UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___.

Commission file number: 1-10403

TEPPCO Partners, L.P.

(Exact name of Registrant as Specified in Its Charter)

Delaware		76-0291058
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)

	1100 Louisiana Street, Suite 1600
	Houston, Texas 77002
	(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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer þ	Accelerated filer o
	Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

There were 104,943,004 limited partner units, including 260,400 restricted units, of TEPPCO Partners, L.P. outstanding at August 1, 2009. These limited partner units trade on the New York Stock Exchange under the ticker symbol “TPP.”

TEPPCO PARTNERS, L.P.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION.
Item 1.	Financial Statements.
	Unaudited Condensed Consolidated Balance Sheets		2
	Unaudited Condensed Statements of Consolidated Income		3
	Unaudited Condensed Statements of Consolidated Comprehensive Income		4
	Unaudited Condensed Statements of Consolidated Cash Flows		5
	Unaudited Condensed Statements of Consolidated Partners’ Capital		6
	Notes to Unaudited Condensed Consolidated Financial Statements:
	1. Partnership Organization and Basis of Presentation		7
	2. General Accounting Matters		8
	3. Accounting for Equity Awards		10
	4. Derivative Instruments and Hedging Activities		12
	5. Inventories		18
	6. Property, Plant and Equipment		18
	7. Investments in Unconsolidated Affiliates		19
	8. Business Combination		21
	9. Intangible Assets and Goodwill		21
	10. Debt Obligations		22
	11. Partners’ Capital and Distributions		23
	12. Business Segments		26
	13. Related Party Transactions		28
	14. Earnings Per Unit		32
	15. Commitments and Contingencies		33
	16. Supplemental Cash Flow Information		40
	17. Supplemental Condensed Consolidating Financial Information		40
	18. Subsequent Events		44
Item 2.	Management’s Discussion and Analysis of Financial Condition
	and Results of Operations.		46
	Cautionary Note Regarding Forward-Looking Statements.		46
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.		71
Item 4.	Controls and Procedures.		72

PART II. OTHER INFORMATION.
Item 1.	Legal Proceedings.		73
Item 1A.	Risk Factors.		73
Item 5.	Other Information.		75
Item 6.	Exhibits.		77

Signatures			79

PART I. FINANCIAL INFORMATION.

Item 1. Financial Statements.

TEPPCO PARTNERS, L.P.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

	June 30,			December 31,
ASSETS	2009			2008
Current assets:
Cash and cash equivalents	$	--		$	--
Accounts receivable, trade (net of allowance for doubtful accounts of
$2.6 at June 30, 2009 and $2.6 at December 31, 2008)		984.8			790.4
Accounts receivable, related parties		10.7			15.8
Inventories		95.6			52.9
Other		38.7			48.5
Total current assets		1,129.8			907.6
Property, plant and equipment, at cost (net of accumulated depreciation of
$729.9 at June 30, 2009 and $678.8 at December 31, 2008)		2,591.6			2,439.9
Investments in unconsolidated affiliates		1,198.9			1,255.9
Intangible assets (net of accumulated amortization of $172.3 at June 30, 2009 and $158.3 at December 31, 2008)		195.1			207.7
Goodwill		106.6			106.6
Other assets		132.9			132.1
Total assets	$	5,354.9		$	5,049.8

LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable and accrued liabilities	$	967.9		$	792.5
Accounts payable, related parties		40.9			17.2
Accrued interest		36.0			36.4
Other accrued taxes		21.0			23.0
Other		21.1			30.9
Total current liabilities		1,086.9			900.0
Long-term debt:
Senior notes		1,710.9			1,713.3
Junior subordinated notes		299.6			299.6
Other long-term debt		723.3			516.7
Total long-term debt		2,733.8			2,529.6
Other liabilities and deferred credits		27.8			28.7
Commitments and contingencies
Partners’ capital:
Limited partners’ interests:
Limited partner units (104,682,604 units outstanding at June 30, 2009 and 104,547,561 units outstanding at December 31, 2008)		1,673.8			1,746.2
Restricted limited partner units (260,400 units outstanding at June 30, 2009 and 157,300 units outstanding at December 31, 2008)		1.9			1.4
General partner’s interest		(126.3	)		(110.3	)
Accumulated other comprehensive loss		(43.0	)		(45.8	)
Total partners’ capital		1,506.4			1,591.5
Total liabilities and partners’ capital	$	5,354.9		$	5,049.8

See Notes to Unaudited Condensed Consolidated Financial Statements.

TEPPCO PARTNERS, L.P.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Dollars in millions, except per unit amounts)

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Operating revenues:
Sales of petroleum products	$	1,745.4		$	4,006.5		$	3,023.3		$	6,651.1
Transportation – Refined products		41.1			44.1			77.0			81.4
Transportation – LPGs		17.5			16.1			55.8			52.3
Transportation – Crude oil		15.2			17.4			37.1			32.7
Transportation – NGLs		13.6			12.7			26.1			25.7
Transportation – Marine		43.7			48.1			80.6			73.6
Gathering – Natural gas		14.4			14.8			28.0			28.2
Other		22.3			20.8			42.9			44.0
Total operating revenues		1,913.2			4,180.5			3,370.8			6,989.0
Costs and expenses:
Purchases of petroleum products		1,703.3			3,975.7			2,938.8			6,582.3
Operating expense		76.4			66.5			143.2			120.3
Operating fuel and power		17.9			29.1			37.6			50.5
General and administrative		15.8			11.0			25.8			19.8
Depreciation and amortization		36.8			31.9			69.8			60.2
Taxes – other than income taxes		7.1			7.0			14.0			13.1
Total costs and expenses		1,857.3			4,121.2			3,229.2			6,846.2
Operating income		55.9			59.3			141.6			142.8
Other income (expense):
Interest expense		(32.3	)		(33.0	)		(64.4	)		(71.6	)
Equity in income (loss) of unconsolidated affiliates		(12.2	)		21.3			12.9			41.0
Other, net		0.7			1.1			1.0			1.4
Income before provision for income taxes		12.1			48.7			91.1			113.6
Provision for income taxes		(0.9	)		(1.0	)		(1.7	)		(1.8	)
Net income	$	11.2		$	47.7		$	89.4		$	111.8

Net income allocated to:
Limited partners	$	9.3		$	39.7		$	74.3		$	93.1
General partner	$	1.9		$	8.0		$	15.1		$	18.7

Basic and diluted earnings per unit	$	0.09		$	0.42		$	0.71		$	0.99

See Notes to Unaudited Condensed Consolidated Financial Statements.

TEPPCO PARTNERS, L.P.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED

COMPREHENSIVE INCOME

(Dollars in millions)

	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2009		2008			2009		2008

Net income	$	11.2	$	47.7		$	89.4	$	111.8
Other comprehensive income (loss):
Cash flow hedges: (see Note 4)
Change in fair values of interest rate derivative instruments		--		--			--		(23.2	)
Reclassification adjustment for loss included in net income
related to interest rate derivative instruments		1.4		--			2.8		(0.1	)
Changes in fair values of commodity derivative instruments		--		(20.6	)		--		(27.1	)
Reclassification adjustment for loss included in net income
related to commodity derivative instruments		--		9.6			--		19.2
Total cash flow hedges		1.4		(11.0	)		2.8		(31.2	)
Total other comprehensive income (loss)		1.4		(11.0	)		2.8		(31.2	)
Comprehensive income	$	12.6	$	36.7		$	92.2	$	80.6

See Notes to Unaudited Condensed Consolidated Financial Statements.

TEPPCO PARTNERS, L.P.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Dollars in millions)

	For the Six Months
	Ended June 30,
	2009			2008
Operating activities:
Net income	$	89.4		$	111.8
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		69.8			60.2
Non-cash impairment charge		2.3			--
Amortization of deferred compensation		0.1			0.7
Amortization in interest expense		1.4			2.2
Changes in fair market value of derivative instruments		(0.4	)		(0.3	)
Equity in income of unconsolidated affiliates		(12.9	)		(41.0	)
Distributions received from unconsolidated affiliates		89.2			79.3
Loss on early extinguishment of debt		--			8.7
Net effect of changes in operating accounts (see Note 16)		(31.4	)		(57.5	)
Net cash provided by operating activities		207.5			164.1
Investing activities:
Cash used for business combinations		(50.0	)		(345.6	)
Investment in Jonah Gas Gathering Company		(19.1	)		(64.5	)
Investment in Texas Offshore Port System (see Note 7)		1.7			--
Acquisition of intangible assets		(1.4	)		(0.3	)
Cash paid for linefill classified as other assets		(1.5	)		(14.5	)
Capital expenditures		(164.3	)		(139.2	)
Net cash used in investing activities		(234.6	)		(564.1	)
Financing activities:
Borrowings under debt agreements		759.3			3,344.4
Repayments of debt		(552.6	)		(2,732.9	)
Net proceeds from issuance of limited partner units		3.3			5.6
Debt issuance costs		--			(9.3	)
Settlement of interest rate derivative instruments - treasury locks		--			(52.1	)
Acquisition of treasury units		(0.1	)		--
Distributions paid to partners		(182.8	)		(155.7	)
Net cash provided by financing activities		27.1			400.0
Net change in cash and cash equivalents		--			--
Cash and cash equivalents, January 1		--			--
Cash and cash equivalents, June 30	$	--		$	--

See Notes to Unaudited Condensed Consolidated Financial Statements.

