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| Delaware                             | 76-0291058                                   |
|--------------------------------------|----------------------------------------------|
| (State      of Other Jurisdiction of | (I.R.S.      Employer Identification Number) |
| Incorporation      or Organization)  |                                         |

| Large accelerated      filer þ                                                   |  Accelerated      Filer o         |
|--------------------------------------------------------------------------------------------|----------------------------------------|
| Non-accelerated      Filer o (Do not      check if a smaller reporting company)  |  Smaller      reporting company o |

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Table of Contents

|                                                                                                                                            | Page      No. |
|-------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
| PART I.  FINANCIAL      INFORMATION                                                                                                   |          |
| Item 1. Financial      Statements                                                                                                               |          |
| Unaudited Condensed Consolidated Balance      Sheets                                                                                            | 1             |
|                                                                                                                                            |          |
| Unaudited Condensed Statements of Consolidated      Income                                                                                      | 2             |
|                                                                                                                                            |          |
| Unaudited Condensed Statements of      Comprehensive Income                                                                                     | 3             |
|                                                                                                                                            |          |
| Unaudited      Condensed Statements of Consolidated Cash Flows                                                                                  | 4             |
|                                                                                                                                            |          |
| Unaudited Condensed Statements of Consolidated      Partners’ Capital                                                                     | 5             |
|                                                                                                                                            |          |
| Notes to      Unaudited Condensed Consolidated Financial Statements                                                                             | 6             |
|           Note 1.  Partnership Organization and Basis of      Presentation          | 6             |
|           Note 2.  General Accounting Policies and Related      Matters             | 7             |
|           Note 3.  Accounting for Unit-Based      Awards                            | 10            |
|           Note 4.  Employee Benefit    Plans                                        | 13            |
|           Note 5.  FinancialInstruments                                             | 13            |
|           Note 6.  Inventories                                                      | 17            |
|           Note 7.  Property, Plant and      Equipment                               | 18            |
|           Note 8.  Investments in Unconsolidated      Affiliates                    | 19            |
|           Note 9.  Acquisitions and      Dispositions                               | 21            |
|           Note 10.  Intangible Assets and      Goodwill                             | 26            |
|           Note 11.  Debt Obligations                                                | 28            |
|           Note 12.  Partners’ Capital and      Distributions                  | 32            |
|           Note 13.  Business      Segments                                          | 35            |
|           Note 14.  Related Party      Transactions                                 | 39            |
|           Note 15.  Earnings per Unit                                               | 42            |
|           Note 16.  Commitments and      Contingencies                              | 43            |
|           Note 17.  Supplemental Cash Flow      Information                         | 48            |
|           Note 18.  Supplemental Condensed Consolidating      Financial Information | 48            |
|           Note 19.  Subsequent Events                                               | 52            |
|                                                                                                                                            |          |
| Item 2.  Management’s Discussion and      Analysis of Financial Condition and Results of      Operations                        | 53            |
|                                                                                                                                            |          |
| Cautionary Note Regarding Forward-Looking      Statements                                                                                       | 54            |
|                                                                                                                                            |          |
| Item 3.  Quantitative and Qualitative      Disclosures About Market Risk                                                              | 74            |
|                                                                                                                                            |          |
| Item 4.  Controls and      Procedures                                                                                                 | 77            |
| PART II.  OTHER INFORMATION                                                                                                           |          |
| Item 1.  Legal      Proceedings                                                                                                       | 77            |
|                                                                                                                                            |          |
| Item 1A.  Risk      Factors                                                                                                           | 77            |
|                                                                                                                                            |          |
| Item 5.  Other      Information                                                                                                       | 79            |
|                                                                                                                                            |          |
| Item 6.  Exhibits                                                                                                                     | 79            |
|                                                                                                                                            |          |
| Signatures                                                                                                                                      | 82            |
|                                                                                                                                            |          |

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FinancialStatements

UNAUDITED CONDENSED CONSOLIDATED BALANCESHEETS

|   | March      31, |   | December      31, |
|--------|----------------|--------|-------------------|
|   | 2008           |   | 2007              |
|   |           |   |              |

| Current      assets:                                                                      |   |      |   |   |
|-------------------------------------------------------------------------------------------|--------|-----------|--------|--------|
|   Cash      and cash equivalents                                           | $      | 32        |   | $      | 23 |   |
|   Accounts      receivable, trade (net of allowance for doubtful accounts    of |   |      |   |   |   |   |
| $128      and $125)                                                                  |   | 1,571,049 |   |   | 1,381,871 |   |
|   Accounts      receivable, related parties                                |   | 5,003     |   |   | 6,525 |   |
|   Inventories                                                         |   | 87,526    |   |   | 80,299 |   |
|   Other                                                               |   | 50,628    |   |   | 47,271 |   |
|      Total      current assets                         |   | 1,714,238 |   |   | 1,515,989 |   |
| Property, plant and equipment,      at cost (net of accumulated                           |   |      |   |   |   |   |
|   depreciation      of $604,021 and $582,225)                              |   | 2,252,377 |   |   | 1,793,634 |   |
| Equity      investments                                                              |   | 1,164,337 |   |   | 1,146,995 |   |
| Intangible      assets                                                               |   | 218,214   |   |   | 164,681 |   |
| Goodwill                                                                        |   | 120,237   |   |   | 15,506 |   |
| Other      assets                                                               |   | 134,449   |   |   | 113,252 |   |
|      Total      assets                            | $      | 5,603,852 |   | $      | 4,750,057 |   |

| Current      liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|
|   Senior      notes                                                                                                                             |   | $      | --        |   | $      | 353,976 |   |
|   Accounts      payable and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 1,591,428 |   |   | 1,413,447 |   |
|   Accounts      payable, related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 29,695    |   |   | 38,980 |   |
|   Accrued      interest                                                                                                                         |   |   | 15,193    |   |   | 35,491 |   |
|   Other      accrued      taxes                                                                                                                 |   |   | 20,719    |   |   | 20,483 |   |
|   Other                                                                                                                                         |   |   | 48,071    |   |   | 84,848 |   |
|      Total      current      liabilities                                                                                         |   |   | 1,705,106 |   |   | 1,947,225 |   |
| Long-term      debt:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |      |   |   |   |   |
|   Senior      notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 1,716,748 |   |   | 721,545 |   |
|   Junior      subordinated notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 299,547   |   |   | 299,538 |   |
|   Other      long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 429,200   |   |   | 490,000 |   |
|   Total      long-term      debt                                                                                                                |   |   | 2,445,495 |   |   | 1,511,083 |   |
| Other      liabilities and deferred credits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 29,944    |   |   | 27,122 |   |
| Commitments      and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |      |   |   |   |   |
| Partners’      capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |      |   |   |   |   |
|   Limited      partners’ interests:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |      |   |   |   |   |
|      Limited      partner units (94,777,260 and 89,849,132 unitsoutstanding)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 1,575,111 |   |   | 1,394,812 |   |
|      Restricted      limited partner units (62,400 and 62,400 unitsoutstanding)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 478       |   |   | 338 |   |
|   General      partner’s interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | (89,614   | )      |   | (87,966 | ) |
|   Accumulated      other comprehensive loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | (62,668   | )      |   | (42,557 | ) |
|      Total partners’      capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 1,423,307 |   |   | 1,264,627 |   |
|      Total liabilities and partners’      capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 5,603,852 |   | $      | 4,750,057 |   |

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Table of Contents

CONSOLIDATEDINCOME

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Three Months Ended |      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | March      31,                  |      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2008                            |      |   | 2007 |   |
| Operating      revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            |      |   |   |   |
| Sales      of petroleum      products                                                                                                          |   | $                               | 2,644,578 |   |   | $ | 1,850,128 |   |
| Transportation      – Refined      products                                                                                              |   |                            | 37,283    |   |   |   | 37,135 |   |
| Transportation      –      LPGs                                                                                                          |   |                            | 36,191    |   |   |   | 36,053 |   |
| Transportation      – Crude      oil                                                                                                     |   |                            | 15,300    |   |   |   | 10,790 |   |
| Transportation      –      NGLs                                                                                                          |   |                            | 12,957    |   |   |   | 10,941 |   |
| Transportation      –      Marine                                                                                                        |   |                            | 25,536    |   |   |   | -- |   |
| Gathering      – Natural      gas                                                                                                        |   |                            | 13,413    |   |   |   | 15,408 |   |
| Other                                                                                                                                          |   |                            | 23,230    |   |   |   | 17,974 |   |
| Total      operating      revenues                                                                                                                            |   |                            | 2,808,488 |   |   |   | 1,978,429 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Costs      and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            |      |   |   |   |   |   |
| Purchases      of petroleum      products                                                                                                      |   |                            | 2,606,607 |   |   |   | 1,813,994 |   |
| Operating      expense                                                                                                                         |   |                            | 53,777    |   |   |   | 45,166 |   |
| Operating      fuel and      power                                                                                                             |   |                            | 21,374    |   |   |   | 15,274 |   |
| General      and      administrative                                                                                                           |   |                            | 8,748     |   |   |   | 8,598 |   |
| Depreciation      and      amortization                                                                                                        |   |                            | 28,344    |   |   |   | 25,369 |   |
| Taxes      – other than income      taxes                                                                                                |   |                            | 6,119     |   |   |   | 5,243 |   |
| Gains      on sales of      assets                                                                                                             |   |                            | --        |   |   |   | (18,649 | ) |
| Total      costs and      expenses                                                                                                                            |   |                            | 2,724,969 |   |   |   | 1,894,995 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Operating      income                                                                                                                                         |   |                            | 83,519    |   |   |   | 83,434 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Other      income (expense):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            |      |   |   |   |   |   |
| Interest      expense – net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            | (38,571   | ) |   |   | (22,211 | ) |
| Gain      on sale of ownership interest in Mont Belvieu Storage Partners,      L.P.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            | --        |   |   |   | 59,837 |   |
| Equity      earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 19,662    |   |   |   | 16,563 |   |
| Interest      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 308       |   |   |   | 342 |   |
| Other      income – net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 40        |   |   |   | 244 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Income      before provision for income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 64,958    |   |   |   | 138,209 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Provision      for income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            | 819       |   |   |   | 18 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Net      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                               | 64,139    |   |   | $ | 138,191 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Net Income      Allocation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            |      |   |   |   |   |   |
| Limited      Partner’s interest in net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                               | 53,403    |   |   | $ | 115,524 |   |
| General      Partner interest in net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | 10,736    |   |   |   | 22,667 |   |
|      Total      net income allocated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                               | 64,139    |   |   | $ | 138,191 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Basic      and diluted net income per Limited Partner Unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                               | 0.57      |   |   | $ | 1.29 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |      |   |   |   |   |   |
| Weighted      average Limited Partner Unitsoutstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            | 93,156    |   |   |   | 89,805 |   |

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Table of Contents

COMPREHENSIVEINCOME

|                                                                                                                                 |   | For      the Three Months Ended |    |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                                                                                 |   | March      31,                  |    |
|                                                                                                                                 |   | 2008                            |    |   | 2007 |   |
|                                                                                                                                 |   |                            |    |   |   |   |
| Net      income                                                                                                       |   | $                               | 64,139  |   |   | $ | 138,191 |   |
| Other      comprehensive income (loss):                                                                                              |   |                            |    |   |   |   |   |   |
|     Cash      flow hedges:                                                                                       |   |                            |    |   |   |   |   |   |
|         Change      in fair values of interest rate cash flow hedges and treasury      locks |   |                            | (23,200 | ) |   |   | 217 |   |
|         Changes      in fair values of crude oil cash flow hedges                  |   |                            | 3,089   |   |   |   | 360 |   |
|            Total      cash flow hedges                                   |   |                            | (20,111 | ) |   |   | 577 |   |
|     Pension      benefit SFAS No. 158 adjustment                                                            |   |                            | --      |   |   |   | (34 | ) |
|           Total      other comprehensive income (loss)                   |   |                            | (20,111 | ) |   |   | 543 |   |
| Comprehensive      income                                                                                                            |   | $                               | 44,028  |   |   | $ | 138,734 |   |

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Table of Contents

CASHFLOWS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | For      the Three Months Ended |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | March      31,                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2008                            |       |   | 2007 |   |
| Operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            |       |   |   |   |
| Net      income                                                                                                |   | $                               | 64,139     |   |   | $ | 138,191 |   |
| Adjustments      to reconcile net income to cash provided by operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            |       |   |   |   |   |   |
| Deferred      income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            | (5         | ) |   |   | (642 | ) |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 28,344     |   |   |   | 25,369 |   |
| Amortization      of deferred compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            | 291        |   |   |   | -- |   |
| Amortization      in interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            | 2,777      |   |   |   | (189 | ) |
| Earnings      in equity investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | (19,662    | ) |   |   | (16,563 | ) |
| Distributions      from equity investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            | 37,234     |   |   |   | 40,304 |   |
| Gains      on sales of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | --         |   |   |   | (18,649 | ) |
| Gain      on sale of ownership interest in Mont Belvieu Storage Partners,      L.P.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | --         |   |   |   | (59,837 | ) |
| Loss      on early extinguishment of debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            | 8,689      |   |   |   | -- |   |
| Net      effect of changes in operating      accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | (63,126                         | )          |   |   | (39,253 | ) |
|      Net      cash provided by operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | 58,681     |   |   |   | 68,731 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |   |   |   |   |
| Investing      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            |       |   |   |   |   |   |
| Proceeds      from sales of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | --         |   |   |   | 26,537 |   |
| Proceeds      from sale of ownership interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | --         |   |   |   | 138,729 |   |
| Cash      used for business combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            | (338,485   | ) |   |   | -- |   |
| Investment      in Centennial Pipeline LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            | --         |   |   |   | (6,081 | ) |
| Investment      in Jonah Gas Gathering Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | (31,773    | ) |   |   | (30,942 | ) |
| Capitalized      costs incurred to develop identifiable intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            | (300       | ) |   |   | -- |   |
| Cash      paid for linefill on assets owned                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | (14,282    | ) |   |   | -- |   |
| Capital      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                            | (51,601    | ) |   |   | (34,084 | ) |
|           Net      cash provided by (used in) investingactivities                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            | (436,441   | ) |   |   | 94,159 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |   |   |   |   |
| Financing      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            |       |   |   |   |   |   |
| Proceeds      from term credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | 1,000,000  |   |   |   | -- |   |
| Repayments      on term credit      facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            | (1,000,000 | ) |   |   | -- |   |
| Proceeds      from revolving credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | 516,250    |   |   |   | 235,000 |   |
| Repayments      on revolving credit facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | (577,050   | ) |   |   | (325,500 | ) |
| Repayment      of debt assumed in Cenac acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | (63,157    | ) |   |   | -- |   |
| Redemption      of 7.51% TE Products Senior Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                            | (181,571   | ) |   |   | -- |   |
| Repayment      of 6.45% TE Products Senior Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            | (180,000   | ) |   |   | -- |   |
| Issuance      of Limited Partner Units, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            | 2,666      |   |   |   | -- |   |
| Issuance      of senior notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 996,349    |   |   |   | -- |   |
| Debt      issuance costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | (8,747     | ) |   |   | -- |   |
| Settlement      of treasury lock agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | (52,098    | ) |   |   | -- |   |
| Distributions      paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            | (74,873    | ) |   |   | (72,389 | ) |
|          Net      cash provided by (used in) financing      activities                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 377,769    |   |   |   | (162,889 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |   |   |   |   |
| Net      change in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                            | 9          |   |   |   | 1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            |       |   |   |   |   |   |
| Cash      and cash equivalents, January 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            | 23         |   |   |   | 70 |   |
| Cash      and cash equivalents, March 31                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                               | 32         |   |   | $ | 71 |   |

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Table of Contents

PARTNERS’CAPITAL

|                                                                                                                        |   | Outstanding |       |   |            |   |    |            |   |   | Accumulated        |   |   |   |    |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|-----------------|--------|---------|-----------------|--------|--------|--------------------|--------|--------|--------|---------|
|                                                                                                                        |   | Limited     |       |   | General         |   |    | Limited         |   |   | Other              |   |   |   |    |
|                                                                                                                        |   | Partner     |       |   | Partner’s |   |    | Partners’ |   |   | Comprehensive      |   |   |   |    |
|                                                                                                                        |   | Units       |       |   | Interest        |   |    | Interests       |   |   | Income      (Loss) |   |   | Total  |    |
|                                                                                                                        |   |        |       |   |            |   |    |            |   |   |               |   |   |   |    |
| Balance,      December 31, 2007                                                                                             |   |        | 89,911,532 |   |            | $      | (87,966 | )               |   | $      | 1,395,150          |   |   | $      | (42,557 | ) |   | $ | 1,264,627 |   |
| Net income      allocation                                                                                             |   |        | --         |   |            |   | 10,736  |            |   |   | 53,403             |   |   |   | --      |   |   |   | 64,139 |   |
| Issuance of units in connection      with Cenac      acquisition      on February 1, 2008     |   |        | 4,854,899  |   |            |   | --      |            |   |   | 186,558            |   |   |   | --      |   |   |   | 186,558 |   |
| Limited Partner Units issued in      connection      with      Distribution Reinvestment Plan |   |        | 69,319     |   |            |   | --      |            |   |   | 2,518              |   |   |   | --      |   |   |   | 2,518 |   |
|    Units      issued in connection with Employee      Unit      Purchase Plan  |   |        | 3,910      |   |            |   | --      |            |   |   | 148                |   |   |   | --      |   |   |   | 148 |   |
| Cash      distributions                                                                                           |   |        | --         |   |            |   | (12,384 | )               |   |   | (62,489            | )      |   |   | --      |   |   |   | (74,873 | ) |
| Non-cash      contribution                                                                                             |   |        | --         |   |            |   | --      |            |   |   | 125                |   |   |   | --      |   |   |   | 125 |   |
| Amortization of equity      awards                                                                                          |   |        | --         |   |            |   | --      |            |   |   | 176                |   |   |   | --      |   |   |   | 176 |   |
| Changes in fair values of crude      oil cash   flow      hedges                                             |   |        | --         |   |            |   | --      |            |   |   | --                 |   |   |   | 3,089   |   |   |   | 3,089 |   |
| Changes in fair values of      treasury locks                                                                               |   |        | --         |   |            |   | --      |            |   |   | --                 |   |   |   | (23,200 | ) |   |   | (23,200 | ) |
|                                                                                                                        |   |        |       |   |            |   |    |            |   |   |               |   |   |   |    |   |   |   |   |   |
| Balance,      March 31, 2008                                                                                      |   |        | 94,839,660 |   |            | $      | (89,614 | )               |   | $      | 1,575,589          |   |   | $      | (62,668 | ) |   | $ | 1,423,307 |   |

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NOTES

NOTE 1

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NOTE 2

    -  pipeline  transportation, marketing and storage of refined products, liquefied petroleum  gases (“LPGs”) and petrochemicals (“Downstream Segment”); 
    -  gathering,  pipeline transportation, marketing and storage of crude oil and distribution  of lubrication oils and specialty chemicals (“Upstream Segment”); 
    -  gathering  of natural gas, fractionation of natural gas liquids (“NGLs”) and pipeline  transportation of NGLs (“Midstream Segment”); and 
    -  marine  transportation of refined products, crude oil, condensate, asphalt, heavy fuel  oil and other heated oil products via tow boats and tank barges (“Marine  Services Segment”). 

