13, Applying the Conditions in Paragraph 42 of FASB Statement No. 144, Accounting for Impairment or Disposal of Long-Lived Assets, in Determining Whether to Report Discontinued Operations, to clarify whether a component of an enterprise that is either disposed of or classified as held for sale qualifies for income statement presentation as discontinued operations. The FASB ratified the consensus on November 30, 2004. The consensus is to be applied prospectively with regard to a component of an enterprise that is either disposed of or classified as held for sale in reporting periods beginning after December 15, 2004. The consensus may be applied retrospectively for previously reported operating results related to disposal transactions initiated within an enterprise’s reporting period that included the date that this consensus was ratified. The adoption of EITF 03-13 did not have an effect on our financial position, results of operations or cash flows.

In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143 (“FIN 47”). FIN 47 clarifies that the term, conditional asset retirement obligation as used in SFAS No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional upon a future event that may or may not be within the control of the entity. Even though uncertainty about the timing and/or method of settlement exists and may be conditional upon a future event, the obligation to perform the asset retirement activity is unconditional. Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of the liability when sufficient information exists. The fair value of a liability for the conditional asset retirement obligation should be recognized when incurred generally upon acquisition, construction, or development or through the normal operation of the asset. SFAS 143 acknowledges that in some cases, sufficient information may not be available to reasonably estimate the fair value of an asset retirement obligation. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective no later than the end of reporting periods ending after December 15, 2005, and early adoption of FIN 47 is encouraged. We will adopt FIN 47 in the fourth quarter of 2005. We do not believe that the adoption of FIN 47 will have a material effect on our financial position, results of operations or cash flows.

In June 2005, the EITF reached consensus in EITF 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, to provide guidance on how general partners in a limited partnership should determine whether they control a limited partnership and therefore should consolidate it. The EITF agreed that the presumption of general partner control would be overcome only when the limited partners have either of two types of rights. The first type, referred to as kick-out rights, is the right to dissolve or liquidate the partnership or otherwise remove the general partner without cause. The second type, referred to as participating rights, is the right to effectively participate in significant decisions made in the ordinary course of the partnership’s business. The kick-out rights and the participating rights must be substantive in order to overcome the presumption of general partner control. The consensus is effective for general partners of all new limited partnerships formed and for existing limited partnerships for which the partnership agreements are modified subsequent to the date of FASB ratification (June 29, 2005). For existing limited partnerships that have not been modified, the guidance in EITF 04-5 is effective no later than the beginning of the first reporting period in fiscal years beginning after December 15, 2005. We are currently evaluating what impact EITF 04-5 will have on our financial statements, but at this time we do not believe that the adoption of EITF 04-5 will have a material effect on our financial position, results of operations or cash flows.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion 29. SFAS 153 amends APB Opinion No. 29, Accounting for Nonmonetary Exchanges, to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for

exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. We adopted SFAS 153 during the second quarter of 2005. The adoption of SFAS 153 did not have a material effect on our financial position, results of operations or cash flows.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections. SFAS 154 establishes new standards on accounting for changes in accounting principles. All such changes must be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so. SFAS 154 completely replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Periods. However, it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in the reporting entity, and the correction of errors. SFAS 154 is effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005, with early adoption permitted for changes and corrections made in years beginning after June 1, 2005. The application of SFAS 154 does not affect the transition provisions of any existing pronouncements, including those that are in the transition phase as of the effective date of SFAS 154. We do not believe that the adoption of SFAS 154 will have a material effect on our financial position, results of operations or cash flows.

In September 2005, the EITF reached consensus in EITF 04-13, Accounting for Purchases and Sales of Inventory with the Same Counterparty, to define when a purchase and a sale of inventory with the same party that operates in the same line of business should be considered a single nonmonetary transaction subject to APB Opinion No. 29, Accounting for Nonmonetary Transactions. Two or more inventory transactions with the same party should be combined if they are entered into in contemplation of one another. The consensus also requires entities to account for exchanges of inventory in the same line of business at fair value or recorded amounts based on inventory classification. The guidance in EITF 04-13 is effective for new inventory arrangements entered into in reporting periods beginning after March 15, 2006. We are currently evaluating what impact EITF 04-13 will have on our financial statements, but at this time we do not believe that the adoption of EITF 04-13 will have a material effect on our financial position, results of operations or cash flows.

NOTE 2. INTANGIBLE ASSETS

We account for our intangible assets under SFAS No. 142, Goodwill and Other Intangible Assets, which was issued by the FASB in July 2001. SFAS 142 prohibits amortization of goodwill and intangible assets with indefinite useful lives, but instead requires testing for impairment at least annually. SFAS 142 requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives. If an intangible asset has a finite useful life, but the precise length of that life is not known, that intangible asset shall be amortized over the best estimate of its useful life. At a minimum, we will assess the useful lives and residual values of all intangible assets on an annual basis to determine if adjustments are required.

The following table reflects the components of amortized intangible assets, included in other assets on the consolidated balance sheets, and excess investments included in equity investments, at September 30, 2005, and December 31, 2004 (in thousands):

	September 30, 2005					December 31, 2004
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization

Intangible assets:
Transportation agreements	$	1,328	$	(310	)	$	1,328	$	(260	)

Excess investment:
Centennial Pipeline LLC	$	33,400	$	(12,167	)	$	33,400	$	(8,875	)

The value assigned to our excess investment in Centennial Pipeline LLC was created upon its formation. Approximately $30.0 million is related to a contract and is being amortized on a unit-of-production basis based upon the volumes transported under the contract compared to the guaranteed total throughput of the contract over a 10-year life. The remaining $3.4 million is related to a pipeline and is being amortized on a straight-line basis over the life of the pipeline, which is 35 years.

Amortization expense on intangible assets was $16,603 for each of the three-month periods ended September 30, 2005 and 2004, and $49,808 for each of the nine-month periods ended September 30, 2005 and 2004. Amortization expense on our excess investment included in equity earnings was $1.2 million and $0.9 million for the three months ended September 30, 2005 and 2004, respectively, and $3.3 million and $2.4 million for the nine months ended September 30, 2005 and 2004, respectively.

The following table sets forth the estimated amortization expense of intangible assets and the estimated amortization expense allocated to equity earnings for the years ending December 31 (in thousands):

	Intangible Assets		Excess Investment
2005	$	66	$	4,072
2006	66		3,999
2007	66		4,422
2008	66		4,747
2009	66		6,187

NOTE 3. PROPERTY, PLANT AND EQUIPMENT

We evaluate impairment of long-lived assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the carrying amount of assets to be held and used is measured by a comparison of the carrying amount of the asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

In September 2005, our Todhunter facility, near Middletown, Ohio, experienced a propane release and fire at a dehydration unit within the storage facility. The dehydration unit was destroyed due to the propane release

and fire, and as a result, we wrote off the remaining book value of the asset of $0.8 million to depreciation and amortization expense during the third quarter of 2005.

During the third quarter of 2004, we completed an evaluation of our marine terminal facility in the Beaumont, Texas, area. The facility consists primarily of a barge dock, a ship dock, four storage tanks and various segments of connecting pipelines. The evaluation indicated that the docks and other assets at the facility needed extensive work to continue to be commercially operational. As a result, we performed an impairment test on the entire marine facility and recorded a $4.4 million non-cash impairment charge, included in depreciation and amortization expense in our consolidated statements of income, for the excess carrying value over the fair value of the facility.

NOTE 4. INTEREST RATE SWAP

In October 2001, we entered into an interest rate swap agreement to hedge our exposure to changes in the fair value of our fixed rate 7.51% Senior Notes due 2028. We designated this swap agreement as a fair value hedge. The swap agreement has a notional amount of $210.0 million and matures in January 2028 to match the principal and maturity of the Senior Notes. Under the swap agreement, we pay a floating rate of interest based on a three-month U.S. Dollar LIBOR rate, plus a spread, and receive a fixed rate of interest of 7.51%. During the nine months ended September 30, 2005 and 2004, we recognized reductions in interest expense of $4.6 million and $7.5 million, respectively, related to the difference between the fixed rate and the floating rate of interest on the interest rate swap. During the quarter ended September 30, 2005, we measured the hedge effectiveness of this interest rate swap and noted that no gain or loss from ineffectiveness was required to be recognized. The fair value of this interest rate swap was a gain of approximately $1.3 million and $3.4 million at September 30, 2005, and December 31, 2004, respectively.

NOTE 5. ACQUISITIONS

Refined Products Terminal and Truck Rack

On July 12, 2005, TEPPCO Terminals purchased a refined products terminal and two-bay truck loading rack in North Little Rock, Arkansas, for $6.8 million from Exxon Mobil Corporation. The assets include three storage tanks and a two-bay truck loading rack. We funded the purchase through borrowings under our Parent Partnership’s revolving credit facility. We allocated the purchase price to property, plant and equipment and inventory, and we accounted for the acquisition of these assets under the purchase method of accounting. The terminal serves the central Arkansas refined products market and complements our existing infrastructure in North Little Rock, Arkansas.

Genco Assets

On July 15, 2005, TEPPCO Interests acquired from Texas Genco LLC (“Genco”) all of its interests in certain companies that own a 90-mile pipeline system and 5.5 million barrels of storage capacity for $62.1 million. We funded the purchase through borrowings under our Parent Partnership’s revolving credit facility. We allocated the purchase price to property, plant and equipment, and we accounted for the acquisition of these assets under the purchase method of accounting. This acquisition was made as part of an expansion of our refined products origin capabilities in the Houston, Texas, and Texas City, Texas areas. The assets of the purchased companies will be integrated into our origin infrastructure in Texas City and Baytown, Texas. The integration and other system enhancements should be in service by the fourth quarter of 2006, at an estimated cost of $45.0 million. The strategic

location of these assets, with refined products interconnections to major exchange terminals in the Houston area, will provide significant long-term value to our customers and the Texas Gulf Coast refining and logistics system.

