Use these links to rapidly review the documentTABLE OF CONTENTS



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

|(Mark One)                                        |                                                                                         
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                 | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
|For the quarterly period ended September 30, 2007
|OR                                               
|o                                                 | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-32505

TRANSMONTAIGNE PARTNERS L.P.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization) |  | 34-2037221(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------

1670 Broadway
Suite 3100
Denver, Colorado 80202(Address, including zip code, of principal executive offices)

(303) 626-8200(Telephone number, including area code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o


Indicate
by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange
Act)    Yes o No ý

As of November 5, 2007, there were 9,122,300 units of the registrant's Common Limited Partner Units outstanding.



---





TABLE OF CONTENTS



|                              |  |                                                                                                                          
|----------------------------- |  | -------------------------------------------------------------------------------------------------------------------------
|Part I. Financial Information
|Item 1.                       |  | Unaudited Consolidated Financial Statements                                                                              
|                              |  | Consolidated balance sheets as of September 30, 2007 and December 31, 2006                                               
|                              |  | Consolidated statements of operations for the three and nine months ended September 30, 2007 and 2006                    
|                              |  | Consolidated statements of partners' equity for the year ended December 31, 2006 and nine months ended September 30, 2007
|                              |  | Consolidated statements of cash flows for the three and nine months ended September 30, 2007 and 2006                    
|                              |  | Notes to consolidated 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 1A.                      |  | Risk Factors                                                                                                             
|Item 2.                       |  | Unregistered sales of equity securities and use of proceeds                                                              
|Item 6.                       |  | Exhibits                                                                                                                 

2

---





CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including the following:



Our
business and results of operations are subject to risks and uncertainties, many of which are beyond our ability to control or predict. Because of these risks and uncertainties,
actual results may differ materially from those expressed or implied by forward-looking statements, and investors are cautioned not to place undue reliance on such statements, which speak only as of
the date thereof. Important factors that could cause actual results to differ materially from our expectations and may adversely affect our business and results of operations, include, but are not
limited to those risk factors set forth in this report in Part II. Other Information under the heading "Item 1A. Risk Factors."

3

---





Part I. Financial Information

ITEM 1.    UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The interim unaudited consolidated financial statements of TransMontaigne Partners L.P. as of and for the three and nine months ended September 30, 2007
are included herein beginning on the following page. The accompanying unaudited interim consolidated financial statements should be read in conjunction with our consolidated financial statements and
related notes for the year ended December 31, 2006, together with our discussion and analysis of financial condition and results of operations, included in our Annual Report on
Form 10-K filed with the Securities and Exchange Commission on March 16, 2007.

TransMontaigne
Partners L.P. is a holding company with the following active wholly-owned subsidiaries during the three and nine months ended September 30, 2007:



We
do not have off-balance-sheet arrangements (other than operating leases) or special-purpose entities.

4

---



TransMontaigne Partners L.P. and subsidiaries        Consolidated balance sheets        (In thousands)

|                                   |                                   | September 30,
2007 |         | December 31,
2006
|---------------------------------- | --------------------------------- | ------------------ | ------- | -----------------
|ASSETS                             |                                   |                    |         |                  
|Current assets:                    |                                   |                    |         |                  
|                                   | Cash and cash equivalents         |                    | $       | 110              
|                                   | Trade accounts receivable, net    |                    |         | 5,478            
|                                   | Due from TransMontaigne Inc., net |                    |         | 192              
|                                   | Prepaid expenses and other        |                    |         | 1,724            
|                                   |                                   |                    |         |                  
|                                   |                                   |                    | 7,504   |                  
|Property, plant and equipment, net |                                   |                    | 232,726 |                  
|Goodwill                           |                                   |                    | 23,235  |                  
|Other assets, net                  |                                   |                    | 11,723  |                  
|                                   |                                   |                    |         |                  
|                                   |                                   | $                  | 275,188 |                  
|                                   |                                   |                    |         |                  
|LIABILITIES AND EQUITY             |                                   |                    |         |                  
|Current liabilities:               |                                   |                    |         |                  
|                                   | Trade accounts payable            |                    | $       | 2,375            
|                                   | Other accrued liabilities         |                    |         | 6,180            
|                                   |                                   |                    |         |                  
|                                   |                                   |                    | 8,555   |                  
|Long-term debt                     |                                   |                    | 2,750   |                  
|                                   |                                   |                    |         |                  
|                                   | Total liabilities                 |                    |         | 11,305           
|                                   |                                   |                    |         |                  
|Partners' equity:                  |                                   |                    |         |                  
|                                   | Common unitholders                |                    |         | 250,625          
|                                   | Subordinated unitholders          |                    |         | 9,473            
|                                   | General partner interest          |                    |         | 3,785            
|                                   |                                   |                    |         |                  
|                                   |                                   |                    | 263,883 |                  
|                                   |                                   |                    |         |                  
|                                   |                                   | $                  | 275,188 |                  
|                                   |                                   |                    |         |                  

See
accompanying notes to consolidated financial statements.

5

---



TransMontaigne Partners L.P. and subsidiaries        Consolidated statements of operations        (In thousands, except per unit amounts)

|                                                             |                                                   | Three months ended
September 30, |                          | Nine months ended
September 30, |        
|------------------------------------------------------------ | ------------------------------------------------- | -------------------------------- | ------------------------ | ------------------------------- | -------
|
|Revenues:                                                    |                                                   |                                  |                          |                                 |        
|                                                             | Revenues from external customers                  |                                  | $                        | 10,655                          |        
|                                                             | Revenues from affiliates                          |                                  |                          | 10,051                          |        
|                                                             |                                                   |                                  |                          |                                 |        
|                                                             |                                                   | Total revenues                   |                          |                                 | 20,706 
|                                                             |                                                   |                                  |                          |                                 |        
|Costs and expenses:                                          |                                                   |                                  |                          |                                 |        
|                                                             | Direct operating costs and expenses               |                                  |                          | (8,954                          | )      
|                                                             | Direct general and administrative expenses        |                                  |                          | (288                            | )      
|                                                             | Allocated general and administrative expenses     |                                  |                          | (1,758                          | )      
|                                                             | Allocated insurance expense                       |                                  |                          | (413                            | )      
|                                                             | Reimbursement of bonus awards                     |                                  |                          | (375                            | )      
|                                                             | Depreciation and amortization                     |                                  |                          | (3,473                          | )      
|                                                             |                                                   |                                  |                          |                                 |        
|                                                             |                                                   | Total costs and expenses         |                          |                                 | (15,261
|                                                             |                                                   |                                  |                          |                                 |        
|                                                             |                                                   | Operating income (loss)          |                          |                                 | 5,445  
|Other income (expenses):                                     |                                                   |                                  |                          |                                 |        
|                                                             | Interest income                                   |                                  |                          | 43                              |        
|                                                             | Interest expense                                  |                                  |                          | (193                            | )      
|                                                             | Amortization of deferred financing costs          |                                  |                          | (92                             | )      
|                                                             |                                                   |                                  |                          |                                 |        
|                                                             |                                                   | Total other expenses             |                          |                                 | (242   
|                                                             |                                                   |                                  |                          |                                 |        
|                                                             |                                                   | Net earnings (loss)              |                          |                                 | 5,203  
|Less earnings (loss) allocable to:                           |                                                   |                                  |                          |                                 |        
|                                                             |                                                   |                                  | Predecessor              |                                 |        
|                                                             |                                                   |                                  | General partner interest |                                 |        
|                                                             |                                                   |                                  |                          |                                 |        
|                                                             | Net earnings (loss) allocable to limited partners |                                  | $                        | 5,098                           |        
|                                                             |                                                   |                                  |                          |                                 |        
|Net earnings (loss) per limited partners' unitbasic         |                                                   | $                                | 0.41                     |                                 | $      
|                                                             |                                                   |                                  |                          |                                 |        
|Net earnings (loss) per limited partners' unitdiluted       |                                                   | $                                | 0.41                     |                                 | $      
|                                                             |                                                   |                                  |                          |                                 |        
|Weighted average limited partners' units outstandingbasic   |                                                   |                                  | 12,444                   |                                 |        
|                                                             |                                                   |                                  |                          |                                 |        
|Weighted average limited partners' units outstandingdiluted |                                                   |                                  | 12,445                   |                                 |        
|                                                             |                                                   |                                  |                          |                                 |        

See
accompanying notes to consolidated financial statements.

6

---



TransMontaigne Partners L.P. and subsidiaries        Consolidated statements of partners' equity        Year ended December 31, 2006  and nine months ended September 30, 2007        (In thousands, except unit amounts)

|                                                                                                                           |  | Predecessor |          | Common
Units |   | Subordinated
Units |   | General
Partner
Interest |        | Total |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ----------- | -------- | ------------ | - | ------------------ | - | ------------------------ | ------ | ----- | -
|Balance December 31, 2005                                                                                                  |  | $           | 9,625    |              | $ | 75,474             |   | $                        | 14,581 |       | $
|Distributions and repayments, net to Predecessor                                                                           |  |             | 70       |              |   |                   |   |                          |       |       |  
|Acquisition of Mobile terminal from Predecessor in exchange for $17.9 million                                              |  |             | (8,869   | )            |   |                   |   |                          | (9,066 | )     |  
|Distributions to unitholders                                                                                               |  |             |         |              |   | (6,552             | ) |                          | (5,614 | )     |  
|Amortization of deferred equity-based compensation related to restricted common units                                      |  |             |         |              |   | 610                |   |                          |       |       |  
|Acceleration of vesting of all outstanding restricted phantom units and restricted common units                            |  |             |         |              |   | 3,258              |   |                          |       |       |  
|Common units repurchased from TransMontaigne Services Inc.'s employees for withholding taxes                               |  |             |         |              |   | (538               | ) |                          |       |       |  
|Repurchase of 38,400 common units by our long-term incentive plan                                                          |  |             |         |              |   | (1,140             | ) |                          |       |       |  
|Purchase of Brownsville and River terminals by Predecessor                                                                 |  |             | 135,823  |              |   |                   |   |                          |       |       |  
|Acquisition of Brownsville and River terminals from Predecessor in exchange for $135 million                               |  |             | (138,505 | )            |   |                   |   |                          | 3,505  |       |  
|Net earnings for the year ended December 31, 2006                                                                          |  |             | 1,856    |              |   | 1,740              |   |                          | 1,460  |       |  
|                                                                                                                           |  |             |          |              |   |                    |   |                          |        |       |  
|Balance December 31, 2006                                                                                                  |  |             |         |              |   | 72,852             |   |                          | 4,866  |       |  
|Proceeds from secondary offering of 5,149,800 common units, net of underwriters' discounts and offering expenses of $9,567 |  |             |         |              |   | 179,946            |   |                          |       |       |  
|Contribution of cash by TransMontaigne GP to maintain its 2% general partner interest                                      |  |             |         |              |   |                   |   |                          |       |       |  
|Contribution by TransMontaigne Inc. of capital improvements to the Brownsville and River terminals                         |  |             |         |              |   |                   |   |                          | 6,273  |       |  
|Distributions to unitholders                                                                                               |  |             |         |              |   | (8,146             | ) |                          | (4,650 | )     |  
|Amortization of deferred equity-based compensation related to restricted phantom units                                     |  |             |         |              |   | 44                 |   |                          |       |       |  
|Repurchase of 840 common units by our long-term incentive plan                                                             |  |             |          |              |   | (28                | ) |                          |       |       |  
|Net earnings for the nine months ended September 30, 2007                                                                  |  |             |         |              |   | 5,957              |   |                          | 2,984  |       |  
|                                                                                                                           |  |             |          |              |   |                    |   |                          |        |       |  
|Balance September 30, 2007                                                                                                 |  | $           |         |              | $ | 250,625            |   | $                        | 9,473  |       | $
|                                                                                                                           |  |             |          |              |   |                    |   |                          |        |       |  

See
accompanying notes to consolidated financial statements.

