|   |
|--------|

| 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 |

|   |
|--------|

----

|                                                                                                                                                 | 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                                 | 11            |
|           Note      4.  Employee Benefit Plans                                           | 14            |
|           Note      5.  Financial Instruments                                            | 14            |
|           Note      6.  Inventories                                                      | 19            |
|           Note      7.  Property, Plant and Equipment                                    | 19            |
|           Note      8.  Investments in Unconsolidated Affiliates                         | 21            |
|           Note      9.  Acquisitions and Dispositions                                    | 24            |
|           Note      10.  Intangible Assets and Goodwill                                  | 28            |
|           Note      11.  Debt Obligations                                                | 30            |
|           Note      12.  Partners’ Capital and Distributions                       | 34            |
|           Note      13.  Business Segments                                               | 37            |
|           Note      14.  Related Party Transactions                                      | 41            |
|           Note      15.  Earnings per Unit                                               | 44            |
|           Note      16.  Commitments and Contingencies                                   | 45            |
|           Note      17.  Supplemental Cash Flow Information                              | 50            |
|           Note      18.  Supplemental Condensed Consolidating Financial      Information | 51            |
|           Note      19.  Subsequent Event                                                | 55            |
|                                                                                                                                                 |          |
| Item      2.  Management’s Discussion and      Analysis of Financial Condition and Results of      Operations                        | 56            |
|                                                                                                                                                 |          |
| Cautionary Note Regarding      Forward-Looking Statements                                                                                            | 57            |
|                                                                                                                                                 |          |
| Item      3.  Quantitative and Qualitative      Disclosures About Market Risk                                                              | 82            |
|                                                                                                                                                 |          |
| Item      4.  Controls      and Procedures                                                                                                 | 84            |
|                                                                                                                                                 |          |
|                                                                                                                                                 |          |
| PART      II.  OTHER INFORMATION                                                                                                           |          |
|                                                                                                                                                 |          |
| Item      1.  Legal      Proceedings                                                                                                       | 85            |
|                                                                                                                                                 |          |
| Item      1A.  Risk      Factors                                                                                                           | 85            |
|                                                                                                                                                 |          |
| Item      6.  Exhibits                                                                                                                     | 85            |
|                                                                                                                                                 |          |
| Signatures                                                                                                                                           | 87            |

----

Item 1. FinancialStatements.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | June      30, |      |   | December      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2008          |      |   | 2007              |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| Current      assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |      |   |              |   |
|   Cash      and cash      equivalents                                                                                                                               |   | $             | 28        |   |              | $      | 23 |   |
|   Accounts      receivable, trade (net of allowance for doubtful accounts    of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |      |   |              |   |   |   |
| $128      and      $125)                                                                                                                                                                          |   |          | 1,968,611 |   |              |   | 1,381,871 |   |
|   Accounts      receivable, related      parties                                                                                                                    |   |          | 12,639    |   |              |   | 6,525 |   |
|   Inventories                                                                                                                                                       |   |          | 125,911   |   |              |   | 80,299 |   |
|   Other                                                                                                                                                             |   |          | 72,845    |   |              |   | 47,271 |   |
|      Total      current      assets                                                                                                                  |   |          | 2,180,034 |   |              |   | 1,515,989 |   |
| Property, plant and equipment,      at cost (net of accumulated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          |      |   |              |   |   |   |
|   depreciation      of $627,671 and      $582,225)                                                                                                                  |   |          | 2,330,061 |   |              |   | 1,793,634 |   |
| Equity      investments                                                                                                                                                       |   |          | 1,175,573 |   |              |   | 1,146,995 |   |
| Intangible      assets                                                                                                                                                        |   |          | 220,927   |   |              |   | 164,681 |   |
| Goodwill                                                                                                                                                                      |   |          | 105,582   |   |              |   | 15,506 |   |
| Other      assets                                                                                                                                                             |   |          | 133,822   |   |              |   | 113,252 |   |
|      Total      assets                                                                                                                               |   | $             | 6,145,999 |   |              | $      | 4,750,057 |   |
| LIABILITIES      AND PARTNERS’ CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Current      liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |      |   |              |   |   |   |
|   Senior      notes                                                                                                                                                 |   | $             | --        |   |              | $      | 353,976 |   |
|   Accounts      payable and accrued      liabilities                                                                                                                |   |          | 2,031,547 |   |              |   | 1,413,447 |   |
|   Accounts      payable, related      parties                                                                                                                       |   |          | 20,022    |   |              |   | 38,980 |   |
|   Accrued      interest                                                                                                                                             |   |          | 39,404    |   |              |   | 35,491 |   |
|   Other      accrued      taxes                                                                                                                                     |   |          | 23,856    |   |              |   | 20,483 |   |
|   Other                                                                                                                                                             |   |          | 74,788    |   |              |   | 84,848 |   |
|      Total      current      liabilities                                                                                                             |   |          | 2,189,617 |   |              |   | 1,947,225 |   |
| Long-term      debt:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |      |   |              |   |   |   |
|   Senior      notes                                                                                                                                                 |   |          | 1,715,615 |   |              |   | 721,545 |   |
|   Junior      subordinated      notes                                                                                                                               |   |          | 299,556   |   |              |   | 299,538 |   |
|   Other      long-term      debt                                                                                                                                    |   |          | 530,000   |   |              |   | 490,000 |   |
|          Total      long-term      debt                                                                                          |   |          | 2,545,171 |   |              |   | 1,511,083 |   |
| Other      liabilities and deferred      credits                                                                                                                              |   |          | 28,723    |   |              |   | 27,122 |   |
| Commitments      and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |      |   |              |   |   |   |
| Partners’      capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          |      |   |              |   |   |   |
|   Limited      partners’ interests:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          |      |   |              |   |   |   |
|      Limited      partner units (94,864,997 and 89,849,132 unitsoutstanding)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |          | 1,550,608 |   |              |   | 1,394,812 |   |
|      Restricted      limited partner units (157,900 and 62,400 units    outstanding)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 738       |   |              |   | 338 |   |
|   General      partner’s      interest                                                                                                                        |   |          | (95,170   | )      |              |   | (87,966 | ) |
|   Accumulated      other comprehensive      loss                                                                                                                    |   |          | (73,688   | )      |              |   | (42,557 | ) |
|      Total partners’      capital                                                                                                              |   |          | 1,382,488 |   |              |   | 1,264,627 |   |
|      Total liabilities and partners’      capital                                                                                              |   | $             | 6,145,999 |   |              | $      | 4,750,057 |   |

----

|                                                                                                 |   | For      the Three Months Ended |      |   | For      the Six Months Ended |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|-------------------------------|--------|
|                                                                                                 |   | June      30,                   |      |   | June      30,                 |   |
|                                                                                                 |   | 2008                            |      |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
| Operating      revenues:                                                                             |   |                            |      |   |                          |   |   |   |   |   |   |   |
| Sales      of petroleum products                                                                     |   | $                               | 4,006,567 |   |                          | $      | 1,933,104 |   |   | $ | 6,651,145 |   |   | $ | 3,783,232 |   |
| Transportation      – Refined products                                                         |   |                            | 44,116    |   |                          |   | 41,718 |   |   |   | 81,399 |   |   |   | 78,853 |   |
| Transportation      – LPGs                                                                     |   |                            | 16,063    |   |                          |   | 16,747 |   |   |   | 52,254 |   |   |   | 52,800 |   |
| Transportation      – Crude oil                                                                |   |                            | 17,432    |   |                          |   | 9,580 |   |   |   | 32,732 |   |   |   | 20,370 |   |
| Transportation      – NGLs                                                                     |   |                            | 12,701    |   |                          |   | 11,098 |   |   |   | 25,658 |   |   |   | 22,039 |   |
| Transportation      – Marine                                                                   |   |                            | 48,030    |   |                          |   | -- |   |   |   | 73,566 |   |   |   | -- |   |
| Gathering      – Natural gas                                                                   |   |                            | 14,789    |   |                          |   | 15,452 |   |   |   | 28,202 |   |   |   | 30,860 |   |
| Other                                                                                                |   |                            | 20,765    |   |                          |   | 21,737 |   |   |   | 43,995 |   |   |   | 39,711 |   |
| Total      operating revenues                                                                        |   |                            | 4,180,463 |   |                          |   | 2,049,436 |   |   |   | 6,988,951 |   |   |   | 4,027,865 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                                                                             |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products                                                                 |   |                            | 3,975,726 |   |                          |   | 1,900,944 |   |   |   | 6,582,333 |   |   |   | 3,714,938 |   |
| Operating      expense                                                                               |   |                            | 66,565    |   |                          |   | 43,917 |   |   |   | 120,342 |   |   |   | 89,083 |   |
| Operating      fuel and power                                                                        |   |                            | 29,073    |   |                          |   | 14,829 |   |   |   | 50,447 |   |   |   | 30,103 |   |
| General      and administrative                                                                      |   |                            | 11,026    |   |                          |   | 8,164 |   |   |   | 19,774 |   |   |   | 16,762 |   |
| Depreciation      and amortization                                                                   |   |                            | 31,819    |   |                          |   | 25,880 |   |   |   | 60,163 |   |   |   | 51,249 |   |
| Taxes      – other than income taxes                                                           |   |                            | 6,978     |   |                          |   | 4,975 |   |   |   | 13,097 |   |   |   | 10,218 |   |
| Gains      on sales of assets                                                                        |   |                            | --        |   |                          |   | (2 | ) |   |   | -- |   |   |   | (18,651 | ) |
| Total      costs and expenses                                                                        |   |                            | 4,121,187 |   |                          |   | 1,998,707 |   |   |   | 6,846,156 |   |   |   | 3,893,702 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                                                |   |                            | 59,276    |   |                          |   | 50,729 |   |   |   | 142,795 |   |   |   | 134,163 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Other      income (expense):                                                                         |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense – net                                                                    |   |                            | (33,034   | )      |                          |   | (22,785 | ) |   |   | (71,605 | ) |   |   | (44,996 | ) |
| Gain      on sale of ownership interest in Mont   Belvieu      Storage Partners, L.P. |   |                            | --        |   |                          |   | (189 | ) |   |   | -- |   |   |   | 59,648 |   |
| Equity      earnings                                                                                 |   |                            | 21,417    |   |                          |   | 19,234 |   |   |   | 41,079 |   |   |   | 35,797 |   |
| Interest      income                                                                                 |   |                            | 283       |   |                          |   | 445 |   |   |   | 591 |   |   |   | 787 |   |
| Other      income – net                                                                        |   |                            | 759       |   |                          |   | 535 |   |   |   | 799 |   |   |   | 779 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Income      before provision for income taxes                                                        |   |                            | 48,701    |   |                          |   | 47,969 |   |   |   | 113,659 |   |   |   | 186,178 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                                                                      |   |                            | 1,019     |   |                          |   | 209 |   |   |   | 1,838 |   |   |   | 227 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                      |   | $                               | 47,682    |   |                          | $      | 47,760 |   |   | $ | 111,821 |   |   | $ | 185,951 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net Income      Allocation:                                                                          |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Limited      Partner’s interest in net income                                                  |   | $                               | 39,701    |   |                          | $      | 39,926 |   |   | $ | 93,104 |   |   | $ | 155,450 |   |
| General      Partner interest in net income                                                          |   |                            | 7,981     |   |                          |   | 7,834 |   |   |   | 18,717 |   |   |   | 30,501 |   |
|      Total      net income allocated                                        |   | $                               | 47,682    |   |                          | $      | 47,760 |   |   | $ | 111,821 |   |   | $ | 185,951 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted net income per Limited Partner Unit                                           |   | $                               | 0.42      |   |                          | $      | 0.44 |   |   | $ | 0.99 |   |   | $ | 1.73 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average Limited Partner Units outstanding                                              |   |                            | 94,940    |   |                          |   | 89,832 |   |   |   | 94,048 |   |   |   | 89,819 |   |
|                                                                                                 |   |                            |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                            |   | For      the Three Months Ended |    |   | For      the Six Months Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|--------|-------------------------------|--------|
|                                                                                                                                                                                            |   | June      30,                   |    |   | June      30,                 |   |
|                                                                                                                                                                                            |   | 2008                            |    |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                            |   |                            |    |   |                          |   |   |   |   |   |   |   |
| Net      income                                                                                                                                                                                 |   | $                               | 47,682  |   |                          | $      | 47,760 |   |   | $ | 111,821 |   |   | $ | 185,951 |   |
| Other      comprehensive income (loss):                                                                                                                                                         |   |                            |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|     Cash      flow hedges:                                                                                                                                                  |   |                            |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|         Change      in fair values of interest rate cash flow          hedges      and treasury locks |   |                            | (27     | )      |                          |   | 1,295 |   |   |   | (23,227 | ) |   |   | 1,512 |   |
|         Changes      in fair values of crude oil cash flow          hedges                            |   |                            | (10,993 | )      |                          |   | (513 | ) |   |   | (7,904 | ) |   |   | (153 | ) |
|             Total      cash flow hedges                                                                                             |   |                            | (11,020 | )      |                          |   | 782 |   |   |   | (31,131 | ) |   |   | 1,359 |   |
|            Total      other comprehensive income (loss)                                                                                  |   |                            | (11,020 | )      |                          |   | 782 |   |   |   | (31,131 | ) |   |   | 1,359 |   |
| Comprehensive      income                                                                                                                                                                       |   | $                               | 36,662  |   |                          | $      | 48,542 |   |   | $ | 80,690 |   |   | $ | 187,310 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | For      the Six Months Ended |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | June      30,                 |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2008                          |       |   | 2007 |   |
| Operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                          |       |   |   |   |
|        Net      income                                                                                                                                                                                      |   | $                             | 111,821    |   |   | $ | 185,951 |   |
|        Adjustments to reconcile net income to cash provided by operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                          |       |   |   |   |   |   |
| Deferred      income      taxes                                                                                                                                                                                       |   |                          | 1          |   |   |   | (654 | ) |
| Depreciation      and      amortization                                                                                                                                                                               |   |                          | 60,163     |   |   |   | 51,249 |   |
| Amortization      of deferred      compensation                                                                                                                                                                       |   |                          | 724        |   |   |   | 202 |   |
| Amortization      in interest      expense                                                                                                                                                                            |   |                          | 2,125      |   |   |   | (1,573 | ) |
| Earnings      in equity      investments                                                                                                                                                                              |   |                          | (41,079    | ) |   |   | (35,797 | ) |
| Distributions      from equity      investments                                                                                                                                                                       |   |                          | 79,319     |   |   |   | 68,159 |   |
| Gains      on sales of      assets                                                                                                                                                                                    |   |                          | --         |   |   |   | (18,651 | ) |
| Gain      on sale of ownership interest in Mont Belvieu Storage Partners,      L.P                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                          | --         |   |   |   | (59,648 | ) |
| Loss      on early extinguishment of      debt                                                                                                                                                                        |   |                          | 8,689      |   |   |   | -- |   |
| Net      effect of changes in operating      accounts                                                                                                                                                                 |   |                          | (57,711    | ) |   |   | 9,895 |   |
|    Net      cash provided by operating      activities                                                                                                                                                           |   |                          | 164,052    |   |   |   | 199,133 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                          |       |   |   |   |   |   |
| Investing      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                          |       |   |   |   |   |   |
| Proceeds      from sales of      assets                                                                                                                                                                               |   |                          | --         |   |   |   | 26,538 |   |
| Proceeds      from sale of ownership      interest                                                                                                                                                                    |   |                          | --         |   |   |   | 137,606 |   |
| Cash      used for business      combinations                                                                                                                                                                         |   |                          | (345,629   | ) |   |   | -- |   |
| Investment      in Centennial Pipeline      LLC                                                                                                                                                                       |   |                          | --         |   |   |   | (11,081 | ) |
| Investment      in Jonah Gas Gathering      Company                                                                                                                                                                   |   |                          | (64,464    | ) |   |   | (86,153 | ) |
| Acquisition      of intangible      assets                                                                                                                                                                            |   |                          | (300       | ) |   |   | (2,500 | ) |
| Cash      paid for linefill on assets      owned                                                                                                                                                                      |   |                          | (14,463    | ) |   |   | (15,095 | ) |
| Capital      expenditures                                                                                                                                                                                             |   |                          | (139,252   | ) |   |   | (109,876 | ) |
|           Net      cash used in investing      activities                                                                                                 |   |                          | (564,108   | ) |   |   | (60,561 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                          |       |   |   |   |   |   |
| Financing      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                          |       |   |   |   |   |   |
| Proceeds      from term credit      facility                                                                                                                                                                          |   |                          | 1,000,000  |   |   |   | -- |   |
| Repayments      on term credit      facility                                                                                                                                                                          |   |                          | (1,000,000 | ) |   |   | -- |   |
| Proceeds      from revolving credit      facility                                                                                                                                                                     |   |                          | 1,348,050  |   |   |   | 405,850 |   |
| Repayments      on revolving credit      facility                                                                                                                                                                     |   |                          | (1,308,050 | ) |   |   | (695,850 | ) |
| 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                                                                                                                                                                      |   |                          | 5,610      |   |   |   | -- |   |
| Issuance      of senior      notes                                                                                                                                                                                    |   |                          | 996,349    |   |   |   | -- |   |
| Issuance      of Junior Subordinated      Notes                                                                                                                                                                       |   |                          | --         |   |   |   | 299,517 |   |
| Debt      issuance      costs                                                                                                                                                                                         |   |                          | (9,326     | ) |   |   | (3,750 | ) |
| Settlement      of treasury lock      agreements                                                                                                                                                                      |   |                          | (52,098    | ) |   |   | 1,589 |   |
| Distributions      paid                                                                                                                                                                                               |   |                          | (155,746   | ) |   |   | (145,976 | ) |
|          Net      cash provided by (used in) financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                          | 400,061    |   |   |   | (138,620 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                          |       |   |   |   |   |   |
| Net      change in cash and cash      equivalents                                                                                                                                                           |   |                          | 5          |   |   |   | (48 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                          |       |   |   |   |   |   |
| Cash      and cash equivalents, January      1                                                                                                                                                              |   |                          | 23         |   |   |   | 70 |   |
| Cash      and cash equivalents, June      30                                                                                                                                                                |   | $                             | 28         |   |   | $ | 22 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 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                                                                                                                                                                     |   |        | --         |   |            |   | 18,717  |            |   |   | 93,104             |   |   |   | --      |   |   |   | 111,821 |   |
| 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                                                                                                                                                                                                                                                                                                                                   |   |        | 149,969    |   |            |   | --      |            |   |   | 5,209              |   |   |   | --      |   |   |   | 5,209 |   |
|    Units      issued in connection with Employee      Unit      Purchase      Plan                                                      |   |        | 10,997     |   |            |   | --      |            |   |   | 401                |   |   |   | --      |   |   |   | 401 |   |
| Issuance of restricted units      under 2006       LTIP                                                                                           |   |        | 95,500     |   |            |   | --      |            |   |   | --                 |   |   |   | --      |   |   |   | -- |   |
| Cash      distributions                                                                                                                                                                        |   |        | --         |   |            |   | (25,921 | )               |   |   | (129,825           | )      |   |   | --      |   |   |   | (155,746 | ) |
| Non-cash      contribution                                                                                                                                                                     |   |        | --         |   |            |   | --      |            |   |   | 273                |   |   |   | --      |   |   |   | 273 |   |
| Amortization of equity      awards                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        | --         |   |            |   | --      |            |   |   | 476                |   |   |   | --      |   |   |   | 476 |   |
| Changes in fair values of crude      oil cash   flow      hedges                                                                                                                |   |        | --         |   |            |   | --      |            |   |   | --                 |   |   |   | (7,904  | ) |   |   | (7,904 | ) |
| Changes in fair values of      treasury locks                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        | --         |   |            |   | --      |            |   |   | --                 |   |   |   | (23,227 | ) |   |   | (23,227 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |       |   |            |   |    |            |   |   |               |   |   |   |    |   |   |   |   |   |
| Balance,      June 30, 2008                                                                                                                                                                                                                                                                                                                                                                                                                              |   |        | 95,022,897 |   |            | $      | (95,170 | )               |   | $      | 1,551,346          |   |   | $      | (73,688 | ) |   | $ | 1,382,488 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |       |   |            |   |    |            |   |   |               |   |   |   |    |   |   |   |   |   |