NOTE 6. INVENTORIES

Inventories are valued at the lower of cost (based on weighted average cost method) or market. The costs of inventories did not exceed market values at September 30, 2005, and December 31, 2004. The major components of inventories were as follows (in thousands):

	September 30, 2005		December 31, 2004
Refined products	$	7,335	$	5,665
LPGs	2,511		—
Materials and supplies	4,949		4,428
Total	$	14,795	$	10,093

NOTE 7. EQUITY INVESTMENTS

We own a 50% ownership interest in Centennial Pipeline Company LLC (“Centennial”), and Marathon Petroleum Company LLC (“Marathon”) owns the remaining 50% interest. Centennial owns an interstate refined petroleum products pipeline extending from the upper Texas Gulf Coast to central Illinois. During the nine months ended September 30, 2005, we have not invested any additional funds in Centennial. During the nine months ended September 30, 2004, we invested an additional $1.5 million in Centennial, which is included in the equity investment balance at September 30, 2005. We have not received any distributions from Centennial since its formation.

On January 1, 2003, we and Louis Dreyfus Energy Services L.P. (“Louis Dreyfus”) formed Mont Belvieu Storage Partners, L.P. (“MB Storage”). We and Louis Dreyfus each own a 50% ownership interest in MB Storage. MB Storage owns storage capacity at the Mont Belvieu fractionation and storage complex and a short haul transportation shuttle system that ties Mont Belvieu, Texas, to the upper Texas Gulf Coast energy marketplace. MB Storage is a service-oriented, fee-based venture serving the fractionation, refining and petrochemical industries with transportation, terminaling and storage. MB Storage has no commodity trading activity. We operate the facilities for MB Storage.

For the year ended December 31, 2005, we will receive the first $1.7 million per quarter (or $6.78 million on an annual basis) of MB Storage’s income before depreciation expense, as defined in the operating agreement. For the year ended December 31, 2004, we received the first $1.8 million per quarter (or $7.15 million on an annual basis) of MB Storage’s income before depreciation expense. Our share of MB Storage’s earnings is adjusted annually by the partners of MB Storage. Any amount of MB Storage’s annual income before depreciation expense in excess of $6.78 million for 2005 and $7.15 million for 2004 is allocated evenly between us and Louis Dreyfus. Depreciation expense on assets each party originally contributed to MB Storage is allocated between us and Louis Dreyfus based on the net book value of the assets contributed. Depreciation expense on assets constructed or acquired by MB Storage subsequent to formation is allocated evenly between us and Louis Dreyfus. For the nine months ended September 30, 2005 and 2004, our sharing ratio in the earnings of MB Storage was approximately 64.3% and 72.3%, respectively. During the nine months ended September 30, 2005, we received distributions of $10.7 million from MB Storage and contributed $4.0 million to MB Storage, which includes a combination of non-cash asset transfers of $1.4 million and cash contributions of $2.6 million. During the nine months ended September

30, 2004, we received distributions of $8.5 million from MB Storage and contributed $20.2 million to MB Storage, of which $16.5 million was used to acquire storage assets in April 2004.

We use the equity method of accounting to account for our investments in Centennial and MB Storage. Summarized combined financial information for Centennial and MB Storage for the nine months ended September 30, 2005 and 2004, is presented below (in thousands):

	Nine Months Ended September 30,
	2005		2004
Revenues	$	54,863	$	44,210
Net income (loss)	6,091		(23		)

Summarized combined balance sheet data for Centennial and MB Storage as of September 30, 2005, and December 31, 2004, is presented below (in thousands):

	September 30, 2005		December 31, 2004
Current assets	$	46,836	$	39,228
Noncurrent assets	371,413		377,924
Current liabilities	44,275		36,015
Long-term debt	140,000		140,000
Noncurrent liabilities	18,863		20,383
Partners’ capital	215,111		220,754

NOTE 8. DEBT

Senior Notes

On January 27, 1998, we completed the issuance of $180.0 million principal amount of 6.45% Senior Notes due 2008, and $210.0 million principal amount of 7.51% Senior Notes due 2028 (collectively, the “Senior Notes”). The 6.45% Senior Notes were issued at a discount of $0.3 million and are being accreted to their face value over the term of the notes. The 6.45% Senior Notes due 2008 are not subject to redemption prior to January 15, 2008. The 7.51% Senior Notes due 2028, issued at par, may be redeemed at any time after January 15, 2008, at our option in whole or in part, at a premium.

The Senior Notes do not have sinking fund requirements. Interest on the Senior Notes is payable semiannually in arrears on January 15 and July 15 of each year. The Senior Notes are unsecured obligations and rank pari passu with all other unsecured and unsubordinated indebtedness. The indenture governing the Senior Notes contains covenants including but not limited to, covenants limiting the creation of liens securing indebtedness and sale and leaseback transactions. However, the indenture does not limit our ability to incur additional indebtedness. As of September 30, 2005, we were in compliance with the covenants of the Senior Notes.

We have entered into an interest rate swap agreement to hedge our exposure to changes in the fair value on a portion of the Senior Notes discussed above. At September 30, 2005, and December 31, 2004, the Senior Notes include the fair value of our interest rate swap of $1.3 million and $3.4 million, respectively (see Note 4. Interest Rate Swap).

The following table summarizes the estimated fair values of the Senior Notes as of September 30, 2005, and December 31, 2004 (in millions):

			Fair Value
	Face Value		September 30, 2005		December 31, 2004
6.45% Senior Notes, due January 2008	$	180.0	$	185.0	$	187.1
7.51% Senior Notes, due January 2028	210.0		223.9		225.6

Other Long Term Debt and Credit Facilities

We currently utilize debt financing available from our Parent Partnership through intercompany notes. The terms of the intercompany notes generally match the principal and interest payment dates under the Parent Partnership’s credit agreement and senior notes. The interest rates charged by the Parent Partnership include the stated interest rate of the Parent Partnership, plus a premium to cover debt issuance costs. The interest rate is also decreased or increased to cover gains and losses, respectively, on any interest rate swaps that the Parent Partnership may have in place on its credit agreement and senior notes. The Parent Partnership’s senior notes and revolving credit facility are described below.

On February 20, 2002, our Parent Partnership issued $500.0 million principal amount of 7.625% Senior Notes due 2012. The 7.625% Senior Notes were issued at a discount of $2.2 million and are being accreted to their face value over the term of the notes. The 7.625% Senior Notes may be redeemed at any time at our Parent Partnership’s option with the payment of accrued interest and a make-whole premium determined by discounting remaining interest and principal payments using a discount rate equal to the rate of the United States Treasury securities of comparable remaining maturity plus 35 basis points. The indenture governing the 7.625% Senior Notes contains covenants, including, but not limited to, covenants limiting the creation of liens securing indebtedness and sale and leaseback transactions. However, the indenture does not limit our Parent Partnership’s ability to incur additional indebtedness.

On January 30, 2003, our Parent Partnership issued $200.0 million principal amount of 6.125% Senior Notes due 2013. The 6.125% Senior Notes were issued at a discount of $1.4 million and are being accreted to their face value over the term of the notes. The 6.125% Senior Notes may be redeemed at any time at our Parent Partnership’s option with the payment of accrued interest and a make-whole premium determined by discounting remaining interest and principal payments using a discount rate equal to the rate of the United States Treasury securities of comparable remaining maturity plus 35 basis points. The indenture governing the 6.125% Senior Notes contains covenants including, but not limited to, covenants limiting the creation of liens securing indebtedness and sale and leaseback transactions. However, the indenture does not limit the Parent Partnership’s ability to incur additional indebtedness.

On June 27, 2003, our Parent Partnership entered into a $550.0 million unsecured revolving credit facility with a three-year term, including the issuance of letters of credit of up to $20.0 million (“Revolving Credit Facility”). The interest rate is based, at our Parent Partnership’ option, on either the lender’s base rate plus a spread, or LIBOR plus a spread in effect at the time of the borrowings. The credit agreement for the Revolving Credit Facility contains certain restrictive financial covenant ratios. Restrictive covenants in the Revolving Credit Facility limit the Parent Partnership’s and its subsidiaries’ ability to, among other things, incur additional indebtedness, make distributions in excess of Available Cash (see Note 9. Quarterly Distributions of Available Cash) complete mergers, acquisitions and sales of assets. On October 21, 2004, our Parent Partnership amended the Revolving Credit Facility to (i) increase the facility size to $600.0 million, (ii) extend the term to October 21, 2009, (iii) remove certain restrictive covenants, (iv) increase the available amount for the issuance of letters of credit up to $100.0 million and (v) decrease the LIBOR rate spread charged at the time of each borrowing. On February 23, 2005, our

Parent Partnership again amended its Revolving Credit Facility to remove the requirement that DEFS must at all times own, directly or indirectly, 100% of the Company, to allow for its acquisition by DFI (see Note 1. Organization and Basis of Presentation). During the second quarter of 2005, the Parent Partnership used a portion of the proceeds from an equity offering in May 2005 to repay a portion of the Revolving Credit Facility. At September 30, 2005, $460.5 million was outstanding under the Revolving Credit Facility at a weighted average interest rate of 4.6%. At September 30, 2005, our Parent Partnership was in compliance with the covenants of this credit agreement.

At September 30, 2005, and December 31, 2004, we had intercompany notes payable to our Parent Partnership of $188.9 million and $301.7 million, respectively, which represented borrowings under the Parent Partnership’s Revolving Credit Facility, 7.625% Senior Notes and 6.125% Senior Notes. The weighted average interest rate on the note payable to the Parent Partnership at September 30, 2005, was 5.7%. At September 30, 2005, accrued interest includes $1.2 million due to our Parent Partnership. For the nine months ended September 30, 2005 and 2004, interest costs incurred on the note payable to our Parent Partnership totaled $7.6 million and $9.2 million, respectively.

NOTE 9. QUARTERLY DISTRIBUTONS OF AVAILABLE CASH

We make quarterly cash distributions of all of our Available Cash, generally defined as consolidated cash receipts less consolidated cash disbursements and cash reserves established by the General Partner in its sole discretion. We pay distributions of 99.999% to the Parent Partnership and 0.001% to the General Partner.

During the nine months ended September 30, 2005 and 2004, we paid cash distributions to our Parent Partnership totaling $91.9 million and $88.3 million, respectively. On November 7, 2005, we will pay a cash distribution to our Parent Partnership of $20.1 million for the quarter ended September 30, 2005.