7

---



TransMontaigne Partners L.P. and subsidiaries        Consolidated statements of cash flows        (In thousands)

|                                                   |                                                                                                      | Three months ended
September 30,                    |       | Nine months ended
September 30, |       
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ----- | ------------------------------- | ------
|
|Cash flows from operating activities:              |                                                                                                      |                                                     |       |                                 |       
|                                                   | Net earnings (loss)                                                                                  |                                                     | $     | 5,203                           |       
|                                                   | Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |                                                     |       |                                 |       
|                                                   | Depreciation and amortization                                                                        |                                                     |       | 3,473                           |       
|                                                   | Amortization of deferred equity-based compensation                                                   |                                                     |       | 22                              |       
|                                                   | Acceleration of vesting of all outstanding restricted phantom units and restricted common units      |                                                     |       |                                |       
|                                                   | Amortization of deferred financing costs                                                             |                                                     |       | 92                              |       
|                                                   | Changes in operating assets and liabilities, net of effects from acquisitions:                       |                                                     |       |                                 |       
|                                                   | Trade accounts receivable, net                                                                       |                                                     |       | (1,004                          | )     
|                                                   | Due from TransMontaigne Inc., net                                                                    |                                                     |       | 6,666                           |       
|                                                   | Prepaid expenses and other                                                                           |                                                     |       | (214                            | )     
|                                                   | Trade accounts payable                                                                               |                                                     |       | (549                            | )     
|                                                   | Other accrued liabilities                                                                            |                                                     |       | 806                             |       
|                                                   |                                                                                                      |                                                     |       |                                 |       
|                                                   |                                                                                                      | Net cash provided by (used in) operating activities |       |                                 | 14,495
|                                                   |                                                                                                      |                                                     |       |                                 |       
|Cash flows from investing activities:              |                                                                                                      |                                                     |       |                                 |       
|                                                   | Acquisition of Mobile terminal                                                                       |                                                     |       |                                |       
|                                                   | Advance towards acquisition of certain Rio Vista operations                                          |                                                     |       | (6,500                          | )     
|                                                   | Additions to property, plant and equipmentexpansion of facilities                                   |                                                     |       | (1,661                          | )     
|                                                   | Additions to property, plant and equipmentmaintain existing facilities                              |                                                     |       | (618                            | )     
|                                                   | Reimbursement of costs to maintain our Port Everglades (South) terminal                              |                                                     |       |                                |       
|                                                   |                                                                                                      |                                                     |       |                                 |       
|                                                   |                                                                                                      | Net cash (used in) investing activities             |       |                                 | (8,779
|                                                   |                                                                                                      |                                                     |       |                                 |       
|Cash flows from financing activities:              |                                                                                                      |                                                     |       |                                 |       
|                                                   | Net (repayments) borrowings of debt                                                                  |                                                     |       | (250                            | )     
|                                                   | Net proceeds from secondary offering of 5,149,800 common units                                       |                                                     |       | (90                             | )     
|                                                   | Contribution of cash by TransMontaigne GP to maintain its 2% general partner interest                |                                                     |       |                                |       
|                                                   | Payment of deferred financing costs                                                                  |                                                     |       | (158                            | )     
|                                                   | Distributions paid to unitholders                                                                    |                                                     |       | (6,470                          | )     
|                                                   | Common units repurchased from TransMontaigne Services Inc.'s employees for withholding taxes         |                                                     |       |                                |       
|                                                   | Repurchase of common units by our long-term incentive plan                                           |                                                     |       | (28                             | )     
|                                                   | Net distributions and repayments to TransMontaigne Inc.                                              |                                                     |       |                                |       
|                                                   |                                                                                                      |                                                     |       |                                 |       
|                                                   |                                                                                                      | Net cash provided by (used in) financing activities |       |                                 | (6,996
|                                                   |                                                                                                      |                                                     |       |                                 |       
|                                                   |                                                                                                      | Decrease in cash and cash equivalents               |       |                                 | (1,280
|Cash and cash equivalents at beginning of period   |                                                                                                      |                                                     | 1,390 |                                 |       
|                                                   |                                                                                                      |                                                     |       |                                 |       
|Cash and cash equivalents at end of period         |                                                                                                      | $                                                   | 110   |                                 | $     
|                                                   |                                                                                                      |                                                     |       |                                 |       
|Supplemental disclosures of cash flow information: |                                                                                                      |                                                     |       |                                 |       
|Cash paid for interest                             |                                                                                                      | $                                                   | 193   |                                 | $     
|                                                   |                                                                                                      |                                                     |       |                                 |       

See accompanying notes to consolidated financial statements.

8

---





TransMontaigne Partners L.P. and subsidiaries        Notes to consolidated financial statements

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



TransMontaigne Partners L.P. ("Partners") was formed in February 2005 as a Delaware master limited partnership initially to own and operate products
terminaling and transportation facilities. We conduct our operations in the United States primarily along the Gulf Coast, in Brownsville, Texas, along the Mississippi and Ohio Rivers, and in the
Midwest. We provide integrated terminaling, storage, transportation and related services for companies engaged in the distribution and marketing of refined products, crude oil, chemicals, fertilizers
and other liquid products.

We
are controlled by our general partner, TransMontaigne GP L.L.C., which is a wholly-owned subsidiary of TransMontaigne Inc. Effective September 1, 2006, Morgan Stanley
Capital Group Inc., a wholly-owned subsidiary of Morgan Stanley, purchased all of the issued and outstanding capital stock of TransMontaigne Inc. Morgan Stanley Capital Group is the
principal commodities trading arm of Morgan Stanley. As a result of Morgan Stanley's acquisition of TransMontaigne Inc., Morgan Stanley became the indirect owner of our general partner. At
September 30, 2007, TransMontaigne Inc. and Morgan Stanley have a significant interest in our partnership through their indirect ownership of a 26.2% limited partner interest and a 2%
general partner interest.



We adopted a December 31 year end for financial and tax reporting purposes effective December 31, 2005. We previously maintained a
June 30 year end for financial and tax reporting purposes.



The accompanying unaudited consolidated financial statements in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, these statements reflect adjustments (consisting only of normal recurring entries), which in our opinion, are necessary for a fair
presentation of the financial results for the interim periods presented. Certain information and notes normally included in annual financial statements have been condensed in or omitted from these
interim financial statements pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes
for the year ended December 31, 2006, together with our discussion and analysis of financial condition and results of operations, included in our Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 16, 2007.

Our
accounting and financial reporting policies conform to accounting principles and practices generally accepted in the United States of America. The accompanying consolidated financial
statements include the accounts of TransMontaigne Partners L.P., a Delaware limited partnership, and its controlled subsidiaries. All significant inter-company accounts and transactions have been
eliminated in the preparation of the accompanying consolidated financial statements.

The
preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The
following estimates, in management's opinion, are subjective in nature, require the exercise of judgment, and involve complex analyses: allowance for doubtful accounts and accrued environmental
obligations. Changes in these

9

---



estimates
and assumptions will occur as a result of the passage of time and the occurrence of future events. Actual results could differ from these estimates.

The
accompanying consolidated financial statements include the assets, liabilities and results of operations of certain TransMontaigne Inc. terminal and pipeline operations prior
to their acquisition by us from TransMontaigne Inc. The acquired assets and liabilities have been recorded at TransMontaigne Inc.'s carryover basis. At the closing of our initial public
offering on May 27, 2005, we acquired from TransMontaigne Inc. seven Florida terminals, including terminals located in Tampa, Port Manatee, Fisher Island, Port Everglades (North), Port
Everglades (South), Cape Canaveral, and Jacksonville; and the Razorback Pipeline system, including the terminals located at Mt. Vernon, Missouri and Rogers, Arkansas in exchange for 120,000 common
units, 2,872,266 subordinated units, a 2% general partner interest, and a cash payment of approximately $111.5 million. On January 1, 2006, we acquired from TransMontaigne Inc.
the Mobile, Alabama terminal in exchange for a cash payment of approximately $17.9 million (see Note 3 of Notes to consolidated financial statements). On December 29, 2006, we
acquired from TransMontaigne Inc. the Brownsville, Texas terminal, twelve terminals along the Mississippi and Ohio Rivers ("River terminals"), and the Baton Rouge, Louisiana dock facility in
exchange for a cash payment of approximately $135.0 million (see Note 3 of Notes to consolidated financial statements). The acquisitions of terminal and pipeline operations from
TransMontaigne Inc. have been accounted for as transactions among entities under common control and, accordingly, prior periods include the activity of the acquired terminal and pipeline
operations since the date common control was established. For acquisitions made by us from TransMontaigne Inc. prior to September 1, 2006, common control was established as of the date
TransMontaigne Inc. purchased the terminal and pipeline operation. For acquisitions made by us from TransMontaigne Inc. on or after September 1, 2006, common control was
established as of September 1, 2006 (the date Morgan Stanley Capital Group purchased TransMontaigne Inc.).

The
accompanying consolidated financial statements include allocated general and administrative charges from TransMontaigne Inc. for indirect corporate overhead to cover costs of
functions such as legal, accounting, treasury, engineering, environmental safety, information technology, and other corporate services (see Note 2 of Notes to consolidated financial
statements). The allocated general and administrative expenses were approximately $1.8 million and $1.1 million for the three months ended September 30, 2007 and 2006,
respectively, and approximately $5.2 million and $2.8 million for the nine months ended September 30, 2007 and 2006, respectively. The accompanying consolidated financial
statements also include allocated insurance charges from TransMontaigne Inc. for insurance premiums to cover costs of insuring activities such as property, casualty, pollution, automobile,
directors' and officers' liability, and other insurable risks. The allocated insurance charges were $0.4 million and $0.3 million for the three months ended September 30, 2007 and
2006, respectively, and approximately $1.2 million and $0.8 million for the nine months ended September 30, 2007 and 2006, respectively. Management believes that the allocated
general and administrative charges and insurance charges are representative of the costs and expenses incurred by TransMontaigne Inc. for managing Partners' operations. The accompanying
consolidated financial statements also include reimbursement of bonus awards for reimbursements paid to TransMontaigne Services Inc. towards bonus awards granted by TransMontaigne
Services Inc. to certain key officers and employees that vest over future service periods. The reimbursement of bonus awards was approximately $0.4 million and $nil for the three months
ended September 30, 2007 and 2006, respectively, and approximately $0.8 million and $nil for the nine months ended September 30, 2007 and 2006, respectively.

10

---





In connection with our terminal and pipeline operations, we utilize the accrual method of accounting for revenue and expenses. We generate revenues in our
terminal and pipeline operations from throughput fees, storage fees, transportation fees, management fees and cost reimbursements, and fees from other ancillary services. Throughput revenue is
recognized when the product is delivered to the customer; storage revenue is recognized ratably over the term of the storage contract; transportation revenue is recognized when the product has been
delivered to the customer at the specified delivery location; management fee revenue and cost reimbursements are recognized as the services are performed or as the costs are incurred; and ancillary
service revenue is recognized as the services are performed.



We consider all short-term investments with a remaining maturity of three months or less at the date of purchase to be cash equivalents.



Depreciation is computed using the straight-line method. Estimated useful lives are 15 to 25 years for plant, which includes buildings, storage
tanks, and pipelines, and 3 to 25 years for equipment. All items of property, plant and equipment are carried at cost. Expenditures that increase capacity or extend useful lives are
capitalized. Repairs and maintenance are expensed as incurred.

We
evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on expected
undiscounted cash flows attributable to that asset. If an asset is impaired, the impairment loss to be recognized is the excess of the carrying amount of the asset over its estimated fair value.



We accrue for environmental costs that relate to existing conditions caused by past operations when estimable. Environmental costs include initial site surveys
and environmental studies of potentially contaminated sites, costs for remediation and restoration of sites determined to be contaminated and ongoing monitoring costs, as well as fines, damages and
other costs, including direct legal costs. Liabilities for environmental costs at a specific site are initially recorded, on an undiscounted basis, when it is probable that we will be liable for such
costs, and a reasonable estimate of the associated costs can be made based on available information. Such an estimate includes our share of the liability for each specific site and the sharing of the
amounts related to each site that will not be paid by other potentially responsible parties, based on enacted laws and adopted regulations and policies. Adjustments to initial estimates are recorded,
from time to time, to reflect changing circumstances and estimates based upon additional information developed in subsequent periods. Estimates of our ultimate liabilities associated with
environmental costs are difficult to make with certainty due to the number of variables involved, including the early stage of investigation at certain sites, the lengthy time frames required to
complete remediation, technology changes, alternatives available and the evolving nature of environmental laws and regulations. We periodically file claims for insurance recoveries of certain
environmental remediation costs with our insurance carriers under our comprehensive liability policies. We recognize our insurance recoveries as a credit to income in the period the insurance
recoveries are received.

11

---



At
September 30, 2007 and December 31, 2006, we have accrued environmental obligations of approximately $1,060,000 and $682,000, respectively, representing our best
estimate of our remediation obligations (see Note 9 of Notes to consolidated financial statements). During the nine months ended September 30, 2007, we charged to income approximately
$435,000 to increase our estimate of our environmental remediation obligations. During the nine months ended September 30, 2007, we made payments of approximately $57,000 towards our
environmental remediation obligations. Changes in our estimates of our environmental remediation obligations may occur as a result of the passage of time and the occurrence of future events.

TransMontaigne Inc.
has indemnified us through May 2010 against certain potential environmental claims, losses and expenses occurring before May 27, 2005, associated
with the operation of the Florida and Midwest terminal facilities, up to a maximum liability not to exceed $15 million for this indemnification obligation (see Note 2 of Notes to
consolidated financial statements). TransMontaigne Inc. has indemnified us through December 2008 against certain potential environmental claims, losses and expenses occurring before
January 1, 2006, associated with the operation of the Mobile, Alabama terminal, up to a maximum liability not to exceed $2.5 million for this indemnification obligation (see
Note 2 of Notes to consolidated financial statements). TransMontaigne Inc. has indemnified us through December 2011 against certain potential environmental claims, losses and
expenses occurring before December 31, 2006, associated with the operation of the Brownsville and River terminals, up to a maximum liability not to exceed $15 million for this
indemnification obligation (see Note 2 of Notes to consolidated financial statements).



