UNITEDTable STATES SECURITIESof AND EXCHANGE COMMISSION Contents

~~Washington,~~UNITED ~~D.C.~~STATES SECURITIES ~~20549~~AND EXCHANGE COMMISSION

~~FORM~~Washington, ~~10-Q~~D.C. 20549 ____________________

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended September 30, 2003
		OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FORM 10-Q

~~Commission~~þ ~~File~~QUARTERLY ~~No. 1-13603~~ REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

TEFor ~~Products~~the ~~Pipeline~~quarterly ~~Company,~~period ~~Limited~~ended ~~Partnership~~March 31, 2004

~~(Exact name of Registrant as specified in its charter)~~OR

~~Delaware~~o ~~(State~~TRANSITION ofREPORT ~~Incorporation~~PURSUANT orTO ~~Organization)~~SECTION ~~76-0329620~~13 OR 15(~~I.R.S.~~d) ~~Employer~~OF ~~Identification~~THE ~~Number)~~SECURITIES EXCHANGE ACT OF 1934

~~2929~~Commission ~~Allen~~File ~~Parkway P~~No.~~O. Box 2521 Houston, Texas 77252~~ 1-~~2521~~13603 ~~(Address of principal executive offices, including zip code)~~____________________

~~(713) 759-3636 (Registrant’s~~TE ~~telephone~~Products ~~number~~Pipeline Company, ~~including~~Limited ~~area code)~~Partnership

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

~~Indicate~~Delaware by(State ~~check~~of ~~mark~~Incorporation ~~whether~~or ~~the~~Organization) ~~registrant~~76-0329620 ~~is an accelerated filer~~ (~~as defined~~I.R.S. inEmployer ~~Rule 12b-2~~Identification ~~of the Exchange Act~~Number)~~. Yes x No o~~

~~TABLE~~2929 OFAllen ~~CONTENTS~~Parkway P.O. Box 2521 Houston, Texas 77252-2521 (Address of principal executive offices, including zip code)

PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	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 and Reports on Form 8-K.
SIGNATURES
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

(713) 759-3636
(Registrant’s telephone number, including area code)

TEIndicate ~~PRODUCTS~~by ~~PIPELINE~~check ~~COMPANY~~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), ~~LIMITED~~and ~~PARTNERSHIP~~(2) has been subject to such filing requirements for the past 90 days. Yes þ No o

~~TABLE~~Indicate OFby ~~CONTENTS~~check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

PART I. FINANCIAL INFORMATION		Page
Item 1. Financial Statements
	Consolidated Balance Sheets as of September 30, 2003 (unaudited) and December 31, 2002		1
	Consolidated Statements of Income for the three months and nine months ended September 30, 2003 and 2002 (unaudited)		2
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2003 and 2002 (unaudited)		3
	Notes to the Consolidated Financial Statements (unaudited)		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
	Forward-Looking Statements		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
Item 4. Controls and Procedures			24
PART II. OTHER INFORMATION			24
Item 1. Legal Proceedings			24
Item 6. Exhibits and Reports on Form 8-K			24
Signatures			29

~~PART~~TE I.PRODUCTS ~~FINANCIAL~~PIPELINE ~~INFORMATION~~COMPANY, LIMITED PARTNERSHIP

~~Item 1.~~TABLE ~~Financial~~OF ~~Statements~~CONTENTS

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2004 (unaudited) and December 31, 2003		1
Consolidated Statements of Income for the three months ended March 31, 2004 and 2003 (unaudited)		2
Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and 2003 (unaudited)		3
Notes to the Consolidated Financial Statements (unaudited)		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Forward-Looking Statements		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk		23
Item 4. Controls and Procedures		24
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		24
Item 6. Exhibits and Reports on Form 8-K		24
Signatures		29
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

~~CONSOLIDATED BALANCE SHEETS~~i ~~(in thousands)~~

					September 30,		December 31,
					2003		2002
					(Unaudited)
				ASSETS
Current assets:
	Cash and cash equivalents				$	48	$	485
	Accounts receivable, trade (net of allowance for doubtful accounts of $1,075 and $287)					26,424		25,930
	Accounts receivable, related parties					229		5,125
	Inventories					14,204		13,800
	Other					6,561		11,939
		Total current assets				47,466		57,279
Property, plant and equipment, at cost (Net of accumulated depreciation and amortization of $271,096 and $284,458)						669,211		722,848
Equity investments						157,529		73,476
Other assets						23,438		29,560
		Total assets			$	897,644	$	883,163
			LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
	Accounts payable and accrued liabilities				$	15,471	$	18,999
	Accounts payable, related parties					5,037		5,685
	Accrued interest					6,049		11,536
	Other accrued taxes					7,385		6,732
	Other					11,825		15,721
		Total current liabilities				45,767		58,673
Senior Notes						397,203		403,428
Note Payable, Parent Partnership						197,917		154,093
Other liabilities and deferred credits						16,373		24,230
Commitments and contingencies
Partners’ capital:
	General partner’s interest					2		2
	Limited partner’s interest					240,382		242,737
		Total partners’ capital				240,384		242,739
		Total liabilities and partners’ capital			$	897,644	$	883,163

~~See~~PART ~~accompanying~~I. ~~Notes~~FINANCIAL ~~to Consolidated Financial Statements.~~INFORMATION

Item 1 . Financial Statements

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

CONSOLIDATED ~~STATEMENTS~~BALANCE ~~OF INCOME~~SHEETS (~~Unaudited) (~~in thousands)

				Three Months Ended							Nine Months Ended
		March 31,				December 31,
				September 30,							September 30,
		2004				2003
				2003				2002			2003			2002
		(Unaudited)
Operating revenues:
ASSETS
	Transportation – Refined products			$	37,992			$	35,271		$	102,688		$	92,218
Current assets:
	Transportation – LPGs				18,498				12,515			62,676			46,688
Cash and cash equivalents		$	43			$	188
	Mont Belvieu operations				—				3,726			—			11,121
Accounts receivable, trade (net of allowance for doubtful accounts of $374)			18,584				25,377
	Other				7,251				7,242			24,151			22,969
Accounts receivable, related parties			4,587				154
		Total operating revenues			63,741				58,754			189,515			172,996
Inventories			10,171				11,186
Costs and expenses:
Other			6,529				10,230
	Operating, general and administrative				29,949				21,256			76,275			60,618
Total current assets			39,914				47,135
	Operating fuel and power				7,762				7,563			23,664			20,202
Property, plant and equipment, at cost (net of accumulated depreciation and amortization of $287,422 and $279,395)			680,762				682,385
	Depreciation and amortization				6,988				7,496			20,925			21,692
Equity investments			156,124				155,861
	Taxes – other than income taxes				2,417				2,711			7,493			8,532
Other assets			26,701				15,267
		Total costs and expenses			47,116				39,026			128,357			111,044
Total assets		$	903,501			$	900,648
		Operating income			16,625				19,728			61,158			61,952
LIABILITIES AND PARTNERS’ CAPITAL
Interest expense					(7,276	)			(6,698	)		(22,213	)		(20,639	)
Current liabilities:
Interest capitalized					814				709			1,704			2,900
Accounts payable and accrued liabilities		$	11,946			$	11,518
Equity losses					(1,437	)			(2,019	)		(2,632	)		(5,005	)
Accounts payable, related parties			15,427				12,277
Other income – net					70				77			119			271
Accrued interest			7,714				15,877
		Income before discontinued operations			8,796				11,797			38,136			39,479
Other accrued taxes			3,893				5,732
Income from discontinued operations					—				—			—			912
Other			8,087				13,983
		Net income		$	8,796			$	11,797		$	38,136		$	40,391
Total current liabilities			47,067				59,387
Senior Notes			398,734				392,164
Note Payable, Parent Partnership			231,815				211,314
Other liabilities and deferred credits			14,782				14,995
Commitments and contingencies
Partners’ capital:
General partner’s interest			2				2
Limited partner’s interest			211,101				222,786
Total partners’ capital			211,103				222,788
Total liabilities and partners’ capital		$	903,501			$	900,648

See accompanying Notes to Consolidated Financial Statements.

TETable PRODUCTSof PIPELINE COMPANY, LIMITED PARTNERSHIP Contents

~~CONSOLIDATED~~TE ~~STATEMENTS~~PRODUCTS OFPIPELINE ~~CASH~~COMPANY, ~~FLOWS (Unaudited) (in~~LIMITED ~~thousands)~~PARTNERSHIP

				Nine Months Ended
				September 30,
				2003			2002
Cash flows from operating activities:
	Net income from continuing operations			$	38,136		$	39,479
	Adjustments to reconcile net income from continuing operations to cash provided by operating activities:
		Depreciation and amortization			20,925			21,692
		Equity in loss of affiliate			2,632			5,005
		Non-cash portion of interest expense			23			23
		(Increase) decrease in accounts receivable			(495	)		3,177
		Increase in inventories			(404	)		(603	)
		Decrease in other current assets			5,378			1,799
		Decrease in accounts payable and accrued expenses			(13,621	)		(3,546	)
		Other			21,237			24,002
			Net cash provided by continuing operations		73,811			91,028
			Net cash provided by discontinued operations		—			1,178
			Net cash provided by operating activities		73,811			92,206
Cash flows from investing activities:
	Proceeds from sale of assets				—			3,380
	Proceeds from sale of TEPPCO Colorado, LLC				—			4,095
	Acquisition of additional interest in Centennial Pipeline LLC				(20,000	)		—
	Investment in Centennial Pipeline LLC				(3,000	)		(7,721	)
	Investment in Mont Belvieu Storage Partners, L.P.				(250	)		—
	Capital expenditures				(37,727	)		(47,423	)
			Net cash used in investing activities		(60,977	)		(47,669	)
Cash flows from financing activities:
	Proceeds from term loan				80,856			176,099
	Repayments of term loan				(53,638	)		(147,667	)
	Equity contribution – Parent Partnership				37,082			2,447
	Distributions paid				(77,571	)		(70,399	)
			Net cash used in financing activities		(13,271	)		(39,520	)
Net increase (decrease) in cash and cash equivalents					(437	)		5,017
Cash and cash equivalents at beginning of period					485			3,654
Cash and cash equivalents at end of period				$	48		$	8,671
Non-cash investing activities:
	Net assets transferred to Mont Belvieu Storage Partners, L.P.			$	61,408		$	—
Supplemental disclosure of cash flows:
	Cash paid for interest (net of amounts capitalized)			$	30,928		$	24,996

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands)

See accompanying Notes to Consolidated Financial Statements.


	Three Months Ended
	March 31,
	2004			2003
Operating revenues:
Transportation – Refined products	$	30,971		$	26,894
Transportation – LPGs		28,780			30,821
Other		13,911			9,254

Total operating revenues		73,662			66,969

Costs and expenses:
Operating, general and administrative		29,048			20,501
Operating fuel and power		8,049			8,178
Depreciation and amortization		8,638			7,008
Taxes – other than income taxes		2,843			2,648

Total costs and expenses		48,578			38,335

Operating income		25,084			28,634
Interest expense – net		(6,909	)		(6,802	)
Equity losses		(1,238	)		(1,259	)
Other income – net		272			(6	)

Net income	$	17,209		$	20,567

3See accompanying Notes to Consolidated Financial Statements.

~~TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP~~2

NOTESTable TOof CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Contents

~~NOTE~~TE 1.PRODUCTS ~~ORGANIZATION~~PIPELINE ~~AND~~COMPANY, ~~BASIS~~LIMITED ~~OF PRESENTATION~~PARTNERSHIP

TECONSOLIDATED ~~Products~~STATEMENTS ~~Pipeline~~OF ~~Company,~~CASH ~~Limited Partnership (the “Partnership”), a~~FLOWS ~~Delaware limited partnership, was formed in March 1990. TEPPCO Partners, L.P.~~ (~~the “Parent Partnership”~~Unaudited) ~~owns a 99.999% interest in us as the sole limited~~ ~~partner. TEPPCO GP, Inc.~~ (~~“TEPPCO GP” or “General Partner”), a subsidiary of the Parent Partnership, holds a 0.001% general partner interest~~ in ~~us. Texas Eastern Products Pipeline Company, LLC (the “Company”~~thousands)~~, a Delaware limited~~ ~~liability company, serves as the general partner of our Parent Partnership.~~ ~~The Company is a wholly owned subsidiary of Duke Energy Field Services, LLC~~ (“DEFS”), a joint venture between Duke Energy Corporation (“Duke Energy”) and ConocoPhillips. Duke Energy holds an approximate 70% interest in DEFS and ConocoPhillips holds the remaining 30%. TEPPCO GP, as general partner, performs all of our management and operating functions required according to the Agreement of Limited Partnership of TE Products Pipeline Company, Limited Partnership (the “Partnership Agreement”). We reimburse our General Partner and the Company for all reasonable direct and indirect expenses that they incur in managing us.

As used in this Report, “we,” “us,” and “our” means TE Products Pipeline Company, Limited Partnership.


	Three Months Ended
	March 31,
	2004			2003
Cash flows from operating activities:
Net income	$	17,209		$	20,567
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		8,638			7,008
Losses in equity investments, net of distributions		1,238			1,259
Non-cash portion of interest expense		7			8
Decrease in accounts receivable		6,793			4,965
Decrease (increase) in inventories		1,015			(2,095	)
Decrease in other current assets		3,700			3,910
Decrease in accounts payable and accrued expenses		(13,332	)		(11,413	)
Other		(8,200	)		2,914

Net cash provided by operating activities		17,068			27,123

Cash flows from investing activities:
Acquisition of additional interest in Centennial Pipeline LLC		—			(20,000	)
Investment in Centennial Pipeline LLC		(1,000	)		(1,000	)
Capital expenditures		(7,820	)		(11,404	)

Net cash used in investing activities		(8,820	)		(32,404	)

Cash flows from financing activities:
Proceeds from term loan		35,474			35,356
Repayments of term loan		(14,973	)		(5,500	)
Equity contribution – Parent Partnership		—			36
Distributions paid		(28,894	)		(24,829	)

Net cash (used in) provided by financing activities		(8,393	)		5,063

Net decrease in cash and cash equivalents		(145	)		(218	)
Cash and cash equivalents at beginning of period		188			485

Cash and cash equivalents at end of period	$	43		$	267

Non-cash investing activities:
Net assets transferred to Mont Belvieu Storage Partners, L.P.	$	—		$	61,042

Supplemental disclosure of cash flows:
Cash paid for interest (net of amounts capitalized)	$	12,610		$	13,789

~~The~~See accompanying ~~unaudited~~Notes ~~consolidated~~to ~~financial~~Consolidated ~~statements~~Financial reflect all adjustments, which are, in the opinion of the management of the Company, of a normal and recurring nature and necessary for a fair statement of our financial position as of September 30, 2003, and the results of our operations and cash flows for the periods presentedStatements. ~~The results of operations for the three~~ ~~months and nine months ended September 30, 2003, are not necessarily indicative~~ ~~of results of our operations for the full year 2003. You should read the~~ ~~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, as amended, for the year ended December 31, 2002. We have reclassified certain amounts from prior periods to conform with the current presentation.

~~We operate and report in one business segment: transportation and storage~~3 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.”

EffectiveTable January 1, 2002, our Parent Partnership realigned its business segments to reflect its entry into the natural gas gathering business and the expanded scope of its natural gas liquids (“NGLs”) operations. As part of this realignment, on May 31, 2002, we transferred our investment in TEPPCO Colorado, LLC (“TEPPCO Colorado”), which fractionates NGLs, to TEPPCO Midstream Companies, L.P. (“TEPPCO Midstream”). As a result of the transfer, the results of operations of TEPPCO Colorado for the periods presented are reflected as discontinued operations (see Note 10. Discontinued Operations). We have reclassified prior periods presented to reflect the current presentation. Contents

~~New~~TE ~~Accounting~~PRODUCTS ~~Pronouncements~~PIPELINE COMPANY, LIMITED PARTNERSHIP

InNOTES ~~December 2002,~~TO ~~the~~CONSOLIDATED ~~Financial~~FINANCIAL ~~Accounting Standards Board (“FASB”) issued~~STATEMENTS ~~Statement of Financial Accounting Standards~~ (~~“SFAS”~~Unaudited) ~~No. 148, Accounting for~~ ~~Stock-Based Compensation – Transition and Disclosure. SFAS 148 amends SFAS No.~~ ~~123, Accounting for Stock-Based Compensation, to provide alternative methods of~~ ~~transition for a voluntary change to the fair value based method of accounting~~ for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on the reported results. The provisions of SFAS 148 are effective for financial statements for fiscal years ending after December 15, 2002. Our Parent Partnership has not granted options for any periods presented. For options outstanding under our 1994 Long Term Incentive Plan, the Parent Partnership followed the intrinsic value method of accounting for recognizing stock-based compensation expense.

4NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

TE ~~PRODUCTS~~Products ~~PIPELINE~~Pipeline ~~COMPANY~~Company, ~~LIMITED~~Limited ~~PARTNERSHIP~~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 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. The Company is a wholly owned subsidiary of Duke Energy Field Services, LLC (“DEFS”), a joint venture between Duke Energy Corporation (“Duke Energy”) and ConocoPhillips. Duke Energy holds an interest of approximately 70% in DEFS, and ConocoPhillips holds the remaining interest of approximately 30%. TEPPCO GP, as 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 (the “Partnership Agreement”). We reimburse our General Partner and the Company for all reasonable direct and indirect expenses that they incur in managing us.

~~NOTES~~ As TOused ~~CONSOLIDATED~~in ~~FINANCIAL~~this ~~STATEMENTS~~Report, –“we,” ~~Continued~~“us,” and “our” means TE Products Pipeline ~~(Unaudited)~~Company, Limited Partnership.

~~Under~~ The ~~this~~accompanying ~~method,~~unaudited ~~the~~consolidated ~~Parent~~financial ~~Partnership~~statements ~~records~~reflect ~~no compensation expense~~all ~~for~~adjustments ~~unit~~that ~~options~~are, ~~granted~~in ~~when~~ the ~~exercise~~opinion ~~price~~ of ~~the~~our ~~options~~management, ~~granted~~of isa normal and ~~equal~~recurring ~~to,~~nature orand ~~greater~~necessary ~~than,~~for ~~the~~a ~~market~~fair ~~price~~statement of ~~the~~our ~~Parent~~financial ~~Partnership’s limited~~position ~~partner~~as ~~units~~of onMarch 31, 2004, and the ~~date~~results of ~~the~~our ~~grant.~~operations ~~Assuming~~and ~~the~~cash ~~Parent~~flows ~~Partnership~~for ~~had~~the ~~used~~periods ~~the~~presented. ~~fair~~The ~~value~~results ~~method~~ of ~~accounting~~operations for ~~its~~the ~~unit~~three ~~option~~months ~~plan,~~ended ~~our pro~~March ~~forma~~31, ~~net~~2004, ~~income~~are ~~for~~not ~~the~~necessarily ~~nine~~indicative ~~months~~of ~~ended~~results ~~September 30,~~of ~~2002,~~our ~~would~~operations befor ~~lower~~the ~~than~~full ~~reported~~year ~~net~~2004. ~~income~~You byshould anread ~~immaterial~~these ~~amount.~~interim ~~Pro~~financial ~~forma~~statements ~~net~~in conjunction ~~income~~with ~~would equal~~our ~~reported~~consolidated ~~net~~financial ~~income~~statements ~~for~~and notes thereto presented in the ~~three~~TE ~~months~~Products ~~ended~~Pipeline ~~September 30~~Company, ~~2003,~~Limited ~~and~~Partnership Annual ~~2002,~~Report ~~and~~on Form 10-K for the ~~nine~~year ~~months~~ ended ~~September~~December 3031, 2003. ~~The~~We ~~adoption~~have ~~of SFAS~~reclassified ~~148~~certain ~~did~~amounts ~~not~~from ~~have~~prior anperiods ~~effect~~to onconform ~~our~~with ~~financial~~the ~~position,~~current ~~results of operations or cash flows~~presentation.

InWe ~~January 2003,~~operate ~~the~~and ~~FASB~~report ~~issued~~in ~~FASB~~one ~~Interpretation~~business ~~No. 46,~~segment: ~~Consolidation~~transportation and storage of ~~Variable~~refined ~~Interest Entities~~products, anliquefied ~~interpretation~~petroleum ofgases ~~ARB No. 51~~ (“~~FIN 46~~LPGs”). ~~FIN 46~~and ~~requires certain variable interest entities to be consolidated by the~~petrochemicals. ~~primary~~Our ~~beneficiary~~interstate oftransportation ~~the~~operations, ~~entity~~including ifrates ~~the~~charged ~~equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity~~ to ~~finance its activities without~~customers, ~~additional subordinated financial support from other parties. We~~ are ~~required to~~subject ~~apply FIN 46~~ to ~~all~~regulations ~~new~~prescribed ~~variable~~by ~~interest~~the ~~entities~~Federal ~~created~~Energy ~~or acquired after~~Regulatory ~~January 31,~~Commission ~~2003~~(“FERC”). ~~For~~We ~~variable~~refer ~~interest entities created or acquired prior~~ to ~~February 1,~~ ~~2003,~~refined ~~we were required to apply FIN 46 on July 1~~products, ~~2003.~~LPGs ~~In connection~~and ~~with~~petrochemicals ~~the adoption of FIN 46, we evaluated our investments~~ in ~~Centennial~~this ~~Pipeline LLC and Mont Belvieu Storage Partners~~Report, ~~L.P. and determined that these entities are not variable interest entities as defined by FIN 46~~collectively, ~~and~~ ~~thus we have accounted for them~~ as ~~equity~~“petroleum ~~method~~products” ~~investments (see Note 6. Equity Investments). The adoption of FIN 46 did not have an effect on our financial position, results of operations~~ or ~~cash flows~~“products.”

InAt ~~April~~March ~~2003~~31, ~~the~~2004, ~~FASB~~and ~~issued SFAS No.~~December ~~149~~31, ~~Amendment~~2003, ofwe ~~Statement~~had ~~133~~working oncapital deficits ~~Derivative~~of ~~Instruments~~$7.2 million and ~~Hedging~~$12.3 million, ~~Activities~~respectively. ~~SFAS~~Cash ~~149~~generated ~~amends SFAS 133 to~~from ~~conform~~operations and ~~incorporate~~from ~~derivative~~our ~~implementation~~Parent ~~issues~~Partnership’s ~~and~~credit ~~subsequently issued~~facilities ~~accounting~~and ~~guidance.~~debt ~~SFAS 149 clarifies under what circumstances a~~and ~~contract~~equity ~~with~~offerings anare ~~initial~~our ~~net~~primary ~~investment~~sources ~~meets~~of ~~the~~liquidity. ~~characteristics~~Working ~~of a~~capital ~~derivative,~~deficits ~~clarifies~~can ~~when~~occur aprimarily ~~derivative~~due ~~contains~~to ~~a financing component, amends~~ the ~~definition~~timing of anoperating ~~underlying~~cash toreceipts ~~conform it to language used in FASB~~from ~~Interpretation No. 45~~customers, ~~Guarantor’s~~payment ~~Accounting~~of ~~and~~cash ~~Disclosure~~distributions ~~Requirements~~and ~~for Guarantees,~~the ~~Including~~payment ~~Indirect Guarantees~~ of ~~Indebtedness~~normal ofoperating expenses ~~Others~~ and ~~amends certain~~capital ~~other existing pronouncements~~expenditures. ~~SFAS~~Our ~~149~~Parent isPartnership ~~effective~~has ~~for contracts~~historically ~~entered~~made ~~into~~capital orcontributions, ~~modified~~loans ~~after~~or ~~June 30,~~otherwise ~~2003,~~provided ~~and~~liquidity ~~should~~to beus ~~applied~~as ~~prospectively. However~~needed, ~~certain~~but ~~SFAS~~the ~~133~~Parent ~~implementation~~Partnership ~~issues~~has ~~that~~no ~~were effective~~contractual ~~for~~obligation ~~all~~to ~~fiscal~~do ~~quarters~~so. ~~prior to June~~At March 1531, ~~2003~~2004, ~~should~~our ~~continue~~Parent toPartnership ~~be applied~~had ~~in accordance with their respective effective dates~~$323.5 million Wein ~~adopted SFAS~~available ~~149~~borrowing ~~effective~~capacity ~~July 1,~~under ~~2003.~~its ~~The~~revolving ~~adoption~~credit offacility ~~SFAS~~and ~~149~~agreed ~~did~~to ~~not~~cover ~~have a material~~any ~~effect~~working oncapital ~~our financial position~~needs, ~~results~~if ~~of operations or cash flows~~required.