----

----

| §   | 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”). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                                               |   | For      the Three Months EndedJune      30, |   |   | For      the Six Months EndedJune      30, |   |
|----------------------------------------------------|--------|----------------------------------------------|--------|--------|-------------------------------------------------|--------|
|                                               |   | 2008                                         |   |   | 2007                                            |   |   | 2008 |   |   | 2007 |   |
| Phantom      Unit Plans: (1) (2)                   |   |                                         |   |   |                                            |   |   |   |   |   |   |   |
|   1999      Phantom Unit Retention Plan  |   | $                                            | 59     |   |                                            | $      | 342 |   |   | $ | 51 |   |   | $ | 782 |   |
|   2000      Long Term Incentive Plan     |   |                                         | 53     |   |                                            |   | 122 |   |   |   | (174 | ) |   |   | 302 |   |
|   2005      Phantom Unit Plan            |   |                                         | 49     |   |                                            |   | 328 |   |   |   | 106 |   |   |   | 541 |   |
| EPCO,      Inc. 2006 TPP Long-Term Incentive Plan: |   |                                         |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|   Unit      options                      |   |                                         | 36     |   |                                            |   | 12 |   |   |   | 63 |   |   |   | 12 |   |

|   Restricted      units (3)                                  |   |   | 248    |   |   |   | 64     |   |   |   | 387    |   |   |   | 64     |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   Unit      appreciation rights (“UARs”) (1) (2) |   |   | 7      |   |   |   | 24     |   |   |   | 4      |   |   |   | 24     |   |
|   Phantom      units (1)                                     |   |   | 4      |   |   |   | 4      |   |   |   | 8      |   |   |   | 4      |   |
| Compensation      expense allocated under ASA (4)                      |   |   | 372    |   |   |   | 263    |   |   |   | 711    |   |   |   | 353    |   |
|       Total      compensation expense    |   | $      | 828    |   |   | $      | 1,159  |   |   | $      | 1,156  |   |   | $      | 2,082  |   |
|                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | These      awards are accounted for as liability awards under the provisions of SFAS      No. 123(R), Share-Based      Payment (“SFAS 123(R)”).  Accruals for plan award payouts      are based on the Unit price. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The      decrease in compensation expense for the three months and six months ended      June 30, 2008, is primarily due to a decrease in the Unit price at June      30, 2008 as compared to the Unit price at March 31, 2008 and December 31,      2007, respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | As      used in the context of the EPCO, Inc. 2006 TPP 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 under other EPCO compensation      plans allocated to us from EPCO under the ASA in connection with shared      service employees working on ourbehalf. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                        |   |          |    |   |              |   |   | Weighted-            |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|--------|----------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                        |   |          |    |   | Weighted-         |   |   | Average              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   |          |    |   | Average           |   |   | Remaining            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   | Number        |    |   | Strike      Price |   |   | Contractual          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   | of Units |    |   | (dollars/Unit)    |   |   | Term      (in years) |   |
| Unit      Options:                                                                                                                                                                                                                                                                                                                                                                                          |   |          |    |   |              |   |   |                 |   |
| Outstanding at December 31, 2007      (1)                                                                                                                                                                                                                                                                                                                                                                   |   |          | 155,000 |   |              | $      | 45.35  |                 |   |   | -- |   |
| Granted      (2)                                                                                                                        |   |          | 200,000 |   |              |   | 35.86  |                 |   |   | -- |   |
| Outstanding at June 30,      2008                                                                                        |   |          | 355,000 |   |              | $      | 40.00  |                 |   |   | 5.07 |   |
|   Options      exercisable at:                                                                                                                                                                                                                                                                                                                                                                    |   |          |    |   |              |   |   |                 |   |   |   |   |
|       June      30,      2008                                                         |   |          | --      |   |              | $      | --     |                 |   |   | -- |   |

| (1)   | During      2008, previous unit option grants were amended.  The expiration      dates of the 2007 awards were modified from May 22, 2017 to December 31,      2012. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The      total grant date fair value of these awards was $0.3 million based on the      following assumptions:  (i) expected life of the option of 4.7      years; (ii) risk-free interest rate of 3.3%; (iii) expected distribution      yield on Units of 7.9%; (iv) estimated forfeiture rate of 17%; and (v)      expected Unit price volatility on Units of  18.7%. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                               |   |          |    |   | Weighted-            |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|----------------------|--------|
|                                                                                                                                                                                                                                                                                                                               |   |          |    |   | Average      Grant   |   |
|                                                                                                                                                                                                                                                                                                                               |   | Number        |    |   | Date      Fair Value |   |
|                                                                                                                                                                                                                                                                                                                               |   | of      Units |    |   | per      Unit (1)    |   |
| Restricted Units at December 31,      2007                                                                                                                                                                                                                                                                                         |   |          | 62,400  |   |                 |   |   |
| Granted      (2)                                                    |   |          | 95,900  |   |                 | $      | 32.97 |   |
| Forfeited                                                           |   |          | (400    | )      |                 |   | 35.86 |   |
| Restricted Units at June 30,      2008                                                                                                                                                                                                                                                                                             |   |          | 157,900 |   |                 |   |   |   |

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

| (2)   | Aggregate      grant date fair value of restricted unit awards issued during the six      months ended June 30, 2008 was $2.8 million based on grant date market      prices of our Units ranging from $34.63 to $35.86 per Unit and an      estimated forfeiture rate of 17%. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| §   | 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      treasury securities. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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                                                          |   | $            | 25,362 |   |         | $      | 95     |   |   | $ | 25,457 |   |
|                                                                                                                                                                                                                                                                                                                                                                                       |   |         |   |   |         |   |   |   |   |   |   |   |
|     Total                                                                 |   | $            | 25,362 |   |         | $      | 95     |   |   | $ | 25,457 |   |
|                                                                                                                                                                                                                                                                                                                                                                                       |   |         |   |   |         |   |   |   |   |   |   |   |
| Financial      liabilities:                                                                                                                                                                                                                                                                                                                                                                |   |         |   |   |         |   |   |   |   |   |   |   |
| Commodity financial      instruments                                                          |   | $            | 51,780 |   |         | $      | 137    |   |   | $ | 51,917 |   |
|                                                                                                                                                                                                                                                                                                                                                                                       |   |         |   |   |         |   |   |   |   |   |   |   |
|     Total                                                                 |   | $            | 51,780 |   |         | $      | 137    |   |   | $ | 51,917 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Net         |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Commodity   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Financial   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Instruments |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        |   |
| Beginning      balance, April 1,      2008                                                                                       |   | $           | 24     |   |
| Total      gains (losses) included in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |
| Net income      (1)                                                                                                                                  |   |        | (66    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        |   |   |
| Ending      balance, June 30,      2008                                                                                          |   | $           | (42    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        |   |   |
| Net      unrealized losses included in net income for the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        |   |   |
| three months relating to      instruments still held at June 30, 2008 (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $           | (66    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        |   |   |
| Beginning      balance, January 1,      2008                                                                                     |   | $           | (394   | ) |
| Total      gains (losses) included in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |
| Net income      (1)                                                                                                                                  |   |        | 352    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        |   |   |
| Ending      balance, June 30,      2008                                                                                          |   | $           | (42    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        |   |   |
| Net      unrealized gains included in net income for the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |        |   |   |
| six months relating to      instruments still held at June 30, 2008 (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $           | 352    |   |

| (1)   | Total      commodity financial instrument gains (losses) included in net income were      a $0.1 million loss and $0.4 million gain for the three months and six      months ended June 30, 2008, respectively.  These amounts were      recognized in revenues on our statement of consolidated income during the      three months and six months ended June 30,2008. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | June      30, |    |   | December      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2008          |    |   | 2007              |   |
| Crude      oil      (1)                                                                                                                            |   | $             | 67,312  |   |              | $      | 44,542 |   |
| Refined      products and LPGs      (2)                                                                                                            |   |          | 39,187  |   |              |   | 18,616 |   |
| Lubrication      oils and specialty      chemicals                                                                                                 |   |          | 9,524   |   |              |   | 9,160 |   |
| Materials      and      supplies                                                                                                                   |   |          | 8,042   |   |              |   | 7,178 |   |
| NGLs                                                                                                                                               |   |          | 1,846   |   |              |   | 803 |   |
|           Total                                                                                  |   | $             | 125,911 |   |              | $      | 80,299 |   |

| (1)   | At      June 30, 2008 and December 31, 2007, $43.5 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. |
|-----------------|---------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Estimated        |   |   |          |   |      |              |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|---------------|--------|-----------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Useful      Life |   |   | June      30, |   |      | December      31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | In      Years    |   |   | 2008          |   |      | 2007              |   |
| Plants      and pipelines (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |             | 5-40   | (4)    |          | $      | 1,823,230 |              |   | $ | 1,810,195 |   |
| Underground      and other storage facilities (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 5-40   | (5)    |          |   | 262,533   |              |   |   | 254,677 |   |
| Transportation      equipment (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 5-10   |   |          |   | 8,885     |              |   |   | 7,780 |   |
| Marine      vessels                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |             | 20-30  |   |          |   | 445,341   |              |   |   | -- |   |
| Land      and right of way                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |             |   |   |          |   | 138,825   |              |   |   | 117,628 |   |
| Construction      work in      progress                                                                             |   |             |   |   |          |   | 278,918   |              |   |   | 185,579 |   |
| Total property, plant and      equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |             |   |   |          | $      | 2,957,732 |              |   | $ | 2,375,859 |   |
| Less accumulated      depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |             |   |   |          |   | 627,671   |              |   |   | 582,225 |   |
| Property, plant and equipment,      net                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |             |   |   |          | $      | 2,330,061 |              |   | $ | 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 EndedJune      30, |   |   | For      the Six Months EndedJune      30, |   |
|-------------------------------|--------|----------------------------------------------|--------|--------|--------------------------------------------|--------|
|                          |   | 2008                                         |   |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
|                          |   |                                         |   |   |                                       |   |   |   |   |   |   |   |
| Depreciation      expense (1) |   | $                                            | 23,941 |   |                                       | $      | 19,948 |   |   | $ | 45,847 |   |   | $ | 39,372 |   |
| Capitalized      interest (2) |   |                                         | 5,477  |   |                                       |   | 3,075 |   |   |   | 9,885 |   |   |   | 6,803 |   |

| (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. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ARO      liability balance, December 31,      2007                                                                                         |   | $      | 1,346 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------|--------|
|   Liabilities      incurred                                                                                                      |   |   | --    |   |
|   Liabilities      settled                                                                                                       |   |   | --    |   |
|   Accretion      expense                                                                                                         |   |   | 62    |   |
| ARO      liability balance, June 30,      2008                                                                                             |   | $      | 1,408 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Ownership      Percentage      at |   |   | Investments      in unconsolidated affiliates      at |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | June      30,2008                 |   |   | June      30,2008                                     |   |   | December      31, 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                              |   |   |                                                  |   |   |   |   |
| Downstream      Segment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |   |   |                                                  |   |   |   |   |
| Centennial                                                                                                                                                             |   |                              | 50.0   | %      |                                                  | $      | 74,966 |   |   | $ | 78,962 |   |
| Other                                                                                                                                                                  |   |                              | 25.0   | %      |                                                  |   | 398 |   |   |   | 362 |   |
| Upstream      Segment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                              |   |   |                                                  |   |   |   |   |   |   |   |
| Seaway                                                                                                                                                                 |   |                              | 50.0   | %      |                                                  |   | 193,905 |   |   |   | 188,650 |   |
| Midstream      Segment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                              |   |   |                                                  |   |   |   |   |   |   |   |
| Jonah                                                                                                                                                                  |   |                              | 80.64  | %      |                                                  |   | 906,304 |   |   |   | 879,021 |   |
|           Total                                                                             |   |                              |   |   |                                                  | $      | 1,175,573 |   |   | $ | 1,146,995 |   |

|                                                                 |   | For      the Three Months EndedJune      30, |   |   | For      the Six Months EndedJune      30, |   |
|----------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|--------------------------------------------|--------|
|                                                                 |   | 2008                                         |   |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
|                                                                 |   |                                         |   |   |                                       |   |   |   |   |   |   |   |
| Equity      earnings (losses):                                       |   |                                         |   |   |                                       |   |   |   |   |   |   |   |
| Downstream    Segment                                                |   | $                                            | (3,585 | )      |                                       | $      | (3,879 | ) |   | $ | (7,717 | ) |   | $ | (5,366 | ) |
| UpstreamSegment                                                      |   |                                         | 4,177  |   |                                       |   | 1,448 |   |   |   | 7,177 |   |   |   | 3,237 |   |
| Midstream    Segment                                                 |   |                                         | 21,886 |   |                                       |   | 22,745 |   |   |   | 45,581 |   |   |   | 41,374 |   |
| Intersegment      eliminations                                       |   |                                         | (1,061 | )      |                                       |   | (1,080 | ) |   |   | (3,962 | ) |   |   | (3,448 | ) |
|        Total      equity earnings |   | $                                            | 21,417 |   |                                       | $      | 19,234 |   |   | $ | 41,079 |   |   | $ | 35,797 |   |