TEPPCO PARTNERS, L.P.

UNAUDITED CONDENSED STATEMENTS OF

CONSOLIDATED PARTNERS’ CAPITAL

(Dollars in millions)

							Accumulated
							Other
	Limited			General			Comprehensive
	Partners			Partner			Income (Loss)			Total
Balance, December 31, 2008	$	1,747.6		$	(110.3	)	$	(45.8	)	$	1,591.5
Net proceeds from issuance of limited partner units		3.3			--			--			3.3
Acquisition of treasury units		(0.1	)		--			--			(0.1	)
Net income		74.3			15.1			--			89.4
Cash distributions paid to partners		(151.8	)		(31.0	)		--			(182.8	)
Non-cash contributions		0.3			--			--			0.3
Amortization of equity awards		2.1			(0.1	)		--			2.0
Reclassification adjustment for loss included in net
income related to interest rate derivative instruments		--			--			2.8			2.8
Balance, June 30, 2009	$	1,675.7		$	(126.3	)	$	(43.0	)	$	1,506.4

							Accumulated
							Other
	Limited			General			Comprehensive
	Partners			Partner			Income (Loss)			Total
Balance, December 31, 2007	$	1,395.2		$	(88.0	)	$	(42.6	)	$	1,264.6
Net proceeds from issuance of limited partner units		5.6			--			--			5.6
Issuance of limited partner units in connection with Cenac acquisition on February 1, 2008		186.6			--			--			186.6
Net income		93.1			18.7			--			111.8
Cash distributions paid to partners		(129.8	)		(25.9	)		--			(155.7	)
Non-cash contributions		0.3			--			--			0.3
Amortization of equity awards		0.5			--			--			0.5
Changes in fair values of commodity derivative instruments		--			--			(27.1	)		(27.1	)
Reclassification adjustment for loss included in net income related to commodity derivative instruments		--			--			19.2			19.2
Changes in fair values of interest rate derivative instruments		--			--			(23.2	)		(23.2	)
Balance, June 30, 2008	$	1,551.5		$	(95.2	)	$	(73.7	)	$	1,382.6

See Notes to Unaudited Condensed Consolidated Financial Statements.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Except per unit amounts, or as noted within the context of each footnote disclosure, the dollar amounts presented in the tabular data within these footnote disclosures are stated in millions.

Note 1. Partnership Organization and Basis of Presentation

Partnership Organization

TEPPCO Partners, L.P. is a publicly traded, diversified energy logistics partnership with operations that span much of the continental United States. Our limited partner units (“Units”) are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “TPP”. We were formed in March 1990 as a Delaware limited partnership. As used in this Report, “we,” “us,” “our,” the “Partnership” and “TEPPCO” mean TEPPCO Partners, L.P. and, where the context requires, include our subsidiaries.

We operate through TE Products Pipeline Company, LLC (“TE Products”), TCTM, L.P. (“TCTM”), TEPPCO Midstream Companies, LLC (“TEPPCO Midstream”), and beginning February 1, 2008, through TEPPCO Marine Services, LLC (“TEPPCO Marine Services”). Texas Eastern Products Pipeline Company, LLC (the “General Partner”), a Delaware limited liability company, serves as our general partner and owns a 2% general partner interest in us. We hold a 99.999% limited partner interest in TCTM, 99.999% membership interests in each of TE Products and TEPPCO Midstream and a 100% membership interest in TEPPCO Marine Services. TEPPCO GP, Inc., our subsidiary, holds a 0.001% general partner interest in TCTM and a 0.001% managing member interest in each of TE Products and TEPPCO Midstream.

Dan L. Duncan and certain of his affiliates, including Enterprise GP Holdings L.P. (“Enterprise GP Holdings”) and Dan Duncan LLC, a privately held company controlled by him, control us, our General Partner and Enterprise Products Partners L.P. (“Enterprise Products Partners”) and its affiliates, including Duncan Energy Partners L.P. (“Duncan Energy Partners”). Enterprise GP Holdings owns and controls the 2% general partner interest in us and has the right (through its 100% ownership of our General Partner) to receive the incentive distribution rights associated with the general partner interest. Enterprise GP Holdings, DFI GP Holdings L.P. (“DFIGP”) and other entities controlled by Mr. Duncan own 17,073,315 of our Units, which include 2,500,000 of our Units owned by DFIGP. Under an amended and restated administrative services agreement (“ASA”), EPCO, Inc. (“EPCO”), a privately held company also controlled by Mr. Duncan, performs management, administrative and operating functions required for us, and we reimburse EPCO for all direct and indirect expenses that have been incurred in managing us.

On June 28, 2009, we and our General Partner entered into definitive merger agreements with Enterprise Products Partners, its general partner, Enterprise Products GP, LLC (“EPGP”), and two of its subsidiaries. See Note 13 for information regarding the proposed merger with Enterprise Products Partners.

We refer to refined products, liquefied petroleum gases (“LPGs”), petrochemicals, crude oil, lubrication oils and specialty chemicals, natural gas liquids (“NGLs”), natural gas, asphalt, heavy fuel oil, other heated oil products and marine bunker fuel, collectively as “petroleum products” or “products.”

Basis of Presentation

The accompanying unaudited condensed 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 June 30, 2009, and the results of our operations and cash flows for the periods presented. The results of operations for the three months and six months ended June 30, 2009 are not necessarily indicative of results of our operations for the full year 2009. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations. You should read these interim financial statements in conjunction with our consolidated financial statements and notes thereto presented in the TEPPCO Partners, L.P. Annual Report on Form 10-K for the year ended December 31, 2008.

Note 2. General Accounting Matters

Estimates

Preparing our financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts presented in the financial statements (e.g. assets, liabilities, revenues and expenses) and disclosures about contingent assets and liabilities. Our actual results could differ from these estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Fair Value Information

Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities are carried at amounts which reasonably approximate their fair values due to their short-term nature. The estimated fair values of our fixed rate debt are based on quoted market prices for such debt or debt of similar terms and maturities. The carrying amount of our variable rate debt obligation reasonably approximates its fair value due to its variable interest rate. See Note 4 for fair value information associated with our derivative instruments.

The following table presents the estimated fair values of our financial instruments at the dates indicated:

	June 30, 2009				December 31, 2008
	Carrying		Fair		Carrying		Fair
Financial Instruments	Value		Value		Value		Value
Financial assets:
Cash and cash equivalents	$	--	$	--	$	--	$	--
Accounts receivable, trade		984.8		984.8		790.4		790.4
Financial liabilities:
Accounts payable and accrued liabilities		967.9		967.9		792.5		792.5
Other current liabilities		21.1		21.1		30.9		30.9
Fixed-rate debt (principal amount)		2,000.0		1,967.0		2,000.0		1,553.2
Variable-rate debt		723.3		723.3		516.7		516.7

Recent Accounting Developments

The following information summarizes recently issued accounting guidance since those reported in our Annual Report on Form 10-K for the year ended December 31, 2008 that will or may affect our future financial statements.

In April 2009, the Financial Accounting Standards Board (“FASB”) issued new guidance in the form of FASB Staff Positions (“FSPs”) in an effort to clarify certain fair value accounting rules. FSP Financial Accounting Standard (“FAS”) 157-4 (Accounting Standards Codification (“ASC”) 820), Determining Fair Value When the Volumes and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, establishes a process to determine whether a market is not active and a transaction is not distressed. FSP FAS 157-4 states that companies should look at several factors and use judgment to ascertain if a formerly active market has become inactive. When estimating fair value, FSP FAS 157-4 requires companies to place more weight on observable transactions determined to be orderly and less weight on transactions for which there is

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

insufficient information to determine whether the transaction is orderly (entities do not have to incur undue cost and effort in making this determination). The FASB also issued FSP FAS 107-1 and APB 28-1 (ASC 825), Interim Disclosures About Fair Value of Financial Instruments. This FSP requires that companies provide qualitative and quantitative information about fair value estimates for all financial instruments not measured on the balance sheet at fair value in each interim report. Previously, this was only an annual requirement. We adopted these FSPs effective June 30, 2009. Our adoption of this new guidance did not have a material impact on our financial statements or related disclosures.

