<PAGE>   1

================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

             For the Quarter Ended September 30, 1999


                          Commission File No. 1-10403

                             TEPPCO PARTNERS, L.P.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                               <C>
              Delaware                                     76-0291058
      (State of Incorporation                           (I.R.S. Employer
          or Organization)                           Identification Number)
</TABLE>


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

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


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No
                                             ---    ---

================================================================================

<PAGE>   2

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                              TEPPCO PARTNERS, L.P.

                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                       September 30,    December 31,
                                                           1999             1998
                                                       ------------     ------------
                                                       (Unaudited)
<S>                                                    <C>              <C>
                                       ASSETS
Current assets:
  Cash and cash equivalents ......................     $     31,529     $     47,423
  Short-term investments .........................            3,910            3,269
  Accounts receivable, trade .....................          182,424          113,541
  Inventories ....................................           18,535           17,803
  Other ..........................................            4,429            3,909
                                                       ------------     ------------
     Total current assets ........................          240,827          185,945
                                                       ------------     ------------
Property, plant and equipment, at cost
  (Net of accumulated depreciation and
  amortization of $212,924 and $193,858) .........          711,868          671,611
Investments ......................................            5,244            6,490
Intangible assets ................................           35,405           36,842
Other assets .....................................           16,932           16,031
                                                       ------------     ------------
     Total assets ................................     $  1,010,276     $    916,919
                                                       ============     ============

                          LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
  Accounts payable and accrued liabilities .......     $    179,351     $    117,933
  Accounts payable, general partner ..............            4,275            2,815
  Accrued interest ...............................            6,408           13,039
  Other accrued taxes ............................            8,541            6,739
  Other ..........................................           16,587            9,649
                                                       ------------     ------------
     Total current liabilities ...................          215,162          150,175
                                                       ------------     ------------
Senior Notes .....................................          389,745          389,722
Other long-term debt .............................           66,000           38,000
Other liabilities and deferred credits ...........            3,574            3,407
Minority interest ................................            3,396            3,393
Redeemable Class B Units held by related party ...          105,507          105,036
Partners' capital:
General partner's interest .......................              390             (380)
Limited partners' interests ......................          226,502          227,566
                                                       ------------     ------------
     Total partners' capital .....................          226,892          227,186
                                                       ------------     ------------
     Total liabilities and partners' capital .....     $  1,010,276     $    916,919
                                                       ============     ============
</TABLE>


          See accompanying Notes to Consolidated Financial Statements.


                                       2

<PAGE>   3

                              TEPPCO PARTNERS, L.P.

                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

<TABLE>
<CAPTION>
                                                            THREE MONTHS      THREE MONTHS      NINE MONTHS       NINE MONTHS
                                                                ENDED             ENDED             ENDED             ENDED
                                                            SEPTEMBER 30,     SEPTEMBER 30,     SEPTEMBER 30,     SEPTEMBER 30,
                                                                1999              1998              1999              1998
                                                            ------------      ------------      ------------      ------------
<S>                                                         <C>               <C>               <C>               <C>
Operating revenues:
  Sales of crude oil and petroleum products ...........     $    497,758      $         --      $  1,118,288      $         --
  Transportation - Refined products ...................           33,448            35,316            92,397            90,533
  Transportation - LPGs ...............................            9,484            10,625            46,173            42,202
  Transportation - Crude oil and NGLs .................            2,963                --             8,499                --
  Mont Belvieu operations .............................            3,329             2,848             9,584             7,936
  Other - net .........................................            7,386             5,440            20,868            15,323
                                                            ------------      ------------      ------------      ------------
    Total operating revenues ..........................          554,368            54,229         1,295,809           155,994
                                                            ------------      ------------      ------------      ------------

Costs and expenses:
  Purchases of crude oil and petroleum products .......          490,604                --         1,098,634                --
  Operating, general and administrative ...............           24,358            18,366            69,661            51,182
  Operating fuel and power ............................            8,238             7,550            23,225            20,315
  Depreciation and amortization .......................            8,163             6,651            24,456            19,356
  Taxes - other than income taxes .....................            2,599             1,940             7,942             6,976
                                                            ------------      ------------      ------------      ------------
    Total costs and expenses ..........................          533,962            34,507         1,223,918            97,829
                                                            ------------      ------------      ------------      ------------

    Operating income ..................................           20,406            19,722            71,891            58,165

Interest expense ......................................           (8,085)           (7,550)          (23,407)          (22,227)
Interest capitalized ..................................              705               121             1,194               638
Other income - net ....................................              481               571             1,612             2,251
                                                            ------------      ------------      ------------      ------------
    Income before minority interest and
       extraordinary loss on debt extinguishment ......           13,507            12,864            51,290            38,827
Minority interest .....................................             (137)             (130)             (519)             (392)
                                                            ------------      ------------      ------------      ------------
    Income before extraordinary loss
     on debt extinguishment ...........................           13,370            12,734            50,771            38,435
                                                            ------------      ------------      ------------      ------------
Extraordinary loss on debt extinguishment,
     net of minority interest .........................               --                --                --           (72,767)
                                                            ------------      ------------      ------------      ------------

    Net income (loss) .................................     $     13,370      $     12,734      $     50,771      $    (34,332)
                                                            ============      ============      ============      ============

Basic and diluted income (loss) per Limited Partner
  and Class B Unit:
    Income before extraordinary loss ..................     $       0.32      $       0.39      $       1.34      $       1.19
    Extraordinary loss on debt extinguishment .........               --                --                --             (2.26)
                                                            ------------      ------------      ------------      ------------
    Net income (loss) .................................     $       0.32      $       0.39      $       1.34      $      (1.07)
                                                            ============      ============      ============      ============
Weighted average Limited Partner and Class B Units
   outstanding ........................................           32,917            29,000            32,917            29,000
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.


                                          3

<PAGE>   4

                              TEPPCO PARTNERS, L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  NINE MONTHS       NINE MONTHS
                                                                                     ENDED             ENDED
                                                                                  SEPTEMBER 30,     SEPTEMBER 30,
                                                                                      1999              1998
                                                                                  ------------      ------------
<S>                                                                               <C>               <C>
Cash flows from operating activities:
 Net income (loss) ..........................................................     $     50,771      $    (34,332)
 Adjustments to reconcile net income (loss) to cash provided by operating
  activities:
  Depreciation and amortization .............................................           24,456            19,356
  Extraordinary loss on early extinguishment of debt, net
     of minority interest ...................................................               --            72,767
  Gain on sale of property, plant and equipment .............................               --              (356)
  Equity in loss of affiliate ...............................................              339               182
  Decrease (increase) in accounts receivable, trade .........................          (68,883)            3,788
  Increase in inventories ...................................................             (732)             (795)
  Decrease (increase) in other current assets ...............................             (520)            1,818
  Increase (decrease) in accounts payable and accrued expenses ..............           64,987            (5,427)
  Other .....................................................................           (1,286)           (1,615)
                                                                                  ------------      ------------
    Net cash provided by operating activities ...............................           69,132            55,386
                                                                                  ------------      ------------

Cash flows from investing activities:
  Proceeds from cash investments ............................................            3,840             2,105
  Purchases of cash investments .............................................           (3,235)               --
  Purchase of fractionator assets and related intangible assets .............               --           (40,000)
  Proceeds from the sale of property, plant and equipment ...................               --               525
  Purchase of crude oil system ..............................................           (2,250)               --
  Capital expenditures ......................................................          (60,427)          (15,200)
                                                                                  ------------      ------------
    Net cash used in investing activities ...................................          (62,072)          (52,570)
                                                                                  ------------      ------------

Cash flows from financing activities:
  Principal payment, First Mortgage Notes ...................................               --          (326,512)
  Prepayment premium, First Mortgage Notes ..................................               --           (70,093)
  Issuance of Senior Notes ..................................................               --           389,694
  Debt issuance costs, Senior Notes .........................................               --            (3,651)
  Proceeds from term loan ...................................................           25,000            38,000
  Proceeds from revolving credit agreement ..................................            8,000                --
  Repayments on revolving credit agreement ..................................           (5,000)               --
  Distributions .............................................................          (50,954)          (42,097)
                                                                                  ------------      ------------
    Net cash used in financing activities ...................................          (22,954)          (14,659)
                                                                                  ------------      ------------

Net decrease in cash and cash equivalents ...................................          (15,894)          (11,843)

Cash and cash equivalents at beginning of period ............................           47,423            43,961
                                                                                  ------------      ------------
Cash and cash equivalents at end of period ..................................     $     31,529      $     32,118
                                                                                  ============      ============

Supplemental disclosure of cash flows:
Interest paid during the period (net of capitalized interest) ...............     $     28,501      $     26,210
                                                                                  ============      ============
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.


                                        4

<PAGE>   5


                              TEPPCO PARTNERS, L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

         TEPPCO Partners, L.P. (the "Partnership"), a Delaware limited
partnership, was formed in March 1990. The Partnership operates through TE
Products Pipeline Company, Limited Partnership (the "Products OLP") and TCTM,
L.P. (the "Crude Oil OLP"). Collectively the Products OLP and the Crude Oil OLP
are referred to as "the Operating Partnerships." The Partnership owns a 99%
interest as the sole limited partner interest in both the Products OLP and the
Crude Oil OLP. Texas Eastern Products Pipeline Company (the "Company" or
"General Partner"), an indirect wholly-owned subsidiary of Duke Energy
Corporation ("Duke Energy"), owns a 1% general partner interest in the
Partnership and 1% general partner interest in each Operating Partnership. The
Company, as general partner, performs all management and operating functions
required for the Partnership pursuant to the Agreements of Limited Partnership
of the Partnership, the Products OLP and the Crude Oil OLP (the "Partnership
Agreements"). The general partner is reimbursed by the Partnership for all
reasonable direct and indirect expenses incurred in managing the Partnership.

         The accompanying unaudited consolidated financial statements reflect
all adjustments, which are, in the opinion of management, of a normal and
recurring nature and necessary for a fair statement of the financial position of
the Partnership as of September 30, 1999, and the results of operations and cash
flows for the periods presented. The results of operations for the nine months
ended September 30, 1999, are not necessarily indicative of results of
operations for the full year 1999. The interim financial statements should be
read in conjunction with the Partnership's consolidated financial statements and
notes thereto presented in the TEPPCO Partners, L.P. Annual Report on Form 10-K
for the year ended December 31, 1998. Certain amounts from the prior year have
been reclassified to conform to current presentation.