Asset retirement obligations are legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction,
development or normal use of the asset. Statement of Financial Accounting Standards No. 143,Accounting for Asset Retirement Obligations,
requires that the fair value of a liability related to the retirement of long-lived assets be recorded at the time a legal obligation is incurred. Once an asset retirement obligation is
identified and a liability is recorded, a corresponding asset is recorded, which is depreciated over the remaining useful life of the asset. After the initial measurement, the liability is adjusted to
reflect changes in the asset retirement obligation's fair value. If and when it is determined that a legal obligation has been incurred, the fair value of any liability is determined based on
estimates and assumptions related to retirement costs, future inflation rates and interest rates. Our long-lived assets consist of above-ground storage facilities and an underground
pipeline. We are unable to predict if and when our long-lived assets will become completely obsolete and require dismantlement. Accordingly, we have not recorded an asset retirement
obligation, or corresponding asset, because the future dismantlement and removal dates of our long-lived assets, and the amount of any associated costs, are indeterminable. Changes in our
estimates and assumptions may occur as a result of the passage of time and the occurrence of future events.



For periods ending prior to July 1, 2005, we accounted for our equity-based compensation awards using the intrinsic value method pursuant to APB Opinion
No. 25,Accounting for Stock Issued to Employees.

Effective
July 1, 2005, we adopted the provisions of Statement of Financial Accounting Standards No. 123 (R),Share-Based
Payment. The adoption of this Statement did not have an impact on our

12

---



consolidated
financial statements, except for the elimination of deferred equity-based compensation from partners' equity. This Statement requires us to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide
service in exchange for the award. We are required to estimate the number of equity instruments that are expected to vest in measuring the total compensation cost to be recognized over the related
service period. Compensation cost is recognized over the service period on a straight-line basis.



No provision for income taxes has been reflected in the accompanying consolidated financial statements because Partners is treated as a partnership for federal
and state income taxes. As a partnership, all income, gains, losses, expenses, deductions and tax credits generated by Partners flow through to the unitholders of the partnership.



EITF Issue No. 03-6,Participating Securities and the Two-Class Method under FASB Statement
No. 128("EITF 03-6"), addresses the computation of earnings per share by entities that have issued securities other than common stock that contractually
entitle the holder to participate in dividends and earnings of the entity when, and if, it declares dividends on its common stock. EITF 03-6 requires that securities that meet the
definition of a participating security be considered for inclusion in the computation of basic earnings per unit using the two-class method. Under the two-class method,
earnings per unit is calculated as if all of the earnings for the period were distributed under the terms of the partnership agreement, without regard to whether the general partner has discretion
over the amount of distributions to be made in any particular period, whether those earnings would actually be distributed during a particular period, or whether the general partner has legal or
contractual limitations on its ability to pay distributions that would prevent it from distributing all of the earnings for a particular period.

Pursuant
to the requirements of EITF 03-6, an increasing portion of our earnings are allocated to our general partner through operation of the incentive distribution rights
in periods in which our net earnings per limited partners' unit exceeds $0.44 per quarter (or $1.76 annually). For the three months ended September 30, 2007 and 2006, our net earnings per
limited partners' unit did not exceed $0.44. For the nine months ended September 30, 2007 and 2006, our net earnings per limited partners' unit did not exceed $1.32. Therefore, net earnings
allocable to our general partner are limited to 2% of our net earnings for the respective periods.

Basic
earnings (loss) per limited partner unit are computed by dividing net earnings (loss) allocable to limited partners by the weighted average number of limited partnership units
outstanding during the period, excluding restricted phantom units. Diluted earnings (loss) per limited partner unit are computed by dividing net earnings (loss) allocable to limited partners by the
weighted average number of limited partnership units outstanding during the period and, when dilutive, restricted phantom units. Net earnings (loss) allocable to limited partners are net of the
earnings (loss) allocable to the general partner.

13

---





Certain amounts in the prior periods have been reclassified to conform to the current period's presentation. Net earnings and partners' equity have not been
affected by these reclassifications.

(2) TRANSACTIONS WITH TRANSMONTAIGNE INC. AND MORGAN STANLEY CAPITAL GROUP

Omnibus Agreement.We have an omnibus agreement with TransMontaigne Inc. that will expire in May 2008, unless
extended. Under the omnibus agreement, we pay TransMontaigne Inc. an administrative fee for the provision of various general and administrative services for our benefit. At September 30,
2007, the annual administrative fee payable to TransMontaigne Inc. was approximately $7.0 million. If we acquire or construct additional facilities, TransMontaigne Inc. will
propose a revised administrative fee covering the provision of services for such additional facilities. If the conflicts committee of our general partner agrees to the revised administrative fee,
TransMontaigne Inc. will provide services for the additional facilities pursuant to the agreement. The administrative fee includes expenses incurred by TransMontaigne Inc. to perform
centralized corporate functions, such as legal, accounting, treasury, insurance administration and claims processing, health, safety and environmental, information technology, human resources, credit,
payroll, taxes and engineering and other corporate services, to the extent such services are not outsourced by TransMontaigne Inc. The omnibus agreement further provides that we pay
TransMontaigne Inc. an insurance reimbursement for premiums on insurance policies covering our facilities and operations. At September 30, 2007, the annual insurance reimbursement
payable to TransMontaigne Inc. was approximately $1.7 million.

We
also reimburse TransMontaigne Inc. for direct operating costs and expenses that TransMontaigne Inc. incurs on our behalf, such as salaries of operational personnel
performing services
on-site at our terminals and pipeline and the cost of their employee benefits, including 401(k) and health insurance benefits.

Reimbursement of Bonus Awards.We have agreed to reimburse TransMontaigne Services Inc. approximately
$1.5 million towards bonus awards granted by TransMontaigne Services Inc. to certain key officers and employees that vest over future service periods. The agreement to reimburse
TransMontaigne Services Inc. was conditioned upon the award of bonuses to officers and employees of TransMontaigne Services Inc. of not less than $1.5 million that are deemed
invested in our common units during the period that the bonus awards vest. Included in reimbursement of bonus awards for the three and nine months ended September 30, 2007 is approximately
$0.4 million and $0.8 million, respectively, of reimbursements paid to TransMontaigne Services Inc.

Environmental Indemnification.Under the omnibus agreement, TransMontaigne Inc. agreed to indemnify us through
May 2010 against certain potential environmental claims, losses and expenses occurring before May 27, 2005, and associated with the operation of the Florida and Midwest terminal
facilities acquired by us on May 27, 2005. TransMontaigne Inc.'s maximum liability for this indemnification obligation is $15 million. TransMontaigne Inc. has no obligation
to indemnify us for losses until such aggregate losses exceed $250,000. TransMontaigne Inc. has no indemnification obligations with respect to environmental claims made as a result of additions
to or modifications of environmental laws promulgated after May 27, 2005.

In
connection with our acquisition of the Mobile, Alabama terminal, TransMontaigne Inc. agreed to indemnify us through December 2008 against certain potential environmental
liabilities associated

14

---



with
the operation of the Mobile terminal that occurred on or prior to January 1, 2006. Our environmental losses must first exceed $200,000 and TransMontaigne Inc.'s indemnification
obligations are capped at $2.5 million. The cap amount does not apply to any environmental liabilities known to exist as of January 1, 2006. TransMontaigne Inc. has no
indemnification obligations with respect to environmental claims made as a result of additions to or modifications of environmental laws promulgated after January 1, 2006.

In
connection with our acquisition of the Brownsville and River terminals, TransMontaigne Inc. agreed to indemnify us through December 2011 against certain potential
environmental liabilities associated with the operation of the Brownsville and River terminals that occurred on or prior to December 31, 2006. Our environmental losses must first exceed
$250,000 and TransMontaigne Inc.'s indemnification obligations are capped at $15 million. The cap amount does not apply to any environmental liabilities known to exist as of
December 31, 2006. TransMontaigne Inc. has no indemnification obligations with respect to environmental claims made as a result of additions to or modifications of environmental laws
promulgated after December 31, 2006.

Terminaling Services AgreementFlorida Terminals and Razorback Pipeline System.Through May 31, 2007, we
had a terminaling and transportation services agreement with TransMontaigne Inc. Under this agreement, TransMontaigne Inc. agreed to transport on the Razorback Pipeline and throughput at
our Florida, Mt. Vernon, Missouri and Rogers, Arkansas terminals a volume of refined products that would, at the fee and tariff schedule contained in the agreement, result in minimum revenues to us of
$20 million per year, or $5 million per quarter, through December 31, 2013. In exchange for TransMontaigne Inc.'s minimum revenue commitment, we agreed to provide
TransMontaigne Inc. approximately 2.6 million barrels of light oil storage capacity and approximately 1.3 million barrels of heavy oil storage capacity at certain of our Florida
terminals.

Effective
June 1, 2007, we entered into a terminaling services agreement with Morgan Stanley Capital Group that replaced our terminaling services agreement with
TransMontaigne Inc. relating to our Florida, Mt. Vernon, Missouri and Rogers, Arkansas terminals. The initial term expires on May 31, 2014. After the initial term, the terminaling
services agreement will automatically renew for subsequent one-year periods, subject to either party's right to terminate with six months' notice prior to the end of the initial term or
the then current renewal term. Under this agreement, Morgan Stanley Capital Group agreed to throughput a volume of refined product that will, at the fee schedule contained in the agreement, result in
minimum throughput payments to us of approximately $30 million for the contract year ending May 31, 2008; with stipulated annual increases in throughput payments each contract year
thereafter. Morgan Stanley Capital Group's minimum annual throughput payment is subject to adjustment in the event that we should fail to complete construction of and place in service certain capital
projects on or before September 30, 2009.

In
the event of a force majeure event that renders performance impossible with respect to an asset for at least 30 consecutive days, Morgan Stanley Capital Group's obligations would be
temporarily suspended with respect to that asset. If a force majeure event continues for 30 consecutive days or more and results in a diminution in the storage capacity we make available to Morgan
Stanley Capital Group, Morgan Stanley Capital Group's minimum throughput payment would be reduced proportionately for the duration of the force majeure event.

15

---



Morgan
Stanley Capital Group may assign the terminaling services agreement only with the consent of the conflicts committee of our general partner. Upon termination of the agreement,
Morgan Stanley Capital Group has a right of first refusal to enter into a new terminaling services agreement with us, provided it pays no less than 105% of the fees offered by the third party.

Revenue Support AgreementOklahoma City Terminal.We have a revenue support agreement with
TransMontaigne Inc. that provides that in the event any current third-party terminaling agreement should expire, TransMontaigne Inc. agrees to enter into a terminaling services agreement
that will expire no earlier than November 1, 2012. The terminaling services agreement will provide that TransMontaigne Inc. agrees to throughput such volume of refined product as may be
required to guarantee minimum revenues of $0.8 million per year. If TransMontaigne Inc. fails to meet its minimum
revenue commitment in any year, it must pay us the amount of any shortfall within 15 business days following receipt of an invoice from us. In exchange for TransMontaigne Inc.'s minimum revenue
commitment, we agreed to provide TransMontaigne Inc. approximately 153,000 barrels of light oil storage capacity at our Oklahoma City terminal. TransMontaigne Inc.'s minimum revenue
commitment currently is not in effect because a major oil company is under contract for the utilization of the light oil storage capacity at the terminal.

Terminaling Services AgreementMobile Terminal.We have a terminaling and transportation services agreement with
TransMontaigne Inc. that will expire on December 31, 2012. Under this agreement, TransMontaigne Inc. agreed to throughput at our Mobile, Alabama terminal a volume of refined
products that will, at the fee and tariff schedule contained in the agreement, result in minimum throughput revenues to us of $2.1 million per year. If TransMontaigne Inc. fails to meet
its minimum commitment in any year, it must pay us the amount of any shortfall within 15 business days following receipt of an invoice from us. A shortfall payment may be applied as a credit in the
following year after TransMontaigne Inc.'s minimum obligations are met. In exchange for TransMontaigne Inc.'s minimum revenue commitment, we agreed to provide TransMontaigne Inc.
approximately 46,000 barrels of light oil storage capacity and approximately 65,000 barrels of heavy oil storage capacity at the terminal.

Terminaling Services AgreementMorgan Stanley Capital Group.We have a terminaling and transportation services
agreement with Morgan Stanley Capital Group, relating to our Brownsville, Texas terminal, which will expire on October 31, 2010. Under this agreement, Morgan Stanley Capital Group agreed to
throughput a specified minimum amount of fuel oils at our Brownsville, Texas terminal that will result in minimum revenues to us of approximately $2.2 million per year. In exchange for its
minimum revenue commitment, we agreed to provide Morgan Stanley Capital Group a minimum amount of storage capacity for such fuel oils.

Terminaling Services AgreementBrownsville LPG.We have a terminaling and transportation services agreement with
TransMontaigne Inc. relating to our Brownsville LPG terminal that will expire on March 31, 2010. Under this agreement, TransMontaigne Inc. agreed to throughput at our Brownsville
LPG terminal certain minimum volumes of natural gas liquids that will, under the fee and tariff schedule contained in the agreement, result in minimum revenues to us of approximately
$1.4 million per year. In exchange for TransMontaigne Inc.'s minimum throughput commitment, we agreed to provide TransMontaigne Inc. approximately 15,000 barrels of storage
capacity at our Brownsville LPG terminal. TransMontaigne Inc.'s minimum revenue commitment will increase to

16

---



approximately
$2.4 million per year when we increase the LPG storage capacity at our Brownsville LPG terminal to approximately 33,700 barrels.