NOTE 10. EMPLOYEE BENEFIT PLANS

Retirement Plans

The Parent Partnership has adopted the TEPPCO Retirement Cash Balance Plan (“TEPPCO RCBP”), which is a non-contributory, trustee-administered pension plan. In addition, the TEPPCO Supplemental Benefit Plan (“TEPPCO SBP”) is a non-contributory, nonqualified, defined benefit retirement plan, in which certain executive officers participate. The TEPPCO SBP was established to restore benefit reductions caused by the maximum benefit limitations that apply to qualified plans. The benefit formula for all eligible employees is a cash balance formula. Under a cash balance formula, a plan participant accumulates a retirement benefit based upon pay credits and current interest credits. The pay credits are based on a participant’s salary, age and service. The Parent Partnership uses a December 31 measurement date for these plans.

On May 27, 2005, the TEPPCO RCBP and the TEPPCO SBP were amended. Effective May 31, 2005, participation in the TEPPCO RCBP was frozen, and no new participants were eligible to be covered by the plan after that date. Effective December 31, 2005, all plan benefits accrued will be frozen, participants will not receive additional pay credits after that date, and all plan participants will be 100% vested regardless of their years of service. The TEPPCO RCBP plan will be terminated effective December 31, 2005, and plan participants will have the option to receive their benefits either through a lump sum payment in 2006 or through an annuity. For those plan participants who elect to receive an annuity, our Parent Partnership will purchase an annuity contract from an insurance company in which the plan participant will own the annuity, absolving our Parent Partnership of any

future obligation to the participant. Participants in the TEPPCO SBP will receive pay credits through November 30, 2005, and will receive lump sum benefit payments in December 2005. Both the RCBP and SBP benefit payments are discussed below.

In June 2005, the Parent Partnership recorded a curtailment charge of $0.1 million in accordance with SFAS No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits, as a result of the TEPPCO RCBP and TEPPCO SBP amendments. A portion of the charge was allocated to us. As of May 31, 2005, the following assumptions were changed for purposes of determining the net periodic benefit costs for the remainder of 2005: the discount rate, the long-term rate of return on plan assets, and the assumed mortality table. The discount rate was decreased from 5.75% to 5.00% to reflect rates of returns on bonds currently available to settle the liability. The expected long-term rate of return on plan assets was changed from 8% to 2% due to the movement of plan funds from equity investments into short-term money market funds. The mortality table was changed to reflect overall improvements in mortality experienced by the general population. The curtailment charge arose due to the accelerated recognition of the unrecognized prior service costs. The Parent Partnership expects to record additional settlement charges of approximately $0.2 million in the fourth quarter of 2005 relating to the TEPPCO SBP and approximately $3.2 million in 2006 relating to the TEPPCO RCBP for any existing unrecognized losses upon the plan termination and final distribution of the assets to the plan participants. We expect to be allocated a share of these charges.

The components of net pension benefits costs allocated to us for the TEPPCO RCBP and the TEPPCO SBP for the three and nine months ended September 30, 2005 and 2004, were as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Service cost benefit earned during the period	$	735		$	635		$	2,082		$	1,905
Interest cost on projected benefit obligation	157			120			472			360
Expected return on plan assets	(53		)	(157		)	(414		)	(471		)
Amortization of prior service cost	1			2			4			6
Recognized net actuarial loss	24			3			61			9
SFAS 88 curtailment chargee	—			—			39			—
Net pension benefits costs	$	864		$	603		$	2,244		$	1,809

Other Postretirement Benefits

The Parent Partnership provides certain health care and life insurance benefits for retired employees on a contributory and non-contributory basis (“TEPPCO OPB”). Employees become eligible for these benefits if they meet certain age and service requirements at retirement, as defined in the plans. The Parent Partnership provides a fixed dollar contribution, which does not increase from year to year, towards retired employee medical costs. The retiree pays all health care cost increases due to medical inflation. The Parent Partnership uses a December 31 measurement date for this plan.

In May 2005, benefits provided to employees under the TEPPCO OPB were changed. Employees eligible for these benefits will receive them through December 31, 2005, however, effective December 31, 2005, these benefits will be terminated. In June 2005, as a result of this change in benefits and in accordance with SFAS 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, the Parent Partnership recorded a curtailment credit of approximately $2.6 million in its accumulated postretirement obligation, partially offset by a curtailment charge of approximately $1.0 million related to the accelerated recognition of the unrecognized prior service costs. The net effect of these curtailment adjustments was to reduce the Parent Partnership’s accumulated

postretirement obligation to the total of the expected remaining 2005 payments under the TEPPCO OPB. The current employees participating in this plan were transferred to DEFS, who will continue to provide postretirement benefits to these retirees. Our Parent Partnership recorded a one-time settlement to DEFS in the third quarter of 2005 of $0.4 million for the remaining postretirement benefits. A portion of these charges was allocated to us.

The components of net postretirement benefits cost allocated to us for the TEPPCO OPB for the three months and nine months ended September 30, 2005 and 2004, were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005			2004
Service cost benefit earned during the period	$	—	$	29	$	49		$	87
Interest cost on accumulated postretirement benefit obligation	—		33		57			99
Amortization of prior service cost	—		28		47			84
Recognized net actuarial loss	—		—		3			—
SFAS 106 curtailment credit	—		—		(1,318		)	—
Net postretirement benefits costs	$	—	$	90	$	(1,162	)	$	270

Effective June 1, 2005, the payroll functions performed by DEFS for the Company were transferred from DEFS to EPCO. For those employees who were receiving certain other postretirement benefits at the time of the acquisition of the Company by DFI, DEFS will continue to provide these benefits to those employees. Effective June 1, 2005, EPCO began providing certain other postretirement benefits to those employees who became eligible for the benefits after June 1, 2005, and will charge those benefit related costs to our Parent Partnership. As a result of these changes, the Parent Partnership recorded a $1.2 million reduction in its other postretirement obligation in June 2005. A portion of the reduction was allocated to us.

Estimated Future Benefit Contributions

The Parent Partnership expects to contribute approximately $1.1 million to its retirement plans and other postretirement benefit plans in 2005. We expect to be allocated a share of these contributions.

NOTE 11. COMMITMENTS AND CONTINGENCIES

Litigation

In the fall of 1999 and on December 1, 2000, the Company and the Partnership were named as defendants in two separate lawsuits in Jackson County Circuit Court, Jackson County, Indiana, styled Ryan E. McCleery and Marcia S. McCleery, et al. v. Texas Eastern Corporation, et al. (including the Company and Partnership) and Gilbert Richards and Jean Richards v. Texas Eastern Corporation, et al. (including the Company and Partnership). In both cases, the plaintiffs contend, among other things, that we and other defendants stored and disposed of toxic and hazardous substances and hazardous wastes in a manner that caused the materials to be released into the air, soil and water. They further contend that the release caused damages to the plaintiffs. In their complaints, the plaintiffs allege strict liability for both personal injury and property damage together with gross negligence, continuing nuisance, trespass, criminal mischief and loss of consortium. The plaintiffs are seeking compensatory, punitive and treble damages. On January 27, 2005, we entered into Release and Settlement Agreements with the McCleery plaintiffs and the Richards plaintiffs dismissing all of these plaintiffs’ claims. The settlement terms included a $2.0 million payment to the plaintiffs, which was accrued at December 31, 2004.

Although we did not settle with all plaintiffs and we therefore remain named parties in the Ryan E. McCleery and Marcia S. McCleery, et al. v. Texas Eastern Corporation, et al. action, a co-defendant has agreed to indemnify us for all remaining claims asserted against us. Consequently, we do not believe that the outcome of these remaining claims will have a material adverse effect on our financial position, results of operations or cash flows.

On December 21, 2001, we were named as a defendant in a lawsuit in the 10th Judicial District, Natchitoches Parish, Louisiana, styled Rebecca L. Grisham et al. v. TE Products Pipeline Company, Limited Partnership. In this case, the plaintiffs contend that our pipeline, which crosses the plaintiffs’ property, leaked toxic products onto their property and, consequently caused damages to them. We have filed an answer to the plaintiffs’ petition denying the allegations, and we are defending ourselves vigorously against the lawsuit. The plaintiffs have not stipulated the amount of damages they are seeking in the suit; however, this case is covered by insurance. We do not believe that the outcome of this lawsuit will have a material adverse effect on our financial position, results of operations or cash flows.

In May 2003, the Company was named as a defendant in a lawsuit styled John R. James, et al. v. J Graves Insulation Company, et al. as filed in the first Judicial District Court, Caddo Parish, Louisiana. There are numerous plaintiffs identified in the action that are alleged to have suffered damages as a result of alleged exposure to asbestos-containing products and materials. According to the petition and as a result of a preliminary investigation, the Company believes that the only claim asserted against it results from one individual for the period from July 1971 through June 1972, who is alleged to have worked on a facility owned by the Company’s predecessor. This period represents a small portion of the total alleged exposure period from January 1964 through December 2001 for this individual. The individual’s claims involve numerous employers and alleged job sites. The Company has been unable to confirm involvement by the Company or its predecessors with the alleged location, and it is uncertain at this time whether this case is covered by insurance. Discovery is planned, and the Company intends to defend itself vigorously against this lawsuit. The plaintiffs have not stipulated the amount of damages that they are seeking in this suit. We are obligated to reimburse the Company for any costs it incurs related to this lawsuit. We cannot estimate the loss, if any, associated with this pending lawsuit. We do not believe that the outcome of this lawsuit will have a material adverse effect on our financial position, results of operations or cash flows.

In addition to the litigation discussed above, we have been, in the ordinary course of business, a defendant in various lawsuits and a party to various other legal proceedings, some of which are covered in whole or in part by insurance. We believe that the outcome of these lawsuits and other proceedings will not individually or in the aggregate have a future material adverse effect on our consolidated financial position, results of operations or cash flows.

Regulatory Matters

Our operations are subject to federal, state and local laws and regulations governing the discharge of materials into the environment. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, imposition of injunctions delaying or prohibiting certain activities and the need to perform investigatory and remedial activities. Although we believe our operations are in material compliance with applicable environmental laws and regulations, risks of significant costs and liabilities are inherent in pipeline operations, and we cannot assure you that significant costs and liabilities will not be incurred. Moreover, it is possible that other developments, such as increasingly strict environmental laws and regulations and enforcement policies thereunder, and claims for damages to property or persons resulting from our operations, could result in substantial costs and liabilities to us. We believe that changes in environmental laws and regulations will not have a material adverse effect on our financial position, results of operations or cash flows in the near term.