         The Partnership operates in two industry segments: refined products and
liquefied petroleum gases ("LPGs") transportation, and crude oil and natural gas
liquids ("NGLs") transportation and marketing. The Partnership's reportable
segments offer different products and services and are managed separately
because each requires different business strategies. The crude oil and NGLs
transportation segment was acquired as a unit, and the management at the time of
the acquisition was retained. The interstate transportation operations of both
segments, including rates charged to customers, are subject to regulations
prescribed by the Federal Energy Regulatory Commission ("FERC"). Refined
products, LPGs, crude oil and NGLs are referred to herein, collectively, as
"petroleum products" or "products."

         Basic net income per Unit is computed by dividing net income, after
deduction of the general partner's interest, by the weighted average number of
Limited Partner and Class B Units outstanding (a total of 32,916,547 Units and
29,000,000 Units as of September 30, 1999 and 1998, respectively). The general
partner's percentage interest in net income is based on its percentage of cash
distributions from Available Cash for each period (see Note 7. Cash
Distributions). The general partner was allocated $6.5 million (12.89%) of the
net income for the nine months ended September 30, 1999, and $3.2 million
(9.38%) of the net loss for the nine months ended September 30, 1998.

         Diluted net income per Unit is similar to the computation of basic net
income per Unit above, except that the denominator was increased to include the
dilutive effect of outstanding Unit options by application of the treasury stock
method. For the quarters ended September 30, 1999 and 1998, the denominator was
increased by 26,142 Units and 41,884 Units, respectively. For the nine months
ended September 30, 1999 and 1998, the denominator was increased by 19,595 Units
and 46,468 Units, respectively.


                                       5

<PAGE>   6



                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
standards for and disclosures of derivative instruments and hedging activities.
In July 1999, the FASB issued SFAS No. 137 to delay the effective date of SFAS
No. 133 until fiscal years beginning after June 15, 2000. The Partnership
expects to adopt this standard effective January 1, 2001. The Partnership has
not determined the impact of this statement on its financial condition and
results of operations.

NOTE 3. RELATED PARTY TRANSACTIONS

         As of March 31, 1998, TEPPCO Colorado, LLC ("TEPPCO Colorado"), a
wholly-owned subsidiary of the Products OLP, purchased two fractionation
facilities located in Weld County, Colorado, from Duke Energy Field Services,
Inc. ("DEFS"), a wholly-owned subsidiary of Duke Energy. TEPPCO Colorado and
DEFS entered into a twenty year Fractionation Agreement, whereby TEPPCO Colorado
will receive a variable fee for all fractionated volumes delivered to DEFS. The
purchase price of these transactions was $40 million. Intangible assets include
$38 million of value assigned to the Fractionation Agreement, which will be
amortized on a straight-line method over the term of the Fractionation
Agreement. The remaining purchase price of $2.0 million was allocated to the
fractionator facilities purchased. TEPPCO Colorado and DEFS also entered into an
Operations and Management Agreement, whereby DEFS will operate and maintain the
fractionation facilities. TEPPCO Colorado pays DEFS a set volumetric rate for
all fractionated volumes delivered to DEFS.

         Effective November 1, 1998, the Crude Oil OLP, through its wholly-owned
subsidiary TEPPCO Crude Oil, LLC ("TCO"), acquired substantially all of the
assets of Duke Energy Transport and Trading Company ("DETTCO") from Duke Energy
for approximately $106 million. In consideration for such assets, Duke Energy
received 3,916,547 Class B Limited Partnership Units ("Class B Units"). The
Class B Units are substantially identical to the 29,000,000 Limited Partner
Units, except they are not listed on the New York Stock Exchange. The Class B
Units may be convertible into Limited Partner Units upon approval by the Limited
Partner Unitholders. The Company does not currently anticipate seeking approval
for the conversion of the Class B Units prior to March 2000. After March 2000,
the holder of the Class B Units will have the right to sell them to the
Partnership at 95.5% of the market price of the Limited Partner Units at the
time of sale. As a result of such option, the Class B Units were not included in
partners' capital at September 30, 1999. Collectively, the Limited Partner Units
and Class B Units are referred to as "Units." The transaction was accounted for
under the purchase method of accounting. Accordingly, the results of the
acquisition are included in the consolidated statements of income for periods
from November 1, 1998.

NOTE 4. INVESTMENTS

SHORT-TERM INVESTMENTS

         The Partnership routinely invests cash in liquid short-term investments
as part of its cash management program. Investments with maturities at date of
purchase of 90 days or less are considered cash equivalents. At September 30,
1999, short-term investments included $3.9 million of investment-grade corporate
notes, which mature within one year. Such investments at September 30, 1999
included a $0.9 million investment in Duke Power Company corporate notes. All
short-term investments are classified as held-to-maturity securities and are
stated at amortized cost. The aggregate fair value of such securities
approximates amortized cost at September 30, 1999.

                                       6

<PAGE>   7

                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


LONG-TERM INVESTMENTS

         At September 30, 1999, the Partnership had $5.2 million invested in
investment-grade corporate notes, which have varying maturities through 2004.
These securities are classified as held-to-maturity securities and are stated at
amortized cost. The aggregate fair value of such securities approximates
amortized cost at September 30, 1999.

NOTE 5. INVENTORIES

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

<TABLE>
<CAPTION>
                                            SEPTEMBER 30,   DECEMBER 31,
                                                1999           1998
                                             ----------     ----------
<S>                                          <C>            <C>
Gasolines ..............................     $      924     $    4,224
Propane ................................            576          1,503
Butanes ................................          2,392          1,654
Fuel oil ...............................            524            564
Crude oil ..............................          7,787          2,886
Other products .........................          2,541          3,306
Materials and supplies .................          3,791          3,666
                                             ----------     ----------
          Total ........................     $   18,535     $   17,803
                                             ==========     ==========
</TABLE>


         The costs of inventories were lower than market at September 30, 1999,
and December 31, 1998.

NOTE 6.  LONG TERM DEBT

SENIOR NOTES

         On January 27, 1998, the Products OLP completed the issuance of $180
million principal amount of 6.45% Senior Notes due 2008, and $210 million
principal amount of 7.51% Senior Notes due 2028 (collectively the "Senior
Notes"). The 6.45% Senior Notes due 2008 are not subject to redemption prior to
January 15, 2008. The 7.51% Senior Notes due 2028 may be redeemed at any time
after January 15, 2008, at the option of the Products OLP, in whole or in part,
at a premium. Net proceeds from the issuance of the Senior Notes totaled
approximately $386 million and was used to repay in full the $61.0 million
principal amount of the 9.60% Series A First Mortgage Notes, due 2000, and the
$265.5 million principal amount 10.20% Series B First Mortgage Notes, due 2010.
The premium for the early redemption of the First Mortgage Notes totaled $70.1
million. The Partnership recorded an extraordinary charge of $73.5 million
during the first quarter of 1998 (including $0.7 million allocated to minority
interest), which represents the redemption premium of $70.1 million and
unamortized debt issue costs related to the First Mortgage Notes of $3.4
million.

         The Senior Notes do not have sinking fund requirements. Interest on the
Senior Notes is payable semiannually in arrears on January 15 and July 15 of
each year. The Senior Notes are unsecured obligations of the Products OLP and
will rank on a parity with all other unsecured and unsubordinated indebtedness
of the Products OLP. The indenture governing the Senior Notes contains
covenants, including, but not limited to, covenants limiting (i) the creation of
liens securing indebtedness and (ii) sale and leaseback transactions. However,
the indenture does not limit the Partnership's ability to incur additional
indebtedness.


                                       7

<PAGE>   8


                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


OTHER LONG TERM DEBT

         In connection with the purchase of the fractionation assets from DEFS
as of March 31, 1998, TEPPCO Colorado received a $38 million bank loan from
SunTrust Bank. Proceeds from the loan were received on April 21, 1998. TEPPCO
Colorado paid interest to DEFS at a per annum rate of 5.75% on the amount of the
total purchase price outstanding for the period from March 31, 1998 until April
21, 1998. The SunTrust loan bears interest at a rate of 6.53%, which is payable
quarterly beginning in July 1998. The principal balance of the loan is payable
in full on April 21, 2001. The Products OLP is guarantor on the loan.

         On May 17, 1999, the Products OLP entered into a $75 million term loan
agreement to finance construction of three new pipelines between the
Partnership's terminal in Mont Belvieu, Texas and Port Arthur, Texas. The loan
agreement has a term of five years. SunTrust Bank is the administrator of the
loan. Approximately $39.7 million of construction cost was included in capital
expenditures during the first nine months of 1999, with a total of approximately
$44.6 million expected to be incurred in 1999, and the remainder in 2000. At
September 30, 1999, $25 million was outstanding under the term loan agreement.
Principal will be paid quarterly as follows, with the remaining principal
balance payable on May 17, 2004.

<TABLE>
<CAPTION>
                QUARTERLY PERIODS ENDING                PAYMENT AMOUNT
                ------------------------                --------------
<S>         <C>                                         <C>
            June 2001 through March 2002                $2.50 million
            June 2002 through March 2003                $3.75 million
            June 2003 through March 2004                $5.00 million
</TABLE>

         The interest rate for the $75 million term loan is based on the
borrower's option of either SunTrust Bank's prime rate, the federal funds rate
or LIBOR rate in effect at the time of the borrowings and is adjusted monthly,
bimonthly, quarterly or semi-annually. Interest is payable quarterly from the
time of borrowing. The current interest rate for amounts outstanding under the
term loan is 6.33%. Commitment fees for the term loan totaled approximately
$47,000 for the period from May 17, 1999 through September 30, 1999.

