News Release
Jan. 14, 2000

 TEPPCO PARTNERS, L.P. REPORTS FOURTH QUARTER AND ANNUAL 1999 EARNINGS

HOUSTON — TEPPCO Partners, L.P. (NYSE:TPP) today reported net income for 1999 of $72.1 million, or $1.91 per unit, compared with net income of $53.4 million before loss on early extinguishment of debt, or $1.61 per unit for the year ended Dec. 31, 1998. The net loss for 1998 after the charge of $72.8 million for early extinguishment of debt was $19.4 million, or $0.60 per unit. Fourth-quarter 1999 net income was $21.3 million, or $0.57 per unit, compared with 1998 fourth-quarter net income of $15.0 million, or $0.42 per unit.

The weighted average number of units outstanding for 1999 was 32.9 million compared with 29.7 million units for 1998. The increase is the result of additional units issued in conjunction with the acquisition of the crude oil assets effective Nov. 1, 1998. The weighted average number of units outstanding for the 1999 fourth quarter was 32.9 million compared with 31.6 million for the 1998 fourth quarter.

"Results for 1999 showed a marked improvement over 1998," said William L. Thacker, chairman, president and chief executive officer. "Record refined products transportation revenues and volumes were lead by new records for distillates and jet fuel. Additionally, total products segment volumes delivered in 1999 reached a new annual record. The full-year contributions from the crude oil segment and fractionation facilities added to TEPPCO’s favorable results. Colder weather in 1999 compared with 1998 resulted in a 20 percent increase in propane transportation deliveries. Also, a significant improvement in petroleum prices resulted in revenues from product sales of $3.6 million and $0.8 million for the 1999 full-year and fourth-quarter, respectively, compared with virtually no product sales in 1998."

Transportation revenues for the products segment for 1999 were $190.7 million, compared with $180.7 million for 1998. The improvement was due to increased throughput of propane, jet fuel, distillates and butanes, offset somewhat by lower volumes of motor fuels and MTBE.

Mont Belvieu and Other revenues were $39.6 million for 1999, compared with $31.0 million for 1998. The increase was the result of an increase in sales of inventories due to improved petroleum prices, a full-year contribution from the Colorado fractionation assets and higher utilization of the Mont Belvieu facilities.

Gross margin for the crude oil segment was $38.6 million in 1999, compared with $5.5 million in 1998, which reflects results for the two-month period during which the crude oil assets were owned by TEPPCO Partners, L.P. Crude oil marketing volumes were approximately 264,000 barrels per day in 1999, compared with 278,000 barrel per day in 1998. The decrease was due to lower bulk sales in 1999 compared with 1998.

Transportation volumes of crude oil and natural gas liquids (NGLs) were approximately 104,000 barrels per day in 1999, compared with approximately 103,000 barrels per day in 1998.

Lube oil volumes were approximately 741,000 gallons per month in 1999, compared with 570,000 gallons per month in 1998. The increase was due to higher sales of lube oils as a result of increased demand for lube oil products.

Operating expenses, including fuel and power, were $136.1 million for 1999, an increase of $25.8 million when compared with 1998 operating expenses of $110.3 million. The increase was due primarily to a full year of expenses from the crude oil segment. The products segment operating expenses were $113.8 million, including fuel and power, compared with $107.1 million for 1998. The increase was due 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 for 1999 were $22.3 million. Total operating expenses during 1999 included costs of $4.2 million related to year 2000 preparedness, compared with $1.3 million during 1998.

Other income – net was $1.4 million for 1999, compared with $2.4 million for 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.

Transportation revenues for the products segment for the 1999 fourth quarter were a record $52.1 million, compared with $48.0 million for the 1998 quarter. The increase was due to record jet fuel volumes and the second highest total refined products deliveries for a fourth quarter.

Mont Belvieu operations and Other revenues were $9.2 million in the 1999 fourth quarter, compared with $7.7 million in the 1999 fourth quarter. The increase was due primarily to increased sales of product inventories and Mont Belvieu activity.

Gross margin for the crude oil segment in the quarter was $10.4 million compared with a gross margin in the 1998 quarter of $5.5 million. The 1998 quarter was for the months of November and December, reflecting the acquisition of the crude oil segment effective Nov. 1, 1998. Crude oil marketing volumes were approximately 269,000 barrels per day in the 1999 quarter compared with 278,000 in the 1998 quarter. Transportation volumes of crude oil and natural gas liquids (NGLs) were approximately 100,000 barrels per day compared with 103,000 barrels per day in the 1998 quarter. Lube oil volumes were approximately 765,000 gallons per month compared with 570,000 gallons in the 1998 fourth quarter.

Operating expenses, including fuel and power, for the 1999 fourth quarter total $35.3 million, compared with $31.8 million for the 1998 fourth quarter. The increase was due primarily to three months of expenses in 1999 for the crude oil segment, compared with two months of expenses in the 1998 fourth quarter. The products segment operating expenses were $29.1 million, including fuel and power, compared with 1998 fourth quarter operating expenses of $28.6 million. The increase was due primarily to higher costs for product throughput, contract labor and pipeline rental expense. The 1998 fourth quarter included a non-cash charge of $2.9 million to reflect the adjustment of refined products and LPGs inventories to a lower-of-cost-or-market basis. The crude oil segment operating expenses were $6.2 million in the 1999 fourth quarter compared with $3.2 million in the 1998 quarter. The increase of $3.0 million was due to an additional month of expenses during the 1999 fourth quarter and an increase in operating and administrative costs compared with the 1998 fourth quarter.

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 including, among other things, market conditions, governmental regulations and factors discussed in TEPPCO Partners, L.P.’s filings with the Securities and Exchange Commission.

TEPPCO Partners, L.P. is a publicly owned master limited partnership, which conducts business through two operating companies. 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 Sates. TEPPCO Crude Oil, LLC is a crude oil gathering, transportation, storage and marketing company operating primarily in Texas and Oklahoma. Texas Eastern Products Pipeline Company, which is a wholly owned subsidiary of Duke Energy, is the general partner of TEPPCO Partners, L.P.

Contact: Brenda J. Peters (Investor Relations)
Phone: (713) 759-3954
24 Hour Phone: (704) 382-8333
Email: media_relations@duke-energy.com
Contact: Kathleen A. Sauvé
Phone: 713) 759-3635
24 Hour Phone: (704) 382-8333
Email: ksauve@teppco.com