In May 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 165 (ASC 855), Subsequent Events, which establishes general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. We adopted SFAS 165 on June 30, 2009. Our adoption of this guidance did not have any impact on our financial position, results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 167 (ASC 810), Amendments to FASB Interpretation No. 46(R), which amended consolidation guidance for variable interest entities (“VIEs”) under FASB Interpretation (“FIN”) No. 46(R) (“FIN 46(R)”) (ASC 810-10) Consolidation of Variable Interest Entities. VIEs are entities whose equity investors do not have sufficient equity capital at risk such that the entity cannot finance its own activities. When a business has a controlling financial interest in a VIE, the assets, liabilities and profit or loss of that entity must be included in consolidation. A business enterprise must consolidate a VIE when that enterprise has a variable interest that will cover most of the entity’s expected losses and/or receive most of the entity’s anticipated residual return. SFAS 167, among other things, eliminates the scope exception for qualifying special-purpose entities, amends certain guidance for determining whether an entity is a VIE, expands the list of events that trigger reconsideration of whether an entity is a VIE, requires a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE, requires continuous assessments of whether a company is the primary beneficiary of a VIE and requires enhanced disclosures about a company’s involvement with a VIE. SFAS 167 is effective for us on January 1, 2010. At June 30, 2009, we did not have any VIEs; therefore, our adoption of this new guidance is not expected to have a material impact on our consolidated financial statements.

In June 2009, the FASB issued SFAS No. 168 (ASC 105), The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162, which establishes the ASC as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. The ASC is a reorganization of current GAAP into a topical format that eliminates the current GAAP hierarchy and establishes instead two levels of guidance — authoritative and nonauthoritative. All guidance contained in the ASC carries an equal level of authority. Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We will adopt SFAS 168 on September 30, 2009. Our adoption of this new guidance is not expected to have any impact on our financial position, results of operations or cash flows. References to specific GAAP in our consolidated financial statements after our adoption of SFAS 168 will refer exclusively to the ASC. We have elected to provide references to the ASC parenthetically in this Quarterly Report.

Subsequent Events

We have evaluated subsequent events through August 6, 2009, which is the date our Unaudited Condensed Consolidated Financial Statements and Notes are being issued.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Accounting for Equity Awards

We account for equity awards in accordance with SFAS No. 123(R) (ASC 718 and 505), Share-Based Payment (“SFAS 123(R)”). Such awards were not material to our consolidated financial position, results of operations or cash flows for all periods presented. The amount of equity-based compensation allocable to us was $1.2 million and $0.8 million for the three months ended June 30, 2009 and 2008, respectively. For the six months ended June 30, 2009 and 2008, the amount of equity-based compensation allocable to us was $2.2 million and $1.2 million, respectively.

Certain key employees of EPCO participate in long-term incentive compensation plans managed by EPCO. The compensation expense we record related to equity awards is based on an allocation of the total cost of such incentive plans to EPCO. We record our pro rata share of such costs based on the percentage of time each employee spends on our business activities.

1999 Phantom Unit Retention Plan

The Texas Eastern Products Pipeline Company, LLC 1999 Phantom Unit Retention Plan (“1999 Plan”) provides for the issuance of phantom unit awards as incentives to key employees. A total of 2,800 phantom units were outstanding under the 1999 Plan at June 30, 2009, which cliff vest in January 2010. During the first quarter of 2009, 2,800 additional phantom units which were outstanding at December 31, 2008 under the 1999 Plan were forfeited. Additionally, in April 2009, 13,000 phantom units vested and $0.3 million was paid out to a participant in April 2009. At June 30, 2009 and December 31, 2008, we had accrued liability balances of $0.1 million and $0.4 million, respectively, for compensation related to the 1999 Plan.

2000 Long Term Incentive Plan

The Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan (“2000 LTIP”) provides key employees incentives to achieve improvements in our financial performance. At December 31, 2008, we had an accrued liability balance of $0.2 million for compensation related to the 2000 LTIP. On December 31, 2008, 11,300 phantom units vested and $0.2 million was paid out to participants in the first quarter of 2009. There were no remaining phantom units outstanding under the 2000 LTIP at June 30, 2009.

2005 Phantom Unit Plan

The Texas Eastern Products Pipeline Company, LLC 2005 Phantom Unit Plan (“2005 Phantom Unit Plan”) provides key employees incentives to achieve improvements in our financial performance. At December 31, 2008, we had an accrued liability balance of $0.6 million for compensation related to the 2005 Phantom Unit Plan. On December 31, 2008, a total of 36,600 phantom units vested and $0.6 million was paid out to participants in the first quarter of 2009. There were no remaining phantom units outstanding under the 2005 Phantom Unit Plan at June 30, 2009.

EPCO 2006 Long-Term Incentive Plan

The EPCO, Inc. 2006 TPP Long-Term Incentive Plan (“2006 LTIP”) provides for awards of our Units and other rights to our non-employee directors and to certain employees of EPCO and its affiliates providing services to us. Awards granted under the 2006 LTIP may be in the form of restricted units, phantom units, unit options, unit appreciation rights (“UARs”) and distribution equivalent rights. Subject to adjustment as provided in the 2006 LTIP, awards with respect to up to an aggregate of 5,000,000 Units may be granted under the 2006 LTIP. After giving effect to the issuance or forfeiture of restricted unit awards and option awards through June 30, 2009, a total of 4,161,046 additional Units could be issued under the 2006 LTIP in the future. The merger agreement governing our proposed merger with a

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

subsidiary of Enterprise Products Partners contains restrictions on the issuance of additional Units under the 2006 LTIP. See Note 13 for information regarding the proposed merger with Enterprise Products Partners.

Unit option awards. The following table presents unit option activity under the 2006 LTIP for the periods indicated:

						Weighted-
				Weighted-		Average
				Average		Remaining
	Number			Strike Price		Contractual
	of Units			(dollars/Unit)		Term (in years)

Outstanding at December 31, 2008		355,000		$	40.00
Granted (1)		329,000		$	24.84
Forfeited		(109,500	)	$	34.38
Outstanding at June 30, 2009 (2)		574,500		$	32.39		4.78

(1) The total grant date fair value of these unit option awards granted in 2009 was $1.3 million based upon the following assumptions: (i) weighted-average expected life of options of 4.8 years; (ii) weighted-average risk-free interest rate of 2.14%; (iii) weighted-average expected distribution yield on our Units of 11.31%; (iv) estimated forfeiture rate of 17.0%; and (v) weighted-average expected unit price volatility on our Units of 59.32%. (2) No unit options were exercisable as of June 30, 2009.

At June 30, 2009, the estimated total unrecognized compensation cost related to nonvested unit option awards granted under the 2006 LTIP was $1.5 million. We expect to recognize our share of this cost over a weighted-average period of 3.46 years in accordance with the ASA (see Note 13).

Restricted unit awards. The following table presents restricted unit activity under the 2006 LTIP for the periods indicated:


				Weighted-
				Average Grant
	Number			Date Fair Value
	of Units			per Unit (1)
Restricted units at December 31, 2008		157,300
Granted (2)		140,450		$	23.93
Vested		(5,000	)	$	34.63
Forfeited		(32,350	)	$	32.29
Restricted units at June 30, 2009		260,400

(1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. The weighted-average grant date fair value per Unit for forfeited and vested awards is determined before an allowance for forfeitures. (2) Aggregate grant date fair value of restricted unit awards issued during 2009 was $3.4 million based on grant date market prices ranging from $28.81 to $29.83 per Unit and an estimated forfeiture rate of 17.0%.

The total fair value of our restricted unit awards that vested during the three months and six months ended June 30, 2009 was $0.1 million. At June 30, 2009, the estimated total unrecognized compensation cost related to restricted unit awards under the 2006 LTIP was $6.2 million. We expect to recognize our share of this cost over a weighted-average period of 3.17 years in accordance with the ASA.

Phantom unit awards. At June 30, 2009, a total of 1,647 phantom units were outstanding, which were awarded in 2007 under the 2006 LTIP to three of the then non-executive members of the board of directors. Each participant is entitled to cash distributions equal to the product of the number of phantom units granted to the participant and the per Unit cash distribution that we paid to our unitholders. Phantom unit awards to non-executive directors are accounted for in a manner similar to SFAS 123(R) liability awards.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UAR awards. At June 30, 2009, a total of 392,788 UARs were outstanding, which were awarded in 2007 under the 2006 LTIP to non-executive members of the board of directors and to certain employees providing services directly to us.