Terminaling Services AgreementRenewable Fuels.We have a terminaling and transportation services agreement with
TransMontaigne Inc. relating to certain renewable fuels tank capacity at our Brownsville and River terminals that will expire on May 31, 2012. Under this agreement,
TransMontaigne Inc. agreed to throughput at these terminals certain minimum volumes of renewable fuels that will, under the fee and tariff schedule contained in the agreement, result in minimum
revenues to us of approximately $0.6 million per year. In exchange for TransMontaigne Inc.'s minimum throughput commitment, we agreed to provide TransMontaigne Inc. approximately
116,000 barrels of storage capacity at these terminals.

(3) ACQUISITIONS

Brownsville and River Terminals.Effective December 29, 2006, we acquired from TransMontaigne Inc. a refined
product terminal in Brownsville, Texas with approximately 2.2 million barrels of aggregate active storage capacity, twelve refined product terminals along the Mississippi and Ohio Rivers with
approximately 2.7 million barrels of aggregate active storage capacity, and the Baton Rouge, Louisiana dock facility for a cash payment of approximately $135.0 million. The Brownsville
terminal provides integrated terminaling services to customers, including TransMontaigne Inc. and Morgan Stanley Capital Group, engaged in the distribution and marketing of refined products,
natural gas liquids, chemicals, fertilizers and other liquid products. The River terminals provide integrated terminaling services to third parties engaged in the distribution and marketing of refined
products, chemicals, fertilizers and other liquid products. The acquisition of the Brownsville and River terminals from TransMontaigne Inc. has been recorded at carryover basis in a manner
similar to a reorganization of entities under common control. As such, prior periods include the assets, liabilities, and results of operations of the Brownsville and River terminals from
September 1, 2006, the date of acquisition by Morgan Stanley Capital Group of TransMontaigne Inc. The results of operations of the Brownsville and River terminals for periods prior to
its actual sale to us have been allocated to TransMontaigne Inc. ("Predecessor"). The difference between the consideration we paid to TransMontaigne Inc. and the carryover basis of the
net assets purchased has been reflected in the accompanying consolidated balance sheet and changes in partners' equity as an increase to partners' equitysubordinated units.

As
a condition to our acquisition of the Brownsville and River terminals, TransMontaigne Inc. agreed to construct in the future certain additional capital improvements to the
facilities. We recognized the additional capital improvements as an increase to property, plant and equipment and a contribution of partners' equitysubordinated units. During the three
months ended June 30, 2007, we recorded an increase of approximately $6.3 million to property, plant and equipment with a corresponding contribution of partners' equity-subordinated
units, resulting from TransMontaigne Inc.'s authorization and approval of capital improvements to the Brownsville and River terminals. During the three months ended June 30, 2007,
TransMontaigne Inc. funded approximately $0.2 million in capital improvements to the terminals. On August 1, 2007, TransMontaigne Inc. paid us $6.1 million in
satisfaction of its obligation to complete additional capital improvements to the terminals.

17

---



TransMontaigne Inc.'s
accounting basis in the assets and liabilities of the Brownsville and River terminals are as follows (in thousands):

December 29,
2006

September 1,
2006Cash

$
15

$
15Trade accounts receivable





2,420Prepaid expenses and other


164


126Property, plant and equipment


111,621


108,066Goodwill


23,235


23,235Other intangible assets, net


3,596


3,699Other assets, net


10


3Trade accounts payable





(1,221
)Other accrued liabilities


(136
)

(520
)Predecessor equity

$
138,505

$
135,823


The
unaudited pro forma combined results of operations as if the acquisition of the Brownsville and River terminals had occurred on January 1, 2006 are as follows (in thousands,
except per unit data):

Three months ended
September 30, 2006

Nine months ended
September 30, 2006Revenue

$
19,434

$
59,262Net loss

$
(2,323
)
$
(359
)Net loss per limited partner unitbasic and diluted

$
(0.32
)
$
(0.05
)


Mobile Terminal.Effective January 1, 2006, we acquired from TransMontaigne Inc. a refined product terminal in
Mobile, Alabama with approximately 0.2 million barrels of aggregate active storage capacity for approximately $17.9 million. The Mobile terminal currently provides integrated terminaling
services to TransMontaigne Inc., a major oil company, a crude oil marketing company and a petro-chemical company. The acquisition of the Mobile terminal from TransMontaigne Inc. has been
recorded at carryover basis in a manner similar to a reorganization of entities under common control. As such, prior periods include the assets, liabilities, and results of operations of the Mobile
terminal from August 1, 2005, the date of acquisition by TransMontaigne Inc. from Radcliff/Economy Marine Services, Inc. The results of operations of the Mobile terminal for
periods prior to its sale to us have been allocated to TransMontaigne Inc. ("Predecessor"). The consideration we paid to TransMontaigne Inc. in excess of the carryover basis of the net
assets purchased has been reflected in the accompanying consolidated balance sheet and changes in partners' equity as a reduction of partners' equitysubordinated units.

18

---



The
basis of the assets and liabilities of the Mobile terminal are as follows (in thousands):

December 31,
2005

August 1,
2005Trade accounts receivable

$


$
72Property, plant and equipment


8,869


9,137Trade accounts payable





(56
)Predecessor equity

$
8,869

$
9,153


(4) CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable, net consists of the following (in thousands):

September 30,
2007

December 31,
2006Trade accounts receivable

$
5,628

$
1,700Less allowance for doubtful accounts


(150
)

(75
)$
5,478

$
1,625


Our
primary market areas are located along the Gulf Coast, in Brownsville, Texas, along the Mississippi and Ohio Rivers, and in the Midwest. We have a concentration of trade receivable
balances due from companies engaged in the trading, distributing and marketing of refined products, crude oil, chemicals, fertilizers and other liquid products, and the United States government. These
concentrations of customers may affect our overall credit risk in that the customers may be similarly affected by changes in economic, regulatory or other factors. Our customers' historical financial
and operating information is analyzed prior to extending credit. We manage our exposure to credit risk through credit analysis, credit approvals, credit limits and monitoring procedures, and for
certain transactions we may request letters of credit, prepayments or guarantees. We maintain allowances for potentially uncollectible accounts receivable. During the three months ended
September 30, 2007 and 2006, we increased the allowance for doubtful accounts through a charge to income of approximately $nil and $75,000, respectively. During the nine months ended
September 30, 2007 and 2006, we increased the allowance for doubtful accounts through a charge to income of approximately $83,000 and $75,000, respectively.

TransMontaigne Inc.
and Morgan Stanley Capital Group, in the aggregate, accounted for approximately 49% and 54% of our total revenues for the three months ended
September 30, 2007 and 2006, respectively. Marathon Petroleum Company LLC ("Marathon") and the previous asphalt storage customer accounted for 11% and 16% of our total revenues for the three
months ended September 30, 2007 and 2006, respectively. Valero Energy Corporation accounted for 16% and 7% of our total revenues for the three months ended September 30, 2007 and 2006,
respectively.

TransMontaigne Inc.
and Morgan Stanley Capital Group, in the aggregate, accounted for approximately 47% and 64% of our total revenues for the nine months ended
September 30, 2007 and 2006, respectively. Marathon and the previous asphalt storage customer accounted for 11% and 17% of our total revenues for the nine months ended September 30, 2007
and 2006, respectively. Valero Energy Corporation accounted for 16% and 3% of our total revenues for the nine months ended September 30, 2007 and 2006, respectively.

19

---





(5) PREPAID EXPENSES AND OTHER

Prepaid expenses and other are as follows (in thousands):

September 30,
2007

December 31,
2006Additive detergent

$
518

$
558Reimbursements due from the Federal government


724


438Deposits and other assets


482


160$
1,724

$
1,156


Reimbursements
due from the Federal government represent costs we have incurred for the development and installation of terminal security plans and enhancements at our Gulf Coast
terminals.

(6) PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net is as follows (in thousands):

September 30,
2007

December 31,
2006Land

$
34,064

$
34,039Terminals, pipelines and equipment


233,387


231,607Furniture, fixtures and equipment


883


874Construction in progress


13,250


8,132281,584


274,652Less accumulated depreciation


(48,858
)

(39,578
)$
232,726

$
235,074


(7) GOODWILL

At September 30, 2007 and December 31, 2006, goodwill is approximately $23.2 million resulting from the acquisition of the Brownsville and
River terminals from TransMontaigne Inc. The acquisition of the Brownsville and River terminals from TransMontaigne Inc. has been recorded at TransMontaigne Inc.'s carryover basis
in a manner similar to a reorganization of entities under common control (see Note 3 of Notes to consolidated financial statements). TransMontaigne Inc.'s carryover basis in the
Brownsville and River terminals is derived from the application of pushdown accounting associated with Morgan Stanley Capital Group's acquisition of TransMontaigne Inc. on September 1,
2006. Goodwill represents the excess of Morgan Stanley Capital Group's aggregate purchase price over the fair value of the identifiable assets acquired attributable to the Brownsville and River
terminals. Goodwill is not amortized, but instead is tested for impairment on an annual basis during the three months ended December 31.

20

---



(8) OTHER ASSETS, NET

Other assets, net are as follows (in thousands):

September 30, 2007

December 31,
2006Deferred financing costs, net of accumulated amortization of $1,123 and $nil

$
1,614

$
2,603Advance towards acquisition of certain Rio Vista operations


6,500


Identifiable intangible assets, net:Customer relationships, net of accumulated amortization of $231 and $nil, respectively


3,365


3,596Coastal Fuels trade name, net of accumulated amortization of $2,292 and $1,917, respectively


208


583Deposits and other assets


36


19$
11,723

$
6,801


Deferred
financing costs are amortized using the interest method over the term of the related credit facility (see Note 10 of Notes to consolidated financial statements). On
December 22, 2006, we entered into an amended and restated senior secured credit facility and incurred deferred financing costs of approximately $2.6 million. On December 29,
2006, we repaid and cancelled our former credit facility. During the three months ended June 30, 2007, we repaid our $75 million term loan outstanding under the Senior Secured Credit
Facility, resulting in a charge to income of approximately $0.8 million for the write-off of the associated unamortized deferred financing costs related to the $75 million
term loan.

On
September 18, 2007, we signed a binding letter of intent with Rio Vista Energy Partners L.P. ("Rio Vista") to acquire Rio Vista's LPG terminal facility in Matamoros, Mexico;
two pipelines, together with associated rights of way and easements, which run from Brownsville, Texas to Matamoros, Mexico; and a permit to distribute liquefied petroleum gas to Mexico's state-owned
petroleum company. The total purchase price for the referenced assets is approximately $10.5 million, subject to adjustments at closing, and is expected to close prior to December 31,
2007. We advanced to Rio Vista approximately $6.5 million that will be applied as a credit towards the total purchase price. The advance is due and payable upon demand in the event the
transaction does not close prior to December 31, 2007 and is secured by certain of the assets included in the acquisition.

Our
acquisitions from TransMontaigne Inc. have been recorded at TransMontaigne Inc.'s carryover basis in a manner similar to a reorganization of entities under common
control (see Note 3 of Notes to consolidated financial statements). Identifiable intangible assets, net include the carryover basis of certain customer relationships at our Brownsville and
River terminals and the right to use the Coastal Fuels trade name at our Florida terminals. The carryover basis of the customer relationships is being amortized on a straight-line basis
over twelve years; the carryover basis of the Coastal Fuels trade name is being amortized on a straight-line basis over five years.

21

---



(9) OTHER ACCRUED LIABILITIES

Other accrued liabilities are as follows (in thousands):

September 30,
2007

December 31,
2006Accrued property taxes

$
1,809

$
177Accrued environmental obligations


1,060


682Customer advances and deposits


3,221


146Interest payable





87Accrued expenses and other


90


373$
6,180

$
1,465


(10) LONG-TERM DEBT

Senior Secured Credit Facility.On December 22, 2006, we entered into an amended and restated senior secured credit
facility ("Senior Secured Credit Facility") with a consortium of lending institutions. At September 30, 2007 and December 31, 2006, our outstanding borrowings under the Senior Secured
Credit Facility were approximately $2.8 million and $189.6 million, respectively. At September 30, 2007 and December 31, 2006, our outstanding letters of credit were
approximately $147,000 and $210,000, respectively.