WORKING CAPITAL FACILITIES

         On May 17, 1999, the Products OLP entered into a $25 million revolving
credit agreement and TCO entered into a $30 million revolving credit agreement.
SunTrust Bank is the administrative agent on both revolving credit agreements.
The $25 million revolving credit agreement has a five year term and the $30
million revolving credit agreement has a three year term. The interest rate on
both agreements is based on the borrower's option of either SunTrust Bank's
prime rate, the federal funds rate or LIBOR rate in effect at the time of the
borrowings and is payable quarterly. Interest rates are adjusted monthly,
bimonthly, quarterly or semi-annually. The Products OLP has not made any
borrowings under this revolving credit facility. TCO had $3 million principal
amount outstanding under its revolving credit agreement as of September 30,
1999. Commitment fees for the revolving credit agreements totaled approximately
$50,000 for the period from May 17, 1999 through September 30, 1999.

         In connection with the purchase of the DETTCO assets by TCO, Duke
Capital also agreed to guarantee the payment by TCO and its subsidiaries under
certain commercial contracts between TCO and its subsidiaries and third parties.
Duke Capital will provide up to $100 million of guarantee credit to TCO and its
subsidiaries for a period of three years from November 30, 1998. Pursuant to
this agreement, the Partnership has agreed to pay Duke Capital a commitment fee
of $100,000 per year.


                                       8

<PAGE>   9

                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


NOTE 7. CASH DISTRIBUTIONS

         The Partnership makes quarterly cash distributions of all of its
Available Cash, generally defined as consolidated cash receipts less
consolidated cash disbursements and cash reserves established by the general
partner in its sole discretion.

         On August 6, 1999, the Partnership paid the second quarter cash
distribution of $0.475 per Limited Partner Unit and Class B Unit to Unitholders
of record on July 30, 1999. Additionally, on October 18, 1999, the Partnership
declared a cash distribution of $0.475 per Limited Partner Unit and Class B Unit
for the quarter ended September 30, 1999. The distribution was paid on November
5, 1999, to Unitholders of record on October 29, 1999.

         The Company receives incremental incentive distributions of 15%, 25%
and 50% of the amount by which quarterly distributions of Available Cash exceed
$0.275, $0.325 and $0.45 per Limited Partner Unit and Class B Unit,
respectively. During the nine months ended September 30, 1999 and 1998,
incentive distributions paid to the Company totaled $5.4 million and $3.6
million, respectively.

NOTE 8. SEGMENT DATA

         The Partnership operates in two industry segments: refined products and
LPGs transportation, which operates through the Products OLP; and crude oil and
NGLs transportation and marketing, which operates through the Crude Oil OLP.

         Operations of the Products OLP consist of interstate transportation,
storage and terminaling of petroleum products; short-haul shuttle transportation
of LPGs at the Mont Belvieu, Texas complex; sale of product inventory;
fractionation of natural gas liquids and other ancillary services. The Products
OLP is one of the largest pipeline common carriers of refined petroleum products
and LPGs in the United States. The Partnership owns and operates an approximate
4,300-mile pipeline system extending from southeast Texas through the central
and midwestern United States to the northeastern United States.

         The Crude Oil OLP gathers, stores, transports and markets crude oil,
principally in Oklahoma and Texas; operates two trunkline NGL pipelines in South
Texas; and distributes lube oil to industrial and commercial accounts. The Crude
Oil OLP's gathering, transportation and storage assets include approximately
2,200 miles of pipeline and 1.3 million barrels of storage. The crude oil and
NGLs transportation and marketing segment was added with the acquisition from
DETTCO effective November 1, 1998.





                                       9


<PAGE>   10

                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)



         The below table includes interim financial information by business
segment for the quarter and nine months ended September 30, 1999. Comparative
data has not been included as the Partnership operated as one business segment
prior to November 1, 1998.

<TABLE>
<CAPTION>
(in thousands):                                     Products         Crude Oil
                                                       OLP               OLP          Consolidated
                                                  ------------      ------------      ------------
<S>                                               <C>               <C>               <C>
Three Months Ended September 30, 1999:
 Unaffiliated revenues ......................     $     53,647      $    500,721      $    554,368
 Operating expenses, including power ........           29,670           496,129           525,799
 Depreciation and amortization expense ......            6,774             1,389             8,163
                                                  ------------      ------------      ------------
      Operating income ......................           17,203             3,203            20,406
 Interest expense, net ......................           (7,287)              (93)           (7,380)
 Other income, net ..........................              243               101               344
                                                  ------------      ------------      ------------
      Net income ............................     $     10,159      $      3,211      $     13,370
                                                  ============      ============      ============

 Nine Months Ended September 30, 1999:
 Unaffiliated revenues ......................     $    169,022      $  1,126,787      $  1,295,809
 Operating expenses, including power ........           84,713         1,114,749         1,199,462
 Depreciation and amortization expense ......           20,307             4,149            24,456
                                                  ------------      ------------      ------------
      Operating income ......................           64,002             7,889            71,891
 Interest expense, net ......................          (22,098)             (115)          (22,213)
 Other income, net ..........................              817               276             1,093
                                                  ------------      ------------      ------------
      Net income ............................     $     42,721      $      8,050      $     50,771
                                                  ============      ============      ============

As of September 30, 1999:
 Identifiable assets ........................     $    711,527      $    298,749      $  1,010,276
 Accounts receivable, trade .................           15,606           166,818           182,424
 Accounts payable and accrued liabilities ...     $      5,794      $    173,557      $    179,351
</TABLE>


NOTE 9. COMMITMENTS AND CONTINGENCIES

         The Partnership is involved in various claims and legal proceedings
incidental to its business. In the opinion of management, these claims and legal
proceedings will not have a material adverse effect on the Partnership's
consolidated financial position or results of operations.

         The operations of the Partnership are subject to federal, state and
local laws and regulations relating to protection of the environment. Although
the Partnership believes the operations of the pipeline system are in material
compliance with applicable environmental regulations, risks of significant costs
and liabilities are inherent in pipeline operations, and there can be no
assurance that significant costs and liabilities will not be incurred. Moreover,
it is possible that other developments, such as increasingly strict
environmental laws and regulations and enforcement policies thereunder, and
claims for damages to property or persons resulting from the operations of the
pipeline system, could result in substantial costs and liabilities to the
Partnership. The Partnership does not anticipate that changes in environmental
laws and regulations will have a material adverse effect on its financial
position, operations or cash flows in the near term.

         The Partnership and the Indiana Department of Environmental Management
("IDEM") have entered into an Agreed Order that will ultimately result in a
remediation program for any on-site and off-site groundwater contamination
attributable to the Partnership's operations at the Seymour, Indiana, terminal.
A Feasibility Study,


                                       10

<PAGE>   11

                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


which includes the Partnership's proposed remediation program, has been approved
by IDEM. IDEM will issue a Record of Decision formally approving the remediation
program. After the Record of Decision has been issued, the Partnership will
enter into an Agreed Order for the continued operation and maintenance of the
program. The Partnership will evaluate the conditions of the Record of Decision
and make adjustments to the program as required. The amount accrued for the
program was approximately $0.4 million at September 30, 1999. In the opinion of
the Company, the completion of the remediation program being proposed by the
Partnership, if such program is approved by IDEM, will not have a material
adverse impact on the Partnership's financial condition, results of operations
or liquidity.

         In 1997, the Company initiated a program to prepare the Partnership's
process controls and business computer systems for the "Year 2000" issue.
Process controls are the automated equipment including hardware and software
systems which run operational activities. Business computer systems are the
computer hardware and software used by the Partnership. The Partnership is
utilizing both internal and external resources to identify, test, remediate or
replace all critical known or discovered non-compliant computerized systems and
applications. The Company continues to evaluate appropriate courses of
corrective action, including replacement of certain systems whose associated
costs would be recorded as assets and amortized. The Partnership has incurred
approximately $4.5 million of costs related to the Year 2000 issue. The Company
estimates the remaining amounts required to address the Year 2000 issue will be
as much as approximately $1.7 million. A portion of such costs would have been
incurred as part of normal system and application upgrades. In certain cases,
the timing of expenditures has been accelerated due to the Year 2000 issue.
Although the Company believes this estimate to be reasonable, due to the
complexities of the Year 2000 issue, there can be no assurance that the actual
costs related to the Year 2000 issue will not be significantly greater.

         The Partnership has adopted a three-phase Year 2000 program consisting
of: Phase I - Preliminary Assessment; Phase II - Detailed Assessment and
Remediation Planning; and Phase III - Remediation Activities and Testing. The
Products OLP has completed Phase I and Phase II; and Phase III is approximately
95% complete. The Crude Oil OLP has completed Phase I; Phase II is approximately
93% complete; and Phase III is approximately 85% complete. Remediation
Activities and Testing of all major process controls and computer systems have
been completed. Remediation Activities and Testing of other software
applications and hardware will be complete by mid-December 1999.

         With respect to its third-party relationships, the Partnership has
contacted its primary vendors, suppliers and service providers to assess their
software and hardware products previously sold to the Partnership and other
aspects of their state of Year 2000 readiness. Information continues to be
updated regularly, thus the Partnership anticipates receiving additional
information in the near future that will assist in determining the extent to
which the Partnership may be vulnerable to those third parties' failure to
identify and remediate their Year 2000 issues. However, there can be no
assurance that the systems or products of other companies, on which the
Partnership's systems rely, will be timely converted, or converted in a manner
that is compatible with the Partnership's systems, or that any such failures by
other companies would not have a material adverse effect on the Partnership.

         Despite the Partnership's determined efforts to address and remediate
its Year 2000 issue, there can be no assurance that all process controls and
business computer systems will continue without interruption through January 1,
2000, and beyond. The complexity of identifying and testing all embedded
microprocessors that are installed in hardware throughout the products pipeline
system and crude oil system used for process or flow control, transportation,
security, communication and other systems may result in unforeseen operational
system shutdowns. Although the amount of potential liability and lost revenue
cannot be estimated, failures that result in substantial disruptions of business
activities could have a material adverse effect on the Partnership. In order to
mitigate


                                       11

<PAGE>   12


                              TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


potential disruptions, the Partnership will prepare contingency plans
for its critical systems, processes and external relationships by December 1,
1999.