----

----

|                        |   | For      the Three Months Ended |   |
|-----------------------------|--------|---------------------------------|--------|
|                        |   | June      30, 2008         |   |   | June      30, 2007 |   |
|                        |   | Revenues                        |   |   | Operating      Income |   |   | NetIncome      (Loss) |   |   | Revenues |   |   | Operating      Income |   |   | NetIncome      (Loss) |   |
| Downstream      Segment (1) |   | $                               | 10,385 |   |   | $ | 1,286 |   |   | $ | (1,435 | ) |   | $ | 11,735 |   |   | $ | 2,395 |   |   | $ | (371 | ) |
| Upstream      Segment       |   |                            | 27,381 |   |   |   | 15,315 |   |   |   | 15,351 |   |   |   | 16,471 |   |   |   | 6,308 |   |   |   | 6,386 |   |
| Midstream      Segment      |   |                            | 60,154 |   |   |   | 26,891 |   |   |   | 27,181 |   |   |   | 46,399 |   |   |   | 23,531 |   |   |   | 23,872 |   |

|                        |   | For      the Six Months Ended |    |
|-----------------------------|--------|-------------------------------|---------|
|                        |   | June      30, 2008       |    |   | June      30, 2007 |   |
|                        |   | Revenues                      |    |   | Operating      Income |   |   | NetIncome      (Loss) |   |   | Revenues |   |   | Operating      Income |   |   | NetIncome      (Loss) |   |
| Downstream      Segment (1) |   | $                             | 20,028  |   |   | $ | 2,157 |   |   | $ | (3,272 | ) |   | $ | 27,598 |   |   | $ | 3,422 |   |   | $ | (2,095 | ) |
| Upstream      Segment       |   |                          | 47,954  |   |   |   | 25,669 |   |   |   | 25,721 |   |   |   | 34,641 |   |   |   | 14,143 |   |   |   | 14,320 |   |
| Midstream      Segment      |   |                          | 118,357 |   |   |   | 56,170 |   |   |   | 56,605 |   |   |   | 102,923 |   |   |   | 43,543 |   |   |   | 44,041 |   |

| (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 9). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | June      30, 2008  |   |
|-------------------------|--------|---------------------|--------|
|                    |   | Current Assets |   |   | NoncurrentAssets |   |   | Current      Liabilities |   |   | Long-term      Debt |   |   | NoncurrentLiabilities |   |   | Partners’ Capital |   |
| Downstream      Segment |   | $                   | 15,676 |   |   | $ | 243,957 |   |   | $ | 21,146 |   |   | $ | 124,800 |   |   | $ | 1,278 |   |   | $ | 112,409 |   |
| Upstream      Segment   |   |                | 35,241 |   |   |   | 249,491 |   |   |   | 5,910 |   |   |   | 32 |   |   |   | -- |   |   |   | 278,790 |   |
| Midstream      Segment  |   |                | 51,840 |   |   |   | 1,107,499 |   |   |   | 32,167 |   |   |   | -- |   |   |   | 305 |   |   |   | 1,126,867 |   |

|                    |   | 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 |   |

----

| 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                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 1,511   |   |
|     Total      consideration                                                                            |   | $      | 444,662 |   |

----

| Property,      plant and      equipment                                                                                                                                            |   | $      | 360,146 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Intangible      assets                                                                                                                                                             |   |   | 63,500  |   |
| Other      assets                                                                                                                                                                  |   |   | 2,726   |   |
|             Total      assets      acquired                                                                            |   |   | 426,372 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |    |   |
| Long-term      debt                                                                                                                                                                |   |   | (63,157 | )      |
|          Total      liabilities      assumed                                                                                          |   |   | (63,157 | )      |
|          Total      assets acquired less liabilities assumed                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 363,215 |   |
|          Total      consideration      given                                                                                          |   |   | 444,662 |   |
| Goodwill                                                                                                                                                                           |   | $      | 81,447  |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | For      the Three Months Ended June 30, |      |   | For      the Six Months EndedJune      30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|-----------|--------|--------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2007                                     |      |   | 2008                                       |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                     |      |   |                                       |   |   |   |   |
| Pro      forma earnings data:                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                     |      |   |                                       |   |   |   |   |
|   Revenues                                                                                                |   | $                                        | 2,075,189 |   |                                       | $      | 7,000,502 |   |   | $ | 4,076,051 |   |
|   Costs      and      expenses                                                                            |   |                                     | 2,022,429 |   |                                       |   | 6,855,050 |   |   |   | 3,939,025 |   |
|   Operating      income                                                                                   |   |                                     | 52,760    |   |                                       |   | 145,452 |   |   |   | 137,026 |   |
|   Net      income                                                                                         |   |                                     | 48,044    |   |                                       |   | 113,895 |   |   |   | 185,321 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                     |      |   |                                       |   |   |   |   |   |   |   |
| Basic and diluted      earnings per unit:                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                     |      |   |                                       |   |   |   |   |   |   |   |
|   Units      outstanding, as      reported                                                                |   |                                     | 89,832    |   |                                       |   | 94,048 |   |   |   | 89,819 |   |
|   Units      outstanding, pro      forma                                                                  |   |                                     | 94,687    |   |                                       |   | 94,875 |   |   |   | 94,674 |   |
|   Basic      and diluted earnings per unit, as reported                                                                                                                                                                                                                                                                                                                                                                              |   | $                                        | 0.44      |   |                                       | $      | 0.99 |   |   | $ | 1.73 |   |
|   Basic      and diluted earnings per unit, pro forma                                                                                                                                                                                                                                                                                                                                                                                |   | $                                        | 0.42      |   |                                       | $      | 1.00 |   |   | $ | 1.64 |   |

| Property,      plant and      equipment                                                                                                                                            |   | $      | 71,215 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Intangible      assets                                                                                                                                                             |   |   | 6,700  |   |
| Other      assets                                                                                                                                                                  |   |   | 981    |   |
|             Total      assets      acquired                                                                            |   |   | 78,896 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |
|          Total      consideration      given                                                                                          |   |   | 87,525 |   |
| Goodwill                                                                                                                                                                           |   | $      | 8,629  |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | June      30, 2008        |    |   | December      31, 2007  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Gross      CarryingAmount |    |   | AccumulatedAmortization |   |   | Gross      CarryingAmount |   |   | AccumulatedAmortization |   |
| Intangible      assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                      |    |   |                    |   |   |   |   |   |   |   |
| DownstreamSegment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                      |    |   |                    |   |   |   |   |   |   |   |
|   Transportation      agreements                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                         | 1,000   |   |                    | $      | (382 | ) |   | $ | 1,000 |   |   | $ | (358 | ) |
|   Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                      | 5,227   |   |                    |   | (544 | ) |   |   | 4,927 |   |   |   | (325 | ) |
|     Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      | 6,227   |   |                    |   | (926 | ) |   |   | 5,927 |   |   |   | (683 | ) |
| Upstream Segment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Transportation      agreements                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                      | 888     |   |                    |   | (365 | ) |   |   | 888 |   |   |   | (335 | ) |
|   Other                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                      | 10,005  |   |                    |   | (3,315 | ) |   |   | 10,005 |   |   |   | (3,046 | ) |
|     Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                      | 10,893  |   |                    |   | (3,680 | ) |   |   | 10,893 |   |   |   | (3,381 | ) |
| Midstream Segment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Gathering      agreements                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                      | 239,649 |   |                    |   | (116,754 | ) |   |   | 239,649 |   |   |   | (107,356 | ) |
|   Fractionation      agreement                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                      | 38,000  |   |                    |   | (19,475 | ) |   |   | 38,000 |   |   |   | (18,525 | ) |
|   Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                      | 306     |   |                    |   | (157 | ) |   |   | 306 |   |   |   | (149 | ) |
|     Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      | 277,955 |   |                    |   | (136,386 | ) |   |   | 277,955 |   |   |   | (126,030 | ) |
| Marine Services      Segment:                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Customer relationship      intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                      | 51,320  |   |                    |   | (1,399 | ) |   |   | -- |   |   |   | -- |   |
|   Other                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                      | 18,880  |   |                    |   | (1,957 | ) |   |   | -- |   |   |   | -- |   |
|     Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      | 70,200  |   |                    |   | (3,356 | ) |   |   | -- |   |   |   | -- |   |
|            Total      intangible assets                                                                                                                                                                                                                                                                                                                                                                                    |   |                      | 365,275 |   |                    |   | (144,348 | ) |   |   | 294,775 |   |   |   | (130,094 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Excess      investments: (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Downstream Segment      (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                      | 33,390  |   |                    |   | (23,895 | ) |   |   | 33,390 |   |   |   | (21,861 | ) |
| Upstream Segment      (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                      | 26,908  |   |                    |   | (5,478 | ) |   |   | 26,908 |   |   |   | (5,135 | ) |
| Midstream Segment    (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                      | 7,469   |   |                    |   | (160 | ) |   |   | 6,988 |   |   |   | (95 | ) |
|            Subtotal                                                                                                                                                   |   |                      | 67,767  |   |                    |   | (29,533 | ) |   |   | 67,286 |   |   |   | (27,091 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|            Total      intangible assets, including       excess      investments                                                   |   | $                         | 433,042 |   |                    | $      | (173,881 | ) |   | $ | 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. |
|-----------------|------------------------------------------|

----

|                                                                                              |   | For      the Three Months EndedJune      30, |   |   | For      the Six Months EndedJune      30, |   |
|---------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|--------------------------------------------|--------|
|                                                                                              |   | 2008                                         |   |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
| Intangible      assets:                                                                           |   |                                         |   |   |                                       |   |   |   |   |   |   |   |
| Downstream Segment                                                                                |   | $                                            | 122    |   |                                       | $      | 170 |   |   | $ | 243 |   |   | $ | 299 |   |
| Upstream Segment                                                                                  |   |                                         | 151    |   |                                       |   | 165 |   |   |   | 299 |   |   |   | 340 |   |
| Midstream Segment                                                                                 |   |                                         | 5,405  |   |                                       |   | 5,574 |   |   |   | 10,356 |   |   |   | 11,181 |   |
| Marine Services      Segment                                                                      |   |                                         | 2,169  |   |                                       |   | -- |   |   |   | 3,356 |   |   |   | -- |   |
|            Subtotal                        |   |                                         | 7,847  |   |                                       |   | 5,909 |   |   |   | 14,254 |   |   |   | 11,820 |   |
|                                                                                              |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Excess      investments: (1)                                                                      |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Downstream Segment                                                                                |   |                                         | 1,113  |   |                                       |   | 976 |   |   |   | 2,034 |   |   |   | 1,593 |   |
| Upstream Segment                                                                                  |   |                                         | 172    |   |                                       |   | 172 |   |   |   | 343 |   |   |   | 343 |   |
| Midstream Segment                                                                                 |   |                                         | 32     |   |                                       |   | 14 |   |   |   | 65 |   |   |   | 33 |   |
|            Subtotal                        |   |                                         | 1,317  |   |                                       |   | 1,162 |   |   |   | 2,442 |   |   |   | 1,969 |   |
|                                                                                              |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|            Total      amortization expense |   | $                                            | 9,164  |   |                                       | $      | 7,071 |   |   | $ | 16,696 |   |   | $ | 13,789 |   |

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

|                                                                                                                                                                                                                                                                                                                               |   | Intangible      Assets |   |   | Excess      Investments |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-------------------------|--------|
| 2008                                                      |   | $                      | 29,123 |   |                    | $      | 5,954 |   |
| 2009                                                      |   |                   | 27,854 |   |                    |   | 3,478 |   |
| 2010                                                      |   |                   | 25,691 |   |                    |   | 2,344 |   |
| 2011                                                      |   |                   | 23,981 |   |                    |   | 1,031 |   |
| 2012                                                      |   |                   | 18,209 |   |                    |   | 1,031 |   |
| 2013                                                      |   |                   | 16,460 |   |                    |   | 1,031 |   |

|                                                                                  |   | June      30, 2008 |    |   | December      31, 2007 |   |
|---------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|
|                                                                                  |   |                    |    |   |                   |   |
| Goodwill:                                                                             |   |                    |    |   |                   |   |
| Downstream Segment                                                                    |   | $                       | 1,339   |   |                   | $      | 1,339 |   |
| Upstream Segment                                                                      |   |                    | 14,167  |   |                   |   | 14,167 |   |
| Midstream Segment                                                                     |   |                    | --      |   |                   |   | -- |   |
| Marine Services      Segment                                                          |   |                    | 90,076  |   |                   |   | -- |   |
|            Total      goodwill |   | $                       | 105,582 |   |                   | $      | 15,506 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | June      30, |      |   | 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                                                                                         |   | $             | 530,000   |   |              | $      | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          | 2,230,000 |   |              |   | 1,190,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |      |   |              |   |   |   |
|      7.000%      Junior Subordinated Notes, due June 2067 (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          | 300,000   |   |              |   | 300,000 |   |
|   Total principal      amount of long-term debt obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          | 2,530,000 |   |              |   | 1,490,000 |   |
| Adjustment to carrying value      associated with hedges of fair value and  unamortized      discounts (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          | 15,171    |   |              |   | 21,083 |   |
|       Total      long-term debt      obligations                                                                                                           |   |          | 2,545,171 |   |              |   | 1,511,083 |   |
| Total      Debt Instruments      (4)                                                                                                                                                     |   | $             | 2,545,171 |   |              | $      | 1,865,059 |   |
| Standby      letters of credit outstanding      (5)                                                                                                                                      |   | $             | 26,130    |   |              | $      | 23,494 |   |

| (1)   | In January 2008, TE Products retired all of its outstanding      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 included 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 June 30, 2008 and December 31, 2007,      amount includes $5.5 million and $2.1 million of unamortized discounts,      respectively, and $20.7 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. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Scheduled      Maturities of Debt |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
| 2008                                                                                                                        |   | $                                 | 5,100   |   |
| 2009                                                                                                                        |   |                              | 9,900   |   |
| 2010                                                                                                                        |   |                              | 9,100   |   |
| 2011                                                                                                                        |   |                              | 9,000   |   |
| 2012                                                                                                                        |   |                              | 8,900   |   |
| After      2012                                                                                                             |   |                              | 93,000  |   |
|   Total      scheduled maturities of      debt                                                                    |   | $                                 | 135,000 |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |        |   |   | 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 Six Months EndedJune      30, |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2008                                       |    |   | 2007 |   |
| Limited      Partner      Units                                                                                                                                      |   | $                                          | 129,825 |   |   | $ | 122,135 |   |
| General      Partner Ownership      Interest                                                                                                                         |   |                                       | 2,649   |   |   |   | 2,493 |   |
| General      Partner      Incentive                                                                                                                                  |   |                                       | 23,272  |   |   |   | 21,348 |   |
|       Total      Cash Distributions      Paid                                                                                          |   | $                                          | 155,746 |   |   | $ | 145,976 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                       |    |   |   |   |   |   |
| Total      Cash Distributions Paid Per      Unit                                                                                                                     |   | $                                          | 1.405   |   |   | $ | 1.360 |   |

|                      |   | Cash      Distribution History |
|---------------------------|--------|--------------------------------|
|                      |   | Distribution      per Unit     |   | RecordDate | PaymentDate |
|                      |   |                           |   |   |   |
| 1st      Quarter 2008     |   | $                              | 0.7100 |   | Apr.      30, 2008 | May      7, 2008 |
| 2nd      Quarter 2008 (1) |   | $                              | 0.7100 |   | Jul.      31, 2008 | Aug.      7, 2008 |

| (1)   | The      second quarter 2008 cash distribution totaled approximately $81.0      million. |
|-----------------|------------------------------------------------------------------------------------------|

----

| Balance      at December 31,      2007                                                                                     |   | $      | (42,557 | )      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
|     Changes      in fair values of crude oil cash flow hedges                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (7,904  | )      |
| Settlement of treasury      locks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (52,098 | )      |
| Amortization of treasury lock      proceeds into earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | (53     | )      |
| 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 June 30,      2008                                                                                         |   | $      | (73,688 | )      |