Non-Executive Members of the Board of Directors. At June 30, 2009, a total of 95,654 UARs, awarded to non-executive members of the board of directors under the 2006 LTIP, were outstanding at a weighted-average exercise price of $41.82 per Unit (66,225 UARs issued in 2007 at an exercise price of $45.30 per Unit to the then three non-executive members of the board of directors and 29,429 UARs issued in 2008 at an exercise price of $33.98 per Unit to a non-executive member of the board of directors in connection with his election to the board). UARs awarded to non-executive directors are accounted for in a manner similar to SFAS 123(R) liability awards. Mr. Hutchison, who was a non-executive member of the board of directors at the time of issuance of these UARs (and the phantom unit awards discussed above), became interim executive chairman in March 2009.

Employees. At June 30, 2009, a total of 297,134 UARs, awarded under the 2006 LTIP to certain employees providing services directly to us, were outstanding at an exercise price of $45.35 per Unit. UARs awarded to employees are accounted for as liability awards under SFAS 123(R) since the current intent is to settle the awards in cash.

Employee Partnerships

In 2008, EPCO formed TEPPCO Unit, L.P. (“TEPPCO Unit”) and TEPPCO Unit II, L.P. (“TEPPCO Unit II”) (collectively, “Employee Partnerships”) to serve as long-term incentive arrangements for key employees of EPCO by providing them with a “profits interest” in the Employee Partnerships. At June 30, 2009, the estimated unrecognized compensation cost related to TEPPCO Unit and TEPPCO Unit II was $1.4 million and $1.2 million, respectively. We expect to recognize our share of these costs over a weighted-average period of 4.27 years in accordance with the ASA.

Note 4. Derivative Instruments and Hedging Activities

In the course of our normal business operations, we are exposed to certain risks, including changes in interest rates and commodity prices. In order to manage risks associated with certain identifiable and anticipated transactions, we use derivative instruments. Derivatives are financial instruments whose fair value is determined by changes in a specified benchmark such as interest rates or commodity prices. Typical derivative instruments include futures, forward contracts, swaps and other instruments with similar characteristics. Substantially all of our derivatives are used for non-trading activities.

SFAS No. 133 (ASC 815), Accounting for Derivative Instruments and Hedging Activities, requires companies to recognize derivative instruments at fair value as either assets or liabilities on the balance sheet. While the standard requires that all derivatives be reported at fair value on the balance sheet, changes in fair value of the derivative instruments will be reported in different ways depending on the nature and effectiveness of the hedging activities to which they are related. After meeting specified conditions, a qualified derivative may be specifically designated as a total or partial hedge of:

§	Changes in the fair value of a recognized asset or liability, or an unrecognized firm commitment – In a fair value hedge, all gains and losses (of both the derivative instrument and the hedged item) are recognized in income during the period of change.

§	Variable cash flows of a forecasted transaction – In a cash flow hedge, the effective portion of the hedge is reported in other comprehensive income and is reclassified into earnings when the forecasted transaction affects earnings.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

An effective hedge is one in which the change in fair value of a derivative instrument can be expected to offset 80% to 125% of changes in the fair value of a hedged item at inception and throughout the life of the hedging relationship. The effective portion of a hedge is the amount by which the derivative instrument exactly offsets the change in fair value of the hedged item during the reporting period. Conversely, ineffectiveness represents the change in the fair value of the derivative instrument that does not exactly offset the change in the fair value of the hedged item. Any ineffectiveness associated with a hedge is recognized in earnings immediately. Ineffectiveness can be caused by, among other things, changes in the timing of forecasted transactions or a mismatch of terms between the derivative instrument and the hedged item.

On January 1, 2009, we adopted the disclosure requirements of SFAS No. 161 (ASC 815), Disclosures About Derivative Financial Instruments and Hedging Activities. SFAS 161 requires enhanced qualitative and quantitative disclosure requirements regarding derivative instruments. This footnote reflects the new disclosure standard.

Interest Rate Derivative Instruments

We utilize interest rate swaps, treasury locks and similar derivative instruments to manage our exposure to changes in the interest rates of certain debt agreements. This strategy is a component in controlling our cost of capital associated with such borrowings. At June 30, 2009, we had no interest rate derivative instruments outstanding.

At times, we may use treasury lock derivative instruments to hedge the underlying U.S. treasury rates related to forecasted issuances of debt. As cash flow hedges, gains or losses on these instruments are recorded in other comprehensive income and amortized to earnings using the effective interest method over the estimated term of the underlying fixed-rate debt. During March 2008, we terminated treasury locks having a combined notional value of $600.0 million and recognized an aggregate loss of $23.2 million in other comprehensive income during the first quarter of 2008. We recognized approximately $3.6 million of this loss in interest expense during the six months ended June 30, 2008 as a result of interest payments hedged under the treasury locks not occurring as forecasted.

For information regarding fair value amounts and gains and losses on interest rate derivative instruments and related hedged items, see “Tabular Presentation of Fair Value Amounts, and Gains and Losses on Derivative Instruments and Related Hedged Items” within this Note 4.

Commodity Derivative Instruments

We seek to maintain a position that is substantially balanced between crude oil purchases and related sales and future delivery obligations. The price of crude oil is subject to fluctuations in response to changes in supply, demand, general market uncertainty and a variety of additional factors that are beyond our control. In order to manage the price risk associated with crude oil, we enter into commodity derivative instruments such as forwards, basis swaps and futures contracts. The purpose of such hedging strategy is to either balance our inventory position or to lock in a profit margin.

At June 30, 2009, we had no outstanding commodity derivatives designated as hedging instruments under SFAS 133. Currently, our commodity derivative instruments do not meet the hedge accounting requirements of SFAS 133 and are accounted for as economic hedges using mark-to-market accounting. These financial instruments had a minimal impact on our earnings. The following table summarizes our outstanding commodity derivative instruments not designated as hedging instruments under SFAS 133 at June 30, 2009:

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Accounting
Derivative Purpose	Volume (1)	Treatment
Derivatives not designated as hedging instruments under SFAS 133:

Crude oil risk management activities (2)	4.5 MMBbls	Mark-to-market

(1) Reflects the absolute value of the derivative notional volumes. (2) Reflects the use of derivative instruments to manage risks associated with our portfolio of crude oil storage assets. These commodity derivative instruments have forward positions through March 2010.

For information regarding fair value amounts and gains and losses on commodity derivative instruments and related hedged items, see “Tabular Presentation of Fair Value Amounts, and Gains and Losses on Derivative Instruments and Related Hedged Items” within this Note 4.

Credit-Risk Related Contingent Features in Derivative Instruments

We have no credit-risk related contingent features in any of our derivative instruments.

Tabular Presentation of Fair Value Amounts, and Gains and Losses on

Derivative Instruments and Related Hedged Items

The following table provides a balance sheet overview of our derivative assets and liabilities at the dates indicated:

Asset Derivatives

Liability Derivatives

June 30, 2009

December 31, 2008

June 30, 2009

December 31, 2008

Balance Sheet

Fair

Balance Sheet

Fair

Balance Sheet

Fair

Balance Sheet

Fair

Location

Value

Location

Value

Location

Value

Location

Value

Derivatives not designated as hedging instruments under SFAS 133

Commodity derivatives

Other current

assets

2.7

Other current

assets

15.7

Other current

liabilities

2.3

Other current

liabilities

15.7

Total derivatives not

designated as hedging

instruments

2.7

15.7

2.3

15.7

The following table presents the effect of our derivative instruments designated as fair value hedges under SFAS 133 on our condensed consolidated statements of income for the periods indicated:

Derivatives in SFAS 133
Fair Value		Gain/(Loss) Recognized in
Hedging Relationships	Location	Income on Derivative
		For the Three Months				For the Six Months
		Ended June 30,				Ended June 30,
		2009		2008		2009		2008
Interest rate derivatives	Interest expense	$	--	$	--	$	--	$	--
Total		$	--	$	--	$	--	$	--

Derivatives in SFAS 133
Fair Value		Gain/(Loss) Recognized in
Hedging Relationships	Location	Income on Hedged Item
		For the Three Months				For the Six Months
		Ended June 30,				Ended June 30,
		2009		2008		2009		2008
Interest rate derivatives	Interest expense	$	--	$	--	$	--	$	--
Total		$	--	$	--	$	--	$	--

