News Release
July 17, 2000

TEPPCO PARTNERS, L.P. REPORTS SECOND QUARTER RESULTS

HOUSTON – TEPPCO Partners, L.P. (NYSE:TPP) today reported second quarter net income of $13.6 million, or $0.35 per unit. This compares with 1999 second quarter net income of $14 million, or $0.38 per unit.

"The performance during the second quarter of 2000 declined slightly from the comparable 1999 quarter due to reduced motor fuel deliveries and revenues, and start-up expenses related to several large previously announced projects in development," said William L. Thacker, chairman, president and chief executive officer of the general partner of TEPPCO.

"Gasoline movements during the first two months of the second quarter 2000 were lower than in the comparable 1999 quarter due to tight Gulf Coast supplies, caused by seasonal vapor pressure changeover and much publicized market price volatility. As a result, TEPPCO saw gasoline volumes decline 7 percent in the 2000 quarter, compared with the 1999 quarter. Record jet fuel deliveries and revenues, higher butane deliveries and revenues, increased sales of product inventory and improved crude oil margins helped to offset the refined products revenue decline and operating expense increase," Thacker continued.

Transportation revenues for the products segment for the second quarter 2000 were $43.1 million, compared with $43.4 million for the 1999 quarter. The decrease was due primarily to lower deliveries of motor fuels as a result of previously mentioned factors. Record jet fuel deliveries helped to offset the motor fuels decline.

Mont Belvieu operations and Other revenues were $11.2 million for the second quarter 2000, compared with $10.9 million for the 1999 quarter. The increase was due primarily to higher sales of product inventory.

Gross margin for the crude oil segment was $10.5 million for the quarter, compared with $9.7 million for the 1999 second quarter. Crude oil marketing volumes in the 2000 quarter were approximately 288,000 barrels per day, compared with 253,000 barrels per day in 1999. Transportation volumes of crude oil and natural gas liquids (NGLs) were approximately 112,000 barrels per day in the current quarter, compared with 108,000 barrels per day in the 1999 comparable quarter. Lube oil volumes were approximately 432,000 gallons per month, compared with 717,000 gallons per month in the prior year quarter.

Operating expenses, including fuel and power, were $36.2 million for the second quarter 2000, compared with $34.8 million in the 1999 second quarter. The increase was due to higher labor and benefit costs, legal and associated start-up costs for projects in development, power costs from electrical service providers, field maintenance costs and outside services.

Interest expense – net was $7.3 million for the second quarter 2000, compared with $7.4 million for the comparable 1999 quarter. Interest expense increased $0.8 million due to higher borrowings for construction of three petrochemical pipelines between Mont Belvieu and Port Arthur, Texas, which are scheduled to be ready for service in the fourth quarter 2000. The increase was offset by higher interest capitalized on the project.

Other income – net for the second quarter 2000 was $0.7 million, compared with $0.4 million for the same quarter in 1999. The increase was attributable to higher interest income earned on cash investments and gains on the sale of right-of-way (ROW) easements.

Net income for the six months ended June 30, 2000, was $37.5 million, or $0.95 per unit, compared with $37.4 million, or $1.02 per unit, for the same period in 1999. The increase in net income was due to a record 11 percent increase in jet fuel deliveries compared with 1999, increased sales of product inventory and increased storage revenues at Mont Belvieu. The increase was offset by lower revenue from propane deliveries as a result of the warmest first quarter in U.S. history and increased operating expenses.

Transportation revenues for the products segment for the first six months of 2000 were $94.2 million, compared with $95.6 million for the comparable 1999 period. The decrease was due to lower deliveries of propane in the first quarter and lower deliveries of gasoline in the second quarter, offset somewhat by record deliveries of jet fuel.

Mont Belvieu operations and Other revenues were $23.9 million for the first half of 2000, compared with $19.8 million for the first half of 1999. The increase was due mainly to higher sales of product inventory resulting from improved product prices and greater demand for storage of inventory at Mont Belvieu.

Gross margin for the crude oil segment was $20 million for the first six months of 2000, compared with $18 million for the comparable 1999 period. Crude oil marketing volumes were approximately 287,000 barrels per day in the first six months of 2000, compared with 246,000 barrels per day in the 1999 period. Transportation volumes of crude oil and NGLs were approximately 111,000 barrels per day in the first six months of 2000, compared with 105,000 barrels per day in the 1999 period. Lube oil volumes were approximately 595,000 gallons per month in the 2000 period, compared with 685,000 gallons per month in the 1999 period.

Operating expenses, including fuel and power, for the six months ended June 30, 2000, totaled $70.5 million, compared with $65.6 million for the same period in 1999. The increase was due to higher labor and benefit costs, power cost increases from electrical service providers, expenses for projects in development, field maintenance expenditures and outside services.

Interest expense – net was $14.7 million during the first six months of 2000, compared with $14.8 million for the first six months of 1999. The increase in interest expense on borrowings for the petrochemical pipelines was offset by an increase in interest capitalized on the project.

Other income – net for the first six months of 2000 was $1.2 million, compared with $0.7 million for the 1999 period. The increase was due to higher interest income on invested cash and gains on the sale of ROW easements.

TEPPCO will be hosting a conference call related to second quarter 2000, on Tuesday, July 18, 2000, at 8:05 a.m. Central Daylight Time. Interested parties may listen via the Internet, on either a live or replay basis at www.streetevents.com.

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 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 States. 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, LLC, which is an indirect wholly owned subsidiary of Duke Energy Field Services, LLC, is the general partner of TEPPCO Partners, L.P. For more information, visit www.teppco.com.