         Tariff rates of interstate oil pipeline companies are currently
regulated by the FERC, primarily through an index methodology, whereby a
pipeline company is allowed to change its rates based on the change from
year-to-year in the Producer Price Index for finished goods less 1% ("PPI
Index"). In the alternative, interstate oil pipeline companies may elect to
support rate filings by using a cost-of-service methodology, competitive market
showings ("Market Based Rates") or agreements between shippers and the oil
pipeline company that the rate is acceptable ("Settlement Rates").


         In May 1999, the Products OLP filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. The FERC approved a request of the Products OLP waiving the requirement
to adjust refined products transportation tariffs pursuant to the PPI Index
while its Market Based Rates application is under review. Under the PPI Index,
refined products transportation rates in effect on June 30, 1999 would have been
reduced by approximately 1.83% effective July 1, 1999. If any portion of the
Market Based Rates application is denied by the FERC, the Products OLP has
agreed to refund, with interest, such amounts collected under the tariff rates
in excess of the PPI Index. As a result of the refund obligation potential, the
Partnership has deferred all revenue recognition of rates charged in excess of
the PPI Index. At September 30, 1999, the amount for accrued rate refunds
totaled approximately $0.4 million.


         In July 1999, certain shippers filed protests with the FERC on the
Products OLP's application for Market Based Rates in four destination markets.
The Partnership believes it will prevail in competitive market determination in
those destination markets under protest.

         Substantially all of the petroleum products transported and stored by
the Partnership are owned by the Partnership's customers. At September 30, 1999,
the Partnership had approximately 17.9 million barrels of products in its
custody owned by customers. The Partnership is obligated for the transportation,
storage and delivery of such products on behalf of its customers. The
Partnership maintains insurance it believes to be adequate to cover product
losses through circumstances beyond its control.



                                       12

<PAGE>   13


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

GENERAL

         Through its ownership of the Products OLP and the Crude Oil OLP, the
Partnership operates in two industry segments - refined products and LPGs
transportation; and crude oil and NGLs transportation and marketing. The
Partnership's reportable segments offer different products and services and are
managed separately because each requires different business strategies.

         The Products OLP segment is involved in the transportation, storage and
terminaling of petroleum products and the fractionation of NGLs. Revenues are
derived from the transportation of refined products and LPGs, the storage and
short-haul shuttle transportation of LPGs at the Mont Belvieu, Texas, complex,
sale of product inventory and other ancillary services. Labor and electric power
costs comprise the two largest operating expense items of the Products OLP.
Operations are somewhat seasonal with higher revenues generally realized during
the first and fourth quarters of each year. Refined products volumes are
generally higher during the second and third quarters because of greater demand
for gasolines during the spring and summer driving seasons. LPGs volumes are
generally higher from November through March due to higher demand in the
Northeast for propane, a major fuel for residential heating.

         The Crude Oil OLP segment is involved in the transportation and
marketing of crude oil and NGLs. Revenues are earned from the gathering,
storage, transportation and marketing of crude oil, NGLs and lube oils
principally in Oklahoma and Texas. Marketing operations consist primarily of
purchasing crude oil along its gathering and pipeline systems to facilitate the
aggregation and transportation and ultimate sale of crude oil to local
refineries or transportation to major oil hubs. Operations of this segment are
included from November 1, 1998, upon the acquisition from Duke Energy.

         The following information is provided to facilitate increased
understanding of the 1999 and 1998 interim consolidated financial statements and
accompanying notes presented in Item 1. Material period-to-period variances in
the consolidated statements of income are discussed under "Results of
Operations." The "Financial Condition and Liquidity" section analyzes cash flows
and financial position. Discussion included in "Other Matters" addresses key
trends, future plans and contingencies. Throughout these discussions, management
addresses items that are reasonably likely to materially affect future liquidity
or earnings.

RESULTS OF OPERATIONS

         Summarized below is financial data by business segment (in thousands):

<TABLE>
<CAPTION>
                                                                   QUARTER ENDED             NINE MONTHS ENDED
                                                                   SEPTEMBER 30,               SEPTEMBER 30,
                                                            -----------------------------     -----------------------------
                                                                1999             1998             1999             1998
                                                            ------------     ------------     ------------     ------------
<S>                                                         <C>              <C>              <C>              <C>
Operating revenues:
    Refined Products and LPGs Transportation ..........     $     53,647     $     54,229     $    169,022     $    155,994
    Crude Oil and NGLs Transportation and Marketing ...          500,721               --        1,126,787               --
                                                            ------------     ------------     ------------     ------------
       Total ..........................................          554,368           54,229        1,295,809          155,994
                                                            ------------     ------------     ------------     ------------

Operating income:
   Refined Products and LPGs Transportation ...........           17,203           19,722           64,002           58,165
   Crude Oil and NGLs Transportation and Marketing ....            3,203               --            7,889               --
                                                            ------------     ------------     ------------     ------------
       Total ..........................................           20,406           19,722           71,891           58,165
                                                            ------------     ------------     ------------     ------------

Income before extraordinary item:
    Refined Products and LPGs Transportation ..........           10,159           12,734           42,721           38,435
    Crude Oil and NGLs Transportation and Marketing ...            3,211               --            8,050               --
                                                            ------------     ------------     ------------     ------------
      Total ...........................................     $     13,370     $     12,734     $     50,771     $     38,435
                                                            ------------     ------------     ------------     ------------
</TABLE>

                                       13

<PAGE>   14

RESULTS OF OPERATIONS - (CONTINUED)

         Net income for the quarter ended September 30, 1999 was $13.4 million,
compared with net income of $12.7 million for the 1998 third quarter. The
increase in net income resulted primarily from $3.2 million of net income
contributed by the crude oil and NGLs transportation and marketing segment,
which was acquired effective November 1, 1998, partially offset by a $2.6
million decrease of net income by the refined products and LPGs transportation
segment. The decrease in net income of the refined products and LPGs
transportation segment was primarily due to a $1.9 million increase in costs and
expenses and a $0.6 million decrease in operating revenues.

         For the nine months ended September 30, 1999, the Partnership reported
net income of $50.8 million, compared with a net loss of $34.3 million for the
first nine months of 1998. The net loss in 1998 included an extraordinary charge
of $72.8 million for early extinguishment of debt, net of $0.7 million allocated
to minority interest. Excluding the extraordinary loss, net income would have
been $38.4 million for the first nine months of 1998. The $12.3 million increase
in income before the loss on debt extinguishment resulted from $8.1 million of
net income contributed by the crude oil and NGLs transportation and marketing
segment, which was acquired effective November 1, 1998, and a $4.3 million
increase of net income by the refined products and LPGs transportation segment.
The increase in net income of the refined products and LPGs transportation
segment resulted primarily from a $13.0 million increase in operating revenues
and a $0.6 million increase in interest capitalized, partially offset by a $7.2
million increase in costs and expenses, a $1.1 million increase in interest
expense and a $1.0 million decrease in other income - net. See discussion below
of factors affecting net income for the comparative periods by business segment.

REFINED PRODUCTS AND LPGS TRANSPORTATION SEGMENT

         See volume and average tariff information below:

<TABLE>
<CAPTION>
                                               QUARTER ENDED                             NINE MONTHS ENDED
                                               SEPTEMBER 30,          PERCENTAGE            SEPTEMBER 30,           PERCENTAGE
                                      -----------------------------    INCREASE     -----------------------------    INCREASE
                                          1999             1998       (DECREASE)        1999            1998        (DECREASE)
                                      ------------     ------------   ----------    ------------     ------------   ----------
<S>                                   <C>              <C>            <C>           <C>              <C>            <C>
VOLUMES DELIVERED
(in thousands of barrels)
      Refined products                      35,883           37,103        (3)%           99,856           96,797         3%
      LPGs                                   6,404            6,845        (6)%           25,943           22,656        15%
      Mont Belvieu operations                8,000            6,890        16%            20,767           18,352        13%
                                      ------------     ------------     -----       ------------     ------------     -----
          Total                             50,287           50,838        (1)%          146,566          137,805         6%
                                      ============     ============     =====       ============     ============     =====

AVERAGE TARIFF PER BARREL
      Refined products                $       0.93     $       0.95        (2)%     $       0.93     $       0.94        (1)%
      LPGs                                    1.48             1.55        (5)%             1.78             1.86        (4)%
      Mont Belvieu operations                 0.15             0.14         7%              0.16             0.15         7%
          Average system tariff       $       0.88     $       0.92        (4)%     $       0.97     $       0.98        (1)%
                                      ============     ============     =====       ============     ============     =====
</TABLE>

         Refined products transportation revenues decreased $1.9 million for the
quarter ended September 30, 1999, compared with the prior-year quarter, due to a
3% decrease in total refined products volumes delivered and a 2% decrease in the
refined products average tariff per barrel. Motor fuel volumes delivered
decreased 2.4 million barrels as a result of unfavorable price differentials in
the Midwest and reduced refinery production received into the Ark-La-Tex system.
Additionally, methyl tertiary butyl ether ("MTBE") volumes delivered decreased
0.4 million barrels as a result of the Partnership canceling its tariffs to
Midwest destinations, effective July 1, 1999. This action was taken with the
consent of MTBE shippers as a result of lower demand for MTBE transportation
caused by changing blending economics, and resulted in increased pipeline
capacity and tankage available for other products. Decreases in motor fuel and
MTBE were partially offset by a 1.1 million barrel increase in jet fuel volumes
delivered and a 1.0 million barrel increase in distillate volumes delivered
attributable to strong economic demand in the Midwest market areas. Jet fuel
volumes delivered also benefited as a result of new military supply agreements
that became effective in the fourth quarter of 1998. The decrease in the average
tariff per barrel was primarily attributable to the 1.83% general tariff
reduction pursuant to the Producer Price Index for finished goods less 1% ("PPI
Index"), effective July 1, 1999. The Partnership has deferred recognition of
approximately $0.4


                                       14

<PAGE>   15


RESULTS OF OPERATIONS - (CONTINUED)

million of revenue with respect to potential refund obligations for rates
charged in excess of the PPI index while its application for Market Based Rates
is under review by FERC. See further discussion regarding Market Based Rates
included in "Other Matters - Market and Regulatory Environment."