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NOTE 3

|                                                                                     |   | For      the Three Months EndedMarch      31, |   |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                     |   | 2008                                          |   |   | 2007 |   |
| Phantom      Unit Plans: (1) (2)                                                         |   |                                          |   |   |   |   |
|   1999      Phantom Unit Retention Plan                                   |   | $                                             | (8     | ) |   | $ | 440 |   |
|   2000      Long Term Incentive Plan                                      |   |                                          | (227   | ) |   |   | 180 |   |
|   2005      Phantom Unit Plan                                             |   |                                          | 57     |   |   |   | 213 |   |
| EPCO,      Inc. 2006 TPP Long-Term Incentive Plan:                                       |   |                                          |   |   |   |   |   |   |
|   Unit      options                                                  |   |                                          | 27     |   |   |   | -- |   |
|   Restricted      units (3)                                               |   |                                          | 139    |   |   |   | -- |   |
|   Unit      appreciation rights (“UARs”) (1) (2)    |   |                                          | (3     | ) |   |   | -- |   |
|   Phantom      units (1)                                                  |   |                                          | 4      |   |   |   | -- |   |
| Compensation      expense allocated under ASA (4)                              |   |                                          | 339    |   |   |   | 90 |   |
|       Total      compensation expense                 |   | $                                             | 328    |   |   | $ | 923 |   |

| (1)   | These      awards are accounted for as liability awards under the provisions of SFAS      123(R).  Accruals for plan award payouts are based on the Unit      price. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The      decrease in compensation expense for the three months ended March 31,      2008, is primarily due to a decrease in the Unit price at March 31, 2008      as compared to the Unit price at December 31,  2007. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | As      used in the context of the EPCO, Inc. 2006 Long-Term Incentive Plan, the      term “restricted unit” represents a time-vested unit under SFAS      123(R).  Such awards are non-vested until the required service      period expires. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Represents      compensation expense under equity awards allocated to us from EPCO under      the ASA in connection with shared service employees working on our      behalf. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                    |   |          |    |              |   | Weighted-            |   |
|---------------------------------------------------------|--------|---------------|---------|-------------------|--------|----------------------|--------|
|                                                    |   |          |    | Weighted-         |   | Average              |   |
|                                                    |   |          |    | Average           |   | Remaining            |   |
|                                                    |   | Number        |    | Strike      Price |   | Contractual          |   |
|                                                    |   | of Units |    | (dollars/Unit)    |   | Term      (in years) |   |
| Unit      Options:                                      |   |          |    |              |   |                 |   |
| Outstanding at December 31,      2007                   |   |          | 155,000 |              | $      | 45.35                |   |   | -- |   |
| Granted                                                 |   |          | --      |              |   | --                   |   |   | -- |   |
| Outstanding at March 31,      2008                      |   |          | 155,000 |              | $      | 45.35                |   |   | 9.15 |   |
|   Options      exercisable at:                |   |          |    |              |   |                 |   |   |   |   |
|       March      31, 2008 |   |          | --      |              | $      | --                   |   |   | -- |   |

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|                                       |          |   | Weighted-            |   |
|--------------------------------------------|---------------|--------|----------------------|--------|
|                                       |          |   | Average      Grant   |   |
|                                       | Number        |   | Date      Fair Value |   |
|                                       | of      Units |   | per      Unit (1)    |   |
| Restricted Units at December 31,      2007 |          | 62,400 |                 |   |   |
| Granted                               |          | --     |                 | $      | -- |   |
| Restricted Units at March 31,      2008    |          | 62,400 |                 | $      | 37.64 |   |

| (1)   | Determined      by dividing the aggregate grant date fair value of awards (including an      allowance for forfeitures) by the number of awards  issued. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

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NOTE 4

NOTE 5.  FINANCIAL INSTRUMENTS

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    -  Level 1  fair values are based on quoted prices, which are available in active markets  for identical assets or liabilities as of the measurement  date.  Active markets are defined as those in which transactions for  identical assets or liabilities occur in sufficient frequency so as to provide  pricing information on an ongoing basis (e.g., the NYSE or New York Mercantile  Exchange).  Level 1 primarily consists of financial assets and  liabilities such as exchange-traded financial instruments, publicly-traded  equity securities and U.S. government treasurysecurities. 
    -  Level 2  fair values are based on pricing inputs other than quoted prices in active  markets (as reflected in Level 1 fair values) and are either directly or  indirectly observable as of the measurement date.  Level 2 fair  values include instruments that are valued using financial models or other  appropriate valuation methodologies.  Such financial models are  primarily industry-standard models that consider various assumptions,  including quoted forward prices for commodities, time value of money,  volatility factors for stocks, and current market and contractual prices for  the underlying instruments, as well as other relevant economic  measures.  Substantially all of these assumptions are observable in  the marketplace throughout the full term of the instrument, can be derived  from observable data, or are validated by inputs other than quoted prices  (e.g., interest rates and yield curves at commonly quoted  intervals).  Level 2 includes non-exchange-traded instruments such  as over-the-counter forward contracts, options, and repurchase  agreements. 

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-  Level 3  fair values are based on unobservable inputs.  Unobservable inputs  are used to measure fair value to the extent that observable inputs are not  available, thereby allowing for situations in which there is little, if any,  market activity for the asset or liability at the measurement  date.  Unobservable inputs reflect the reporting entity’s own ideas  about the assumptions that market participants would use in pricing an asset  or liability (including assumptions about risk).  Unobservable  inputs are based on the best information available in the circumstances, which  might include the reporting entity’s internally-developed data.  The  reporting entity must not ignore information about market participant  assumptions that is reasonably available without undue cost and  effort.  Level 3 inputs are typically used in connection with  internally developed valuation methodologies where management makes its best  estimate of an instrument’s fair value.  Level 3 generally includes  specialized or unique financial instruments that are tailored to meet a  customer’s specific needs. 

|                                                                                                                                                                                                                                                                                                                                                                                |   | Level      2 |   | Level      3 |   | Total  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                |   |         |   |         |   |   |   |
| Financial      assets:                                                                                                                                                                                                                                                                                                                                                              |   |         |   |         |   |   |   |
| Commodity financial      instruments                                                                                                                                                                                                                                                                                                                                           |   | $            | 10,545 |         | $      | 758    |   | $ | 11,303 |   |
|     Total                                                          |   | $            | 10,545 |         | $      | 758    |   | $ | 11,303 |   |
|                                                                                                                                                                                                                                                                                                                                                                                |   |         |   |         |   |   |   |   |   |   |
| Financial      liabilities:                                                                                                                                                                                                                                                                                                                                                         |   |         |   |         |   |   |   |   |   |   |
| Commodity financial      instruments                                                                                                                                                                                                                                                                                                                                                |   | $            | 25,960 |         | $      | 734    |   | $ | 26,694 |   |
|     Total                                                                                                                                                                                                                                                                                                                                             |   | $            | 25,960 |         | $      | 734    |   | $ | 26,694 |   |

|                                                                  |   | Net         |   |
|-----------------------------------------------------------------------|--------|-------------|--------|
|                                                                  |   | Commodity   |   |
|                                                                  |   | Financial   |   |
|                                                                  |   | Instruments |   |
|                                                                  |   |        |   |
| Beginning      balance, January 1, 2008                          |   | $           | (394   | ) |
| Total      gains (losses) included in:                                |   |        |   |   |
| Net      income (1)                                    |   |        | 418    |   |
| Other comprehensive      income                                       |   |        | --     |   |
| Purchases,      issuances, settlements                           |   |        | --     |   |
| Transfer      in/out of Level 3                        |   |        | --     |   |
|                                                                  |   |        |   |   |
| Ending      balance, March 31, 2008                              |   | $           | 24     |   |
|                                                                  |   |        |   |   |
| Net      unrealized gains (losses) included in net income for         |   |        |   |   |
| quarter relating to instruments      still held at March 31, 2008 (1) |   | $           | 418    |   |

| (1)   | At      March 31, 2008, total commodity financial instrument gains included in net      income were $0.4 million, which were unrealized.  This amount      was recognized in revenues on our statement of consolidated income for the      three months ended March 31,2008. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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NOTE 6

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | March      31, 2008 |   |   | December      31,2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|-----------------------|--------|
| Crude      oil      (1)                                                                                                                            |   | $                        | 36,529 |   |                  | $      | 44,542 |   |
| Refined      products and LPGs      (2)                                                                                                            |   |                     | 31,916 |   |                  |   | 18,616 |   |
| Lubrication      oils and specialty      chemicals                                                                                                 |   |                     | 9,332  |   |                  |   | 9,160 |   |
| Materials      and      supplies                                                                                                                   |   |                     | 7,858  |   |                  |   | 7,178 |   |
| NGLs                                                                                                                                               |   |                     | 1,891  |   |                  |   | 803 |   |
|           Total                                                                                  |   | $                        | 87,526 |   |                  | $      | 80,299 |   |

| (1)   | At      March 31, 2008 and December 31, 2007, $21.4 million and $16.5 million,      respectively, of our crude oil inventory was subject to forward sales      contracts. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Refined      products and LPGs inventory is managed on a combined  basis. |
|-----------------|---------------------------------------------------------------------------|

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NOTE 7

|                                                    |   | Estimated        |   |   |           |   |      |              |   |
|---------------------------------------------------------|--------|------------------|--------|--------|----------------|--------|-----------|-------------------|--------|
|                                                    |   | Useful      Life |   |   | March      31, |   |      | December      31, |   |
|                                                    |   | In      Years    |   |   | 2008           |   |      | 2007              |   |
| Plants      and pipelines (1)                           |   |             | 5-40   | (4)    |           | $      | 1,801,600 |              |   | $ | 1,810,195 |   |
| Underground      and other storage facilities (2)  |   |             | 5-40   | (5)    |           |   | 256,082   |              |   |   | 254,677 |   |
| Transportation      equipment (3)                       |   |             | 5-10   |   |           |   | 8,484     |              |   |   | 7,780 |   |
| Marine      vessels                                |   |             | 20-30  |   |           |   | 422,045   |              |   |   | -- |   |
| Land      and right of way                              |   |             |   |   |           |   | 138,593   |              |   |   | 117,628 |   |
| Construction      work in progress            |   |             |   |   |           |   | 229,594   |              |   |   | 185,579 |   |
| Total property, plant and      equipment           |   |             |   |   |           | $      | 2,856,398 |              |   | $ | 2,375,859 |   |
| Less accumulated      depreciation                      |   |             |   |   |           |   | 604,021   |              |   |   | 582,225 |   |
| Property, plant and equipment,      net            |   |             |   |   |           | $      | 2,252,377 |              |   | $ | 1,793,634 |   |

| (1)   | Plants      and pipelines include refined products, LPGs, NGL, petrochemical, crude      oil and natural gas pipelines; terminal loading and unloading facilities;      office furniture and equipment; buildings, laboratory and shop equipment;      and related assets. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Underground      and other storage facilities include underground product storage caverns;      storage tanks; and other relatedassets. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Transportation      equipment includes vehicles and similar assets used in our      operations. |
|-----------------|-------------------------------------------------------------------------------------------------|

| (4)   | The      estimated useful lives of major components of this category are as      follows:  pipelines, 20-40 years (with some equipment at 5      years); terminal facilities, 10-40 years; office furniture and equipment,      5-10 years; buildings 20-40 years; and laboratory and shop equipment, 5-40      years. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | The      estimated useful lives of major components of this category are as      follows:  underground storage facilities, 20-40 years (with some      components at 5 years) and storage tanks, 20-30  years. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | For      the Three Months EndedMarch      31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2008                                          |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                          |   |   |   |   |
| Depreciation      expense      (1)                                                                        |   | $                                             | 21,906 |   |   | $ | 19,424 |   |
| Capitalized      interest      (2)                                                                        |   |                                          | 4,408  |   |   |   | 3,728 |   |

| (1)   | Depreciation      expense is a component of depreciation and amortization expense as      presented in our statements of consolidated  income. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Capitalized      interest increases the carrying value of the associated asset and reduces      interest expense during the period it is  recorded. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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| ARO      liability balance, December 31,      2007                                                                                         |   | $      | 1,346 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------|--------|
|   Liabilities      incurred                                                                                                      |   |   | --    |   |
|   Liabilities      settled                                                                                                       |   |   | --    |   |
|   Accretion      expense                                                                                                         |   |   | 31    |   |
| ARO      liability balance, March 31,      2008                                                                                            |   | $      | 1,377 |   |

NOTE 8

|                                                                    |   | Ownership      Percentage      at |   |   | Investments      in unconsolidated affiliates at |   |
|-------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|--------------------------------------------------|--------|
|                                                                    |   | March      31,2008                |   |   | March      31,2008                               |   |   | December      31, 2007 |   |
|                                                                    |   |                              |   |   |                                             |   |   |   |   |
| Downstream      Segment:                                                |   |                              |   |   |                                             |   |   |   |   |
| Centennial Pipeline LLC      (“Centennial”)            |   |                              | 50.0   | %      |                                             | $      | 77,069 |   |   | $ | 78,962 |   |
| Other                                                         |   |                              | 25.0   | %      |                                             |   | 373 |   |   |   | 362 |   |
| Upstream      Segment:                                                  |   |                              |   |   |                                             |   |   |   |   |   |   |   |
| Seaway Crude Pipeline Company      (“Seaway”)               |   |                              | 50.0   | %      |                                             |   | 192,047 |   |   |   | 188,650 |   |
| Midstream      Segment:                                                 |   |                              |   |   |                                             |   |   |   |   |   |   |   |
| Jonah Gas Gathering Company      (“Jonah”)                  |   |                              | 80.64  | %      |                                             |   | 894,848 |   |   |   | 879,021 |   |
|           Total  |   |                              |   |   |                                             | $      | 1,164,337 |   |   | $ | 1,146,995 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | For      the Three Months EndedMarch      31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2008                                          |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |   |   |   |   |
| Equity      earnings (losses):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                          |   |   |   |   |
| Downstream      Segment                                                                                                                             |   | $                                             | (4,132 | ) |   | $ | (1,487 | ) |
| Upstream      Segment                                                                                                                               |   |                                          | 3,000  |   |   |   | 1,789 |   |
| Midstream      Segment                                                                                                                              |   |                                          | 23,695 |   |   |   | 18,629 |   |
| Intersegment      eliminations                                                                                                                      |   |                                          | (2,901 | ) |   |   | (2,368 | ) |
|        Total      equity      earnings                                                                           |   | $                                             | 19,662 |   |   | $ | 16,563 |   |