At
June 30, 2007, after repayment of the $75 million term loan outstanding under the Senior Secured Credit Facility with a portion of the proceeds from our May 2007
secondary offering of common units, the Senior Secured Credit Facility provided for a $150 million revolving credit facility (see Note 11 of Notes to consolidated financial statements).
On July 12, 2007, we amended the Senior Secured Credit Facility to increase the maximum amount of the revolving credit line from $150 million to $200 million. As a result, the
Senior Secured Credit Facility provides for a maximum borrowing line of credit equal to the lesser of (i) $200 million and (ii) four times Consolidated EBITDA (as defined;
$142.0 million at September 30, 2007). In addition, at our request, the term loan commitment or the revolving loan commitment can be increased up to an additional $50 million, in
the aggregate, without the approval of the lenders, but subject to the approval of the administrative agent and the receipt of additional commitments from one or more lenders. We may elect to have
loans under the Senior Secured Credit Facility bear interest either (i) at a rate of LIBOR plus a margin ranging from 1.50% to 2.50% depending on the total leverage ratio then in effect, or
(ii) at a base rate (the greater of (a) the federal funds rate plus 0.5% or (b) the prime rate) plus a margin ranging from 0.5% to 1.5% depending on the total leverage ratio then
in effect. We also pay a commitment fee ranging from 0.30% to 0.50% per annum, depending on the total leverage ratio then in effect, on the total amount of unused commitments. For the three and nine
months ended September 30, 2007, the weighted average interest rate on borrowings under our Senior Secured Credit Facility was approximately 7.8% and 7.9%, respectively. Our obligations under
the Senior Secured Credit Facility are secured by a first priority security interest in favor of the lenders in our assets, including cash, accounts receivable, inventory, general intangibles,
investment property, contract rights and real property. The terms of the Senior Secured Credit Facility include covenants that restrict our ability to make cash distributions and acquisitions. The
principal balance of loans and any accrued and unpaid interest will be due and payable in full on the maturity date, December 22, 2011.

The
Senior Secured Credit Facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, absence of
defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). The primary
financial

22

---



covenants
contained in the Senior Secured Credit Facility are (i) a total leverage ratio test (not to exceed 4.5 times), (ii) a senior secured leverage ratio test (not to exceed 4.0
times), and (iii) a minimum interest coverage ratio test (not to be less than 2.5 times through December 31, 2007, and not less than 2.75 times thereafter).

Former Credit Facility.On May 9, 2005, we entered into a $75 million senior secured credit facility ("Former
Credit Facility"). The Former Credit Facility provided for a maximum borrowing line of credit equal to the lesser of (i) $75 million and (ii) four times Consolidated EBITDA (as
defined; $89.8 million at June 30, 2006). The maximum borrowing amount was reduced by the amount of letters of credit that were outstanding. The weighted average interest rate on
borrowings under our Former
Credit Facility was 7.0% and 6.5% during the three and nine months ended September 30, 2006, respectively. On December 29, 2006, we repaid all outstanding borrowings under the Former
Credit Facility with the proceeds from the initial borrowings under our new Senior Secured Credit Facility and the Former Credit Facility was cancelled.

(11) PARTNERS' EQUITY

On May 23, 2007, we issued, pursuant to an underwritten public offering, 4.8 million common units representing limited partner interests at a public
offering price of $36.80 per common unit. On June 20, 2007, the underwriters of our secondary offering exercised a portion of their over-allotment option to purchase an additional
349,800 common units representing limited partnership interests at a price of $36.80 per common unit. The net proceeds from the offering were approximately $180.0 million, after deducting
underwriting discounts, commissions, and offering expenses of approximately $9.6 million. Additionally, TransMontaigne GP L.L.C., our general partner, made a cash contribution of approximately
$3.9 million to us to maintain its 2% general partner interest.

(12) LONG-TERM INCENTIVE PLAN

TransMontaigne GP L.L.C. ("TransMontaigne GP") is our general partner and manages our operations and activities. TransMontaigne Services Inc. is a
wholly-owned subsidiary of TransMontaigne Inc. and is the sole member of TransMontaigne GP. TransMontaigne Services Inc. adopted a long-term incentive plan for its employees
and consultants and non-officer directors of our general partner. The long-term incentive plan currently permits the grant of awards covering an aggregate of 345,895 common
units, which amount will automatically increase on an annual basis by 2% of the total outstanding common and subordinated units at the end of the preceding fiscal year. As of September 30,
2007, 306,290 common units are available for future grant under the long-term incentive plan. Ownership in the awards is subject to forfeiture until the vesting date, but recipients have
distribution and voting rights from the date of grant. The plan is administered by the compensation committee of the board of directors of our general partner. On May 7, 2007, we announced a
program for the repurchase of outstanding common units for purposes of making subsequent grants of restricted phantom units to non-officer directors of our general partner. We anticipate
repurchasing annually up to 10,000 common units for this purpose. As of September 30, 2007, we have repurchased 840 common units pursuant to the program.

On
March 31, 2007, TransMontaigne Services Inc. granted 10,000 restricted phantom units to the non-officer directors of our general partner. On March 31,
2006, TransMontaigne Services Inc. granted 58,000 restricted phantom units to its key employees and executive officers, and non-employee directors of our general partner. On
May 27, 2005, TransMontaigne Services Inc. granted 120,000 restricted common units to its key employees and executive officers, and non-employee directors of our general

23

---



partner.
We recognized deferred equity-based compensation of approximately $0.4 million, $1.7 million and $2.6 million associated with the March 2007, March 2006 and
May 2005 grants, respectively.

Pursuant
to the terms of the long-term incentive plan, all restricted phantom units and restricted common units vest upon a change in control of TransMontaigne Inc. As
such, all grants of restricted phantom units and restricted common units made prior to September 1, 2006, became fully vested on September 1, 2006 when Morgan Stanley Capital Group
acquired TransMontaigne Inc. Amortization of deferred equity-based compensation of approximately $22,000 and $0.2 million is included in direct general and administrative expense for the
three months ended September 30, 2007 and 2006, respectively. Amortization of deferred equity-based compensation of approximately $44,000 and $3.9 million is included in direct general
and administrative expense for the nine months ended September 30, 2007 and 2006, respectively.

(13) COMMITMENTS AND CONTINGENCIES

Operating Leases.We lease property and equipment under non-cancelable operating leases that extend through
April 2021. At September 30, 2007, future minimum lease payments under these non-cancelable operating leases are as follows (in thousands):

Years ending December 31:

Property and
equipment2007 (remainder of the year)

$
2132008


7062009


6622010


6172011


244Thereafter


1,199$
3,641


Rental
expense under operating leases was approximately $202,000 and $117,000 for the three months ended September 30, 2007 and 2006, respectively. Rental expense under operating
leases was approximately $630,000 and $273,000 for the nine months ended September 30, 2007 and 2006, respectively.

(14) NET EARNINGS (LOSS) PER LIMITED PARTNER UNIT

The following table reconciles the computation of basic and diluted weighted average units (in thousands):

Three months
ended
September 30,

Nine months ended
September 30,2007

2006

2007

2006Basic weighted average units

12,444

7,273

9,730

7,279Dilutive effect of restricted phantom units

1



1

5Diluted weighted average units

12,445

7,273

9,731

7,284


For
the three and nine months ended September 30, 2007, we included the dilutive effect of 10,000 restricted phantom units in the computation of diluted net earnings per limited
partners' unit because the average quoted market price of our common units for the period exceeded the related unamortized

24

---



deferred
compensation. For the nine months ended September 30, 2006, we included the dilutive effect of 58,000 restricted phantom units, prior to their vesting on September 1, 2006, in
the computation of diluted net earnings per limited partners' unit because the average quoted market price of our common units for the period exceeded the related unamortized deferred compensation.

We
exclude potentially dilutive securities from our computation of diluted earnings per limited partner unit when their effect would be anti-dilutive. There were no
anti-dilutive securities for the three months ended September 30, 2006.

(15) BUSINESS SEGMENTS

We provide integrated terminaling, storage, transportation and related services to companies engaged in the trading, distribution and marketing of refined
products, crude oil, chemicals, fertilizers and other liquid products. Our chief operating decision maker is our general partner's chief executive officer ("CEO"). Our general partner's CEO reviews
the financial performance of our business segments using disaggregated financial information about "net margins" for purposes of making operating decisions and assessing financial performance. "Net
margins" is composed of revenues less direct operating costs and expenses. Accordingly, we present "net margins" for each of our business segments: (i) Gulf Coast terminals, (ii) Midwest
terminals and pipeline system, (iii) Brownsville terminal and (iv) River terminals.

25

---



The
financial performance of our business segments is as follows (in thousands):

Three months ended
September 30,

Nine months ended
September 30,2007

2006

2007

2006Gulf Coast Terminals:Throughput and additive injection fees, net

$
7,205

$
4,695

$
21,264

$
14,889Storage


2,201


2,815


7,234


8,207Other


1,427


2,218


3,527


6,577Revenues


10,833


9,728


32,025


29,673Direct operating costs and expenses


(4,405
)

(4,837
)

(13,650
)

(14,263
)Net margins


6,428


4,891


18,375


15,410Midwest Terminals and Pipeline System:Throughput and additive injection fees, net


820


736


2,171


2,349Pipeline transportation fees


481


580


1,612


1,835Other


39


376


787


1,216Revenues


1,340


1,692


4,570


5,400Direct operating costs and expenses


(1,060
)

(446
)

(2,046
)

(1,194
)Net margins


280


1,246


2,524


4,206Brownsville Terminal (since September 1, 2006):Throughput and additive injection fees, net


1,646


403


4,662


403Storage


1,162


468


4,187


468Other


855


140


2,881


140Revenues


3,663


1,011


11,730


1,011Direct operating costs and expenses


(1,952
)

(584
)

(6,673
)

(584
)Net margins


1,711


427


5,057


427River Terminals (since September 1, 2006):Throughput and additive injection fees, net


972


376


3,113


376Storage


3,757


1,045


10,951


1,045Other


141


(2
)

420


(2
)Revenues


4,870


1,419


14,484


1,419Direct operating costs and expenses


(1,537
)

(641
)

(5,151
)

(641
)Net margins


3,333


778


9,333


778Total net margins


11,752


7,342


35,289


20,821Direct general and administrative expenses


(288
)

(3,761
)

(1,642
)

(5,533
)Allocated general and administrative expenses


(1,758
)

(1,135
)

(5,219
)

(2,769
)Allocated insurance expense


(413
)

(304
)

(1,238
)

(804
)Reimbursement of bonus awards


(375
)




(750
)

Depreciation and amortization


(3,473
)

(2,250
)

(9,883
)

(5,982
)Operating income (loss)


5,445


(108
)

16,557


5,733Other income (expense), net


(242
)

(937
)

(7,433
)

(2,522
)Net earnings (loss)

$
5,203

$
(1,045
)
$
9,124

$
3,211


26

---



Supplemental
information about our business segments is summarized below (in thousands):

|                                                                   |          | Three months ended September 30, 2007
|------------------------------------------------------------------ | -------- | -------------------------------------
|
|Revenues from external customers                                   |          | $                                    
|Revenues from TransMontaigne Inc. and Morgan Stanley Capital Group |          |                                      
|                                                                   |          |                                      
|                                                                   | Revenues |                                      
|                                                                   |          |                                      
|Identifiable assets                                                |          | $                                    
|                                                                   |          |                                      
|Capital expenditures                                               |          | $                                    
|                                                                   |          |                                      

|                                                                   |          | Three months ended September 30, 2006
|------------------------------------------------------------------ | -------- | -------------------------------------
|
|Revenues from external customers                                   |          | $                                    
|Revenues from TransMontaigne Inc. and Morgan Stanley Capital Group |          |                                      
|                                                                   |          |                                      
|                                                                   | Revenues |                                      
|                                                                   |          |                                      
|Identifiable assets                                                |          | $                                    
|                                                                   |          |                                      
|Capital expenditures                                               |          | $                                    
|                                                                   |          |                                      

|                                                                   |          | Nine months ended September 30, 2007
|------------------------------------------------------------------ | -------- | ------------------------------------
|
|Revenues from external customers                                   |          | $                                   
|Revenues from TransMontaigne Inc. and Morgan Stanley Capital Group |          |                                     
|                                                                   |          |                                     
|                                                                   | Revenues |                                     
|                                                                   |          |                                     
|Identifiable assets                                                |          | $                                   
|                                                                   |          |                                     
|Capital expenditures                                               |          | $                                   
|                                                                   |          |                                     

|                                                                   |          | Nine months ended September 30, 2006
|------------------------------------------------------------------ | -------- | ------------------------------------
|
|Revenues from external customers                                   |          | $                                   
|Revenues from TransMontaigne Inc. and Morgan Stanley Capital Group |          |                                     
|                                                                   |          |                                     
|                                                                   | Revenues |                                     
|                                                                   |          |                                     
|Identifiable assets                                                |          | $                                   
|                                                                   |          |                                     
|Capital expenditures                                               |          | $                                   
|                                                                   |          |                                     

27

---



ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition should be read in conjunction with the accompanying unaudited
consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A summary of the significant accounting policies that we have adopted and followed in the preparation of our consolidated financial statements is detailed in our
consolidated financial statements for the year ended December 31, 2006, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on
March 16, 2007 (see Note 1 of Notes to the consolidated financial statements). Certain of these accounting policies require the use of estimates. The following estimates, in our opinion,
are subjective in nature, require the exercise of judgment, and involve complex analysis: allowance for doubtful accounts and accrued environmental obligations. These estimates are based on our
knowledge and understanding of current conditions and actions we may take in the future. Changes in these estimates will occur as a result of the passage of time and the occurrence of future events.
Subsequent changes in these estimates may have a significant impact on our financial condition and results of operations.

SIGNIFICANT DEVELOPMENTS DURING THE THREE MONTHS ENDED SEPTEMBER 30, 2007

On July 12, 2007, we amended the Senior Secured Credit Facility to increase the amount of revolving credit permissible under the facility from
$150 million to $200 million.