         LPGs transportation revenues decreased $1.1 million for the quarter
ended September 30, 1999, compared with the third quarter of 1998, as a result
of a 6% decrease in total LPGs volumes delivered and a 5% decrease in the LPGs
average tariff per barrel. The decrease was primarily attributable to a 0.2
million barrel decrease in long-haul propane volumes delivered in the Northeast
market area attributable to unfavorable price differentials versus competing
Canadian product. Additionally, short-haul propane volumes delivered decreased
0.5 million barrels as a result of lower deliveries along the upper Texas Gulf
Coast. These decreases were partially offset by a 0.2 million barrel increase in
propane volumes delivered in the Midwest market area primarily attributable to
higher demand from a petrochemical facility served by the Partnership. The
decrease in the LPGs average tariff per barrel resulted from the decrease in
long-haul volumes delivered in the Northeast market area in 1999 and tariff rate
reductions under the PPI Index, effective July 1, 1999.

         For the nine months ended September 30, 1999, refined products
transportation revenues increased $1.9 million, compared with the corresponding
period in 1998, as a result of a 3% increase in total refined products volumes
delivered, partially offset by a 1% decrease in the average tariff per barrel.
Strong economic demand coupled with lower refinery production resulted in a 2.6
million barrel increase in distillate volumes delivered and a 2.6 million barrel
increase in jet fuel volumes delivered. These increases were partially offset by
a 0.8 million barrel decrease in MTBE volumes delivered as a result of lower
blending demand in the Chicago market area, a 0.7 million barrel decrease in
natural gasoline volumes delivered attributable to lower feed stock and blending
demand, and a 0.4 million barrel decrease in motor fuel volumes delivered due to
unfavorable Midwest price differentials. The decrease in the average tariff per
barrel resulted primarily from the general tariff reduction under the PPI Index,
effective July 1, 1999.

         LPGs transportation revenues increased $4.0 million, during the nine
months ended September 30, 1999, compared with the same period in 1998, due to a
15% increase in total LPGs volumes delivered, partially offset by a 4% decrease
in the LPGs average tariff per barrel. Propane deliveries in the Northeast
market area increased 1.2 million barrels from higher weather-related demand in
the first quarter of 1999, partially offset by unfavorable price differentials
during the second and third quarters of 1999. Propane deliveries in the Midwest
market area and the upper Texas Gulf Coast increased 1.2 million barrels and 0.9
million barrels, respectively, from the prior year due primarily to increased
petrochemical feed stock demand. Butane volumes delivered were relatively
unchanged from the prior year due to lower refinery feed stock demand in the
Northeast, partially offset by increased demand from Midwest area refineries.
The 4% decrease in the average tariff per barrel resulted from the larger
percentage of short-haul barrels during 1999, coupled with the reduction in
tariffs rates pursuant to the PPI Index, effective July 1, 1999.

         Revenues generated from Mont Belvieu operations increased during both
the quarter and nine months ended September 30, 1999, compared with the
corresponding periods in 1998, due primarily to increased storage revenue and
increased demand for shuttle deliveries of propane and butane.

         Other operating revenues increased $1.9 million during the third
quarter of 1999, as compared with the third quarter of 1998, due primarily to a
$1.7 million increase in gains on the sale of product inventory attributable to
favorable market prices and increased revenue earned on contracts for butane
storage during the summer months.

         During the nine months ended September 30, 1999, other operating
revenues increased $5.5 million, as compared to the same period in 1998, due
primarily to a $2.8 million increase in gains on the sale of product inventory,
a $1.8 million increase in operating revenues from the fractionator facilities
acquired on March 31, 1998, lower exchange losses incurred to position product
in the Midwest market area, and higher propane imports received at the marine
terminal at Providence, Rhode Island.


                                       15

<PAGE>   16

RESULTS OF OPERATIONS - (CONTINUED)


         Costs and expenses increased $1.9 million for the quarter ended
September 30, 1999, compared with the third quarter of 1998, primarily due to a
$1.1 million increase in operating, general and administrative expenses, a $0.3
million increase in operating fuel and power expense, and a $0.5 million
increase in taxes - other than income. The increase in operating, general and
administrative expenses was primarily attributable to a $0.7 million increase in
expenses associated with Year 2000 activities, a $0.5 million increase in rental
fees from higher volume through the connection from Colonial Pipeline at
Beaumont, and increased general and administrative supplies and services. These
increases were partially offset by a $0.5 million decrease in product
measurement losses. The increase in operating fuel and power expense was
primarily attributable to a heavier mix of products transported during the third
quarter of 1999. The increase in taxes - other than income was primarily due to
credits recorded during the third quarter of 1998 for the over accrual of
previous years' property taxes.

         Costs and expenses increased $7.2 million for the nine-months ended
September 30, 1999, compared with the same period in 1998, due to a $4.0 million
increase in operating, general and administrative expenses, a $1.8 million
volume-related increase in operating fuel and power expense, a $1.0 million
increase in depreciation and amortization expense and a $0.4 million increase in
taxes - other than income. The increase in operating, general and administrative
expenses was primarily attributable to a $1.8 million increase in expenses
associated with Year 2000 activities; a $1.5 million increase in rental fees
from higher volume through the connection from Colonial Pipeline at Beaumont; a
$0.3 million insurance reimbursement received in June 1998 for past litigation
costs related to the Seymour, Indiana, terminal; nine months of fractionation
fees in 1999 related to the facilities acquired on March 31, 1998; and higher
general and administrative supplies and services. Depreciation and amortization
expense increased as a result of the completion of capital projects, coupled
with nine months of expense in 1999 for amortization of the value assigned to
the Fractionation Agreement. The increase in taxes - other than income increased
due to factor noted above during the third quarter of 1998.

         Interest expense increased $1.1 million during the nine-months ended
September 30, 1999, compared with the prior year period. Approximately $0.6
million of the increase was attributable to nine months of interest expense in
1999 on the $38 million term-loan used to finance the purchase of the
fractionation assets on March 31, 1998. The remaining increase resulted from $25
million of borrowings during the second quarter of 1999 against the term loan to
finance construction of the pipelines between Mont Belvieu and Port Arthur,
Texas. Capitalized interest increased during both the quarter ended and nine
months ended September 30, 1999, compared with the corresponding periods in
1998, as a result of higher balances associated with construction-in-progress of
the new pipelines between Mont Belvieu and Port Arthur.

         Other income decreased during both the quarter and nine-months ended
September 30, 1999, compared with the corresponding periods in 1998, due
primarily to lower interest income earned on cash investments in 1999, and a
$0.4 million gain on the disposition of non-carrier assets in June 1998.


                                       16


<PAGE>   17

RESULTS OF OPERATIONS - (CONTINUED)


CRUDE OIL AND NGLS TRANSPORTATION AND MARKETING SEGMENT

         Margin and volume information is presented below:

<TABLE>
<CAPTION>
                                                              NINE MONTHS
                                             QUARTER ENDED        ENDED
                                             SEPTEMBER 30,    SEPTEMBER 30,
                                                 1999             1999
                                             ------------     ------------
<S>                                          <C>              <C>
Margins (dollars in thousands):
   Crude oil transportation ............     $      4,456     $     13,406
   Crude oil marketing .................            3,461            8,450
   NGL transportation ..................            1,592            4,554
   LSI .................................              607            1,742
                                             ------------     ------------
        Total margin ...................     $     10,116     $     28,152
                                             ============     ============

Barrels per day:
   Crude oil transportation ............           90,779           92,145
   Crude oil marketing .................          253,261          250,082
   NGL transportation ..................           14,347           12,827

LSI volume (total gallons): ............        2,290,440        6,423,375

Margin per barrel:
   Crude oil transportation ............     $      0.534     $      0.533
   Crude oil marketing .................     $      0.149     $      0.124
   NGL transportation ..................     $      1.206     $      1.301

LSI margin (per gallon): ...............     $      0.265     $      0.271
</TABLE>

         The crude oil and NGLs transportation and marketing segment was added
to the Partnership's operations with the acquisition of the DETTCO assets
effective November 1, 1998. The acquisition was accounted for as a purchase for
accounting purposes. Net income contributed by the crude oil transportation and
marketing segment for the quarter and nine-month periods ended September 30,
1999 totaled $3.2 million and $8.1 million, respectively.

         Margin is a more meaningful measure of financial performance than
operating revenues and operating expenses due to the significant fluctuations in
revenues and expense that may occur with changes in the level of marketing
activity. Margin is calculated as revenues generated from crude oil and lube oil
sales and crude oil and NGLs transportation less the cost of crude oil and lube
oil purchases. During the three months ended September 30, 1999, crude oil
transportation and NGL transportation contributed 44% and 16% of the margin,
respectively, while crude oil marketing operations accounted for 34% of the
margin. Operations of LSI contributed $0.6 million, or 6%, of the margin for the
three month period ended September 30, 1999. During the nine months ended
September 30, 1999, crude oil transportation and NGL transportation contributed
48% and 16% of the margin, respectively, while crude oil marketing operations
accounted for 30% of the margin. Operations of LSI contributed $1.7 million, or
6%, of the margin for the nine month period ended September 30, 1999.

       For the quarter ended September 30, 1999, operating, general and
administrative expenses, including operating fuel and power, of the crude oil
and NGLs transportation and marketing segment totaled $5.3 million, or 53% of
the margin. Depreciation and amortization expenses and taxes - other than income
totaled $1.6 million, or 16% of the margin for the third quarter. For the nine
months ended September 30, 1999, operating, general and administrative expenses,
including operating fuel and power, of the crude oil and NGLs transportation and
marketing segment totaled $15.6 million, or 55% of the margin. Depreciation and
amortization expenses and taxes - other than income totaled $4.7 million, or 17%
of the margin during the nine months ended September 30, 1999.



                                       17

<PAGE>   18


FINANCIAL CONDITION AND LIQUIDITY


         Net cash from operations for the nine-month period ended September 30,
1999, totaled $69.1 million, comprised of $75.2 million of income before charges
for depreciation and amortization, partially offset by $6.1 million of cash used
for working capital changes. This compares with cash flows from operations of
$55.4 million for the corresponding period in 1998, comprised of $57.8 million
of income before extraordinary loss on early extinguishment of debt and charges
for depreciation and amortization, partially offset by $2.4 million of cash used
for working capital changes. Net cash from operations for the nine months ended
September 30, 1999 and 1998, included interest payments of $29.7 million and
$26.8 million, respectively.