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|                        |   | For      the Three Months Ended |   |
|-----------------------------|--------|---------------------------------|--------|
|                        |   | March      31, 2008        |   |   | March      31, 2007 |   |
|                        |   | Revenues                        |   |   | Operating      Income |   |   | NetIncome      (Loss) |   |   | Revenues |   |   | Operating      Income |   |   | NetIncome      (Loss) |   |
|                        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Downstream      Segment (1) |   | $                               | 9,643  |   |   | $ | 871 |   |   | $ | (1,837 | ) |   | $ | 15,863 |   |   | $ | 1,027 |   |   | $ | (1,724 | ) |
| Upstream      Segment       |   |                            | 20,573 |   |   |   | 10,354 |   |   |   | 10,370 |   |   |   | 18,170 |   |   |   | 7,835 |   |   |   | 7,934 |   |
| Midstream      Segment      |   |                            | 58,203 |   |   |   | 29,279 |   |   |   | 29,424 |   |   |   | 56,524 |   |   |   | 20,012 |   |   |   | 20,169 |   |

| (1)   | On      March 1, 2007, we sold our ownership interest in Mont Belvieu Storage      Partners, L.P. (“MB Storage”) to Louis Dreyfus Energy Services L.P.      (“Louis Dreyfus”) (see Note 10). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | March      31, 2008 |   |
|-------------------------|--------|---------------------|--------|
|                    |   | Current Assets |   |   | NoncurrentAssets |   |   | Current      Liabilities |   |   | Long-term      Debt |   |   | NoncurrentLiabilities |   |   | Partners’ Capital |   |
|                    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Downstream      Segment |   | $                   | 12,905 |   |   | $ | 246,410 |   |   | $ | 17,294 |   |   | $ | 127,350 |   |   | $ | 827 |   |   | $ | 113,844 |   |
| Upstream      Segment   |   |                | 25,714 |   |   |   | 250,236 |   |   |   | 3,978 |   |   |   | 33 |   |   |   | -- |   |   |   | 271,939 |   |
| Midstream      Segment  |   |                | 49,567 |   |   |   | 1,093,225 |   |   |   | 27,305 |   |   |   | -- |   |   |   | 262 |   |   |   | 1,115,225 |   |

|                    |   | December      31, 2007 |   |
|-------------------------|--------|------------------------|--------|
|                    |   | Current Assets    |   |   | NoncurrentAssets |   |   | Current      Liabilities |   |   | Long-term      Debt |   |   | NoncurrentLiabilities |   |   | Partners’ Capital |   |
|                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Downstream      Segment |   | $                      | 20,864 |   |   | $ | 248,896 |   |   | $ | 23,814 |   |   | $ | 129,900 |   |   | $ | 365 |   |   | $ | 115,681 |   |
| Upstream      Segment   |   |                   | 16,429 |   |   |   | 251,635 |   |   |   | 6,457 |   |   |   | -- |   |   |   | 38 |   |   |   | 261,569 |   |
| Midstream      Segment  |   |                   | 55,396 |   |   |   | 1,065,304 |   |   |   | 22,545 |   |   |   | -- |   |   |   | 264 |   |   |   | 1,097,891 |   |

NOTE 9

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| Cash      payment for Cenac acquisition       |   | $      | 256,593 |   |
|---------------------------------------------------------|--------|--------|---------|--------|
| Fair      value of our 4,854,899 Units             |   |   | 186,558 |   |
| Other      cash acquisition costs paid to third-parties |   |   | 1,117   |   |
|     Total      consideration        |   | $      | 444,268 |   |

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| Property,      plant and      equipment                                                                                                                              |   | $      | 359,956 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Intangible      assets                                                                                                                                               |   |   | 52,850  |   |
| Total      assets acquired                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 412,806 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |    |   |
| Long-term      debt                                                                                                                                                  |   |   | (63,157 | )      |
|          Total      liabilities      assumed                                                                            |   |   | (63,157 | )      |
|          Total      assets acquired less liabilities assumed                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 349,649 |   |
|          Total      consideration      given                                                                            |   |   | 444,268 |   |
| Goodwill                                                                                                                                                             |   | $      | 94,619  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | For      the Three Months EndedMarch      30, |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2008                                          |      |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                          |      |   |   |   |
| Pro      forma earnings data:                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                          |      |   |   |   |
|   Revenues                                                                                                |   | $                                             | 2,820,039 |   |   | $ | 2,000,862 |   |
|   Costs      and      expenses                                                                            |   |                                          | 2,733,916 |   |   |   | 1,916,753 |   |
|   Operating      income                                                                                   |   |                                          | 86,123    |   |   |   | 84,109 |   |
|   Net      income                                                                                         |   |                                          | 65,681    |   |   |   | 135,677 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                          |      |   |   |   |   |   |
| Basic and diluted      earnings per unit:                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                          |      |   |   |   |   |   |
|   Units      outstanding, as      reported                                                                |   |                                          | 93,156    |   |   |   | 89,805 |   |
|   Units      outstanding, pro      forma                                                                  |   |                                          | 94,747    |   |   |   | 94,660 |   |
|   Basic      and diluted earnings per unit, as reported                                                                                                                                                                                                                                                                                                                                                                              |   | $                                             | 0.57      |   |   | $ | 1.29 |   |
|   Basic      and diluted earnings per unit, pro forma                                                                                                                                                                                                                                                                                                                                                                                |   | $                                             | 0.58      |   |   | $ | 1.20 |   |

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| Property,      plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $      | 63,872 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Intangible      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 6,790  |   |
|                 Total assets acquired                                                                                                                                                                                                                                                                                                                                                                          |   |   | 70,662 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
|          Total      consideration given                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 80,774 |   |
| Goodwill                                                                            |   | $      | 10,112 |   |

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NOTE 10

|                                                                                                                                                                       |   | March      31, 2008       |    |   | December      31, 2007  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|-------------------------|--------|
|                                                                                                                                                                       |   | Gross      CarryingAmount |    |   | AccumulatedAmortization |   |   | Gross      CarryingAmount |   |   | AccumulatedAmortization |   |
| Intangible      assets:                                                                                                                                                    |   |                      |    |   |                    |   |   |   |   |   |   |   |
| DownstreamSegment:                                                                                                                                                         |   |                      |    |   |                    |   |   |   |   |   |   |   |
|   Transportation      agreements                                                                                                                                 |   | $                         | 1,000   |   |                    | $      | (371 | ) |   | $ | 1,000 |   |   | $ | (358 | ) |
|   Other                                                                                                                                                          |   |                      | 5,227   |   |                    |   | (434 | ) |   |   | 4,927 |   |   |   | (325 | ) |
|     Subtotal                                                                                                                                      |   |                      | 6,227   |   |                    |   | (805 | ) |   |   | 5,927 |   |   |   | (683 | ) |
| Upstream Segment:                                                                                                                                                          |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Transportation      agreements                                                                                                                            |   |                      | 888     |   |                    |   | (350 | ) |   |   | 888 |   |   |   | (335 | ) |
|   Other                                                                                                                                                     |   |                      | 10,005  |   |                    |   | (3,179 | ) |   |   | 10,005 |   |   |   | (3,046 | ) |
|     Subtotal                                                                                                                                      |   |                      | 10,893  |   |                    |   | (3,529 | ) |   |   | 10,893 |   |   |   | (3,381 | ) |
| Midstream Segment:                                                                                                                                                         |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Gathering      agreements                                                                                                                                      |   |                      | 239,649 |   |                    |   | (111,828 | ) |   |   | 239,649 |   |   |   | (107,356 | ) |
|   Fractionation      agreement                                                                                                                         |   |                      | 38,000  |   |                    |   | (19,000 | ) |   |   | 38,000 |   |   |   | (18,525 | ) |
|   Other                                                                                                                                                     |   |                      | 306     |   |                    |   | (153 | ) |   |   | 306 |   |   |   | (149 | ) |
|     Subtotal                                                                                                                                      |   |                      | 277,955 |   |                    |   | (130,981 | ) |   |   | 277,955 |   |   |   | (126,030 | ) |
| Marine Services      Segment:                                                                                                                                              |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Customer relationship      intangibles                                                                                                                         |   |                      | 40,900  |   |                    |   | (448 | ) |   |   | -- |   |   |   | -- |   |
|   Other                                                                                                                                                     |   |                      | 18,740  |   |                    |   | (738 | ) |   |   | -- |   |   |   | -- |   |
|     Subtotal                                                                                                                                      |   |                      | 59,640  |   |                    |   | (1,186 | ) |   |   | -- |   |   |   | -- |   |
|            Total      intangible assets                                                                        |   |                      | 354,715 |   |                    |   | (136,501 | ) |   |   | 294,775 |   |   |   | (130,094 | ) |
|                                                                                                                                                                       |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Excess      investments: (1)                                                                                                                                               |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Downstream Segment      (2)                                                                                                                                           |   |                      | 33,390  |   |                    |   | (22,782 | ) |   |   | 33,390 |   |   |   | (21,861 | ) |
| Upstream Segment      (3)                                                                                                                                             |   |                      | 26,908  |   |                    |   | (5,306 | ) |   |   | 26,908 |   |   |   | (5,135 | ) |
| Midstream Segment      (4)                                                                                                                                            |   |                      | 7,469   |   |                    |   | (128 | ) |   |   | 6,988 |   |   |   | (95 | ) |
|            Subtotal                                                                                                 |   |                      | 67,767  |   |                    |   | (28,216 | ) |   |   | 67,286 |   |   |   | (27,091 | ) |
|                                                                                                                                                                       |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|            Total      intangible assets, including       excess      investments |   | $                         | 422,482 |   |                    | $      | (164,717 | ) |   | $ | 362,061 |   |   | $ | (157,185 | ) |

| (1)   | Excess      investments are included in “Equity Investments” in our consolidated      balance sheets. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

| (2)   | Relates      to our investment in Centennial. |
|-----------------|-----------------------------------------------|

| (3)   | Relates      to our investment in Seaway. |
|-----------------|-------------------------------------------|

| (4)   | Relates      to our investment in Jonah. |
|-----------------|------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | For      the Three Months EndedMarch      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2008                                          |   |   | 2007 |   |
| Intangible      assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                          |   |   |   |   |
| Downstream      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                                             | 122    |   |   | $ | 129 |   |
| Upstream      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                          | 148    |   |   |   | 175 |   |
| Midstream      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          | 4,951  |   |   |   | 5,607 |   |
| Marine Services      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                          | 1,186  |   |   |   | -- |   |
|            Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                          | 6,407  |   |   |   | 5,911 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                          |   |   |   |   |   |   |
| Excess      investments: (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                          |   |   |   |   |   |   |
| Downstream      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                          | 921    |   |   |   | 617 |   |
| Upstream      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                          | 171    |   |   |   | 171 |   |
| Midstream      Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          | 33     |   |   |   | 19 |   |
|            Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                          | 1,125  |   |   |   | 807 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                          |   |   |   |   |   |   |
|            Total      amortization      expense                                                                         |   | $                                             | 7,532  |   |   | $ | 6,718 |   |

| (1)   | Amortization      of excess investments is included in equity  earnings. |
|-----------------|--------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                               |   | Intangible      Assets |   |   | Excess      Investments |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-------------------------|--------|
| 2008                                                      |   | $                      | 28,438 |   |                    | $      | 5,958 |   |
| 2009                                                      |   |                   | 27,278 |   |                    |   | 3,483 |   |
| 2010                                                      |   |                   | 25,116 |   |                    |   | 2,349 |   |
| 2011                                                      |   |                   | 23,405 |   |                    |   | 1,036 |   |
| 2012                                                      |   |                   | 17,665 |   |                    |   | 1,036 |   |
| 2013                                                      |   |                   | 16,343 |   |                    |   | 1,036 |   |

|                                  |   | Downstream      Segment |   |   | Midstream      Segment |   |   | Upstream      Segment |   |   | Marine      ServicesSegment |   |   | SegmentsTotal |    |
|---------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|--------|-----------------------|--------|--------|-----------------------------|--------|--------|---------------|---------|
|                                  |   |                    |   |   |                   |   |   |                  |   |   |                        |   |   |          |    |
| Goodwill:                             |   |                    |   |   |                   |   |   |                  |   |   |                        |   |   |          |    |
|   March      31, 2008  |   | $                       | 1,339  |   |                   | $      | --     |                  |   | $      | 14,167                      |   |   | $             | 104,731 |   |   | $ | 120,237 |   |
|   December      31, 2007    |   |                    | 1,339  |   |                   |   | --     |                  |   |   | 14,167                      |   |   |          | --      |   |   |   | 15,506 |   |

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NOTE 11

|                                                                                                                                      |   | March      31, |      |   | December      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                                                                                                                      |   | 2008           |      |   | 2007              |   |
|                                                                                                                                      |   |           |      |   |              |   |
|   Short-term      senior debt obligations:                                                                                      |   |           |      |   |              |   |
|      6.45%      TE Products Senior Notes, due January 2008 (1)                                                   |   | $              | --        |   |              | $      | 180,000 |   |
|      7.51%      TE Products Senior Notes, due January 2028 (1)                                                   |   |           | --        |   |              |   | 175,000 |   |
|             Total      principal amount of short-term senior debt obligations |   |           | --        |   |              |   | 355,000 |   |
| Adjustment to carrying value      associated with hedges of                                                                               |   |           |      |   |              |   |   |   |
|   fair value and      unamortized discounts (2)                                                                  |   |           | --        |   |              |   | (1,024 | ) |
|         Total      short-term senior debt obligations                                             |   | $              | --        |   |              | $      | 353,976 |   |
|                                                                                                                                      |   |           |      |   |              |   |   |   |
|   Long-term:                                                                                                                    |   |           |      |   |              |   |   |   |
| Senior debt obligations:      (3)                                                                                                         |   |           |      |   |              |   |   |   |
|        Revolving      Credit Facility, due December 2012                                               |   | $              | 429,200   |   |              | $      | 490,000 |   |
|        7.625%      Senior Notes, due February 2012                                                     |   |           | 500,000   |   |              |   | 500,000 |   |
|        6.125%      Senior Notes, due February 2013                                           |   |           | 200,000   |   |              |   | 200,000 |   |
|   5.90% Senior Notes,      due April 2013                                                                                  |   |           | 250,000   |   |              |   | -- |   |
|   6.65% Senior Notes,      due April 2018                                                                             |   |           | 350,000   |   |              |   | -- |   |
|   7.55% Senior Notes,      due April 2038                                                                        |   |           | 400,000   |   |              |   | -- |   |
| Total principal amount of      long-term senior debt obligations                                                                          |   |           | 2,129,200 |   |              |   | 1,190,000 |   |
|                                                                                                                                      |   |           |      |   |              |   |   |   |
|      7.000%      Junior Subordinated Notes, due June 2067 (3)                                                    |   |           | 300,000   |   |              |   | 300,000 |   |
|   Total principal      amount of long-term debt obligations                                                                     |   |           | 2,429,200 |   |              |   | 1,490,000 |   |
| Adjustment to carrying value      associated with hedges of fair value and  unamortized      discounts (4)                      |   |           | 16,295    |   |              |   | 21,083 |   |
|       Total      long-term debt obligations                                                            |   |           | 2,445,495 |   |              |   | 1,511,083 |   |
| Total      Debt Instruments (4)                                                                                                 |   | $              | 2,445,495 |   |              | $      | 1,865,059 |   |
| Standby      letter of credit outstanding (5)                                                                              |   | $              | 23,086    |   |              | $      | 23,494 |   |

| (1)   | In January 2008, TE Products retired all of its outstanding      long-term debt by repaying at maturity $180.0 million principal amount of      its 6.45% TE Products Senior Notes due 2008 and redeeming the remaining      $175.0 million principal amount of its 7.51% TE Products Senior Notes due      2028.  The redemption price for the 7.51% TE Products Senior      Notes due 2028 was 103.755% (or $181.6 million, which includes a $6.6      million make-whole premium) of the principal amount plus accrued and      unpaid interest to January 28, 2008, the date of redemption, of $0.5      million.    |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes      $1.0 million related to fair value hedges and $2 thousand in unamortized      discount.  In January 2008, with the redemption of the 7.51% TE      Products Senior Notes, the remaining unamortized loss was recognized in      the statement of consolidatedincome. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | TE      Products, TCTM, TEPPCO Midstream and Val Verde (collectively, the      “Subsidiary Guarantors”) have issued full, unconditional, joint and      several guarantees of our senior notes, junior subordinated notes and      revolving credit facility. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | We      have entered into interest rate swap agreements to hedge our exposure to      changes in the fair value on a portion of the debt obligations presented      above (see Note 5).  At March 31, 2008 and December 31, 2007,      amount includes $5.6 million and $2.1 million of unamortized discounts,      respectively, and $21.9 million and $23.2 million related to fair value      hedges, respectively. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Letters      of credit were issued in connection with crude oil purchased during the      respective quarter.  Payables related to these purchases of      crude oil are generally paid during the following  quarter. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                      |   |            |    |   | Fair      Value |   |
|-----------------------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|
|                                                      |   |            |    |   | March      31,  |   |   | December      31, |   |
|                                                      |   | Face      Value |    |   | 2008            |   |   | 2007 |   |
|                                                      |   |            |    |   |            |   |   |   |   |
| 6.45%      TE Products Senior Notes, due January 2008 (1) |   | $               | 180,000 |   |            | $      | -- |   |   | $ | 179,982 |   |
| 7.625%      Senior Notes, due February 2012               |   |            | 500,000 |   |            |   | 533,188 |   |   |   | 536,765 |   |
| 6.125%      Senior Notes, due February 2013               |   |            | 200,000 |   |            |   | 202,368 |   |   |   | 202,027 |   |
| 5.90%      Senior Notes, due April 2013                   |   |            | 250,000 |   |            |   | 251,960 |   |   |   | -- |   |
| 6.65%      Senior Notes, due April 2018                   |   |            | 350,000 |   |            |   | 353,531 |   |   |   | -- |   |
| 7.51%      TE Products Senior Notes, due January 2028 (1) |   |            | 175,000 |   |            |   | -- |   |   |   | 181,571 |   |
| 7.55%      Senior Notes, due April 2038                   |   |            | 400,000 |   |            |   | 404,031 |   |   |   | -- |   |
| 7.000%      Junior Subordinated Notes, due June 2067      |   |            | 300,000 |   |            |   | 253,724 |   |   |   | 270,485 |   |

| (1)   | On      January 28, 2008, TE Products redeemed the $175.0 million of 7.51% TE      Products Senior Notes at a redemption price of 103.755% of the principal      amount plus accrued and unpaid interest at the date of      redemption.  Additionally, the $180.0 million principal amount      of 6.45% TE Products Senior Notes matured and was repaid on January 15,      2008.  We funded the retirement of both series with borrowings      under our term credit agreement. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Scheduled      Maturities of Debt |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
| 2008                                                                                                                        |   | $                                 | 10,100  |   |
| 2009                                                                                                                        |   |                              | 9,900   |   |
| 2010                                                                                                                        |   |                              | 9,100   |   |
| 2011                                                                                                                        |   |                              | 9,000   |   |
| 2012                                                                                                                        |   |                              | 8,900   |   |
| After      2012                                                                                                             |   |                              | 93,000  |   |
|   Total      scheduled maturities of      debt                                                                    |   | $                                 | 140,000 |   |