----

| §   | 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 specialtychemicals; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                 |   | For      the Three Months EndedJune      30, |      |   | For      the Six Months EndedJune      30, |   |
|--------------------------------------------------------------------------------------|--------|----------------------------------------------|-----------|--------|--------------------------------------------|--------|
|                                                                                 |   | 2008                                         |      |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
|                                                                                 |   |                                         |      |   |                                       |   |   |   |   |   |   |   |
| Total      operating revenues                                                        |   | $                                            | 4,180,463 |   |                                       | $      | 2,049,436 |   |   | $ | 6,988,951 |   |   | $ | 4,027,865 |   |
| Less:  Total      costs and expenses                                       |   |                                         | 4,121,187 |   |                                       |   | 1,998,707 |   |   |   | 6,846,156 |   |   |   | 3,893,702 |   |
|    Operating      income                                              |   |                                         | 59,276    |   |                                       |   | 50,729 |   |   |   | 142,795 |   |   |   | 134,163 |   |
| Add: Gain      on sale of ownership interest in  MB      Storage      |   |                                         | --        |   |                                       |   | (189 | ) |   |   | -- |   |   |   | 59,648 |   |
| Equity earnings                                                                      |   |                                         | 21,417    |   |                                       |   | 19,234 |   |   |   | 41,079 |   |   |   | 35,797 |   |
| Interest income                                                                      |   |                                         | 283       |   |                                       |   | 445 |   |   |   | 591 |   |   |   | 787 |   |
| Other income –net                                                              |   |                                         | 759       |   |                                       |   | 535 |   |   |   | 799 |   |   |   | 779 |   |
| Earnings      before interest expense and provision  for      income taxes |   | $                                            | 81,735    |   |                                       | $      | 70,754 |   |   | $ | 185,264 |   |   | $ | 231,174 |   |

|                                                                                             |   | For      the Three Months EndedJune      30, |    |   | For      the Six Months EndedJune      30, |   |
|--------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|--------------------------------------------|--------|
|                                                                                             |   | 2008                                         |    |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
|                                                                                             |   |                                         |    |   |                                       |   |   |   |   |   |   |   |
| Earnings      before interest expense and provision  for      income taxes   |   | $                                            | 81,735  |   |                                       | $      | 70,754 |   |   | $ | 185,264 |   |   | $ | 231,174 |   |
| Interest      expense – net                                                                |   |                                         | (33,034 | )      |                                       |   | (22,785 | ) |   |   | (71,605 | ) |   |   | (44,996 | ) |
| Income      before provision for income taxes                                                    |   |                                         | 48,701  |   |                                       |   | 47,969 |   |   |   | 113,659 |   |   |   | 186,178 |   |
| Provision      for income taxes                                                                  |   |                                         | 1,019   |   |                                       |   | 209 |   |   |   | 1,838 |   |   |   | 227 |   |
|     Net      income                                                          |   | $                                            | 47,682  |   |                                       | $      | 47,760 |   |   | $ | 111,821 |   |   | $ | 185,951 |   |

----

|                                              |   | Downstream      Segment |    |   | Upstream      Segment |   |      | Midstream      Segment |   |   | Marine      Services Segment |   |   | Partnership and      Other |   |   | Consolidated |   |
|---------------------------------------------------|--------|-------------------------|---------|--------|-----------------------|--------|-----------|------------------------|--------|--------|------------------------------|--------|--------|---------------------------------|--------|--------|--------------|--------|
| Revenues      from third parties:                 |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |
|   Three      months ended June 30, 2008 |   | $                       | 75,155  |   |                  | $      | 4,025,198 |                   |   | $      | 27,216                       |   |   | $                               | 48,036 |   |         | $      | -- |   |   | $ | 4,175,605 |   |
|   Three      months ended June 30, 2007 |   |                    | 81,513  |   |                  |   | 1,935,773 |                   |   |   | 27,228                       |   |   |                            | --     |   |         |   | -- |   |   |   | 2,044,514 |   |
|   Six      months ended June 30, 2008   |   |                    | 169,657 |   |                  |   | 6,680,266 |                   |   |   | 53,793                       |   |   |                            | 73,572 |   |         |   | -- |   |   |   | 6,977,288 |   |
|   Six      months ended June 30, 2007   |   |                    | 174,465 |   |                  |   | 3,789,855 |                   |   |   | 53,791                       |   |   |                            | --     |   |         |   | -- |   |   |   | 4,018,111 |   |
|                                              |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Revenues      from related parties:               |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended June 30, 2008 |   | $                       | 1,348   |   |                  | $      | 157       |                   |   | $      | 3,388                        |   |   | $                               | --     |   |         | $      | (35 | ) |   | $ | 4,858 |   |
|   Three      months ended June 30, 2007 |   |                    | 1,667   |   |                  |   | 214       |                   |   |   | 3,206                        |   |   |                            | --     |   |         |   | (165 | ) |   |   | 4,922 |   |
|   Six      months ended June 30, 2008   |   |                    | 4,478   |   |                  |   | 392       |                   |   |   | 6,892                        |   |   |                            | --     |   |         |   | (99 | ) |   |   | 11,663 |   |
|   Six      months ended June 30, 2007   |   |                    | 3,633   |   |                  |   | 468       |                   |   |   | 6,016                        |   |   |                            | --     |   |         |   | (363 | ) |   |   | 9,754 |   |
|                                              |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Intersegment      and intrasegment revenues:      |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended June 30, 2008 |   | $                       | --      |   |                  | $      | --        |                   |   | $      | --                           |   |   | $                               | --     |   |         | $      | -- |   |   | $ | -- |   |
|   Three      months ended June 30, 2007 |   |                    | --      |   |                  |   | (1        | )                      |   |   | --                           |   |   |                            | --     |   |         |   | 1 |   |   |   | -- |   |
|   Six      months ended June 30, 2008   |   |                    | --      |   |                  |   | --        |                   |   |   | --                           |   |   |                            | --     |   |         |   | -- |   |   |   | -- |   |
|   Six      months ended June 30, 2007   |   |                    | --      |   |                  |   | 80        |                   |   |   | --                           |   |   |                            | --     |   |         |   | (80 | ) |   |   | -- |   |
|                                              |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Total      revenues:                              |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended June 30, 2008 |   | $                       | 76,503  |   |                  | $      | 4,025,355 |                   |   | $      | 30,604                       |   |   | $                               | 48,036 |   |         | $      | (35 | ) |   | $ | 4,180,463 |   |
|   Three      months ended June 30, 2007 |   |                    | 83,180  |   |                  |   | 1,935,986 |                   |   |   | 30,434                       |   |   |                            | --     |   |         |   | (164 | ) |   |   | 2,049,436 |   |
|   Six      months ended June 30, 2008   |   |                    | 174,135 |   |                  |   | 6,680,658 |                   |   |   | 60,685                       |   |   |                            | 73,572 |   |         |   | (99 | ) |   |   | 6,988,951 |   |
|   Six      months ended June 30, 2007   |   |                    | 178,098 |   |                  |   | 3,790,403 |                   |   |   | 59,807                       |   |   |                            | --     |   |         |   | (443 | ) |   |   | 4,027,865 |   |
|                                              |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
| Depreciation      and amortization:               |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |
|   Three      months ended June 30, 2008 |   | $                       | 10,502  |   |                  | $      | 4,969     |                   |   | $      | 9,994                        |   |   | $                               | 6,354  |   |         | $      | -- |   |   | $ | 31,819 |   |
|   Three      months ended June 30, 2007 |   |                    | 11,724  |   |                  |   | 4,148     |                   |   |   | 10,008                       |   |   |                            | --     |   |         |   | -- |   |   |   | 25,880 |   |
|   Six      months ended June 30, 2008   |   |                    | 20,738  |   |                  |   | 9,746     |                   |   |   | 19,591                       |   |   |                            | 10,088 |   |         |   | -- |   |   |   | 60,163 |   |
|   Six      months ended June 30, 2007   |   |                    | 22,860  |   |                  |   | 8,216     |                   |   |   | 20,173                       |   |   |                            | --     |   |         |   | -- |   |   |   | 51,249 |   |
|                                              |   |                    |    |   |                  |   |      |                   |   |   |                         |   |   |                            |   |   |         |   |   |   |   |   |   |   |

----

|                                                                                  |   | Downstream      Segment |      |   | Upstream      Segment |   |      | Midstream      Segment |   |   | Marine      Services Segment |   |   | Partnershipand      Other |    |   | Consolidated |   |
|---------------------------------------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|-----------|------------------------|--------|--------|------------------------------|--------|--------|---------------------------|---------|--------|--------------|--------|
| Operating      income:                                                                |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |
|   Three      months ended June 30, 2008                                     |   | $                       | 15,654    |   |                  | $      | 25,633    |                   |   | $      | 8,278                        |   |   | $                         | 8,650   |   |         | $      | 1,061 |   |   | $ | 59,276 |   |
|   Three      months ended June 30, 2007                                     |   |                    | 20,946    |   |                  |   | 20,743    |                   |   |   | 7,960                        |   |   |                      | --      |   |         |   | 1,080 |   |   |   | 50,729 |   |
|   Six      months ended June 30, 2008                                       |   |                    | 51,983    |   |                  |   | 54,968    |                   |   |   | 16,664                       |   |   |                      | 15,218  |   |         |   | 3,962 |   |   |   | 142,795 |   |
|   Six      months ended June 30, 2007                                       |   |                    | 74,887    |   |                  |   | 43,058    |                   |   |   | 12,770                       |   |   |                      | --      |   |         |   | 3,448 |   |   |   | 134,163 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Equity      earnings (losses):                                                        |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   Three      months ended June 30, 2008                                     |   | $                       | (3,585    | )      |                  | $      | 4,177     |                   |   | $      | 21,886                       |   |   | $                         | --      |   |         | $      | (1,061 | ) |   | $ | 21,417 |   |
|   Three      months ended June 30, 2007                                     |   |                    | (3,879    | )      |                  |   | 1,448     |                   |   |   | 22,745                       |   |   |                      | --      |   |         |   | (1,080 | ) |   |   | 19,234 |   |
|   Six      months ended June 30, 2008                                       |   |                    | (7,717    | )      |                  |   | 7,177     |                   |   |   | 45,581                       |   |   |                      | --      |   |         |   | (3,962 | ) |   |   | 41,079 |   |
|   Six      months ended June 30, 2007                                       |   |                    | (5,366    | )      |                  |   | 3,237     |                   |   |   | 41,374                       |   |   |                      | --      |   |         |   | (3,448 | ) |   |   | 35,797 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Earnings      before interest expense and  provision      for income taxes: |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   Three      months ended June 30, 2008                                     |   | $                       | 12,378    |   |                  | $      | 30,432    |                   |   | $      | 30,273                       |   |   | $                         | 8,652   |   |         | $      | -- |   |   | $ | 81,735 |   |
|   Three      months ended June 30, 2007                                     |   |                    | 17,636    |   |                  |   | 22,248    |                   |   |   | 30,870                       |   |   |                      | --      |   |         |   | -- |   |   |   | 70,754 |   |
|   Six      months ended June 30, 2008                                       |   |                    | 44,793    |   |                  |   | 62,773    |                   |   |   | 62,474                       |   |   |                      | 15,224  |   |         |   | -- |   |   |   | 185,264 |   |
|   Six      months ended June 30, 2007                                       |   |                    | 130,358   |   |                  |   | 46,395    |                   |   |   | 54,421                       |   |   |                      | --      |   |         |   | -- |   |   |   | 231,174 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Segment      assets:                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   At      June 30, 2008                                                     |   | $                       | 1,273,312 |   |                  | $      | 2,781,355 |                   |   | $      | 1,679,621                    |   |   | $                         | 656,126 |   |         | $      | (244,415 | ) |   | $ | 6,145,999 |   |
|   At      December 31, 2007                                                 |   |                    | 1,221,316 |   |                  |   | 2,084,830 |                   |   |   | 1,512,621                    |   |   |                      | --      |   |         |   | (68,710 | ) |   |   | 4,750,057 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Capital      expenditures:                                                            |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   At      June 30, 2008                                                     |   | $                       | 107,037   |   |                  | $      | 12,736    |                   |   | $      | 1,821                        |   |   | $                         | 17,952  |   |         | $      | (294 | ) |   | $ | 139,252 |   |
|   At      December 31, 2007                                                 |   |                    | 165,353   |   |                  |   | 54,583    |                   |   |   | 7,412                        |   |   |                      | --      |   |         |   | 924 |   |   |   | 228,272 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Investments      in unconsolidated affiliates:                                        |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   At      June 30, 2008                                                     |   | $                       | 66,121    |   |                  | $      | 193,905   |                   |   | $      | 906,304                      |   |   | $                         | --      |   |         | $      | 9,243 |   |   | $ | 1,175,573 |   |
|   At      December 31, 2007                                                 |   |                    | 79,324    |   |                  |   | 188,650   |                   |   |   | 879,021                      |   |   |                      | --      |   |         |   | -- |   |   |   | 1,146,995 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Intangible      assets:                                                               |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   At      June 30, 2008                                                     |   | $                       | 5,301     |   |                  | $      | 7,213     |                   |   | $      | 141,569                      |   |   | $                         | 66,844  |   |         | $      | -- |   |   | $ | 220,927 |   |
|   At      December 31, 2007                                                 |   |                    | 5,244     |   |                  |   | 7,512     |                   |   |   | 151,925                      |   |   |                      | --      |   |         |   | -- |   |   |   | 164,681 |   |
|                                                                                  |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
| Goodwill:                                                                             |   |                    |      |   |                  |   |      |                   |   |   |                         |   |   |                      |    |   |         |   |   |   |   |   |   |   |
|   At      June 30, 2008                                                     |   | $                       | 1,339     |   |                  | $      | 14,167    |                   |   | $      | --                           |   |   | $                         | 90,076  |   |         | $      | -- |   |   | $ | 105,582 |   |
|   At      December 31, 2007                                                 |   |                    | 1,339     |   |                  |   | 14,167    |                   |   |   | --                           |   |   |                      | --      |   |         |   | -- |   |   |   | 15,506 |   |

----

|                                                    |   | For      the Three Months Ended |   |   | For      the Six Months Ended |   |
|---------------------------------------------------------|--------|---------------------------------|--------|--------|-------------------------------|--------|
|                                                    |   | June      30,                   |   |   | June      30,                 |   |
|                                                    |   | 2008                            |   |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
| Revenues      from EPCO and affiliates:                 |   |                            |   |   |                          |   |   |   |   |   |   |   |
| Sales      of petroleum products (1)                    |   | $                               | 273    |   |                          | $      | 29 |   |   | $ | 919 |   |   | $ | 105 |   |
| Transportation      – NGLs (2)                    |   |                            | 3,388  |   |                          |   | 3,206 |   |   |   | 6,791 |   |   |   | 6,015 |   |
| Transportation      – LPGs (3)                    |   |                            | 1,012  |   |                          |   | 667 |   |   |   | 3,299 |   |   |   | 2,273 |   |
| Transportation      – Refined products            |   |                            | --     |   |                          |   | 44 |   |   |   | -- |   |   |   | 44 |   |
| Other      operating revenues (4)                       |   |                            | 177    |   |                          |   | 901 |   |   |   | 610 |   |   |   | 1,207 |   |
| Revenues      from unconsolidated affiliates:           |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Other      operating revenues (5)                       |   |                            | 8      |   |                          |   | 75 |   |   |   | 44 |   |   |   | 109 |   |
| Costs      and Expenses from EPCO and affiliates:       |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products (6)                |   |                            | 30,532 |   |                          |   | 11,097 |   |   |   | 50,225 |   |   |   | 23,244 |   |
| Operating      expense (7)                              |   |                            | 26,681 |   |                          |   | 24,466 |   |   |   | 48,260 |   |   |   | 48,764 |   |
| General      and administrative (8)                     |   |                            | 8,043  |   |                          |   | 6,044 |   |   |   | 16,777 |   |   |   | 12,582 |   |
| Costs      and Expenses from unconsolidated affiliates: |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products (9)                |   |                            | 1,950  |   |                          |   | -- |   |   |   | 3,542 |   |   |   | -- |   |
| Operating      expense (10)                             |   |                            | 1,629  |   |                          |   | 2,992 |   |   |   | 3,901 |   |   |   | 3,662 |   |
| Costs      and Expenses from Cenac and affiliates: (11) |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expense (12)                             |   |                            | 10,650 |   |                          |   | -- |   |   |   | 18,517 |   |   |   | -- |   |