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the effect of our derivative instruments designated as cash flow hedges under SFAS 133 on our condensed consolidated statements of income for the periods indicated:

Derivatives
in SFAS 133 Cash Flow	Change in Value Recognized in OCI on
Hedging Relationships	Derivative (Effective Portion)
	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2009		2008			2009		2008
Interest rate derivatives	$	--	$	--		$	--	$	(23.2	)
Commodity derivatives		--		(20.6	)		--		(27.1	)
Total	$	--	$	(20.6	)	$	--	$	(50.3	)

Derivatives	Location of Gain/(Loss)
in SFAS 133 Cash Flow	Reclassified from AOCI	Amount of Gain/(Loss) Reclassified from AOCI
Hedging Relationships	into Income (Effective Portion)	to Income (Effective Portion)
		For the Three Months						For the Six Months
		Ended June 30,						Ended June 30,
		2009			2008			2009			2008
Interest rate derivatives	Interest expense	$	(1.4	)	$	--		$	(2.8	)	$	0.1
Commodity derivatives	Revenue		--			(9.6	)		--			(19.2	)
Total		$	(1.4	)	$	(9.6	)	$	(2.8	)	$	(19.1	)

	Location of Gain/(Loss)
Derivatives	Recognized in Income
in SFAS 133 Cash Flow	on Ineffective Portion	Amount of Gain/(Loss) Reclassified in Income
Hedging Relationships	of Derivative	on Ineffective Portion of Derivative
		For the Three Months				For the Six Months
		Ended June 30,				Ended June 30,
		2009		2008		2009		2008
Interest rate derivatives	Interest expense	$	--	$	--	$	--	$	(3.6	)
Commodity derivatives	Revenue		--		--		--		--
Total		$	--	$	--	$	--	$	(3.6	)

Over the next twelve months, we expect to reclassify $6.0 million of accumulated other comprehensive loss attributable to settled treasury locks to earnings as an increase to interest expense.

The following table presents the effect of our derivative instruments not designated as hedging instruments under SFAS 133 on our condensed consolidated statements of income for the periods indicated:

Derivatives Not
Designated as SFAS 133		Gain/(Loss) Recognized in
Hedging Instruments	Location	Income on Derivative
		For the Three Months						For the Six Months
		Ended June 30,						Ended June 30,
		2009			2008			2009		2008
Commodity derivatives	Revenue	$	(0.2	)	$	(0.1	)	$	0.6	$	0.3
Total		$	(0.2	)	$	(0.1	)	$	0.6	$	0.3

SFAS 157 – Fair Value Measurements

SFAS 157 (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Our fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. Recognized valuation

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

techniques employ inputs such as product prices, operating costs, discount factors and business growth rates. These inputs may be either readily observable, corroborated by market data or generally unobservable. In developing our estimates of fair value, we endeavor to utilize the best information available and apply market-based data to the extent possible. Accordingly, we utilize valuation techniques (such as the market approach) that maximize the use of observable inputs and minimize the use of unobservable inputs.

SFAS 157 established a three-tier hierarchy that classifies fair value amounts recognized or disclosed in the financial statements based on the observability of inputs used to estimate such fair values. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy. The characteristics of fair value amounts classified within each level of the SFAS 157 hierarchy are described as follows:

Level 1 fair values are based on quoted prices, which are available in active markets for identical assets or liabilities as of the measurement date. Active markets are defined as those in which transactions for identical assets or liabilities occur with sufficient frequency so as to provide pricing information on an ongoing basis (e.g., the NYSE or New York Mercantile Exchange). Level 1 primarily consists of financial assets and liabilities such as exchange-traded financial instruments, publicly-traded equity securities and U.S. government treasury securities. At June 30, 2009, we had no Level 1 financial assets and liabilities.

Level 2 fair values are based on pricing inputs other than quoted prices in active markets (as reflected in Level 1 fair values) and are either directly or indirectly observable as of the measurement date. Level 2 fair values include instruments that are valued using financial models or other appropriate valuation methodologies. Such financial models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, the time value of money, volatility factors for stocks, current market and contractual prices for the underlying instruments and other relevant economic measures. Substantially all of these assumptions are (i) observable in the marketplace throughout the full term of the instrument, (ii) can be derived from observable data or (iii) are validated by inputs other than quoted prices (e.g., interest rates and yield curves at commonly quoted intervals). Our Level 2 fair values primarily consist of commodity forward agreements transacted over-the-counter. The fair values of these derivatives are based on observable price quotes for similar products and locations.

Level 3 fair values are based on unobservable inputs. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Unobservable inputs reflect the reporting entity’s own ideas about the assumptions that market participants would use in pricing an asset or liability (including assumptions about risk). Unobservable inputs are based on the best information available in the circumstances, which might include the reporting entity’s internally developed data. The reporting entity must not ignore information about market participant assumptions that is reasonably available without undue cost and effort. Level 3 inputs are typically used in connection with internally developed valuation methodologies where management makes its best estimate of an instrument’s fair value. Our Level 3 fair values largely consist of commodity contracts generally less than one year in term. We rely on broker quotes for these prices due to the limited observability of locational and quality-based pricing differentials. At June 30, 2009, our Level 3 financial assets were less than $0.1 million.

The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities measured on a recurring basis at June 30, 2009. These financial assets and liabilities are

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value assets and liabilities, in addition to their placement within the fair value hierarchy levels.

	Level 2		Level 3		Total
Financial assets:
Commodity derivative instruments	$	2.7	$	--	$	2.7
Total	$	2.7	$	--	$	2.7

Financial liabilities:
Commodity derivative instruments	$	2.3	$	--	$	2.3
Total	$	2.3	$	--	$	2.3

The following table sets forth a reconciliation of changes in the fair value of our Level 3 financial assets and liabilities for the periods indicated:

	For the Six Months Ended June 30,
	2009			2008
Balance, January 1	$	(0.1	)	$	(0.4	)
Total gains included in net income		0.4			0.4
Purchases, issuances, settlements		0.1			--
Balance, March 31		0.4			--
Total losses included in net income		--			(0.1	)
Purchases, issuances, settlements		(0.4	)		--
Balance, June 30	$	--		$	(0.1	)

We adopted the provisions of SFAS 157 that apply to nonfinancial assets and liabilities on January 1, 2009. Our adoption of this guidance had no impact on our financial position, results of operations or cash flows.

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents the fair value of an asset carried on the balance sheet by caption and by level within the SFAS 157 valuation hierarchy (as described above) at the date indicated for which a nonrecurring change in fair value has been recorded during the period:

		June 30, 2009				Level 1				Level 2				Level 3				Total Losses
Property, plant and equipment		$	3.0			$	--			$	--			$	3.0			$	2.3

As a result of idling a river terminal at Helena, Arkansas, in our Downstream Segment, during the six months ended June 30, 2009, we recorded a non-cash impairment charge of $2.3 million, which is included in operating expense for the three months and six months ended June 30, 2009 (see Note 6). We estimated the fair value of the asset using appropriate valuation techniques.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Inventories

Inventories are valued at the lower of cost (based on weighted-average cost method) or market. The major components of inventories were as follows at the dates indicated:

	June 30,		December 31,
	2009		2008
Crude oil (1)	$	58.1	$	32.8
Refined products and LPGs (2)		17.2		0.4
Lubrication oils and specialty chemicals		10.2		11.1
Materials and supplies		10.0		8.6
NGLs		0.1		--
Total	$	95.6	$	52.9

(1) At June 30, 2009 and December 31, 2008, $57.8 million and $30.7 million, respectively, of our crude oil inventory was subject to forward sales contracts. (2) Refined products and LPGs inventory is managed on a combined basis.

Due to fluctuating commodity prices, we recognize lower of average cost or market (“LCM”) adjustments when the carrying value of our inventories exceeds their net realizable value. These non-cash charges are a component of costs and expenses in the period they are recognized. For the three months ended June 30, 2009 and 2008, we recognized LCM adjustments of approximately $1.1 million and $0.1 million, respectively. We recognized LCM adjustments of $2.1 million and $0.1 million for the six months ended June 30, 2009 and 2008, respectively.