NOTE 12

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|                                                                           |   |        |   |   | General |   |
|--------------------------------------------------------------------------------|--------|-------------|--------|--------|---------|--------|
|                                                                           |   | Unitholders |   |   | Partner |   |
| Quarterly      Cash Distribution per Unit:                                     |   |        |   |   |    |   |
| Up to Minimum Quarterly      Distribution ($0.275 per Unit)                    |   |        | 98     | %      |    |   | 2 | % |
| First Target – $0.276 per Unit up      to $0.325 per Unit           |   |        | 85     | %      |    |   | 15 | % |
| Over First Target – Cash      distributions greater than $0.325 per Unit |   |        | 75     | %      |    |   | 25 | % |

|                                                                                     |   | For      the Three Months EndedMarch      31, |   |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                     |   | 2008                                          |   |   | 2007 |   |
| Limited      Partner Units                                                |   | $                                             | 62,489 |   |   | $ | 60,618 |   |
| General      Partner Ownership Interest                                        |   |                                          | 1,275  |   |   |   | 1,237 |   |
| General      Partner Incentive                                                      |   |                                          | 11,109 |   |   |   | 10,534 |   |
|       Total      Cash Distributions Paid    |   | $                                             | 74,873 |   |   | $ | 72,389 |   |
|                                                                                     |   |                                          |   |   |   |   |   |   |
| Total      Cash Distributions Paid Per Unit                                    |   | $                                             | 0.695  |   |   | $ | 0.675 |   |

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|                  |   | Cash      Distribution History  |
|-----------------------|--------|---------------------------------|
|                  |   | Distribution      per      Unit |   | RecordDate |   | PaymentDate |
|                  |   |                            |   |   |   |   |
| 1st      Quarter 2008 |   | $                               | 0.7100 |   | Apr.      30, 2008 |   | May      7, 2008 |

| (1)   | The      first quarter 2008 cash distribution totaled approximately $80.9      million. |
|-----------------|-----------------------------------------------------------------------------------------|

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| Balance      at December 31,      2007                                                                                     |   | $      | (42,557 | )      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
|     Changes      in fair values of crude oil cash flow hedges                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 3,089   |   |
| Settlement of treasury      locks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (52,098 | )      |
| Amortization of treasury lock      proceeds into earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | (26     | )      |
| Changes in fair values of treasury      locks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 25,296  |   |
|     Ineffectiveness      of treasury locks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 42      |   |
|     Transfer      portion of interest payment hedged under treasury locks                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |    |   |
|         not      occurring as forecasted to earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 3,586   |   |
| Balance      at March 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $      | (62,668 | )      |

NOTE 13

-  Our  Downstream Segment, which is engaged in the pipeline transportation, marketing  and storage of refined products, LPGs and petrochemicals; 
-  Our  Upstream Segment, which is engaged in the gathering, pipeline transportation,  marketing and storage of crude oil and distribution of lubrication oils and  specialty chemicals; 
-  Our  Midstream Segment, which is engaged in the gathering of natural gas,  fractionation of NGLs and pipeline transportation of NGLs; and 
-  Our  Marine Services Segment, which is engaged in the marine transportation of  refined products, crude oil, condensate, asphalt, heavy fuel oil and other  heated oil products via tow boats and tank barges. 

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|                                                                 |   | For      the Three Months EndedMarch      31, |      |
|----------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                                 |   | 2008                                          |      | 2007 |   |
|                                                                 |   |                                          |      |   |   |
| Total      operating revenues                                        |   | $                                             | 2,808,488 |   | $ | 1,978,429 |   |
| Less:  Total      costs and expenses                       |   |                                          | 2,724,969 |   |   | 1,894,995 |   |
|    Operating      income                              |   |                                          | 83,519    |   |   | 83,434 |   |
| Add:Gain      on sale of ownership interest in MB Storage            |   |                                          | --        |   |   | 59,837 |   |
| Equity earnings                                                      |   |                                          | 19,662    |   |   | 16,563 |   |
| Interest    income                                              |   |                                          | 308       |   |   | 342 |   |
| Other income –net                                              |   |                                          | 40        |   |   | 244 |   |
| Earnings      before interest expense and provision for income taxes |   | $                                             | 103,529   |   | $ | 160,420 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | For      the Three Months EndedMarch      31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2008                                          |    |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                          |    |   |   |   |
| Earnings      before interest expense and provision for income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                                             | 103,529 |   |   | $ | 160,420 |   |
| Interest      expense – net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          | (38,571 | ) |   |   | (22,211 | ) |
| Income      before provision for income      taxes                                                                                |   |                                          | 64,958  |   |   |   | 138,209 |   |
| Provision      for income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                          | 819     |   |   |   | 18 |   |
|     Net      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                                             | 64,139  |   |   | $ | 138,191 |   |

|                                               |   | Downstream      Segment |   |   | Upstream      Segment |   |      | Midstream      Segment |   |   | Marine      Services Segment |   |   | Partnership and      Other |   |   | Consolidated |   |
|----------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|-----------|------------------------|--------|--------|------------------------------|--------|--------|---------------------------------|--------|--------|--------------|--------|
|                                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |
| Revenues      from third parties:                  |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |
|   Three      months ended March 31, 2008 |   | $                       | 94,502 |   |                  | $      | 2,655,068 |                   |   | $      | 26,577                       |   |   | $                               | 25,536 |   |         | $      | -- |   |   | $ | 2,801,683 |   |
|   Three      months ended March 31, 2007 |   |                    | 92,952 |   |                  |   | 1,854,082 |                   |   |   | 26,563                       |   |   |                            | --     |   |         |   | -- |   |   |   | 1,973,597 |   |
|                                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Revenues      from related parties:                |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008 |   | $                       | 3,130  |   |                  | $      | 235       |                   |   | $      | 3,504                        |   |   | $                               | --     |   |         | $      | (64 | ) |   | $ | 6,805 |   |
|   Three      months ended March 31, 2007 |   |                    | 1,966  |   |                  |   | 254       |                   |   |   | 2,810                        |   |   |                            | --     |   |         |   | (198 | ) |   |   | 4,832 |   |
|                                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Intersegment      and intrasegment revenues:       |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008 |   | $                       | --     |   |                  | $      | --        |                   |   | $      | --                           |   |   | $                               | --     |   |         | $      | -- |   |   | $ | -- |   |
|   Three      months ended March 31, 2007 |   |                    | --     |   |                  |   | --        |                   |   |   | 81                           |   |   |                            | --     |   |         |   | (81 | ) |   |   | -- |   |
|                                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Total      revenues:                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008 |   | $                       | 97,632 |   |                  | $      | 2,655,303 |                   |   | $      | 30,081                       |   |   | $                               | 25,536 |   |         | $      | (64 | ) |   | $ | 2,808,488 |   |
|   Three      months ended March 31, 2007 |   |                    | 94,918 |   |                  |   | 1,854,417 |                   |   |   | 29,373                       |   |   |                            | --     |   |         |   | (279 | ) |   |   | 1,978,429 |   |
|                                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Depreciation      and amortization:                |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008 |   | $                       | 10,236 |   |                  | $      | 4,777     |                   |   | $      | 9,597                        |   |   | $                               | 3,734  |   |         | $      | -- |   |   | $ | 28,344 |   |
|   Three      months ended March 31, 2007 |   |                    | 11,136 |   |                  |   | 4,068     |                   |   |   | 10,165                       |   |   |                            | --     |   |         |   | -- |   |   |   | 25,369 |   |
|                                               |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Operating      income:                             |   |                    |   |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008 |   | $                       | 36,329 |   |                  | $      | 29,335    |                   |   | $      | 8,386                        |   |   | $                               | 6,568  |   |         | $      | 2,901 |   |   | $ | 83,519 |   |
|   Three      months ended March 31, 2007 |   |                    | 53,941 |   |                  |   | 22,315    |                   |   |   | 4,810                        |   |   |                            | --     |   |         |   | 2,368 |   |   |   | 83,434 |   |

|                                                                                  |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Equity      earnings (losses):                                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008                                    |   | $      | (4,132  | )      |   | $      | 3,000  |   |   | $      | 23,695 |   |   | $      | --     |   |   | $      | (2,901 | ) |   | $ | 19,662 |   |
|   Three      months ended March 31, 2007                                    |   |   | (1,487  | )      |   |   | 1,789  |   |   |   | 18,629 |   |   |   | --     |   |   |   | (2,368 | ) |   |   | 16,563 |   |
|                                                                                  |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before interest expense and  provision      for income taxes: |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Three      months ended March 31, 2008                                    |   | $      | 32,415  |   |   | $      | 32,341 |   |   | $      | 32,201 |   |   | $      | 6,572  |   |   | $      | -- |   |   | $ | 103,529 |   |
|   Three      months ended March 31, 2007                                    |   |   | 112,722 |   |   |   | 24,147 |   |   |   | 23,551 |   |   |   | --     |   |   |   | -- |   |   |   | 160,420 |   |

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|                                           |   | Downstream      Segment |      |   | Upstream      Segment |   |      | Midstream      Segment |   |   | Marine      Services Segment |   |   | Partnership and      Other |    |   | Consolidated |   |
|------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|-----------|------------------------|--------|--------|------------------------------|--------|--------|---------------------------------|---------|--------|--------------|--------|
|                                           |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |
| Segment      assets:                           |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |
|   At      March 31, 2008             |   | $                       | 1,216,875 |   |                  | $      | 2,403,701 |                   |   | $      | 1,609,762                    |   |   | $                               | 606,415 |   |         | $      | (232,901 | ) |   | $ | 5,603,852 |   |
|   At      December 31, 2007          |   |                    | 1,221,316 |   |                  |   | 2,084,830 |                   |   |   | 1,512,621                    |   |   |                            | --      |   |         |   | (68,710 | ) |   |   | 4,750,057 |   |
|                                           |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
| Capital      expenditures:                     |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
|   At      March 31, 2008             |   | $                       | 45,747    |   |                  | $      | 5,510     |                   |   | $      | 387                          |   |   | $                               | 110     |   |         | $      | (153 | ) |   | $ | 51,601 |   |
|   At      December 31, 2007          |   |                    | 165,353   |   |                  |   | 54,583    |                   |   |   | 7,412                        |   |   |                            | --      |   |         |   | 924 |   |   |   | 228,272 |   |
|                                           |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
| Investments      in unconsolidated affiliates: |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
|   At      March 31, 2008             |   | $                       | 68,052    |   |                  | $      | 192,047   |                   |   | $      | 904,238                      |   |   | $                               | --      |   |         | $      | -- |   |   | $ | 1,164,337 |   |
|   At      December 31, 2007          |   |                    | 79,324    |   |                  |   | 188,650   |                   |   |   | 879,021                      |   |   |                            | --      |   |         |   | -- |   |   |   | 1,146,995 |   |
|                                           |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
| Intangible      assets:                        |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
|   At      March 31, 2008             |   | $                       | 5,422     |   |                  | $      | 7,364     |                   |   | $      | 146,974                      |   |   | $                               | 58,454  |   |         | $      | -- |   |   | $ | 218,214 |   |
|   At      December 31, 2007          |   |                    | 5,244     |   |                  |   | 7,512     |                   |   |   | 151,925                      |   |   |                            | --      |   |         |   | -- |   |   |   | 164,681 |   |
|                                           |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
| Goodwill:                                      |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                            |    |   |         |   |   |   |   |   |   |   |
|   At      March 31, 2008             |   | $                       | 1,339     |   |                  | $      | 14,167    |                   |   | $      | --                           |   |   | $                               | 104,731 |   |         | $      | -- |   |   | $ | 120,237 |   |
|   At      December 31, 2007          |   |                    | 1,339     |   |                  |   | 14,167    |                   |   |   | --                           |   |   |                            | --      |   |         |   | -- |   |   |   | 15,506 |   |

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NOTE 14

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | For      the Three Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | March      31,                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2008                            |   |   | 2007 |   |
| Revenues      from EPCO and affiliates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            |   |   |   |   |
| Sales      of petroleum products      (1)                                                                                            |   | $                               | 646    |   |   | $ | 76 |   |
| Transportation      – NGLs      (2)                                                                                            |   |                            | 3,403  |   |   |   | 2,810 |   |
| Transportation      – LPGs      (3)                                                                                            |   |                            | 2,287  |   |   |   | 1,606 |   |
| Other      operating revenues      (4)                                                                                               |   |                            | 433    |   |   |   | 306 |   |
| Revenues      from unconsolidated affiliates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            |   |   |   |   |   |   |
| Other      operating revenues      (5)                                                                                               |   |                            | 36     |   |   |   | 34 |   |
| Costs      and Expenses from EPCO and affiliates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |   |   |   |   |
| Purchases      of petroleum products      (6)                                                                                        |   |                            | 19,693 |   |   |   | 12,147 |   |
| Operating      expense      (7)                                                                                                      |   |                            | 26,112 |   |   |   | 24,297 |   |
| General      and administrative      (8)                                                                                             |   |                            | 8,525  |   |   |   | 6,538 |   |
| Costs      and Expenses from unconsolidated affiliates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            |   |   |   |   |   |   |
| Purchases      of petroleum products      (9)                                                                                        |   |                            | 1,592  |   |   |   | -- |   |
| Operating      expense      (10)                                                                                                     |   |                            | 2,272  |   |   |   | 670 |   |
| Costs      and Expenses from Cenac and affiliates: (11)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            |   |   |   |   |   |   |
| Operating      expense      (12)                                                                                                     |   |                            | 7,867  |   |   |   | -- |   |

| (1)   | Includes      sales from TE Products and Lubrication Services, LLC (“LSI”) to Enterprise      Products Partners and certain of its  subsidiaries. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes      revenues from NGL transportation on the Chaparral and Panola NGL pipelines      from Enterprise Products Partners and certain of its      subsidiaries. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Represents      revenues from LPG transportation on the TE Products pipeline from      Enterprise Products Partners and certain of its    subsidiaries. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Includes      other operating revenues on the TE Products pipeline and the Val Verde      system from Enterprise Products Partners and certain of its      subsidiaries. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Includes      sales of petroleum products, management fees and rental      revenues. |
|-----------------|--------------------------------------------------------------------------------------|

| (6)   | Includes      TCO purchases of condensate of $15.6 million and $8.8 million for the      three months ended March 31, 2008 and 2007, respectively, and expenses      related to TCO’s and LSI’s use of an affiliate of EPCO as a      transporter. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Includes      operating payroll, payroll related expenses and other operating expenses,      including reimbursements related to employee benefits and employee benefit      plans, incurred by EPCO in managing us and our subsidiaries in accordance      with the ASA.  Also includes insurance expense for the three      months ended March 31, 2008 and 2007, of $2.9 million and $5.1 million,      respectively, related to premiums paid by EPCO on our behalf. The majority      of our insurance coverage, including property, liability, business      interruption, auto and directors and officers’ liability insurance, is      obtained through EPCO. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Includes      administrative payroll, payroll related expenses and other administrative      expenses, including reimbursements related to employee benefits and      employee benefit plans, incurred by EPCO in managing and operating us and      our subsidiaries in accordance with theASA. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9)   | Includes      TCO purchases of petroleum products from Jonah and Seaway and pipeline      transportation expense from Seaway. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------|

| (10)   | Includes      rental expense and other operatingexpense. |
|------------------|----------------------------------------------------------|

| (11)   | We      entered into a transitional operating agreement with Cenac in which our      fleet of acquired tow boats and tank barges (including those acquired from      Horizon) are operated by employees of Cenac for a period of up to two      years following the acquisition. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12)   | Includes      reimbursement for operating payroll, payroll related expenses, certain      repairs and maintenance expenses and insurance premiums on our equipment,      as well as payment of a $42 thousand monthly service fee and a 5% overhead      fee charged on direct costs      incurred by Cenac to operate the marine assets in accordance with the      transitional operating agreement with  Cenac. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | March      31, 2008 |   |   | December      31, 2007 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     |   |
| Accounts      receivable, related parties      (1)                                                                              |   | $                        | 5,003  |   |                   | $      | 6,525 |   |
| Accounts      payable, related parties      (2)                                                                                 |   |                     | 29,695 |   |                   |   | 38,980 |   |

| (1)   | Relates      to sales and transportation services provided to Enterprise Products      Partners and certain of its subsidiaries and EPCO and certain of its      affiliates and direct payroll, payroll related costs and other operational      expenses charged to unconsolidatedaffiliates. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Relates      to direct payroll, payroll related costs and other operational related      charges from Enterprise Products Partners and certain of its subsidiaries      and EPCO and certain of its affiliates, transportation and other services      provided by unconsolidated affiliates and advances from Seaway for      operating expenses. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

-  EPCO  and its consolidated private company subsidiaries; 
-  Texas  Eastern Products Pipeline Company, LLC, our General Partner; 
-  Enterprise  GP Holdings, which owns and controls our General Partner; 
-  Enterprise  Products Partners, which is controlled by affiliates of EPCO, including  Enterprise GP Holdings; 
-  Duncan  Energy Partners L.P., which is controlled by affiliates of EPCO;  and 
-  Enterprise  Gas Processing LLC, which is controlled by affiliates of EPCO and is our joint  venture partner in Jonah. 