         Cash flows used in investing activities during the first nine months of
1999 included $60.4 million of capital expenditures, $2.3 million for the
purchase of a 125-mile crude oil system in Southeast Texas, and $3.2 million of
additional cash investments. These decreases of cash were offset by $3.8 million
from investment maturities. Cash flows used in investing activities during the
first nine months of 1998 included $40.0 million for the purchase price of the
fractionation assets and related intangible assets and $15.2 million of capital
expenditures, partially offset by $2.1 million from investment maturities and
$0.5 million received from the sale of non-carrier assets.

         In February 1999, the Partnership announced plans to construct three
new pipelines between the Partnership's terminal in Mont Belvieu, Texas and Port
Arthur, Texas. The project includes three 12-inch diameter common-carrier
pipelines and associated facilities. Each pipeline will be approximately 70
miles in length. Upon completion, the new pipelines will transport ethylene,
propylene and natural gasoline. The anticipated completion date is the fourth
quarter of 2000. The Partnership has entered into an agreement for turnkey
construction of the pipelines and related facilities and has separately entered
into agreements for guaranteed throughput commitments. The cost of this project
is expected to total approximately $74.5 million. Approximately $39.7 million of
construction cost was included in capital expenditures during the nine month
period ended September 30, 1999, with a total of approximately $44.6 million
expected to be incurred in 1999, and the remainder in 2000.

         Exclusive of the pipeline construction between Mont Belvieu and Port
Arthur, the Partnership estimates that capital expenditures for 1999 will total
approximately $38 million. Approximately $25 million is expected to be used for
the Products OLP and $13 million is expected to be used for the Crude Oil OLP.
Approximately $23 million of planned expenditures of the Products OLP are
expected to be used for life-cycle replacements and to upgrade current
facilities, with the remaining $2 million expected to be used for
revenue-generating projects. Approximately $9 million of planned expenditures of
the Crude Oil OLP are expected to be used in revenue-generating and
cost-reduction projects, with the remainder to be used to maintain existing
operations. The Partnership revises capital spending estimates periodically in
response to changes in cash flows and operations.

         On January 27, 1998, the Products OLP completed the issuance of $180
million principal amount of 6.45% Senior Notes due 2008, and $210 million
principal amount of 7.51% Senior Notes due 2028 (collectively the "Senior
Notes"). The 6.45% Senior Notes due 2008 are not subject to redemption prior to
January 15, 2008. The 7.51% Senior Notes due 2028 may be redeemed at any time
after January 15, 2008, at the option of the Products OLP, in whole or in part,
at a premium. Net proceeds from the issuance of the Senior Notes totaled
approximately $386 million and was used to repay in full the $61.0 million
principal amount of the 9.60% Series A First Mortgage Notes, due 2000, and the
$265.5 million principal amount of the 10.20% Series B First Mortgage Notes, due
2010. The premium for the early redemption of the First Mortgage Notes totaled
$70.1 million. The repayment of the First Mortgage Notes and the issuance of the
Senior Notes reduced the level of cash required for debt service until 2008. The
Partnership recorded an extraordinary charge of $73.5 million during the first
quarter of 1998 (including $0.7 million allocated to minority interest), which
represents the redemption premium of $70.1 million and unamortized debt issue
costs related to the First Mortgage Notes of $3.4 million.

         The Senior Notes do not have sinking fund requirements. Interest on the
Senior Notes is payable semiannually in arrears on January 15 and July 15 of
each year, commencing July 15, 1998. The Senior Notes are unsecured obligations
of the Products OLP and rank on a parity with all other unsecured and
unsubordinated


                                       18

<PAGE>   19

FINANCIAL CONDITION AND LIQUIDITY - (CONTINUED)


indebtedness of the Products OLP. The indenture governing the Senior Notes
contains covenants, including, but not limited to, covenants limiting (i) the
creation of liens securing indebtedness and (ii) sale and leaseback
transactions. However, the indenture does not limit the Partnership's ability to
incur additional indebtedness.

         In connection with the purchase of the fractionation assets from DEFS
as of March 31, 1998, TEPPCO Colorado received a $38 million bank loan from
SunTrust Bank. Proceeds from the loan were received on April 21, 1998. The loan
bears interest at a rate of 6.53%, which is payable quarterly. The principal
balance of the loan is payable in full on April 21, 2001. The Products OLP is
guarantor on the loan.

         On May 17, 1999, the Products OLP entered into a $75 million term loan
agreement to finance construction of three new pipelines between the
Partnership's terminal in Mont Belvieu, Texas and Port Arthur, Texas. The loan
agreement has a term of five years. SunTrust Bank is the administrator of the
loan. At September 30, 1999, $25 million has been borrowed under the term loan
agreement. Principal will be paid quarterly beginning in 2001. The interest rate
for the $75 million term loan is based on the borrower's option of either
SunTrust Bank's prime rate, the federal funds rate or LIBOR rate in effect at
the time of the borrowings and is adjusted monthly, bimonthly, quarterly or
semi-annually. Interest is payable quarterly from the time of borrowing. The
current interest rate for amounts outstanding under the term loan is 6.33%.
Commitment fees for the term loan agreement totaled approximately $47,000 for
the period from May 17, 1999 through September 30, 1999.

         On May 17, 1999, the Products OLP entered into a $25 million revolving
credit agreement and TCO entered into a $30 million revolving credit agreement.
SunTrust Bank is the administrative agent on both revolving credit agreements.
The $25 million revolving credit agreement has a five year term and the $30
million revolving credit agreement has a three year term. The interest rate on
both agreements is based on the borrower's option of either SunTrust Bank's
prime rate, the federal funds rate or LIBOR rate in effect at the time of the
borrowings and is payable quarterly. Interest rates are adjusted monthly,
bimonthly, quarterly or semi-annually. The Products OLP has not borrowed any
amounts under the revolving credit facility. TCO had $3 million principal amount
outstanding under its revolving credit agreement as of September 30, 1999.
Commitment fees for the revolving credit agreements totaled approximately
$50,000 for the period from May 17, 1999 through September 30, 1999.

         In connection with the purchase of the DETTCO assets by TCO, Duke
Capital also agreed to guarantee the payment by TCO and its subsidiaries under
certain commercial contracts between TCO and its subsidiaries and third parties.
Duke Capital will provide up to $100 million of guarantee credit to TCO and its
subsidiaries for a period of three years from November 30, 1998. Pursuant to
this agreement, the Partnership has agreed to pay Duke Capital a commitment fee
of $100,000 per year.

         The Partnership paid cash distributions of $51.0 million during the
nine months ended September 30, 1999. Additionally, on October 18, 1999, the
Partnership declared a cash distribution of $0.475 per Limited Partner and Class
B Unit. The third quarter cash distribution was paid on November 5, 1999 to
Unitholders of record on October 29, 1999.

OTHER MATTERS

      Environmental

         The operations of the Partnership are subject to federal, state and
local laws and regulations relating to protection of the environment. Although
the Partnership believes the operations of the Pipeline System are in material
compliance with applicable environmental regulations, risks of significant costs
and liabilities are inherent in pipeline operations, and there can be no
assurance that significant costs and liabilities will not be incurred. Moreover,
it is possible that other developments, such as increasingly strict
environmental laws and regulations and enforcement policies thereunder, and
claims for damages to property or persons resulting from the operations of the
Pipeline System, could result in substantial costs and liabilities to the
Partnership. The Partnership does not

                                       19

<PAGE>   20


OTHER MATTERS - (CONTINUED)


anticipate that changes in environmental laws and regulations will have a
material adverse effect on it financial position, operations or cash flows in
the near term.

         The Partnership and the Indiana Department of Environmental Management
("IDEM") have entered into an Agreed Order that will ultimately result in a
remediation program for any on-site and off-site groundwater contamination
attributable to the Partnership's operations at the Seymour, Indiana, terminal.
A Feasibility Study, which includes the Partnership's proposed remediation
program, has been approved by IDEM. IDEM will issue a Record of Decision
formally approving the remediation program. After the Record of Decision has
been issued, the Partnership will enter into an Agreed Order for the continued
operation and maintenance of the program. The Partnership will evaluate the
conditions of the Record of Decision and make adjustments to the program as
required. The amount accrued for the program was approximately $0.4 million at
September 30, 1999. In the opinion of the Company, the completion of the
remediation program being proposed by the Partnership, if such program is
approved by IDEM, will not have a material adverse impact on the Partnership's
financial condition, results of operations or liquidity.

     Year 2000 Issues

         In 1997, the Company initiated a program to prepare the Partnership's
process controls and business computer systems for the "Year 2000" issue.
Process controls are the automated equipment including hardware and software
systems which run operational activities. Business computer systems are the
computer hardware and software used by the Partnership. The Partnership is
utilizing both internal and external resources to identify, test, remediate or
replace all critical known or discovered non-compliant computerized systems and
applications. The Company continues to evaluate appropriate courses of
corrective action, including replacement of certain systems whose associated
costs would be recorded as assets and amortized. The Partnership has incurred
approximately $4.5 million of costs related to the Year 2000 issue. The Company
estimates the remaining amounts required to address the Year 2000 issue will be
as much as approximately $1.7 million. A portion of such costs would have been
incurred as part of normal system and application upgrades. In certain cases,
the timing of expenditures has been accelerated due to the Year 2000 issue.
Although the Company believes this estimate to be reasonable, due to the
complexities of the Year 2000 issue, there can be no assurance that the actual
costs related to the Year 2000 issue will not be significantly greater.

         The Partnership has adopted a three-phase Year 2000 program consisting
of: Phase I - Preliminary Assessment; Phase II - Detailed Assessment and
Remediation Planning; and Phase III - Remediation Activities and Testing. The
Products OLP has completed Phase I and Phase II; and Phase III is approximately
95% complete. The Crude Oil OLP has completed Phase I; Phase II is approximately
93% complete; and Phase III is approximately 85% complete. Remediation
Activities and Testing of all major process controls and computer systems have
been completed. Remediation Activities and Testing of other software
applications and hardware will be complete by mid-December 1999.