Note 6. Property, Plant and Equipment

Our property, plant and equipment values and accumulated depreciation balances were as follows at the dates indicated:

	Estimated
	Useful Life		June 30,		December 31,
	in Years		2009		2008
Plants and pipelines (1)		5-40(5)	$	1,943.9	$	1,919.7
Underground and other storage facilities (2)		5-40(6)		315.8		296.8
Transportation equipment (3)		5-10		13.0		11.3
Marine vessels (4)		20-30		508.6		453.0
Land and right of way				144.1		143.8
Construction work in progress				396.1		294.1
Total property, plant and equipment			$	3,321.5	$	3,118.7
Less: accumulated depreciation				729.9		678.8
Property, plant and equipment, net			$	2,591.6	$	2,439.9

(1) Plants and pipelines include refined products, LPGs, NGLs, petrochemical, crude oil and natural gas pipelines; terminal loading and unloading facilities; office furniture and equipment; buildings, laboratory and shop equipment; and related assets. (2) Underground and other storage facilities include underground product storage caverns, storage tanks and other related assets. (3) Transportation equipment includes vehicles and similar assets used in our operations. (4) $50.0 million of the increase relates to the vessels acquired from TransMontaigne Products Services Inc. (see Note 8). (5) The estimated useful lives of major components of this category are as follows: pipelines, 20-40 years (with some equipment at 5 years); terminal facilities, 10-40 years; office furniture and equipment, 5-10 years; buildings, 20-40 years; and laboratory and shop equipment, 5-40 years. (6) The estimated useful lives of major components of this category are as follows: underground storage facilities, 20-40 years (with some components at 5 years); and storage tanks, 20-30 years.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our depreciation expense and capitalized interest amounts for the periods indicated:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2009		2008		2009		2008
Depreciation expense (1)	$	28.4	$	23.9	$	53.8	$	45.8
Capitalized interest (2)		5.2		5.5		10.5		9.9

(1) Depreciation expense is a component of depreciation and amortization expense as presented in our unaudited condensed statements of consolidated income. (2) Capitalized interest (included in interest expense on our unaudited condensed statements of consolidated income) increases the carrying value of the associated asset and reduces interest expense during the period it is recorded.

During the three months and six months ended June 30, 2009, we recorded a $2.3 million non-cash impairment charge, which is included in operating expense, related to the idling of a river terminal at Helena, Arkansas, in our Downstream Segment.

Asset Retirement Obligations

Asset retirement obligations (“AROs”) are legal obligations associated with the retirement of certain tangible long-lived assets that result from acquisitions, construction, development and/or normal operations or a combination of these factors. Our ARO liability balance at June 30, 2009 and December 31, 2008 was $1.5 million. Accretion expense was less than $0.1 million for each of the three months ended June 30, 2009 and 2008. For each of the six months ended June 30, 2009 and 2008, accretion expense was $0.1 million. Property, plant and equipment at June 30, 2009 include $0.7 million of asset retirement costs capitalized as an increase in the associated long-lived asset.

Note 7. Investments In Unconsolidated Affiliates

We own interests in related businesses that are accounted for using the equity method of accounting. These investments are identified in the following table by reporting business segment (see Note 12 for a general discussion of our business segments). The following table presents our investments in unconsolidated affiliates at the dates indicated:

	Ownership
	Percentage at
	June 30,		June 30,		December 31,
	2009		2009		2008
Downstream Segment:
Centennial Pipeline LLC (“Centennial”)		50.0%	$	66.4	$	71.8
Other		25.0%		0.4		0.4
Upstream Segment:
Seaway Crude Pipeline Company (“Seaway”)		50.0%		182.9		190.1
Texas Offshore Port System (“TOPS”) (1)		--		--		35.9
Midstream Segment:
Jonah Gas Gathering Company (“Jonah”)		80.64%		949.2		957.7
Total			$	1,198.9	$	1,255.9

(1) In January 2009, we received a $3.1 million refund of our 2008 contributions to TOPS due to a delay in the timing of the expected project spending. In February and March 2009, we then invested an additional $1.4 million in TOPS. In April 2009, we elected to dissociate from TOPS and forfeited our investment. See below for further information.

Our investments in Centennial, Seaway and Jonah included excess cost amounts totaling $73.3 million and $72.9 million at June 30, 2009 and December 31, 2008, respectively. The value assigned to our excess investment in Centennial was created upon its formation, the value assigned to our excess investment in Seaway was created upon acquisition of our ownership interest in Seaway and the value assigned to our excess investment in Jonah was created as a result of interest capitalized on the construction of Jonah’s expansion. We amortize such excess cost as a reduction in equity earnings in a manner similar

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

to depreciation over the life of applicable contracts or assets acquired or constructed. Amortization of excess cost amounts was $1.1 million and $1.3 million for the three months ended June 30, 2009 and 2008, respectively. For the six months ended June 30, 2009 and 2008, amortization of such excess cost amounts was $2.6 million and $2.4 million, respectively. For the remainder of 2009, amortization expense associated with our excess investments is currently estimated at $3.0 million.

In August 2008, a wholly owned subsidiary of ours, together with a subsidiary of Enterprise Products Partners and Oiltanking Holding Americas, Inc. (“Oiltanking”), formed the TOPS partnership. Effective April 16, 2009, our wholly owned subsidiary dissociated from TOPS. As a result, equity earnings and net income for the second quarter of 2009 include a non-cash charge of $34.2 million. This loss represents our cumulative investment in TOPS through the date of dissociation and reflects our capital contributions to TOPS for construction in progress amounts. We believe that the dissociation discharged our affiliate with respect to further obligations under the TOPS partnership agreement, and accordingly, us from the associated liability under the related parent guarantee; therefore, we have not recorded any amounts related to such guarantee. The wholly owned subsidiary of Enterprise Products Partners that was a partner in TOPS also dissociated from the partnership effective April 16, 2009. See Note 15 for litigation matters associated with our dissociation from TOPS.

The following table summarizes equity in income (loss) of unconsolidated affiliates by business segment for the periods indicated:

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Downstream Segment	$	(4.3	)	$	(3.7	)	$	(7.4	)	$	(7.8	)
Upstream Segment (1)		(31.3	)		4.2			(28.0	)		7.2
Midstream Segment		23.8			21.9			49.4			45.6
Intersegment eliminations		(0.4	)		(1.1	)		(1.1	)		(4.0	)
Total	$	(12.2	)	$	21.3		$	12.9		$	41.0

(1) 2009 periods include the non-cash charge of $34.2 million related to the dissociation from TOPS.

On a quarterly basis, we monitor the underlying business fundamentals of our investments in unconsolidated affiliates and test such investments for impairment when impairment indicators are present. As a result of our reviews for the second quarter of 2009, no impairment charges were required. We have the intent and ability to hold these investments, which are integral to our operations.

Summarized Financial Information of Unconsolidated Affiliates

Summarized combined income statement data by reporting segment for the periods indicated is presented in the following table (on a 100% basis):

	Summarized Income Statement Information for the Three Months Ended
	June 30, 2009								June 30, 2008
			Operating			Net					Operating		Net
	Revenues		Income (Loss)			Income (Loss)			Revenues		Income		Income (Loss)
Downstream Segment	$	7.7	$	(2.8	)	$	(5.4	)	$	10.4	$	1.3	$	(1.5	)
Upstream Segment		21.8		10.1			10.0			27.4		15.3		15.3
Midstream Segment		61.2		29.6			29.6			60.2		26.9		27.2

	Summarized Income Statement Information for the Six Months Ended
	June 30, 2009								June 30, 2008
			Operating			Net					Operating		Net
	Revenues		Income (Loss)			Income (Loss)			Revenues		Income		Income (Loss)
Downstream Segment	$	17.4	$	(0.6	)	$	(5.8	)	$	20.0	$	2.2	$	(3.3	)
Upstream Segment		41.5		18.8			18.8			48.0		25.7		25.7
Midstream Segment		120.6		61.4			61.6			118.4		56.2		56.6

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8. Business Combination

On June 5, 2009, we expanded our Marine Services Segment with the acquisition of 19 tow boats and 28 tank barges from TransMontaigne Product Services Inc. (“TransMontaigne”), for $50.0 million in cash. The acquired vessels provide marine vessel fueling services for cruise liners and cargo ships, referred to as bunkering, and other ship-assist services and transport fuel oil for electric generation plants. The acquisition complements our existing fleet of vessels that currently transport petroleum products along the nation’s inland waterway system and in the Gulf of Mexico. The newly acquired marine assets are generally supported by contracts that have a three to five year term and are based primarily in Miami, Florida, with additional assets located in Mobile, Alabama, and Houston, Texas. We financed the acquisition with borrowings under our revolving credit facility.

The results of operations for the TransMontaigne acquisition are included in our consolidated financial statements beginning at the date of acquisition. This acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with SFAS 141(R) (ASC 805). Under SFAS 141(R), all of the assets acquired in the transaction are recognized at their acquisition-date fair values, while transaction costs associated with the transaction are expensed as incurred. Accordingly, the cost of the acquisition has been recorded as property, plant and equipment based on estimated fair values. Such fair values have been developed using recognized business valuation techniques.