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NOTE 15

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | For      the Three Months EndedMarch      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2008                                          |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                          |   |   |   |   |
| Net      income                                                                                                                  |   | $                                             | 64,139 |   |   | $ | 138,191 |   |
| General      Partner interest in net      income                                                                                 |   |                                          | 16.74  | % |   |   | 16.40 | % |
| Earnings      allocated to General      Partner                                                                                  |   | $                                             | 10,736 |   |   | $ | 22,667 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                          |   |   |   |   |   |   |
| BASIC      AND DILUTED EARNINGS PER UNIT:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                          |   |   |   |   |   |   |
|   Numerator:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                          |   |   |   |   |   |   |
| Limited partners’ interest in      net      income                                                                                        |   | $                                             | 53,403 |   |   | $ | 115,524 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                          |   |   |   |   |   |   |
|   Denominator:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                          |   |   |   |   |   |   |
|    Units                                                                                                                         |   |                                          | 93,094 |   |   |   | 89,805 |   |
| Time-vested restricted      Units                                                                                                               |   |                                          | 62     |   |   |   | -- |   |
| Total Weighted average Units      outstanding                                                                                                   |   |                                          | 93,156 |   |   |   | 89,805 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                          |   |   |   |   |   |   |
|   Basic and diluted earnings per      Unit:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          |   |   |   |   |   |   |
| Limited partners’ interest in      net      income                                                                                        |   | $                                             | 0.57   |   |   | $ | 1.29 |   |

NOTE 16

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|                                  |   | Payment      or Settlement due by Period |      |
|---------------------------------------|--------|------------------------------------------|-----------|
|                                  |   | Total                                    |      |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | Thereafter |   |
|                                  |   |                                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Maturities      of long-term debt (1) |   | $                                        | 2,429,200 |   |   | $ | -- |   |   | $ | -- |   |   | $ | -- |   |   | $ | 500,000 |   |   | $ | 629,200 |   |   | $ | 1,300,000 |   |
| Interest      payments (2)            |   | $                                        | 2,772,485 |   |   | $ | 152,900 |   |   | $ | 152,900 |   |   | $ | 152,900 |   |   | $ | 152,900 |   |   | $ | 110,896 |   |   | $ | 2,049,989 |   |

| (1)   | We      have long-term payment obligations under our Revolving Credit Facility,      our Senior Notes and our Junior Subordinated Notes.  Amounts      shown in the table represent our scheduled future maturities of long-term      debt principal for the periods indicated (see Note 11 for additional      information regarding our consolidated debt  obligations). |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes      interest payments due on our Senior Notes and junior subordinated notes      and interest payments and commitment fees due on our Revolving Credit      Facility.  The interest amount calculated on the Revolving      Credit Facility and the junior subordinated notes is based on the      assumption that the amount outstanding and the interest rate charged both      remain at their current levels. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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NOTE 17

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Three Months EndedMarch 31, |     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2008                                          |     |   | 2007 |   |
| Decrease      (increase) in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                          |     |   |   |   |
| Accounts receivable,      trade                                                                                                                                                        |   | $                                             | (189,177 | ) |   | $ | 76,246 |   |
| Accounts receivable, related      parties                                                                                                                                              |   |                                          | 1,531    |   |   |   | (10,774 | ) |
| Inventories                                                                                                                                                                            |   |                                          | (7,227   | ) |   |   | 8,359 |   |
| Other current      assets                                                                                                                                                              |   |                                          | (2,778   | ) |   |   | 778 |   |
| Other                                                                                                                                                                                  |   |                                          | (5,184   | ) |   |   | (4,181 | ) |
| Increase      (decrease) in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                          |     |   |   |   |   |   |
| Accounts payable and accrued      expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                          | 157,684  |   |   |   | (111,763 | ) |
| Accounts payable, related      parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                          | (6,879   | ) |   |   | 4,789 |   |
| Other                                                                                                                                                                                  |   |                                          | (11,096  | ) |   |   | (2,707 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          |     |   |   |   |   |   |
| Net      effect of changes in operating      accounts                                                                                                         |   | $                                             | (63,126  | ) |   | $ | (39,253 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          |     |   |   |   |   |   |
| Non-cash      investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                          |     |   |   |   |   |   |
|    Payable      to Enterprise Gas Processing, LLC for spending for Phase V     expansion      of Jonah Gas Gathering Company (see Note 8)                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                                             | 7,437    |   |   | $ | 14,935 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          |     |   |   |   |   |   |
| Non-cash      financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                          |     |   |   |   |   |   |
|    Issuance      of Units in Cenac acquisition (see Note      9)                                                                                         |   | $                                             | 186,558  |   |   | $ | -- |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                          |     |   |   |   |   |   |
| Supplemental      disclosure of cash flows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                          |     |   |   |   |   |   |
| Cash paid for interest (net of      amounts      capitalized)                                                                                                           |   | $                                             | 47,388   |   |   | $ | 42,947 |   |

NOTE 18

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|                                                                       |   | March      31, 2008        |      |
|----------------------------------------------------------------------------|--------|----------------------------|-----------|
|                                                                       |   | TEPPCO      Partners, L.P. |      |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
|                                                                       |   |                       |      |
| Assets                                                                     |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |
|         Current assets                                           |   | $                          | 7,347     |   |   | $ | 120,097 |   |   | $ | 1,833,034 |   |   | $ | (246,240 | ) |   | $ | 1,714,238 |   |
|         Property, plant and equipment – net                |   |                       | --        |   |   |   | 1,175,317 |   |   |   | 1,077,060 |   |   |   | -- |   |   |   | 2,252,377 |   |
|         Equity investments                                       |   |                       | 1,474,324 |   |   |   | 1,389,675 |   |   |   | 192,068 |   |   |   | (1,891,730 | ) |   |   | 1,164,337 |   |
|         Intercompany notes receivable                            |   |                       | 2,438,582 |   |   |   | -- |   |   |   | -- |   |   |   | (2,438,582 | ) |   |   | -- |   |
|         Intangible assets                                        |   |                       | --        |   |   |   | 131,790 |   |   |   | 86,424 |   |   |   | -- |   |   |   | 218,214 |   |
|         Other assets                                             |   |                       | 16,278    |   |   |   | 34,867 |   |   |   | 203,541 |   |   |   | -- |   |   |   | 254,686 |   |
|     Total      assets                                  |   | $                          | 3,936,531 |   |   | $ | 2,851,746 |   |   | $ | 3,392,127 |   |   | $ | (4,576,552 | ) |   | $ | 5,603,852 |   |
| Liabilities      and partners’ capital                               |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Current liabilities                                      |   | $                          | 58,510    |   |   | $ | 263,517 |   |   | $ | 1,629,319 |   |   | $ | (246,240 | ) |   | $ | 1,705,106 |   |
|         Long-term debt                                           |   |                       | 2,445,495 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 2,445,495 |   |
|         Intercompany notes payable                               |   |                       | --        |   |   |   | 1,338,395 |   |   |   | 1,100,187 |   |   |   | (2,438,582 | ) |   |   | -- |   |
|         Other long-term liabilities                              |   |                       | 9,219     |   |   |   | 18,597 |   |   |   | 2,128 |   |   |   | -- |   |   |   | 29,944 |   |
|         Total partners’ capital                            |   |                       | 1,423,307 |   |   |   | 1,231,237 |   |   |   | 660,493 |   |   |   | (1,891,730 | ) |   |   | 1,423,307 |   |
|     Total      liabilities and partners’ capital |   | $                          | 3,936,531 |   |   | $ | 2,851,746 |   |   | $ | 3,392,127 |   |   | $ | (4,576,552 | ) |   | $ | 5,603,852 |   |
|                                                                       |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                       |   | December      31, 2007     |      |
|----------------------------------------------------------------------------|--------|----------------------------|-----------|
|                                                                       |   | TEPPCO      Partners, L.P. |      |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
|                                                                       |   |                       |      |
| Assets                                                                     |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |
|         Current assets                                           |   | $                          | 32,302    |   |   | $ | 77,083 |   |   | $ | 1,499,653 |   |   | $ | (93,049 | ) |   | $ | 1,515,989 |   |
|         Property, plant and equipment – net                |   |                       | --        |   |   |   | 1,142,630 |   |   |   | 651,004 |   |   |   | -- |   |   |   | 1,793,634 |   |
|         Equity investments                                       |   |                       | 1,286,021 |   |   |   | 1,347,313 |   |   |   | 188,669 |   |   |   | (1,675,008 | ) |   |   | 1,146,995 |   |
|         Intercompany notes receivable                            |   |                       | 1,511,168 |   |   |   | -- |   |   |   | -- |   |   |   | (1,511,168 | ) |   |   | -- |   |
|         Intangible assets                                        |   |                       | --        |   |   |   | 136,050 |   |   |   | 28,631 |   |   |   | -- |   |   |   | 164,681 |   |
|         Other assets                                             |   |                       | 8,580     |   |   |   | 34,839 |   |   |   | 85,401 |   |   |   | (62 | ) |   |   | 128,758 |   |
|     Total      assets                                  |   | $                          | 2,838,071 |   |   | $ | 2,737,915 |   |   | $ | 2,453,358 |   |   | $ | (3,279,287 | ) |   | $ | 4,750,057 |   |
|         Liabilities and partners’ capital                  |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Current liabilities                                      |   | $                          | 61,926    |   |   | $ | 493,184 |   |   | $ | 1,485,164 |   |   | $ | (93,049 | ) |   | $ | 1,947,225 |   |
|         Long-term debt                                           |   |                       | 1,511,083 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 1,511,083 |   |
|         Intercompany notes payable                               |   |                       | --        |   |   |   | 1,006,801 |   |   |   | 504,367 |   |   |   | (1,511,168 | ) |   |   | -- |   |
|         Other long term liabilities                              |   |                       | 435       |   |   |   | 24,466 |   |   |   | 2,283 |   |   |   | (62 | ) |   |   | 27,122 |   |
|         Total partners’ capital                            |   |                       | 1,264,627 |   |   |   | 1,213,464 |   |   |   | 461,544 |   |   |   | (1,675,008 | ) |   |   | 1,264,627 |   |
|     Total      liabilities and partners’ capital |   | $                          | 2,838,071 |   |   | $ | 2,737,915 |   |   | $ | 2,453,358 |   |   | $ | (3,279,287 | ) |   | $ | 4,750,057 |   |

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|                                                      |   | For      the Three Months Ended March 31, 2008 |   |
|-----------------------------------------------------------|--------|------------------------------------------------|--------|
|                                                      |   | TEPPCO      Partners, L.P.                     |   |   | GuarantorSubsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
|                                                      |   |                                           |   |
| Operating      revenues                                   |   | $                                              | --     |   |   | $ | 102,934 |   |   | $ | 2,705,618 |   |   | $ | (64 | ) |   | $ | 2,808,488 |   |
| Costs      and expenses                                   |   |                                           | --     |   |   |   | 67,931 |   |   |   | 2,660,003 |   |   |   | (2,965 | ) |   |   | 2,724,969 |   |
|   Operating      income                         |   |                                           | --     |   |   |   | 35,003 |   |   |   | 45,615 |   |   |   | 2,901 |   |   |   | 83,519 |   |
| Interest      expense – net                         |   |                                           | --     |   |   |   | (26,752 | ) |   |   | (11,819 | ) |   |   | -- |   |   |   | (38,571 | ) |
| Equity      earnings                                      |   |                                           | 64,139 |   |   |   | 52,958 |   |   |   | 3,000 |   |   |   | (100,435 | ) |   |   | 19,662 |   |
| Other      income – net                             |   |                                           | --     |   |   |   | 250 |   |   |   | 98 |   |   |   | -- |   |   |   | 348 |   |
|   Income      before provision for income taxes |   |                                           | 64,139 |   |   |   | 61,459 |   |   |   | 36,894 |   |   |   | (97,534 | ) |   |   | 64,958 |   |
| Provision      for income taxes                           |   |                                           | --     |   |   |   | 178 |   |   |   | 641 |   |   |   | -- |   |   |   | 819 |   |
|   Net      income                               |   | $                                              | 64,139 |   |   | $ | 61,281 |   |   | $ | 36,253 |   |   | $ | (97,534 | ) |   | $ | 64,139 |   |
|                                                      |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                             |   | For      the Three Months Ended March 31, 2007 |    |
|------------------------------------------------------------------|--------|------------------------------------------------|---------|
|                                                             |   | TEPPCO      Partners, L.P.                     |    |   | GuarantorSubsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
|                                                             |   |                                           |    |
| Operating      revenues                                          |   | $                                              | --      |   |   | $ | 98,918 |   |   | $ | 1,879,790 |   |   | $ | (279 | ) |   | $ | 1,978,429 |   |
| Costs      and expenses                                          |   |                                           | --      |   |   |   | 66,167 |   |   |   | 1,850,124 |   |   |   | (2,647 | ) |   |   | 1,913,644 |   |
| Gains      on sales of assets                                    |   |                                           | --      |   |   |   | (18,651 | ) |   |   | 2 |   |   |   | -- |   |   |   | (18,649 | ) |
|   Operating      income                                |   |                                           | --      |   |   |   | 51,402 |   |   |   | 29,664 |   |   |   | 2,368 |   |   |   | 83,434 |   |
| Interest      expense – net                                |   |                                           | --      |   |   |   | (15,962 | ) |   |   | (6,249 | ) |   |   | -- |   |   |   | (22,211 | ) |
| Gain      on sale of ownership interest in MB  Storage |   |                                           | --      |   |   |   | 59,837 |   |   |   | -- |   |   |   | -- |   |   |   | 59,837 |   |
| Equity      earnings                                             |   |                                           | 138,191 |   |   |   | 41,935 |   |   |   | 1,789 |   |   |   | (165,352 | ) |   |   | 16,563 |   |
| Other      income – net                                    |   |                                           | --      |   |   |   | 489 |   |   |   | 97 |   |   |   | -- |   |   |   | 586 |   |
|   Income      before provision for income taxes        |   |                                           | 138,191 |   |   |   | 137,701 |   |   |   | 25,301 |   |   |   | (162,984 | ) |   |   | 138,209 |   |
| Provision      for income taxes                                  |   |                                           | --      |   |   |   | (490 | ) |   |   | 508 |   |   |   | -- |   |   |   | 18 |   |
|   Net      income                                      |   | $                                              | 138,191 |   |   | $ | 138,191 |   |   | $ | 24,793 |   |   | $ | (162,984 | ) |   | $ | 138,191 |   |
|                                                             |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|                                                                                                                                   |   | For      the Three Months Ended March 31, 2008 |     |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|----------|
|                                                                                                                                   |   | TEPPCO      Partners, L.P.                     |     |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
|                                                                                                                                   |   |                                           |     |
| Operating      activities:                                                                                                             |   |                                           |     |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net      income                                                                                                            |   | $                                              | 64,139   |   |   | $ | 61,281 |   |   | $ | 36,253 |   |   | $ | (97,534 | ) |   | $ | 64,139 |   |
|   Adjustments      to reconcile net income to net cash    from      operating activities:                |   |                                           |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Deferred      income taxes                                                                         |   |                                           | --       |   |   |   | 31 |   |   |   | (36 | ) |   |   | -- |   |   |   | (5 | ) |
|       Depreciation      and amortization                                                                 |   |                                           | --       |   |   |   | 16,900 |   |   |   | 11,444 |   |   |   | -- |   |   |   | 28,344 |   |
|       Earnings      in equity investments, net of       distributions |   |                                           | 10,734   |   |   |   | 11,230 |   |   |   | (3,000 | ) |   |   | (1,392 | ) |   |   | 17,572 |   |
|       Changes      in assets and liabilities and other                                                   |   |                                           | (504,850 | ) |   |   | 89,288 |   |   |   | (188,657 | ) |   |   | 552,850 |   |   |   | (51,369 | ) |
| Net      cash from operating activities                                                                                                |   |                                           | (429,977 | ) |   |   | 178,730 |   |   |   | (143,996 | ) |   |   | 453,924 |   |   |   | 58,681 |   |
|                                                                                                                                   |   |                                           |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities                                                                                              |   |                                           | --       |   |   |   | (74,462 | ) |   |   | (361,979 | ) |   |   | -- |   |   |   | (436,441 | ) |
| Cash      flows from financing activities                                                                                              |   |                                           | 427,210  |   |   |   | (104,268 | ) |   |   | 505,985 |   |   |   | (451,158 | ) |   |   | 377,769 |   |
| Net      change in cash and cash equivalents                                                                                           |   |                                           | (2,767   | ) |   |   | -- |   |   |   | 10 |   |   |   | 2,766 |   |   |   | 9 |   |
| Cash      and cash equivalents, January 1                                                                                              |   |                                           | 8,147    |   |   |   | 70 |   |   |   | 22 |   |   |   | (8,216 | ) |   |   | 23 |   |
| Cash      and cash equivalents, March 31                                                                                               |   | $                                              | 5,380    |   |   | $ | 70 |   |   | $ | 32 |   |   | $ | (5,450 | ) |   | $ | 32 |   |