| (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)   | Includes      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 from      Centennial, Jonah and Seaway. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| (6)   | Includes      TCO purchases of condensate of $25.9 million, $7.4 million, $41.5 million      and $16.1 million from Enterprise Products Partners and certain of its      subsidiaries for the three months and six months ended June 30, 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 and six months ended June 30, 2008 and 2007, of $2.2 million, $3.6      million, $5.2 million and $8.8 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 theacquisition. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (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. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | June      30, 2008 |   |   | December      31, 2007 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                    |   |
| Accounts      receivable, related parties      (1)                                                                              |   | $                       | 12,639 |   |                        | $      | 6,525 |   |
| Accounts      payable, related parties      (2)                                                                                 |   |                    | 20,022 |   |                        |   | 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,      EPCO and certain of its affiliates and Cenac and affiliates, and      transportation and other services provided by unconsolidated affiliates      and advances from Seaway for operatingexpenses. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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, 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. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                |   | For      the Three Months EndedJune      30, |   |   | For      the Six Months EndedJune      30, |   |
|-----------------------------------------------------|--------|----------------------------------------------|--------|--------|--------------------------------------------|--------|
|                                                |   | 2008                                         |   |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |
| Net      income                                     |   | $                                            | 47,682 |   |                                       | $      | 47,760 |   |   | $ | 111,821 |   |   | $ | 185,951 |   |
| General      Partner interest in net income         |   |                                         | 16.74  | %      |                                       |   | 16.40 | % |   |   | 16.74 | % |   |   | 16.40 | % |
| Earnings      allocated to General Partner          |   | $                                            | 7,981  |   |                                       | $      | 7,834 |   |   | $ | 18,717 |   |   | $ | 30,501 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| BASIC      EARNINGS PER UNIT:                       |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|   Numerator:                              |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners’ interest in      net income |   | $                                            | 39,701 |   |                                       | $      | 39,926 |   |   | $ | 93,104 |   |   | $ | 155,450 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|   Denominator:                            |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|    Units                             |   |                                         | 94,829 |   |                                       |   | 89,805 |   |   |   | 93,961 |   |   |   | 89,805 |   |
| Time-vested restricted      units                   |   |                                         | 111    |   |                                       |   | 27 |   |   |   | 87 |   |   |   | 14 |   |
| Total Weighted average Units      outstanding       |   |                                         | 94,940 |   |                                       |   | 89,832 |   |   |   | 94,048 |   |   |   | 89,819 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|   Basic earnings per      Unit:           |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners’ interest in      net income |   | $                                            | 0.42   |   |                                       | $      | 0.44 |   |   | $ | 0.99 |   |   | $ | 1.73 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| DILUTED      EARNINGS PER UNIT:                     |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|   Numerator:                              |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners’ interest in      net income |   | $                                            | 39,701 |   |                                       | $      | 39,926 |   |   | $ | 93,104 |   |   | $ | 155,450 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|   Denominator:                            |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|    Units                             |   |                                         | 94,829 |   |                                       |   | 89,805 |   |   |   | 93,961 |   |   |   | 89,805 |   |
| Time-vested restricted      units                   |   |                                         | 111    |   |                                       |   | 27 |   |   |   | 87 |   |   |   | 14 |   |
| Incremental option      units                       |   |                                         | --     |   |                                       |   | -- |   |   |   | * |   |   |   | -- |   |
| Total Weighted average Units      outstanding       |   |                                         | 94,940 |   |                                       |   | 89,832 |   |   |   | 94,048 |   |   |   | 89,819 |   |
|                                                |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|   Diluted earnings per      Unit:         |   |                                         |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners’ interest in      net income |   | $                                            | 0.42   |   |                                       | $      | 0.44 |   |   | $ | 0.99 |   |   | $ | 1.73 |   |

----

----

----

----

|                                  |   | Payment      or Settlement due by Period |      |   |
|---------------------------------------|--------|------------------------------------------|-----------|--------|
|                                  |   | Total                                    |      |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | Thereafter |
|                                  |   |                                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Maturities      of long-term debt (1) |   | $                                        | 2,530,000 |   |   | $ | -- |   |   | $ | -- |   |   | $ | -- |   |   | $ | -- |   |   | $ | 1,030,000 |   |   | $ | 1,500,000 |   |
| Interest      payments (2)            |   | $                                        | 2,742,161 |   |   | $ | 155,935 |   |   | $ | 155,935 |   |   | $ | 155,935 |   |   | $ | 155,935 |   |   | $ | 113,046 |   |   | $ | 2,005,375 |   |

| (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. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Six Months EndedJune      30, |     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2008                                       |     |   | 2007 |   |
| Decrease      (increase) in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |     |   |   |   |
| Accounts receivable,      trade                                                                                                                                                        |   | $                                          | (586,740 | ) |   | $ | (74,759 | ) |
| Accounts receivable, related      parties                                                                                                                                              |   |                                       | (6,090   | ) |   |   | (1,702 | ) |
| Inventories                                                                                                                                                                            |   |                                       | (43,685  | ) |   |   | (21,186 | ) |
| Other current      assets                                                                                                                                                              |   |                                       | (9,893   | ) |   |   | (8,837 | ) |
| Other                                                                                                                                                                                  |   |                                       | (22,699  | ) |   |   | (10,172 | ) |
| Increase      (decrease) in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |     |   |   |   |   |   |
| Accounts payable and accrued      expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                       | 610,846  |   |   |   | 97,103 |   |
| Accounts payable, related      parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                       | (12,113  | ) |   |   | 30,435 |   |
| Other                                                                                                                                                                                  |   |                                       | 12,663   |   |   |   | (987 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                       |     |   |   |   |   |   |
| Net      effect of changes in operating      accounts                                                                                                         |   | $                                          | (57,711  | ) |   | $ | 9,895 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                       |     |   |   |   |   |   |
| Non-cash      investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                       |     |   |   |   |   |   |
|    Payable      to Enterprise Gas Processing, LLC for spending for Phase V     expansion      of Jonah Gas Gathering Company (see Note 8)                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                                          | 2,815    |   |   | $ | 10,864 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                       |     |   |   |   |   |   |
| 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)                                                                                                           |   | $                                          | 56,863   |   |   | $ | 43,850 |   |

----

| §   | The      timing of cash receipts from revenue transactions and cash payments for      expense transactions near the end of each reporting      period.   For example, if significant cash receipts are      posted on the last day of the current reporting period, but subsequent      payments on expense invoices are made on the first day of the next      reporting period, cash provided by operating activities will reflect an      increase in the current reporting period that will be reduced as payments      are made in the next period. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | If      commodity or other prices increase between reporting periods, changes in      accounts receivable and accounts payable and accrued expenses may appear      larger than in previous periods; however, overall levels of receivables      and payables may still reflect normalranges. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Additions      to inventory for forward sales transactions or other reasons or increased      expenditures for prepaid items would be reflected as a use of cash and      reduce overall cash provided by operating activities in a given reporting      period.  As these assets are charged to expense in subsequent      periods, the expense amount is reflected as a positive change in operating      accounts; however, there is no impact on operating cash    flows. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                       |   | June      30, 2008         |      |
|------------------------------------------------------------|--------|----------------------------|-----------|
|                                                       |   | TEPPCO      Partners, L.P. |      |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Assets                                                     |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |
|   Current      assets                  |   | $                          | 17,587    |   |   | $ | 197,634 |   |   | $ | 2,230,723 |   |   | $ | (265,910 | ) |   | $ | 2,180,034 |   |
|   Property,      plant and equipment – net |   |                       | --        |   |   |   | 1,224,989 |   |   |   | 1,105,072 |   |   |   | -- |   |   |   | 2,330,061 |   |
|   Equity      investments                        |   |                       | 1,429,993 |   |   |   | 1,402,569 |   |   |   | 193,925 |   |   |   | (1,850,914 | ) |   |   | 1,175,573 |   |
|   Intercompany      notes receivable        |   |                       | 2,538,730 |   |   |   | -- |   |   |   | -- |   |   |   | (2,538,730 | ) |   |   | -- |   |
|   Intangible      assets                    |   |                       | --        |   |   |   | 126,777 |   |   |   | 94,150 |   |   |   | -- |   |   |   | 220,927 |   |
|   Other      assets               |   |                       | 14,691    |   |   |   | 31,715 |   |   |   | 192,998 |   |   |   | -- |   |   |   | 239,404 |   |
| Total assets                                               |   | $                          | 4,001,001 |   |   | $ | 2,983,684 |   |   | $ | 3,816,868 |   |   | $ | (4,655,554 | ) |   | $ | 6,145,999 |   |
| Liabilities      and partners’ capital               |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Current      liabilities        |   | $                          | 64,280    |   |   | $ | 287,037 |   |   | $ | 2,104,210 |   |   | $ | (265,910 | ) |   | $ | 2,189,617 |   |
|   Long-term      debt                  |   |                       | 2,545,171 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 2,545,171 |   |
|   Intercompany      notes payable                |   |                       | --        |   |   |   | 1,486,239 |   |   |   | 1,052,491 |   |   |   | (2,538,730 | ) |   |   | -- |   |
|   Other      long-term liabilities               |   |                       | 9,062     |   |   |   | 17,782 |   |   |   | 1,879 |   |   |   | -- |   |   |   | 28,723 |   |
|   Total      partners’ capital   |   |                       | 1,382,488 |   |   |   | 1,192,626 |   |   |   | 658,288 |   |   |   | (1,850,914 | ) |   |   | 1,382,488 |   |
| Total liabilities and      partners’ capital         |   | $                          | 4,001,001 |   |   | $ | 2,983,684 |   |   | $ | 3,816,868 |   |   | $ | (4,655,554 | ) |   | $ | 6,145,999 |   |
|                                                       |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                       |   | 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 |   |

----

|                                                      |   | For      the Three Months Ended June 30, 2008 |   |
|-----------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                      |   | TEPPCO      Partners, L.P.                    |   |   | GuarantorSubsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Operating      revenues                                   |   | $                                             | --     |   |   | $ | 88,200 |   |   | $ | 4,092,298 |   |   | $ | (35 | ) |   | $ | 4,180,463 |   |
| Costs      and expenses                                   |   |                                          | --     |   |   |   | 70,294 |   |   |   | 4,051,989 |   |   |   | (1,096 | ) |   |   | 4,121,187 |   |
|   Operating      income                         |   |                                          | --     |   |   |   | 17,906 |   |   |   | 40,309 |   |   |   | 1,061 |   |   |   | 59,276 |   |
| Interest      expense – net                         |   |                                          | --     |   |   |   | (17,424 | ) |   |   | (15,610 | ) |   |   | -- |   |   |   | (33,034 | ) |
| Equity      earnings                                      |   |                                          | 47,682 |   |   |   | 45,039 |   |   |   | 4,177 |   |   |   | (75,481 | ) |   |   | 21,417 |   |
| Other      income – net                             |   |                                          | --     |   |   |   | 332 |   |   |   | 710 |   |   |   | -- |   |   |   | 1,042 |   |
|   Income      before provision for income taxes |   |                                          | 47,682 |   |   |   | 45,853 |   |   |   | 29,586 |   |   |   | (74,420 | ) |   |   | 48,701 |   |
| Provision      for income taxes                           |   |                                          | --     |   |   |   | 311 |   |   |   | 708 |   |   |   | -- |   |   |   | 1,019 |   |
|   Net      income                               |   | $                                             | 47,682 |   |   | $ | 45,542 |   |   | $ | 28,878 |   |   | $ | (74,420 | ) |   | $ | 47,682 |   |

|                                                             |   | For      the Three Months Ended June 30, 2007 |   |
|------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                             |   | TEPPCO      Partners, L.P.                    |   |   | GuarantorSubsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Operating      revenues                                          |   | $                                             | --     |   |   | $ | 87,687 |   |   | $ | 1,961,913 |   |   | $ | (164 | ) |   | $ | 2,049,436 |   |
| Costs      and expenses                                          |   |                                          | --     |   |   |   | 67,455 |   |   |   | 1,932,498 |   |   |   | (1,244 | ) |   |   | 1,998,709 |   |
| Gains      on sales of assets                                    |   |                                          | --     |   |   |   | -- |   |   |   | (2 | ) |   |   | -- |   |   |   | (2 | ) |
|   Operating      income                                |   |                                          | --     |   |   |   | 20,232 |   |   |   | 29,417 |   |   |   | 1,080 |   |   |   | 50,729 |   |
| Interest      expense – net                                |   |                                          | --     |   |   |   | (15,342 | ) |   |   | (7,443 | ) |   |   | -- |   |   |   | (22,785 | ) |
| Gain      on sale of ownership interest in MB  Storage |   |                                          | --     |   |   |   | (189 | ) |   |   | -- |   |   |   | -- |   |   |   | (189 | ) |
| Equity      earnings                                             |   |                                          | 47,760 |   |   |   | 42,224 |   |   |   | 1,448 |   |   |   | (72,198 | ) |   |   | 19,234 |   |
| Other      income – net                                    |   |                                          | --     |   |   |   | 830 |   |   |   | 150 |   |   |   | -- |   |   |   | 980 |   |
|   Income      before provision for income taxes        |   |                                          | 47,760 |   |   |   | 47,755 |   |   |   | 23,572 |   |   |   | (71,118 | ) |   |   | 47,969 |   |
| Provision      for income taxes                                  |   |                                          | --     |   |   |   | (5 | ) |   |   | 214 |   |   |   | -- |   |   |   | 209 |   |
|   Net      income                                      |   | $                                             | 47,760 |   |   | $ | 47,760 |   |   | $ | 23,358 |   |   | $ | (71,118 | ) |   | $ | 47,760 |   |

|                                                      |   | For      the Six Months Ended June 30, 2008 |    |
|-----------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                      |   | TEPPCO      Partners, L.P.                  |    |   | GuarantorSubsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Operating      revenues                                   |   | $                                           | --      |   |   | $ | 191,134 |   |   | $ | 6,797,916 |   |   | $ | (99 | ) |   | $ | 6,988,951 |   |
| Costs      and expenses                                   |   |                                        | --      |   |   |   | 138,225 |   |   |   | 6,711,992 |   |   |   | (4,061 | ) |   |   | 6,846,156 |   |
|   Operating      income                         |   |                                        | --      |   |   |   | 52,909 |   |   |   | 85,924 |   |   |   | 3,962 |   |   |   | 142,795 |   |
| Interest      expense – net                         |   |                                        | --      |   |   |   | (44,176 | ) |   |   | (27,429 | ) |   |   | -- |   |   |   | (71,605 | ) |
| Equity      earnings                                      |   |                                        | 111,821 |   |   |   | 97,997 |   |   |   | 7,177 |   |   |   | (175,916 | ) |   |   | 41,079 |   |
| Other      income – net                             |   |                                        | --      |   |   |   | 582 |   |   |   | 808 |   |   |   | -- |   |   |   | 1,390 |   |
|   Income      before provision for income taxes |   |                                        | 111,821 |   |   |   | 107,312 |   |   |   | 66,480 |   |   |   | (171,954 | ) |   |   | 113,659 |   |
| Provision      for income taxes                           |   |                                        | --      |   |   |   | 489 |   |   |   | 1,349 |   |   |   | -- |   |   |   | 1,838 |   |
|   Net      income                               |   | $                                           | 111,821 |   |   | $ | 106,823 |   |   | $ | 65,131 |   |   | $ | (171,954 | ) |   | $ | 111,821 |   |

----

|                                                             |   | For      the Six Months Ended June 30, 2007 |    |
|------------------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                             |   | TEPPCO      Partners, L.P.                  |    |   | GuarantorSubsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Operating      revenues                                          |   | $                                           | --      |   |   | $ | 186,605 |   |   | $ | 3,841,703 |   |   | $ | (443 | ) |   | $ | 4,027,865 |   |
| Costs      and expenses                                          |   |                                        | --      |   |   |   | 133,622 |   |   |   | 3,782,622 |   |   |   | (3,891 | ) |   |   | 3,912,353 |   |
| Gains      on sales of assets                                    |   |                                        | --      |   |   |   | (18,651 | ) |   |   | -- |   |   |   | -- |   |   |   | (18,651 | ) |
|   Operating      income                                |   |                                        | --      |   |   |   | 71,634 |   |   |   | 59,081 |   |   |   | 3,448 |   |   |   | 134,163 |   |
| Interest      expense – net                                |   |                                        | --      |   |   |   | (31,304 | ) |   |   | (13,692 | ) |   |   | -- |   |   |   | (44,996 | ) |
| Gain      on sale of ownership interest in MB  Storage |   |                                        | --      |   |   |   | 59,648 |   |   |   | -- |   |   |   | -- |   |   |   | 59,648 |   |
| Equity      earnings                                             |   |                                        | 185,951 |   |   |   | 84,159 |   |   |   | 3,237 |   |   |   | (237,550 | ) |   |   | 35,797 |   |
| Other      income – net                                    |   |                                        | --      |   |   |   | 1,319 |   |   |   | 247 |   |   |   | -- |   |   |   | 1,566 |   |
|   Income      before provision for income taxes        |   |                                        | 185,951 |   |   |   | 185,456 |   |   |   | 48,873 |   |   |   | (234,102 | ) |   |   | 186,178 |   |
| Provision      for income taxes                                  |   |                                        | --      |   |   |   | (495 | ) |   |   | 722 |   |   |   | -- |   |   |   | 227 |   |
|   Net      income                                      |   | $                                           | 185,951 |   |   | $ | 185,951 |   |   | $ | 48,151 |   |   | $ | (234,102 | ) |   | $ | 185,951 |   |

|                                                                                                                                   |   | For      the Six Months Ended June 30, 2008 |     |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------|
|                                                                                                                                   |   | TEPPCO      Partners, L.P.                  |     |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Operating      activities:                                                                                                             |   |                                        |     |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net      income                                                                                                            |   | $                                           | 111,821  |   |   | $ | 106,823 |   |   | $ | 65,131 |   |   | $ | (171,954 | ) |   | $ | 111,821 |   |
|   Adjustments      to reconcile net income to net cash    from      operating activities:                |   |                                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Deferred      income taxes                                                                         |   |                                        | --       |   |   |   | 32 |   |   |   | (31 | ) |   |   | -- |   |   |   | 1 |   |
|       Depreciation      and amortization                                                                 |   |                                        | --       |   |   |   | 34,542 |   |   |   | 25,621 |   |   |   | -- |   |   |   | 60,163 |   |
|       Earnings      in equity investments, net of       distributions |   |                                        | 43,925   |   |   |   | 24,963 |   |   |   | (3,777 | ) |   |   | (26,871 | ) |   |   | 38,240 |   |
|       Changes      in assets and liabilities and other                                                   |   |                                        | (592,855 | ) |   |   | 33,918 |   |   |   | (124,673 | ) |   |   | 637,437 |   |   |   | (46,173 | ) |
| Net      cash from operating activities                                                                                                |   |                                        | (437,109 | ) |   |   | 200,278 |   |   |   | (37,729 | ) |   |   | 438,612 |   |   |   | 164,052 |   |
|                                                                                                                                   |   |                                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities                                                                                              |   |                                        | --       |   |   |   | (163,343 | ) |   |   | (400,765 | ) |   |   | -- |   |   |   | (564,108 | ) |
| Cash      flows from financing activities                                                                                              |   |                                        | 446,549  |   |   |   | (36,935 | ) |   |   | 438,494 |   |   |   | (448,047 | ) |   |   | 400,061 |   |
| Net      change in cash and cash equivalents                                                                                           |   |                                        | 9,440    |   |   |   | -- |   |   |   | -- |   |   |   | (9,435 | ) |   |   | 5 |   |
| Cash      and cash equivalents, January 1                                                                                              |   |                                        | 8,147    |   |   |   | 70 |   |   |   | 22 |   |   |   | (8,216 | ) |   |   | 23 |   |
| Cash      and cash equivalents, June 30                                                                                                |   | $                                           | 17,587   |   |   | $ | 70 |   |   | $ | 22 |   |   | $ | (17,651 | ) |   | $ | 28 |   |