InNew ~~May 2003, the FASB issued SFAS No. 150,~~ Accounting ~~for Certain~~Pronouncements ~~Financial Instruments with Characteristics of both Liabilities and Equity.~~ ~~SFAS 150 establishes standards for how an issuer classifies and measures~~ ~~certain freestanding financial instruments with characteristics of both~~ liabilities and equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or asset in some circumstances). We adopted SFAS 150 effective July 1, 2003. The adoption of SFAS 150 did not have a material effect on our financial position, results of operations or cash flows.

In ~~May~~December 2003, the ~~Emerging~~Financial ~~Issues~~Accounting ~~Task~~Standards ~~Force~~Board (“~~EITF~~FASB”) revised ~~reached~~FASB ~~consensus~~Interpretation ~~in EITF 03-04~~No. 46, ~~Accounting~~Consolidation ~~for~~of ~~“Cash~~Variable ~~Balance” Pension Plans~~Interest Entities, toan ~~specifically address~~interpretation ~~the~~of ~~accounting~~ARB ~~for~~No. 51 ~~certain~~(“FIN ~~cash~~46”). ~~balance~~FIN ~~pension~~46, ~~plans.~~issued ~~The~~by ~~consensus~~the ~~reached~~FASB in ~~EITF~~January 2003, ~~03-04~~ requires certain ~~cash~~variable ~~balance~~interest ~~pension~~entities ~~plans~~ to be ~~accounted~~consolidated ~~for~~by asthe ~~defined~~primary ~~benefit~~beneficiary ~~plans.~~of ~~For~~the ~~cash~~entity ~~balance~~if ~~plans~~the ~~described~~equity ininvestors ~~the~~in ~~consensus,~~ the ~~consensus~~entity ~~also~~do ~~requires~~not have the ~~use~~characteristics of ~~the~~a ~~traditional~~controlling ~~unit~~financial ~~credit~~interest ~~method~~or ~~for~~do ~~purposes~~not ofhave ~~measuring~~sufficient ~~benefit~~equity ~~obligations~~at ~~and~~risk ~~annual~~for ~~cost~~the ~~of benefits~~entity ~~earned as opposed~~ to ~~the~~finance ~~projected unit credit method. We have~~its ~~historically~~activities ~~accounted~~without ~~for~~additional ~~our~~subordinated ~~cash~~financial ~~balance~~support ~~plans~~from asother parties. ~~defined~~The ~~benefit~~revised ~~plans; however~~statement, weFASB ~~are~~Interpretation ~~required~~No. 46(R), ~~to adopt the measurement provisions~~ Consolidation of ~~EITF~~Variable ~~03-04~~Interest ~~in our~~Entities, ~~cash~~an ~~balance~~interpretation ~~plans’ next measurement date~~ of ~~December 31,~~ARB ~~2003~~No. 51 ~~Any~~(“FIN 46(R)”), ~~differences~~clarifies insome ~~the measurement~~ of the ~~obligation~~requirements asof aFIN ~~result~~46, ofeases ~~applying~~some ~~the~~implementation ~~consensus~~problems ~~will~~that becompanies ~~reported~~experienced asimplementing aFIN ~~component~~46, ofadds ~~actuarial~~new ~~gain or loss. We do not~~scope ~~believe~~exceptions ~~that~~and makes the ~~adoption~~probability ofmore ~~EITF~~likely ~~03-04~~for ~~will~~many ~~have~~companies ~~a material effect on our~~that ~~financial~~potential ~~position,~~variable ~~results~~interest ofentities ~~operations~~will orbe ~~cash~~identified ~~flows.~~and

TETable PRODUCTSof PIPELINE COMPANY, LIMITED PARTNERSHIP Contents

~~NOTES~~TE TOPRODUCTS ~~CONSOLIDATED~~PIPELINE ~~FINANCIAL~~COMPANY, ~~STATEMENTS~~LIMITED ~~– Continued~~PARTNERSHIP ~~(Unaudited)~~

InNOTES ~~May 2003,~~TO ~~the~~CONSOLIDATED ~~EITF~~FINANCIAL ~~reached consensus in EITF 01-08, Determining Whether~~STATEMENTS ~~an Arrangement Contains a Lease, to clarify the requirements of identifying~~(Unaudited) ~~whether an arrangement should be accounted for as a lease at its inception.~~ ~~The guidance in the consensus is designed to mandate reporting revenue as~~ ~~rental or leasing income that otherwise would be reported as part of product~~ sales or service revenue. EITF 01-08 requires both parties in an arrangement to determine whether a service contract or similar arrangement is or includes a lease within the scope of SFAS No. 13, Accounting For Leases. We have historically leased storage capacity to outside parties and entered into pipeline capacity lease agreements both as the lessee and as the lessor. Upon application of EITF 01-08, the accounting requirements under the consensus could affect the timing of revenue and expense recognition, and revenues reported as transportation and storage services might have to be reported as rental or leasing income. Should capital-lease treatment be necessary, purchasers of transportation and storage services in the arrangements would have to recognize new assets on their balance sheets. The consensus is to be applied prospectively to arrangements agreed to, modified, or acquired in business combinations in fiscal periods beginning after May 28, 2003. Previous arrangements that would be leases or would contain a lease according to the consensus will continue to be accounted for as transportation and storage purchases or sales arrangements. The adoption of EITF 01-08 did not have a material effect on our financial position, results of operations or cash flows.

Inconsolidated. ~~July 2003,~~We adopted the ~~EITF~~new ~~reached~~requirements ~~consensus~~detailed in ~~EITF~~FIN ~~03-11,~~46(R) ~~Reporting~~as ~~Gains~~of ~~and Losses on Derivative Instruments That Are Subject to FASB Statement No. 133~~March 31, ~~Accounting for Derivative Instruments and Hedging Activities, and Not Held for Trading Purposes~~2004. In aconnection ~~2002~~with ~~Issue,~~our ~~the~~adoption ~~EITF~~of ~~reached~~FIN ~~a consensus that all gains and losses~~ 46(~~realized and unrealized~~R), onwe ~~derivative~~evaluated ~~instruments within the~~our ~~scope~~investments ofin ~~SFAS~~Centennial ~~133~~Pipeline ~~should~~LLC beand ~~shown~~Mont ~~net~~Belvieu inStorage ~~the income statement~~Partners, ~~whether or not~~L.P. ~~settled~~and ~~physically,~~determined ifthat ~~the~~these ~~derivative~~entities ~~instruments~~ are ~~held~~not ~~for~~materially ~~trading purposes.~~affected ~~However,~~by ~~the~~our ~~EITF recognized that there may be contracts within the~~adoption ~~scope~~ of ~~SFAS~~FIN ~~133~~46(R), ~~considered~~and ~~not~~thus ~~held~~we ~~for~~have ~~trading~~accounted ~~purposes~~for ~~that~~them ~~warrant further consideration~~ as toequity ~~the~~method ~~appropriate income statement classification of the~~investments ~~gains~~(see ~~and~~Note ~~losses~~5. InEquity ~~EITF 03-11, the EITF clarified certain criteria to use in determining whether gains and losses related to non-trading derivative instruments should be shown net in the income statement~~Investments). The adoption of ~~EITF 03-11~~FIN 46(R) did not have ~~a material~~ an effect on our financial position, results of operations or cash flows.

~~NOTE~~ On 2December 8, 2003, President Bush signed into a law a bill that expands Medicare, primarily adding a prescription drug benefit for Medicare-eligible retirees starting in 2006. ~~ASSET~~We ~~RETIREMENT~~anticipate ~~OBLIGATIONS~~that the benefits our Parent Partnership pays after 2006 could be lower as a result of the new Medicare provisions; however, at this time the retiree medical obligations and costs reported do not reflect any changes as a result of this legislation. Deferring the recognition of the new Medicare provisions’ impact is permitted by FASB Staff Position 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, due to open questions about some of the new Medicare provisions and a lack of authoritative accounting guidance about certain matters. The final accounting guidance could require changes to previously reported information. We do not believe that this regulation will have a material adverse effect on our financial position, results of operations or cash flows.

In ~~June~~December ~~2001~~2003, the FASB issued a revision to Statement of Financial Accounting Standards (“SFAS”) No. ~~143~~132, ~~Accounting~~Employers’ ~~for~~Disclosures ~~Asset~~about Pensions and Other Post-Retirement ~~Obligations~~Benefits. ~~SFAS~~This ~~143~~revision ~~requires~~required usthat tocompanies provide ~~record~~more ~~the~~details ~~fair~~about ~~value~~their ofplan ~~an asset~~assets, ~~retirement~~benefit ~~obligation~~obligations, ascash aflows, benefit ~~liability~~costs inand ~~the~~other ~~period~~relevant ininformation. ~~which~~A wedescription ~~incur~~of ainvestment ~~legal~~policies ~~obligation~~and ~~for~~strategies ~~the~~and ~~retirement~~target ofallocation ~~tangible~~percentages, ~~long-lived~~or ~~assets.~~target Aranges, ~~corresponding~~for these asset iscategories also ~~recorded~~are ~~and~~required ~~depreciated~~in ~~over~~financial ~~the~~statements. ~~life~~Cash flows will include projections of ~~the asset.~~future ~~After~~benefit ~~the~~payments ~~initial~~and ~~measurement~~an estimate of contributions to be made in the ~~asset~~next ~~retirement~~year ~~obligation~~to fund pension and other postretirement benefit plans. In addition to expanded annual disclosures, the ~~liability~~FASB ~~will~~is berequiring ~~adjusted~~companies atto report the ~~end~~various elements of ~~each~~pension ~~reporting~~and ~~period~~other postretirement tobenefit ~~reflect~~costs on a quarterly basis. The guidance is effective ~~changes~~for infiscal ~~the~~years ~~estimated~~ending ~~future~~after ~~cash~~December 15, ~~flows~~2003, ~~underlying~~and ~~the~~for ~~obligation.~~quarters beginning ~~Determination~~after ofDecember 15, ~~any~~2003. ~~amounts~~We ~~recognized~~adopted ~~upon~~the ~~adoption~~provisions isof ~~based~~the ~~upon~~revised ~~numerous~~SFAS 132 ~~estimates~~effective ~~and~~December 31, ~~assumptions~~2003, ~~including~~and ~~future~~certain ~~retirement~~provisions ~~costs,~~regarding ~~future~~disclosure ~~inflation~~of ~~rates~~information ~~and~~about ~~the~~estimated ~~credit-adjusted~~future ~~risk-free~~benefit ~~interest~~payments ~~rates~~in the first quarter of 2004.

~~Our~~NOTE ~~assets consist of an interstate trunk pipeline system and a series of storage facilities that originate along the upper Texas Gulf Coast and extend through the Midwest and northeastern United States~~2. WeINTANGIBLE ~~transport refined~~ASSETS ~~products, LPGs and petrochemicals through the pipeline system. These products~~ ~~are primarily received in the south end of the system and stored and/or~~ ~~transported to various points along the system per customer nominations.~~

We ~~have~~account ~~completed~~for our ~~assessment~~intangible ofassets under SFAS ~~143~~No. 142, Goodwill and Other weIntangible ~~have~~Assets, ~~determined~~which ~~that we~~was ~~are~~issued ~~obligated~~ by ~~contractual~~the orFASB ~~regulatory~~in ~~requirements~~July 2001. toSFAS ~~remove facilities~~142 orprohibits ~~perform~~the ~~other~~amortization ~~remediation~~of ~~upon~~goodwill ~~retirement~~and ofintangible ~~our~~ assets. ~~However,~~with ~~we are~~indefinite ~~not~~useful ~~able~~lives, toand ~~reasonably~~instead ~~determine~~should ~~the~~be ~~fair~~tested ~~value~~for ofimpairment ~~the~~at ~~asset~~least ~~retirement~~annually. ~~obligations~~SFAS ~~for~~142 ~~our~~requires ~~trunk~~that ~~and~~intangible ~~interstate~~assets ~~pipelines~~with ~~and~~definite ~~our~~useful ~~surface~~lives ~~facilities,~~be ~~since~~amortized ~~future~~over ~~dismantlement~~their ~~and~~respective ~~removal~~estimated ~~dates~~useful ~~are indeterminate~~lives. ItIf isan intangible asset ~~impossible~~has toa ~~predict~~finite ~~when~~useful ~~demand~~life, ~~for~~but ~~transportation~~the precise length of ~~the~~that ~~related~~life ~~products will~~is ~~cease.~~not ~~Our~~known, that ~~right-of-way~~intangible ~~agreements~~asset ~~allow~~shall usbe toamortized ~~maintain~~over the ~~right-of-way rather~~best ~~than~~estimate ~~remove~~of ~~the~~its ~~pipe~~useful life. InAt ~~addition~~a minimum, we ~~can~~will ~~evaluate~~assess ~~our~~the ~~trunk~~useful ~~pipelines~~lives and residual values of all ~~for~~intangible ~~alternative~~assets ~~uses,~~on ~~which~~an ~~can~~annual bebasis ~~and~~to ~~have~~determine ~~been~~if ~~found~~adjustments are required.

6 The following table reflects the components of amortized intangible assets, included in other assets on the consolidated balance sheets at March 31, 2004, and December 31, 2003 (in thousands):

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP


	March 31, 2004					December 31, 2003
	Gross Carrying		Accumulated			Gross Carrying		Accumulated
	Amount		Amortization			Amount		Amortization
Amortized intangible assets:
Transportation agreements	$	1,328	$	(211	)	$	1,328	$	(194	)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued~~5 ~~(Unaudited)~~

WeTable will record such asset retirement obligations in the period in which more information becomes available for us to reasonably estimate the settlement dates of the retirement obligations. The adoption of SFAS 143 did not have an effect on our financial position, results of operations or cash flows. Contents

~~NOTE~~TE 3.PRODUCTS ~~INTANGIBLE~~PIPELINE ~~ASSETS~~COMPANY, LIMITED PARTNERSHIP

WeNOTES ~~account~~TO ~~for~~CONSOLIDATED ~~our~~FINANCIAL ~~intangible assets under SFAS No. 142, Goodwill and~~STATEMENTS-Continued ~~Other Intangible Assets which was issued by the FASB in July 2001. SFAS 142~~(Unaudited) ~~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 finite 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 should 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~~At ~~following~~March 31, ~~table~~2004, ~~reflects~~we ~~the~~had ~~components~~$33.4 million of ~~amortized~~excess ~~intangible~~investment in our equity ~~assets~~investment in Centennial Pipeline LLC, ~~included~~which inwas ~~other~~created ~~assets~~upon onformation of the company ~~consolidated~~(see ~~balance~~Note ~~sheets~~5. atEquity Investments). The excess investment is included ~~September 30,~~in ~~2003,~~our ~~and~~equity ~~December~~investments account at March 31, ~~2002~~2004. ~~(in~~This ~~thousands):~~excess investment is accounted for as an intangible asset with an indefinite life. We assess the intangible asset for impairment on an annual basis.

		September 30, 2003					December 31, 2002
		Gross Carrying		Accumulated			Gross Carrying		Accumulated
		Amount		Amortization			Amount		Amortization
Amortized intangible assets:
	Transportation agreements	$	1,328	$	(177	)	$	1,328	$	(127	)

Amortization expense on intangible assets was $16,603 for each of the three month periods ended March 31, 2004 and 2003.

AtEstimated ~~September 30,~~amortization ~~2003,~~expense weon ~~had~~intangible assets will be $330.41 million ~~of excess investment in our~~ ~~equity~~for ~~investment~~each ~~in Centennial Pipeline LLC, which was created upon formation~~ of the ~~company~~years ~~(see~~ending ~~Note 6. Equity Investments). The excess investment is included in our equity investments account at September~~December 3031, ~~2003.~~2004 ~~This~~through ~~excess investment is accounted for as an intangible asset with an indefinite life~~2008. We ~~will assess the intangible asset for impairment on an annual basis.~~

~~Amortization~~NOTE ~~expense~~3. onINTEREST ~~intangible~~RATE ~~assets was $16,603 and $12,500 for the~~SWAP ~~three months ended September 30, 2003 and 2002, respectively, and $49,808 and~~ ~~$37,500 for the nine months ended September 30, 2003 and 2002, respectively.~~

~~Estimated~~On ~~amortization~~October 4, 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 7.51% 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 three months ended March 31, 2004, and 2003, we recognized reductions in interest expense of $2.6 million and $2.4 million, respectively, related to the difference between the fixed rate and the floating rate of interest on ~~intangible~~the ~~assets~~interest ~~will~~rate swap. During the quarter ended March 31, 2004, 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 $08.19 million at ~~for~~March 31, ~~each~~2004, and a gain of ~~the~~approximately ~~years~~$2.3 million ~~ending~~at December 31, 2003 ~~through 2007~~.

NOTE 4. ~~DERIVATIVE FINANCIAL INSTRUMENTS~~INVENTORIES

OnInventories ~~October 4,~~are ~~2001,~~valued weat ~~entered into an interest rate swap agreement to hedge our exposure to changes in~~ the ~~fair~~lower ~~value~~ of ~~our~~cost ~~fixed~~(based ~~rate~~on ~~7.51%~~weighted ~~Senior~~average ~~Notes~~cost ~~due~~method) ~~2028.~~or ~~We designated this swap agreement as a fair value hedge~~market. The ~~swap~~ ~~agreement~~costs ~~has a notional amount~~ of ~~$210.0 million~~inventories ~~and~~did ~~matures~~not inexceed ~~January 2028~~market ~~to match the principal and maturity of the 7.51% Senior Notes. Under the~~values ~~swap~~at ~~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~~March 3031, ~~2003~~2004, and ~~2002, we recognized reductions in interest expense of $7.4~~December ~~million and $5.4 million~~31, ~~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,~~ 2003~~, 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~~major ~~value~~components of ~~this interest rate swap was a gain of approximately $7.3~~inventories ~~million~~were ~~and~~as ~~$13.6 million~~follows at(in ~~September 30, 2003, and December 31, 2002,~~thousands): ~~respectively.~~


	March 31,		December 31,
	2004		2003
Refined products	$	5,119	$	6,632
LPGs		418		517
Materials and supplies		4,634		4,037

Total	$	10,171	$	11,186

TENOTE ~~PRODUCTS~~5. ~~PIPELINE~~EQUITY ~~COMPANY, LIMITED PARTNERSHIP~~INVESTMENTS

~~NOTES~~ In TOAugust 2000, ~~CONSOLIDATED~~we ~~FINANCIAL~~entered ~~STATEMENTS~~into –agreements ~~Continued~~with Panhandle Eastern Pipeline Company (~~Unaudited~~“PEPL”), a former subsidiary of CMS Energy Corporation, and Marathon Ashland Petroleum LLC (“Marathon”) to form Centennial Pipeline LLC (“Centennial”). Centennial owns an interstate refined petroleum products pipeline extending from the upper Texas Gulf Coast to central Illinois. Through February 9, 2003, each participant owned a one-third interest in Centennial. On February 10, 2003, we and Marathon each acquired an additional interest in Centennial from PEPL for $20.0 million each, increasing our ownership percentages in Centennial to 50% each. During the three months

~~NOTE 5. INVENTORIES~~6

InventoriesTable are carried at the lower of cost (based on weighted average cost method) or market. The major components of inventories were as follows (in thousands): Contents

		September 30,		December 31,
		2003		2002
Gasolines		$	557	$	4,700
Butanes			4,222		1,991
Transmix			2,632		2,526
Other products			—		845
Materials and supplies			6,793		3,738
	Total	$	14,204	$	13,800

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

~~The~~NOTES ~~costs~~TO ofCONSOLIDATED ~~inventories~~FINANCIAL ~~did not exceed market values at September 30,~~STATEMENTS-Continued ~~2003, and December 31, 2002.~~(Unaudited)

~~NOTE~~ended 6March 31, 2004, we invested $1.0 million ~~EQUITY~~in ~~INVESTMENTS~~Centennial, which is included in the equity investment balance at March 31, 2004.

InAs ~~August~~of January ~~2000~~1, 2003, we ~~entered~~and ~~into~~Louis ~~agreements~~Dreyfus ~~with~~Energy ~~Panhandle~~Services, ~~Eastern~~L.P. ~~Pipeline Company~~ (“~~PEPL~~Louis Dreyfus”), aformed ~~former~~Mont ~~subsidiary~~Belvieu ofStorage ~~CMS~~Partners, ~~Energy~~L.P. ~~Corporation,~~(“MB ~~and~~Storage”). ~~Marathon~~We and ~~Ashland~~Louis ~~Petroleum~~Dreyfus ~~LLC~~each ~~(“Marathon”)~~own toa ~~form~~50% ~~Centennial~~ownership ~~Pipeline~~interest ~~LLC (“Centennial”)~~in MB Storage. ~~Centennial~~The ~~owns~~purpose anof MB ~~interstate~~Storage ~~refined~~is ~~petroleum~~to ~~products pipeline~~expand ~~extending~~services ~~from~~to the upper Texas Gulf Coast toenergy marketplace ~~Illinois.~~by ~~Through~~increasing pipeline throughput and the mix of products handled ~~February 9,~~through ~~2003,~~the ~~each~~existing ~~participant~~system ~~owned~~and establishing new receipt and delivery connections. MB Storage is a ~~one~~service-~~third~~oriented, ~~interest~~fee-based inventure ~~Centennial~~with no commodity trading activity. We operate the facilities for MB Storage. OnEffective ~~February~~January 101, 2003, we ~~and~~contributed ~~Marathon~~property, ~~each~~plant ~~acquired~~and anequipment ~~additional~~with ~~interest in~~a ~~Centennial~~net ~~from~~book ~~PEPL~~value ~~for~~of $2067.01 million ~~each~~to MB Storage. Additionally, ~~increasing~~as ~~our~~of ~~percentage~~the ~~ownerships~~contribution indate, ~~Centennial~~Louis toDreyfus ~~50%~~had ~~each~~invested $6.1 million ~~During~~for ~~the~~expansion projects ~~nine~~for ~~months~~MB ~~ended~~Storage ~~September 30,~~that ~~2003,~~we ~~excluding~~were ~~the~~required ~~amount~~to ~~paid~~reimburse ~~for~~if the ~~acquisition~~original joint ofdevelopment ~~the~~and ~~additional ownership~~marketing ~~interest,~~agreement wewas ~~contributed~~terminated ~~approximately~~by $3either party.~~0 million~~ ~~to Centennial,~~This ~~which~~deferred isliability ~~included~~was inalso contributed and converted to the ~~equity~~capital ~~investment~~account ~~balance~~of Louis atDreyfus ~~September 30,~~in ~~2003~~MB Storage.