         With respect to its third-party relationships, the Partnership has
contacted its primary vendors, suppliers and service providers to assess their
software and hardware products previously sold to the Partnership and other
aspects of their state of Year 2000 readiness. Information continues to be
updated regularly, thus the Partnership anticipates receiving additional
information in the near future that will assist in determining the extent to
which the Partnership may be vulnerable to those third parties' failure to
identify and remediate their Year 2000 issues. However, there can be no
assurance that the systems or products of other companies, on which the
Partnership's systems rely, will be timely converted, or converted in a manner
that is compatible with the Partnership's systems, or that any such failures by
other companies would not have a material adverse effect on the Partnership.

         Despite the Partnership's determined efforts to address and remediate
its Year 2000 issue, there can be no assurance that all process controls and
business computer systems will continue without interruption through January 1,
2000, and beyond. The complexity of identifying and testing all embedded
microprocessors that are


                                       20

<PAGE>   21

OTHER MATTERS - (CONTINUED)


installed in hardware throughout the products pipeline system and crude oil
system used for process or flow control, transportation, security, communication
and other systems may result in unforeseen operational system shutdowns.
Although the amount of potential liability and lost revenue cannot be estimated,
failures that result in substantial disruptions of business activities could
have a material adverse effect on the Partnership. In order to mitigate
potential disruptions, the Partnership will prepare contingency plans for its
critical systems, processes and external relationships by December 1, 1999.

      Market and Regulatory Environment

         In July 1999, the Partnership announced plans to build a new 360-mile
pipeline from Beaumont, Texas, to Little Rock, Arkansas. The new pipeline will
parallel the Partnership's two existing pipelines and will increase delivery
capability of refined petroleum products by 100,000 barrels per day. The
expansion will also include construction of additional storage tanks,
connections to other pipelines to increase volumes entering the pipeline system
and increased delivery capability in the Partnership's Midwest market areas. The
expansion is scheduled to be completed in 18 to 24 months. The Partnership
currently anticipates finalizing its evaluation of various construction
alternatives of the capacity expansion during the fourth quarter of 1999.

         Tariff rates of interstate oil pipeline companies are currently
regulated by the FERC, primarily through an index methodology, whereby a
pipeline company is allowed to change its rates based on the change from
year-to-year in the Producer Price Index for finished goods less 1% ("PPI
Index"). In the alternative, interstate oil pipeline companies may elect to
support rate filings by using a cost-of-service methodology, competitive market
showings ("Market Based Rates") or agreements between shippers and the oil
pipeline company that the rate is acceptable ("Settlement Rates").


         In May 1999, the Products OLP filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. The FERC approved a request of the Products OLP waiving the requirement
to adjust refined products transportation tariffs pursuant to the PPI Index
while its Market Based Rates application is under review. Under the PPI Index,
refined products transportation rates in effect on June 30, 1999 would have been
reduced by approximately 1.83% effective July 1, 1999. If any portion of the
Market Based Rates application is denied by the FERC, the Products OLP has
agreed to refund, with interest, such amounts collected under the tariff rates
in excess of the PPI Index. As a result of the refund obligation potential, the
Partnership has deferred all revenue recognition of rates charged in excess of
the PPI Index. At September 30, 1999, the amount for accrued rate refunds
totaled approximately $0.4 million.

         In July 1999, certain shippers filed protests with the FERC on the
Products OLP's application for Market Based Rates in four destination markets.
The Partnership believes it will prevail in competitive market determination in
those destination markets under protest.

         Effective July 1, 1999, the Products OLP established Settlement Rates
with all shippers that utilize certain LPGs transportation tariff rates, whereby
such rates in effect on June 30, 1999, would not be adjusted for a period of
either two or three years. Other LPGs transportation tariff rates under which
such agreements could not be reached with all shippers were reduced pursuant to
the PPI Index (approximately 1.83%), effective July 1, 1999. Effective July 1,
1999, the Products OLP canceled its tariff for deliveries of MTBE into the
Chicago market area reflecting reduced demand for transportation of MTBE into
such area. The MTBE tariffs were canceled with the consent of MTBE shippers and
resulted in increased pipeline capacity and tankage available for other
products.

     Other

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
standards for and disclosures of derivative instruments and hedging activities.
In July 1999, the FASB issued SFAS No. 137 to delay the effective date of SFAS
No. 133 until fiscal years beginning after


                                       21

<PAGE>   22

OTHER MATTERS - (CONTINUED)


June 15, 2000. The Partnership expects to adopt this standard effective January
1, 2001. The Partnership has not determined the impact of this statement on its
financial condition and results of operations.

         The matters discussed herein include "forward-looking statements"
within the meaning of various provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included in this document that address activities, events or
developments that the Partnership expects or anticipates will or may occur in
the future, including such things as estimated future capital expenditures
(including the amount and nature thereof), business strategy and measures to
implement strategy, competitive strengths, goals, expansion and growth of the
Partnership's business and operations, plans, references to future success,
references to intentions as to future matters and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Partnership in light of its experience and its
perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate under the
circumstances. However, whether actual results and developments will conform
with the Partnership's expectations and predictions is subject to a number of
risks and uncertainties, including general economic, market or business
conditions, the opportunities (or lack thereof) that may be presented to and
pursued by the Partnership, competitive actions by other pipeline companies,
changes in laws or regulations, and other factors, many of which are beyond the
control of the Partnership. Consequently, all of the forward-looking statements
made in this document are qualified by these cautionary statements and there can
be no assurance that actual results or developments anticipated by the
Partnership will be realized or, even if substantially realized, that they will
have the expected consequences to or effect on the Partnership or its business
or operations. For additional discussion of such risks and uncertainties, see
TEPPCO Partners, L.P.'s 1998 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Partnership may be exposed to market risk through changes in
commodity prices and interest rates as discussed below. The Partnership has no
foreign exchange risks.

         The Partnership mitigates exposure to commodity price fluctuations by
maintaining a balanced position between crude oil purchases and sales. As a
hedging strategy to manage crude oil price fluctuations, the Partnership enters
into futures contracts on the New York Mercantile Exchange, and makes limited
use of other derivative instruments. It is the Partnership's general policy not
to acquire crude oil, futures contracts or other derivative products for the
purpose of speculating on price changes, however, the Partnership may take
limited speculative positions to capitalize on crude oil price fluctuations. Any
contracts held for trading purposes or speculative positions are accounted for
using the mark-to-market method. Under this methodology, contracts are adjusted
to market value, and the gains and losses are recognized in current period
income. Comprehensive risk management policies have been established by the Risk
Management Committee to monitor and control these market risks. The Risk
Management Committee is comprised of senior executives of the Partnership.
Market risks associated with commodity derivatives were not material at
September 30, 1999.

         At September 30, 1999, the Products OLP had outstanding $180 million
principal amount of 6.45% Senior Notes due 2008, and $210 million principal
amount of 7.51% Senior Notes due 2028 (collectively the "Senior Notes").
Additionally, the Products OLP had a $38 million bank loan outstanding from
SunTrust Bank. The SunTrust loan bears interest at a fixed rate of 6.53% and is
payable in full in April 2001. At September 30, 1999, the estimated fair value
of the Senior Notes and the SunTrust loan was approximately $361.2 million and
$37.8 million, respectively.

         At September 30, 1999, the Products OLP had $25 million outstanding
under a variable interest rate term loan and the Crude Oil OLP had $3 million
outstanding under its revolving credit agreement. The interest rates for these
credit facilities are based on the borrower's option of either SunTrust Bank's
prime rate, the federal funds rate or LIBOR rate in effect at the time of the
borrowings and is adjusted monthly, bimonthly, quarterly or


                                       22

<PAGE>   23

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - (CONTINUED)


semi-annually. Utilizing the balances of variable interest rate debt outstanding
at September 30, 1999, and assuming market interest rates increase 1%, the
potential annual increase in interest expense is approximately $0.3 million.

                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits:

       Exhibit
       Number                             Description
       -------                            -----------
         3.1      Certificate of Limited Partnership of the Partnership (Filed
                  as Exhibit 3.2 to the Registration Statement of TEPPCO
                  Partners, L.P. (Commission File No. 33-32203) and incorporated
                  herein by reference).

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

         3.3      Second Amended and Restated Agreement of Limited Partnership
                  of TEPPCO Partners, L.P., dated November 30, 1998 (Filed as
                  Exhibit 3.3 to Form 10-K of TEPPCO Partners, L.P. (Commission
                  File No. 1-10403) for the year ended December 31, 1998 and
                  incorporated herein by reference).

         3.4      Amended and Restated Agreement of Limited Partnership of TE
                  Products Pipeline Company, Limited Partnership, effective July
                  21, 1998 (Filed as Exhibit 3.2 to Form 8-K of TEPPCO Partners,
                  L.P. (Commission File No. 1-10403) dated July 21, 1998 and
                  incorporated herein by reference).

         3.5      Agreement of Limited Partnership of TCTM, L.P., dated November
                  30, 1998 (Filed as Exhibit 3.3 to Form 10-K of TEPPCO
                  Partners, L.P. (Commission File No. 1-10403) for the year
                  ended December 31, 1998 and incorporated herein by reference).

         4.1      Form of Certificate representing Limited Partner Units (Filed
                  as Exhibit 4.1 to the Registration Statement of TEPPCO
                  Partners, L.P. (Commission File No. 33-32203) and incorporated
                  herein by reference).

         4.2      Form of Indenture between TE Products Pipeline Company,
                  Limited Partnership and The Bank of New York, as Trustee,
                  dated as of January 27, 1998 (Filed as Exhibit 4.3 to TE
                  Products Pipeline Company, Limited Partnership's Registration
                  Statement on Form S-3 (Commission File No. 333-38473) and
                  incorporated herein by reference).

         4.3      Form of Certificate representing Class B Units (Filed as
                  Exhibit 3.3 to Form 10-K of TEPPCO Partners, L.P. (Commission
                  File No. 1-10403) for the year ended December 31, 1998 and
                  incorporated herein by reference).

         10.1     Assignment and Assumption Agreement, dated March 24, 1988,
                  between Texas Eastern Transmission Corporation and the Company
                  (Filed as Exhibit 10.8 to the Registration Statement of TEPPCO
                  Partners, L.P. (Commission File No. 33-32203) and incorporated
                  herein by reference).