----

|                                                                                                                                          |   | For      the Six Months Ended June 30, 2007 |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------|
|                                                                                                                                          |   | TEPPCO      Partners, L.P.                  |     |   | Guarantor      Subsidiaries |   |   | Non-Guarantor      Subsidiaries |   |   | Consolidating      Adjustments |   |   | TEPPCO      Partners, L.P. Consolidated |   |
| Operating      activities:                                                                                                                    |   |                                        |     |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net      income                                                                                                                   |   | $                                           | 185,951  |   |   | $ | 185,951 |   |   | $ | 48,151 |   |   | $ | (234,102 | ) |   | $ | 185,951 |   |
|   Adjustments      to reconcile net income to net cash    from      operating activities:                       |   |                                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Deferred      income taxes                                                                                |   |                                        | --       |   |   |   | (633 | ) |   |   | (21 | ) |   |   | -- |   |   |   | (654 | ) |
|       Depreciation      and amortization                                                                        |   |                                        | --       |   |   |   | 37,272 |   |   |   | 13,977 |   |   |   | -- |   |   |   | 51,249 |   |
|       Earnings      in equity investments, net of        distributions  |   |                                        | (39,975  | ) |   |   | 21,905 |   |   |   | 4,163 |   |   |   | 46,269 |   |   |   | 32,362 |   |
|       Gains      on sales of assets and ownership        interest  |   |                                        | --       |   |   |   | (78,299 | ) |   |   | -- |   |   |   | -- |   |   |   | (78,299 | ) |
|       Changes      in assets and liabilities and other                                                          |   |                                        | 9,321    |   |   |   | (25,539 | ) |   |   | 34,535 |   |   |   | (9,793 | ) |   |   | 8,524 |   |
| Net      cash from operating activities                                                                                                       |   |                                        | 155,297  |   |   |   | 140,657 |   |   |   | 100,805 |   |   |   | (197,626 | ) |   |   | 199,133 |   |
|                                                                                                                                          |   |                                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities                                                                                                     |   |                                        | --       |   |   |   | (21,054 | ) |   |   | (39,507 | ) |   |   | -- |   |   |   | (60,561 | ) |
| Cash      flows from financing activities                                                                                                     |   |                                        | (138,708 | ) |   |   | (119,603 | ) |   |   | (61,346 | ) |   |   | 181,037 |   |   |   | (138,620 | ) |
| Net      change in cash and cash equivalents                                                                                                  |   |                                        | 16,589   |   |   |   | -- |   |   |   | (48 | ) |   |   | (16,589 | ) |   |   | (48 | ) |
| Cash      and cash equivalents, January 1                                                                                                     |   |                                        | 10,975   |   |   |   | -- |   |   |   | 70 |   |   |   | (10,975 | ) |   |   | 70 |   |
| Cash      and cash equivalents, June 30                                                                                                       |   | $                                           | 27,564   |   |   | $ | -- |   |   | $ | 22 |   |   | $ | (27,564 | ) |   | $ | 22 |   |

----

| §   | Key      References Used in this QuarterlyReport. |
|--------------------|---------------------------------------------------|

| §   | Cautionary      Note Regarding Forward-LookingStatements. |
|--------------------|-----------------------------------------------------------|

| §   | Overview      of Critical Accounting Policies andEstimates. |
|--------------------|-------------------------------------------------------------|

| §   | Overview      of Business. |
|--------------------|----------------------------|

| §   | Recent      Developments – Discusses recent developments during the quarter ended June      30, 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, and certain      trends, future plans andcontingencies. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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               |

----

----

| §   | 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 specialtychemicals; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                    |   | For      the Three Months EndedJune      30, |      |   | For      the Six Months EndedJune      30, |   |
|-------------------------------------------------------------------------|--------|----------------------------------------------|-----------|--------|--------------------------------------------|--------|
|                                                                    |   | 2008                                         |      |   | 2007                                       |   |   | 2008 |   |   | 2007 |   |
| Operating      revenues:                                                |   |                                         |      |   |                                       |   |   |   |   |   |   |   |
| Downstream    Segment                                                   |   | $                                            | 76,503    |   |                                       | $      | 83,180 |   |   | $ | 174,135 |   |   | $ | 178,098 |   |
| UpstreamSegment                                                         |   |                                         | 4,025,355 |   |                                       |   | 1,935,986 |   |   |   | 6,680,658 |   |   |   | 3,790,403 |   |
| Midstream    Segment                                                    |   |                                         | 30,604    |   |                                       |   | 30,434 |   |   |   | 60,685 |   |   |   | 59,807 |   |
| Marine Services      Segment                                            |   |                                         | 48,036    |   |                                       |   | -- |   |   |   | 73,572 |   |   |   | -- |   |
| Intersegment      eliminations                                          |   |                                         | (35       | )      |                                       |   | (164 | ) |   |   | (99 | ) |   |   | (443 | ) |
|        Total      operating revenues |   |                                         | 4,180,463 |   |                                       |   | 2,049,436 |   |   |   | 6,988,951 |   |   |   | 4,027,865 |   |
|                                                                    |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income:                                                  |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Downstream    Segment                                                   |   |                                         | 15,654    |   |                                       |   | 20,946 |   |   |   | 51,983 |   |   |   | 74,887 |   |
| UpstreamSegment                                                         |   |                                         | 25,633    |   |                                       |   | 20,743 |   |   |   | 54,968 |   |   |   | 43,058 |   |
| Midstream    Segment                                                    |   |                                         | 8,278     |   |                                       |   | 7,960 |   |   |   | 16,664 |   |   |   | 12,770 |   |
| Marine Services      Segment                                            |   |                                         | 8,650     |   |                                       |   | -- |   |   |   | 15,218 |   |   |   | -- |   |
| Intersegment      eliminations                                          |   |                                         | 1,061     |   |                                       |   | 1,080 |   |   |   | 3,962 |   |   |   | 3,448 |   |
|        Total      operating income   |   |                                         | 59,276    |   |                                       |   | 50,729 |   |   |   | 142,795 |   |   |   | 134,163 |   |
|                                                                    |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Equity      earnings (losses):                                          |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|      Downstream      Segment                   |   |                                         | (3,585    | )      |                                       |   | (3,879 | ) |   |   | (7,717 | ) |   |   | (5,366 | ) |
|      Upstream      Segment                     |   |                                         | 4,177     |   |                                       |   | 1,448 |   |   |   | 7,177 |   |   |   | 3,237 |   |
| Midstream    Segment                                                    |   |                                         | 21,886    |   |                                       |   | 22,745 |   |   |   | 45,581 |   |   |   | 41,374 |   |
| Intersegment      eliminations                                          |   |                                         | (1,061    | )      |                                       |   | (1,080 | ) |   |   | (3,962 | ) |   |   | (3,448 | ) |
|        Total      equity earnings    |   |                                         | 21,417    |   |                                       |   | 19,234 |   |   |   | 41,079 |   |   |   | 35,797 |   |
|                                                                    |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before interest:(1)                                       |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
|      Downstream      Segment                   |   |                                         | 12,378    |   |                                       |   | 17,636 |   |   |   | 44,793 |   |   |   | 130,358 |   |
|      Upstream      Segment                     |   |                                         | 30,432    |   |                                       |   | 22,248 |   |   |   | 62,773 |   |   |   | 46,395 |   |
| Midstream    Segment                                                    |   |                                         | 30,273    |   |                                       |   | 30,870 |   |   |   | 62,474 |   |   |   | 54,421 |   |
| Marine Services      Segment                                            |   |                                         | 8,652     |   |                                       |   | -- |   |   |   | 15,224 |   |   |   | -- |   |
|                                                                    |   |                                         |      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                   |   |                                         | (38,511   | )      |                                       |   | (25,860 | ) |   |   | (81,490 | ) |   |   | (51,799 | ) |
| Interest      capitalized                                               |   |                                         | 5,477     |   |                                       |   | 3,075 |   |   |   | 9,885 |   |   |   | 6,803 |   |
| Income before provision for      income taxes                           |   |                                         | 48,701    |   |                                       |   | 47,969 |   |   |   | 113,659 |   |   |   | 186,178 |   |
| Provision      for income taxes                                         |   |                                         | 1,019     |   |                                       |   | 209 |   |   |   | 1,838 |   |   |   | 227 |   |
|         Net      income         |   | $                                            | 47,682    |   |                                       | $      | 47,760 |   |   | $ | 111,821 |   |   | $ | 185,951 |   |

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

----

|                                                                                  |   | For      the Three Months Ended |   |   |     |   |   | For      the Six Months Ended |   |   |     |   |
|---------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|--------|-------------------------------|--------|--------|----------|--------|
|                                                                                  |   | June      30,                   |   |   | Increase |   |   | June      30,                 |   |   | Increase |   |
|                                                                                  |   | 2008                            |   |   | 2007     |   |   | (Decrease)                    |   |   | 2008     |   |   | 2007 |   |   | (Decrease) |   |
| Operating      revenues:                                                              |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |
| Sales      of petroleum products                                                      |   | $                               | 1,318  |   |     | $      | 9,403  |                          |   | $      | (8,085   | )      |   | $ | 8,307 |   |   | $ | 18,779 |   |   | $ | (10,472 | ) |
| Transportation      – Refined products                                          |   |                            | 44,116 |   |     |   | 41,718 |                          |   |   | 2,398    |   |   |   | 81,399 |   |   |   | 78,853 |   |   |   | 2,546 |   |
| Transportation      – LPGs                                                 |   |                            | 16,063 |   |     |   | 16,747 |                          |   |   | (684     | )      |   |   | 52,254 |   |   |   | 52,800 |   |   |   | (546 | ) |
|          Other                                                    |   |                            | 15,006 |   |     |   | 15,312 |                          |   |   | (306     | )      |   |   | 32,175 |   |   |   | 27,666 |   |   |   | 4,509 |   |
|         Total      operating revenues         |   |                            | 76,503 |   |     |   | 83,180 |                          |   |   | (6,677   | )      |   |   | 174,135 |   |   |   | 178,098 |   |   |   | (3,963 | ) |
|                                                                                  |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                                                              |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products                                                  |   |                            | 1,306  |   |     |   | 9,311  |                          |   |   | (8,005   | )      |   |   | 8,216 |   |   |   | 18,705 |   |   |   | (10,489 | ) |
| Operating      expense                                                           |   |                            | 30,458 |   |     |   | 24,774 |                          |   |   | 5,684    |   |   |   | 57,328 |   |   |   | 46,294 |   |   |   | 11,034 |   |
| Operating      fuel and power                                                         |   |                            | 10,450 |   |     |   | 9,404  |                          |   |   | 1,046    |   |   |   | 20,976 |   |   |   | 19,817 |   |   |   | 1,159 |   |
| General      and administrative                                                       |   |                            | 4,630  |   |     |   | 4,244  |                          |   |   | 386      |   |   |   | 8,163 |   |   |   | 8,319 |   |   |   | (156 | ) |
| Depreciation      and amortization                                                    |   |                            | 10,502 |   |     |   | 11,724 |                          |   |   | (1,222   | )      |   |   | 20,738 |   |   |   | 22,860 |   |   |   | (2,122 | ) |
| Taxes      – other than income taxes                                            |   |                            | 3,503  |   |     |   | 2,777  |                          |   |   | 726      |   |   |   | 6,731 |   |   |   | 5,867 |   |   |   | 864 |   |
| Gains      on sales of assets                                                         |   |                            | --     |   |     |   | --     |                          |   |   | --       |   |   |   | -- |   |   |   | (18,651 | ) |   |   | 18,651 |   |
| Total      costs and expenses                                                         |   |                            | 60,849 |   |     |   | 62,234 |                          |   |   | (1,385   | )      |   |   | 122,152 |   |   |   | 103,211 |   |   |   | 18,941 |   |
|                                                                                  |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                                 |   |                            | 15,654 |   |     |   | 20,946 |                          |   |   | (5,292   | )      |   |   | 51,983 |   |   |   | 74,887 |   |   |   | (22,904 | ) |
|                                                                                  |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain      on sale of ownership interest   in      Mont Belvieu Storage |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Partners,      L.P. (“MB Storage”)                      |   |                            | --     |   |     |   | (189   | )                             |   |   | 189      |   |   |   | -- |   |   |   | 59,648 |   |   |   | (59,648 | ) |
| Equity      losses                                                          |   |                            | (3,585 | )      |     |   | (3,879 | )                             |   |   | 294      |   |   |   | (7,717 | ) |   |   | (5,366 | ) |   |   | (2,351 | ) |
| Interest      income                                                                  |   |                            | 160    |   |     |   | 229    |                          |   |   | (69      | )      |   |   | 328 |   |   |   | 431 |   |   |   | (103 | ) |
| Other      income – net                                                    |   |                            | 149    |   |     |   | 529    |                          |   |   | (380     | )      |   |   | 199 |   |   |   | 758 |   |   |   | (559 | ) |
|                                                                                  |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before interest                                                    |   | $                               | 12,378 |   |     | $      | 17,636 |                          |   | $      | (5,258   | )      |   | $ | 44,793 |   |   | $ | 130,358 |   |   | $ | (85,565 | ) |

|                                                                                  |   | For      the Three Months Ended |   |   | Percentage |   |   | For      the Six Months Ended |   |   | Percentage |   |
|---------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|--------|------------|--------|
|                                                                                  |   | June      30,                   |   |   | Increase   |   |   | June 30,                 |   |   | Increase   |   |
|                                                                                  |   | 2008                            |   |   | 2007       |   |   | (Decrease)                    |   |   | 2008       |   |   | 2007 |   |   | (Decrease) |   |
| Volumes      Delivered:                                                               |   |                            |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |
|     Refined      products (1)                                          |   |                            | 41,892 |   |       |   | 44,922 |                          |   |   | (7         | %)     |   |   | 80,412 |   |   |   | 80,676 |   |   |   | -- |   |
|          LPGs                                                          |   |                            | 6,652  |   |       |   | 6,964  |                          |   |   | (4         | %)     |   |   | 19,538 |   |   |   | 22,487 |   |   |   | (13 | %) |
|         Total                                 |   |                            | 48,544 |   |       |   | 51,886 |                          |   |   | (6         | %)     |   |   | 99,950 |   |   |   | 103,163 |   |   |   | (3 | %) |
|                                                                                  |   |                            |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      Tariff per Barrel:                                                       |   |                            |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Refined      products                                         |   | $                               | 1.05   |   |       | $      | 0.93   |                          |   |   | 13         | %      |   | $ | 1.01 |   |   | $ | 0.98 |   |   |   | 3 | % |
|          LPGs                                                          |   |                            | 2.41   |   |       |   | 2.40   |                          |   |   | --         |   |   |   | 2.67 |   |   |   | 2.24 |   |   |   | 19 | % |
|         Average      system tariff per barrel |   |                            | 1.24   |   |       |   | 1.13   |                          |   |   | 10         | %      |   |   | 1.34 |   |   |   | 1.26 |   |   |   | 6 | % |