AsWe ofreceive ~~January 1,~~the ~~2003,~~first we$1.8 million ~~and~~per ~~Louis~~quarter ~~Dreyfus Energy Services, L.P.~~ (~~“Louis Dreyfus”)~~or ~~effectively formed Mont Belvieu Storage Partners, L~~$7.P.15 million ~~(“MB Storage”).~~on ~~We and Louis Dreyfus each own a 50% ownership interest in MB~~an ~~Storage.~~annual ~~The~~basis) ~~purpose~~ of MB Storage’s isincome tobefore ~~expand~~depreciation ~~services~~expense toless ~~the upper Texas~~mandatory ~~Gulf~~capital ~~Coast~~expenditures, ~~energy~~as ~~marketplace~~defined byin ~~increasing pipeline throughput and~~ the ~~mix~~operating ~~of products handled through the existing system and establishing new receipt and delivery connections~~agreement. MBAny ~~Storage~~amount isof ~~a service-oriented, fee-based venture with no commodity trading activity. We continue to operate the facilities for~~ MB Storage.’s ~~Effective~~annual ~~January 1,~~income ~~2003,~~before wedepreciation ~~contributed~~expense ~~property~~less ~~and~~mandatory ~~equipment with~~capital aexpenditures ~~net~~in ~~book~~excess ~~value~~ of $677.415 million tois MBallocated ~~Storage.~~evenly ~~Additionally,~~between ~~as of the contribution date,~~ Louis Dreyfus ~~had~~and ~~invested $6~~us.~~1 million~~ ~~for~~Depreciation ~~expansion projects~~expense ~~for~~on MBassets ~~Storage~~each ~~that~~originally wecontributed ~~were required~~ to ~~reimburse if the original~~ ~~joint~~MB ~~development~~Storage ~~and~~is ~~marketing~~allocated ~~agreement~~between ~~was~~us ~~terminated by either party. This deferred liability was also contributed~~ and ~~converted to the capital account of~~ Louis Dreyfus inbased MBon ~~Storage. We receive~~ the ~~first~~net ~~$1.8 million per quarter~~book ~~(or~~value ~~$7.2 million on an annual basis)~~ of MBthe ~~Storage’s~~assets ~~earnings~~contributed. ~~before~~Depreciation ~~interest, taxes,~~expense ~~depreciation~~on ~~and~~assets ~~amortization,~~constructed ~~as defined in the operating agreement.~~or ~~Any~~acquired ~~amount~~by of MB Storage’s ~~earnings~~subsequent ~~before~~to ~~interest,~~formation ~~taxes, depreciation and amortization in excess of the $7.2 million~~ is allocated evenly between ~~Louis~~us ~~Dreyfus~~ and usLouis Dreyfus. For the ~~nine~~three months ended ~~September~~March 3031, ~~2003~~2004, our sharing ratio in the earnings of MB Storage was approximately 7466.4%.

We use the equity method of accounting to account for our ~~investment~~investments in Centennial and MB Storage. Summarized combined financial information for Centennial and MB Storage for the ~~nine~~three months ended ~~September~~March 3031, ~~2003,~~2004 and ~~Centennial~~ ~~for the nine months ended September 30~~2003, ~~2002,~~ is presented below (in thousands):


	Three Months Ended
	March 31,
	2004			2003
Revenues	$	12,151		$	9,043
Net loss		(996	)		(3,189	)

TE Summarized ~~PRODUCTS~~combined ~~PIPELINE~~balance ~~COMPANY~~sheet data for Centennial and MB Storage as of March 31, ~~LIMITED~~2004, ~~PARTNERSHIP~~and December 31, 2003, is presented below (in thousands):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued (Unaudited)


	March 31,		December 31,
	2004		2003
Current assets	$	53,881	$	26,771
Noncurrent assets		348,513		351,241
Current liabilities		40,909		35,032
Long-term debt		140,000		140,000
Noncurrent liabilities		13,292		13,182
Partners’ capital		208,193		189,798

	Nine Months Ended
	September 30,
	2003			2002
Revenues	$	37,971		$	10,652
Net loss		(3,246	)		(14,384	)

Our investment in Centennial includes an excess net investment amount of $33.4 million (see Note 2. Intangible Assets). Excess investment is the amount by which our investment balance exceeds our proportionate share of the net assets of the investment.

~~Summarized combined balance sheet data for Centennial and MB Storage as of~~7 ~~September 30, 2003, and for Centennial as of December 31, 2002, is presented below (in thousands):~~

	September 30,		December 31,
	2003		2002
Current assets	$	24,886	$	8,184
Noncurrent assets		350,677		285,885
Current liabilities		31,384		19,949
Long-term debt		140,000		140,000
Noncurrent liabilities		14,234		14,875
Partners’ capital		189,945		119,245

~~Our~~TE ~~investment~~PRODUCTS inPIPELINE ~~Centennial~~COMPANY, ~~includes~~LIMITED ~~an excess net investment amount of~~PARTNERSHIP ~~$33.4 million (see Note 3. Intangible Assets). Excess investment is the~~ ~~amount by which our investment balance exceeds our proportionate share of the~~ ~~net assets of the investment.~~

~~NOTE~~NOTES 7.TO ~~LONG~~CONSOLIDATED ~~TERM~~FINANCIAL ~~DEBT~~STATEMENTS-Continued (Unaudited)

~~Senior~~NOTE ~~Notes~~6. DEBT

~~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~~On ~~Senior~~January 27, ~~Notes~~1998, dowe ~~not~~completed ~~have~~the ~~sinking~~issuance ~~fund~~of ~~requirements~~$180.0 million ~~Interest~~principal amount onof ~~the~~ 6.45% Senior Notes isdue ~~payable~~2008, ~~semiannually~~and ~~in arrears on January~~$210.0 15million ~~and~~principal ~~July 15~~amount of ~~each year~~7.51% ~~The~~ Senior Notes ~~are~~due ~~unsecured~~2028 ~~obligations~~(collectively ~~and~~the ~~rank~~“Senior onNotes”). aThe ~~parity~~6.45% ~~with~~Senior ~~all~~Notes ofwere ~~our~~issued ~~other~~at ~~unsecured~~a ~~and~~discount ~~unsubordinated~~of ~~indebtedness~~$0.3 million ~~The~~and ~~indenture~~are being accreted ~~governing~~to their face value over the ~~Senior~~term ~~Notes~~of ~~contains~~the ~~covenants,~~notes. ~~including,~~The ~~but~~6.45% ~~not~~Senior ~~limited~~Notes ~~to,~~due ~~covenants~~2008 ~~limiting~~are ~~the~~not ~~creation~~subject ofto ~~liens~~redemption ~~securing~~prior ~~indebtedness~~to ~~and~~January 15, ~~sale~~2008. ~~and leaseback~~The ~~transactions~~7.51% ~~However,~~Senior Notes ~~the~~due ~~indenture~~2028, ~~does~~issued ~~not~~at ~~limit~~par, ~~our~~may ~~ability~~be ~~to incur~~redeemed ~~additional~~at ~~indebtedness.~~any Astime ofafter ~~September~~January 3015, ~~2003~~ 2008, weat ~~were~~our option in ~~compliance with~~whole ~~the~~or ~~covenants~~in ofpart, ~~the~~at ~~Senior~~a ~~Notes~~premium.

WeThe Senior Notes do not have ~~entered~~sinking ~~into~~fund anrequirements. ~~interest~~Interest ~~rate~~on ~~swap~~the Senior ~~agreement~~Notes tois ~~hedge~~payable ~~our~~semiannually ~~exposure~~in arrears on January 15 and July 15 of toeach ~~changes~~year. inThe ~~the~~Senior ~~fair~~Notes ~~value~~are unsecured obligations and rank on a ~~portion~~parity with all of our other unsecured and unsubordinated indebtedness. The indenture governing the Senior Notes ~~discussed~~contains ~~above~~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 ~~See~~incur ~~Note~~additional 4indebtedness. ~~Derivative~~As ~~Financial~~of ~~Instruments~~March 31, 2004, we were in compliance with the covenants of the Senior Notes.

~~Other~~ We ~~Long~~have ~~Term~~entered ~~Debt~~into ~~and~~an ~~Credit~~interest ~~Facilities~~rate swap agreement to hedge our exposure to changes in the fair value on a portion of the Senior Notes discussed above. See Note 3. Interest Rate Swap.

WeAt ~~currently~~March 31, ~~utilize~~2004, ~~debt~~the ~~financing~~estimated ~~available~~fair ~~from~~values ~~our Parent Partnership through intercompany notes. The terms~~ of the ~~intercompany~~6.45% ~~notes~~Senior ~~generally~~Notes ~~match~~and ~~the~~7.51% ~~principal~~Senior ~~and~~Notes ~~interest~~were ~~payment~~approximately ~~dates~~$198.5 million ~~under~~and ~~the Parent Partnership’s credit~~$238.2 million, ~~agreements~~respectively. ~~The~~Market ~~interest~~prices ~~rates~~for ~~charged~~recent bytransactions ~~the~~and ~~Parent~~rates ~~Partnership include the~~currently ~~stated~~available ~~interest~~to ~~rate~~us offor ~~the~~debt ~~Parent~~with ~~Partnership,~~similar ~~plus~~terms aand ~~premium~~maturities towere ~~cover~~used ~~debt~~to ~~issuance~~estimate ~~costs.~~fair ~~The interest rate is also decreased or~~value.

9Other Long Term Debt and Credit Facilities

TE We ~~PRODUCTS~~currently ~~PIPELINE~~utilize ~~COMPANY~~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 agreements. The interest rates charged by the Parent Partnership include the stated interest rate of the Parent Partnership, ~~LIMITED~~plus ~~PARTNERSHIP~~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 respective credit agreements. These credit facilities of the Parent Partnership are described below.

~~NOTES~~ On TOApril 6, ~~CONSOLIDATED~~2001, ~~FINANCIAL~~our ~~STATEMENTS~~Parent –Partnership ~~Continued~~entered into a $500.0 million revolving credit facility including the issuance of letters of credit of up to $20.0 million (~~Unaudited~~“Three Year Facility”). The interest rate was based, at our Parent Partnership’s 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 Three Year Facility contained certain restrictive financial covenant ratios. During the first quarter of 2003, our Parent Partnership repaid $182.0 million of the outstanding balance of the Three Year Facility with proceeds from the issuance of its 6.125% Senior Notes on January 30, 2003. On June 27, 2003, our Parent Partnership repaid the outstanding balance under the Three Year Facility with borrowings under a new credit facility, and canceled the Three Year Facility.

~~increased~~ On toFebruary 20, ~~cover~~2002, ~~gains~~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 ~~losses,~~are ~~respectively,~~being onaccreted ~~any~~to ~~interest~~their ~~rate~~face value ~~swaps~~over ~~that~~the term of the notes. The Senior Notes may be redeemed at any time at our Parent Partnership’s ~~may~~option ~~have~~with inthe ~~place~~payment onof ~~its~~accrued ~~respective~~interest ~~credit~~and a ~~agreements.~~make-whole ~~These~~premium ~~credit~~determined ~~facilities~~by discounting remaining interest and principal payments using a discount rate equal to the rate of the ~~Parent~~United ~~Partnership~~States ~~are~~Treasury securities ~~described~~of comparable remaining maturity plus 35 basis points. The ~~below~~indenture governing these 7.625% Senior Notes contains covenants, including, but not limited to, covenants limiting the creation of liens securing indebtedness and sale and

~~On April 6, 2001, our Parent Partnership entered into a $500.0 million~~8 revolving credit facility including the issuance of letters of credit of up to $20.0 million (“Three Year Facility”). The interest rate was based, at our Parent Partnership’s 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 Three Year Facility contained certain restrictive financial covenant ratios. During 2002, our Parent Partnership’s borrowings under the Three Year Facility were used to finance the acquisitions of the Chaparral NGL system on March 1, 2002, and Val Verde Gas Gathering Company (“Val Verde”) on June 30, 2002, and for general Parent Partnership purposes. During 2002, our Parent Partnership made repayments on the Three Year Facility with proceeds from the issuance of its 7.625% Senior Notes, proceeds from the issuance of its units representing limited partnership interests (“Limited Partner Units”) and proceeds from the termination of interest rate swaps. During the first quarter of 2003, our Parent Partnership repaid $182.0 million of the outstanding balance of the Three Year Facility with proceeds from the issuance of its 6.125% Senior Notes on January 30, 2003. On June 27, 2003, our Parent Partnership repaid the outstanding balance under the Three Year Facility with borrowings under a new credit facility, and canceled the Three Year Facility.

OnTable June 27, 2003, our Parent Partnership entered into a $550.0 million 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’s 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. The Parent Partnership borrowed $263.0 million under the Revolving Credit Facility and repaid the outstanding balance of the Three Year Facility. On September 30, 2003, $225.0 million was outstanding under the Revolving Credit Facility. Contents

OnTE ~~April 6,~~PRODUCTS ~~2001,~~PIPELINE ~~our Parent Partnership entered into a 364-day~~COMPANY, ~~$200.0 million~~LIMITED ~~revolving credit agreement (“Short-term Revolver”). The interest rate~~PARTNERSHIP ~~was based, at our Parent Partnership’s 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 contained certain restrictive financial covenant ratios.~~ On March 28, 2002, the Short-term Revolver was extended for an additional period of 364 days, ending in March 2003. During 2002, the Parent Partnership’s borrowings under the Short-term Revolver were used to finance the acquisition of the Val Verde assets and for other purposes. During 2002, the Parent Partnership repaid the existing amounts outstanding under the Short-term Revolver with proceeds it received from the issuance of Limited Partner Units in 2002. The Short-term Revolver expired on March 27, 2003.

OnNOTES ~~February 20,~~TO ~~2002,~~CONSOLIDATED ~~our~~FINANCIAL 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 Parent Partnership used the proceeds from the offering to reduce a portion of the outstanding balances of its credit facilities. 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 makeSTATEMENTS-~~whole~~Continued ~~premium determined by discounting remaining interest and principal payments~~(Unaudited) ~~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 these 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.

Onleaseback ~~January 30,~~transactions. ~~2003~~However, 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~~indenture ofdoes ~~the~~not ~~notes.~~limit ~~The~~our Parent Partnership’s ~~used~~ability ~~$182.0 million of the proceeds from the offering~~ to ~~reduce~~incur ~~the~~additional ~~outstanding principal on the Three Year Facility to $250~~indebtedness.~~0 million. The balance of the net proceeds received was~~ ~~used for general Parent Partnership purposes. The 6.125% Senior Notes may be redeemed~~ ~~at any time at our~~

10 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 Parent Partnership used $182.0 million of the proceeds from the offering to reduce the outstanding principal on the Three Year Facility to $250.0 million. The balance of the net proceeds received was used for general Parent Partnership purposes. The 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.

TE On ~~PRODUCTS~~June 27, ~~PIPELINE~~2003, ~~COMPANY~~our Parent Partnership entered into a $550.0 million revolving credit facility with a three year term, ~~LIMITED~~including ~~PARTNERSHIP~~the issuance of letters of credit of up to $20.0 million (“Revolving Credit Facility”). The interest rate is based, at our Parent Partnership’s 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. Our Parent Partnership borrowed $263.0 million under the Revolving Credit Facility and repaid the outstanding balance of the Three Year Facility. At March 31, 2004, $226.5 million was outstanding under the Revolving Credit Facility.

~~NOTES~~ As TOof ~~CONSOLIDATED~~March 31, ~~FINANCIAL~~2004, ~~STATEMENTS~~and –December 31, ~~Continued~~2003, we had an intercompany note ~~(Unaudited)~~payable to our Parent Partnership of $231.8 million and $211.3 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 March 31, 2004, was 5.2%. At March 31, 2004, accrued interest includes $2.0 million due to the Parent Partnership. For the three months ended March 31, 2004 and 2003, interest costs incurred on the note payable to the Parent Partnership totaled $2.9 million and $2.7 million, respectively.

~~Parent~~Short ~~Partnership’s~~Term ~~option~~Credit ~~with the payment of accrued interest and a~~Facilities ~~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.

AtOn ~~September~~April 306, ~~2003~~2001, ~~and~~our ~~December 31,~~Parent ~~2002,~~Partnership weentered ~~had~~into ana ~~intercompany~~364-day, ~~note~~$200.0 ~~payable~~million torevolving ~~our~~credit ~~Parent~~agreement ~~Partnership~~(“Short-term ~~of $197~~Revolver”).~~9 million~~ ~~and~~The ~~$154.1 million,~~interest rate ~~respectively~~was based, ~~which~~at ~~represented~~our ~~borrowings under the~~ Parent Partnership’s ~~Revolving~~ ~~Credit Facility~~option, ~~7.625%~~on ~~Senior~~either ~~Notes~~the ~~and~~lender’s ~~6.125%~~base ~~Senior Notes. The~~rate ~~interest~~plus ~~rate~~a onspread, ~~the~~or ~~note~~LIBOR ~~payable~~plus toa ~~the~~spread ~~Parent~~in ~~Partnership~~effect at ~~September 30, 2003,~~the ~~was~~time 6of the borrowings.~~1%.~~ The Atcredit ~~September 30,~~agreement ~~2003,~~contained ~~accrued~~certain ~~interest~~restrictive ~~includes~~financial $0covenant ratios.~~5 million~~ ~~due~~On toMarch 28, ~~our~~2002, ~~Parent~~the ~~Partnership.~~Short-term ~~For~~Revolver ~~the~~was ~~nine~~extended ~~months~~for ~~ended~~an ~~September 30, 2003,~~additional ~~interest~~period ~~costs~~of ~~incurred~~364 days, onending ~~the~~in ~~note~~March 2003. ~~payable~~The toShort-term ~~our~~Revolver ~~Parent~~expired ~~Partnership totaled~~on ~~$8.8~~March ~~million~~27, 2003.

NOTE 87. QUARTERLY DISTRIBUTIONS 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~~three months ended ~~September~~March 3031, ~~2003~~2004 and ~~2002~~2003, we paid cash distributions to our Parent Partnership totaling $7728.69 million and $7024.4 8 million, respectively. ~~The distribution increase reflects our success in improving cash flow levels.~~ On ~~November~~ May 7, ~~2003~~2004, we will pay a cash distribution ofto ~~approximately~~our Parent Partnership of $2829.0 7 million for the quarter ended ~~September~~March 3031, ~~2003~~2004.

~~NOTE~~ 9~~. COMMITMENTS AND CONTINGENCIES~~

InTable 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, in 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. We have filed an answer to both complaints, denying the allegations, as well as various other motions. These cases are not covered by insurance. Discovery is ongoing, and we are defending ourselves vigorously against the lawsuits. The plaintiffs have not stipulated the amount of damages that they are seeking in the suits. We cannot estimate the loss, if any, associated with these pending lawsuits. Contents

~~On December 21, 2001, we were named as a defendant in a lawsuit in the 10th Judicial District, Natchitoches Parish, Louisiana, in Rebecca L. Grisham et al. v.~~ TE ~~Products~~PRODUCTS ~~Pipeline~~PIPELINE ~~Company~~COMPANY, ~~Limited~~LIMITED ~~Partnership. In this case,~~PARTNERSHIP ~~the plaintiffs contend that our pipeline, which crosses the plaintiffs’~~ ~~property, leaked toxic products onto the plaintiffs’ property. The plaintiffs~~ ~~further contend that this leak caused damages to the plaintiffs. We have filed~~ an answer to the plaintiffs’ petition denying the allegations. The plaintiffs have not stipulated the amount of damages they are seeking in the suit. We are defending ourselves vigorously against the lawsuit. We cannot estimate the damages, if any, associated with this pending lawsuit; however, this case is covered by insurance.

11NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-Continued (Unaudited)

TENOTE ~~PRODUCTS~~8. ~~PIPELINE~~EMPLOYEE ~~COMPANY,~~BENEFIT ~~LIMITED PARTNERSHIP~~PLANS

~~NOTES~~Retirement ~~TO CONSOLIDATED FINANCIAL STATEMENTS – Continued~~Plans ~~(Unaudited)~~

InThe ~~May 2003,~~Parent ~~the~~Partnership ~~Company~~has ~~was~~adopted ~~named~~the asTEPPCO aRetirement ~~defendant~~Cash inBalance ~~a lawsuit styled John~~Plan R.(“TEPPCO ~~James~~RCBP”), etwhich ~~al.~~is v.a ~~J Graves Insulation Company~~noncontributory, ettrustee-administered ~~al.~~pension ~~as filed in the first~~plan. ~~Judicial~~In ~~District Court~~addition, ~~Caddo~~certain ~~Parish,~~executive ~~Louisiana.~~officers ~~There~~participate ~~are numerous plaintiffs identified~~ in the ~~action~~TEPPCO ~~that are alleged to have suffered damages~~Supplemental asBenefit ~~the~~Plan ~~result~~(“TEPPCO ofSBP”), ~~alleged~~which ~~exposure~~is ~~to asbestos-containing products and materials. According to the petition and as~~ a ~~result~~noncontributory, ~~of a preliminary investigation~~nonqualified, ~~the Company believes that the only claim asserted against it~~defined ~~results~~benefit ~~from~~retirement ~~one~~plan. ~~individual~~The ~~for~~TEPPCO ~~the~~SBP ~~period~~was ofestablished ~~July 1971~~to ~~through~~restore ~~June 1972, who~~benefit isreductions ~~alleged~~caused ~~to have worked on a facility owned~~ by the ~~Company’s~~maximum ~~predecessor. This~~benefit ~~period~~limitations ~~represents~~that aapply ~~small~~to ~~portion of the total alleged exposure period~~qualified ~~from January 1964 through December 2001 for this individual~~plans. The ~~individual’s claims~~benefit ~~involve~~formula ~~numerous~~for ~~employers~~all ~~and~~eligible ~~alleged~~employees ~~job~~is ~~sites.~~a ~~Currently,~~cash ~~the~~balance ~~Company~~formula. ~~has~~Under ~~been~~a ~~unable~~cash tobalance ~~confirm~~formula, ~~involvement~~a byplan ~~the~~participant ~~Company~~accumulates ~~or its~~a ~~predecessors~~retirement ~~with~~benefit ~~the~~based ~~alleged~~upon ~~location~~pay ~~and~~credits ~~it is currently uncertain whether this case is covered by insurance. Discovery is planned,~~ and ~~the~~current ~~Company intends~~interest ~~to defend itself vigorously against this lawsuit~~credits. The ~~plaintiffs have~~ ~~not~~pay ~~stipulated~~credits ~~the amount of damages that they~~ are ~~seeking~~based inon ~~this~~a ~~suit.~~participant’s ~~We are~~salary, ~~obligated~~age toand ~~reimburse the Company for any costs it incurs related to this lawsuit~~service. WeThe ~~cannot estimate the loss, if any, associated with this pending~~Parent ~~lawsuit.~~Partnership Weuses ~~do not believe that the outcome of this lawsuit will have~~ a ~~material~~ ~~adverse~~December 31 ~~effect~~measurement ondate ~~our~~for ~~financial~~these ~~position, results of operations or cash flows~~plans.

