News Release
Oct. 18, 1999

TEPPCO PARTNERS, L.P. REPORTS THIRD-QUARTER RESULTS

Houston -- TEPPCO Partners, L.P. (NYSE:TPP) today reported third-quarter net income of $13.4 million, or $0.32 per unit. This compares with 1998 third-quarter net income of $12.7 million, or $0.39 per unit.

"The third quarter of 1999 saw TEPPCO’s net income increase over 5 percent compared with the 1998 third quarter," said William L. Thacker, chairman president and chief executive officer. "Record revenues from distillate and jet fuel deliveries during the quarter were offset somewhat by lower revenues from deliveries of motor fuels, propane, natural gasoline and MTBE. The crude oil segment had a strong third quarter due to increased margins earned on crude oil marketing activities. As TEPPCO moves into the fourth quarter of 1999, an increase in propane deliveries is expected with the onset of cooler weather, along with continued strong deliveries of distillates and jet fuel.

Transportation revenues for the products segment for the 1999 third quarter were $43.0 million, compared with $45.9 million for the 1998 quarter. The decrease was due primarily to decreased deliveries of gasolines and MTBE as a result of lower Gulf Coast production, lower demand for natural gasoline for blending purposes and decreased deliveries of propane as a result of high product prices in the Northeast. Offsetting these decreases somewhat was strong Midwest demand for jet fuel and distillates.

Mont Belvieu operations and Other revenues were $10.6 million in the 1999 third quarter, compared with $8.3 million in the 1998 third quarter. The increase was due primarily to sales of product inventory and increased storage and shuttle revenues at Mont Belvieu.

Gross margin for the crude oil segment in the quarter was $10.2 million on crude marketing volumes of approximately 253,000 barrels per day, transportation volumes of crude oil and natural gas liquids (NGLs) of approximately 105,000 barrels per day, and lube oil volumes of approximately 763,000 gallons per month.

Operating expenses for the 1999 third quarter totaled $35.2 million, compared with $27.9 million for the 1998 third quarter, which did not include any expenses for the crude oil segment. The products segment operating expenses were $29.7 million, including fuel and power. The increase was due primarily to higher costs for contract labor, costs for leased space on a connecting carrier to supply TEPPCO’s requirements at Beaumont, Texas, and higher ad valorem taxes. The crude oil segment operating expenses were $5.5 million. Operating expenses during the 1999 third quarter included costs of $1.3 million related to year 2000 preparedness.

Net income for the nine months ended September 30, 1999, was $50.8 million, or $1.34 per unit, compared with $38.4 million, or $1.19 per unit for the same period in 1998, before loss on early extinguishment of debt. The 1998 year-to-date loss after a charge of $72.8 million for early extinguishment of debt was $34.4 million, or $1.07 per unit.

Transportation revenues for the products segment for the 1999 nine-month period were $138.6 million, compared with $132.7 million for the nine months ended September 30, 1998. The increase was due to increased deliveries of distillates, jet fuel and propane, offset somewhat by decreased deliveries of motor fuels, natural gasoline, butanes and MTBE.

Mont Belvieu operations and Other revenues were $30.4 million for the first nine months of 1999, compared with $23.3 million for the first nine months of 1998. The increase was attributable primarily to higher product inventory sales, improved Mont Belvieu storage and shuttle activity, and nine months of revenue from the Weld County, Colorado fractionators in 1999 compared with six months in 1998.

Gross margin for the crude oil segment was $28.2 million for the first nine months of 1999 on crude marketing volumes of approximately 250,000 barrels per day, transportation volumes of crude oil and NGLs of approximately 105,000 per day and lube oil volumes of approximately 714,000 gallons per month.

Operating expenses for the nine months ended September 30, 1999, totaled $100.8 million, compared with $78.5 million for the same period in 1998, which did not include any expenses for the crude oil segment. The products segment operating expenses were $84.7 million, including fuel and power. The increase was due to the higher costs for contract labor and ad valorem taxes noted above for the third quarter, higher power and pipeline lease costs related to increased deliveries and costs of the fractionation facilities for nine months in 1999 compared with six months in 1998. The crude oil segment operating expenses were $16.1 million. Operating expenses related to year 2000 preparedness totaled $2.7 million during the nine months ended September 30, 1999.

Interest expense - net increased $0.6 million, to $22.2 million, during the first nine months of 1999 compared with $21.6 million for the 1998 period, due primarily to the debt related to the purchase of the fractionators purchased on March 31, 1998.

Other income - net for the first nine months of 1999 was $1.1 million compared with $1.9 million for the first nine months of 1998. The decrease was due primarily to a gain from the disposition of assets in 1998 and lower interest income earned on cash investments in 1999.

TEPPCO Partners, L.P. is a publicly owned master limited partnership which conducts business through two operating partnerships. TE Products Pipeline Company, Limited Partnership is one of the largest common carrier pipelines of refined petroleum products and liquefied petroleum gases in the United States. TCTM, L.P. is a crude oil gathering, transportation, storage and marketing company operating primarily in Texas and Oklahoma.

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve certain risks and uncertainties. These risks and uncertainties include, among other things, market conditions, governmental regulations and other factors discussed in TEPPCO’s filings with the Securities and Exchange Commission.



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Contact: William G. Nikolis
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