| (1)   | Includes      7,134 and 8,377 barrels and 13,246 and 13,658 barrels delivered via the      Centennial Pipeline during the three months and six months ended June 30,      2008 and 2007, respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Three Months |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                            |   | Ended      June 30,       |   |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |   | 2008                      |   |   | 2007     |   |   | (Decrease) |   |
| Centennial                                                                                                        |   | $                         | (3,610 | )      |     | $      | (2,762 | ) |   | $ | (848 | ) |
| MB      Storage                                                                                                   |   |                      | --     |   |     |   | (1,123 | ) |   |   | 1,123 |   |
| Other                                                                                                             |   |                      | 25     |   |     |   | 6 |   |   |   | 19 |   |
|      Total      equity      losses                                                       |   | $                         | (3,585 | )      |     | $      | (3,879 | ) |   | $ | 294 |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Six Months |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                            |   | Ended      June 30,     |   |   | Increase |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |   | 2008                    |   |   | 2007     |   |   | (Decrease) |   |
| Centennial                                                                                                        |   | $                       | (7,753 | )      |     | $      | (6,749 | ) |   | $ | (1,004 | ) |
| MB      Storage                                                                                                   |   |                    | --     |   |     |   | 1,368 |   |   |   | (1,368 | ) |
| Other                                                                                                             |   |                    | 36     |   |     |   | 15 |   |   |   | 21 |   |
|      Total      equity      losses                                                       |   | $                       | (7,717 | )      |     | $      | (5,366 | ) |   | $ | (2,351 | ) |

|                                                                          |   | For      the Three Months Ended |      |   |     |   |      | For      the Six Months Ended |   |   |      |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|----------|--------|-----------|-------------------------------|--------|--------|-----------|--------|
|                                                                          |   | June      30,                   |      |   | Increase |   |      | June      30,                 |   |   | Increase  |   |
|                                                                          |   | 2008                            |      |   | 2007     |   |      | (Decrease)                    |   |   | 2008      |   |   | 2007 |   |   | (Decrease) |   |
| Operating      revenues: (1)                                                  |   |                            |      |   |     |   |      |                          |   |   |      |   |   |   |   |   |   |   |
|    Sales      of petroleum products (2)                        |   | $                               | 4,005,284 |   |     | $      | 1,923,865 |                          |   | $      | 2,081,419 |   |   | $ | 6,642,936 |   |   | $ | 3,764,896 |   |   | $ | 2,878,040 |   |
|    Transportation      – Crude oil                       |   |                            | 17,432    |   |     |   | 9,580     |                          |   |   | 7,852     |   |   |   | 32,732 |   |   |   | 20,370 |   |   |   | 12,362 |   |
|    Other                                                       |   |                            | 2,639     |   |     |   | 2,541     |                          |   |   | 98        |   |   |   | 4,990 |   |   |   | 5,137 |   |   |   | (147 | ) |
|         Total      operating revenues |   |                            | 4,025,355 |   |     |   | 1,935,986 |                          |   |   | 2,089,369 |   |   |   | 6,680,658 |   |   |   | 3,790,403 |   |   |   | 2,890,255 |   |
|                                                                          |   |                            |      |   |     |   |      |                          |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses: (1)                                                  |   |                            |      |   |     |   |      |                          |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products (2)                                      |   |                            | 3,975,516 |   |     |   | 1,892,878 |                          |   |   | 2,082,638 |   |   |   | 6,578,178 |   |   |   | 3,700,044 |   |   |   | 2,878,134 |   |
| Operating      expense                                                        |   |                            | 12,697    |   |     |   | 13,365    |                          |   |   | (668      | )      |   |   | 26,045 |   |   |   | 28,838 |   |   |   | (2,793 | ) |
| Operating      fuel and power                                                 |   |                            | 1,943     |   |     |   | 1,642     |                          |   |   | 301       |   |   |   | 3,591 |   |   |   | 3,700 |   |   |   | (109 | ) |
| General      and administrative                                               |   |                            | 2,631     |   |     |   | 1,770     |                          |   |   | 861       |   |   |   | 4,471 |   |   |   | 3,598 |   |   |   | 873 |   |
| Depreciation      and amortization                                            |   |                            | 4,969     |   |     |   | 4,148     |                          |   |   | 821       |   |   |   | 9,746 |   |   |   | 8,216 |   |   |   | 1,530 |   |
|    Taxes      – other than income taxes                  |   |                            | 1,966     |   |     |   | 1,442     |                          |   |   | 524       |   |   |   | 3,659 |   |   |   | 2,949 |   |   |   | 710 |   |
|    Gains      on sales of assets                               |   |                            | --        |   |     |   | (2        | )                             |   |   | 2         |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Total      costs and expenses                                                 |   |                            | 3,999,722 |   |     |   | 1,915,243 |                          |   |   | 2,084,479 |   |   |   | 6,625,690 |   |   |   | 3,747,345 |   |   |   | 2,878,345 |   |
|                                                                          |   |                            |      |   |     |   |      |                          |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                         |   |                            | 25,633    |   |     |   | 20,743    |                          |   |   | 4,890     |   |   |   | 54,968 |   |   |   | 43,058 |   |   |   | 11,910 |   |
|                                                                          |   |                            |      |   |     |   |      |                          |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      earnings                                                          |   |                            | 4,177     |   |     |   | 1,448     |                          |   |   | 2,729     |   |   |   | 7,177 |   |   |   | 3,237 |   |   |   | 3,940 |   |
| Interest      income                                                          |   |                            | 12        |   |     |   | 50        |                          |   |   | (38       | )      |   |   | 28 |   |   |   | 79 |   |   |   | (51 | ) |
| Other      income (expense) – net                                       |   |                            | 610       |   |     |   | 7         |                          |   |   | 603       |   |   |   | 600 |   |   |   | 21 |   |   |   | 579 |   |
|                                                                          |   |                            |      |   |     |   |      |                          |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before interest                                                 |   | $                               | 30,432    |   |     | $      | 22,248    |                          |   | $      | 8,184     |   |   | $ | 62,773 |   |   | $ | 46,395 |   |   | $ | 16,378 |   |

| (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. |
|-----------------|-------------------------------------------------------------------------------------------|

----

|                                                  |   | For      the Three Months Ended |   |   | Percentage |   |   | For      the Six Months Ended |   |   | Percentage |   |
|-------------------------------------------------------|--------|--------------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|--------|------------|--------|
|                                                  |   | June      30,                        |   |   | Increase   |   |   | June      30,                 |   |   | Increase   |   |
|                                                  |   | 2008                                 |   |   | 2007       |   |   | (Decrease)                    |   |   | 2008       |   |   | 2007 |   |   | (Decrease) |   |
| Margins:      (1)                                     |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |
|   Crude      oil marketing             |   | $                                    | 15,585 |   |       | $      | 18,854 |                          |   |   | (17        | %)     |   | $ | 35,899 |   |   | $ | 40,385 |   |   |   | (11 | %) |
|   Lubrication      oil sales                |   |                                 | 3,022  |   |       |   | 2,075  |                          |   |   | 46         | %      |   |   | 5,754 |   |   |   | 4,229 |   |   |   | 36 | % |
| Revenues:      (1)                                    |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Crude      oil transportation   |   |                                 | 24,049 |   |       |   | 16,594 |                          |   |   | 45         | %      |   |   | 47,460 |   |   |   | 33,814 |   |   |   | 40 | % |
|   Crude      oil terminaling           |   |                                 | 4,544  |   |       |   | 3,044  |                          |   |   | 49         | %      |   |   | 8,377 |   |   |   | 6,794 |   |   |   | 23 | % |
| Total      margins/revenues                           |   | $                                    | 47,200 |   |       | $      | 40,567 |                          |   |   | 16         | %      |   | $ | 97,490 |   |   | $ | 85,222 |   |   |   | 14 | % |
|                                                  |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      barrels/gallons:                           |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Crude      oil marketing (barrels) (1)    |   |                                 | 61,640 |   |       |   | 58,058 |                          |   |   | 6          | %      |   |   | 119,198 |   |   |   | 114,004 |   |   |   | 5 | % |
|   Lubrication      oil volume (gallons)     |   |                                 | 2,535  |   |       |   | 3,519  |                          |   |   | (28        | %)     |   |   | 6,466 |   |   |   | 7,350 |   |   |   | (12 | %) |
|                                                  |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Crude      oil transportation (barrels)   |   |                                 | 29,404 |   |       |   | 22,182 |                          |   |   | 33         | %      |   |   | 57,210 |   |   |   | 46,315 |   |   |   | 24 | % |
|   Crude      oil terminaling (barrels)      |   |                                 | 39,723 |   |       |   | 31,056 |                          |   |   | 28         | %      |   |   | 72,859 |   |   |   | 71,199 |   |   |   | 2 | % |
|                                                  |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Margin      per barrel or gallon:                     |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Crude      oil marketing (per barrel) (1) |   | $                                    | 0.253  |   |       | $      | 0.325  |                          |   |   | (22        | %)     |   | $ | 0.301 |   |   | $ | 0.354 |   |   |   | (15 | %) |
|   Lubrication      oil margin (per gallon)  |   |                                 | 1.192  |   |       |   | 0.590  |                          |   |   | 102        | %      |   |   | 0.890 |   |   |   | 0.575 |   |   |   | 55 | % |
|                                                  |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      tariff per barrel:                       |   |                                 |   |   |       |   |   |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Crude      oil transportation        |   | $                                    | 0.818  |   |       | $      | 0.748  |                          |   |   | 9          | %      |   | $ | 0.830 |   |   | $ | 0.730 |   |   |   | 14 | % |
|   Crude      oil terminaling           |   |                                 | 0.114  |   |       |   | 0.098  |                          |   |   | 16         | %      |   |   | 0.115 |   |   |   | 0.095 |   |   |   | 21 | % |

| (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 |       |   | For      the Six Months Ended |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|-------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                 |   | June      30,                   |       |   | June      30,                 |   |
|                                                                                                                                                                                                                                                                                                                                                                 |   | 2008                            |       |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
| Sales      of petroleum products                                                                                                                                                                                                                                                                                                                                     |   | $                               | 4,005,284  |   |                          | $      | 1,923,865 |   |   | $ | 6,642,936 |   |   | $ | 3,764,896 |   |
| Transportation      – Crude      oil                                                                 |   |                            | 17,432     |   |                          |   | 9,580 |   |   |   | 32,732 |   |   |   | 20,370 |   |
| Less:  Purchases      of petroleum products                                                                                                                                                                                                                                                                                                                |   |                            | (3,975,516 | )      |                          |   | (1,892,878 | ) |   |   | (6,578,178 | ) |   |   | (3,700,044 | ) |
|     Total      margins/revenues                                                        |   |                            | 47,200     |   |                          |   | 40,567 |   |   |   | 97,490 |   |   |   | 85,222 |   |
| Other      operating      revenues                                                                         |   |                            | 2,639      |   |                          |   | 2,541 |   |   |   | 4,990 |   |   |   | 5,137 |   |
|     Net      operating      revenues                                                   |   |                            | 49,839     |   |                          |   | 43,108 |   |   |   | 102,480 |   |   |   | 90,359 |   |
| Operating      expense                                                                                     |   |                            | 12,697     |   |                          |   | 13,365 |   |   |   | 26,045 |   |   |   | 28,838 |   |
| Operating      fuel and      power                                                                         |   |                            | 1,943      |   |                          |   | 1,642 |   |   |   | 3,591 |   |   |   | 3,700 |   |
| General      and administrative expense                                                                                                                                                                                                                                                                                                                              |   |                            | 2,631      |   |                          |   | 1,770 |   |   |   | 4,471 |   |   |   | 3,598 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                   |   |                            | 4,969      |   |                          |   | 4,148 |   |   |   | 9,746 |   |   |   | 8,216 |   |
| Taxes      – other than income taxes                                                                                                                                                                                                                                                                                                                           |   |                            | 1,966      |   |                          |   | 1,442 |   |   |   | 3,659 |   |   |   | 2,949 |   |
| Gains      on sales of      assets                                                                         |   |                            | --         |   |                          |   | (2 | ) |   |   | -- |   |   |   | -- |   |
|     Operating      income                                                              |   | $                               | 25,633     |   |                          | $      | 20,743 |   |   | $ | 54,968 |   |   | $ | 43,058 |   |

----

----

|                                                                          |   | For      the Three Months Ended |   |   |     |   |   | For      the Six Months Ended |   |   |     |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|--------|-------------------------------|--------|--------|----------|--------|
|                                                                          |   | June 30,                   |   |   | Increase |   |   | June      30,                 |   |   | Increase |   |
|                                                                          |   | 2008                            |   |   | 2007     |   |   | (Decrease)                    |   |   | 2008     |   |   | 2007 |   |   | (Decrease) |   |
| Operating      revenues: (1)                                                  |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |
| Gathering      – Natural gas – Val Verde                          |   | $                               | 14,789 |   |     | $      | 15,452 |                          |   | $      | (663     | )      |   | $ | 28,202 |   |   | $ | 30,860 |   |   | $ | (2,658 | ) |
| Transportation      – NGLs (1)                                          |   |                            | 12,701 |   |     |   | 11,098 |                          |   |   | 1,603    |   |   |   | 25,658 |   |   |   | 22,039 |   |   |   | 3,619 |   |
|          Other                                                 |   |                            | 3,114  |   |     |   | 3,884  |                          |   |   | (770     | )      |   |   | 6,825 |   |   |   | 6,908 |   |   |   | (83 | ) |
|         Total      operating revenues |   |                            | 30,604 |   |     |   | 30,434 |                          |   |   | 170      |   |   |   | 60,685 |   |   |   | 59,807 |   |   |   | 878 |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                                                      |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expense                                                        |   |                            | 4,394  |   |     |   | 5,777  |                          |   |   | (1,383   | )      |   |   | 9,374 |   |   |   | 14,031 |   |   |   | (4,657 | ) |
|  Operating      fuel and power                                           |   |                            | 4,450  |   |     |   | 3,783  |                          |   |   | 667      |   |   |   | 8,161 |   |   |   | 6,586 |   |   |   | 1,575 |   |
| General      and administrative expense                                       |   |                            | 2,687  |   |     |   | 2,150  |                          |   |   | 537      |   |   |   | 5,326 |   |   |   | 4,845 |   |   |   | 481 |   |
|  Depreciation      and amortization                                      |   |                            | 9,994  |   |     |   | 10,008 |                          |   |   | (14      | )      |   |   | 19,591 |   |   |   | 20,173 |   |   |   | (582 | ) |
| Taxes      – other than income taxes                                    |   |                            | 801    |   |     |   | 756    |                          |   |   | 45       |   |   |   | 1,569 |   |   |   | 1,402 |   |   |   | 167 |   |
| Total      costs and expenses                                                 |   |                            | 22,326 |   |     |   | 22,474 |                          |   |   | (148     | )      |   |   | 44,021 |   |   |   | 47,037 |   |   |   | (3,016 | ) |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                         |   |                            | 8,278  |   |     |   | 7,960  |                          |   |   | 318      |   |   |   | 16,664 |   |   |   | 12,770 |   |   |   | 3,894 |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      earnings – Jonah                                            |   |                            | 21,886 |   |     |   | 22,745 |                          |   |   | (859     | )      |   |   | 45,581 |   |   |   | 41,374 |   |   |   | 4,207 |   |
| Interest      income                                                          |   |                            | 109    |   |     |   | 166    |                          |   |   | (57      | )      |   |   | 229 |   |   |   | 277 |   |   |   | (48 | ) |
| Other      income – net                                                 |   |                            | --     |   |     |   | (1     | )                             |   |   | 1        |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before interest                                                 |   | $                               | 30,273 |   |     | $      | 30,870 |                          |   | $      | (597     | )      |   | $ | 62,474 |   |   | $ | 54,421 |   |   | $ | 8,053 |   |