OnThe ~~April 2,~~components 2003, Centennial was served with a petition in a matter styled Adams, et al. v. Centennial Pipeline Company LLC, et al. This matter involves approximately 2,000 plaintiffs who allege that over 200 defendants, including Centennial, generated, transported, and/or disposed of ~~hazardous~~net ~~and~~pension ~~toxic waste~~benefits atcosts ~~two~~allocated ~~sites in Bayou Sorrell, Louisiana, an underground injection well and a landfill. The plaintiffs allege personal injuries ranging from headaches and allergies~~ to ~~birth~~us ~~defects,~~for ~~cancer and death. The underground injection well has been in operation since May 1976. Based upon current information, Centennial appears to be a de minimis contributor, having used~~ the ~~disposal~~ ~~site~~TEPPCO ~~during~~RCBP ~~the two month time period of December 2001 to January 2002. The plaintiffs have made a global settlement offer of $198.5 million. The defendants have rejected this offer~~ and ~~are~~the ~~preparing~~TEPPCO toSBP ~~make a global settlement counteroffer. Marathon is handling this matter~~ for ~~Centennial~~the ~~under its~~three ~~operating~~months ~~agreement~~ended ~~with Centennial. We have a 50% ownership interest in Centennial. Based upon Centennial’s limited involvement with the disposal site~~March 31, we2004 ~~do not believe that the outcome of this matter will have a material~~and ~~adverse effect on our financial position~~2003, ~~results~~were ofas ~~operations~~follows or(in ~~cash flows.~~thousands):

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 material adverse effect on our consolidated financial position, results of operations or cash flows.


	Three Months Ended
	March 31,
	2004			2003
Service cost benefit earned during the period	$	635		$	540
Interest cost on projected benefit obligation		120			87
Expected return on plan assets		(157	)		(108	)
Amortization of prior service cost		2			2
Recognized net actuarial loss		3			4

Net pension benefits costs	$	603		$	525

~~Our~~Other ~~operations~~Postretirement ~~are subject to federal, state and local laws and~~Benefits ~~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.

InEffective ~~1994~~January 1, 2001, the ~~Louisiana~~Parent ~~Department~~Partnership ofprovides ~~Environmental~~certain ~~Quality~~health care ~~(“LDEQ”)~~and ~~issued a~~life ~~compliance~~insurance ~~order~~benefits for ~~environmental~~retired ~~contamination~~employees aton ~~our~~a ~~Arcadia,~~contributory ~~Louisiana,~~and ~~facility.~~non-contributory ~~This~~basis ~~contamination~~(“TEPPCO ~~may~~OPB”). beEmployees ~~attributable~~become toeligible ~~our~~for ~~operations, as well as~~these tobenefits ~~adjacent~~if ~~petroleum~~they ~~terminals~~meet ~~operated~~certain byage ~~other companies. In 1999, our Arcadia facility~~ and ~~adjacent~~service ~~terminals~~requirements ~~were~~at ~~directed~~retirement, ~~by the Remediation~~as ~~Services~~defined ~~Division~~in of the ~~LDEQ~~plans. toThe ~~pursue~~Parent ~~remediation~~Partnership ofprovides ~~this~~a ~~containment~~fixed ~~phase.~~dollar ~~At September 30~~contribution, ~~2003,~~which wedoes ~~have~~not anincrease ~~accrued~~from ~~liability~~year ofto ~~$0.3 million~~year, ~~for~~towards retired ~~remediation~~employee medical costs. atThe ~~our~~retiree ~~Arcadia~~pays ~~facility.~~all Wehealth docare ~~not~~cost ~~expect~~increases ~~that~~due ~~the~~to ~~completion~~medical ofinflation. ~~the~~The ~~remediation~~Parent ~~program~~Partnership ~~that~~uses ~~we have proposed will have~~ a ~~future material~~December 31 ~~adverse~~measurement ~~effect on our financial position, results of operations or~~date ~~cash~~for ~~flows~~this plan.

12 The components of net postretirement benefits cost allocated to us for the TEPPCO OPB for the three months ended March 31, 2004 and 2003, were as follows (in thousands):

TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP


	Three Months Ended
	March 31,
	2004		2003
Service cost benefit earned during the period	$	29	$	23
Interest cost on accumulated postretirement benefit obligation		33		29
Amortization of prior service cost		28		28

Net postretirement benefits costs	$	90	$	80

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued~~10 ~~(Unaudited)~~

OnTable March 17, 2003, we experienced a release of 511 barrels of jet fuel from a tank at our Blue Island terminal located in Cook County, Illinois. As a result of the release, we have entered into an Agreed Preliminary Injunction and Order (“Agreed Order”) with the State of Illinois. The Agreed Order requires us, in part, to complete a site investigation plan to delineate the scope of any potential contamination resulting from the release and to remediate any contamination. The Agreed Order does not contain any provision for any fines or penalties; however, it does not preclude the State of Illinois from assessing these at a later date. We do not expect that the completion of the remediation program will have a future material adverse effect on our financial position, results of operations or cash flows. Contents

~~Centennial~~TE ~~entered~~PRODUCTS ~~into~~PIPELINE ~~credit facilities totaling $150.0 million~~COMPANY, ~~and~~LIMITED asPARTNERSHIP ~~of September 30, 2003, $150.0 million was outstanding under those credit~~ ~~facilities. The proceeds were used to fund construction and conversion costs~~ ~~of its pipeline system. We and Marathon have each guaranteed one-half of~~ ~~Centennial’s debt, up to a maximum amount of $75.0 million each.~~

~~NOTE~~NOTES ~~10.~~TO ~~DISCONTINUED~~CONSOLIDATED ~~OPERATIONS~~FINANCIAL STATEMENTS-Continued (Unaudited)

~~Effective~~Estimated ~~January 1,~~Future ~~2002,~~Benefit ~~our Parent Partnership realigned its business~~Contributions ~~segments to reflect its entry into the natural gas gathering business and the~~ ~~expanded scope of its NGLs operations. As part of this realignment, on May 31,~~ ~~2002, we entered into an Assignment and Assumption Agreement with TEPPCO~~ Midstream to transfer our investment in TEPPCO Colorado to TEPPCO Midstream at the book value of TEPPCO Colorado’s net assets. SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, requires that long-lived assets to be disposed of should be recorded at the lower of their carrying amount or fair value less costs to sell. As a result, in the quarter ended June 30, 2002, we compared the fair value of TEPPCO Colorado to its carrying value and noted no indication of impairment.

The ~~transfer~~Parent ofPartnership ~~TEPPCO~~expects ~~Colorado~~ to ~~TEPPCO~~contribute ~~Midstream~~approximately ~~was recorded at the book value of TEPPCO Colorado’s net assets, which was~~ $43.10 million. Into ~~connection with~~ the ~~transfer,~~retirement weplans ~~received~~and ~~$4.1 million~~other inpostretirement ~~cash~~benefit ~~from~~plans ~~TEPPCO Midstream.~~in ~~TEPPCO Midstream assumed the outstanding debt of TEPPCO Colorado of $32~~2004.~~0 million~~ asWe ~~part of the transaction. As a result of the transfer, our~~expect ~~financial position and results of operations have been reclassified~~ to ~~reflect revenue,~~be ~~expenses,~~allocated ~~assets~~a ~~and~~share ~~liabilities~~ of ~~TEPPCO~~these ~~Colorado as discontinued operations for the periods presented~~contributions. ~~A condensed statement of income is shown~~ ~~below for TEPPCO Colorado for the nine months ended September 30, 2002 (in~~ ~~thousands):~~

		Nine Months Ended
		September 30,
		2002
Revenues		$	3,115
Operating, general and administrative expense			369
Depreciation and amortization expense			840
	Operating income		1,906
Interest expense			(1,015	)
Other income – net			21
	Net income	$	912

NOTE 9. COMMITMENTS AND CONTINGENCIES

13 In the fall of 1999 and on December 1, 2000, the Company and the Parent 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 the Parent Partnership) and Gilbert Richards and Jean Richards v. Texas Eastern Corporation, et al. (including the Company and the Parent 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. We have filed an answer to both complaints, denying the allegations, as well as various other motions. In April 2004, the court granted a partial motion for summary judgment in favor of the defendants, dismissing two of the plaintiffs’ personal injury claims in their entirety. It is anticipated that the plaintiffs will appeal this ruling. These cases are not covered by insurance. Discovery is ongoing, and we are defending ourselves vigorously against the lawsuits. The plaintiffs have not stipulated the amount of damages that they are seeking in the suits. We cannot estimate the loss, if any, associated with these pending lawsuits.

~~Item~~ On December 221, 2001, we were named as a defendant in a lawsuit in the 10th Judicial District, Natchitoches Parish, Louisiana, styled Rebecca L. Grisham ~~Management~~et al. v. TE Products Pipeline Company, Limited Partnership. In this case, the plaintiffs contend that our pipeline, which crosses the plaintiffs’s property, ~~Discussion~~leaked toxic products onto their property and ~~Analysis~~consequently ofcaused damages ~~Financial~~to ~~Condition~~them. We have filed an answer to the plaintiffs’ petition denying the allegations and ~~Results~~are defending ourselves vigorously against the lawsuit. The plaintiffs have not stipulated the amount of ~~Operations~~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.

~~General~~ 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 the 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.

~~You~~On ~~should~~April 2, ~~read~~2003, ~~the~~Centennial ~~following~~was ~~review~~served ~~of our financial position and results of operations in conjunction~~ with ~~the~~a ~~Consolidated~~petition ~~Financial Statements. Material period-to-period variances~~ in ~~the~~a ~~consolidated~~matter ~~statements of income~~styled ~~are~~Adams, ~~discussed~~et ~~under “Results of Operations~~al.” ~~The “Financial Condition and Liquidity” section analyzes cash flows and financial position~~v. ~~“Other Considerations”~~Centennial ~~addresses~~Pipeline ~~trends~~Company LLC, ~~future~~et ~~plans and contingencies that are reasonably likely to materially affect future liquidity or earnings~~al. ~~The Consolidated~~This ~~Financial~~matter ~~Statements should be read in conjunction with the~~involves ~~financial~~approximately ~~statements and related notes~~2,000 ~~together~~plaintiffs ~~with~~who ~~our~~allege ~~discussion~~that ~~and analysis~~over ~~of financial position and results of operations included in our Annual~~200 ~~Report on Form 10-K, as amended, for the year ended December 31, 2002.~~

~~We operate and report in one business segment: transportation and storage~~11 of refined products, LPGs and petrochemicals. Revenues are earned from transportation and storage of refined products and LPGs, intrastate transportation of petrochemicals, sale 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 LLC (“Centennial”) and Mont Belvieu Storage Partners, L.P. (“MB Storage”) (see Note 6. Equity Investments).

ResultsTable of Operations Contents

~~The~~TE ~~following~~PRODUCTS ~~table~~PIPELINE ~~presents~~COMPANY, ~~volumes~~LIMITED ~~delivered in barrels and average~~PARTNERSHIP ~~tariff per barrel for the three months and nine months ended September 30,~~ ~~2003, and 2002:~~

				Three Months Ended							Nine Months Ended
				September 30,				PercentageIncrease			September 30,				PercentageIncrease
				2003		2002		(Decrease)			2003		2002		(Decrease)
				(In thousands, except tariff information)
	Volumes Delivered
		Refined products			42,476		40,065		6	%		114,964		101,174		14	%
		LPGs			9,146		8,689		5	%		29,678		27,780		7	%
			Total		51,622		48,754		6	%		144,642		128,954		12	%
Average Tariff per Barrel
		Refined products		$	0.89	$	0.88		1	%	$	0.89	$	0.91		(2	%)
		LPGs			2.02		1.44		40	%		2.11		1.68		26	%
			Average system tariff per barrel	$	1.09	$	0.98		11	%	$	1.14	$	1.08		6	%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-Continued
(Unaudited)

~~Three~~defendants, ~~Months~~including ~~Ended~~Centennial, ~~September 30~~generated, ~~2003~~transported, ~~Compared~~and/or ~~with~~disposed of ~~Three~~hazardous ~~Months~~and ~~Ended~~toxic waste at two sites in Bayou Sorrell, Louisiana, an ~~September~~underground injection well and a landfill. The plaintiffs allege personal injuries, allergies, birth defects, cancer and death. The underground injection well has been in operation since May 301976. Based upon current information, Centennial appears to be a de minimis contributor, having used the disposal site during the two month time period of December 2001 to January 2002. Marathon has been handling this matter for Centennial under its operating agreement with Centennial. We have a 50% ownership interest in Centennial. Based upon Centennial’s limited involvement with the disposal site, we do not believe that the outcome of this matter will have a material adverse effect on our financial position, results of operations or cash flows.

WeOn ~~reported~~December 16, ~~net~~2003, ~~income~~Centennial, ofthe ~~$8.8 million~~Company, ~~for~~ the ~~three~~Parent ~~months~~Partnership ~~ended~~and ~~September 30,~~other ~~2003,~~Parent ~~compared~~Partnership ~~with~~entities ~~net~~were ~~income~~named ofas ~~$11.8 million~~defendants ~~for~~in ~~the~~a ~~three~~lawsuit in the ~~months~~128th ~~ended~~District ~~September 30~~Court of Orange County, ~~2002.~~Texas, ~~Net~~styled ~~income~~Elwood ~~decreased~~Karr $3et al.~~0 million~~ ~~primarily~~v. ~~due~~Centennial toPipeline, anLLC ~~increase~~et ~~of $8~~al.~~1 million~~ inIn ~~costs~~this ~~and~~case, ~~expenses~~the ~~and~~plaintiffs ancontend ~~increase~~that ofour ~~$0.6 million~~pipeline inleaked ~~interest~~toxic ~~expense,~~substances ~~partially~~on ~~offset~~their byproperty, ancausing ~~increase~~them ~~of $5.0~~property ~~million~~damage. inWe ~~operating~~have ~~revenues,~~filed ~~increased~~an ~~income~~answer ofto ~~$0.6 million~~the ~~from~~plaintiffs’ ~~equity investments~~petition, denying the allegations and anare ~~increase~~defending ofourselves $0vigorously against this lawsuit.~~1 million~~ inThis case ~~interest~~is ~~capitalized~~covered by insurance. We ~~discuss~~ do not believe that the ~~factors~~outcome ~~influencing~~of this lawsuit will have a material adverse effect on our ~~operating~~financial ~~performance~~position, ~~below~~results of operations or cash flows.

~~Revenues~~In ~~from~~addition ~~refined~~to ~~products~~the ~~transportation~~litigation ~~increased~~discussed ~~$2.7 million~~above, ~~for the~~we ~~three~~have ~~months~~been, ~~ended~~in ~~September 30,~~the ordinary ~~2003~~course of business, ~~compared~~a ~~with~~defendant ~~the~~in ~~three~~various ~~months~~lawsuits ~~ended September 30,~~and ~~2002,~~a ~~due~~party to various another ~~overall~~legal ~~increase~~proceedings, some of 6%which are covered in ~~the~~whole ~~refined~~or ~~products~~in part ~~volumes~~by ~~delivered~~insurance. ~~This~~We ~~increase~~believe ~~was~~that ~~primarily~~the ~~due~~outcome toof ~~deliveries~~these oflawsuits ~~products~~and other ~~received~~proceedings ~~into~~will ~~our~~not ~~pipeline~~individually ~~from~~or ~~Centennial~~in atthe ~~Creal~~aggregate ~~Springs,~~have ~~Illinois.~~a future material ~~Centennial,~~adverse ~~which~~effect ~~commenced~~on ~~refined~~our ~~products~~consolidated ~~deliveries~~financial toposition, usresults of operations or cash flows.

14 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.

in On ~~April~~March ~~2002~~26, ~~has~~2004, ~~provided~~an ~~our~~initial ~~system~~decision in ARCO Products Co., et al. v. SFPP, Docket OR96-2-000, et al. (“SFPP”) was issued by the FERC, which made several significant determinations with ~~additional~~respect ~~pipeline~~to ~~capacity~~finding ~~for~~“changed ~~products~~circumstances” ~~originating~~under the Energy Policy Act of 1992 (“EP Act”). The decision lists factors that will be considered by the FERC, which include showing a substantial change in economic circumstances, the ~~U.S.~~time ~~Gulf~~factor ~~Coast~~that ~~area~~will be reviewed, what will be considered the basis of the rate and a pipeline’s documentary requirements. ~~With~~The ~~this~~decision ~~incremental~~largely clarifies, but does not fully quantify, the standard required for a complainant to demonstrate that an oil pipeline’s ~~capacity,~~rates ~~our~~are ~~previously~~no ~~constrained~~longer ~~system~~subject ~~has~~to ~~expanded~~the ~~deliveries~~rate protection of the EP Act by demonstrating that a substantial change in circumstances has occurred since ~~markets~~1992 ~~both~~with ~~south~~respect ~~and~~to ~~north~~the basis of ~~Creal~~the ~~Springs~~rates being challenged. ~~Volume~~In ~~increases~~the ~~were~~SFPP decision, ~~due~~the toFERC found that a limited number of rate elements will ~~increased~~significantly ~~demand~~affect ~~and~~the ~~market~~economic ~~share~~basis for ~~products~~a ~~supplied~~pipeline ~~from~~company’s rates. The elements identified in the ~~U.S.~~decision ~~Gulf~~are volume changes, allowed total return ~~Coast~~and ~~into~~total ~~Midwest~~cost ~~markets~~of service (including major cost elements of rate base such as tax rates and tax allowances, among others). The ~~refined~~FERC ~~products~~did ~~average~~reject, however, the use of changes in tax rate ~~per~~and ~~barrel~~income tax allowances as standalone factors. ~~increased~~The 1%FERC ~~from~~further ~~the~~found ~~prior~~that ~~year~~if ~~period~~a ~~primarily~~complainant ~~due~~can toshow ~~higher~~that ~~market-based~~a pipeline’s volumes ~~tariff~~and ~~rates,~~overall ~~which~~cost ~~went~~of ~~into~~service ~~effect~~collectively inreflect ~~July 2003,~~a ~~partially~~significant ~~offset~~increase byin ~~the~~net ~~impact~~earnings between the establishment of the ~~Midwest~~challenged ~~origin~~rate ~~point~~pre-1992 ~~for~~and ~~barrels~~the ~~received~~time of ~~from~~the ~~Centennial~~complaint, ~~which resulted~~based primarily on the combined impact of changes in anvolumes and ~~increase~~changes in ~~short-haul~~overall ~~barrels~~cost ~~transported~~of onservice, ~~our~~the ~~system~~complainant has met its burden relative to establishing “changed circumstances.” It appears very likely

~~Revenues from LPGs transportation increased $6.0 million for the three~~12 months ended September 30, 2003, compared with the three months ended September 30, 2002, primarily due to the impact of lower propane inventories at competing supply locations in the mid-continent. Lower mid-continent propane inventory resulted in increased foreign propane imports into the U.S. Gulf Coast at Mont Belvieu, Texas, and resulted in increased transportation to the mid-continent through our previously constrained system. Additional pipeline capacity for expanded propane movements was available due to a shift of refined product volumes to Centennial. The increase in total volumes of LPGs delivered was due to increased long-haul delivery of propane to the Midwest and Northeast. The LPGs average rate per barrel increased 40% from the prior year period as a result of an increased percentage of long-haul deliveries during the three months ended September 30, 2003, and higher LPG tariff rates, which went into effect in July 2003.

EffectiveTable January 1, 2003, our 50% ownership interest in MB Storage is accounted for as an equity investment. Revenues generated from Mont Belvieu operations totaled $3.7 million during the three months ended September 30, 2002. As a result of the formation of MB Storage, revenues and expenses related to Mont Belvieu operations are now recorded within equity earnings. See discussion regarding changes in equity earnings/losses below. The purpose of MB Storage is to expand services to the upper Texas Gulf Coast energy marketplace by increasing pipeline throughput and the mix of products handled through the existing system and establishing new receipt and delivery connections. Contents

~~Costs~~TE ~~and~~PRODUCTS ~~expenses~~PIPELINE ~~increased $8.1 million for the three months ended September 30~~COMPANY, ~~2003,~~LIMITED ~~compared with the three months ended September 30, 2002.~~PARTNERSHIP ~~The increase was made up of a $8.7 million increase in operating, general and~~ ~~administrative expenses and a $0.2 million increase in operating fuel and~~ ~~power, partially offset by a $0.5 million decrease in depreciation and~~ amortization expense and a $0.3 million decrease in taxes – other than income taxes. Operating, general and administrative expenses increased primarily due to higher pipeline maintenance expenses, due in part to higher than planned pipeline rehabilitation expenses associated with our Integrity Management program, increased consulting and contract services, increased labor costs, increased general and administrative supplies expense, increased insurance expense and expense from the Centennial pipeline capacity lease agreement that we entered into in 2003. Operating fuel and power expense increased as a result of increased mainline throughput and higher power costs due to an increase in the price of natural gas. Depreciation expense decreased from the prior year period primarily due to the transfer of assets to MB Storage. Taxes – other than income taxes decreased as a result of actual property taxes being lower than previously estimated and due to the transfer of assets to MB Storage.

~~Net~~NOTES ~~losses~~TO ~~from~~CONSOLIDATED ~~equity~~FINANCIAL ~~investments decreased $0.6 million for the three~~STATEMENTS-Continued ~~months ended September 30, 2003, compared with the three months ended September~~(Unaudited) ~~30, 2002. Centennial, which commenced operations in April 2002, accounted for~~ ~~$3.0 million of the equity losses during the three months ended September 30,~~ ~~2003, resulting in an increase in equity losses of $1.0 million from Centennial~~ during the period. On February 10, 2003, we acquired an additional 16.7% interest in Centennial, bringing our ownership interest to 50%. The losses from Centennial were partially offset by equity earnings of $1.6 million from our 50% ownership interest in MB Storage, which was formed effective January 1, 2003. Amounts in the prior year period related to Mont Belvieu operations which were recorded to revenues and costs and expenses are now being recorded within equity earnings based upon our 50% ownership interest in MB Storage, effective with its formation on January 1, 2003. If the 2002 revenues and costs and expenses from the Mont Belvieu operations had been accounted for under the same method as in 2003, equity earnings from MB Storage would have decreased $0.1 million in 2003, compared with the prior year, due to a slight increase in depreciation expense on MB Storage assets.

15that the decision will be appealed. We have not yet determined the impact, if any, that the decision could have on our rates if they were reviewed under the criteria of the SFPP decision.

~~Interest~~In ~~expense~~1994, ~~increased~~the ~~$0.6 million~~Louisiana ~~for~~Department ~~the~~of ~~three~~Environmental ~~months~~Quality ~~ended~~(“LDEQ”) issued ~~September 30~~a compliance order for environmental contamination at our Arcadia, ~~2003~~Louisiana, facility. ~~compared~~In ~~with~~1999, our Arcadia facility and adjacent terminals were directed by the ~~three~~Remediation ~~months~~Services ~~ended~~Division ~~September~~of the LDEQ to pursue remediation of this contamination. Effective in March 302004, ~~2002,~~we asexecuted an access agreement with aan ~~result~~adjacent industrial landowner who is located upgradient of ~~higher~~the ~~outstanding~~Arcadia facility. ~~debt~~This ~~balances~~agreement ~~under~~enables the ~~Note~~landowner ~~Payable~~to proceed with remediation activities at our Arcadia facility for which they have accepted shared ~~Parent~~responsibility. ~~Partnership~~At March 31, ~~and~~2004, we have an ~~increased~~accrued ~~percentage~~liability of ~~fixed-rate~~$0.3 million ~~debt~~for inremediation ~~2003~~costs byat our Arcadia facility. We do not expect that the ~~Parent~~completion ~~Partnership~~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.