On
July 20, 2007, we announced a distribution of $0.50 per unit for the period from April 1, 2007 through June 30, 2007, payable on August 7, 2007 to
unitholders of record on July 31, 2007.

On
September 18, 2007, we signed a binding letter of intent with Rio Vista Energy Partners L.P. ("Rio Vista") to acquire Rio Vista's LPG terminal facility in Matamoros, Mexico;
two pipelines, together with associated rights of way and easements, which run from Brownsville, Texas to Matamoros, Mexico; and a permit to distribute liquefied petroleum gas to Mexico's state-owned
petroleum company. The total purchase price for the referenced assets is approximately $10.5 million, subject to adjustments at closing, and is expected to close prior to December 31,
2007. We advanced to Rio Vista approximately $6.5 million that will be applied as a credit towards the total purchase price. The advance is due and payable upon demand in the event the
transaction does not close prior to December 31, 2007 and is secured by certain of the assets included in the acquisition.

SUBSEQUENT EVENTS

On October 19, 2007, we announced a distribution of $0.50 per unit for the period from July 1, 2007 through September 30, 2007, payable on
November 6, 2007 to unitholders of record on October 31, 2007.

RESULTS OF OPERATIONSTHREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

In reviewing our historical results of operations, you should be aware that the accompanying consolidated financial statements include the assets, liabilities and
results of operations of certain TransMontaigne Inc. terminal and pipeline transportation operations prior to their acquisition by us from TransMontaigne Inc. The results of operations
of TransMontaigne Inc.'s terminals and pipelines prior to being acquired by us are reflected in the accompanying consolidated financial statements as being attributable to
TransMontaigne Inc. ("Predecessor"). The acquired assets and liabilities have been recorded at TransMontaigne Inc.'s carryover basis.

28

---



At
the closing of our initial public offering on May 27, 2005, we acquired from TransMontaigne Inc. seven Florida terminals, including terminals located in Tampa, Port
Manatee, Fisher Island, Port Everglades (North), Port Everglades (South), Cape Canaveral, and Jacksonville; and the Razorback Pipeline system, including the terminals located at Mt. Vernon, Missouri
and Rogers, Arkansas in exchange for 120,000 common units, 2,872,266 subordinated units, a 2% general partner interest, and a cash payment of approximately $111.5 million. On January 1,
2006, we acquired from TransMontaigne Inc. the Mobile, Alabama terminal in exchange for a cash payment of approximately $17.9 million (see Note 3 of Notes to consolidated
financial statements). On December 29, 2006, we acquired from TransMontaigne Inc. the Brownsville, Texas terminal, twelve terminals along the Mississippi and Ohio Rivers ("River
terminals"), and the Baton Rouge, Louisiana dock facility in
exchange for a cash payment of approximately $135.0 million (see Note 3 of Notes to consolidated financial statements). The acquisitions of terminal and pipeline operations from
TransMontaigne Inc. have been accounted for as transactions among entities under common control and, accordingly, prior periods include the activity of the acquired terminal and pipeline
operations since the date common control was established. For acquisitions made by us from TransMontaigne Inc. prior to September 1, 2006, common control was established as of the date
TransMontaigne Inc. purchased the terminal and pipeline operation. For acquisitions made by us from TransMontaigne Inc. on or after September 1, 2006, common control was
established as of September 1, 2006 (the date Morgan Stanley Capital Group purchased TransMontaigne Inc.).

The
historical results of operations reflect the impact of the following acquisitions:



Revenues.We derive revenues from our terminal and pipeline transportation operations by charging
fees for providing integrated terminaling, transportation and related services. Our revenues were as follows (in thousands):

Three months ended
September 30,2007

2006Throughput and additive injection fees, net

$
10,643

$
6,210Terminaling storage fees


7,120


4,328Pipeline transportation fees


481


580Management fees and reimbursed costs


327


347Other


2,135


2,385Revenues

$
20,706

$
13,850


29

---



The revenues of our business segments were as follows (in thousands):

Three months ended
September 30,2007

2006Gulf Coast terminals

$
10,833

$
9,728Midwest terminals and pipeline system


1,340


1,692Brownsville terminal (since September 1, 2006)


3,663


1,011River terminals (since September 1, 2006)


4,870


1,419Revenues

$
20,706

$
13,850


Effective
December 29, 2006, we acquired the Brownsville terminal, River terminals and the Baton Rouge, Louisiana dock facility from TransMontaigne Inc. The Brownsville
terminal, River terminals and the Baton Rouge, Louisiana dock facility are included in our results of operations from September 1, 2006, the date of Morgan Stanley Capital Group's acquisition
of TransMontaigne Inc.

Throughput and Additive Injection Fees, Net.We earn throughput fees for each barrel of product that
is distributed at our terminals by our customers. Terminal throughput fees are based on the volume of product distributed at the facility's truck loading racks, generally at a standard rate per barrel
of product. We provide additive injection services in connection with the delivery of product at our
terminals. These fees generally are based on the volume of product injected and delivered over the rack at our terminals. The throughput and additive injection fees, net by business segments were as
follows (in thousands):

Three months ended
September 30,2007

2006Gulf Coast terminals

$
7,205

$
4,695Midwest terminals and pipeline system


820


736Brownsville terminal (since September 1, 2006)


1,646


403River terminals (since September 1, 2006)


972


376Throughput and additive injection fees, net

$
10,643

$
6,210


Effective
April 1, 2007, we entered into a Terminaling Services Agreement with TransMontaigne Inc. for additional tank capacity at our Florida terminals. Effective
June 1, 2007, we entered into a Terminaling Services Agreement with Morgan Stanley Capital Group that replaced our terminaling services agreement with TransMontaigne Inc. relating to our
Florida, Mt. Vernon, Missouri and Rogers, Arkansas terminals. For the three months ended September 30, 2007, we recognized approximately $2.4 million of additional throughput and
additive injection fees, net due to an increase in rates charged and additional tank capacity provided for under the Terminaling Services Agreement with Morgan Stanley Capital Group.

Included
in throughput and additive injection fees, net for the three months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. and Morgan Stanley
Capital Group of approximately $8.7 million and $5.0 million, respectively.

Terminaling Storage Fees.We provide storage capacity at our terminals. Terminaling storage fees
generally are based on a rate per barrel of storage capacity per month and vary with the duration of

30

---



the
terminaling services agreement and the type of product. The terminaling storage fees by business segments were as follows (in thousands):

Three months ended
September 30,2007

2006Gulf Coast terminals

$
2,201

$
2,815Midwest terminals and pipeline system





Brownsville terminal (since September 1, 2006)


1,162


468River terminals (since September 1, 2006)


3,757


1,045Terminaling storage fees

$
7,120

$
4,328


Effective
April 1, 2007, certain Florida terminal storage agreements with third party customers expired, resulting in a decline of approximately $0.6 million in terminaling
storage fees. Upon expiration of these agreements, we granted TransMontaigne Inc. (and subsequently Morgan Stanley Capital Group) the right to throughput additional products utilizing that tank
capacity pursuant to their Terminaling Services Agreement.

Included
in terminaling storage fees for the three months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. and Morgan Stanley Capital Group of
approximately $60,000 and $60,000, respectively.

Pipeline Transportation Fees.We earn pipeline transportation fees at our Razorback Pipeline based on
the volume of product transported and the distance from the origin point to the delivery point. The Federal Energy Regulatory Commission regulates the tariff on the Razorback Pipeline. Included in
pipeline transportation fees for the three months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. and Morgan Stanley Capital Group of approximately
$0.5 million and $0.6 million, respectively.

Management Fees and Reimbursed Costs.We manage and operate for a major oil company certain tank
capacity at our Port Everglades (South) terminal and receive reimbursement of its proportionate share of operating and maintenance costs. We also manage and operate for an affiliate of Mexico's state-
owned petroleum company a bi-directional products pipeline connected to our Brownsville, Texas terminal facility and receive a management fee and reimbursement of costs. From
May 27, 2005 through August 31, 2006, we managed and operated on behalf of TransMontaigne Inc. certain tank capacity owned by a utility and received a management fee from
TransMontaigne Inc. Effective September 1, 2006, our agreement with TransMontaigne Inc. to manage and operate the utility's tank capacity was terminated. For the three months
ended September 30, 2006, we recognized management fees of approximately $202,000 for managing and operating on behalf of TransMontaigne Inc. certain tank capacity owned by the utility.
The management fees and reimbursed costs by business segments were as follows (in thousands):

Three months ended
September 30,2007

2006Gulf Coast terminals

$
32

$
263Midwest terminals and pipeline system





Brownsville terminal (since September 1, 2006)


295


84River terminals (since September 1, 2006)





Management fees and reimbursed costs

$
327

$
347


31

---



Included
in management fees and reimbursed costs for the three months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. of approximately $nil and
$0.2 million, respectively.

Other Revenue.We provide ancillary services including heating and mixing of stored products and
product transfer services. We also recognize gains from the sale of product to our affiliates resulting from the excess of product deposited by certain of our customers into our terminals over the
amount of product that the customer is contractually permitted to withdraw from those terminals. The other revenue by business segments were as follows (in thousands):

Three months ended
September 30,2007

2006Gulf Coast terminals

$
1,395

$
1,955Midwest terminals and pipeline system


39


376Brownsville terminal (since September 1, 2006)


560


56River terminals (since September 1, 2006)


141


(2
)Other revenue

$
2,135

$
2,385


Effective
September 1, 2006, we amended our Terminaling Services Agreement with TransMontaigne Inc. to eliminate the retention by us of a loss allowance on product receipts
at our Florida terminals. We continue to retain a loss allowance on product receipts at our Mobile and Oklahoma City terminals. Included in other revenue for the three months ended
September 30, 2007 and 2006, are product gains, including product retained under the product gain/loss allowance provisions in our terminaling services agreements with certain of our customers,
of approximately $0.3 million and $1.6 million, respectively.

Included
in other revenue for the three months ended September 30, 2007 and 2006, are amounts charged to TransMontaigne Inc. and Morgan Stanley Capital Group of
approximately $0.8 million and $1.6 million, respectively.

Costs and Expenses.The direct operating costs and expenses of our operations include the directly
related wages and employee benefits, utilities, communications, maintenance and repairs, property taxes, rent, vehicle expenses, environmental compliance costs, materials and supplies. The direct
operating costs and expenses of our operations were as follows (in thousands):

Three months ended
September 30,2007

2006Wages and employee benefits

$
2,638

$
1,639Utilities and communication charges


705


554Repairs and maintenance


3,139


2,520Office, rentals and property taxes


1,009


763Vehicles and fuel costs


580


500Environmental compliance costs


813


326Other


70


206Lessproperty and environmental insurance recoveries





Direct operating costs and expenses

$
8,954

$
6,508


32

---



The
direct operating costs and expenses of our business segments were as follows (in thousands):

Three months ended
September 30,2007

2006Gulf Coast terminals

$
4,405

$
4,837Midwest terminals and pipeline system


1,060


446Brownsville terminal (since September 1, 2006)


1,952


584River terminals (since September 1, 2006)


1,537


641Direct operating costs and expenses

$
8,954

$
6,508


Effective
December 29, 2006, we acquired the Brownsville terminal, River terminals and the Baton Rouge, Louisiana dock facility from TransMontaigne Inc. The Brownsville
terminal, River terminals and Baton Rouge, Louisiana dock facility are included in our results of operations from September 1, 2006, the date of Morgan Stanley Capital Group's acquisition of
TransMontaigne Inc.

The
direct general and administrative expenses of our operations include costs related to operating as a public entity, such as accounting and legal costs associated with annual and
quarterly reports and tax return and Schedule K-1 preparation and distribution, independent director fees and amortization of deferred equity-based compensation. Direct general and
administrative expenses were as follows (in thousands):

Three months ended
September 30,2007

2006Accounting and tax expenses

$
78

$
34Legal expenses


78


66Independent director fees and investor relations expenses


56


67Amortization of deferred equity-based compensation


22


180Acceleration of vesting of all outstanding restricted phantom units and restricted common units





3,258Provision for bad debts





75Other


54


81Direct general and administrative expenses

$
288

$
3,761


The
accompanying consolidated financial statements include allocated general and administrative charges from TransMontaigne Inc. for allocations of indirect corporate overhead to
cover costs of centralized corporate functions such as legal, accounting, treasury, insurance administration and claims processing, health, safety and environmental, information technology, human
resources, credit, payroll,
taxes, engineering and other corporate services. The allocated general and administrative expenses were approximately $1.8 million and $1.1 million for the three months ended
September 30, 2007 and 2006, respectively. For the three months ended September 30, 2007 and 2006, allocated general and administrative expenses include approximately $0.9 million
and $0.3 million, respectively, related to the Brownsville and River terminals.

The
accompanying consolidated financial statements also include allocated insurance charges from TransMontaigne Inc. for allocations of insurance premiums to cover costs of
insuring activities such as property, casualty, pollution, automobile, directors' and officers', and other insurable risks. The allocated insurance expenses were approximately $0.4 million and
$0.3 million for the three months ended September 30, 2007 and 2006, respectively. For the three months ended September 30, 2007 and

33

---



2006,
allocated insurance expense includes approximately $0.2 million and $54,000, respectively, related to the Brownsville and River terminals.