On a pro forma basis, our revenues, costs and expenses, operating income, net income and earnings per Unit amounts would not have differed materially from those we actually reported for the three months and six months ended June 30, 2009 and 2008 due to the immaterial nature of our 2009 business combination transaction.

Note 9. Intangible Assets and Goodwill

Intangible Assets

The following table summarizes intangible assets by business segment being amortized at the dates indicated:

	June 30, 2009							December 31, 2008
	Gross		Accum.			Carrying		Gross		Accum.			Carrying
	Value		Amort.			Value		Value		Amort.			Value
Intangible assets:
Downstream Segment:
Transportation agreements	$	1.0	$	(0.4	)	$	0.6	$	1.0	$	(0.4	)	$	0.6
Other		7.0		(1.0	)		6.0		5.6		(0.8	)		4.8
Subtotal		8.0		(1.4	)		6.6		6.6		(1.2	)		5.4
Upstream Segment:
Transportation agreements		0.9		(0.4	)		0.5		0.9		(0.4	)		0.5
Other		10.5		(3.3	)		7.2		10.6		(3.0	)		7.6
Subtotal		11.4		(3.7	)		7.7		11.5		(3.4	)		8.1
Midstream Segment:
Gathering agreements		239.7		(134.1	)		105.6		239.6		(125.8	)		113.8
Fractionation agreements		38.0		(21.4	)		16.6		38.0		(20.4	)		17.6
Other		0.3		(0.2	)		0.1		0.3		(0.1	)		0.2
Subtotal		278.0		(155.7	)		122.3		277.9		(146.3	)		131.6
Marine Services Segment:
Customer relationship intangibles		51.3		(4.8	)		46.5		51.3		(3.1	)		48.2
Other		18.7		(6.7	)		12.0		18.7		(4.3	)		14.4
Subtotal		70.0		(11.5	)		58.5		70.0		(7.4	)		62.6
Total intangible assets	$	367.4	$	(172.3	)	$	195.1	$	366.0	$	(158.3	)	$	207.7

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents amortization expense of intangible assets by business segment for the periods indicated:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2009		2008		2009		2008
Downstream Segment	$	0.1	$	0.1	$	0.2	$	0.2
Upstream Segment		0.2		0.2		0.3		0.3
Midstream Segment		4.8		5.4		9.4		10.4
Marine Services Segment		2.0		2.2		4.1		3.4
Total	$	7.1	$	7.9	$	14.0	$	14.3

Based on information currently available, we estimate that amortization expense will approximate $13.1 million for the last six months of 2009, $24.6 million for 2010, $22.7 million for 2011, $17.2 million for 2012 and $15.6 million for 2013.

Goodwill

The following table presents the carrying amount of goodwill by business segment at the dates indicated:

	June 30,		December 31,
	2009		2008
Downstream Segment	$	1.3	$	1.3
Upstream Segment		14.9		14.9
Marine Services Segment		90.4		90.4
Total	$	106.6	$	106.6

Note 10. Debt Obligations

The following table summarizes the principal amounts outstanding under all of our debt instruments at the dates indicated:

	June 30,		December 31,
	2009		2008
Senior debt obligations: (1)
Revolving Credit Facility, due December 2012 (2)	$	723.3	$	516.7
7.625% Senior Notes, due February 2012		500.0		500.0
6.125% Senior Notes, due February 2013		200.0		200.0
5.90% Senior Notes, due April 2013		250.0		250.0
6.65% Senior Notes, due April 2018		350.0		350.0
7.55% Senior Notes, due April 2038		400.0		400.0
Total principal amount of long-term senior debt obligations		2,423.3		2,216.7
7.000% Junior Subordinated Notes, due June 2067 (1)		300.0		300.0
Total principal amount of long-term debt obligations		2,723.3		2,516.7
Adjustment to carrying value associated with hedges of fair value and
unamortized discounts (3)		10.5		12.9
Total long-term debt obligations		2,733.8		2,529.6
Total Debt Instruments (3)	$	2,733.8	$	2,529.6

(1) TE Products, TCTM, TEPPCO Midstream and Val Verde Gas Gathering Company, L.P. (“Val Verde”) (collectively, the “Guarantor Subsidiaries”) have issued full, unconditional, joint and several guarantees of our senior notes, junior subordinated notes and revolving credit facility (“Revolving Credit Facility”). (2) The weighted-average interest rate paid on our variable rate Revolving Credit Facility at June 30, 2009 was 0.92%. (3) From time to time we enter into interest rate swap agreements to hedge our exposure to changes in the fair value on a portion of the debt obligations presented above (see Note 4). At June 30, 2009 and December 31, 2008, amount includes $5.0 million and $5.2 million of unamortized discounts, respectively, and $15.5 million and $18.1 million, respectively, related to fair value hedges.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Except for routine fluctuations in our unsecured Revolving Credit Facility, there have been no material changes in the terms of our debt obligations since those reported in our Annual Report on Form 10-K for the year ended December 31, 2008.

During September 2008, Lehman Brothers Bank, FSB (“Lehman”), which had a 4.05% participation in our Revolving Credit Facility, stopped funding its commitment following the bankruptcy filing of its parent entity. Assuming that future fundings are not received for the Lehman percentage commitment, aggregate available capacity would be reduced by approximately $28.9 million. At June 30, 2009, our available borrowing capacity under the Revolving Credit Facility was approximately $197.8 million.

See Note 18 for a subsequent event regarding a loan agreement we entered into with Enterprise Products Partners.

Covenants

We were in compliance with the covenants of our long-term debt obligations at June 30, 2009.

Debt Obligations of Unconsolidated Affiliates

We have one unconsolidated affiliate, Centennial, with long-term debt obligations. The following table shows the total debt of Centennial at June 30, 2009 (on a 100% basis) and the corresponding scheduled maturities of such debt.

	Our				Scheduled Maturities of Debt
	Ownership														After
	Interest		Total		2009		2010		2011		2012		2013		2013
Centennial		50%	$	124.8	$	4.8	$	9.1	$	9.0	$	8.9	$	8.6	$	84.4

At June 30, 2009 and December 31, 2008, Centennial’s debt obligations consisted of $124.8 million and $129.9 million, respectively, borrowed under a master shelf loan agreement. Borrowings under the master shelf agreement mature in May 2024 and are collateralized by substantially all of Centennial’s assets and severally guaranteed by Centennial’s owners (see Note 15).

There have been no material changes in the terms of the debt obligations of Centennial since those reported in our Annual Report on Form 10-K for the year ended December 31, 2008.

Note 11. Partners’ Capital and Distributions

Our Units represent limited partner interests, which give the holders thereof the right to participate in distributions and to exercise the other rights or privileges available to them under our partnership agreement (“Partnership Agreement”). We are managed by our General Partner.

In accordance with the Partnership Agreement, capital accounts are maintained for our General Partner and limited partners. The capital account provisions of our Partnership Agreement incorporate principles established for U.S. federal income tax purposes and are not comparable to the equity accounts reflected under GAAP in our consolidated financial statements. In connection with the amendment of our Partnership Agreement in December 2006, the General Partner’s obligation to make capital contributions to maintain its 2% capital account was eliminated.

Our Partnership Agreement sets forth the calculation to be used in determining the amount and priority of cash distributions that our limited partners and General Partner will receive. Net income reflected under GAAP in our financial statements is allocated between the General Partner and the limited

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

partners in the same proportion as aggregate cash distributions made to the General Partner and the limited partners during the period. Net income determined under our Partnership Agreement, however, incorporates principles established for U.S. federal income tax purposes and is not comparable to net income reflected under GAAP in our financial statements.

Registration Statements

In general, the Partnership Agreement authorizes us to issue an unlimited number of additional limited partner interests and other equity securities for such consideration and on such terms and conditions as may be established by our General Partner in its sole discretion (subject, under certain circumstances, to the approval of our unitholders).

We have a universal shelf registration statement on file with the SEC that allows us to issue an unlimited amount of debt and equity securities.

We also have a registration statement on file with the SEC authorizing the issuance of up to 10,000,000 Units in connection with our distribution reinvestment plan (“DRIP”). A total of 533,936 Units have been issued under this registration statement from inception of the DRIP through June 30, 2009. See Note 18 for information regarding the suspension of the DRIP.

In addition, we have a registration statement on file related to our employee unit purchase plan (“EUPP”), under which we can issue up to 1,000,000 Units. A total of 43,506 Units have been issued to employees under this plan from inception of the EUPP through June 30, 2009. See Note 18 for information regarding the suspension of the EUPP.