|                                                                                                                                         |   | For      the Three Months Ended March 31, 2007 |     |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|----------|
|                                                                                                                                         |   | TEPPCO      Partners, L.P.                     |     |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
|                                                                                                                                         |   |                                           |     |
| Operating      activities:                                                                                                                   |   |                                           |     |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net      income                                                                                                                  |   | $                                              | 138,191  |   |   | $ | 138,191 |   |   | $ | 24,793 |   |   | $ | (162,984 | ) |   | $ | 138,191 |   |
|   Adjustments      to reconcile net income to net cash    from      operating activities:                      |   |                                           | --       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Deferred      income taxes                                                                               |   |                                           | --       |   |   |   | (638 | ) |   |   | (4 | ) |   |   | -- |   |   |   | (642 | ) |
|       Depreciation      and amortization                                                                       |   |                                           | --       |   |   |   | 18,380 |   |   |   | 6,989 |   |   |   | -- |   |   |   | 25,369 |   |
|       Earnings      in equity investments, net of        distributions |   |                                           | (65,802  | ) |   |   | 20,564 |   |   |   | 2,011 |   |   |   | 66,968 |   |   |   | 23,741 |   |
|       Gains      on sales of assets and ownership        interest      |   |                                           | --       |   |   |   | (78,488 | ) |   |   | 2 |   |   |   | -- |   |   |   | (78,486 | ) |
|       Changes      in assets and liabilities and other                                                         |   |                                           | 85,031   |   |   |   | 38,365 |   |   |   | (87,101 | ) |   |   | (75,737 | ) |   |   | (39,442 | ) |
| Net      cash from operating activities                                                                                                      |   |                                           | 157,420  |   |   |   | 136,374 |   |   |   | (53,310 | ) |   |   | (171,753 | ) |   |   | 68,731 |   |
|                                                                                                                                         |   |                                           |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities                                                                                                    |   |                                           | --       |   |   |   | 55,360 |   |   |   | 68,119 |   |   |   | (29,320 | ) |   |   | 94,159 |   |
| Cash      flows from financing activities                                                                                                    |   |                                           | (162,889 | ) |   |   | (191,510 | ) |   |   | (14,808 | ) |   |   | 206,318 |   |   |   | (162,889 | ) |
| Net      change in cash and cash equivalents                                                                                                 |   |                                           | (5,469   | ) |   |   | 224 |   |   |   | 1 |   |   |   | 5,245 |   |   |   | 1 |   |
| Cash      and cash equivalents, January 1                                                                                                    |   |                                           | 10,975   |   |   |   | -- |   |   |   | 70 |   |   |   | (10,975 | ) |   |   | 70 |   |
| Cash      and cash equivalents, March 31                                                                                                     |   | $                                              | 5,506    |   |   | $ | 224 |   |   | $ | 71 |   |   | $ | (5,730 | ) |   | $ | 71 |   |

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NOTE 19

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Item 2

-  Key  References Used in this Quarterly Report. 
-  Cautionary  Note Regarding Forward-Looking Statements. 
-  Overview  of Critical Accounting Policies and Estimates. 
-  Overview  of Business. 
-  Recent  Developments – Discusses recent developments during the quarter ended March  31, 2008. 
-  Results  of Operations – Discusses material period-to-period variances in the  statements of consolidated income. 
-  Financial  Condition and Liquidity – Analyzes cash flows and financial  position. 
-  Other  Considerations – Addresses available sources of liquidity, trends, future  plans and contingencies that are reasonably likely to materially affect future  liquidity or earnings. 
-  Recent  Accounting Pronouncements. 

|      /d     |  = per      day                       |
|-----------------------------------------------------|--------------------------------------------|
|      BBtus            |  = billion      British Thermal units |
|      Bcf    |  = billion      cubic feet            |
|      MMBtus           |  = million      British Thermal units |
|      MMcf                  |  = million      cubic feet            |
|      Mcf              |  = thousand      cubic feet           |
|      MMBbls           |  = million      barrels               |

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Cautionary Note

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-  Our  Downstream Segment, which is engaged in the pipeline transportation, marketing  and storage of refined products, liquefied petroleum gases (“LPGs”) and  petrochemicals; 
-  Our  Upstream Segment, which is engaged in the gathering, pipeline transportation,  marketing and storage of crude oil and distribution of lubrication oils and  specialty chemicals; 
-  Our  Midstream Segment, which is engaged in the gathering of natural gas, pipeline  transportation of natural gas liquids (“NGLs”) and fractionation of NGLs;  and 
-  Our  Marine Services Segment, which is engaged in the marine transportation of  refined products, crude oil, condensate, asphalt, heavy fuel oil and other  heated oil products via tow boats and tank barges. 

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|                                                                        |   | For      the Three Months EndedMarch      31, |      |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                                        |   | 2008                                          |      |   | 2007 |   |
| Operating      revenues:                                                    |   |                                          |      |   |   |   |
| Downstream      Segment                                           |   | $                                             | 97,632    |   |   | $ | 94,918 |   |
| Upstream      Segment                                             |   |                                          | 2,655,303 |   |   |   | 1,854,417 |   |
| Midstream      Segment                                                 |   |                                          | 30,081    |   |   |   | 29,373 |   |
| Marine Services      Segment                                           |   |                                          | 25,536    |   |   |   | -- |   |
| Intersegment      eliminations                                              |   |                                          | (64       | ) |   |   | (279 | ) |
|        Total      operating revenues     |   |                                          | 2,808,488 |   |   |   | 1,978,429 |   |
|                                                                        |   |                                          |      |   |   |   |   |   |
| Operating      income:                                                      |   |                                          |      |   |   |   |   |   |
| Downstream      Segment                                                |   |                                          | 36,329    |   |   |   | 53,941 |   |
| Upstream      Segment                                                  |   |                                          | 29,335    |   |   |   | 22,315 |   |
| Midstream    Segment                                                        |   |                                          | 8,386     |   |   |   | 4,810 |   |
| Marine Services      Segment                                                |   |                                          | 6,568     |   |   |   | -- |   |
| Intersegment      eliminations                                              |   |                                          | 2,901     |   |   |   | 2,368 |   |
|        Total      operating income  |   |                                          | 83,519    |   |   |   | 83,434 |   |
|                                                                        |   |                                          |      |   |   |   |   |   |
| Equity      earnings (losses):                                              |   |                                          |      |   |   |   |   |   |
|      Downstream      Segment                  |   |                                          | (4,132    | ) |   |   | (1,487 | ) |
|      Upstream      Segment               |   |                                          | 3,000     |   |   |   | 1,789 |   |
| Midstream    Segment                                                        |   |                                          | 23,695    |   |   |   | 18,629 |   |
| Intersegment      eliminations                                              |   |                                          | (2,901    | ) |   |   | (2,368 | ) |
|        Total      equity earnings        |   |                                          | 19,662    |   |   |   | 16,563 |   |
|                                                                        |   |                                          |      |   |   |   |   |   |
| Earnings      before interest:(1)                                           |   |                                          |      |   |   |   |   |   |
|      Downstream      Segment                  |   |                                          | 32,415    |   |   |   | 112,722 |   |
|      Upstream      Segment                    |   |                                          | 32,341    |   |   |   | 24,147 |   |
| Midstream      Segment                                            |   |                                          | 32,201    |   |   |   | 23,551 |   |
| Marine Services      Segment                                           |   |                                          | 6,572     |   |   |   | -- |   |
|                                                                        |   |                                          |      |   |   |   |   |   |
| Interest      expense                                                  |   |                                          | (42,979   | ) |   |   | (25,939 | ) |
| Interest      capitalized                                         |   |                                          | 4,408     |   |   |   | 3,728 |   |
| Income before provision for      income taxes                               |   |                                          | 64,958    |   |   |   | 138,209 |   |
| Provision      for income taxes                                        |   |                                          | 819       |   |   |   | 18 |   |
|         Net      income        |   | $                                             | 64,139    |   |   | $ | 138,191 |   |

| (1)   | See      Note 13 in the Notes to Unaudited Condensed Consolidated Financial      Statements for a reconciliation of earnings before interest to net      income. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | For      the Three Months Ended |   |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | March      31,                  |   |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2008                            |   |   | 2007     |   |   | (Decrease) |   |
| Operating      revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |     |   |   |   |   |
| Sales      of petroleum      products                                                                                                                                     |   | $                               | 6,989  |   |     | $      | 9,376 |   |   | $ | (2,387 | ) |
| Transportation      – Refined      products                                                                                                                         |   |                            | 37,283 |   |     |   | 37,135 |   |   |   | 148 |   |
| Transportation      –      LPGs                                                                                                                                     |   |                            | 36,191 |   |     |   | 36,053 |   |   |   | 138 |   |
|          Other                                                                                                                                   |   |                            | 17,169 |   |     |   | 12,354 |   |   |   | 4,815 |   |
|         Total      operating      revenues                                                                              |   |                            | 97,632 |   |     |   | 94,918 |   |   |   | 2,714 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            |   |   |     |   |   |   |   |   |   |   |
| Costs      and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |     |   |   |   |   |   |   |   |
| Purchases      of petroleum      products                                                                                                                                 |   |                            | 6,910  |   |     |   | 9,394 |   |   |   | (2,484 | ) |
| Operating      expense                                                                                                                                                    |   |                            | 26,870 |   |     |   | 21,520 |   |   |   | 5,350 |   |
| Operating      fuel and      power                                                                                                                                        |   |                            | 10,526 |   |     |   | 10,413 |   |   |   | 113 |   |
| General      and      administrative                                                                                                                                      |   |                            | 3,533  |   |     |   | 4,075 |   |   |   | (542 | ) |
| Depreciation      and      amortization                                                                                                                                   |   |                            | 10,236 |   |     |   | 11,136 |   |   |   | (900 | ) |
| Taxes      – other than income      taxes                                                                                                                           |   |                            | 3,228  |   |     |   | 3,090 |   |   |   | 138 |   |
| Gains      on sales of      assets                                                                                                                                        |   |                            | --     |   |     |   | (18,651 | ) |   |   | 18,651 |   |
| Total      costs and      expenses                                                                                                                                                  |   |                            | 61,303 |   |     |   | 40,977 |   |   |   | 20,326 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            |   |   |     |   |   |   |   |   |   |   |
| Operating      income                                                                                                                                                     |   |                            | 36,329 |   |     |   | 53,941 |   |   |   | (17,612 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            |   |   |     |   |   |   |   |   |   |   |
| Gain      on sale of ownership interest in Mont Belvieu Storage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                            |   |   |     |   |   |   |   |   |   |   |
|    Partners,      L.P. (“MB      Storage”)                                                                                                     |   |                            | --     |   |     |   | 59,837 |   |   |   | (59,837 | ) |
| Equity      losses                                                                                                                                                        |   |                            | (4,132 | )      |     |   | (1,487 | ) |   |   | (2,645 | ) |
| Interest      income                                                                                                                                                      |   |                            | 168    |   |     |   | 202 |   |   |   | (34 | ) |
| Other      income –      net                                                                                                                                        |   |                            | 50     |   |     |   | 229 |   |   |   | (179 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            |   |   |     |   |   |   |   |   |   |   |
| Earnings      before      interest                                                                                                                                        |   | $                               | 32,415 |   |     | $      | 112,722 |   |   | $ | (80,307 | ) |

|                                                                                  |   | For      the Three Months Ended |   |   | Percentage |   |
|---------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|------------|--------|
|                                                                                  |   | March      31,                  |   |   | Increase   |   |
|                                                                                  |   | 2008                            |   |   | 2007       |   |   | (Decrease) |   |
| Volumes      Delivered:                                                               |   |                            |   |   |       |   |   |   |   |
|     Refined      products (1)                                          |   |                            | 38,520 |   |       |   | 35,754 |   |   |   | 8 | % |
|          LPGs                                                          |   |                            | 12,886 |   |       |   | 15,523 |   |   |   | (17 | %) |
|         Total                                 |   |                            | 51,406 |   |       |   | 51,277 |   |   |   | -- |   |
|                                                                                  |   |                            |   |   |       |   |   |   |   |   |   |   |
| Average      Tariff per Barrel:                                                       |   |                            |   |   |       |   |   |   |   |   |   |   |
|     Refined      products                                         |   | $                               | 0.97   |   |       | $      | 1.04 |   |   |   | (7 | %) |
|          LPGs                                                          |   |                            | 2.81   |   |       |   | 2.29 |   |   |   | 23 | % |
|         Average      system tariff per barrel |   |                            | 1.43   |   |       |   | 1.26 |   |   |   | 13 | % |

| (1)   | Includes      6,111 and 5,281 barrels delivered via the Centennial Pipeline during the      three months ended March 31, 2008 and 2007,  respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Three Months |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                            |   | Ended      March 31,      |   |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |   | 2008                      |   |   | 2007     |   |   | (Decrease) |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |   |                      |   |
| Centennial                                                                                                        |   | $                         | (4,143 | )      |     | $      | (3,987 | ) |   | $ | (156 | ) |
| MB      Storage                                                                                                   |   |                      | --     |   |     |   | 2,491 |   |   |   | (2,491 | ) |
| Other                                                                                                             |   |                      | 11     |   |     |   | 9 |   |   |   | 2 |   |
|      Total      equity      losses                                                       |   | $                         | (4,132 | )      |     | $      | (1,487 | ) |   | $ | (2,645 | ) |