###

 

TEPPCO Partners, L. P.
OPERATING DATA

(Unaudited - In Millions, Except Per Barrel, Per Gallon
and MBbl/day Amounts)

Three Months
Ended
June 30,

Six Months
Ended
June 30,



2000

1999

2000

1999





Products System:

Barrels Delivered

Refined Products

35.1

35.8

64.7

63.9

LPGs

6.6

6.4

18.3

19.6

Mont Belvieu Operations

6.6

5.9

13.7

12.8





TOTAL

48.3

48.1

96.7

96.3





Average Tariff Per Barrel

Refined Products

$0.93

$0.93

$0.94

$0.92

LPGs

1.56

1.59

1.83

1.88

Mont Belvieu Operations

0.14

0.15

0.15

0.16





Average System Tariff Per Barrel

$0.91

$0.92

$1.00

$1.01





Crude Oil System

Margins:

Crude oil transportation

$4.9

$4.6

$9.7

$8.9

Crude oil marketing

3.3

3.0

5.6

5.0

NGL transportation

1.6

1.6

3.3

3.0

LSI

0.7

0.5

1.4

1.1





Total Margin

$10.5

$9.7

$20.0

$18.0





Volumes: (MBbl/day)

Crude oil transportation

98.5

94.4

97.4

92.5

Crude oil marketing

287.5

253.2

286.5

246.2

NGL transportation

13.3

13.2

13.4

12.1

LSI Volume (Total Gallons)

1.3

2.2

3.6

4.1

Margin (Per Barrel)

Crude oil transportation

$0.543

$0.542

$0.549

$0.535

Crude oil marketing

$0.128

$0.130

$0.107

$0.112

NGL transportation

$1.311

$1.295

$1.370

$1.358

LSI Margin (Per Gallon)

$0.576

$0.275

$0.384

$0.276

TEPPCO Partners, L. P.
Condensed Balance Sheets (Unaudited)

(In Millions)

June 30,

December 31,

2000

1999


Assets

Current assets

Cash and cash equivalents

$ 39.1

$ 32.6

Short-term investments

1.0

1.5

Other

250.5

229.0


Total current assets

290.6

263.1

Property, plant and equipment - net

744.4

720.9

Investments

6.3

5.2

Other assets

52.6

52.2


Total assets

$ 1,093.9

$ 1,041.4


Liabilities and Partners' Capital

Current liabilities and maturities of debt

$ 314.1

$ 243.5

Senior Notes

389.7

389.7

Other long-term debt

48.0

66.0

Other non-current liabilities and minority interest

7.0

6.5

Class B Units

105.8

105.9

Partners' capital

General partner's interest

1.1

0.7

Limited partners' interests

228.2

229.1


Total partners' capital

229.3

229.8


Total liabilities and partners' capital

$ 1,093.9

$ 1,041.4


 

TEPPCO Partners, L. P.
Condensed Statements of Cash Flow (Unaudited) (In Millions)

Six Months
Ended
June 30,

2000

1999


Cash Flows from Operating Activities

Net income

$37.5

$37.4

Depreciation, working capital and other

27.0

8.0


Net Cash Provided by Operating Activities

64.5

45.4


Cash Flows from Investing Activities:

Proceeds from cash investments

1.5

3.8

Purchases of cash investments

(2.0)

(2.2)

Purchase of crude oil system

-

(2.2)

Capital expenditures

(39.2)

(40.3)


Net Cash Used in Investing Activities

(39.7)

(40.9)


Cash Flows from Financing Activities:

Proceeds from term loan

20.0

25.0

Proceeds from revolving credit agreement

-

5.0

Distributions paid

(38.3)

(32.7)


Net Cash Used in Financing Activities

(18.3)

(2.7)


Net Increase in Cash and Cash Equivalents

6.5

1.8

Cash and Cash Equivalents -- beginning of period

32.6

47.4


Cash and Cash Equivalents -- end of period

$39.1

$49.2


Supplemental Cash Information:

Interest paid during the year (net of capitalized interest)

$14.1

$14.5


TEPPCO Partners, L. P.
FINANCIAL HIGHLIGHTS

(Unaudited - In Millions, Except Per Unit Amounts)

Three Months
Ended
June 30,

Six Months
Ended
June 30,



2000

1999

2000

1999





Operating Revenues:

Sales of crude oil and petroleum products

$689.6

$398.1

$1,372.4

$620.5

Transportation - Refined Products

32.7

33.3

60.7

58.9

Transportation - LPGs

10.4

10.1

33.5

36.7

Transportation - Crude oil and NGLs

3.8

2.9

7.9

5.5

Mont Belvieu operations

2.9

3.4

7.4

6.3

Other

8.3

7.5

16.5

13.5





Total Operating Revenues

747.7

455.3

1,498.4

741.4





Purchases of crude oil and petroleum products

682.9

391.3

1,360.3

608.0

Operating expenses - general and administrative

27.9

26.7

54.7

50.6

Operating fuel and power

8.3

8.1

15.8

15.0

Depreciation and amortization

8.4

8.2

16.6

16.3





Total Costs and Expenses

727.5

434.3

1,447.4

689.9





Operating income

20.2

21.0

51.0

51.5





Interest expense - net

(7.3)

(7.4)

(14.7)

(14.8)

Other income - net

0.7

0.4

1.2

0.7





Net Income

$13.6

$14.0

$37.5

$37.4





Net Income Allocation:

General Partner

$2.3

$1.4

$6.3

$3.8

Limited Partners

$11.3

$12.6

$31.2

$33.6





Net Income

$13.6

$14.0

$37.5

$37.4





Basic and Diluted Income

Per Limited Partner and Class B Unit:

$0.35

$0.38

$0.95

$1.02





Number of Limited Partner and Class B Units

32.9

32.9

32.9

32.9

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