The
accompanying consolidated financial statements also include reimbursement of bonus awards for reimbursements paid to TransMontaigne Services Inc. towards bonus awards granted
by TransMontaigne Services Inc. to certain key officers and employees that vest over future service periods. The reimbursement of bonus awards was approximately $0.4 million and $nil for
the three months ended September 30, 2007 and 2006, respectively.

For
the three months ended September 30, 2007 and 2006, depreciation and amortization expense was approximately $3.5 million and $2.3 million, respectively. For the
three months ended September 30, 2007 and 2006, depreciation and amortization expense includes approximately $1.5 million and $0.4 million, respectively, related to the
Brownsville and River terminals.

RESULTS OF OPERATIONSNINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

Revenues.We derive revenues from our terminal and pipeline transportation operations by charging
fees for providing integrated terminaling, transportation and related services. Our revenues were as follows (in thousands):

Nine months ended
September 30,2007

2006Throughput and additive injection fees, net

$
31,210

$
18,017Terminaling storage fees


22,372


9,720Pipeline transportation fees


1,612


1,835Management fees and reimbursed costs


989


978Other


6,626


6,953Revenues

$
62,809

$
37,503


The
revenues of our business segments were as follows (in thousands):

Nine months ended
September 30,2007

2006Gulf Coast terminals

$
32,025

$
29,673Midwest terminals and pipeline system


4,570


5,400Brownsville terminal (since September 1, 2006)


11,730


1,011River terminals (since September 1, 2006)


14,484


1,419Revenues

$
62,809

$
37,503


Effective
December 29, 2006, we acquired the Brownsville terminal, River terminals and the Baton Rouge, Louisiana dock facility from TransMontaigne Inc. The Brownsville
terminal, River terminals and the Baton Rouge, Louisiana dock facility are included in our results of operations from September 1, 2006, the date of Morgan Stanley Capital Group's acquisition
of TransMontaigne Inc.

Throughput and Additive Injection Fees, Net.We earn throughput fees for each barrel of product that
is distributed at our terminals by our customers. Terminal throughput fees are based on the volume of product distributed at the facility's truck loading racks, generally at a standard rate per barrel
of product. We provide additive injection services in connection with the delivery of product at our terminals. These fees generally are based on the volume of product injected and delivered over the

34

---



rack
at our terminals. The throughput and additive injection fees, net by business segments were as follows (in thousands):

Nine months ended
September 30,2007

2006Gulf Coast terminals

$
21,264

$
14,889Midwest terminals and pipeline system


2,171


2,349Brownsville terminal (since September 1, 2006)


4,662


403River terminals (since September 1, 2006)


3,113


376Throughput and additive injection fees, net

$
31,210

$
18,017


Effective
September 1, 2006, we amended our Terminaling Services Agreement with TransMontaigne Inc. The amendment eliminated the retention by us of a loss allowance on
product receipts at our Florida terminals and the collection by us of a management fee for managing and operating on behalf of TransMontaigne Inc. certain tank capacity owned by a utility. In
exchange, the amendment provides for an increase in throughput fees charged on light and heavy oil volumes at our Florida terminals. Effective April 1, 2007, we entered into a Terminaling
Services Agreement with TransMontaigne Inc. for additional tank capacity at our Florida terminals. Effective June 1, 2007, we entered into a Terminaling Services Agreement with Morgan
Stanley Capital Group that replaced our terminaling services agreement with TransMontaigne Inc. relating to our Florida, Mt. Vernon, Missouri and Rogers, Arkansas terminals.

The
cumulative effect of the changes to these Terminaling Services Agreements resulted in approximately $5.6 million of additional throughput and additive injection fees, net for
the nine months ended September 30, 2007 as compared to the nine months ended September 30, 2006.

Included
in throughput and additive injection fees, net for the nine months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. and Morgan Stanley
Capital Group of approximately $24.5 million and $15.9 million, respectively.

Terminaling Storage Fees.We provide storage capacity at our terminals. Terminaling storage fees
generally are based on a rate per barrel of storage capacity per month and vary with the duration of the terminaling services agreement and the type of product. The terminaling storage fees by
business segments were as follows (in thousands):

Nine months ended
September 30,2007

2006Gulf Coast terminals

$
7,234

$
8,207Midwest terminals and pipeline system





Brownsville terminal (since September 1, 2006)


4,187


468River terminals (since September 1, 2006)


10,951


1,045Terminaling storage fees

$
22,372

$
9,720


Effective
April 1, 2007, certain Florida terminal storage agreements with third party customers expired, resulting in a decline of approximately $1.2 million in terminaling
storage fees. Upon expiration of these agreements, we granted TransMontaigne Inc. (and subsequently Morgan Stanley Capital Group) the right to throughput additional products utilizing that tank
capacity pursuant to their Terminaling Services Agreement.

35

---



Included
in terminaling storage fees for the nine months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. and Morgan Stanley Capital Group of
approximately $1.2 million and $0.2 million, respectively.

Pipeline Transportation Fees.We earn pipeline transportation fees at our Razorback Pipeline based on
the volume of product transported and the distance from the origin point to the delivery point. The Federal Energy Regulatory Commission regulates the tariff on the Razorback Pipeline. Included in
pipeline transportation fees for the nine months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. and Morgan Stanley Capital Group of approximately
$1.6 million and $1.8 million, respectively.

Management Fees and Reimbursed Costs.We manage and operate for a major oil company certain tank
capacity at our Port Everglades (South) terminal and receive reimbursement of its proportionate share of operating and maintenance costs. We also manage and operate for an affiliate of Mexico's state-
owned petroleum company a bi-directional products pipeline connected to our Brownsville, Texas terminal facility and receive a management fee and reimbursement of costs. From
May 27, 2005 through August 31, 2006, we managed and operated on behalf of TransMontaigne Inc. certain tank capacity owned by a utility and received a management fee from
TransMontaigne Inc. Effective September 1, 2006, our agreement with TransMontaigne Inc. to manage and operate the utility's tank capacity was terminated. For the nine months ended
September 30, 2006, we recognized management fees of approximately $756,000 for managing and operating on behalf of TransMontaigne Inc. certain tank capacity owned by the utility. The
management fees and reimbursed costs by business segments were as follows (in thousands):

Nine months
ended
September 30,2007

2006Gulf Coast terminals

$
133

$
894Midwest terminals and pipeline system





Brownsville terminal (since September 1, 2006)


856


84River terminals (since September 1, 2006)





Management fees and reimbursed costs

$
989

$
978


Included
in management fees and reimbursed costs for the nine months ended September 30, 2007 and 2006, are fees charged to TransMontaigne Inc. of approximately $nil and
$0.8 million, respectively.

Other Revenue.We provide ancillary services including heating and mixing of stored products and
product transfer services. We also recognize gains from the sale of product to our affiliates resulting from the excess of product deposited by certain of our customers into our terminals over the
amount of product that the customer is contractually permitted to withdraw from those terminals. The other revenue by business segments were as follows (in thousands):

Nine months ended
September 30,2007

2006Gulf Coast terminals

$
3,394

$
5,683Midwest terminals and pipeline system


787


1,216Brownsville terminal (since September 1, 2006)


2,025


56River terminals (since September 1, 2006)


420


(2
)Other revenue

$
6,626

$
6,953


36

---



Effective
September 1, 2006, we amended our Terminaling Services Agreement with TransMontaigne Inc. to eliminate the retention by us of a loss allowance on product receipts
at our Florida terminals. We continue to retain a loss allowance on product receipts at our Mobile and Oklahoma City terminals. Included in other revenue for the nine months ended September 30,
2007 and 2006, are product gains, including product retained under the product gain/loss allowance provisions in our terminaling services agreements with certain of our customers, of approximately
$1.4 million and $5.2 million, respectively.

Included
in other revenue for the nine months ended September 30, 2007 and 2006, are amounts charged to TransMontaigne Inc. and Morgan Stanley Capital Group of
approximately $2.0 million and $5.1 million, respectively.

Costs and Expenses.The direct operating costs and expenses of our operations include the directly
related wages and employee benefits, utilities, communications, maintenance and repairs, property taxes, rent, vehicle expenses, environmental compliance costs, materials and supplies. The direct
operating costs and expenses of our operations were as follows (in thousands):

Nine months ended
September 30,2007

2006Wages and employee benefits

$
8,424

$
4,298Utilities and communication charges


2,077


1,399Repairs and maintenance


10,236


5,962Office, rentals and property taxes


3,117


2,028Vehicles and fuel costs


1,642


1,453Environmental compliance costs


1,537


1,046Other


511


496Lessproperty and environmental insurance recoveries


(24
)

Direct operating costs and expenses

$
27,520

$
16,682


The
direct operating costs and expenses of our business segments were as follows (in thousands):

Nine months ended
September 30,2007

2006Gulf Coast terminals

$
13,650

$
14,263Midwest terminals and pipeline system


2,046


1,194Brownsville terminal (since September 1, 2006)


6,673


584River terminals (since September 1, 2006)


5,151


641Direct operating costs and expenses

$
27,520

$
16,682


Effective
December 29, 2006, we acquired the Brownsville terminal, River terminals and the Baton Rouge, Louisiana dock facility from TransMontaigne Inc. The Brownsville
terminal, River terminals and Baton Rouge, Louisiana dock facility are included in our results of operations from September 1, 2006, the date of Morgan Stanley Capital Group's acquisition of
TransMontaigne Inc.

The
direct general and administrative expenses of our operations include costs related to operating as a public entity, such as accounting and legal costs associated with annual and
quarterly reports and tax return and Schedule K-1 preparation and distribution, independent director fees and amortization

37

---



of
deferred equity-based compensation. Direct general and administrative expenses were as follows (in thousands):

Nine months ended
September 30,2007

2006Accounting and tax expenses

$
795

$
724Legal expenses


362


416Independent director fees and investor relations expenses


200


182Amortization of deferred equity-based compensation


44


610Acceleration of vesting of all outstanding restricted phantom units and restricted common units





3,258Provision for bad debts


83


75Other


158


268Direct general and administrative expenses

$
1,642

$
5,533


The
accompanying consolidated financial statements include allocated general and administrative charges from TransMontaigne Inc. for allocations of indirect corporate overhead to
cover costs of centralized corporate functions such as legal, accounting, treasury, insurance administration and claims processing, health, safety and environmental, information technology, human
resources, credit, payroll, taxes, engineering and other corporate services. The allocated general and administrative expenses were approximately $5.2 million and $2.8 million for the
nine months ended September 30, 2007 and 2006, respectively. For the nine months ended September 30, 2007 and 2006, allocated general and administrative expenses include approximately
$2.7 million and $0.3 million, respectively, related to the Brownsville and River terminals.

The
accompanying consolidated financial statements also include allocated insurance charges from TransMontaigne Inc. for allocations of insurance premiums to cover costs of
insuring activities such as property, casualty, pollution, automobile, directors' and officers', and other insurable risks. The allocated insurance expenses were approximately $1.2 million and
$0.8 million for the nine months ended
September 30, 2007 and 2006, respectively. For the nine months ended September 30, 2007 and 2006, allocated insurance expense includes approximately $0.5 million and $54,000,
respectively, related to the Brownsville and River terminals.

The
accompanying consolidated financial statements also include reimbursement of bonus awards for reimbursements paid to TransMontaigne Services Inc. towards bonus awards granted
by TransMontaigne Services Inc. to certain key officers and employees that vest over future service periods. The reimbursement of bonus awards was approximately $0.8 million and $nil for
the nine months ended September 30, 2007 and 2006, respectively.

For
the nine months ended September 30, 2007 and 2006, depreciation and amortization expense was approximately $9.9 million and $6.0 million, respectively. For the
nine months ended September 30, 2007 and 2006, depreciation and amortization expense includes approximately $4.1 million and $0.4 million, respectively, related to the Brownsville
and River terminals.

38

---





LIQUIDITY AND CAPITAL RESOURCES

Our primary liquidity needs are to fund our distributions to unitholders, fund our capital expenditures and fund our working capital requirements. Currently, our
principal sources of funds to meet our liquidity needs are cash generated by operations, borrowings under our senior secured credit facility and debt and equity offerings.

Excluding
acquisitions, capital expenditures for the nine months ended September 30, 2007 were approximately $7.0 million for terminal and pipeline facilities and assets to
support these facilities. Excluding acquisitions, budgeted capital projects to be initiated during the year ending December 31, 2007, are estimated to range up to $60 million, which
includes approximately $5.0 million of capital expenditures to maintain our existing facilities. The budgeted capital projects, which are expected to be completed during 2008, include the
following:

|Terminal        |  | Description of project                                                             |  | Incremental
Storage Capacity
|--------------- |  | ---------------------------------------------------------------------------------- |  | ----------------------------
|
|Brownsville     |  | Increase LPG tank capacity                                                         |  | 19,000                      
|Tampa           |  | Increase light oil tank capacity and improve truck rack capacity and functionality |  | 265,000                     
|Port Everglades |  | Increase light oil and residual oil tank capacity                                  |  | 900,000                     
|River           |  | Reactivate light oil tank capacity                                                 |  | 185,000                     

We
have begun discussions with TransMontaigne Inc. regarding the acquisition of its Southeast terminaling operations with an expectation of closing the transaction prior to
December 31, 2007. TransMontaigne Inc.'s Southeast terminaling operations currently include 24 terminals with an aggregate active storage capacity of approximately
8.5 million barrels. We plan to utilize our existing borrowing capacity under our Senior Secured Credit Facility to fund the acquisition of the Southeast terminaling operations.