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Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | For      the Three Months Ended |      |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | March      31,                  |      |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2008                            |      |   | 2007     |   |   | (Decrease) |   |
| Operating      revenues: (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                            |      |   |     |   |   |   |   |
|    Sales      of petroleum products (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                               | 2,637,652 |   |     | $      | 1,841,031 |   |   | $ | 796,621 |   |
|    Transportation      – Crude oil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | 15,300    |   |     |   | 10,790 |   |   |   | 4,510 |   |
|    Other                                                                                                                                        |   |                            | 2,351     |   |     |   | 2,596 |   |   |   | (245 | ) |
|         Total      operating      revenues                                                                             |   |                            | 2,655,303 |   |     |   | 1,854,417 |   |   |   | 800,886 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |      |   |     |   |   |   |   |   |   |   |
| Costs      and expenses: (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                            |      |   |     |   |   |   |   |   |   |   |
| Purchases      of petroleum products (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 2,602,662 |   |     |   | 1,807,166 |   |   |   | 795,496 |   |
| Operating      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | 13,348    |   |     |   | 15,473 |   |   |   | (2,125 | ) |
| Operating      fuel and power                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 1,648     |   |     |   | 2,058 |   |   |   | (410 | ) |
| General      and administrative                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            | 1,840     |   |     |   | 1,828 |   |   |   | 12 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | 4,777     |   |     |   | 4,068 |   |   |   | 709 |   |
|    Taxes      – other than income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 1,693     |   |     |   | 1,507 |   |   |   | 186 |   |
|    Gains      on sales of assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            | --        |   |     |   | 2 |   |   |   | (2 | ) |
| Total      costs and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 2,625,968 |   |     |   | 1,832,102 |   |   |   | 793,866 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |      |   |     |   |   |   |   |   |   |   |
| Operating      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            | 29,335    |   |     |   | 22,315 |   |   |   | 7,020 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |      |   |     |   |   |   |   |   |   |   |
| Equity      earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 3,000     |   |     |   | 1,789 |   |   |   | 1,211 |   |
| Interest      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 16        |   |     |   | 29 |   |   |   | (13 | ) |
| Other      income (expense) – net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | (10       | )      |     |   | 14 |   |   |   | (24 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |      |   |     |   |   |   |   |   |   |   |
| Earnings      before interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                               | 32,341    |   |     | $      | 24,147 |   |   | $ | 8,194 |   |

| (1)   | Amounts      in this table are presented after elimination of intercompany      transactions, including sales and purchases of petroleum      products. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Petroleum      products include crude oil, lubrication oils and specialty      chemicals. |
|-----------------|-------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | For      the Three Months Ended |   |   | Percentage |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | March      31,                  |   |   | Increase   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2008                            |   |   | 2007       |   |   | (Decrease) |   |
| Margins:      (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |   |   |       |   |   |   |   |
|   Crude      oil      marketing                                                                                          |   | $                               | 20,314 |   |       | $      | 21,531 |   |   |   | (6 | %) |
|   Lubrication      oil      sales                                                                                        |   |                            | 2,732  |   |       |   | 2,154 |   |   |   | 27 | % |
| Revenues:      (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |       |   |   |   |   |   |   |   |
|   Crude      oil      transportation                                                                                     |   |                            | 23,411 |   |       |   | 17,220 |   |   |   | 36 | % |
|   Crude      oil      terminaling                                                                                        |   |                            | 3,833  |   |       |   | 3,750 |   |   |   | 2 | % |
| Total      margins/revenues                                                                                                                                                     |   | $                               | 50,290 |   |       | $      | 44,655 |   |   |   | 13 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |       |   |   |   |   |   |   |   |
| Total      barrels/gallons:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            |   |   |       |   |   |   |   |   |   |   |
|   Crude      oil marketing (barrels)      (1)                                                                            |   |                            | 57,558 |   |       |   | 55,946 |   |   |   | 3 | % |
|   Lubrication      oil volume      (gallons)                                                                             |   |                            | 3,931  |   |       |   | 3,831 |   |   |   | 3 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |       |   |   |   |   |   |   |   |
|   Crude      oil transportation      (barrels)                                                                           |   |                            | 27,806 |   |       |   | 24,133 |   |   |   | 15 | % |
|   Crude      oil terminaling      (barrels)                                                                              |   |                            | 33,136 |   |       |   | 40,143 |   |   |   | (17 | %) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |       |   |   |   |   |   |   |   |
| Margin      per barrel or gallon:                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |   |   |       |   |   |   |   |   |   |   |
|   Crude      oil marketing (per barrel)      (1)                                                                         |   | $                               | 0.353  |   |       | $      | 0.385 |   |   |   | (8 | %) |
|   Lubrication      oil margin (per      gallon)                                                                          |   |                            | 0.695  |   |       |   | 0.562 |   |   |   | 24 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |       |   |   |   |   |   |   |   |
| Average      tariff per barrel:                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |   |   |       |   |   |   |   |   |   |   |
|   Crude      oil      transportation                                                                                     |   | $                               | 0.842  |   |       | $      | 0.714 |   |   |   | 18 | % |
|   Crude      oil      terminaling                                                                                        |   |                            | 0.116  |   |       |   | 0.093 |   |   |   | 24 | % |

| (1)   | Amounts      in this table are presented prior to the eliminations of intercompany      sales, revenues and purchases between TEPPCO Crude Oil, LLC (“TCO”) and      TEPPCO Crude Pipeline, LLC (“TCPL”), both of which are our wholly-owned      subsidiaries.  TCO is a significant shipper on      TCPL.  Crude oil marketing volumes also include inter-region      transfers, which are transfers among TCO’s various geographically managed      regions. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | For      the Three Months Ended |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | March      31,                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2008                            |       |   | 2007 |   |
| Sales      of petroleum products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                               | 2,637,652  |   |   | $ | 1,841,031 |   |
| Transportation      – Crude      oil                                                                                               |   |                            | 15,300     |   |   |   | 10,790 |   |
| Less:  Purchases      of petroleum      products                                                                               |   |                            | (2,602,662 | ) |   |   | (1,807,166 | ) |
|     Total      margins/revenues                                                                                      |   |                            | 50,290     |   |   |   | 44,655 |   |
| Other      operating revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                            | 2,351      |   |   |   | 2,596 |   |
|     Net      operating revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                            | 52,641     |   |   |   | 47,251 |   |
| Operating      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | 13,348     |   |   |   | 15,473 |   |
| Operating      fuel and power                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                            | 1,648      |   |   |   | 2,058 |   |
| General      and administrative expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | 1,840      |   |   |   | 1,828 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            | 4,777      |   |   |   | 4,068 |   |
| Taxes      – other than income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | 1,693      |   |   |   | 1,507 |   |
| Gains      on sales of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                            | --         |   |   |   | 2 |   |
|     Operating      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                               | 29,335     |   |   | $ | 22,315 |   |

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Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | For      the Three Months Ended |   |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | March      31,                  |   |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2008                            |   |   | 2007     |   |   | (Decrease) |   |
| Operating      revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            |   |   |     |   |   |   |   |
| Gathering      – Natural gas – Val Verde                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                               | 13,413 |   |     | $      | 15,408 |   |   | $ | (1,995 | ) |
| Transportation      – NGLs (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 12,957 |   |     |   | 10,941 |   |   |   | 2,016 |   |
|          Other                                                                                                                                  |   |                            | 3,711  |   |     |   | 3,024 |   |   |   | 687 |   |
|         Total      operating      revenues                                                                             |   |                            | 30,081 |   |     |   | 29,373 |   |   |   | 708 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |     |   |   |   |   |   |   |   |
| Costs      and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            |   |   |     |   |   |   |   |   |   |   |
| Operating      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | 4,980  |   |     |   | 8,254 |   |   |   | (3,274 | ) |
|  Operating      fuel and power                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | 3,711  |   |     |   | 2,803 |   |   |   | 908 |   |
| General      and administrative expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | 2,639  |   |     |   | 2,695 |   |   |   | (56 | ) |
|  Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 9,597  |   |     |   | 10,165 |   |   |   | (568 | ) |
| Taxes      – other than income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            | 768    |   |     |   | 646 |   |   |   | 122 |   |
| Total      costs and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 21,695 |   |     |   | 24,563 |   |   |   | (2,868 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |     |   |   |   |   |   |   |   |
| Operating      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            | 8,386  |   |     |   | 4,810 |   |   |   | 3,576 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |     |   |   |   |   |   |   |   |
| Equity      earnings – Jonah                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | 23,695 |   |     |   | 18,629 |   |   |   | 5,066 |   |
| Interest      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 120    |   |     |   | 111 |   |   |   | 9 |   |
| Other      income – net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | --     |   |     |   | 1 |   |   |   | (1 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            |   |   |     |   |   |   |   |   |   |   |
| Earnings      before interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                               | 32,201 |   |     | $      | 23,551 |   |   | $ | 8,650 |   |

| (1)   | Includes      transportation revenue from Enterprise Products Partners of $3.4 million      and $2.8 million for the three months ended March 31, 2008 and 2007,      respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                                                      |   | For      the Three Months Ended |    |   | Percentage |   |
|-----------------------------------------------------------|--------|---------------------------------|---------|--------|------------|--------|
|                                                      |   | March      31,                  |    |   | Increase   |   |
|                                                      |   | 2008                            |    |   | 2007       |   |   | (Decrease) |   |
| Gathering      – Natural Gas – Jonah: (1)     |   |                            |    |   |       |   |   |   |   |
| MMcf                                                      |   |                            | 167,094 |   |       |   | 131,543 |   |   |   | 27 | % |
| BBtu                                                      |   |                            | 184,628 |   |       |   | 145,159 |   |   |   | 27 | % |
| Average      fee per MMcf                                 |   | $                               | 0.258   |   |       | $      | 0.226 |   |   |   | 14 | % |
| Average      fee per MMBtu                                |   | $                               | 0.234   |   |       | $      | 0.205 |   |   |   | 14 | % |
|                                                      |   |                            |    |   |       |   |   |   |   |   |   |   |
| Gathering      – Natural Gas – Val Verde: (1) |   |                            |    |   |       |   |   |   |   |   |   |   |
| MMcf                                                      |   |                            | 38,240  |   |       |   | 43,567 |   |   |   | (12 | %) |
| BBtu                                                      |   |                            | 34,178  |   |       |   | 38,582 |   |   |   | (11 | %) |
| Average      fee per MMcf                                 |   | $                               | 0.351   |   |       | $      | 0.354 |   |   |   | (1 | %) |
| Average      fee per MMBtu                                |   | $                               | 0.392   |   |       | $      | 0.399 |   |   |   | (2 | %) |
|                                                      |   |                            |    |   |       |   |   |   |   |   |   |   |
| Transportation      and movements – NGLs:           |   |                            |    |   |       |   |   |   |   |   |   |   |
| Transportation      barrels                               |   |                            | 16,549  |   |       |   | 15,503 |   |   |   | 7 | % |
| Lease      barrels (2)                                    |   |                            | 3,041   |   |       |   | 2,061 |   |   |   | 48 | % |
| Average      rate per barrel                              |   | $                               | 0.736   |   |       | $      | 0.689 |   |   |   | 7 | % |
|                                                      |   |                            |    |   |       |   |   |   |   |   |   |   |
| Natural      Gas Sales – Jonah:                     |   |                            |    |   |       |   |   |   |   |   |   |   |
| BBtu                                                      |   |                            | 1,679   |   |       |   | 3,546 |   |   |   | (53 | %) |
| Average      fee per MMBtu                                |   | $                               | 6.806   |   |       | $      | 7.059 |   |   |   | (4 | %) |
|                                                      |   |                            |    |   |       |   |   |   |   |   |   |   |
| Fractionation      – NGLs:                          |   |                            |    |   |       |   |   |   |   |   |   |   |
| Barrels                                                   |   |                            | 1,095   |   |       |   | 978 |   |   |   | 12 | % |
| Average      rate per barrel                              |   | $                               | 1.661   |   |       | $      | 1.721 |   |   |   | (4 | %) |
|                                                      |   |                            |    |   |       |   |   |   |   |   |   |   |
| Sales      – Condensate – Jonah: (3)          |   |                            |    |   |       |   |   |   |   |   |   |   |
| Barrels                                                   |   |                            | 47.9    |   |       |   | 48.6 |   |   |   | (1 | %) |
| Average      rate per barrel                              |   | $                               | 76.72   |   |       | $      | 52.85 |   |   |   | 45 | % |

| (1)   | The      majority of volumes in Val Verde’s contracts are measured in MMcf, while      the majority of volumes in Jonah’s contracts are measured in      MMBtu.  Both measures are shown for each asset for comparability      purposes. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Revenues      associated with capacity leases are classified as other operating revenues      in our statements of consolidatedincome. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | All      of Jonah’s condensate volumes are sold toTCO. |
|-----------------|--------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | For      the Three Months Ended |   |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | March      31,                  |   |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2008                            |   |   | 2007     |   |   | (Decrease) |   |
| Operating      revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            |   |   |     |   |   |   |   |
| Transportation      – Marine                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                               | 25,536 |   |     | $      | -- |   |   | $ | 25,536 |   |
|         Total      operating      revenues                                                                                |   |                            | 25,536 |   |     |   | -- |   |   |   | 25,536 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |     |   |   |   |   |   |   |   |
| Costs      and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            |   |   |     |   |   |   |   |   |   |   |
| Operating      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 8,579  |   |     |   | -- |   |   |   | 8,579 |   |
| Operating      fuel and power                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            | 5,489  |   |     |   | -- |   |   |   | 5,489 |   |
| General      and administrative                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 736    |   |     |   | -- |   |   |   | 736 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            | 3,734  |   |     |   | -- |   |   |   | 3,734 |   |
| Taxes      – other than income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 430    |   |     |   | -- |   |   |   | 430 |   |
| Total      costs and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            | 18,968 |   |     |   | -- |   |   |   | 18,968 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |     |   |  |   |   |   |   |   |
| Operating      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | 6,568  |   |     |   | -- |   |   |   | 6,568 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |     |   |   |   |   |   |   |   |
| Interest      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            | 4      |   |     |   | -- |   |   |   | 4 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                            |   |   |     |   |   |   |   |   |   |   |
| Earnings      before interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                               | 6,572  |   |     | $      | -- |   |   | $ | 6,572 |   |

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|                                  |   | For      the Three Months Ended |     |
|---------------------------------------|--------|---------------------------------|----------|
|                                  |   | March      31,                  |     |
|                                  |   | 2008                            |     |   | 2007 |   |
|                                  |   |                            |     |   |   |   |
| Cash      provided by (used in):      |   |                            |     |   |   |   |
|   Operating      activities |   | $                               | 58,681   |   |   | $ | 68,731 |   |
|   Investing      activities |   |                            | (436,441 | ) |   |   | 94,159 |   |
|   Financing      activities |   |                            | 377,769  |   |   |   | (162,889 | ) |

    -  Cash  flow from operating activities decreased due to the timing of cash  disbursements and cash receipts related to working capital  components. 
    -  Cash  distributions received from unconsolidated affiliates decreased $3.1 million.  Distributions received from our equity investment in MB Storage decreased  $10.4 million due to the sale of our investment in MB Storage on March 1,  2007.  Distributions received from our equity investment in Seaway  decreased $3.8 million primarily due to its operating cash requirements.  Distribution from our equity investment in Jonah increased $11.1 million  primarily due to increased revenues and volumes generated from completion of a  portion of the Phase V expansion project in July 2007. 
    -  Cash  paid for interest, net of amounts capitalized, increased $4.4 million  period-to-period primarily due to higher outstanding balances on our variable  rate revolving credit facility.  Excluding the effects of hedging  activities and interest capitalized during the year ended December 31, 2008,  we expect interest payments on our fixed rate senior notes and junior  subordinated notes for 2008 to be approximately $137.6 million.  We  expect to make our interest payments with cash flows from operating  activities. 

    -  Cash  used for business combinations was $338.5 million during the three months  ended March 31, 2008, of which $257.7 million was for the Cenac acquisition  and $80.8 million was for the Horizon acquisition. 

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    -  Capital  expenditures increased $17.5 million primarily due to an increase in organic  growth projects period-to-period and higher spending to sustain existing  operations, including pipeline integrity (see “Other Considerations – Future  Capital Needs and Commitments” below).  Cash paid for linefill on  assets owned increased $14.3 million period-to-period primarily due to the  completion of organic growth projects in our Upstream  Segment. 
    -  Proceeds  from the sales of assets and ownership interests during the three months ended  March 31, 2007 were $165.3 million, which includes $138.8 million from the  sale of TE Products’ ownership interests in MB Storage and its general partner  and $18.5 million for the sale of other Downstream Segment assets, all to  Louis Dreyfus on March 1, 2007; and $8.0 million for the sale of Downstream  Segment assets to Enterprise Products Partners in January 2007 (see Note 10 in  the Notes to Unaudited Condensed Consolidated Financial  Statements). 
    -  Investments  in unconsolidated affiliates decreased $5.3 million, which includes a $6.1  million decrease in contributions to Centennial, partially offset by a $0.8  million increase in contributions to Jonah primarily for capital expenditures  on its Phase V expansion.  Contributions to Centennial during the  three months ended March 31, 2007 were for contractual obligations that were  created upon formation of Centennial. 
    -  During  the three months ended March 31, 2008, we paid $0.3 million related to  customer reimbursable commitments. 

    -  During  the three months ended March 31, 2008, we used $1.0 billion of proceeds from  our term credit agreement (i) to fund the cash portion of our Cenac and  Horizon acquisitions, (ii) to fund the redemption of our 7.51% TE Products  Senior Notes in January 2008, and the repayment of our 6.45% TE Products  Senior Notes, which matured in January 2008, (iii) to repay $63.2 million of  debt assumed in the Cenac acquisition, and (iv) for other general partnership  purposes.  We used the proceeds from the issuance of senior notes in  March 2008 to repay the outstanding balance of $1.0 billion under the term  credit agreement (see Note 11 in the Notes to Unaudited Condensed Consolidated  Financial Statements).  Debt issuance costs paid during the three  months ended March 31, 2008 were $8.7 million. 

-  Net  repayments under our revolving credit facility decreased $29.7  million. 

-  We paid  $52.1 million to settle treasury locks in March 2008 (see Note 5 in the Notes  to Unaudited Condensed Consolidated Financial Statements) upon the issuance of  senior notes. 

-  Cash  distributions to our partners increased $2.5 million period-to-period due to  an increase in the number of Units outstanding and our quarterly cash  distribution rates.  We paid cash distributions of $74.9 million  ($0.695 per Unit) and $72.4 million ($0.675 per Unit) during the three months  ended March 31, 2008 and 2007, respectively.  Additionally, we  declared a cash distribution of $0.71 per Unit for the quarter ended March 31,  2008.  We paid the distribution of $80.9 million on May 7, 2008 to  unitholders of record on April 30, 2008. 