On March 26, 2004, an initial decision in ARCO Products Co., et al. v. SFPP, Docket OR96-2-000, was issued by the FERC, which made several significant determinations with respect to finding “changed circumstances” under the Energy Policy Act of 1992 (“EP Act”). The decision largely clarifies, but does not fully quantify, the standard required for a complainant to demonstrate that an oil pipeline’s rates are no longer subject to the rate protection of the EP Act by demonstrating that a substantial change in circumstances has occurred since 1992 with respect to the basis of the rates being challenged. In the decision, the FERC found that a limited number of rate elements will significantly affect the economic basis for a pipeline company’s rates. The elements identified in the decision are volume changes, allowed total return and total cost-of-service (including major cost elements such as rate base, tax rates and tax allowances, among others). The FERC did reject, however, the use of changes in tax rates and income tax allowances as standalone factors. Judicial review of that decision, which has been sought by a number of parties to the case, is currently pending before the U.S. Court of Appeals for the District of Columbia Circuit. We have not yet determined the impact, if any, that the decision, if it is ultimately upheld, would have on our rates if they were reviewed under the criteria of this decision.

On July 20, 2004, the District of Columbia Circuit issued an opinion in BP West Coast Products LLC v. FERC. In reviewing a series of orders involving SFPP, L.P., the court held among other things that the FERC had not adequately justified its policy of providing an oil pipeline limited partnership with an income tax allowance equal to the proportion of its income attributable to partnership interests owned by corporate partners. Under the FERC’s initial ruling, SFPP, L.P. was permitted an income tax allowance on its cost-of-service filing for the percentage of its net operating (pre-tax) income attributable to partnership units held by corporations, and was denied an income tax allowance equal to the percentage attributable to partnership units held by non-corporate partners. The court remanded the case back to the FERC for further review. As a result of the court’s remand, on December 2, 2004, the FERC issued a Request for Comments seeking comments on whether the court’s ruling applies only to the specific facts of the SFPP, L.P. proceeding or also extends to other capital structures involving partnerships and other forms of ownership. On May 4, 2005, the FERC issued its Policy Statement on Income Tax Allowances, which permits regulated partnerships, limited liability companies and other pass-through entities an income tax allowance on their income attributable to any owner that has an actual or potential income tax liability on that income, regardless whether the owner is an individual or corporation. If there is more than one level of pass-through entities, the regulated company income must be traced to where the ultimate tax liability lies. The Policy Statement is to be applied in individual cases, and the regulated entity bears the burden of proof to establish the tax status of its owners. On June 1, 2005, the FERC issued an Order on Remand in the SFPP, L.P. proceedings holding the Policy Statement would apply in that case and requesting briefs on whether additional evidence was necessary to apply it. Briefs have been filed but the FERC has not yet acted on them. The ultimate outcome of the FERC’s inquiry on income tax allowance should not affect our current rates and rate structure because our rates are not based on cost-of-service methodology. However, the outcome of the income tax allowance would become relevant to us should we (i) elect in the future to use cost-of-service to support our rates, or (ii) be required to use such methodology to defend our indexed rates.

In 1994, the Louisiana Department of Environmental Quality (“LDEQ”) issued a compliance order for environmental contamination at our Arcadia, Louisiana facility. In 1999, our Arcadia facility and adjacent terminals were directed by the Remediation Services Division of the LDEQ to pursue remediation of this contamination. Effective March 2004, we executed an access agreement with an adjacent industrial landowner who is located upgradient of the Arcadia facility. This agreement enables the landowner to proceed with remediation activities at our Arcadia facility for which it has accepted shared responsibility. At September 30, 2005, we have an accrued liability of $0.2 million for remediation costs at our Arcadia facility. We do not expect that the completion of the remediation program proposed to the LDEQ will have a future material adverse effect on our financial position, results of operations or cash flows.

On March 17, 2003, we experienced a release of 511 barrels of jet fuel from a storage tank at our Blue Island terminal located in Cook County, Illinois. As a result of the release, we have entered into an Agreed Order

with the State of Illinois, which required us to conduct an environmental investigation. At this time, we have complied with the terms of the Agreed Order, and the results of the environmental investigation indicated there were no soil or groundwater impacts from the release. On August 30, 2005, a final settlement was reached with the State of Illinois. The settlement included the payment of a civil penalty of $0.1 million and the requirement that we make certain modifications to the equipment of the facility, none of which are expected to have a material adverse effect on our financial position, results of operations or cash flows.

On July 27, 2004, we received notice from the United States Department of Justice (“DOJ”) of its intent to seek a civil penalty against us related to our November 21, 2001, release of approximately 2,575 barrels of jet fuel from our 14-inch diameter pipeline located in Orange County, Texas. The DOJ, at the request of the Environmental Protection Agency, is seeking a civil penalty against us for alleged violations of the Clean Water Act (“CWA”) arising out of this release. We are in discussions with the DOJ regarding this matter and have responded to its request for additional information. The maximum statutory penalty proposed by the DOJ for this alleged violation of the CWA is $2.1 million. We do not expect any civil penalty to have a material adverse effect on our financial position, results of operations or cash flows.

At September 30, 2005, we have an accrued liability of $1.5 million related to various sites requiring environmental remediation activities. We do not expect that the completion of remediation programs associated with our activities will have a future material adverse effect on our financial position, results of operations or cash flows.

Other

Centennial entered into credit facilities totaling $150.0 million, and as of September 30, 2005, $150.0 million was outstanding under those credit facilities. We and Marathon have each guaranteed one-half of the repayment of Centennial’s outstanding debt balance under a long-term credit agreement, which expires in 2024, and a short-term credit agreement, which expires in 2007. The guarantees arose in order for Centennial to obtain adequate financing, and the proceeds of the credit agreements were used to fund construction and conversion costs of its pipeline system. Prior to the expiration of the long-term credit agreement, we could be relinquished from responsibility under the guarantee should Centennial meet certain financial tests. If Centennial defaults on its outstanding balance, the estimated maximum potential amount of future payments for us and Marathon is $75.0 million each at September 30, 2005.

We have entered into a limited cash call agreement with Marathon and Centennial, which allows each member to contribute cash in lieu of Centennial procuring separate insurance in the event of a third-party liability arising from a catastrophic event. There is an indefinite term for the agreement and each member is to contribute cash in proportion to its ownership interest, up to a maximum of $50.0 million each. As a result of the catastrophic event guarantee, we have recorded a $4.7 million obligation, which represents the present value of the estimated amount that we would have to pay under the guarantee. In the event that a catastrophic event occurred and we were required to contribute cash to Centennial, contributions exceeding our deductible may be covered by our insurance.

On February 24, 2005, the Company was acquired from DEFS by DFI. The Company owns a 2% general partner interest in us and is the general partner of the Partnership. On March 11, 2005, the Bureau of Competition of the Federal Trade Commission (“FTC”) delivered written notice to DFI’s legal advisor that it was conducting a non-public investigation to determine whether DFI’s acquisition of the Company may substantially lessen competition. The FTC has contacted the Company requesting data. The Company intends to cooperate fully with any such investigations and inquiries requested by the FTC or any other regulatory authorities.

NOTE 12. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

We are restating our previously reported consolidated financial statements for the quarterly periods ended September 30, 2004 and 2005. In the fourth quarter of 2005, we determined that our method of accounting for the $33.4 million excess investment in Centennial, previously described as an intangible asset with an indefinite life, was incorrect. Through our accounting for this excess investment in Centennial as an intangible asset with an indefinite life, we have been testing the amount for impairment on an annual basis as opposed to amortizing it over a determinable life. We determined that it would be more appropriate to account for this excess investment as an intangible asset with a determinable life. As a result, we made a non-cash adjustment that reduced the net value of the excess investment in Centennial and increased amortization expense allocated to our equity earnings. The restatement caused a $1.2 million and $0.9 million reduction to net income as previously reported for the three months ended September 30, 2005 and 2004, respectively, and a $3.3 million and $2.4 million reduction to net income as previously reported for the nine months ended September 30, 2005 and 2004, respectively. We restated previously reported consolidated financial statements for the fiscal years ended December 31, 2003 and 2004 in our Annual Report on Form 10-K for the year ended December 31, 2005.

While we believe the impact of this non-cash adjustment is not material to any previously issued financial statements, we determined that the cumulative adjustment for this non-cash item was too material to record in the fourth quarter of 2005, and therefore it was most appropriate to restate prior periods’ results. This non-cash adjustment had no effect on our operating income, compensation expense, debt balances or ability to meet all requirements related to our debt facilities. The restatement had no impact on total cash flows from operating activities, investing activities or financing activities. All amounts in the accompanying consolidated financial statements have been adjusted for this restatement.

We will continue to amortize the $30.0 million excess investment in Centennial related to a contract using units-of-production methodology over a 10-year life. The remaining $3.4 million related to a pipeline will continue to be amortized on a straight-line basis over 35 years.