~~Interest~~On ~~capitalized~~March 17, ~~decreased~~2003, ~~$0.1 million~~we ~~for~~experienced ~~the~~a ~~three~~release ~~months~~of ~~ended~~511 barrels of jet fuel ~~September 30~~from a storage tank at our Blue Island terminal located in Cook County, Illinois. ~~2003~~As a result of the release, ~~compared~~we have entered into an Agreed Order with the ~~three~~State ~~months~~of ~~ended~~Illinois. ~~September 30~~The Agreed Order requires us, ~~2002~~in part, asto complete a ~~result~~site investigation plan to delineate the scope of ~~decreased~~any ~~construction~~potential ~~work-in-progress~~contamination resulting ~~balances~~from ~~during~~the release and to remediate any contamination present above regulatory standards. This site investigation plan has been completed and submitted to the ~~third~~State of Illinois. The Agreed Order does not contain any ~~quarter~~provision for any fines or penalties; however, it does not preclude the State of ~~2003~~Illinois from assessing these at a later date. We do not expect that the completion of the Agreed Order will have a future material adverse effect on our financial position, results of operations or cash flows.

~~Nine~~ We ~~Months~~regularly ~~Ended~~review ~~September~~our long-lived assets for impairment in accordance with SFAS No. 30144, ~~2003~~Accounting ~~Compared~~for ~~with~~the ~~Nine~~Impairment ~~Months~~or ~~Ended~~Disposal of Long-Lived ~~September~~Assets. At March 3031, ~~2002~~2004, we have identified certain assets that we are monitoring for possible impairment. We are unable to reasonably estimate the probabilities associated with the performance of an impairment test. We are continuing to monitor the circumstances surrounding the assets and will test the assets for impairment as more information becomes available. We do not believe that the resolution of the matter will have a material effect on our financial condition, results of operations or cash flows.

WeCentennial ~~reported~~entered ~~net~~into ~~income~~credit offacilities $totaling 38$150.10 million ~~for~~and, ~~the nine months ended~~as ~~September~~of March 3031, ~~2003~~2004, ~~compared with net income of~~ $40150.40 million ~~for~~was ~~the~~outstanding ~~nine months~~under ~~ended~~those ~~September 30, 2002~~credit facilities. ~~Net~~The ~~income~~proceeds ~~decreased~~were ~~$2.3 million~~used ~~primarily due~~ to anfund ~~increase~~construction ~~of $17.3 million in costs~~ and ~~expenses,~~conversion ~~an increase of $1.6~~costs ~~million in interest expense, a decrease~~ of ~~$1.2 million~~Centennial’s inpipeline ~~interest capitalized, a decrease of $0~~system.~~2 million~~ inWe ~~other income – net~~ and aMarathon ~~decrease~~have ~~of $0.9 million~~each inguaranteed ~~income from discontinued operations, partially offset by an~~one-half ~~increase~~ of ~~$16.5 million~~Centennial’s indebt, ~~operating~~up ~~revenues~~to ~~and~~a ~~increased~~maximum ~~income~~amount of $275.4 0 million ~~from equity investments~~each. ~~We discuss the factors influencing our~~ ~~operating performance below.~~

~~Revenues from refined products transportation increased $10.5 million for~~13 the nine months ended September 30, 2003, compared with the nine months ended September 30, 2002, due to an overall increase of 14% in the refined products volumes delivered. This increase was primarily due to deliveries of products received into our pipeline from Centennial at Creal Springs, Illinois. Centennial, which commenced refined products deliveries to us in April 2002, has provided our system with additional pipeline capacity for products originating in the U.S. Gulf Coast area. With this incremental pipeline capacity, our previously constrained system has expanded deliveries in markets both south and north of Creal Springs. 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 2% from the prior year period primarily due to the impact of the Midwest origin point for barrels received from Centennial, which resulted in an increase in short-haul barrels transported on our system, partially offset by higher market-based tariff rates, which went into effect in July 2003.

RevenuesTable from LPGs transportation increased $16.0 million for the nine months ended September 30, 2003, compared with the nine months ended September 30, 2002, primarily due to increased deliveries of propane in the upper Midwest and Northeast market areas attributable to colder than normal weather during the first quarter of 2003 and due to low inventories at competing supply locations during the second and third quarters of 2003. Lower mid-continent propane inventory resulted in increased foreign propane imports into the U.S. Gulf Coast at Mont Belvieu and resulted in increased transportation to the mid-continent through our previously constrained system. Additional pipeline capacity for expanded propane movements was available due to a shift of refined product volumes to Centennial. Butane deliveries also increased due to the increased demand by refineries for normal butane for use in gasoline blending and increased isobutane deliveries to Chicago area refineries. The LPGs average rate per barrel increased 26% from the prior year period as a result of an increased percentage of long-haul deliveries during the nine months ended September 30, 2003, and an increase in LPG tariff rates, which went into effect in July 2003. Contents

~~Effective~~Item ~~January 1, 2003, our 50% ownership interest in MB Storage is accounted for as an equity investment~~2. ~~Revenues~~Management’s ~~generated~~Discussion ~~from~~and ~~Mont~~Analysis ~~Belvieu operations totaled $11.1 million during the nine months ended September 30, 2002. As a result~~ of ~~the~~Financial ~~formation~~Condition ~~of MB Storage, revenues~~ and ~~expenses related~~Results toof ~~Mont Belvieu operations are now recorded within equity earnings. See discussion regarding changes in equity earnings/losses below.~~ Operations

~~Other operating revenues increased $1.1 million for the nine months ended~~General ~~September 30, 2003, compared with the nine months ended September 30, 2002,~~ ~~primarily due to higher propane deliveries at our Providence, Rhode Island~~ ~~import facility, higher refined product rental charges and loading fees and~~ higher revenues from product loans. These increases were partially offset by lower revenues from product location exchanges which are used to position product in the Midwest market area and lower volume of product inventory sales.

16 You should read the following review of our financial position and results of operations in conjunction with our Consolidated Financial Statements. Material period-to-period variances in the consolidated statements of income are discussed under “Results of Operations.” 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, 2003.

~~Costs~~Critical ~~and~~Accounting ~~expenses~~Policies increased $17.3 million for the nine months ended September 30, 2003, compared with the nine months ended September 30, 2002. The increase was made up of a $15.7 million increase in operating, general and ~~administrative~~ ~~expenses and a $3.4 million increase in operating fuel and~~Estimates ~~power, partially offset by a $1.0 million decrease in taxes – other than income~~ ~~taxes and a $0.8 million decrease in depreciation and amortization expense.~~ ~~Operating, general and administrative expenses increased primarily due to~~ higher pipeline maintenance expenses, due in part to higher than planned pipeline rehabilitation expenses associated with our Integrity Management program, increased consulting and contract services, increased labor costs, increased general and administrative supplies expense, increased insurance expense, expense from the Centennial pipeline capacity lease agreement that we entered into in 2003 and the write-off of receivables of $0.4 million related to customer bankruptcies. Operating fuel and power expense increased as a result of increased mainline throughput and higher power costs due to an increase in the price of natural gas. Taxes – other than income taxes decreased as a result of actual property taxes being lower than previously estimated and the transfer of assets to MB Storage. Depreciation expense decreased from the prior year period because of assets retired during the nine months ended September 30, 2003, which reduced the asset base, and due to the transfer of assets to MB Storage.

~~Net~~A ~~losses~~summary ~~from~~of ~~equity investments decreased $2.4 million for~~ the ~~nine months~~significant ~~ended~~accounting ~~September 30,~~policies ~~2003,~~we ~~compared~~have ~~with~~adopted ~~the nine months ended September~~and ~~30,~~followed ~~2002. Centennial, which commenced operations~~ in ~~April 2002,~~the ~~accounted~~preparation ~~for $8.0 million~~ of ~~the~~our ~~equity~~consolidated ~~losses~~financial ~~during~~statements ~~the nine months ended September 30,~~is ~~2003,~~detailed ~~resulting~~ in anour ~~increase~~consolidated offinancial ~~$3.0 million~~statements infor ~~equity~~the ~~losses~~year ~~during~~ended ~~the~~December ~~period. On February 10~~31, 2003, weincluded ~~acquired an additional 16.7% interest~~ in ~~Centennial,~~ ~~bringing~~ our ~~ownership~~Annual ~~interest~~Report toon ~~50%~~Form 10-K. ~~The~~Certain ~~losses~~of ~~from Centennial~~these ~~are~~accounting ~~partially~~policies ~~offset~~require bythe ~~equity~~use ~~earnings~~ of $5estimates.~~4 million~~ ~~from~~The ~~our~~following ~~50%~~estimates, ~~ownership~~in ~~interest~~our ~~in MB Storage~~opinion, ~~which~~are ~~was~~subjective ~~formed~~in ~~effective January 1~~nature, ~~2003.~~require ~~Amounts in~~ the ~~prior~~exercise ~~year~~of ~~period~~judgment ~~related~~and involve tocomplex ~~Mont~~analysis: ~~Belvieu~~revenue ~~operations~~and ~~which~~expense ~~were~~accruals, ~~recorded~~including topower costs, ~~revenues~~property ~~and~~taxes, environmental costs and ~~expenses~~property, ~~are~~plant ~~now~~and ~~being~~equipment. ~~recorded~~These estimates ~~within~~are ~~equity earnings~~ based ~~upon~~on our ~~50%~~knowledge ~~ownership~~and ~~interest~~understanding inof MBcurrent ~~Storage, effective with its~~conditions ~~formation~~and onactions ~~January 1,~~we ~~2003.~~may Iftake in the ~~2002~~future. ~~revenues~~Changes ~~and~~in ~~costs~~these ~~and~~estimates ~~expenses~~will ~~from~~occur ~~the~~as ~~Mont~~a ~~Belvieu~~result ~~operations~~of ~~had~~the ~~been~~passage ~~accounted~~of ~~for~~time ~~under~~and the ~~same~~occurrence ~~method~~of asfuture inevents. ~~2003,~~Subsequent ~~equity~~changes ~~earnings~~in ~~from~~these MBestimates ~~Storage~~may ~~would~~ have ~~decreased~~a ~~$0.2 million~~significant ~~in 2003,~~impact ~~compared~~on ~~with the prior year, due to an increase in depreciation expense~~our onfinancial MBcondition ~~Storage assets, partially offset by increased shuttle deliveries~~ and ~~increased~~ ~~storage~~results ~~revenue~~of operations.

~~Interest~~Management ~~expense~~Overview ~~increased $1.6 million for the nine months ended September 30, 2003, compared with the nine months ended September 30, 2002, as a result~~ of ~~higher outstanding debt balances under~~ the ~~Note~~Quarter ~~Payable~~Ended ~~with our Parent Partnership, an increased percentage of fixed-rate debt in 2003 by the Parent Partnership, the write-off of debt issuance costs by the Parent Partnership in June~~March ~~2003~~31, ~~related to the refinancing of its revolving credit~~2004 ~~facility, and expense related to the discounted portion of a cash flow hedge.~~

~~Interest~~We ~~capitalized~~reported ~~decreased~~net income of $117.2 million for the ~~nine~~three months ended March ~~September 30~~31, ~~2003~~2004, compared with net income of $20.6 million for the ~~nine~~three months ended ~~September~~ March 3031, ~~2002,~~2003. asOur results were impacted by higher pipeline integrity costs, awhich ~~result~~were ofpartially ~~decreased~~offset ~~work-in-progress~~by ~~balances~~strong ~~during~~revenues ~~2003~~from both our refined products and ~~interest~~propane businesses. We anticipate that our pipeline integrity costs for ~~capitalized~~the onremainder of 2004 will be higher than our ~~investment~~2003 incosts ~~Centennial~~as ~~during~~we ~~the~~continue ~~first~~to perform ~~quarter~~pipeline ofmaintenance ~~2002~~under our integrity management program.

~~Discontinued~~ We ~~Operations~~are focused on opportunities, challenges and risks that are inherent in our business. These include 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 the business in which we operate.

~~Effective~~We ~~January 1,~~remain ~~2002,~~confident that our ~~Parent~~current ~~Partnership~~strategy ~~realigned its business segments to reflect its entry into the natural gas gathering business~~ and ~~the expanded~~focus ~~scope~~will ~~of its NGLs operations. As part of this realignment, on May 31,~~provide ~~2002,~~continued wegrowth ~~entered~~in ~~into~~earnings ~~an Assignment~~ and ~~Assumption~~cash ~~Agreement with TEPPCO Midstream to transfer our investment in TEPPCO Colorado, which fractionates NGLs, to TEPPCO Midstream at the book value of TEPPCO Colorado’s net assets (see Note 10~~distributions. ~~Discontinued~~These ~~Operations). SFAS No. 144, Accounting for the~~growth ~~Impairment~~opportunities ~~or Disposal of Long-Lived Assets, requires that long-lived assets to~~include: ~~be disposed of should be recorded at the lower of their carrying amount or fair~~ ~~value less costs to sell. As a result, in the quarter ended June 30, 2002, we~~ ~~compared the fair value of TEPPCO Colorado to its carrying value and noted no indication of impairment.~~

As• aContinued ~~result~~development of ~~the~~refined ~~transfer,~~products ~~our financial position~~ and ~~results~~propane ~~of operations~~market ~~have been reclassified to reflect revenue, expenses, assets and liabilities of TEPPCO Colorado as discontinued operations for the periods presented~~opportunities. A• ~~condensed~~Construction ~~statement~~ of ~~income~~a isnew ~~shown~~truck ~~below~~loading ~~for~~facility ~~TEPPCO~~in ~~Colorado for~~Bossier ~~the nine months ended September 30~~City, ~~2002 (in thousands):~~ Louisiana.

17 We are continuing to pursue a plan to make system changes to allow for bi-directional flow and deliveries into the Shreveport market area. We have completed feasibility studies, and are in discussions with potential customers regarding the transportation of volumes through the pipeline system in this area. Engineering design work and property acquisition for the terminal site in Bossier City, Louisiana, are currently under way along with engineering efforts to reverse the flow of the pipeline segment from Shreveport to El Dorado, Arkansas. The project is scheduled to be completed by the end of 2004.

		Nine Months Ended
		September 30,
		2002
Revenues		$	3,115
Operating, general and administrative expense			369
Depreciation and amortization expense			840
	Operating income		1,906
Interest expense			(1,015	)
Other income – net			21
	Net income	$	912

We have begun a Phase II project to further expand our delivery capacity of liquefied petroleum gases (“LPGs”) to the Northeast by 8,000 to 10,000 barrels per day. In 2003, we increased the delivery capability between Todhunter, Ohio, and Coshocton, Ohio, by 8,000 to 10,000 barrels per day and increased storage and improved

~~The following table presents volume and average rate information for~~14 ~~TEPPCO Colorado for the nine months ended September 30, 2002:~~

		Nine Months Ended
		September 30,
		2002
Fractionation – NGLs:
	Thousand barrels		2,043
	Average rate per barrel	$	1.827

~~Financial~~loading ~~Condition~~capability at Oneonta, New York. The Phase II expansion includes the construction of three pump stations between Coshocton and ~~Liquidity~~Greensburg, Pennsylvania, and two stations from Greensburg to Watkins Glen, New York. Additional work on the pipeline segment between Greensburg and Philadelphia, Pennsylvania, will increase delivery rates to the Philadelphia area. Improvements will also be made at our Dubois, Pennsylvania, and Eagle, Pennsylvania, terminals. The project is scheduled for completion in October 2004.

~~Net~~Our ~~cash from operating activities totaled $73.8 million for the nine~~Business ~~months ended September 30, 2003. This cash was made up of $59.1 million of~~ ~~income before charges for depreciation and amortization and $14.7 million of~~ ~~cash provided by working capital. This compares with net cash from operating~~ activities of $92.2 million for the nine months ended September 30, 2002, comprised of $61.2 million of income before charges for depreciation and amortization, $29.8 million of cash provided by working capital and $1.2 million of cash provided by discontinued operations. Net cash from operating activities for the nine months ended September 30, 2003, and 2002, included interest payments of $30.9 million and $25.0 million, respectively.

~~Cash~~TE ~~flows~~Products ~~used~~Pipeline inCompany, ~~investing~~Limited ~~activities~~Partnership, ~~totaled~~a ~~$61.0 million~~Delaware ~~for~~limited partnership, ~~the~~was ~~nine months~~formed ~~ended~~in ~~September~~March ~~30,~~1990. ~~2003~~TEPPCO Partners, ~~and~~L.P. ~~were~~(“Parent Partnership”) ~~comprised~~owns ofa ~~$37~~99.~~7 million~~999% ofinterest ~~capital~~in us as the sole limited partner. ~~expenditures~~TEPPCO GP, ~~$20~~Inc.~~0 million~~ ~~for~~(“TEPPCO ~~our~~GP” ~~acquisition~~or “General Partner”), a subsidiary of the ~~additional~~Parent Partnership, holds a 0.001% General Partner interest in us. Texas Eastern ~~Centennial~~Products onPipeline ~~February 10~~Company, ~~2003,~~LLC ~~$3.0 million~~(the of“Company”), ~~cash~~a ~~contributions~~Delaware ~~for~~limited ~~our~~liability ~~ownership~~company, ~~interest~~serves inas ~~Centennial,~~the ~~and~~general $0partner of our Parent Partnership.~~3 million~~ The Company is a wholly owned subsidiary of ~~cash~~Duke ~~contributions~~Energy ~~for~~Field Services, LLC (“DEFS”), a ~~our~~joint ~~ownership~~venture ~~interest~~between inDuke MBEnergy ~~Storage~~Corporation (“Duke Energy”) and ConocoPhillips. ~~Cash~~Duke ~~flows~~Energy ~~used~~holds inan ~~investing~~interest ~~activities~~of approximately 70% in DEFS, ~~totaled~~and ~~$47.7 million~~ConocoPhillips ~~for~~holds the ~~nine~~remaining ~~months~~interest ~~ended~~of ~~September~~ approximately 30,%. ~~2002~~TEPPCO GP, ~~and~~as ~~were comprised~~general ofpartner, ~~$47.5 million~~performs all of ~~capital~~our ~~expenditures~~management and ~~$7.7 million~~operating ~~of cash~~functions ~~contributions~~required ~~for~~in ~~our~~accordance ~~ownership~~with ~~interest~~the inAgreement ~~Centennial,~~of ~~partially~~Limited ~~offset~~Partnership byof TE Products $3Pipeline Company, Limited Partnership.~~4 million~~ ofWe ~~cash~~reimburse ~~proceeds~~our ~~from~~General Partner and the ~~sale~~Company offor ~~assets~~all ~~and~~reasonable ~~$4.1 million~~direct ofand ~~cash proceeds~~indirect ~~from~~expenses ~~the~~that ~~sale~~they ofincur ~~TEPPCO~~in managing ~~Colorado~~us.

~~Cash~~We ~~flows~~operate ~~used~~and report in ~~financing~~one ~~activities~~business ~~totaled~~segment: ~~$13.3 million~~transportation ~~for~~and ~~the nine~~storage ~~months~~of ~~ended~~refined ~~September 30~~products, ~~2003,~~LPGs and ~~were~~petrochemicals. ~~comprised~~Revenues ofare ~~$77.6 million~~earned offrom ~~distributions~~transportation ~~paid~~and tostorage ~~our~~of ~~Parent~~refined ~~Partnership~~products and ~~$53.6 million~~LPGs, intrastate transportation of ~~repayments~~petrochemicals, ~~on our~~sales ~~term~~of ~~loan,~~product ~~partially~~inventory ~~offset~~and byother ancillary ~~$80~~services.~~9 million~~ ofOur ~~proceeds~~two ~~for~~largest ~~our~~operating ~~term~~expense ~~loan~~ items are labor and electric ~~$37~~power.~~0 million~~ inWe ~~contributions~~generally ~~from~~realize ~~our~~higher ~~Parent~~revenues ~~Partnership.~~during ~~Cash~~the ~~flows~~first and ~~provided~~fourth byquarters ~~financing~~of ~~activities~~each ~~for~~year ~~the~~since ~~nine~~our ~~months~~operations ~~ended~~are ~~September 30,~~somewhat ~~2002,~~seasonal. ~~totaled~~Refined ~~$39.5 million,~~products volumes are generally higher during the second and ~~were~~third quarters ~~comprised~~because of ~~$70.4 million~~greater ofdemand ~~distributions paid~~for togasolines ~~our~~during ~~Parent~~the ~~Partnership~~spring and ~~$147~~summer driving seasons.~~7 million~~ ofLPGs ~~repayments~~volumes onare ~~our~~generally ~~term~~higher from November through March ~~loan~~due to higher demand in the Northeast for propane, ~~partially~~a ~~offset~~major byfuel ~~$176~~for residential heating.~~1 million~~ ofOur ~~proceeds~~results ~~from~~also include our ~~term~~equity ~~loan~~investments ~~and~~in Centennial $2Pipeline LLC (“Centennial”) and Mont Belvieu Storage Partners, L.~~5 million~~P. of(“MB Storage”) ~~contributions~~(see ~~from~~Note ~~our~~5. ~~Parent~~Equity ~~Partnership~~Investments).

18 We are one of three operating subsidiaries of our Parent Partnership. Our Parent Partnership is managed by its general partner, the Company, which has approximately 1,000 employees dedicated to the operations and management of the 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 method for allocating corporate operating, general and administrative expenses to us is reasonable.

~~Centennial~~Results ~~entered into credit facilities totaling $150.0 million, and as~~ of ~~September 30, 2003, $150.0 million was outstanding under those credit~~Operations ~~facilities. The proceeds were used to fund construction and conversion costs~~ ~~of its pipeline system. We and Marathon have each guaranteed one-half of~~ ~~Centennial’s debt, up to a maximum amount of $75.0 million each.~~

OnThe ~~February 20,~~following ~~2002,~~table ~~our~~presents ~~Parent~~volumes ~~Partnership~~delivered ~~issued~~in ~~$500.0 million principal~~barrels ~~amount of 7.625% Senior Notes due 2012. We~~ and ~~the Parent~~average ~~Partnership’s~~tariff ~~other~~per ~~significant~~barrel ~~operating~~for ~~subsidiaries,~~the ~~which~~three ~~include~~months ~~TCTM, L.P.,~~ended ~~TEPPCO Midstream Companies, L.P. and Jonah Gas Gathering Company, issued guarantees of this debt. On June~~March 3031, ~~2002,~~2004 our Parent Partnership acquired the Val Verde Gas Gathering System (“Val Verde”) through its subsidiary, Val Verde Gas Gathering Company, L.P., which also issued an unconditional guaranty of our Parent Partnership’s debt securities. The guarantees are full, unconditional and ~~joint and several. The proceeds from the offering of the $500.0 million~~2003: ~~principal amount of 7.625% Senior Notes were used to reduce the outstanding~~ ~~balances of our Parent Partnership’s credit facilities.~~

On January 30, 2003, our Parent Partnership issued $200.0 million principal amount of 6.125% Senior Notes due 2013. We and our Parent Partnership’s other significant operating subsidiaries issued guarantees of this debt. The guarantees are full, unconditional and joint and several. The proceeds from the offering of the $200.0 million principal amount of 6.125% Senior Notes were used to reduce the outstanding principal of our Parent Partnership’s credit facilities.