-  Net  proceeds from the issuance of Units was $2.7 million during the three months  ended March 31, 2008 from the issuance of Units to employees under the  employee unit purchase plan and the issuance of Units in connection with our  distribution reinvestment plan (see Note 12 in the Notes to Unaudited  Condensed Consolidated Financial Statements). 

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|                                                              |   |                                        Amount of Commitment Expiration Per Period |
|-------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                              |   | Total                                                                                                                                                                                                                                                  |   |   | Less      than 1 Year |   |   | 1-3      Years |   |   | 4-5      Years |   |   | After      5 Years |
|                                                              |   |                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revolving      Credit Facility, due 2012                          |   | $                                                                                                                                                                                                                                                      | 429,200 |   |   | $ | -- |   |   | $ | -- |   |   | $ | 429,200 |   |   | $ | -- |   |
| 7.625%      Senior Notes due 2012 (1)                             |   |                                                                                                                                                                                                                                                   | 500,000 |   |   |   | -- |   |   |   | -- |   |   |   | 500,000 |   |   |   | -- |   |
| 6.125%      Senior Notes due 2013 (1)                             |   |                                                                                                                                                                                                                                                   | 200,000 |   |   |   | -- |   |   |   | -- |   |   |   | 200,000 |   |   |   | -- |   |
| 5.90%      Senior Notes, due 2013 (1)                             |   |                                                                                                                                                                                                                                                   | 250,000 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 250,000 |   |
| 6.65%      Senior Notes, due 2018 (1)                             |   |                                                                                                                                                                                                                                                   | 350,000 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 350,000 |   |
| 7.55%      Senior Notes, due 2038 (1)                             |   |                                                                                                                                                                                                                                                   | 400,000 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 400,000 |   |
| 7.00%      Junior Subordinated Notes due  2067      (1) |   |                                                                                                                                                                                                                                                   | 300,000 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 300,000 |   |
| Interest      payments (2)                                        |   |                                                                                                                                                                                                                                                   | 2,772,485 |   |   |   | 152,900 |   |   |   | 305,800 |   |   |   | 263,796 |   |   |   | 2,049,989 |   |
|  Debt      and interest total                                |   | $                                                                                                                                                                                                                                                      | 5,201,685 |   |   | $ | 152,900 |   |   | $ | 305,800 |   |   | $ | 1,392,996 |   |   | $ | 3,349,989 |   |

| (1)   | At      March 31, 2008, the 7.625% Senior Notes includes a deferred gain of $21.9      million, net of amortization, from interest rate swap terminations (see      Note 5 in the Notes to Unaudited Condensed Consolidated Financial      Statements).  At March 31, 2008, our 7.625% Senior Notes, our      6.125% Senior Notes, our 5.90% Senior Notes, our 6.65% Senior Notes, our      7.55% Senior Notes and our 7.00% junior subordinated notes include an      aggregate of $5.6 million of unamortized debt discounts.  The      deferred gain and the unamortized debt discounts are excluded from this      table. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes      interest payments due on our senior notes and junior subordinated notes      and interest payments and commitment fees due on our Revolving Credit      Facility. The interest amounts calculated on the Revolving Credit Facility      and the junior subordinated notes are based on the assumption that the      amounts outstanding and the interest rates charged both remain at their      current levels. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Scenario                                                     |   | Resulting      Classification |   | December      31,2007 |    |   | March      31,2008 |   |    | April      22,2008 |   |
|--------------------------------------------------------------|--------|-------------------------------|--------|-----------------------|---------|--------|--------------------|--------|---------|--------------------|--------|
|                                                         |   |                          |   |                  |    |   |               |   |    |               |   |
| FV      assuming no change in underlying commodity prices    |   | Liability                     |   | $                     | (18,897 | )      |               | $      | (15,391 | )                  |   | $ | (24,391 | ) |
| FV      assuming 10% increase in underlying commodity prices |   | Liability                     |   |                  | (33,606 | )      |               |   | (24,574 | )                  |   |   | (32,895 | ) |
| FV      assuming 10% decrease in underlying commodity prices |   | Liability                     |   |                  | (4,188  | )      |               |   | (6,208  | )                  |   |   | (15,887 | ) |

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|                                                      |   |            |    |   | Fair      Value |   |
|-----------------------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|
|                                                      |   |            |    |   | March      31,  |   |   | December      31, |   |
|                                                      |   | Face      Value |    |   | 2008            |   |   | 2007 |   |
|                                                      |   |            |    |   |            |   |   |   |   |
| 6.45%      TE Products Senior Notes, due January 2008 (1) |   | $               | 180,000 |   |            | $      | -- |   |   | $ | 179,982 |   |
| 7.625%      Senior Notes, due February 2012               |   |            | 500,000 |   |            |   | 533,188 |   |   |   | 536,765 |   |
| 6.125%      Senior Notes, due February 2013               |   |            | 200,000 |   |            |   | 202,368 |   |   |   | 202,027 |   |
| 5.90%      Senior Notes, due April 2013                   |   |            | 250,000 |   |            |   | 251,960 |   |   |   | -- |   |
| 6.65%      Senior Notes, due April 2018                   |   |            | 350,000 |   |            |   | 353,531 |   |   |   | -- |   |
| 7.51%      TE Products Senior Notes, due January 2028 (1) |   |            | 175,000 |   |            |   | -- |   |   |   | 181,571 |   |
| 7.55%      Senior Notes, due April 2038                   |   |            | 400,000 |   |            |   | 404,031 |   |   |   | -- |   |
| 7.000%      Junior Subordinated Notes, due June 2067      |   |            | 300,000 |   |            |   | 253,724 |   |   |   | 270,485 |   |

| (1)   | On      January 28, 2008, TE Products redeemed the $175.0 million of 7.51% TE      Products Senior Notes at a redemption price of 103.755% of the principal      amount plus accrued and unpaid interest at the date of      redemption.  Additionally, the $180.0 million principal amount      of 6.45% TE Products Senior Notes matured and was repaid on January 15,      2008.  We funded the retirement of both series with borrowings      under our Term Credit Agreement. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 4

| (i)   | that      our disclosure controls and procedures are designed to ensure that      information required to be disclosed by us in the reports that we file or      submit under the Securities Exchange Act of 1934 is recorded, processed,      summarized and reported within the time periods specified in the SEC’s      rules and forms, and that such information is accumulated and communicated      to our management, including the CEO and CFO, as appropriate to allow      timely decisions regarding required disclosure;  and |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | that      our disclosure controls and procedures are  effective. |
|------------------|------------------------------------------------------------------|

PART II.  OTHER INFORMATION

Item 1

Item 1A

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-  a  significant portion of our cash flow could be dedicated to the payment of  principal and interest on our future debt and may not be available for other  purposes, including the payment of distributions on our Units and capital  expenditures; 
-  credit  rating agencies may view our debt level negatively; 
-  covenants  contained in our existing debt arrangements will require us to continue to  meet financial tests that may adversely affect our flexibility in planning for  and reacting to changes in our business; 
-  our  ability to obtain additional financing for working capital, capital  expenditures, acquisitions, and general partnership purposes may be  limited; 
-  we may  be at a competitive disadvantage relative to similar companies that have less  debt; and 
-  we may  be more vulnerable to adverse economic and industry conditions as a result of  our significant debt level. 

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Item 5

Item 6

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

|   | 3.2 | Fourth      Amended and Restated Agreement of Limited Partnership of TEPPCO Partners,      L.P., dated December 8, 2006 (Filed as Exhibit 3 to the Current Report on      Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on      December 13, 2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.3 | Amended      and Restated Limited Liability Company Agreement of Texas Eastern Products      Pipeline Company, LLC (Filed as Exhibit 3 to the Current Report on Form      8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on May      10, 2007 and incorporated herein byreference). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.4 | First      Amendment to Fourth Amended and Restated Partnership Agreement of TEPPCO      Partners, L.P. dated as of December 27, 2007 (Filed as Exhibit 3.1 to      Current Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No.      1-10403) filed December 28, 2007 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 byreference). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | Indenture      between TEPPCO Partners, L.P., as issuer, TE Products Pipeline Company,      Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and      Jonah Gas Gathering Company, as subsidiary guarantors, and First Union      National Bank, NA, as trustee, dated as of February 20, 2002 (Filed as      Exhibit 99.2 to Form 8-K of TEPPCO Partners, L.P. (Commission File No.      1-10403) dated as of February 20, 2002 and incorporated herein by      reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                      4.3   | First      Supplemental Indenture between TEPPCO Partners, L.P., as issuer, TE      Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO      Midstream Companies, L.P. and Jonah Gas Gathering Company, as subsidiary      guarantors, and First Union National Bank, NA, as trustee, dated as of      February 20, 2002 (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners,      L.P. (Commission File No. 1-10403) dated as of February 20, 2002 and      incorporated herein by reference). |
|-----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.4 | Second      Supplemental Indenture, dated as of June 27, 2002, among TEPPCO Partners,      L.P., as issuer, TE Products Pipeline Company, Limited Partnership, TCTM,      L.P., TEPPCO Midstream Companies, L.P., and Jonah Gas Gathering Company,      as Initial Subsidiary Guarantors, and Val Verde Gas Gathering Company,      L.P., as New Subsidiary Guarantor, and Wachovia Bank, National      Association, formerly known as First Union National Bank, as trustee      (Filed as Exhibit 4.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission      File No. 1-10403) for the quarter ended June 30, 2002 and incorporated      herein by reference). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.5 | Third      Supplemental Indenture among TEPPCO Partners, L.P. as issuer, TE Products      Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream      Companies, L.P., Jonah Gas Gathering Company and Val Verde Gas Gathering      Company, L.P. as Subsidiary Guarantors, and Wachovia Bank, National      Association, as trustee, dated asof |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | January      30, 2003 (Filed as Exhibit 4.7 to Form 10-K of TEPPCO Partners, L.P.      (Commission File No. 1-10403) for the year ended December 31, 2002 and      incorporated herein by reference). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.6 | Full      Release of Guarantee dated as of July 31, 2006 by Wachovia Bank, National      Association, as trustee, in favor of Jonah Gas Gathering Company (Filed as      Exhibit 4.8 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No.      1-10403) for the quarter ended September 30, 2006 and incorporated herein      by reference). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.7 | Indenture,      dated as of May 14, 2007, by and among TEPPCO Partners, L.P., as      issuer, TE Products Pipeline Company, Limited Partnership, TCTM, L.P.,      TEPPCO Midstream Companies, L.P. and Val Verde Gas Gathering Company,      L.P., as subsidiary guarantors, and The Bank of New York Trust Company,      N.A., as trustee (Filed as Exhibit 99.1 to the Current Report on Form 8-K      of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on May 15,      2007 and incorporated herein byreference). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.8 | First      Supplemental Indenture, dated as of May 18, 2007, by and among TEPPCO      Partners, L.P., as issuer, TE Products Pipeline Company, Limited      Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and Val Verde      Gas Gathering Company, L.P., as subsidiary guarantors, and The Bank of New      York Trust Company, N.A., as trustee (Filed as Exhibit 4.2 to the Current      Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403)      filed on May 18, 2007 and incorporated herein by    reference). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.9 | Second      Supplemental Indenture, dated as of June 30, 2007, by and among TEPPCO      Partners, L.P., as issuer, TE Products Pipeline Company, Limited      Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. , Val Verde Gas      Gathering Company, L.P., TE Products Pipeline Company, LLC and TEPPCO      Midstream Companies, LLC, as subsidiary guarantors, and The Bank of New      York Trust Company, N.A., as trustee (Filed as Exhibit 4.2 to the Current      Report on Form 8-K of TE Products Pipeline Company, LLC (Commission File      No. 1-13603) filed on July 6, 2007 and incorporated herein by      reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.10 | Fourth      Supplemental Indenture, dated as of June 30, 2007, by and among TEPPCO      Partners, L.P., as issuer, TE Products Pipeline Company, Limited      Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P., Val Verde Gas      Gathering Company, L.P., TE Products Pipeline Company, LLC and TEPPCO      Midstream Companies, LLC, as subsidiary guarantors, and U.S. Bank National      Association, as trustee (Filed as Exhibit 4.3 to the Current Report on      Form 8-K of TE Products Pipeline Company, LLC (Commission File No.      1-13603) filed on July 6, 2007 and incorporated herein by      reference). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.11* | Fifth      Supplemental Indenture, dated as of March 27, 2008, by and among TEPPCO      Partners, L.P., as issuer, TE Products Pipeline Company, LLC, TCTM, L.P.,      TEPPCO Midstream Companies, LLC, and Val Verde Gathering Company, L.P., as      subsidiary guarantors, and U.S. Bank National Association, as      trustee. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.12* | Sixth      Supplemental Indenture, dated as of March 27, 2008, by and among TEPPCO      Partners, L.P., as issuer, TE Products Pipeline Company, LLC, TCTM, L.P.,      TEPPCO Midstream Companies, LLC and Val Verde Gas Gathering Company, L.P.,      as subsidiary guarantors, and U.S. Bank National Association, as      trustee. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.13* | Seventh      Supplemental Indenture, dated as of March 27, 2008, by and among TEPPCO      Partners, L.P., as issuer, TE Products Pipeline Company, LLC, TCTM, L.P.,      TEPPCO Midstream Companies, LLC and Val Verde Gas Gathering Company, L.P.,      as subsidiary guarantors, and U.S. Bank National Association, as      trustee. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 10.1 | Amended      and Restated Guaranty Agreement, dated as of January 17, 2008, by and      among The Prudential Insurance Company of America, TCTM, L.P., TEPPCO      Midstream Companies, LLC, TEPPCO Partners, L.P. and TE Products Pipeline      Company, LLC (Filed as Exhibit 10.1 to Current Report on Form 8-K of      TEPPCO Partners, L.P. (Commission File No. 1-10403) filed January 24, 2008      and incorporated herein byreference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | Asset      Purchase Agreement, dated February 1, 2008, by and among TEPPCO Marine      Services, LLC, TEPPCO Partners, L.P., Cenac Towing Co., Inc., Cenac      Offshore, L.L.C. and Mr. Arlen B. Cenac, Jr. (Filed as Exhibit 2 to      Current Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No.      1-10403) filed February 7, 2008 and incorporated herein by      reference). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3 | Transitional      Operating Agreement, dated February 1, 2008, by and among TEPPCO Marine      Services, LLC, Cenac Towing Co., Inc., Cenac Offshore, L.L.C. and Mr.      Arlen B. Cenac, Jr. (Filed as Exhibit 10 to Current Report on Form 8-K of      TEPPCO Partners, L.P. (Commission File No. 1-10403) filed February 7, 2008      and incorporated herein byreference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Asset      Purchase Agreement, dated February 29, 2008, by and among TEPPCO Marine      Services, LLC, Horizon Maritime, L.L.C., Mr. Arlen B. Cenac, Jr., Mr.      Steven G. Proehl, Mr. John P. Binion, Mr. Richard M. Seale and CHO, LLC      (Filed as Exhibit 10 to Current Report on Form 8-K of TEPPCO Partners,      L.P. (Commission File No. 1-10403) filed March  6, 2008 and      incorporated herein by reference). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5* | Amendment      No. 1, dated February 29, 2008, to Asset Purchase Agreement, dated      February 1, 2008, by and among TEPPCO Marine Serivces, LLC, TEPPCO      Partners, L.P., Cenac Towing Co., Inc., Cenac Offshore, L.L.C. and Mr.      Arlen B. Cenac, Jr. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6* | Amendment      No. 1, dated February 29, 2008, to Transitional Operating Agreement, dated      February 1, 2008, by and among Cenac Towing Co., Inc., Cenac Offshore,      L.L.C., Mr. Arlen B. Cenac, Jr., and TEPPCO Marine Serivces,      LLC. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7* | Form      of TPP Employee Unit Option Grant under the EPCO, Inc. 2006 TPP Long-Term      Incentive Plan. |
|--------|-------|----------------------------------------------------------------------------------------------------------|

|   | 10.8* | Form      of TPP Employee Amendment to Unit Option Grant under the EPCO, Inc. 2006      TPP Long-Term Incentive Plan for options granted between April 2007 and      April 2008. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.1* | Statement      of Computation of Ratio of Earnings to Fixed  Charges. |
|--------|-------|-----------------------------------------------------------------------|

|   | 31.1* | Certification      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002. |
|--------|-------|---------------------------------------------------------------------------------------------------------------|

|   | 31.2* | Certification      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002. |
|--------|-------|---------------------------------------------------------------------------------------------------------------|

|   | 32.1** | Certification      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002. |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | 32.2** | Certification      of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002. |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

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Table of Contents

SIGNATURES

|                                          | TEPPCO      Partners, L.P.                                                                                                                                                                        |
|-----------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   Date:  May      8, 2008 | By:  /s/   JERRY      E. THOMPSONJerry      E. Thompson,President      and Chief Executive Officer ofTexas      Eastern Products Pipeline Company, LLC, General Partner       |
|                                          |                                                                                                                                                                                                   |
|   Date:  May      8, 2008 | By:  /s/   WILLIAM      G. MANIASWilliam      G. Manias,Vice      President and Chief Financial Officer ofTexas      Eastern Products Pipeline Company, LLC, General  Partner |

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