The following tables summarize the impact of the restatement adjustment on previously reported balance sheet amounts for September 30, 2005, and income statement amounts and cash flow amounts for the periods ended September 30, 2005 and 2004 (in thousands):

Balance Sheet Amounts:

	September 30, 2005
	As Previously Reported		Adjustment			As Restated

Equity investments	$	168,016	$	(12,167	)	$	155,849
Total assets	$	1,039,500	$	(12,167	)	$	1,027,333

Partners’ capital:
General partner’s interest	$	4	$	—-		$	4
Limited partners’ interest	381,823		(12,167		)	369,656
Total partners’ capital	381,827		(12,167		)	369,660
Total liabilities and partners’ capital	$	1,039,500	$	(12,167	)	$	1,027,333

Income Statement Amounts:

	Three Months Ended September 30, 2005
	As Previously Reported		Adjustment			As Restated
Equity earnings (losses)	$	524	$	(1,175	)	$	(651	)
Net income	7,359		(1,175		)	6,184

	Three Months Ended September 30, 2004
	As Previously Reported			Adjustment			As Restated
Equity losses	$	(322	)	$	(912	)	$	(1,234	)
Net income	4,698			(912		)	3,786

	Nine Months Ended September 30, 2005
	As Previously Reported		Adjustment			As Restated
Equity earnings (losses)	$	574	$	(3,292	)	$	(2,718	)
Net income	37,377		(3,292		)	34,085

	Nine Months Ended September 30, 2004
	As Previously Reported			Adjustment			As Restated
Equity losses	$	(2,069	)	$	(2,408	)	$	(4,477	)
Net income	28,811			(2,408		)	26,403

Cash Flow Amounts:

	Nine Months Ended September 30, 2005
	As Previously Reported		Adjustment			As Restated
Cash flows from operating activities:
Net income	$	37,377	$	(3,292	)	$	34,085
(Earnings) losses from equity investments, net of distributions	10,114		3,292			13,406

	Nine Months Ended September 30, 2004
	As Previously Reported		Adjustment			As Restated
Cash flows from operating activities:
Net income	$	28,811	$	(2,408	)	$	26,403
Losses in equity investments, net of distributions	10,594		2,408			13,002

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

You should read the following review of our financial position and results of operations in conjunction with our Consolidated Financial Statements and the notes thereto. Material period-to-period variances in the consolidated statements of income are discussed under “Results of Operations.” The adjustments resulting from the restatement of our financial statements are discussed under “Restatement of Consolidated Financial Statements.” The “Financial Condition and Liquidity” section analyzes our cash flows and financial position. “Other Considerations” addresses trends, future plans and contingencies that are reasonably likely to materially affect future liquidity or earnings. The Consolidated Financial Statements should be read in conjunction with the financial statements and related notes, together with our discussion and analysis of financial position and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2004.

Forward-Looking Statements

The matters discussed in this Report include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements that express belief, expectation, estimates or intentions, as well as those that are not statements of historical facts are forward-looking statements. The words “proposed”, “anticipates”, “potential”, “may”, “will”, “could”, “should”, “expect”, “estimate”, “believe”, “intend” and similar expressions are intended to identify forward-looking statements. Without limiting the broader description of forward-looking statements above, we specifically note that statements included in this document that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as estimated future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success, references to intentions as to future matters and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. While we believe our expectations reflected in these forward-looking statements are reasonable, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including general economic, market or business conditions, the opportunities (or lack thereof) that may be presented to and pursued by us, competitive actions by other pipeline companies, changes in laws or regulations and other factors, many of which are beyond our control. For example, the demand for refined products is dependent upon the price, prevailing economic conditions and demographic changes in the markets served, trucking and railroad freight, agricultural usage and military usage; the demand for propane is sensitive to the weather and prevailing economic conditions; and the demand for petrochemicals is dependent upon prices for products produced from petrochemicals. We are also subject to regulatory factors such as the amounts we are allowed to charge our customers for the services we provide on our regulated pipeline systems. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and we cannot assure you that actual results or developments that we anticipate will be realized or, even if substantially realized, will have the expected consequences to or effect on us or our business or operations. For additional discussion of such risks and uncertainties, see our Annual Report on Form 10-K for the year ended December 31, 2004, and other filings we have made with the Securities and Exchange Commission (“SEC”).

Restatement of Consolidated Financial Statements

the excess investment in Centennial and increased amortization expense allocated to our equity earnings. The restatement caused a $1.2 million and $0.9 million reduction to net income as previously reported for the three months ended September 30, 2005 and 2004, respectively, and a $3.3 million and $2.4 million reduction to net income as previously reported for the nine months ended September 30, 2005 and 2004, respectively. We restated previously reported consolidated financial statements for the fiscal years ended December 31, 2003 and 2004 in our Annual Report on Form 10-K for the year ended December 31, 2005.

Critical Accounting Policies and Estimates

A summary of the significant accounting policies we have adopted and followed in the preparation of our consolidated financial statements is detailed in our consolidated financial statements for the year ended December 31, 2004, included in our Annual Report on Form 10-K. Certain of these accounting policies require the use of estimates. The following estimates, in our opinion, are subjective in nature, require the exercise of judgment and involve complex analysis: revenue and expense accruals, including power costs, property taxes, environmental costs and property, plant and equipment. These estimates are based on our knowledge and understanding of current conditions and actions we may take in the future. Changes in these estimates will occur as a result of the passage of time and the occurrence of future events. Subsequent changes in these estimates may have a significant impact on our financial condition and results of operations.

Management Overview of the Three Months and Nine Months Ended September 30, 2005

We reported net income of $6.2 million for the three months ended September 30, 2005, compared with net income of $3.8 million for the three months ended September 30, 2004, and net income of $34.1 million for the nine months ended September 30, 2005, compared with net income of $26.4 million for the nine months ended September 30, 2004.

Our operating income for the three months ended September 30, 2005, increased compared with the prior year period primarily due to lower depreciation expense attributable to a $4.4 million asset impairment charge in the 2004 period (see Note 3. Property, Plant and Equipment), a $4.0 million decrease in pipeline integrity costs, increased margins on product inventory sales and decreased product measurement losses. These increases to operating income were partially offset by the recognition in the 2004 period of $4.1 million of deferred revenue related to the expiration of two customer transportation agreements, $1.3 million of regulatory penalties for past incidents, the impacts of Hurricanes Katrina and Rita in the third quarter of 2005 which reduced revenues by an estimated $1.5 million, the impact of a propane release and fire at an LPG storage facility in Ohio, which reduced revenues by an estimated $0.3 million, increased pipeline operating expense, higher property taxes, higher depreciation expense primarily due to asset acquisitions and the retirement of assets in the current period, increased environmental remediation and assessment costs and transition expenses related to the change in control of the Company.

For the nine months ended September 30, 2005, operating income increased compared with the prior year period primarily due to a $9.7 million decrease in pipeline integrity costs, lower depreciation expense attributable to an asset impairment charge in the 2004 period, increased refined products and LPG transportation revenues and volumes and decreased product measurement losses. We anticipate that our pipeline integrity expenses for 2005 will be approximately $15.1 million lower than our 2004 expenses primarily due to the completion of pipeline inspections and repairs under our integrity management program. These increases to operating income were partially offset by the recognition of $4.1 million of deferred revenue in the 2004 period, $1.8 million of regulatory penalties for past incidents, the impact of the hurricanes in the third quarter of 2005 and the propane release and fire at a storage facility in Ohio, increased pipeline operating expenses, higher property taxes, higher depreciation expense primarily due to asset acquisitions and the retirement of assets in the current period, transition expenses related to the change in control of the Company and increased environmental remediation and assessment costs.

We focus on the safe, reliable and efficient operation of the pipelines and facilities that we own or operate while meeting increased regulations that govern the operation of our assets and the costs associated with such regulations. We are also focused on our continued growth through expansion of the assets that we own and through acquisition of assets that complement our current operations. We believe that our current strategy and focus will provide continued growth in earnings and cash distributions. These opportunities include continued growth, resulting from our recent capacity expansion and grass roots facility investments and growing demand for Gulf Coast sourced products.

On July 15, 2005, TEPPCO Interests acquired from Texas Genco LLC (“Genco”) all of its interests in certain companies that own a 90-mile pipeline system and 5.5 million barrels of storage capacity for $62.1 million. This acquisition was made as part of an expansion of our refined products origin capabilities in the Houston, Texas, and Texas City, Texas areas. The assets of the purchased companies will be integrated into our origin infrastructure in Texas City and Baytown, Texas. The integration and other system enhancements should be in service by the fourth quarter of 2006, at an estimated cost of $45.0 million. The strategic location of these assets, with refined products interconnections to major exchange terminals in the Houston area, will provide significant long-term value to our customers and the Texas Gulf Coast refining and logistics system.

Consistent with our business strategy, we continuously evaluate possible acquisitions of assets that would complement our current operations, including assets which, if acquired, would have a material effect on our financial position, results of operations or cash flows.

Our Business

On May 18, 2005, we formed TEPPCO Terminals, L.P. (“TEPPCO Terminals”), a Delaware limited partnership, and we own a 99.999% interest in TEPPCO Terminals as the sole limited partner. TEPPCO GP serves as the general partner and holds a 0.001% general partner interest in TEPPCO Terminals. On July 12, 2005, TEPPCO Terminals purchased a refined products terminal two-bay and truck loading rack in North Little Rock, Arkansas, for $6.8 million from Exxon Mobil Corporation (see Note 5. Acquisitions).

On May 9, 2005, we formed TEPPCO Interests, LLC (“TEPPCO Interests”), a Delaware limited liability company, of which we own 100% of the member interests. On July 15, 2005, TEPPCO Interests acquired from Texas Genco LLC 100% of its member interests in TG Pipeline GP, LLC, a Delaware limited liability company, which is the owner of 100% of the general partner interests in TG Pipeline, L.P. (“Pipeline LP”), a Texas limited partnership, and 100% of the membership interests in TG Pipeline LP, LLC, a Delaware limited liability company, which is the owner of 100% of the limited partner interests in Pipeline LP (see Note 5. Acquisitions).

We operate and report in one business segment: transportation and storage of refined products, liquefied petroleum gases (“LPGs”) and petrochemicals. Revenues are earned from transportation and storage of refined products and LPGs, intrastate transportation of petrochemicals, sales of product inventory and other ancillary services. Our two largest operating expense items are labor and electric power. We generally realize higher revenues during the first and fourth quarters of each year since our operations are somewhat seasonal. Refined products volumes are generally higher during the second and third quarters because of greater demand for gasolines during the spring and summer driving seasons. LPGs volumes are generally higher from November through March due to higher demand in the Northeast for propane, a major fuel for residential heating. Our results also include our equity investments in Centennial Pipeline Company, LLC (“Centennial”) and Mont Belvieu Storage Partners, L.P. (“MB Storage”) (see Note 7. Equity Investments).

We are one of three operating subsidiaries of our Parent Partnership. Our Parent Partnership is managed by its general partner, the Company. Approximately 1,200 employees of EPCO are dedicated to the operations and management of our Parent Partnership’s operating subsidiaries. Our Parent Partnership allocates operating, general and administrative expenses to us for legal, insurance, financial, communication and other administrative services based upon the estimated level of effort devoted to our various operations. We believe that the methods for allocating corporate operating, general and administrative expenses to us are reasonable.