	Three Months Ended
	March 31,				Percentage
					Increase
	2004		2003		(Decrease)
	(in thousands, except tariff
	information)
Volumes Delivered
Refined products		32,522		30,232		8	%
LPGs		13,208		13,700		(4	%)

Total		45,730		43,932		4	%

Average Tariff per Barrel
Refined products	$	0.95	$	0.89		7	%
LPGs		2.18		2.25		(3	%)
Average system tariff per barrel	$	1.31	$	1.31		—

~~Parent Partnership Credit Facilities~~15

WeTable 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 agreements. 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 respective credit agreements. These credit facilities of the Parent Partnership are described below. Contents

OnWe ~~April 6,~~reported ~~2001,~~net ~~our~~income ~~Parent~~of ~~Partnership entered into a~~ $~~500~~17.02 million ~~revolving~~ ~~credit~~for ~~facility including~~ the ~~issuance~~three ofmonths ~~letters~~ended ~~of credit of up to~~March ~~$20.0 million (“Three Year Facility”). The interest rate was based~~31, ~~at our Parent Partnership’s option~~2004, oncompared ~~either~~with ~~the~~net ~~lender’s~~income ~~base rate plus a spread, or LIBOR plus a spread in effect at the time~~ of ~~the borrowings~~$20.6 million ~~The credit agreement~~ for the ~~Three~~three ~~Year~~months ~~Facility contained certain restrictive financial~~ended ~~covenant~~March 31, ~~ratios~~2003. ~~During~~Net ~~2002,~~income ~~our~~decreased ~~Parent~~$3.4 million ~~Partnership’s~~primarily ~~borrowings~~due ~~under the Three Year Facility were used~~ to ~~finance~~an ~~the acquisitions~~ increase of ~~the Chaparral NGL system on March~~$10.3 1,million ~~2002,~~in costs and ~~Val~~expenses ~~Verde on June 30, 2002,~~ and ~~for~~an ~~general~~increase ~~Parent~~of ~~Partnership purposes~~$0.1 million ~~During 2002, our Parent Partnership made repayments on~~in ~~the~~interest ~~Three~~expense ~~Year~~– ~~Facility~~net, ~~with~~partially ~~proceeds~~offset ~~from~~by ~~the~~an ~~issuance~~increase of ~~its 7~~$6.~~625%~~7 million ~~Senior Notes, proceeds from the issuance of its units representing limited partnership interests (“Limited~~in ~~Partner~~operating ~~Units”)~~revenues and ~~proceeds~~an ~~from~~increase ~~the termination~~ of ~~interest rate swaps. During the first quarter of 2003, our Parent Partnership repaid~~ $~~182.~~0.3 million of ~~the~~in ~~outstanding~~other ~~balance~~income of– ~~the Three Year Facility with proceeds from the issuance of its 6~~net.~~125%~~ ~~Senior Notes on January 30, 2003. On June 27, 2003, our~~We ~~Parent~~discuss ~~Partnership repaid~~ the ~~outstanding~~factors ~~balance~~influencing ~~under~~our ~~the~~operating ~~Three~~performance ~~Year Facility with borrowings under a new credit facility, and canceled the Three Year Facility~~below.

OnRevenues ~~June 27,~~from ~~2003,~~refined ~~our~~products ~~Parent~~transportation ~~Partnership~~increased ~~entered into a~~ $~~550~~4.01 million for ~~revolving~~the ~~credit~~three ~~facility~~months ended March 31, 2004, compared with athe three ~~year~~months ~~term~~ended March 31, ~~including~~2003, ~~the~~due ~~issuance~~to ~~of letters~~an ofoverall ~~credit~~increase of up8% toin ~~$20.0 million~~the ~~(“Revolving~~refined ~~Credit~~products volumes ~~Facility”)~~delivered. ~~The~~This increase was primarily due to deliveries of products ~~interest~~received ~~rate~~into isour ~~based,~~pipeline from Centennial at Creal Springs, Illinois. Centennial has provided our ~~Parent~~system ~~Partnership’s~~with ~~option~~additional pipeline capacity for products originating in the U.S. Gulf Coast area. Prior to the construction of Centennial, deliveries on ~~either~~our ~~the~~pipeline system were limited by our pipeline ~~lender’s~~capacity, ~~base~~and ~~rate~~transportation ~~plus~~services for our customers were allocated in accordance with a ~~spread~~proration policy. With this incremental pipeline capacity, our orpreviously ~~LIBOR~~constrained ~~plus~~system ahas ~~spread~~expanded deliveries in ~~effect~~markets atboth ~~the time~~south and north of ~~the~~Creal ~~borrowings~~Springs. ~~The~~In ~~credit~~February 2003, ~~agreement~~we ~~for~~entered ~~the~~into ~~Revolving~~a ~~Credit Facility~~lease ~~contains~~agreement ~~certain~~with ~~restrictive~~Centennial ~~financial~~that ~~covenant~~increased ~~ratios.~~our ~~The~~flexibility ~~Parent~~to ~~Partnership~~deliver refined ~~borrowed~~products ~~$263~~to our market areas.~~0 million~~ ~~under~~Volume ~~the~~increases ~~Revolving~~were ~~Credit~~due ~~Facility~~to increased demand and ~~repaid~~market share for products supplied from the U.S. Gulf Coast into Midwest ~~outstanding~~markets. ~~balance~~The ofrefined products average rate per barrel increased 7% from the prior ~~Three~~year ~~Year~~period ~~Facility.~~primarily Atdue ~~September 30,~~to higher market-based tariff rates which went into effect in July 2003, ~~$225.0 million~~partially ~~was~~offset ~~outstanding~~by ~~under~~the impact of the ~~Revolving~~Midwest ~~Credit~~origin point ~~Facility~~for barrels received from Centennial, which resulted in an increase in short-haul barrels transported on our system.

OnRevenues ~~April~~from LPGs transportation decreased $2.0 6million for the three months ended March 31, ~~2001~~2004, ~~our~~compared ~~Parent~~with ~~Partnership~~the ~~entered~~three ~~into~~months aended ~~364-day~~March 31, 2003, ~~$200~~primarily due to lower deliveries of propane in the upper Midwest and Northeast market areas attributable to warmer weather during the first quarter of 2004.0 Additionally, in late February 2004, the Mont Belvieu propane price ~~million~~spiked, ~~revolving~~which ~~credit~~resulted ~~agreement~~in ~~(“Short-term~~our ~~Revolver”)~~sourced propane being less competitive than propane from other source points. This decrease was partially offset by increased deliveries of isobutane to Chicago area refineries. The ~~interest~~LPGs average rate per barrel decreased 3% from the prior year period as a result of a ~~was~~decreased ~~based~~percentage of long-haul deliveries during the three months ended March 31, at2004, ~~our~~partially ~~Parent~~offset ~~Partnership’s~~by ~~option~~an increase in LPG tariff rates, onwhich ~~either~~went into ~~the~~effect ~~lender’s~~in ~~base~~July 2003.

19 Other operating revenues increased $4.6 million for the three months ended March 31, 2004, compared with the three months ended March 31, 2003, primarily due to higher propane inventory fees, higher propane deliveries at our Providence, Rhode Island, import facility and higher refined product loading fees. These increases were partially offset by lower margins on product inventory sales.

~~rate~~ Costs ~~plus~~and aexpenses ~~spread,~~increased or$10.3 million ~~LIBOR~~for ~~plus~~the athree ~~spread~~months inended March 31, ~~effect~~2004, atcompared with the ~~time~~three ofmonths ~~the borrowings~~ended March 31, 2003. The increase ~~credit~~was ~~agreement~~made ~~contained~~up ~~certain~~of ~~restrictive~~an ~~financial covenant ratios~~$8.6 million Onincrease ~~March 28~~in operating, ~~2002~~general and administrative expenses, ~~the~~a ~~Short-term~~$1.6 million ~~Revolver~~increase ~~was~~in ~~extended~~depreciation ~~for~~and anamortization ~~additional~~expense ~~period~~and ofa ~~364~~$0.2 ~~days,~~million ~~ending~~increase in ~~March 2003~~taxes – other than income taxes. ~~During~~These ~~2002~~increases were partially offset by a $0.1 million decrease in operating fuel and power. Operating, ~~the~~general and administrative expenses ~~Parent~~increased ~~Partnership’s~~primarily ~~borrowings~~due ~~under~~to higher pipeline maintenance expenses due to pipeline rehabilitation expenses associated with our integrity management program, increased consulting and contract services primarily related to compliance with the ~~Short~~Sarbanes-~~term~~Oxley ~~Revolver~~Act ~~were~~of ~~used~~2002, increased labor costs primarily due to an ~~finance~~increase in the ~~acquisition~~number of employees between years, increased rental expense from the ~~Val~~Centennial ~~Verde~~pipeline ~~assets~~capacity lease agreement that we entered into in February 2003 and ~~for~~increased ~~other~~general ~~purposes~~and administrative supplies expense. Depreciation ~~During~~expense increased from the prior year period because of assets ~~2002~~placed in service during 2003, ~~the~~partially ~~Parent~~offset ~~Partnership~~by ~~repaid~~an increase in the ~~existing~~estimated remaining ~~amounts~~life ~~outstanding~~of ~~under~~a section of our pipeline system in the Northeast, as a ~~Short-term~~result ~~Revolver~~of ~~with~~pipeline ~~proceeds~~improvements itmade ~~received~~as ~~from~~part ~~the~~of ~~issuance~~our integrity management program. Taxes – other than income taxes increased as a result of ~~Limited~~actual ~~Partner~~property ~~Units~~taxes inbeing ~~2002~~slightly higher than previously estimated. ~~The~~Operating ~~Short-term~~fuel and ~~Revolver~~power ~~expired~~expense ondecreased ~~March 27~~slightly as a result of a more efficient use of our transportation assets, ~~2003~~partially offset by increased mainline throughput.

~~At September 30, 2003, and December 31, 2002, we had an intercompany note~~16 payable to our Parent Partnership of $197.9 million and $154.1 million, respectively, which represented borrowings under the Parent Partnership’s Revolving Credit Facility, 7.625% Senior Notes and 6.125% Senior Notes. The interest rate on the note payable to the Parent Partnership at September 30, 2003, was 6.1%. At September 30, 2003, accrued interest includes $0.5 million due to our Parent Partnership. For the nine months ended September 30, 2003, interest costs incurred on the note payable to our Parent Partnership totaled $8.8 million.

SeniorTable Notes of Contents

OnNet ~~January 27,~~losses ~~1998,~~from weequity ~~completed~~investments ~~the~~remained ~~issuance~~virtually ofunchanged ~~$180.0 million~~for ~~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~~three ~~Notes~~months ~~were~~ended ~~issued at a discount of $0.3~~March ~~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~~31, ~~2008. The 7.51% Senior Notes due 2028~~2004, ~~issued~~compared atwith ~~par,~~the ~~may~~three bemonths ~~redeemed~~ended ~~at any time after January 15,~~March ~~2008~~31, ~~at our option~~2003, inas ~~whole~~shown orbelow (in ~~part, at a premium.~~thousands):

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 on a parity with all of our 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 indebtedness. As of September 30, 2003, we were in compliance with the covenants of the Senior Notes.


	Three Months Ended
	March 31,						Increase
	2004			2003			(Decrease)
Centennial	$	(3,856	)	$	(3,178	)	$	(678	)
MB Storage		2,629			1,945			684
Other		(11	)		(26	)		15

Total equity losses	$	(1,238	)	$	(1,259	)	$	21

WeEquity ~~have~~losses ~~entered~~in ~~into~~Centennial increased primarily due to the acquisition of an additional 16.7% interest ~~rate~~in ~~swap~~Centennial ~~agreement~~on toFebruary 10, ~~hedge~~2003, ~~our~~bringing ~~exposure~~our ownership interest to ~~changes~~50%, inand ~~the~~higher ~~fair~~pipeline ~~value~~cleaning expenses, partially offset by an increase in transportation volumes on aCentennial. ~~portion~~The losses from Centennial are partially offset by increased earnings of $0.7 million from our ~~Senior~~50% ~~Notes~~ownership interest in MB Storage. ~~This~~Equity ~~agreement~~earnings in MB isStorage ~~more~~increased ~~fully~~between ~~described~~periods indue ~~Item 3.~~to ~~Quantitative~~increased storage revenue and ~~Qualitative~~receipt revenue, ~~Disclosures~~lower general and administrative expenses and lower pipeline ~~About~~rehabilitation ~~Market~~expenses ~~Risk~~on the MB Storage system.

~~Cash~~ Interest ~~Distributions~~expense increased $0.3 million for the three months ended March 31, 2004, compared with the three months ended March 31, 2003, as a result of higher outstanding debt balances under the note payable with our Parent Partnership. Interest capitalized increased $0.2 million for the three months ended March 31, 2004, compared with the three months ended March 31, 2003, as a result of increased balances of construction work-in-progress.

~~During~~Other ~~the~~income ~~nine~~– ~~months~~net ~~ended~~increased ~~September 30, 2003 and 2002, we paid cash distributions of~~ $770.63 million ~~and~~for ~~$70.4 million,~~the ~~respectively.~~three ~~The distribution~~months ~~increase~~ended ~~reflects~~March 31, ~~our~~2004, ~~success~~compared inwith ~~improving~~the ~~cash~~three ~~flow~~months ~~levels.~~ended ~~On November~~March 731, 2003, weprimarily ~~will~~due ~~pay~~to higher ainterest ~~cash~~income ~~distribution~~earned ofon ~~$28.0 million~~cash ~~for~~investments ~~the three~~and ~~months~~other ~~ended September 30, 2003~~investing activities.

~~Future~~Financial ~~Capital~~Condition ~~Needs~~ and ~~Commitments~~Liquidity

WeCash ~~estimate~~flows ~~that capital expenditures, excluding acquisitions,~~ for ~~2003 will~~the bethree ~~approximately~~months ~~$50.7 million~~ended ~~(which includes $1.6~~March ~~million of capitalized interest). We expect to use approximately $26.2 million for revenue generating projects~~31, ~~which~~2004 ~~will include the expansion of our pumping capacity for LPGs into the Northeast markets, expansion of our North Houston terminal facility, increased capacity at Princeton, Indiana,~~ and ~~expansion of deliverability capacity at various locations throughout the system. We expect to spend approximately $15.2 million to sustain existing operations~~2003, ~~including~~were ~~the~~as ~~replacement~~follows of(in ~~storage tanks and pipeline rehabilitation projects to comply~~thousands): ~~with regulations enacted by the United States Department of Transportation~~ Office of Pipeline Safety. An additional $7.7 million will be expended on other replacements and system upgrade projects. We continually review and evaluate potential capital improvements and expansions that would be complementary to our present system.


	Three Months Ended
	March 31,
	2004			2003
Cash provided by (used in):
Operating activities	$	17,068		$	27,123
Investing activities		(8,820	)		(32,404	)
Financing activities		(8,393	)		5,063

~~These expenditures can vary greatly depending on the magnitude of our~~17 ~~transactions. We may finance capital expenditures through internally generated funds, debt or capital contributions from our Parent Partnership or any combination thereof.~~

OurTable debt repayment obligations consist of payments for principal and interest on (i) $180.0 million 6.45% Senior Notes due January 15, 2008, (ii) $197.9 million principal amount due to our Parent Partnership related to our share of our Parent Partnership’s Revolving Credit Facility, 7.625% Senior Notes and 6.125% Senior Notes, due in April 2004, February 2012 and February 2013, respectively, and (iii) $210.0 million 7.51% Senior Notes due January 15, 2028. Contents

WeOperating ~~are also contingently liable as guarantor for the lesser of one-half or~~Activities ~~$75.0 million principal amount (plus interest) of the borrowings of Centennial.~~ ~~In January 2003, we entered into a pipeline capacity lease agreement with~~ ~~Centennial for a period of five years that contains a minimum capacity~~ requirement. On February 10, 2003, we acquired an additional 16.7% interest in Centennial, bringing our ownership percentage to 50%. We are also 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.

WeNet docash ~~not~~from ~~rely~~operating onactivities ~~off-balance~~for ~~sheet~~the ~~borrowings~~three tomonths ~~fund~~ended ~~our acquisitions.~~March 31, We2004 ~~have~~and no2003, ~~off-balance~~were ~~sheet~~comprised ~~commitments for indebtedness other than the limited guaranty~~ of the ~~Centennial~~following ~~debt, our Parent Partnership’s debt and leases covering assets utilized~~ (in ~~several areas of our operations.~~thousands):

The following table summarizes our debt repayment obligations and material contractual commitments as of September 30, 2003 (in millions):


	Three Months Ended
	March 31,
	2004			2003
Net income	$	17,209		$	20,567
Depreciation and amortization		8,638			7,008
Losses in equity investments		1,238			1,259
Non-cash portion of interest expense		7			8
Cash used in working capital and other		(10,024	)		(1,719	)

Net cash from operating activities	$	17,068		$	27,123

				Amount of Commitment Expiration Per Period
				Less than
		Total		1 Year		1-3 Years		4-5 Years		After 5 Years
Note payable, Parent Partnership		$	197.9	$	—	$	197.9	$	—	$	—
6.45% Senior Notes due 2008 (1)			180.0		—		—		180.0		—
7.51% Senior Notes due 2028 (1)			210.0		—		—		—		210.0
	Debt subtotal		587.9		—		197.9		180.0		210.0
Operating leases			43.0		11.3		20.7		10.9		0.1
	Total	$	630.9	$	11.3	$	218.6	$	190.9	$	210.1

Cash provided by operating activities decreased for the quarter ended March 31, 2004, compared with the quarter ended March 31, 2003, primarily due to lower net income and changes in working capital components resulting from the timing of cash receipts and cash disbursements.

~~(1)~~ We ~~entered~~believe ~~into~~that anwe ~~interest~~will ~~rate~~continue ~~swap~~to ~~agreement~~have adequate liquidity to ~~hedge~~fund ~~our~~future recurring ~~exposure~~operating toand ~~changes~~investing inactivities. ~~the~~Our ~~fair~~primary ~~value~~cash requirements consist of ~~our~~normal ~~7.51%~~operating ~~Senior~~expenses, capital expenditures to sustain existing operations and revenue generating expenditures, interest payments on our Senior Notes ~~due~~and ~~2028~~on borrowings under our Parent Partnership’s credit facilities and distributions to our Parent Partnership. AtShort-term ~~September~~cash 30requirements, ~~2003~~such as operating expenses, ~~the~~capital ~~7.51%~~expenditures ~~Senior~~to ~~Notes~~sustain ~~include~~existing anoperations ~~adjustment~~and quarterly distributions to ~~increase~~our ~~the~~Parent ~~fair~~Partnership, ~~value~~are ofexpected ~~the~~to ~~debt~~be byfunded through $7operating cash flows.3 ~~million~~Long-term ~~related~~cash torequirements ~~this~~for ~~interest~~expansion projects ~~rate~~are ~~swap~~expected ~~agreement.~~to Atbe ~~September~~funded 30by several sources, ~~2003~~including cash flows from operating activities, borrowings under our ~~6.45%~~Parent ~~Senior~~Partnership’s ~~Notes~~credit facilities ~~include~~and ~~$0.1~~the ~~million~~issuance by our Parent Partnership of ~~unamortized~~additional equity and debt ~~discount~~securities. The ~~fair~~timing ~~value~~of ~~adjustment~~any debt or offerings by our Parent Partnership will depend on various factors, including prevailing market conditions, interest rates and ~~unamortized~~our ~~debt~~Parent ~~discount~~Partnership’s ~~are~~financial ~~excluded~~condition ~~from~~and ~~this~~credit rating ~~table~~at the time.

WeAt ~~expect~~March 31, to2004 ~~repay~~and December 31, 2003, we had working capital deficits of $7.2 million and $12.3 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 ~~long-term~~timing of operating cash receipts from customers, ~~senior~~payment ~~unsecured~~of ~~obligations~~cash ~~through~~distributions and the payment of normal operating ~~issuance~~expenses and capital expenditures. We are a wholly owned subsidiary of ~~additional~~the Parent ~~long-term~~Partnership. ~~senior~~We ~~unsecured~~expect ~~debt~~that atour Parent Partnership will make capital contributions, loans or otherwise provide liquidity to us as needed, but the Parent ~~time~~Partnership has no contractual obligation to do so. We anticipate that the ~~2008~~Parent ~~and~~Partnership will provide the necessary liquidity to protect its ~~2028~~investment ~~debts~~in ~~mature~~us. At March 31, ~~proceeds~~2004, our Parent Partnership had $323.5 million in available borrowing capacity under its revolving credit facility to cover any working capital needs, and expects that cash flows from ~~dispositions~~operating activities, the sale of ~~assets~~additional debt or ~~any~~equity ~~combination~~offerings ofwill provide ~~the~~necessary ~~above~~liquidity ~~items~~to us.

~~Sources~~ Investing ~~of Future Capital~~Activities

WeCash ~~expect~~flows ~~that~~used ~~our~~in ~~cash~~investing ~~flow from operating~~ activities ~~will~~totaled be$8.8 million ~~adequate~~for tothe three ~~fund~~months ~~cash~~ended ~~distributions~~March 31, 2004, and were comprised of $7.8 million of capital expenditures ~~additions~~and ~~necessary~~$1.0 million toof ~~sustain~~cash ~~existing~~contributions for our ownership interest ~~operations~~in Centennial. ~~However~~Cash flows used in investing activities totaled $32.4 million for the three months ended March 31, ~~expansionary~~2003, and were comprised of $11.4 million of capital ~~projects~~expenditures, $20.0 million for our acquisition of the additional interest in Centennial on February 10, 2003, and ~~acquisitions~~$1.0 million of cash contributions for our ownership interest in Centennial.

2118

mayTable require additional capital contributions from our Parent Partnership. The Parent Partnership has funded its capital commitments from operating cash flow, borrowings under bank credit facilities, the issuance of long term debt in capital markets and the public offering of Limited Partner Units. We expect future capital needs would be similarly funded. Contents

OnFinancing ~~May 29, 2002, Moody’s Investors Service downgraded our Parent~~Activities ~~Partnership’s senior unsecured debt rating to Baa3 from Baa2. We were also~~ ~~included in this downgrade. These ratings were given with stable outlooks and~~ ~~followed our Parent Partnership’s announcement of the acquisition of Val Verde.~~ The downgrades reflect Moody’s concern that the Parent Partnership has a high level of debt relative to many of its peers and that its debt may be continually higher than its long-term targets if the Parent Partnership continues to make a series of acquisitions of increasingly larger size. Because of its high distribution rate, the Parent Partnership is particularly reliant on external financing to finance its acquisitions. Moody’s indicated that the Parent Partnership’s cash flows are becoming less predictable as a result of its acquisitions and expansion into the crude oil and natural gas gathering businesses. Further reductions in the Parent Partnership’s and our credit ratings could increase the debt financing costs or possibly reduce the availability of financing. Generally, a subsidiary’s credit rating will not be higher than its parent. 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 decides that the circumstances warrant such a change. In October 2003, Moody’s reaffirmed the Baa3 ratings on us and our Parent Partnership.