| (1)   | Includes      transportation revenue from Enterprise Products Partners of $3.4 million,      $3.2 million, $6.8 million and $6.0 million for the three months and six      months ended June 30, 2008 and 2007,  respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                      |   | For      the Three Months Ended |    |   | Percentage |   |    | For      the Six Months Ended |   |   | Percentage |   |
|-----------------------------------------------------------|--------|---------------------------------|---------|--------|------------|--------|---------|-------------------------------|--------|--------|------------|--------|
|                                                      |   | June      30,                   |    |   | Increase   |   |    | June      30,                 |   |   | Increase   |   |
|                                                      |   | 2008                            |    |   | 2007       |   |    | (Decrease)                    |   |   | 2008       |   |   | 2007 |   |   | (Decrease) |   |
| Gathering      – Natural Gas – Jonah: (1)     |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |
| MMcf                                                      |   |                            | 173,482 |   |       |   | 140,917 |                          |   |   | 23         | %      |   |   | 340,575 |   |   |   | 272,459 |   |   |   | 25 | % |
| BBtus                                                     |   |                            | 192,523 |   |       |   | 155,152 |                          |   |   | 24         | %      |   |   | 377,151 |   |   |   | 300,310 |   |   |   | 26 | % |
| Average      fee per MMcf                                 |   | $                               | 0.258   |   |       | $      | 0.224   |                          |   |   | 15         | %      |   | $ | 0.258 |   |   | $ | 0.225 |   |   |   | 15 | % |
| Average      fee per MMBtu                                |   | $                               | 0.233   |   |       | $      | 0.204   |                          |   |   | 14         | %      |   | $ | 0.233 |   |   | $ | 0.204 |   |   |   | 14 | % |
|                                                      |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gathering      – Natural Gas – Val Verde: (1) |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MMcf                                                      |   |                            | 41,564  |   |       |   | 43,487  |                          |   |   | (4         | %)     |   |   | 79,804 |   |   |   | 87,054 |   |   |   | (8 | %) |
| BBtu                                                      |   |                            | 36,804  |   |       |   | 38,515  |                          |   |   | (4         | %)     |   |   | 70,982 |   |   |   | 77,097 |   |   |   | (8 | %) |
| Average      fee per MMcf                                 |   | $                               | 0.356   |   |       | $      | 0.355   |                          |   |   | --         |   |   | $ | 0.353 |   |   | $ | 0.354 |   |   |   | -- |   |
| Average      fee per MMBtu                                |   | $                               | 0.402   |   |       | $      | 0.401   |                          |   |   | --         |   |   | $ | 0.397 |   |   | $ | 0.400 |   |   |   | (1 | %) |
|                                                      |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transportation      – NGLs:                         |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transportation      barrels                               |   |                            | 15,972  |   |       |   | 15,340  |                          |   |   | 4          | %      |   |   | 32,521 |   |   |   | 30,843 |   |   |   | 5 | % |
| Lease      barrels (2)                                    |   |                            | 2,852   |   |       |   | 3,607   |                          |   |   | (21        | %)     |   |   | 5,893 |   |   |   | 5,668 |   |   |   | 4 | % |
| Average      rate per barrel                              |   | $                               | 0.747   |   |       | $      | 0.677   |                          |   |   | 10         | %      |   | $ | 0.742 |   |   | $ | 0.683 |   |   |   | 9 | % |
|                                                      |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural      Gas Sales – Jonah:                     |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BBtu                                                      |   |                            | 1,163   |   |       |   | 4,501   |                          |   |   | (74        | %)     |   |   | 2,842 |   |   |   | 8,048 |   |   |   | (65 | %) |
| Average      fee per MMBtu                                |   | $                               | 8.552   |   |       | $      | 3.204   |                          |   |   | 167        | %      |   | $ | 7.521 |   |   | $ | 4.903 |   |   |   | 53 | % |
|                                                      |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fractionation      – NGLs:                          |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Barrels                                                   |   |                            | 1,050   |   |       |   | 1,074   |                          |   |   | (2         | %)     |   |   | 2,145 |   |   |   | 2,052 |   |   |   | 4 | % |
| Average      rate per barrel                              |   | $                               | 1.785   |   |       | $      | 1.822   |                          |   |   | (2         | %)     |   | $ | 1.722 |   |   | $ | 1.774 |   |   |   | (3 | %) |
|                                                      |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales      – Condensate – Jonah: (3)          |   |                            |    |   |       |   |    |                          |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Barrels                                                   |   |                            | 12.5    |   |       |   | 21.2    |                          |   |   | (41        | %)     |   |   | 60.4 |   |   |   | 69.8 |   |   |   | (13 | %) |
| Average      rate per barrel                              |   | $                               | 108.97  |   |       | $      | 58.64   |                          |   |   | 86         | %      |   | $ | 83.39 |   |   | $ | 54.61 |   |   |   | 53 | % |

| (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. |
|-----------------|--------------------------------------------------------------|

----

----

----

|                                                                          |   | For      the Three Months Ended |   |   |     |   |   | For      the Six Months Ended |   |   |     |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|--------|-------------------------------|--------|--------|----------|--------|
|                                                                          |   | June      30,                   |   |   | Increase |   |   | June      30,                 |   |   | Increase |   |
|                                                                          |   | 2008                            |   |   | 2007     |   |   | (Decrease)                    |   |   | 2008     |   |   | 2007 |   |   | (Decrease) |   |
| Operating      revenues:                                                      |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |
| Transportation      – Marine                                            |   | $                               | 48,030 |   |     | $      | --     |                          |   | $      | 48,030   |   |   | $ | 73,566 |   |   | $ | -- |   |   | $ | 73,566 |   |
| Other                                                                         |   |                            | 6      |   |     |   | --     |                          |   |   | 6        |   |   |   | 6 |   |   |   |   |   |   |   | 6 |   |
|         Total      operating revenues |   |                            | 48,036 |   |     |   | --     |                          |   |   | 48,036   |   |   |   | 73,572 |   |   |   | -- |   |   |   | 73,572 |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                                                      |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expense                                                        |   |                            | 19,016 |   |     |   | --     |                          |   |   | 19,016   |   |   |   | 27,595 |   |   |   | -- |   |   |   | 27,595 |   |
| Operating      fuel and power                                                 |   |                            | 12,230 |   |     |   | --     |                          |   |   | 12,230   |   |   |   | 17,719 |   |   |   | -- |   |   |   | 17,719 |   |
| General      and administrative                                               |   |                            | 1,078  |   |     |   | --     |                          |   |   | 1,078    |   |   |   | 1,814 |   |   |   | -- |   |   |   | 1,814 |   |
| Depreciation      and amortization                                            |   |                            | 6,354  |   |     |   | --     |                          |   |   | 6,354    |   |   |   | 10,088 |   |   |   | -- |   |   |   | 10,088 |   |
| Taxes      – other than income taxes                                    |   |                            | 708    |   |     |   | --     |                          |   |   | 708      |   |   |   | 1,138 |   |   |   | -- |   |   |   | 1,138 |   |
| Total      costs and expenses                                                 |   |                            | 39,386 |   |     |   | --     |                          |   |   | 39,386   |   |   |   | 58,354 |   |   |   | -- |   |   |   | 58,354 |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                         |   |                            | 8,650  |   |     |   | --     |                          |   |   | 8,650    |   |   |   | 15,218 |   |   |   | -- |   |   |   | 15,218 |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                                          |   |                            | 2      |   |     |   | --     |                          |   |   | 2        |   |   |   | 6 |   |   |   | -- |   |   |   | 6 |   |
|                                                                          |   |                            |   |   |     |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before interest                                                 |   | $                               | 8,652  |   |     | $      | --     |                          |   | $      | 8,652    |   |   | $ | 15,224 |   |   | $ | -- |   |   | $ | 15,224 |   |

----

----

|                                  |   | For      the Six Months Ended |     |
|---------------------------------------|--------|-------------------------------|----------|
|                                  |   | June      30,                 |     |
|                                  |   | 2008                          |     |   | 2007 |   |
|                                  |   |                          |     |   |   |   |
| Cash      provided by (used in):      |   |                          |     |   |   |   |
|   Operating      activities |   | $                             | 164,052  |   |   | $ | 199,133 |   |
|   Investing      activities |   |                          | (564,108 | ) |   |   | (60,561 | ) |
|   Financing      activities |   |                          | 400,061  |   |   |   | (138,620 | ) |

| §   | 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 increased $11.2      million. Distributions from our equity investment in Jonah increased $25.6      million primarily due to increased revenues and volumes generated from      completion of the Phase V expansion.  Distributions received      from our equity investment in Seaway decreased $4.0 million primarily due      to its operating cash requirements.   In the 2007 period,      we received distributions from our equity investment in MB Storage of      $10.4 million.  We sold our interest in MB Storage on March 1,      2007. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| §   | Cash      paid for interest, net of amounts capitalized, increased $13.0 million      period-to-period primarily due to the increase in debt outstanding,      including 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 $345.6 million during the six months      ended June 30, 2008, of which $258.1 million was for the Cenac acquisition      and $87.5 million was for the Horizon  acquisition. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Capital      expenditures increased $29.4 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 decreased $0.6      million period-to-period primarily due to the timing of completion of      organic growth projects in our UpstreamSegment. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Proceeds      from the sales of assets and ownership interests during the six months      ended June 30, 2007 were $164.1 million, which includes $137.6 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 9 in the Notes to Unaudited Condensed Consolidated      Financial Statements). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Investments      in unconsolidated affiliates decreased $32.8 million, which includes an      $11.1 million decrease in contributions to Centennial and a $21.7 million      decrease in contributions to Jonah primarily related to timing of capital      expenditures on its Phase V expansion.  During the six months      ended June 30, 2007, TE Products contributed $11.1 million to Centennial,      of which $6.1 million was for contractual obligations that were created      upon formation of Centennial and $5.0 million was for debt service      requirements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | During      the six months ended June 30, 2008 and 2007, we paid $0.3 million and $2.5      million, respectively, related to customer reimbursable      commitments. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | During      the six months ended June 30, 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 six months ended June 30, 2008 were $9.3      million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| §   | We      received $295.8 million from the issuance in May 2007 of our 7.000% junior      subordinated notes due June 2067 (net of debt issuance costs of $3.8      million) (see Note 11 in the Notes to Unaudited Condensed Consolidated      Financial Statements). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Net      borrowings under our revolving credit facility increased $330.0      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.  We received $1.6 million in      proceeds from the termination of treasury locks in May 2007 upon the      issuance of junior subordinatednotes. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cash      distributions to our partners increased $9.8 million period-to-period due      to an increase in the number of Units outstanding and an increase in our      quarterly cash distribution rate per Unit.  We paid cash      distributions of $155.7 million ($1.405 per Unit) and $146.0 million      ($1.360 per Unit) during the six months ended June 30, 2008 and 2007,      respectively.  Additionally, we declared a cash distribution of      $0.71 per Unit for the quarter ended June 30, 2008.  We paid the      distribution of $81.0 million on August 7, 2008 to unitholders of record      on July 31, 2008. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Net      proceeds from the issuance of Units was $5.6 million during the six months      ended June 30, 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 FinancialStatements). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                              |   | Amount      of Commitment Expiration Per Period |      |
|-------------------------------------------------------------------|--------|-------------------------------------------------|-----------|
|                                                              |   | Total                                           |      |   | Less      than 1Year |   |   | 1-3      Years |   |   | 4-5      Years |   |   | After      5 Years |   |
|                                                              |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Revolving      Credit Facility, due 2012                          |   | $                                               | 530,000   |   |   | $ | -- |   |   | $ | -- |   |   | $ | 530,000 |   |   | $ | -- |   |
| 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)                                        |   |                                            | 2,742,161 |   |   |   | 155,935 |   |   |   | 311,870 |   |   |   | 268,981 |   |   |   | 2,005,375 |   |
|  Debt      and interest total                                |   | $                                               | 5,272,161 |   |   | $ | 155,935 |   |   | $ | 311,870 |   |   | $ | 1,748,981 |   |   | $ | 3,055,375 |   |

| (1)   | At      June 30, 2008, the 7.625% Senior Notes includes a deferred gain of $20.7      million, net of amortization, from interest rate swap terminations (see      Note 5 in the Notes to Unaudited Condensed Consolidated Financial      Statements).  At June 30, 2008, our senior notes and our junior      subordinated notes include an aggregate of $5.5 million of unamortized      debt discounts.  The deferred gain and the unamortized debt      discounts are excluded from thistable. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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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|                                                    |   | For      the Three Months Ended |   |   | For      the Six Months Ended |   |
|---------------------------------------------------------|--------|---------------------------------|--------|--------|-------------------------------|--------|
|                                                    |   | June      30,                   |   |   | June      30,                 |   |
|                                                    |   | 2008                            |   |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
| Revenues      from EPCO and affiliates:                 |   |                            |   |   |                          |   |   |   |   |   |   |   |
| Sales      of petroleum products                        |   | $                               | 273    |   |                          | $      | 29 |   |   | $ | 919 |   |   | $ | 105 |   |
| Transportation      – NGLs                        |   |                            | 3,388  |   |                          |   | 3,206 |   |   |   | 6,791 |   |   |   | 6,015 |   |
| Transportation      – LPGs                        |   |                            | 1,012  |   |                          |   | 667 |   |   |   | 3,299 |   |   |   | 2,273 |   |
| Transportation      – Refined products            |   |                            | --     |   |                          |   | 44 |   |   |   | -- |   |   |   | 44 |   |
| Other      operating revenues                           |   |                            | 177    |   |                          |   | 901 |   |   |   | 610 |   |   |   | 1,207 |   |
| Revenues      from unconsolidated affiliates:           |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Other      operating revenues                           |   |                            | 8      |   |                          |   | 75 |   |   |   | 44 |   |   |   | 109 |   |
| Costs      and Expenses from EPCO and affiliates:       |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products                    |   |                            | 30,532 |   |                          |   | 11,097 |   |   |   | 50,225 |   |   |   | 23,244 |   |
| Operating      expense                                  |   |                            | 26,681 |   |                          |   | 24,466 |   |   |   | 48,260 |   |   |   | 48,764 |   |
| General      and administrative                         |   |                            | 8,043  |   |                          |   | 6,044 |   |   |   | 16,777 |   |   |   | 12,582 |   |
| Costs      and Expenses from unconsolidated affiliates: |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of petroleum products                    |   |                            | 1,950  |   |                          |   | -- |   |   |   | 3,542 |   |   |   | -- |   |
| Operating      expense                                  |   |                            | 1,629  |   |                          |   | 2,992 |   |   |   | 3,901 |   |   |   | 3,662 |   |
| Costs      and Expenses from Cenac and affiliates:      |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expense                                  |   |                            | 10,650 |   |                          |   | -- |   |   |   | 18,517 |   |   |   | -- |   |

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| Scenario                                                     | Resulting      Classification |   | December      31,2007 |    |   | June      30,2008 |   |    | July      22,2008 |   |
|--------------------------------------------------------------|-------------------------------|--------|-----------------------|---------|--------|-------------------|--------|---------|-------------------|--------|
|                                                         |                          |   |                  |    |   |              |   |    |              |   |
| FV      assuming no change in underlying commodity prices    | Liability                     |   | $                     | (18,897 | )      |              | $      | (26,460 | )                 |   | $ | (14,008 | ) |
| FV      assuming 10% increase in underlying commodity prices | Liability                     |   |                  | (33,606 | )      |              |   | (38,052 | )                 |   |   | (21,775 | ) |
| FV      assuming 10% decrease in underlying commodity prices | Liability                     |   |                  | (4,188  | )      |              |   | (14,868 | )                 |   |   | (6,240 | ) |

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| (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. |
|------------------|------------------------------------------------------------------|

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|                 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 byreference). |
|-----------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                      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 as of 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      (Filed as Exhibit 4.11 to Form |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 10-Q      of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter      ended March 31, 2008 and incorporated herein by  reference). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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      (Filed as Exhibit 4.12 to Form 10-Q of TEPPCO Partners, L.P. (Commission      File No. 1-10403) for the quarter ended March 31, 2008 and incorporated      herein by reference). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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      (Filed as Exhibit 4.13 to Form 10-Q of TEPPCO Partners, L.P. (Commission      File No. 1-10403) for the quarter ended March 31, 2008 and incorporated      herein by reference). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1+ | 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 (Filed as Exhibit 10.8 to Form 10-Q of TEPPCO Partners, L.P.      (Commission File No. 1-10403) for the quarter eneded March 31, 2008 and      incorporated herein by reference). |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2* | Sixth      Amendment to Amended and Restated Credit Agreement, dated as of July 1,      2008, by and among TEPPCO Partners, L.P., the Borrower, the several banks      and other financial institutions party hereto and Suntrust Bank, as the      Administrative Agent for theLenders. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   Date:  August      8, 2008 |                       By:  /s/   JERRY      E. THOMPSONJerry      E. Thompson,President      and Chief Executive Officer ofTexas      Eastern Products Pipeline Company, LLC, General Partner       |
|--------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                             |                                                                                                                                                                                                                                                                                                         |
|   Date:  August      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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