Results of Operations

The following table presents volumes delivered in barrels and average tariff per barrel for the three months and nine months ended September 30, 2005 and 2004 (in thousands, except tariff information):

	Three Months Ended September 30,				Percentage Increase		Nine Months Ended September 30,				Percentage Increase
	2005		2004		(Decrease)		2005		2004		(Decrease)
Volumes Delivered:
Refined products	43,067		41,726		3	%	123,759		116,184		7	%
LPGs	8,646		9,107		(5	)%	31,303		31,109		1	%
Total	51,713		50,833		2	%	155,062		147,293		5	%

Average Tariff per Barrel:
Refined products (1)	$	0.89	$	1.04	(14	)%	$	0.90	$	0.98	(8	)%
LPGs	1.91		1.76		9	%	2.02		1.88		7	%
Average system tariff per barrel	$	1.06	$	1.17	(9	)%	$	1.12	$	1.17	(4	)%

(1) The 2004 periods include $4.1 million of deferred revenue related to the expiration of two customer transportation agreements.

Three Months Ended September 30, 2005 Compared with Three Months Ended September 30, 2004

Revenues from refined products transportation decreased $5.1 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, primarily due to the recognition in the 2004 period of $4.1 million of deferred revenue related to the expiration of two customer transportation agreements. The $4.1 million of deferred revenue increased the refined products average tariff for the third quarter of 2004 by $0.10 per barrel, or 11%. Excluding the effect of the deferred revenue recognized in the 2004 period, the refined products average tariff per barrel decreased 5% from the prior year period primarily due to the impact of greater growth in the volume of products delivered under a Centennial tariff compared with the growth in deliveries under a our tariff, which resulted in an increased proportion of lower tariff barrels transported on our system. Prior to the construction of Centennial, deliveries on our pipeline system were limited by our pipeline capacity, and transportation services for our customers were allocated in accordance with a proration policy. With this incremental pipeline capacity, our previously constrained system has expanded deliveries in markets both south and north of Creal Springs, Illinois. In February 2003, we entered into a lease agreement with Centennial that increased our flexibility to deliver refined products to our market areas. Centennial has provided our system with additional pipeline capacity for movement of products originating in the U.S. Gulf Coast area. The overall increase in refined products volumes was primarily due to increased demand and market share for products supplied from the U.S. Gulf Coast into Midwest markets.

Revenues from LPGs transportation increased $0.4 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, due to higher deliveries of isobutane in the upper Midwest market areas, partially offset by lower deliveries of propane. The LPGs average rate per barrel increased from the prior period primarily as a result of decreased short-haul deliveries during the three months ended September 30, 2005, and an increase in tariff rates which went into effect in July 2005. Our propane revenues also decreased due to a propane release and fire at a dehydration unit in September 2005 at our Todhunter storage facility, near Middletown, Ohio. As a result of the propane release and fire, our LPG storage facilities at Todhunter were shut down for approximately three weeks. We estimate that the reduction to propane revenues for this occurrence was approximately $0.3 million for the third quarter of 2005. The propane release and fire will also reduce fourth quarter 2005 propane revenues, by an estimated which we estimate to be approximately $0.3 million.

Revenues from refined products and LPGs for the current period were also impacted by Hurricane Katrina and Hurricane Rita, which affected the U.S. Gulf Coast in August and September 2005, respectively. Hurricane Katrina disrupted refineries and other pipeline systems in the central U.S. Gulf Coast, which provided us with additional deliveries at Shreveport and Arcadia, Louisiana, as shippers used alternative sources to supply product to areas where normal distribution patterns were disrupted. Hurricane Katrina also resulted in higher prices of refined products and LPGs, which had a negative impact on the current demand for the products.

Hurricane Rita disrupted production at western U.S. Gulf Coast refineries, many of which directly supply us with product. Hurricane Rita also disrupted power to our Beaumont terminal, which resulted in the mainline being shut down for four days and Centennial being shut down for ten days. Our mainline system was reopened, but has been operating at reduced rates as a result of Hurricane Rita. At September 30, 2005, our 230,000 barrel per day capacity, 20-inch diameter mainline system, which primarily delivers LPGs and gasoline from the Texas Gulf Coast to the Midwest, was pumping from MB Storage’s facility at approximately 60% of normal operating capacity. Our 110,000 barrel per day capacity, 14-inch and 16-inch diameter pipelines, which primarily deliver distillates and gasoline from the Texas Gulf Coast to the Midwest, were pumping at approximately 75% of normal operating capacity from our Baytown, Texas, terminal. We installed generators at our Beaumont, Texas, facility, which enabled receipt and delivery of refined products out of tankage at the terminal. Commercial power was restored to the Beaumont terminal and the Newton, Texas, pump station in mid-October and full operations were resumed. Centennial resumed operating at its normal capacity on October 1, 2005. For the quarter ended September 30, 2005, we estimate that the hurricanes reduced refined products and propane revenues by approximately $1.2 million

and $0.3 million, respectively. The impact to operating expenses for the period was less than $0.1 million through September 30, 2005. We expect the impact of Hurricane Rita to reduce our fourth quarter 2005 revenues as well, resulting in estimated losses in that period of approximately $4.0 million of refined products revenues and $0.5 million of LPG revenues. The estimated impact to operating expenses for the fourth quarter of 2005 is an increase of approximately $1.2 million.

Other operating revenues increased $2.2 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, primarily due to increased margins on product inventory sales and higher refined products additive and tender deduction revenue.

Costs and expenses decreased $4.5 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, due to decreased operating, general and administrative expenses, decreased depreciation and amortization expense and decreased operating fuel and power, partially offset by increased taxes — other than income taxes and lower gains on the sales of assets in the 2005 period. Operating, general and administrative expenses decreased $2.7 million primarily due to a $4.0 million decrease in pipeline inspection and repair costs associated with our integrity management program, a $0.6 million decrease in product losses, a $0.6 million decrease in labor and benefits expenses related to the vesting of certain of our Parent Partnership’s compensation plans in the first quarter of 2005 as a result of changes in control of the Company, a $0.6 million decrease in rental expense from the Centennial pipeline capacity lease agreement and a $0.5 million decrease in rental expense on a lease agreement with a third-party pipeline.

These decreases to costs and expenses were partially offset by a $1.3 million increase attributable to regulatory penalties for past incidents, a $0.7 million increase in pipeline operating and maintenance expenses, a $0.4 million increase in labor and benefits expense related to retirement plan settlements with DEFS, a $0.4 million increase related to transition costs due to the changes in control of the Company, a $0.4 million increase in environmental assessment and remediation expenses and an increase in insurance expense. Depreciation expense increased $2.7 million primarily due to a $0.8 million write-off of assets related to a propane release and fire at a storage facility in Ohio and assets retired to depreciation expense during the quarter, partially offset by a $4.4 million non-cash impairment charge in the third quarter of 2004 (see Note 3. Property, Plant and Equipment). Operating fuel and power decreased $0.3 million primarily due to adjustments to power accruals, partially offset by increased mainline throughput. Taxes — other than income taxes increased $1.0 million primarily due to increases in property tax accruals and a higher asset base in the 2005 period. During the three months ended September 30, 2004, we recognized net gains of $0.5 million from the sales of various assets.

Interest expense increased $0.6 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, primarily due to higher short-term floating interest rates under the note payable with our Parent Partnership. Interest capitalized increased $0.3 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, as a result of increased balances of construction work-in-progress.

Net losses from equity investments decreased for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, as shown below (in thousands):

	Three Months Ended September 30,
	2005			2004			Increase
	(as restated)			(as restated)
Centennial	$	(2,391	)	$	(2,751	)	$	360
MB Storage	1,728			1,530			198
Other	12			(13		)	25
Total equity losses	$	(651	)	$	(1,234	)	$	583

Equity losses in Centennial decreased $0.4 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, primarily due to higher transportation revenues, decreased operating expenses and lower product measurement losses during the 2005 period. Equity earnings in

MB Storage increased $0.2 million for the three months ended September 30, 2005, compared with the three months ended September 30, 2004, primarily due to increased tender deduction and lease line revenues on the MB Storage system. As a result of Hurricane Rita, MB Storage’s revenues were reduced by approximately $0.2 million during the three months ended September 30, 2005. We expect the impact of Hurricane Rita to reduce MB Storage’s fourth quarter 2005 revenues by an estimated $0.1 million and increase operating expenses by approximately $0.4 million.

Nine Months Ended September 30, 2005 Compared with Nine Months Ended September 30, 2004

Revenues from refined products transportation decreased $2.3 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, primarily due to the recognition of $4.1 million of deferred revenue in the 2004 period related to the expiration of two customer transportation agreements, and the effects of Hurricanes Katrina and Rita in August and September 2005 as discussed above, partially offset by an overall increase in the refined products volumes delivered. This increase was primarily due to deliveries of products moved on Centennial. Volume increases were due to increased demand and market share for products supplied from the U.S. Gulf Coast into Midwest markets. The refined products average rate per barrel decreased from the prior year period primarily due to the impact of greater growth in the volume of products delivered under a Centennial tariff compared with the growth in deliveries under our tariff, which resulted in an increased proportion of lower tariff barrels transported on our system.

Revenues from LPGs transportation increased $4.7 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, due to higher deliveries of propane in the upper Midwest and Northeast market areas primarily resulting from cold weather in March 2005. Prior year LPG transportation revenues were negatively impacted by a price spike in the Mont Belvieu propane price in late February 2004, which resulted in our sourced propane being less competitive than propane from other source points. Our propane revenues were also affected by Hurricane Rita and a propane release and fire at a storage facility in September 2005 as discussed above.

Other operating revenues decreased $0.2 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, primarily due to lower propane inventory fees in the 2005 period, partially offset by higher refined products tender deduction and loading revenues and increased margins on product inventory sales.

Costs and expenses decreased $6.2 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, due to decreased operating, general and administrative expenses and decreased depreciation and amortization expense, partially offset by increased taxes — other than income taxes and lower gains on the sales of assets in the 2005 period. Operating, general and administrative expenses decreased $5.8 million primarily due to a $9.7 million decrease in pipeline inspection and repair costs associated with our integrity management program, a $2.0 million decrease in postretirement benefit accruals related to plan amendments (see Note 10. Employee Benefit Plans), a $1.1 million decrease in consulting services primarily related to acquisition related activities in the 2004 period and a $0.7 million decrease in product losses.