~~Other~~ Cash ~~Considerations~~flows used in financing activities totaled $8.4 million for the three months ended March 31, 2004, and were comprised of $28.9 million of distributions paid to our Parent Partnership and $15.0 million of repayments on our term loan, partially offset by $35.5 million of proceeds from our term loan. Cash flows provided by financing activities totaled $5.1 million for the three months ended March 31, 2003, and were comprised of $35.4 million of proceeds from our term loan, partially offset by $24.8 million of distributions paid to our Parent Partnership and $5.5 million of repayments on our term loan.

~~Our~~Centennial ~~operations~~entered ~~are~~into ~~subject~~credit tofacilities ~~federal,~~totaling ~~state~~$150.0 million and, ~~local laws and~~as ~~regulations governing the discharge~~ of ~~materials into the environment. Failure to comply with these laws and regulations may result in the assessment of administrative~~March 31, ~~civil and criminal penalties~~2004, ~~imposition~~$150.0 million ofwas ~~injunctions delaying~~outstanding orunder ~~prohibiting~~those ~~certain activities and the need to perform~~credit ~~investigatory and remedial activities~~facilities. ~~Although~~The weproceeds ~~believe~~were ~~our~~used ~~operations~~to ~~are in~~fund ~~material~~construction ~~compliance with applicable environmental laws~~ and ~~regulations, risks~~conversion costs of ~~significant~~Centennial’s ~~costs and liabilities are inherent in~~ pipeline ~~operations, and~~system. weWe ~~cannot assure you that significant costs~~ and ~~liabilities~~Marathon ~~will~~Ashland ~~not~~Petroleum ~~be incurred.~~LLC ~~Moreover, it is possible that other developments, such as~~have ~~increasingly~~each ~~strict~~guaranteed ~~environmental~~one-half ~~laws~~of ~~and~~Centennial’s ~~regulations and enforcement policies thereunder~~debt, ~~and~~up ~~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~~maximum ~~effect on our financial position, results~~ of ~~operations or~~$75.0 million ~~cash flows in the near term~~each.

InParent ~~1994,~~Partnership ~~the~~Credit ~~Louisiana Department of Environmental Quality (“LDEQ”) issued~~Facilities ~~a compliance order for environmental contamination at our Arcadia, Louisiana,~~ ~~facility. This contamination may be attributable to our operations, as well as~~ ~~to adjacent petroleum terminals operated by other companies. In 1999, our~~ Arcadia facility and adjacent terminals were directed by the Remediation Services Division of the LDEQ to pursue remediation of this containment phase. At September 30, 2003, we have an accrued liability of $0.3 million for remediation costs at our Arcadia facility. We do not expect that the completion of the remediation program that we have proposed will have a future material adverse effect on our financial position, results of operations or cash flows.

OnWe ~~March 17,~~currently ~~2003,~~utilize wedebt ~~experienced~~financing aavailable ~~release of 511 barrels of jet fuel~~ from ~~a tank at~~ our ~~Blue~~Parent ~~Island~~Partnership through ~~terminal~~intercompany ~~located in Cook County, Illinois~~notes. AsThe ~~a result~~terms of the ~~release,~~intercompany wenotes ~~have~~generally ~~entered~~match the ~~into~~principal ~~an Agreed Preliminary Injunction~~ and ~~Order~~interest ~~(“Agreed~~payment ~~Order”)~~dates ~~with~~under the ~~State~~Parent ofPartnership’s ~~Illinois~~credit agreements. The ~~Agreed~~interest ~~Order requires~~rates ~~us,~~charged inby ~~part,~~the toParent ~~complete~~Partnership ainclude ~~site investigation plan to delineate~~ the ~~scope~~stated ofinterest ~~any~~rate ~~potential~~of ~~contamination~~the ~~resulting~~Parent ~~from~~Partnership, ~~the~~plus ~~release~~a ~~and~~premium to ~~remediate~~ ~~any~~cover ~~contamination~~debt issuance costs. The ~~Agreed~~interest ~~Order~~rate ~~does~~is ~~not~~also ~~contain~~decreased ~~any provision for any fines~~ or ~~penalties;~~increased ~~however,~~to ~~it does not preclude the State of Illinois~~cover ~~from~~gains ~~assessing~~and ~~these~~losses, atrespectively, aon ~~later~~any ~~date.~~interest Werate doswaps ~~not expect~~ that the ~~completion of~~Parent ~~the~~Partnership ~~remediation~~may ~~program will~~ have ain ~~future~~place ~~material~~on ~~adverse~~its ~~effect~~respective oncredit ~~our~~agreements. These ~~financial~~credit ~~position,~~facilities ~~results~~ of ~~operations~~the orParent ~~cash~~Partnership ~~flows~~are described below.

22 On April 6, 2001, our Parent Partnership entered into a $500.0 million revolving credit facility including the issuance of letters of credit of up to $20.0 million (“Three Year Facility”). The interest rate was based, at our Parent Partnership’s 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 Three Year Facility contained certain restrictive financial covenant ratios. During the first quarter of 2003, our Parent Partnership repaid $182.0 million of the outstanding balance of the Three Year Facility with proceeds from the issuance of its 6.125% Senior Notes on January 30, 2003. On June 27, 2003, our Parent Partnership repaid the outstanding balance under the Three Year Facility with borrowings under a new credit facility and canceled the Three Year Facility.

~~New~~ On ~~Accounting~~June 27, ~~Pronouncements~~2003, our Parent Partnership entered into a $550.0 million 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’s 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. Our Parent Partnership borrowed $263.0 million under the Revolving Credit Facility and repaid the outstanding balance of the Three Year Facility. At March 31, 2004, $226.5 million was outstanding under the Revolving Credit Facility.

~~See~~On ~~discussion~~February 20, 2002, our Parent Partnership issued $500.0 million principal amount of ~~new~~7.625% ~~accounting~~Senior ~~pronouncements~~Notes indue ~~Note~~2012. 1The 7.625% ~~Organization~~Senior Notes were issued at a discount of $2.2 million and ~~Basis~~are being accreted to their face value over the term of ~~Presentation~~the –notes. ~~New~~The ~~Accounting~~Senior ~~Pronouncements~~Notes inmay be redeemed at any time at our Parent Partnership’s option with the ~~accompanying~~payment of accrued interest and a ~~consolidated~~make-whole ~~financial~~premium ~~statements~~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 these 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.

~~Forward-Looking~~ On ~~Statements~~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 Parent Partnership used $182.0 million of the proceeds from the offering to reduce the outstanding principal on the Three Year Facility to $250.0 million. The balance of the net proceeds

~~The matters discussed herein include “forward-looking statements” within~~19 the meaning of various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements, other than statements of historical facts, 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. However, 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. 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, that they 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, as amended, for the year ended December 31, 2002, and other filings we have made with the Securities and Exchange Commission.

Item 3.Table Quantitativeof and Qualitative Disclosures About Market Risk Contents

Wereceived was used for general Parent Partnership purposes. The Senior Notes may be ~~exposed~~redeemed toat ~~market~~any ~~risk~~time ~~through~~at ~~changes~~our inParent ~~commodity~~Partnership’s ~~prices~~option ~~and~~with the payment of accrued interest ~~rates.~~and Wea domake-whole ~~not~~premium ~~have~~determined ~~foreign~~by ~~exchange~~discounting remaining ~~risks.~~interest ~~Our~~and ~~Risk~~principal ~~Management Committee~~payments ~~has~~using ~~established~~a ~~policies~~discount rate equal to ~~monitor~~the rate ~~and~~of ~~control~~the ~~these~~United ~~market~~States ~~risks.~~Treasury securities of comparable remaining maturity plus 35 basis points. The ~~Risk~~indenture ~~Management~~governing ~~Committee~~the is6.125% ~~comprised~~Senior Notes contains covenants, inincluding, ~~part~~but not limited to, ofcovenants ~~senior~~limiting ~~executives~~the creation of liens securing indebtedness and sale and leaseback transactions. However, the indenture ~~Company~~does not limit the Parent Partnership’s ability to incur additional indebtedness.

WeAs ~~have~~of ~~utilized~~March 31, 2004, and ~~expect~~December 31, to2003, ~~continue~~we tohad ~~utilize~~an ~~interest~~intercompany ~~rate swap~~note ~~agreements~~payable to ~~hedge~~our aParent ~~portion~~Partnership of ~~our fair value risks~~$231.8 million ~~Interest~~and ~~rate swap~~$211.3 million, ~~agreements~~respectively, ~~are~~which ~~used~~represented toborrowings ~~manage~~under the ~~fixed~~Parent ~~interest~~Partnership’s Revolving ~~rate~~Credit ~~mix~~Facility, of7.625% ~~our~~Senior ~~debt~~Notes ~~portfolio~~ and ~~overall~~6.125% ~~cost~~Senior ~~of borrowing~~Notes. The weighted average interest rate ~~swap~~on ~~related~~the tonote ~~our~~payable ~~fair value risk is intended~~ to ~~reduce our exposure to changes in~~ the ~~fair~~Parent ~~value~~Partnership ofat ~~our~~March 31, ~~fixed~~2004, ~~rate~~was ~~Senior Notes~~5.2%. ~~The~~At ~~interest~~March 31, ~~rate~~2004, ~~swap~~accrued ~~agreement~~interest ~~involves~~includes ~~the~~$2.0 ~~periodic~~million ~~exchange~~due ofto ~~payments without~~ the ~~exchange~~Parent ofPartnership. For the ~~notional~~three ~~amount~~months ~~upon~~ended March 31, ~~which~~2004 ~~the~~and ~~payments~~2003, ~~are~~interest ~~based.~~costs ~~The~~incurred ~~related~~on ~~amount~~the note payable to orthe ~~receivable from~~Parent ~~counterparties~~Partnership istotaled ~~included~~$2.9 million asand an$2.7 million, ~~adjustment to accrued interest~~respectively.

At September 30, 2003, and December 31, 2002, we had an intercompany note payable to our Parent Partnership of $197.9 million and $154.1 million, respectively, which represented borrowings under the Parent Partnership’s Revolving Credit Facility, 7.625% Senior Notes ~~and 6.125% Senior Notes. The~~ ~~interest rate on the note payable to the Parent Partnership at September 30,~~ ~~2003, was 6.1%. At September 30, 2003, accrued interest includes $0.5 million~~ ~~due to the Parent Partnership. For the nine months ended September 30, 2003,~~ ~~interest costs incurred on the note payable to the Parent Partnership totaled $8.8 million.~~

AtOn ~~September~~January 3027, ~~2003~~1998, we ~~had~~completed ~~outstanding~~the issuance of $180.0 million principal ~~amount~~ 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”). AtThe ~~September~~6.45% Senior Notes were issued at a discount of $0.3 ~~30,~~million ~~2003,~~and ~~the~~are ~~estimated~~being ~~fair~~accreted to their face value over the term of the notes. The 6.45% Senior Notes ~~was~~due 2008 ~~approximately~~are ~~$414~~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 ~~million~~15, 2008, at our option in whole or in part, at a premium.

23 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 on a parity with all of our 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 March 31, 2004, we were in compliance with the covenants of the Senior Notes.

AsWe ofhave ~~September 30,~~entered ~~2003,~~into ~~we had~~ an interest rate swap agreement ~~in place~~ to hedge our exposure to changes in the fair value ofon ~~our fixed rate 7.51% Senior Notes due 2028. We have designated this swap agreement as~~ a ~~fair~~portion ~~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 7.51%~~ Senior Notes~~. Under the swap agreement~~, weas ~~pay~~more ~~a floating rate of interest based on a~~fully ~~three-month~~described ~~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, 2003, and 2002, we recognized reductions~~ in ~~interest expense of $7.4~~Item million and $5.4 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, 2003, 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 $7.3 ~~million and $13~~.~~6 million~~ atQuantitative ~~September 30, 2003,~~ and ~~December 31,~~Qualitative ~~2002, respectively.~~Disclosures ~~Utilizing~~About ~~the balance of the 7.51% Senior Notes outstanding at~~Market ~~September 30, 2003, and including the effects of hedging activities, assuming market interest rates increase 100 basis points, the potential annual increase in interest expense is $2~~Risk.~~1 million.~~

~~Item 4.~~ Cash ~~Controls and Procedures~~Distributions

~~The~~During ~~principal~~the ~~executive~~three ~~officer~~months ~~and~~ended ~~principal~~March 31, ~~financial~~2004 ~~officer~~and ~~of our General Partner~~2003, ~~after~~we ~~evaluating~~paid ~~the~~cash distributions ~~effectiveness~~to of our ~~disclosure~~Parent ~~controls and~~Partnership ~~procedures~~totaling ~~(as defined in Exchange Act Rules~~$28.9 ~~13a-15(e)~~million and ~~15d-15(e)) as~~$24.8 ~~of September 30~~million, ~~2003,~~respectively. ~~have~~On ~~concluded that~~May 7, ~~as of such date~~2004, ~~our~~we ~~disclosure controls~~will ~~and~~pay ~~procedures~~a ~~are~~cash ~~adequate~~distribution ~~and effective~~ to ~~ensure that material~~our ~~information~~Parent ~~relating~~Partnership toof us$29.7 million ~~and~~for ~~our~~the ~~consolidated~~quarter ~~subsidiaries~~ended ~~would~~March 31, ~~be made known to them by others within those entities~~2004.

~~There~~ Future ~~have~~Capital ~~been~~Needs noand ~~changes in our internal controls or in other factors~~Commitments ~~known to us that could materially affect, or are reasonably likely to~~ ~~materially affect, those internal controls subsequent to the date of the~~ ~~evaluation. As a result, no corrective actions were required or undertaken.~~

~~PART~~ We IIestimate that capital expenditures, excluding acquisitions, for 2004 will be approximately $70.2 million ~~OTHER~~(which ~~INFORMATION~~includes $2.0 million of capitalized interest). We expect to spend approximately $45.9 million for revenue generating projects and facility improvements that will include the expansion of our pipelines extending from Seymour to Indianapolis, Indiana, further expansions of our Northeast pipeline system and construction of a new truck loading terminal in Bossier City, Louisiana. We expect to spend approximately $22.3 million of capital costs to sustain existing operations, including life-cycle replacements for equipment at various facilities and pipeline and tank replacements. 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, capital contributions from our Parent Partnership or any combination thereof.

~~Item 1. Legal Proceedings~~20

WeTable 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 9. Commitments and Contingencies in the accompanying consolidated financial statements. Contents

~~Item~~ Our debt repayment obligations consist of payments for principal and interest on (i) our $231.8 million principal amount due to the Parent Partnership related to our share of the Parent Partnership’s Revolving Credit Facility due in June 2006, 7.625% Senior Notes due in February 2012 and 6.125% Senior ~~Exhibits~~Notes due in February 2013, (ii) our $210.0 million 7.51% Senior Notes due January 15, 2028, and ~~Reports~~(iii) onour ~~Form~~$180.0 ~~8-K~~million 6.45% Senior Notes due January 15, 2008.

We are also contingently liable as guarantor for the lesser of one-half or $75.0 million principal amount (aplus interest) of Centennial’s borrowings. In January ~~Exhibits:~~2003, we entered into a pipeline capacity lease agreement with Centennial for a period of five years that contains a minimum throughput requirement. During the year ended December 31, 2003, we exceeded the minimum throughput requirements on the lease agreements. We are also 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.

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).

During the three months ended March 31, 2004, we contributed $1.0 million to Centennial to cover operating needs and capital expenditures. On April 1, 2004, we contributed $16.5 million to MB Storage for its acquisition of storage assets. During the remainder of 2004, we may be required to contribute cash to both Centennial and MB Storage to cover capital expenditures, acquisitions or other operating needs.

24 Off-Balance Sheet Arrangements

Exhibit
Number		Description
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+		Duke Energy Corporation Executive Savings Plan (Filed as Exhibit 10.7 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).
10.2+		Duke Energy Corporation Executive Cash Balance Plan (Filed as Exhibit 10.8 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).
10.3+		Duke Energy Corporation Retirement Benefit Equalization Plan (Filed as Exhibit 10.9 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).
10.4+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan executed on March 8, 1994 (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1994 and incorporated herein by reference).
10.5+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan, Amendment 1, effective January 16, 1995 (Filed as Exhibit 10.12 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 1999 and incorporated herein by reference).
10.6+		Texas Eastern Products Pipeline Company Non-employee Directors Unit Accumulation Plan, effective April 1, 1999 (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).
10.7+		Texas Eastern Products Pipeline Company Non-employee Directors Deferred Compensation Plan, effective November 1, 1999 (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).
10.8+		Texas Eastern Products Pipeline Company Phantom Unit Retention Plan, effective August 25, 1999 (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

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 Parent Partnership debt and leases covering assets utilized in several areas of our operations.

25 Contractual Obligations

Exhibit
Number		Description
10.9		Asset Purchase Agreement between Duke Energy Field Services, Inc. and TEPPCO Colorado, LLC, dated March 31, 1998 (Filed as Exhibit 10.14 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1998 and incorporated herein by reference).
10.10+		Form of Employment Agreement between the Company and Thomas R. Harper, Charles H. Leonard, James C. Ruth, John N. Goodpasture, Leonard W. Mallett, Stephen W. Russell, David E. Owen, and Barbara A. Carroll (Filed as Exhibit 10.20 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1998 and incorporated herein by reference).
10.11+		Employment Agreement with Barry R. Pearl (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).
10.12		Services and Transportation Agreement between TE Products Pipeline Company, Limited Partnership and Fina Oil and Chemical Company, BASF Corporation and BASF Fina Petrochemical Limited Partnership, dated February 9, 1999 (Filed as Exhibit 10.22 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).
10.13		Call Option Agreement, dated February 9, 1999 (Filed as Exhibit 10.23 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).
10.14+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Amendment and Restatement, effective January 1, 2000 (Filed as Exhibit 10.28 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).
10.15+		TEPPCO Supplemental Benefit Plan, effective April 1, 2000 (Filed as Exhibit 10.29 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).
10.16		Contribution, Assignment and Amendment Agreement among TEPPCO Partners, L.P., TE Products Pipeline Company, Limited Partnership, TCTM, L.P., Texas Eastern Products Pipeline Company, LLC, and TEPPCO GP, Inc., dated July 26, 2001 (Filed as Exhibit 3.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2001 and incorporated herein by reference).
10.17		Certificate of Formation of TEPPCO Colorado, LLC (Filed as Exhibit 3.2 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1998 and incorporated herein by reference).
10.18		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).
10.19		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).
10.20		Amendment 1, dated as of September 28, 2001, to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.33 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).
10.21		Amendment 1, dated as of September 28, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.34 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).

The following table summarizes our debt repayment obligations and material contractual commitments as of March 31, 2004 (in millions):


	Amount of Commitment Expiration Per Period
			Less than						More than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
Note payable, Parent Partnership	$	231.8	$	—	$	231.8	$	—	$	—
6.45% Senior Notes due 2008 (1)		180.0		—		—		180.0		—
7.51% Senior Notes due 2028 (1)		210.0		—		—		—		210.0

Debt subtotal		621.8		—		231.8		180.0		210.0

Operating leases		55.5		11.5		22.4		11.4		10.2

Total	$	677.3	$	11.5	$	254.2	$	191.4	$	220.2

Exhibit
Number		Description
10.22		Amendment and Restatement, dated as of November 13, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.35 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).
10.23		Second Amendment and Restatement, dated as of November 13, 2001, to the Amended and Restated Credit Agreement amount TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.36 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).
10.24		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and Certain Lenders, as Lenders dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 10.44 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).
10.25		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank, as Administrative Agent and LC Issuing Bank and Certain Lenders, as Lenders dated as of March 28, 2002 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.45 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).
10.26		Amendment, dated as of June 27, 2002 to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent, and Certain Lenders, dated as of March 28, 2002 ($500,000,000 Revolving Credit Facility) (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).
10.27		Amendment 1, dated as of June 27, 2002 to the Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent and Certain Lenders, dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 99.4 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).
10.28+		Texas Eastern Products Pipeline Company, LLC 2002 Phantom Unit Retention Plan, effective June 1, 2002 (Filed as Exhibit 10.49 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).
10.29+		Amended and Restated TEPPCO Supplemental Benefit Plan, effective November 1, 2002 (Filed as Exhibit 10.44 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).
10.30+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Second Amendment and Restatement, effective January 1, 2003 (Filed as Exhibit 10.45 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).
10.31+		Amended and Restated Texas Eastern Products Pipeline Company, LLC Management Incentive Compensation Plan, effective January 1, 2003 (Filed as Exhibit 10.46 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).
10.32+		Amended and Restated TEPPCO Retirement Cash Balance Plan, effective January 1, 2002 (Filed as Exhibit 10.47 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).
10.33		Formation Agreement between Panhandle Eastern Pipe Line Company and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, dated as of August 10, 2000 (Filed as Exhibit 10.48 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).

(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 March 31, 2004, the 7.51% Senior Notes include an adjustment to increase the fair value of the debt by $8.9 million related to this interest rate swap agreement. At March 31, 2004, our 6.45% Senior Notes include $0.1 million of unamortized debt discount. The fair value adjustment and unamortized debt discount are excluded from this table.

27 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, contributions from our Parent Partnership or any combination of the above items.

Exhibit
Number		Description
10.34		Amended and Restated Limited Liability Company Agreement of Centennial Pipeline LLC dated as of August 10, 2000 (Filed as Exhibit 10.49 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).
10.35		Guaranty Agreement, dated as of September 27, 2002, between TE Products Pipeline Company, Limited Partnership and Marathon Ashland Petroleum LLC for Note Agreements of Centennial Pipeline LLC (Filed as Exhibit 10.50 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).
10.36		LLC Membership Interest Purchase Agreement By and Between CMS Panhandle Holdings, LLC, As Seller and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, Severally as Buyers, dated February 10, 2003 (Filed as Exhibit 10.51 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).
10.37		Joint Development Agreement between TE Products Pipeline Company, Limited Partnership and Louis Dreyfus Plastics Corporation dated February 10, 2000 (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2003, and incorporated herein by reference).
10.38		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank and The Lenders Party Hereto, as Lenders, dated as of June 27, 2003 ($550,000,000 Revolving Facility) (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2003, and incorporated herein by reference).
10.39		Agreement of Limited Partnership of Mont Belvieu Storage Partners, L.P. dated effective January 21, 2003. (Filed as Exhibit 10.53 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).
10.40		Letter of Agreement Clarifying Rights and Obligations of the Parties Under the Mont Belvieu Storage Partners, L.P., Partnership Agreement and the Mont Belvieu Venture, LLC, LLC Agreement, dated October 13, 2003. (Filed as Exhibit 10.54 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).
31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Table Filedof herewith. + A management contract or compensation plan or arrangement.Contents

~~(b) Reports~~Sources onof ~~Form~~Future ~~8-K filed with or furnished to the Securities~~Capital ~~and Exchange Commission during the quarter ended September 30, 2003:~~

A We ~~Report~~expect onthat ~~Form~~our ~~8-K~~cash ~~was~~flow ~~filed~~from onoperating ~~July 15,~~activities ~~2003~~will be adequate to fund cash distributions and capital additions necessary to sustain existing operations. However, ~~including~~expansionary ascapital projects and acquisitions may anrequire ~~exhibit~~additional ~~the~~capital ~~audited~~contributions ~~balance~~from ~~sheet~~our ofParent ~~Texas~~Partnership. ~~Eastern~~The ~~Products~~Parent ~~Pipeline~~Partnership ~~Company~~has funded its capital commitments from operating cash flow, borrowings ~~LLC~~under bank credit facilities, asthe issuance of ~~December 31,~~long ~~2002~~term debt in capital markets and the public offering of Limited Partner Units. We expect future capital needs will be similarly funded.