During the six months ended June 30, 2009, a total of 131,605 Units were issued in connection with the DRIP and the EUPP. Total net proceeds received during the six months ended June 30, 2009 from these Unit offerings was $3.3 million.

Summary of Changes in Outstanding Units

The following table summarizes changes in our outstanding units since December 31, 2008:

		Limited
		Partner	Restricted	Treasury
		Units	Units	Units	Total
Balance, December 31, 2008		104,547,561	157,300	--	104,704,861
	Units issued in connection with DRIP	115,703	--	--	115,703
	Units issued in connection with EUPP	15,902	--	--	15,902
	Issuance of restricted units under 2006 LTIP	--	140,450	--	140,450
	Conversion of restricted units to Units	5,000	(5,000)	--	--
	Acquisition of treasury units	(1,562)	--	1,562	--
	Cancellation of treasury units	--	--	(1,562)	(1,562)
	Forfeiture of restricted units	--	(32,350)	--	(32,350)
Balance, June 30, 2009		104,682,604	260,400	--	104,943,004

During the six months ended June 30, 2009, 5,000 restricted unit awards vested and were converted into Units. Of this amount, 1,562 were sold back to us by an employee to cover related withholding tax requirements. The total cost of these treasury units were approximately $0.1 million, which was allocated to our limited partners. Immediately upon acquisition, we cancelled such treasury units.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Quarterly Distributions of Available Cash

We make quarterly cash distributions of all of our available cash, generally defined in our Partnership Agreement as consolidated cash receipts less consolidated cash disbursements and cash reserves established by the General Partner in its reasonable discretion (“Available Cash”). Pursuant to the Partnership Agreement, the General Partner receives incremental incentive cash distributions when unitholders’ cash distributions exceed certain target thresholds.

The following table reflects the allocation of total distributions paid during the periods indicated:

	For the Six Months Ended June 30,
	2009		2008
Limited Partner Units	$	151.8	$	129.8
General Partner Ownership Interest		3.1		2.6
General Partner Incentive		27.9		23.3
Total Cash Distributions Paid	$	182.8	$	155.7
Total Cash Distributions Paid Per Unit	$	1.450	$	1.405

Our quarterly cash distributions for 2009 are presented in the following table:

	Distribution		Record	Payment
	per Unit		Date	Date
1st Quarter 2009	$	0.725	Apr. 30, 2009	May 7, 2009
2nd Quarter 2009 (1)	$	0.725	Jul. 31, 2009	Aug. 7, 2009

(1) The second quarter 2009 cash distribution will total approximately $91.6 million.

General Partner’s Interest

At June 30, 2009 and December 31, 2008, we had deficit balances of $126.3 million and $110.3 million, respectively, in our General Partner’s equity account. These negative balances do not represent assets to us and do not represent obligations of the General Partner to contribute cash or other property to us. According to the Partnership Agreement, in the event of our dissolution, after satisfying our liabilities, our remaining assets would be divided among our limited partners and the General Partner generally in the same proportion as Available Cash but calculated on a cumulative basis over the life of the Partnership. If a deficit balance still remains in the General Partner’s equity account after all allocations are made between the partners, the General Partner would not be required to make whole any such deficit.

Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss balance consisted of losses of $43.0 million and $45.8 million related to interest rate and treasury lock derivative instruments at June 30, 2009 and December 31, 2008, respectively.

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Business Segments

We have four reporting segments:

§	Our Downstream Segment, which is engaged in the pipeline transportation, marketing and storage of refined products, LPGs and petrochemicals;

§	Our Upstream Segment, which is engaged in the gathering, pipeline transportation, marketing and storage of crude oil, distribution of lubrication oils and specialty chemicals and fuel transportation services;

§	Our Midstream Segment, which is engaged in the gathering of natural gas, fractionation of NGLs and pipeline transportation of NGLs; and

§	Our Marine Services Segment, which is engaged in the marine transportation of petroleum products and provision of marine vessel fueling and other ship-assist services.

The following table presents our measurement of earnings before interest expense for the periods indicated:

	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2009			2008		2009		2008
Total operating revenues	$	1,913.2		$	4,180.5	$	3,370.8	$	6,989.0
Less: Total costs and expenses		1,857.3			4,121.2		3,229.2		6,846.2
Operating income		55.9			59.3		141.6		142.8
Add: Equity in income (loss) of unconsolidated affiliates		(12.2	)		21.3		12.9		41.0
Other, net		0.7			1.1		1.0		1.4
Earnings before interest expense and provision for income taxes	$	44.4		$	81.7	$	155.5	$	185.2

A reconciliation of our earnings before interest expense and provision for income taxes to net income for the periods indicated is as follows:

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Earnings before interest expense and provision for income taxes	$	44.4		$	81.7		$	155.5		$	185.2
Interest expense		(32.3	)		(33.0	)		(64.4	)		(71.6	)
Income before provision for income taxes		12.1			48.7			91.1			113.6
Provision for income taxes		(0.9	)		(1.0	)		(1.7	)		(1.8	)
Net income	$	11.2		$	47.7		$	89.4		$	111.8

Amounts indicated in the following table as “Partnership and Other” for income and expense items (including operating income) relate primarily to intersegment eliminations from activities among our reporting segments. Amounts indicated in the following table as “Partnership and Other” for assets and capital expenditures include the elimination of intersegment related party receivables and investment balances among our reporting segments and assets that we hold that have not been allocated to any of our reporting segments (including such items as corporate furniture and fixtures, vehicles, computer hardware and software, prepaid insurance and unamortized debt issuance costs on debt issued at the Partnership level).

TEPPCO PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table includes information by segment, together with reconciliations to our consolidated totals, for the periods indicated:

	Reportable Segments
									Marine
	Downstream			Upstream			Midstream		Services		Partnership
	Segment			Segment			Segment		Segment		and Other			Consolidated
Revenues from third parties:
Three months ended June 30, 2009	$	79.0		$	1,751.4		$	27.6	$	43.7	$	--		$	1,901.7
Three months ended June 30, 2008		75.1			4,025.2			27.2		48.1		--			4,175.6
Six months ended June 30, 2009		155.6			3,047.5			52.8		80.6		--			3,336.5
Six months ended June 30, 2008		169.7			6,680.3			53.8		73.6		--			6,977.4

Revenues from related parties:
Three months ended June 30, 2009		7.9			0.2			3.5		--		(0.1	)		11.5
Three months ended June 30, 2008		1.3			0.2			3.4		--		--			4.9
Six months ended June 30, 2009		26.8			0.3			7.3		--		(0.1	)		34.3
Six months ended June 30, 2008		4.4			0.4			6.9		--		(0.1	)		11.6

Total revenues:
Three months ended June 30, 2009		86.9			1,751.6			31.1		43.7		(0.1	)		1,913.2
Three months ended June 30, 2008		76.4			4,025.4			30.6		48.1		--			4,180.5
Six months ended June 30, 2009		182.4			3,047.8			60.1		80.6		(0.1	)		3,370.8
Six months ended June 30, 2008		174.1			6,680.7			60.7		73.6		(0.1	)		6,989.0

Depreciation and amortization:
Three months ended June 30, 2009		13.3			6.7			10.3		6.5		--			36.8
Three months ended June 30, 2008		10.5			5.0			10.0		6.4		--			31.9
Six months ended June 30, 2009		24.8			12.3			19.8		12.9		--			69.8
Six months ended June 30, 2008		20.7			9.8			19.6		10.1		--			60.2

Operating income:
Three months ended June 30, 2009		13.5			29.9			3.8		8.3		0.4			55.9
Three months ended June 30, 2008		15.7			25.6			8.3		8.6		1.1			59.3
Six months ended June 30, 2009		47.9			70.8			8.3		13.5		1.1			141.6
Six months ended June 30, 2008		52.0			54.9			16.7		15.2		4.0			142.8

Equity in income (loss) of unconsolidated affiliates:
Three months ended June 30, 2009		(4.3	)		(31.3	)		23.8		--		(0.4	)		(12.2	)
Three months ended June 30, 2008		(3.7	)		4.2			21.9		--		(1.1	)		21.3
Six months ended June 30, 2009		(7.4	)		(28.0	)		49.4		--		(1.1	)		12.9
Six months ended June 30, 2008		(7.8	)		7.2			45.6		--		(4.0	)		41.0

Earnings before interest expense and provision for income taxes:
Three months ended June 30, 2009		9.4			(0.9	)		27.6		8.3		--			44.4
Three months ended June 30, 2008

TEPPCO PARTNERS LP 10-Q