These decreases to costs and expenses were partially offset by a $1.8 million increase in labor and benefits expenses associated with vesting provisions in certain of our Parent Partnership’s compensation plans as a result of changes in control of the Company resulting in higher incentive compensation expenses compared to the prior year period, a $1.8 million increase attributable to regulatory penalties for past incidents, a $1.4 million increase in pipeline operating and maintenance expense, a $0.6 million increase related to transition costs due to the changes in control of the Company, a $0.4 million increase in environmental assessment and remediation expenses, a $0.4 million increase in labor and benefits expense related to retirement plan settlements with DEFS and an increase in insurance expense. Depreciation expense decreased $1.7 million primarily due to a $4.4 million non-cash impairment charge in the third quarter of 2004, partially offset by a $0.8 million write-off of assets related to a propane release and fire at a storage facility in Ohio (see Note 3. Property Plant, and Equipment), assets placed into service and assets retired to depreciation expense in the 2005 period. Taxes — other than income taxes increased $1.0 million primarily due to asset acquisitions and a higher tax base in the 2005 period. During the nine months ended September 30, 2004, we recognized net gains of $0.5 million from the sales of various assets.

Interest expense increased $2.5 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, primarily due to higher short-term floating interest rates under the note payable with our Parent Partnership. Interest capitalized increased $0.1 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, as a result of increased balances of construction work-in-progress.

Net losses from equity investments decreased for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, as shown below (in thousands):

	Nine Months Ended September 30,						Increase
	2005			2004			(Decrease)
	(as restated)			(as restated)
Centennial	$	(8,476	)	$	(10,390	)	$	1,914
MB Storage	5,727			5,944			(217		)
Other	31			(31		)	62
Total equity losses	$	(2,718	)	$	(4,477	)	$	1,759

Equity losses in Centennial decreased $1.9 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, primarily due to higher transportation revenues and volumes and lower transmix related product replacement costs and product measurement losses during the 2005 period. Equity earnings in MB Storage decreased $0.2 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, primarily due to increased depreciation and amortization expense and higher general and administrative expenses, partially offset by higher rental and storage revenues and volumes. MB Storage’s revenues were also impacted by Hurricane Rita as discussed above. In April 2004, MB Storage acquired storage and pipeline assets and contracts for approximately $35.0 million, of which we contributed $16.5 million. Increases in storage revenue, shuttle revenue, rental revenue and depreciation and amortization expense for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, are primarily related to the acquired storage assets and contracts.

Financial Condition and Liquidity

Cash generated from operations and from our Parent Partnership’s credit facilities and debt and equity offerings are our primary sources of liquidity. At September 30, 2005, and December 31, 2004, we had working capital deficits of $8.6 million and $61.9 million, respectively. Cash generated from operations and from our Parent Partnership’s credit facilities and debt and equity offerings are our primary sources of liquidity. Working capital deficits can occur primarily due to the timing of operating cash receipts from customers, payment of cash distributions and the payment of normal operating expenses and capital expenditures. We are a wholly owned subsidiary of the Parent Partnership. We expect that our Parent Partnership will make capital contributions, loans or otherwise provide liquidity to us as needed, but the Parent Partnership has no contractual obligation to do so. At September 30, 2005, our Parent Partnership had $139.5 million in available borrowing capacity under its revolving credit facility to cover any working capital needs, and expects that cash generated from operating activities, credit facilities and the sale of additional debt or equity offerings, if any, will provide necessary liquidity to us. Cash flows for the nine months ended September 30, 2005 and 2004 were as follows (in thousands):

	Nine Months Ended September 30,
	2005			2004
	(as restated)			(as restated)
Cash provided by (used in):
Operating activities	$	19,650		$	97,012
Investing activities	(109,870		)	(74,308		)
Financing activities	90,220			(22,892		)

Operating Activities

Net cash from operating activities for the nine months ended September 30, 2005 and 2004, were comprised of the following (in thousands):

	Nine Months Ended September 30,
	2005			2004
	(as restated)			(as restated)
Net income	$	34,085		$	26,403
Depreciation and amortization	28,653			30,392
Losses in equity investments	2,718			4,477
Distributions from equity investments	10,688			8,525
Non-cash portion of interest expense	199			22
Gains on sales of assets	(131		)	(587		)
Cash provided by (used in) working capital and other	(56,562		)	27,780
Net cash from operating activities	$	19,650		$	97,012

For a discussion of changes in net income, depreciation and amortization and equity earnings, see “—Results of Operations”. Cash provided by operating activities decreased $77.4 million for the nine months ended September 30, 2005, compared with the nine months ended September 30, 2004, primarily due to the timing of cash disbursements and cash receipts for working capital components partially offset by higher net income and distributions from MB Storage in the 2005 period.

Investing Activities

Cash flows used in investing activities totaled $109.9 million for the nine months ended September 30, 2005, and were comprised of $69.0 million for acquisitions, $38.4 million of capital expenditures and $2.5 million of cash contributions of our ownership interest in MB Storage for capital expenditures. Cash flows used in investing activities totaled $74.3 million for the nine months ended September 30, 2004, and were comprised of $51.2 million of capital expenditures, $1.5 million of cash contributions for our ownership interest in Centennial to cover operating needs and capital expenditures, $20.2 million of cash contributions for our ownership interest in MB Storage, of which $16.5 million was used to acquire storage assets and $2.0 million for the acquisition of assets, partially offset by $0.6 million in net cash proceeds from the sale of various assets.

Financing Activities

Cash flows provided by financing activities totaled $90.2 million for the nine months ended September 30, 2005, and were comprised of $294.8 million of contributions from our Parent Partnership, partially offset by $112.7 million of repayments on the note payable to our Parent Partnership, net of borrowings, and $91.9 million of distributions paid to our Parent Partnership. The contributions received from the Parent Partnership during 2005 were primarily used to reduce the level of indebtedness owed to our Parent Partnership. Cash flows used in financing activities totaled $22.9 million for the nine months ended September 30, 2004, and were comprised of $88.3 million of distributions paid to our Parent Partnership, partially offset by $65.4 million of borrowings under our notes payable to our Parent Partnership, net of repayments.

Universal Shelf

Our Parent Partnership has filed with the SEC a universal shelf registration statement that, subject to agreement on terms at the time of use and appropriate supplementation, allows it to issue, in one or more offerings, up to an aggregate of $2.0 billion of equity securities, debt securities or a combination thereof. In May 2005, our

Parent Partnership issued $279.2 million of equity securities. At September 30, 2005, our Parent Partnership had $1.7 billion remaining under this shelf registration, subject to customary marketing terms and conditions.

Credit Facilities

Our Parent Partnership has in place an unsecured revolving credit facility for up to $600.0 million (“Revolving Credit Facility”), including the issuance of letters of credit of up to $100.0 million. Interest is payable at an applicable margin above either the lender’s base rate or LIBOR. At September 30, 2005, $460.5 million was outstanding under the facility, and our Parent Partnership had $139.5 million of availability. Restrictive covenants in the credit agreement limit the Parent Partnership’s and its subsidiaries’ ability to, among other things, incur additional indebtedness, and make certain distributions, and complete mergers, acquisitions and sales of assets. In addition, the credit agreement requires our Parent Partnership to maintain certain financial ratios, which our Parent Partnership was in compliance with at September 30, 2005.

We are contingently liable as guarantor for $500.0 million principal amount of 7.625% Senior Notes due 2012 issued in February 2002 and for $200.0 million principal amount of 6.125% Senior Notes due 2013 issued in January 2003 by our Parent Partnership.

Centennial entered into credit facilities totaling $150.0 million, and as of September 30, 2005, $150.0 million was outstanding under those credit facilities. We and Marathon Petroleum Company LLC (“Marathon”) have each guaranteed one-half of the repayment of Centennial’s outstanding debt balance (plus interest) under a long-term credit agreement, which expires in 2024, and a short-term credit agreement, which expires in 2007. The guarantees arose in order for Centennial to obtain adequate financing, and the proceeds of the credit agreements were used to fund construction and conversion costs of its pipeline system. Prior to the expiration of the long-term credit agreement, we could be relinquished from responsibility under the guarantee should Centennial meet certain financial tests. If Centennial defaults on its outstanding balance, the estimated maximum potential amount of future payments for us and Marathon is $75.0 million each at September 30, 2005.

2005 Capital Expenditures

We estimate that capital expenditures, excluding acquisitions, for 2005 will be approximately $52.2 million (including $2.5 million of capitalized interest). We expect to spend approximately $17.5 million for revenue generating projects and facility improvements. We expect to spend approximately $17.0 million to sustain existing operations, including life-cycle replacements for equipment at various facilities and pipeline and tank replacements and $15.2 million for various system upgrade projects. During the remainder of 2005, we may be required to contribute cash to Centennial to cover capital expenditures, acquisitions or other operating needs and to MB Storage to cover significant capital expenditures or additional acquisitions. We continually review and evaluate potential capital improvements and expansions that would be complementary to our present system. These expenditures can

vary greatly depending on the magnitude of our transactions. We may finance capital expenditures through internally generated funds, debt or capital contributions from our Parent Partnership or any combination thereof.

Liquidity Outlook

We believe that we will continue to have adequate liquidity to fund future recurring operating and investing activities. Our primary cash requirements consist of normal operating expenses, capital expenditures to sustain existing operations and revenue generating expenditures, interest payments on our Senior Notes, interest payments on intercompany notes payable to our Parent Partnership and distributions to our Parent Partnership. Our cash requirements for the remainder of 2005 and 2006, such as operating expenses, capital expenditures to sustain existing operations and quarterly distributions to our Parent Partnership, are expected to be funded through operating cash flows. Long-term cash requirements for expansion projects, acquisitions and repayment of intercompany notes are expected to be funded by several sources, including cash flows from operating activities, borrowings under our Parent Partnership’s credit facilities and possibly the issuance by our Parent Partnership of additional equity and debt securities. The timing of any debt or offerings by our Parent Partnership will depend on various factors, including prevailing market conditions, interest rates and our Parent Partnership’s financial condition and credit rating at the time.