28 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”). Our senior unsecured debt is also rated BBB by S&P and Baa3 by Moody’s. Both ratings are stable. 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.

~~SIGNATURES~~Other Considerations

~~Pursuant~~Our operations are subject to federal, state and local laws and regulations governing the ~~requirements~~discharge of materials into the ~~Securities~~environment. ~~Exchange~~Failure to ~~Act~~comply with these laws and regulations may result in the assessment of administrative, ~~1934~~civil and criminal penalties, ~~the~~imposition of injunctions ~~registrant~~delaying ~~has~~or ~~duly~~prohibiting ~~caused~~certain ~~this~~activities ~~report~~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. ~~signed~~Moreover, onit ~~its~~is ~~behalf~~possible bythat ~~the~~other developments, such as ~~undersigned~~increasingly strict environmental laws and ~~thereunto~~regulations ~~duly~~and ~~authorized~~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.

		TE Products Pipeline Company, Limited Partnership (Registrant) (A Delaware Limited Partnership)
		By: TEPPCO GP, Inc., as General Partner
		By: /s/ BARRY R. PEARL
		Barry R. Pearl, President, Chief Executive Officer and Director (Principal Executive Officer)
		By: /s/ CHARLES H. LEONARD
		Charles H. Leonard, Senior Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)
Date:	October 30, 2003

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 in 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 they have accepted shared responsibility. At March 31, 2004, we have an accrued liability of $0.3 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.

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+		Duke Energy Corporation Executive Savings Plan (Filed as Exhibit 10.7 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).
10.2+		Duke Energy Corporation Executive Cash Balance Plan (Filed as Exhibit 10.8 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).
10.3+		Duke Energy Corporation Retirement Benefit Equalization Plan (Filed as Exhibit 10.9 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).
10.4+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan executed on March 8, 1994 (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1994 and incorporated herein by reference).
10.5+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan, Amendment 1, effective January 16, 1995 (Filed as Exhibit 10.12 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 1999 and incorporated herein by reference).
10.6+		Texas Eastern Products Pipeline Company Non-employee Directors Unit Accumulation Plan, effective April 1, 1999 (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

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. The Agreed Order requires us, in part, to complete a site investigation plan to delineate the scope of any potential contamination resulting from the release and to remediate any contamination present above regulatory standards. This site investigation plan has been completed and submitted to the State of Illinois. The Agreed Order does not contain any provision for any fines or penalties; however, it does not preclude the State of Illinois from assessing these at a later date. We do not expect that the completion of the Agreed Order will have a future material adverse effect on our financial position, results of operations or cash flows.

Exhibit
Number		Description
10.7+		Texas Eastern Products Pipeline Company Non-employee Directors Deferred Compensation Plan, effective November 1, 1999 (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).
10.8+		Texas Eastern Products Pipeline Company Phantom Unit Retention Plan, effective August 25, 1999 (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).
10.9		Asset Purchase Agreement between Duke Energy Field Services, Inc. and TEPPCO Colorado, LLC, dated March 31, 1998 (Filed as Exhibit 10.14 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1998 and incorporated herein by reference).
10.10+		Form of Employment Agreement between the Company and Thomas R. Harper, Charles H. Leonard, James C. Ruth, John N. Goodpasture, Leonard W. Mallett, Stephen W. Russell, David E. Owen, and Barbara A. Carroll (Filed as Exhibit 10.20 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1998 and incorporated herein by reference).
10.11+		Employment Agreement with Barry R. Pearl (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).
10.12		Services and Transportation Agreement between TE Products Pipeline Company, Limited Partnership and Fina Oil and Chemical Company, BASF Corporation and BASF Fina Petrochemical Limited Partnership, dated February 9, 1999 (Filed as Exhibit 10.22 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).
10.13		Call Option Agreement, dated February 9, 1999 (Filed as Exhibit 10.23 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).
10.14+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Amendment and Restatement, effective January 1, 2000 (Filed as Exhibit 10.28 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).
10.15+		TEPPCO Supplemental Benefit Plan, effective April 1, 2000 (Filed as Exhibit 10.29 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).
10.16		Contribution, Assignment and Amendment Agreement among TEPPCO Partners, L.P., TE Products Pipeline Company, Limited Partnership, TCTM, L.P., Texas Eastern Products Pipeline Company, LLC, and TEPPCO GP, Inc., dated July 26, 2001 (Filed as Exhibit 3.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2001 and incorporated herein by reference).
10.17		Certificate of Formation of TEPPCO Colorado, LLC (Filed as Exhibit 3.2 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1998 and incorporated herein by reference).
10.18		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).
10.19		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).

We regularly review our long-lived assets for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. At March 31, 2004, we have identified certain assets that we are monitoring for possible impairment. We are unable to reasonably estimate the probabilities associated with the performance of an impairment test. We are continuing to monitor the circumstances surrounding the assets and will test the assets for impairment as more information becomes available. We do not believe that the resolution of the matter will have a material effect on our financial condition, results of operations or cash flows.

Exhibit
Number		Description
10.20		Amendment 1, dated as of September 28, 2001, to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.33 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).
10.21		Amendment 1, dated as of September 28, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.34 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).
10.22		Amendment and Restatement, dated as of November 13, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.35 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).
10.23		Second Amendment and Restatement, dated as of November 13, 2001, to the Amended and Restated Credit Agreement amount TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.36 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).
10.24		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and Certain Lenders, as Lenders dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 10.44 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).
10.25		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank, as Administrative Agent and LC Issuing Bank and Certain Lenders, as Lenders dated as of March 28, 2002 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.45 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).
10.26		Amendment, dated as of June 27, 2002 to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent, and Certain Lenders, dated as of March 28, 2002 ($500,000,000 Revolving Credit Facility) (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).
10.27		Amendment 1, dated as of June 27, 2002 to the Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent and Certain Lenders, dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 99.4 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).
10.28+		Texas Eastern Products Pipeline Company, LLC 2002 Phantom Unit Retention Plan, effective June 1, 2002 (Filed as Exhibit 10.49 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).
10.29+		Amended and Restated TEPPCO Supplemental Benefit Plan, effective November 1, 2002 (Filed as Exhibit 10.44 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).
10.30+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Second Amendment and Restatement, effective January 1, 2003 (Filed as Exhibit 10.45 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).
10.31+		Amended and Restated Texas Eastern Products Pipeline Company, LLC Management Incentive Compensation Plan, effective January 1, 2003 (Filed as Exhibit 10.46 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).

Exhibit
Number		Description
10.32+		Amended and Restated TEPPCO Retirement Cash Balance Plan, effective January 1, 2002 (Filed as Exhibit 10.47 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).
10.33		Formation Agreement between Panhandle Eastern Pipe Line Company and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, dated as of August 10, 2000 (Filed as Exhibit 10.48 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).
10.34		Amended and Restated Limited Liability Company Agreement of Centennial Pipeline LLC dated as of August 10, 2000 (Filed as Exhibit 10.49 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).
10.35		Guaranty Agreement, dated as of September 27, 2002, between TE Products Pipeline Company, Limited Partnership and Marathon Ashland Petroleum LLC for Note Agreements of Centennial Pipeline LLC (Filed as Exhibit 10.50 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).
10.36		LLC Membership Interest Purchase Agreement By and Between CMS Panhandle Holdings, LLC, As Seller and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, Severally as Buyers, dated February 10, 2003 (Filed as Exhibit 10.51 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).
10.37		Joint Development Agreement between TE Products Pipeline Company, Limited Partnership and Louis Dreyfus Plastics Corporation dated February 10, 2000 (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2003, and incorporated herein by reference).
10.38		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank and The Lenders Party Hereto, as Lenders, dated as of June 27, 2003 ($550,000,000 Revolving Facility) (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2003, and incorporated herein by reference).
10.39		Agreement of Limited Partnership of Mont Belvieu Storage Partners, L.P. dated effective January 21, 2003. (Filed as Exhibit 10.53 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).
10.40		Letter of Agreement Clarifying Rights and Obligations of the Parties Under the Mont Belvieu Storage Partners, L.P., Partnership Agreement and the Mont Belvieu Venture, LLC, LLC Agreement, dated October 13, 2003. (Filed as Exhibit 10.54 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).
31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Recent ~~Filed~~Accounting ~~herewith. + A management contract or compensation plan or arrangement.~~Pronouncements

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

Forward-Looking Statements

The matters discussed herein include “forward-looking statements” within the meaning of various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements, other than statements of historical facts, 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. However, 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. 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, that they 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, 2003, and other filings we have made with the Securities and Exchange Commission.

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 March 31, 2004, 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 March 31, 2004, the estimated fair values of the 6.45% Senior Notes and 7.51% Senior Notes were approximately $198.5 million and $238.2 million, respectively.

As of March 31, 2004, we had an interest rate swap agreement in place 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 three months ended March 31, 2004 and 2003, we recognized reductions in interest expense of $2.6 million and $2.4 million, respectively, related to the difference between the fixed rate and the floating rate of interest on the interest rate swap. During the three months ended March 31, 2004, 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 $8.9 million at March 31, 2004, and a gain of approximately $2.3 million at December 31, 2003. Utilizing the balance of the 7.51% Senior Notes outstanding at March 31, 2004, 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.

As of March 31, 2004, and December 31, 2003, we had an intercompany note payable to our Parent Partnership of $231.8 million and $211.3 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 March 31, 2004, was 5.2%. At March 31, 2004, accrued interest includes $2.0 million due to the Parent Partnership. For the three months ended March 31, 2004 and 2003, interest costs incurred on the note payable to the Parent Partnership totaled $2.9 million and $2.7 million, respectively.

Item 4. Controls and Procedures

The principal executive officer and principal financial officer of the Company, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2004, have concluded that, as of such date, our disclosure controls and procedures are adequate and effective to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities.

During the first quarter of 2004, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, those internal controls subsequent to the date of the evaluation. As a result, no corrective actions were required or undertaken.

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 9. Commitments and Contingencies in the accompanying consolidated financial statements.

Item 6. Exhibits and Reports on Form 8-K.

(a)

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+		Duke Energy Corporation Executive Savings Plan (Filed as Exhibit 10.7 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).

10.2+		Duke Energy Corporation Executive Cash Balance Plan (Filed as Exhibit 10.8 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).

10.3+		Duke Energy Corporation Retirement Benefit Equalization Plan (Filed as Exhibit 10.9 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).

10.4+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan executed on March 8, 1994 (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1994 and incorporated herein by reference).

10.5+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan, Amendment 1, effective January 16, 1995 (Filed as Exhibit 10.12 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 1999 and incorporated herein by reference).

10.6+		Texas Eastern Products Pipeline Company Non-employee Directors Unit Accumulation Plan, effective April 1, 1999 (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

10.7+		Texas Eastern Products Pipeline Company Non-employee Directors Deferred Compensation Plan, effective November 1, 1999 (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

10.8+		Texas Eastern Products Pipeline Company Phantom Unit Retention Plan, effective August 25, 1999 (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).


10.9+		Form of Employment Agreement between the Company and Thomas R. Harper, Charles H. Leonard, James C. Ruth, John N. Goodpasture, Leonard W. Mallett, Stephen W. Russell, David E. Owen, and Barbara A. Carroll (Filed as Exhibit 10.20 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1998 and incorporated herein by reference).

10.10+		Employment Agreement with Barry R. Pearl (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).

10.11		Services and Transportation Agreement between TE Products Pipeline Company, Limited Partnership and Fina Oil and Chemical Company, BASF Corporation and BASF Fina Petrochemical Limited Partnership, dated February 9, 1999 (Filed as Exhibit 10.22 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).

10.12		Call Option Agreement, dated February 9, 1999 (Filed as Exhibit 10.23 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).

10.13+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Amendment and Restatement, effective January 1, 2000 (Filed as Exhibit 10.28 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).

10.14+		TEPPCO Supplemental Benefit Plan, effective April 1, 2000 (Filed as Exhibit 10.29 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).

10.15		Contribution, Assignment and Amendment Agreement among TEPPCO Partners, L.P., TE Products Pipeline Company, Limited Partnership, TCTM, L.P., Texas Eastern Products Pipeline Company, LLC, and TEPPCO GP, Inc., dated July 26, 2001 (Filed as Exhibit 3.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2001 and incorporated herein by reference).

10.16		Certificate of Formation of TEPPCO Colorado, LLC (Filed as Exhibit 3.2 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1998 and incorporated herein by reference).

10.17		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).

10.18		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).

10.19		Amendment 1, dated as of September 28, 2001, to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.33 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).

10.20		Amendment 1, dated as of September 28, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.34 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).


10.21		Amendment and Restatement, dated as of November 13, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.35 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).

10.22		Second Amendment and Restatement, dated as of November 13, 2001, to the Amended and Restated Credit Agreement amount TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.36 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).

10.23		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and Certain Lenders, as Lenders dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 10.44 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).

10.24		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank, as Administrative Agent and LC Issuing Bank and Certain Lenders, as Lenders dated as of March 28, 2002 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.45 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).

10.25		Amendment, dated as of June 27, 2002 to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent, and Certain Lenders, dated as of March 28, 2002 ($500,000,000 Revolving Credit Facility) (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).

10.26		Amendment 1, dated as of June 27, 2002 to the Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent and Certain Lenders, dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 99.4 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).

10.27+		Texas Eastern Products Pipeline Company, LLC 2002 Phantom Unit Retention Plan, effective June 1, 2002 (Filed as Exhibit 10.49 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).

10.28+		Amended and Restated TEPPCO Supplemental Benefit Plan, effective November 1, 2002 (Filed as Exhibit 10.44 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).

10.29+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Second Amendment and Restatement, effective January 1, 2003 (Filed as Exhibit 10.45 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).

10.30+		Amended and Restated Texas Eastern Products Pipeline Company, LLC Management Incentive Compensation Plan, effective January 1, 2003 (Filed as Exhibit 10.46 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).

10.31+		Amended and Restated TEPPCO Retirement Cash Balance Plan, effective January 1, 2002 (Filed as Exhibit 10.47 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).

10.32		Formation Agreement between Panhandle Eastern Pipe Line Company and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, dated as of August 10, 2000 (Filed as Exhibit 10.48 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).


10.33		Amended and Restated Limited Liability Company Agreement of Centennial Pipeline LLC dated as of August 10, 2000 (Filed as Exhibit 10.49 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).

10.34		Guaranty Agreement, dated as of September 27, 2002, between TE Products Pipeline Company, Limited Partnership and Marathon Ashland Petroleum LLC for Note Agreements of Centennial Pipeline LLC (Filed as Exhibit 10.50 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).

10.35		LLC Membership Interest Purchase Agreement By and Between CMS Panhandle Holdings, LLC, As Seller and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, Severally as Buyers, dated February 10, 2003 (Filed as Exhibit 10.51 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).

10.36		Joint Development Agreement between TE Products Pipeline Company, Limited Partnership and Louis Dreyfus Plastics Corporation dated February 10, 2000 (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2003, and incorporated herein by reference).

10.37		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank and The Lenders Party Hereto, as Lenders, dated as of June 27, 2003 ($550,000,000 Revolving Facility) (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2003, and incorporated herein by reference).

10.38		Agreement of Limited Partnership of Mont Belvieu Storage Partners, L.P. dated effective January 21, 2003. (Filed as Exhibit 10.53 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).

10.39		Letter of Agreement Clarifying Rights and Obligations of the Parties Under the Mont Belvieu Storage Partners, L.P., Partnership Agreement and the Mont Belvieu Venture, LLC, LLC Agreement, dated October 13, 2003. (Filed as Exhibit 10.54 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).

31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer 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.

+		A management contract or compensation plan or arrangement.

(b)

Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission during the quarter ended March 31, 2004:

No reports were filed or furnished on Form 8-K during the quarter ended March 31, 2004.

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

	(Registrant)
	(A Delaware Limited Partnership)

	By:	TEPPCO GP, Inc.,
		as General Partner

	By:	/s/ BARRY R. PEARL

		Barry R. Pearl,
		President, Chief Executive
		Officer and Director

	By:	/s/ CHARLES H. LEONARD

		Charles H. Leonard,
		Senior Vice President, Chief Financial
		Officer and Director
Date: April 29, 2004

Index to Exhibit


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+		Duke Energy Corporation Executive Savings Plan (Filed as Exhibit 10.7 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).

10.2+		Duke Energy Corporation Executive Cash Balance Plan (Filed as Exhibit 10.8 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).

10.3+		Duke Energy Corporation Retirement Benefit Equalization Plan (Filed as Exhibit 10.9 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1999 and incorporated herein by reference).

10.4+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan executed on March 8, 1994 (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1994 and incorporated herein by reference).

10.5+		Texas Eastern Products Pipeline Company 1994 Long Term Incentive Plan, Amendment 1, effective January 16, 1995 (Filed as Exhibit 10.12 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 1999 and incorporated herein by reference).


10.6+		Texas Eastern Products Pipeline Company Non-employee Directors Unit Accumulation Plan, effective April 1, 1999 (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

10.7+		Texas Eastern Products Pipeline Company Non-employee Directors Deferred Compensation Plan, effective November 1, 1999 (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

10.8+		Texas Eastern Products Pipeline Company Phantom Unit Retention Plan, effective August 25, 1999 (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 1999 and incorporated herein by reference).

10.9+		Form of Employment Agreement between the Company and Thomas R. Harper, Charles H. Leonard, James C. Ruth, John N. Goodpasture, Leonard W. Mallett, Stephen W. Russell, David E. Owen, and Barbara A. Carroll (Filed as Exhibit 10.20 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 1998 and incorporated herein by reference).

10.10+		Employment Agreement with Barry R. Pearl (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).

10.11		Services and Transportation Agreement between TE Products Pipeline Company, Limited Partnership and Fina Oil and Chemical Company, BASF Corporation and BASF Fina Petrochemical Limited Partnership, dated February 9, 1999 (Filed as Exhibit 10.22 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).

10.12		Call Option Agreement, dated February 9, 1999 (Filed as Exhibit 10.23 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1999 and incorporated herein by reference).

10.13+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Amendment and Restatement, effective January 1, 2000 (Filed as Exhibit 10.28 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).

10.14+		TEPPCO Supplemental Benefit Plan, effective April 1, 2000 (Filed as Exhibit 10.29 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended December 31, 2000 and incorporated herein by reference).

10.15		Contribution, Assignment and Amendment Agreement among TEPPCO Partners, L.P., TE Products Pipeline Company, Limited Partnership, TCTM, L.P., Texas Eastern Products Pipeline Company, LLC, and TEPPCO GP, Inc., dated July 26, 2001 (Filed as Exhibit 3.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2001 and incorporated herein by reference).

10.16		Certificate of Formation of TEPPCO Colorado, LLC (Filed as Exhibit 3.2 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1998 and incorporated herein by reference).

10.17		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).

10.18		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2001 and incorporated herein by reference).


10.19		Amendment 1, dated as of September 28, 2001, to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.33 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).

10.20		Amendment 1, dated as of September 28, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.34 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).

10.21		Amendment and Restatement, dated as of November 13, 2001, to the Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent, and Certain Lenders, dated as of April 6, 2001 ($200,000,000 Revolving Facility) (Filed as Exhibit 10.35 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).

10.22		Second Amendment and Restatement, dated as of November 13, 2001, to the Amended and Restated Credit Agreement amount TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank, and Certain Lenders, dated as of April 6, 2001 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.36 to Form 10-K of TEPPCO Partners, L.P (Commission File No. 1-10403) for the year ended December 31, 2001 and incorporated herein by reference).

10.23		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and Certain Lenders, as Lenders dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 10.44 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).

10.24		Amended and Restated Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank, as Administrative Agent and LC Issuing Bank and Certain Lenders, as Lenders dated as of March 28, 2002 ($500,000,000 Revolving Facility) (Filed as Exhibit 10.45 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the three months ended March 31, 2002 and incorporated herein by reference).

10.25		Amendment, dated as of June 27, 2002 to the Amended and Restated Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent, and Certain Lenders, dated as of March 28, 2002 ($500,000,000 Revolving Credit Facility) (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).

10.26		Amendment 1, dated as of June 27, 2002 to the Credit Agreement among TEPPCO Partners, L.P., as Borrower, SunTrust Bank, as Administrative Agent and Certain Lenders, dated as of March 28, 2002 ($200,000,000 Revolving Credit Facility) (Filed as Exhibit 99.4 to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of July 2, 2002 and incorporated herein by reference).

10.27+		Texas Eastern Products Pipeline Company, LLC 2002 Phantom Unit Retention Plan, effective June 1, 2002 (Filed as Exhibit 10.49 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).

10.28+		Amended and Restated TEPPCO Supplemental Benefit Plan, effective November 1, 2002 (Filed as Exhibit 10.44 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).

10.29+		Texas Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan, Second Amendment and Restatement, effective January 1, 2003 (Filed as Exhibit 10.45 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).


10.30+		Amended and Restated Texas Eastern Products Pipeline Company, LLC Management Incentive Compensation Plan, effective January 1, 2003 (Filed as Exhibit 10.46 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).

10.31+		Amended and Restated TEPPCO Retirement Cash Balance Plan, effective January 1, 2002 (Filed as Exhibit 10.47 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).

10.32		Formation Agreement between Panhandle Eastern Pipe Line Company and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, dated as of August 10, 2000 (Filed as Exhibit 10.48 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).

10.33		Amended and Restated Limited Liability Company Agreement of Centennial Pipeline LLC dated as of August 10, 2000 (Filed as Exhibit 10.49 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).

10.34		Guaranty Agreement, dated as of September 27, 2002, between TE Products Pipeline Company, Limited Partnership and Marathon Ashland Petroleum LLC for Note Agreements of Centennial Pipeline LLC (Filed as Exhibit 10.50 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).

10.35		LLC Membership Interest Purchase Agreement By and Between CMS Panhandle Holdings, LLC, As Seller and Marathon Ashland Petroleum LLC and TE Products Pipeline Company, Limited Partnership, Severally as Buyers, dated February 10, 2003 (Filed as Exhibit 10.51 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).

10.36		Joint Development Agreement between TE Products Pipeline Company, Limited Partnership and Louis Dreyfus Plastics Corporation dated February 10, 2000 (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended March 31, 2003, and incorporated herein by reference).

10.37		Credit Agreement among TEPPCO Partners, L.P. as Borrower, SunTrust Bank as Administrative Agent and LC Issuing Bank and The Lenders Party Hereto, as Lenders, dated as of June 27, 2003 ($550,000,000 Revolving Facility) (Filed as Exhibit 10.52 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended June 30, 2003, and incorporated herein by reference).

10.38		Agreement of Limited Partnership of Mont Belvieu Storage Partners, L.P. dated effective January 21, 2003. (Filed as Exhibit 10.53 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).

10.39		Letter of Agreement Clarifying Rights and Obligations of the Parties Under the Mont Belvieu Storage Partners, L.P., Partnership Agreement and the Mont Belvieu Venture, LLC, LLC Agreement, dated October 13, 2003. (Filed as Exhibit 10.54 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended September 30, 2003, and incorporated herein by reference).


31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer 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.

+		A management contract or compensation plan or arrangement.

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*Table Filedof herewith. + A management contract or compensation plan or arrangement.Contents

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Filing Compare · TE PRODUCTS PIPELINE CO LLC