Future
capital expenditures will depend on numerous factors, including the availability, economics and cost of appropriate acquisitions which we identify and evaluate; the economics,
cost and required regulatory approvals with respect to the expansion and enhancement of existing systems and facilities; customer demand for the services we provide; local, state and federal
governmental regulations; environmental compliance requirements; and the availability of debt financing and equity capital on acceptable terms.

Senior Secured Credit Facility.On December 22, 2006, we entered into an amended and restated
senior secured credit facility ("Senior Secured Credit Facility") with a consortium of lending institutions. At June 30, 2007, after repayment of the $75 million term loan outstanding
under the Senior Secured Credit Facility with a portion of the proceeds from our May 2007 secondary offering of common units, the Senior Secured Credit Facility provided for a
$150 million revolving credit facility. On July 12, 2007, we amended our Senior Secured Credit Facility to increase the maximum amount of the revolving credit line from
$150 million to $200 million. As a result, the Senior Secured Credit Facility provides for a maximum borrowing line of credit equal to the lesser of (i) $200 million and
(ii) four times Consolidated EBITDA (as defined; $142.0 million at September 30, 2007). In addition, at our request, the term loan commitment or the revolving loan commitment can
be increased up to an additional $50 million, in the aggregate, without the approval of the lenders, but subject to the approval of the administrative agent and the receipt of additional
commitments from one or more lenders. We may elect to have loans under the Senior Secured Credit Facility bear interest either (i) at a rate of LIBOR plus a margin ranging from 1.50% to 2.50%
depending on the total leverage ratio then in effect, or (ii) at the base rate (the greater of (a) the federal funds rate plus 0.5% or (b) the prime rate) plus a margin ranging
from 0.5% to 1.5% depending on the total leverage ratio then in effect. We also pay a commitment fee ranging from 0.30% to 0.50% per annum, depending on the total leverage ratio

39

---



then
in effect, on the total amount of unused commitments. Our obligations under the Senior Secured Credit Facility are secured by a first priority security interest in favor of the lenders in our
assets, including cash, accounts receivable, inventory, general intangibles, investment property, contract rights and real property.

The
terms of the Senior Secured Credit Facility include covenants that restrict our ability to make cash distributions and acquisitions. We may make distributions of cash to the extent
of our "available cash" as defined in our partnership agreement. We may make acquisitions meeting the definition of "permitted acquisitions" which include: acquisitions in which the consideration paid
for such acquisition, together with the consideration paid for other acquisitions in the same fiscal year, does not exceed $25 million; acquisitions that arise from the exercise of options
under the omnibus agreement with TransMontaigne Inc.; and acquisitions in which we have (1) provided the agent prior written documentation in form and substance reasonably satisfactory
to the agent demonstrating our pro forma compliance with all financial and other covenants contained in the Senior Secured Credit Facility after giving effect to such acquisition and
(2) satisfied all other conditions precedent to such acquisition which the agent may reasonably require in connection therewith. The principal balance of loans and any accrued and unpaid
interest are due and payable in full on the maturity date, December 22, 2011.

The
Senior Secured Credit Facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, absence of
defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). The primary
financial covenants contained in the Senior Secured Credit Facility are (i) a total leverage ratio test (not to exceed 4.5 times), (ii) a senior secured leverage ratio test (not to
exceed 4.0 times), and (iii) a minimum interest coverage ratio test (not to be less than 2.5 times through December 31, 2007, and not less than 2.75 times thereafter). These financial
covenants are based on a defined financial performance measure within the credit facility known as "Consolidated EBITDA."

For
each of the quarters ending on or before December 31, 2006, the Senior Secured Credit Facility stipulates our Consolidated EBITDA at approximately $9.0 million per
quarter for purposes of calculating the total leverage ratio and the senior secured leverage ratio. That assumption is reflected

40

---



in
the following calculation of the "total leverage ratio" and "senior secured leverage ratio" contained in the Senior Secured Credit Facility.

|                                                                                       |  | Three Months Ended |        |   |  
|-------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | -
|
|Financial performance debt covenant test:                                              |  |                    |        |   |  
|Consolidated EBITDA for the total leverage ratio, as stipulated in the credit facility |  | $                  | 9,025  |   | $
|Consolidated funded indebtedness                                                       |  |                    |        |   |  
|Total leverage ratio and senior secured leverage ratio                                 |  |                    |        |   |  
|Consolidated EBITDA for the interest coverage ratio                                    |  | $                  | 3,950  |   | $
|Consolidated interest expense, as stipulated in the credit facility                    |  | $                  | 935    |   | $
|Interest coverage ratio                                                                |  |                    |        |   |  
|Reconciliation of Consolidated EBITDA to cash flows provided by operating activities:  |  |                    |        |   |  
|Consolidated EBITDA for total leverage ratio                                           |  | $                  | 9,025  |   | $
|Less pro forma adjustments                                                             |  |                    | (5,075 | ) |  
|                                                                                       |  |                    |        |   |  
|Consolidated EBITDA for interest coverage ratio                                        |  |                    | 3,950  |   |  
|Consolidated interest expense                                                          |  |                    | (935   | ) |  
|Effects of our acquisition of Brownsville and River terminals on December 29, 2006     |  |                    | 2,362  |   |  
|Change in operating assets and liabilities                                             |  |                    | 4,026  |   |  
|                                                                                       |  |                    |        |   |  
|Cash flows provided by operating activities                                            |  | $                  | 9,403  |   | $
|                                                                                       |  |                    |        |   |  

If
we were to fail either financial performance covenant, or any other covenant contained in the Senior Secured Credit Facility, we would seek a waiver from our lenders under such
facility. If we were unable to obtain a waiver from our lenders and the default remained uncured after any applicable grace period, we would be in breach of the Senior Secured Credit Facility, and the
lenders would be entitled to declare all outstanding borrowings immediately due and payable.

We
believe that our future cash expected to be provided by operating activities, available borrowing capacity under our Senior Secured Credit Facility, and our relationship with
institutional lenders and equity investors should enable us to meet our planned capital and liquidity requirements through at least the maturity date of our Senior Secured Credit Facility
(December 2011).

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained in Item 3 updates, and should be read in conjunction with, information set forth in Part II, Item 7A in our Annual
Report on Form 10-K for the year ended December 31, 2006, in addition to the interim unaudited consolidated financial statements, accompanying notes and management's
discussion and analysis of financial condition and results of operations presented in Items 1 and 2 of this Quarterly Report on Form 10-Q. There are no material changes in
the market

41

---



risks
faced by us from those reported in our Annual Report on Form 10-K for the year ended December 31, 2006.

Market
risk is the risk of loss arising from adverse changes in market rates and prices. The principal market risk to which we are exposed is interest rate risk associated with
borrowings under our Senior Secured Credit Facility. Borrowings under our Senior Secured Credit Facility bear interest at a variable rate based on LIBOR or the lender's base rate. We currently do not
manage our exposure to interest rates, but we may in the future. At September 30, 2007, we had outstanding borrowings of approximately $2.8 million under our Senior Secured Credit
Facility. Based on the outstanding balance of our variable-interest-rate debt at September 30, 2007, and assuming market interest rates increase or decrease by 100 basis points, the
potential annual increase or decrease in interest expense is approximately $28,000.

We
generally do not purchase or market products that we handle or transport and, therefore, we do not have material direct exposure to changes in commodity prices, except for the value
of product gains and losses arising from our terminaling services agreements with certain of our customers. We do not use derivative commodity instruments to manage the commodity risk associated with
the product we may own at any given time. Generally, to the extent we are entitled to retain product pursuant to terminaling services agreements with certain of our customers, we sell the product to
TransMontaigne Inc. As a result, we do not have a material direct exposure to commodity price fluctuations.

ITEM 4.    CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit
to the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission's rules and forms, and that information is
accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to as our Certifying Officer), as appropriate to allow timely decisions
regarding required disclosure. Our management evaluated, with the participation of our Certifying Officer, the effectiveness of our disclosure controls and procedures as of September 30, 2007,
pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of September 30, 2007, our disclosure controls and
procedures were effective. There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.

42

---





Part II. Other Information

ITEM 1A.    RISK FACTORS

Important factors that could cause actual results to differ materially from our expectations and may adversely affect our business and results of operations,
include, but are not limited to:



These
risk factors are discussed in more detail in "Item 1A. Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2006, filed
with the Securities and Exchange Commission on March 16, 2007, and in "Risk Factors" in our Prospectus Supplement dated May 17, 2007 to our Prospectus dated May 10, 2007, as filed
with the Securities and Exchange Commission on May 18, 2007 (Securities Act File No. 333-142108), which risk factors are expressly incorporated into this report by reference.

43

---



ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Securities.The following table covers the purchases of our common units by, or on
behalf of, Partners during the three months ended September 30, 2007 covered by this report.

|Period    |  | Total
Number of
Common
Units
Purchased |  | Average Price
Paid per
Common Unit |       | Total Number of
Common Units
Purchased as Part of
Publicly Announced
Plans or Programs |     | Maximum Number
of Common Units that
May Yet Be Purchased
Under the Plans or
Programs
|--------- |  | -------------------------------------- |  | ---------------------------------- | ----- | -------------------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------------------
|July      |  | 200                                    |  | $                                  | 35.25 |                                                                                        | 200 |                                                                                     
|August    |  | 280                                    |  | $                                  | 31.85 |                                                                                        | 280 |                                                                                     
|September |  | 360                                    |  | $                                  | 33.09 |                                                                                        | 360 |                                                                                     
|          |  |                                        |  |                                    |       |                                                                                        |     |                                                                                     
|          |  | 840                                    |  | $                                  | 33.22 |                                                                                        | 840 |                                                                                     
|          |  |                                        |  |                                    |       |                                                                                        |     |                                                                                     

---

All
repurchases were made in the open market pursuant to a program announced on May 7, 2007 for the repurchase, from time to time, of our outstanding common units for purposes of making
subsequent grants of restricted phantom units under our Long-Term Incentive Plan to non-officer directors of our general partner. Pursuant to the terms of the repurchase plan,
we anticipate repurchasing annually up to 10,000 common units. As of September 30, 2007, we have repurchased 840 common units with approximately $28,000 of aggregate market value for this
purpose. Unless we choose to terminate the repurchase program earlier, the repurchase program terminates on the earlier to occur of May 31, 2012; our liquidation, dissolution, bankruptcy or
insolvency; the public announcement of a tender or exchange offer for the common units; or a merger, acquisition, recapitalization, business combination or other occurrence of a "Change of Control"
under the TransMontaigne Services Inc. Long-Term Incentive Plan.

44

---



ITEM 6.    EXHIBITS

Exhibits:

|10.1 |  | First Amendment to Amended and Restated Senior Secured Credit Facility, dated July 12, 2007, by and among TransMontaigne Operating Company L.P., a Delaware limited partnership, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as syndication
agents, BNP Paribas and Société Générale, New York Branch, as the documentation agents, Wachovia Bank, National Association, as administrative agent, and the other lenders a party thereto (filed as exhibit 10.1 to
TransMontaigne Partners L.P.'s Current Report on Form 8-K (Commission File No. 001-32505) on July 18, 2007 and incorporated herein by reference).
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2 |  | Increased Commitment Supplement, dated July 12, 2007, by and among TransMontaigne Operating Company L.P., Wachovia Bank, National Association, as administrative agent, and the other lenders a party thereto (filed as exhibit 10.2 to
TransMontaigne Partners L.P.'s Current Report on Form 8-K (Commission File No. 001-32505) on July 18, 2007 and incorporated herein by reference).                                                                                                                                                                                                                                   
|31.1 |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|32.1 |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                              

45

---





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.

|                        |  | TRANSMONTAIGNE PARTNERS L.P.(Registrant)
|----------------------- |  | ----------------------------------------
|Dated: November 7, 2007 |  | By:                                     
|                        |  | By:                                     

46

---



EXHIBIT INDEX

|Exhibit
Number |  | Description of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1           |  | First Amendment to Amended and Restated Senior Secured Credit Facility, dated July 12, 2007, by and among TransMontaigne Operating Company L.P., a Delaware limited partnership, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as syndication
agents, BNP Paribas and Société Générale, New York Branch, as the documentation agents, Wachovia Bank, National Association, as administrative agent, and the other lenders a party thereto (filed as exhibit 10.1 to
TransMontaigne Partners L.P.'s Current Report on Form 8-K (Commission File No. 001-32505) on July 18, 2007 and incorporated herein by reference).
|10.2           |  | Increased Commitment Supplement, dated July 12, 2007, by and among TransMontaigne Operating Company L.P., Wachovia Bank, National Association, as administrative agent, and the other lenders a party thereto (filed as exhibit 10.2 to
TransMontaigne Partners L.P.'s Current Report on Form 8-K (Commission File No. 001-32505) on July 18, 2007 and incorporated herein by reference).                                                                                                                                                                                                                                   
|31.1           |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|32.1           |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                              

---