         10.2     Texas Eastern Products Pipeline Company 1997 Employee
                  Incentive Compensation Plan executed on July 14, 1997 (Filed
                  as Exhibit 10 to Form 10-Q of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the quarter ended September
                  30, 1997 and incorporated herein by reference).

         10.3     Agreement Regarding Environmental Indemnities and Certain
                  Assets (Filed as Exhibit 10.5 to Form 10-K of TEPPCO Partners,
                  L.P. (Commission File No. 1-10403) for the year ended December
                  31, 1990 and incorporated herein by reference).



                                       23

<PAGE>   24



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)


         10.4     Texas Eastern Products Pipeline Company Management Incentive
                  Compensation Plan executed on January 30, 1992 (Filed as
                  Exhibit 10 to Form 10-Q of TEPPCO Partners, L.P. (Commission
                  File No. 1-10403) for the quarter ended March 31, 1992 and
                  incorporated herein by reference).

         10.5     Texas Eastern Products Pipeline Company Long-Term Incentive
                  Compensation Plan executed on October 31, 1990 (Filed as
                  Exhibit 10.9 to Form 10-K of TEPPCO Partners, L.P. (Commission
                  File No. 1-10403) for the year ended December 31, 1990 and
                  incorporated herein by reference).

         10.6     Form of Amendment to Texas Eastern Products Pipeline Company
                  Long-Term Incentive Compensation Plan (Filed as Exhibit 10.7
                  to the Partnership's Form 10-K (Commission File No. 1-10403)
                  for the year ended December 31, 1995 and incorporated herein
                  by reference).

         10.7     Employees' Savings Plan of Panhandle Eastern Corporation and
                  Participating Affiliates (Effective January 1, 1991) (Filed as
                  Exhibit 10.10 to the Partnership's Form 10-K (Commission File
                  No. 1-10403) for the year ended December 31, 1990 and
                  incorporated herein by reference).

         10.8     Retirement Income Plan of Panhandle Eastern Corporation and
                  Participating Affiliates (Effective January 1, 1991) (Filed as
                  Exhibit 10.11 to Form 10-K of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the year ended December 31,
                  1990 and incorporated herein by reference).

         10.9     Panhandle Eastern Corporation Key Executive Retirement Benefit
                  Equalization Plan, adopted December 20, 1993; effective
                  January 1, 1994 (Filed as Exhibit 10.12 to Form 10-K of
                  Panhandle Eastern Corporation (Commission File No. 1-8157) for
                  the year ended December 31, 1993 and incorporated herein by
                  reference).

         10.10    Employment Agreement with William L. Thacker, Jr. (Filed as
                  Exhibit 10 to Form 10-Q of TEPPCO Partners, L.P. (Commission
                  File No. 1-10403) for the quarter ended September 30, 1992 and
                  incorporated herein by reference).

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

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

         10.13    Panhandle Eastern Corporation Key Executive Deferred
                  Compensation Plan established effective January 1, 1994 (Filed
                  as Exhibit 10.2 to Form 10-Q of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the quarter ended March 31,
                  1994 and incorporated herein by reference).

         10.14    Asset Purchase Agreement between Duke Energy Field Services,
                  Inc. and TEPPCO Colorado, LLC, dated March 31, 1998 (Filed as
                  Exhibit 10.14 to Form 10-Q of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the quarter ended March 31,
                  1998 and incorporated herein by reference).

         10.15    Credit Agreement between TEPPCO Colorado, LLC, SunTrust Bank,
                  Atlanta, and Certain Lenders, dated April 21, 1998 (Filed as
                  Exhibit 10.15 to Form 10-Q of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the quarter ended March 31,
                  1998 and incorporated herein by reference).

         10.16    First Amendment to Credit Agreement between TEPPCO Colorado,
                  LLC, SunTrust Bank, Atlanta, and Certain Lenders, effective
                  June 29, 1998 (Filed as Exhibit 10.15 to Form 10-Q of TEPPCO
                  Partners, L.P. (Commission File No. 1-10403) for the quarter
                  ended June 30, 1998 and incorporated herein by reference).


                                       24

<PAGE>   25

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)


         10.17    Contribution Agreement between Duke Energy Transport and
                  Trading Company and TEPPCO Partners, L.P., dated October 15,
                  1998 (Filed as Exhibit 3.3 to Form 10-K of TEPPCO Partners,
                  L.P. (Commission File No. 1-10403) for the year ended December
                  31, 1998 and incorporated herein by reference).

         10.18    Guaranty Agreement by Duke Energy Natural Gas Corporation for
                  the benefit of TEPPCO Partners, L.P., dated November 30, 1998,
                  effective November 1, 1998 (Filed as Exhibit 3.3 to Form 10-K
                  of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the
                  year ended December 31, 1998 and incorporated herein by
                  reference).

         10.19    Revolving Credit Agreement between TCTM, L.P. as Borrower and
                  Duke Capital Corporation as Lender, dated November 30, 1998
                  (Filed as Exhibit 3.3 to Form 10-K of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the year ended December 31,
                  1998 and incorporated herein by reference).

         10.20    Letter Agreement regarding Payment Guarantees of Certain
                  Obligations of TCTM, L.P. between Duke Capital Corporation and
                  TCTM, L.P., dated November 30, 1998 (Filed as Exhibit 3.3 to
                  Form 10-K of TEPPCO Partners, L.P. (Commission File No.
                  1-10403) for the year ended December 31, 1998 and incorporated
                  herein by reference).

         10.21    Form of Employment Agreement between the Company and O. Horton
                  Cunningham, Ernest P. Hagan, Thomas R. Harper, David L.
                  Langley, Charles H. Leonard and James C. Ruth, dated December
                  1, 1998 (Filed as Exhibit 3.3 to Form 10-K of TEPPCO Partners,
                  L.P. (Commission File No. 1-10403) for the year ended December
                  31, 1998 and incorporated herein by reference).

         10.22    Agreement Between Owner and Contractor between TE Products
                  Pipeline Company, Limited Partnership and Eagleton Engineering
                  Company, dated February 4, 1999 (Filed as Exhibit 10.21 to
                  Form 10-Q of TEPPCO Partners, L.P. (Commission File No.
                  1-10403) for the quarter ended March 31, 1999 and incorporated
                  herein by reference).

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

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

         10.25    Texas Eastern Products Pipeline Company Retention Incentive
                  Compensation Plan, effective January 1, 1999 (Filed as Exhibit
                  10.24 to Form 10-Q of TEPPCO Partners, L.P. (Commission File
                  No. 1-10403) for the quarter ended March 31, 1999 and
                  incorporated herein by reference).

         10.26    Credit Agreement between TE Products Pipeline Company, Limited
                  Partnership, SunTrust Bank, Atlanta, and Certain Lenders,
                  dated May 17, 1999 (Filed as Exhibit 10.26 to Form 10-Q of
                  TEPPCO Partners, L.P. (Commission File No. 1-10403) for the
                  quarter ended June 30, 1999 and incorporated herein by
                  reference).

         10.27    Credit Agreement between TEPPCO Crude Oil, LLC, SunTrust Bank,
                  Atlanta, and Certain Lenders, dated May 17, 1999 (Filed as
                  Exhibit 10.27 to Form 10-Q of TEPPCO Partners, L.P.
                  (Commission File No. 1-10403) for the quarter ended June 30,
                  1999 and incorporated herein by reference).

         10.28    Second Amendment to Credit Agreement between TEPPCO Colorado,
                  LLC, SunTrust Bank, Atlanta, and Certain Lenders, effective
                  May 17, 1999 (Filed as Exhibit 10.28 to Form 10-Q of TEPPCO
                  Partners, L.P. (Commission File No. 1-10403) for the quarter
                  ended June 30, 1999 and incorporated herein by reference).

         *10.29   Form of Employment and Non-Compete Agreement between the
                  Company and Samuel N. Brown, J. Michael Cockrell and William
                  S. Dickey, effective January 1, 1999.


                                       25

<PAGE>   26

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)


         *10.30   Texas Eastern Products Pipeline Company Nonemployee Directors
                  Unit Accumulation Plan, effective April 1, 1999.

         *10.31   Texas Eastern Products Pipeline Company Nonemployee Directors
                  Deferred Compensation Plan, effective November 1, 1999.

         *10.32   Texas Eastern Products Pipeline Company Phantom Unit Retention
                  Plan, effective August 25, 1999.

          21.1    Subsidiaries of the Partnership (Filed as Exhibit 22.1 to the
                  Registration Statement of TEPPCO Partners, L.P. (Commission
                  File No. 33-32203) and incorporated herein by reference).

         *27      Financial Data Schedule as of and for the nine months ended
                  September 30, 1999.

         -----------------
          * Filed herewith.

         (b)      Reports on Form 8-K:  None

Items 1, 2, 3, 4 and 5 of Part II were not applicable and have been omitted.


                                    SIGNATURE

         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 duly authorized officer and principal financial officer.


                             TEPPCO Partners, L.P.
                             (Registrant)

                             By: Texas Eastern Products Pipeline Company,
                                 General Partner



                                         /s/  CHARLES H. LEONARD
                             --------------------------------------------------
                                             Charles H. Leonard
                               Senior Vice President, Chief Financial Officer
                                               and Treasurer



Date:  November 9, 1999



                                       26


<PAGE>   27


                                 EXHIBIT INDEX



         Exhibit
         Number                   Description
         -------                  -----------

         *10.29   Form of Employment and Non-Compete Agreement between the
                  Company and Samuel N. Brown, J. Michael Cockrell and William
                  S. Dickey, effective January 1, 1999.

         *10.30   Texas Eastern Products Pipeline Company Nonemployee Directors
                  Unit Accumulation Plan, effective April 1, 1999.

         *10.31   Texas Eastern Products Pipeline Company Nonemployee Directors
                  Deferred Compensation Plan, effective November 1, 1999.

         *10.32   Texas Eastern Products Pipeline Company Phantom Unit Retention
                  Plan, effective August 25, 1999.

         *27      Financial Data Schedule as of and for the nine months ended
                  September 30, 1999.

         -----------------
          * Filed herewith.