Off-Balance Sheet Arrangements

We do not rely on off-balance sheet borrowings to fund our acquisitions. We have no off-balance sheet commitments for indebtedness other than the limited guaranty of the Centennial debt, the limited guaranty of Centennial catastrophic events, the Parent Partnership debt and leases covering assets utilized in several areas of our operations.

Contractual Obligations

The following table summarizes our debt repayment obligations and material contractual commitments as of September 30, 2005 (in millions):

	Amount of Commitment Expiration Per Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		After 5 Years
Note payable, Parent Partnership	$	188.9	$	—	$	—	$	188.9	$	—
6.45% Senior Notes due 2008 (1)	180.0		—		180.0		—		—
7.51% Senior Notes due 2028 (1)	210.0		—		—		—		210.0
Debt subtotal	578.9		—		180.0		188.9		210.0

Operating leases (2)	57.7		13.0		21.1		10.4		13.2
Capital expenditure obligations (3)	0.9		0.9		—		—		—
Other liabilities and deferred credits (4)	5.9		—		1.3		0.8		3.8

Total	$	643.4	$	13.9	$	202.4	$	200.1	$	227.0

(1) We entered into an interest rate swap agreement to hedge our exposure to changes in the fair value of our 7.51% Senior Notes due 2028. At September 30, 2005, the 7.51% Senior Notes include an adjustment to increase the fair value of the debt by $1.3 million related to this interest rate swap agreement. At September 30, 2005, our 6.45% Senior Notes include less than $0.1 million of unamortized debt discount. The fair value adjustment and unamortized debt discount are excluded from this table.

(2) Includes a pipeline capacity lease with Centennial. In January 2003, we entered into a pipeline capacity lease agreement with Centennial for a period of five years that contains a minimum throughput requirement. For the year ended December 31, 2004, we exceeded the minimum throughput requirements on the lease agreement.

(3) Includes accruals of cost incurred but not yet paid relating to capital projects.

(4) Excludes approximately $8.9 million of long-term deferred revenue payments, which are being transferred to income over the term of the respective revenue contracts. The amount of commitment by year is our best estimate of projected payments of these long-term liabilities.

We expect to repay the long-term, senior unsecured obligations and note payable to our Parent Partnership through the issuance of additional long-term senior unsecured debt at the time the 2008 and 2028 debts mature, with proceeds from the dispositions of assets, cash flows from operations, and contributions from our Parent Partnership or any combination of the above items.

We have entered into a limited cash call agreement with Marathon and Centennial, which allows each member to contribute cash in lieu of Centennial procuring separate insurance in the event of a third-party liability arising from a catastrophic event. There is an indefinite term for the agreement and each member is to contribute cash in proportion to its ownership interest, up to a maximum of $50.0 million. As a result of the catastrophic event guarantee, we have recorded a $4.7 million obligation, which represents the present value of the estimated amount that we would have to pay under the guarantee. In the event that a catastrophic event occurred and we were required to contribute cash to Centennial, contributions exceeding our deductible may be covered by our insurance.

Our Parent Partnership’s senior unsecured debt is rated BBB- by Standard and Poors (“S&P”) and Baa3 by Moody’s Investors Service (“Moody’s”). S&P assigned this rating on June 14, 2005, following its review of the ownership structure, corporate governance issues, and proposed funding after the acquisition of the Company by DFI. Both ratings are with a stable outlook. A rating reflects only the view of a rating agency and is not a recommendation to buy, sell or hold any indebtedness. Any rating can be revised upward or downward or withdrawn at any time by a rating agency if it determines that the circumstances warrant such a change. Our senior unsecured debt is also rated BBB- by S&P and Baa3 by Moody’s. Both ratings are with a stable outlook.

Other Considerations

Recent Accounting Pronouncements

See discussion of new accounting pronouncements in Note 1. Organization and Basis of Presentation - New Accounting Pronouncements in the accompanying consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We may be exposed to market risk through changes in commodity prices and interest rates. We do not have foreign exchange risks. Our Risk Management Committee has established policies to monitor and control these market risks. The Risk Management Committee is comprised, in part, of senior executives of the Company.

We have utilized and expect to continue to utilize interest rate swap agreements to hedge a portion of our fair value risks. Interest rate swap agreements are used to manage the fixed interest rate mix of our debt portfolio and overall cost of borrowing. The interest rate swap related to our fair value risk is intended to reduce our exposure to changes in the fair value of our fixed rate Senior Notes. The interest rate swap agreement involves the periodic

exchange of payments without the exchange of the notional amount upon which the payments are based. The related amount payable to or receivable from counterparties is included as an adjustment to accrued interest.

At September 30, 2005, we had outstanding $180.0 million principal amount of 6.45% Senior Notes due 2008 and $210.0 million principal amount of 7.51% Senior Notes due 2028. At September 30, 2005, the estimated fair value of the 6.45% Senior Notes and 7.51% Senior Notes was approximately $185.0 million and $223.9 million, respectively.

In October 2001, we entered into an interest rate swap agreement to hedge our exposure to changes in the fair value of our fixed rate 7.51% Senior Notes due 2028. We designated this swap agreement as a fair value hedge. The swap agreement has a notional amount of $210.0 million and matures in January 2028 to match the principal and maturity of the Senior Notes. Under the swap agreement, we pay a floating rate of interest based on a three-month U.S. Dollar LIBOR rate, plus a spread, and receive a fixed rate of interest of 7.51%. During the nine months ended September 30, 2005, and 2004, we recognized reductions in interest expense of $4.6 million and $7.5 million, respectively, related to the difference between the fixed rate and the floating rate of interest on the interest rate swap. During the quarter ended September 30, 2005, we measured the hedge effectiveness of this interest rate swap and noted that no gain or loss from ineffectiveness was required to be recognized. The fair value of this interest rate swap was a gain of approximately $1.3 million and $3.4 million at September 30, 2005, and December 31, 2004, respectively. Utilizing the balance of the 7.51% Senior Notes outstanding at September 30, 2005, and including the effects of hedging activities, assuming market interest rates increase 100 basis points, the potential annual increase in interest expense is $2.1 million.

Item 4. Controls and Procedures

As of the end of the period covered by this report, our management carried out an evaluation, with the participation of our principal executive officer (the “CEO”) and our principal financial officer (the “CFO”), of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based on those evaluations, as of September 30, 2005, the CEO and CFO concluded:

(i) that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure; and

(ii) that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the third quarter of 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We have been, in the ordinary course of business, a defendant in various lawsuits and a party to various other legal proceedings, some of which are covered in whole or in part by insurance. We believe that the outcome of these lawsuits and other proceedings will not individually or in the aggregate have a material adverse effect on our consolidated financial position, results of operations or cash flows. See discussion of legal proceedings in Note 11. Commitments and Contingencies in the accompanying consolidated financial statements.

Item 6. Exhibits

Exhibit Number		Description
3.1		Second Amended and Restated Agreement of Limited Partnership of TE Products Pipeline Company, Limited Partnership, effective September 21, 2001 (Filed as Exhibit 3.8 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2001, and incorporated herein by reference).
4.1		Form of Indenture between TE Products Pipeline Company, Limited Partnership and The Bank of New York, as Trustee, dated as of January 27, 1998 (Filed as Exhibit 4.3 to TE Products Pipeline Company, Limited Partnership’s Registration Statement on Form S-3 (Commission File No. 333-38473) and incorporated herein by reference).
4.2		Form of Indenture between TEPPCO Partners, L.P., as issuer, TE Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and Jonah Gas Gathering Company, as subsidiary guarantors, and First Union National Bank, NA, as trustee, dated as of February 20, 2002 (Filed as Exhibit 99.2 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of February 20, 2002 and incorporated herein by reference).
4.3		First Supplemental Indenture between TEPPCO Partners, L.P., as issuer, TE Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and Jonah Gas Gathering Company, as subsidiary guarantors, and First Union National Bank, NA, as trustee, dated as of February 20, 2002 (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners, L.P (Commission File No. 1-10403) dated as of February 20, 2002 and incorporated herein by reference).
4.4		Second Supplemental Indenture, dated as of June 27, 2002, among TEPPCO Partners, L.P., as issuer, TE Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P., and Jonah Gas Gathering Company, as Initial Subsidiary Guarantors, and Val Verde Gas Gathering Company, L.P., as New Subsidiary Guarantor, and Wachovia Bank, National Association, formerly known as First Union National Bank, as trustee (Filed as Exhibit 4.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2002 and incorporated herein by reference).
4.5		Third Supplemental Indenture among TEPPCO Partners, L.P. as issuer, TE Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P., Jonah Gas Gathering Company and Val Verde Gas Gathering Company, L.P. as Subsidiary Guarantors, and Wachovia Bank, National Association, as trustee, dated as of January 30, 2003 (Filed as Exhibit 4.7 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2002, and incorporated herein by reference).
10.1		Third Amended and Restated Administrative Services Agreement by and among EPCO, Inc., Enterprise Products Partners L.P., Enterprise Products Operating L.P., Enterprise Products GP, LLC and Enterprise Products OLPGP, Inc., Enterprise GP Holdings L.P., EPE Holdings, LLC, TEPPCO Partners, L.P., Texas Eastern Products Pipeline Company, LLC, TE Products Pipeline Company, Limited Partnership, TEPPCO Midstream Companies, L.P., TCTM, L.P. and TEPPCO GP, Inc. dated August 15, 2005, but effective as of February 24, 2005 (Filed as Exhibit 99.1 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated August 19, 2005 and incorporated herein by reference).

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
32.1**		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith.

** Furnished herewith pursuant to Item 601(b)-(32) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TE Products Pipeline Company, Limited Partnership


Date: June 16, 2006	By:	/s/ JERRY E. THOMPSON
		Jerry E. Thompson,
		President and Chief Executive Officer of TEPPCO GP, Inc., General Partner


Date: June 16, 2006	By:	/s/ WILLIAM G. MANIAS
		William G. Manias,
		Vice President and Chief Financial Officer of TEPPCO GP, Inc., General Partner

TE PRODUCTS PIPELINE CO LP 10-Q/A