<PAGE>   1

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



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

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

                                       OR

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

             FOR THE QUARTER ENDED JUNE 30, 2000


                          COMMISSION FILE NO. 1-10403

                             TEPPCO PARTNERS, L.P.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                    <C>
        DELAWARE                                               76-0291058

(STATE OF INCORPORATION                                     (I.R.S. EMPLOYER

    OR ORGANIZATION)                                     IDENTIFICATION NUMBER)
</TABLE>



                               2929 ALLEN PARKWAY
                                 P.O. BOX 2521
                           HOUSTON, TEXAS 77252-2521
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

                                 (713) 759-3636
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


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


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

<PAGE>   2


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                              TEPPCO PARTNERS, L.P.

                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     JUNE 30,     DECEMBER 31,
                                                                      2000            1999
                                                                  ------------    ------------
                                                                   (UNAUDITED)
<S>                                                               <C>             <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents ..................................    $     39,146    $     32,593
  Short-term investments .....................................           1,013           1,475
  Accounts receivable, trade .................................         234,346         205,766
  Inventories ................................................          10,739          16,766
  Other ......................................................           5,365           6,409
                                                                  ------------    ------------
     Total current assets ....................................         290,609         263,009
                                                                  ------------    ------------
Property, plant and equipment, at cost (Net of accumulated
  depreciation and amortization of $235,319 and $220,467) ....         744,437         720,919
Investments ..................................................           6,227           5,242
Intangible assets ............................................          33,969          34,926
Other assets .................................................          18,657          17,277
                                                                  ------------    ------------
     Total assets ............................................    $  1,093,899    $  1,041,373
                                                                  ============    ============

                        LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
  Accounts payable and accrued liabilities ...................    $    231,857    $    201,660
  Accounts payable, general partner ..........................           7,796           4,741
  Accrued interest ...........................................          13,605          13,297
  Other accrued taxes ........................................           8,778           8,822
  Other ......................................................          14,030          14,972
                                                                  ------------    ------------
     Total current liabilities ...............................         276,066         243,492
                                                                  ------------    ------------
Senior Notes .................................................         389,768         389,753
Other long-term debt .........................................          86,000          66,000
Other liabilities and deferred credits .......................           3,581           3,073
Minority interest ............................................           3,425           3,429
Redeemable Class B Units held by related party ...............         105,754         105,859
Partners' capital:
General partner's interest ...................................           1,122             657
Limited partners' interests ..................................         228,183         229,110
                                                                  ------------    ------------
     Total partners' capital .................................         229,305         229,767
                                                                  ------------    ------------
     Total liabilities and partners' capital .................    $  1,093,899    $  1,041,373
                                                                  ============    ============
</TABLE>


          See accompanying Notes to Consolidated Financial Statements.


                                       2

<PAGE>   3

                              TEPPCO PARTNERS, L.P.

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

<TABLE>
<CAPTION>
                                                          THREE MONTHS     THREE MONTHS     SIX MONTHS       SIX MONTHS
                                                             ENDED            ENDED            ENDED            ENDED
                                                            JUNE 30,         JUNE 30,         JUNE 30,         JUNE 30,
                                                              2000             1999             2000             1999
                                                          ------------     ------------     ------------     ------------
<S>                                                       <C>              <C>              <C>              <C>
Operating revenues:
  Sales of crude oil and petroleum products ..........    $    689,643     $    398,156     $  1,372,428     $    620,530
  Transportation - Refined products ..................          32,685           33,353           60,715           58,949
  Transportation - LPGs ..............................          10,367           10,094           33,484           36,689
  Transportation - Crude oil and NGLs ................           3,773            2,970            7,902            5,536
  Mont Belvieu operations ............................           2,883            3,358            7,354            6,255
  Other - Net ........................................           8,353            7,420           16,513           13,482
                                                          ------------     ------------     ------------     ------------
    Total operating revenues .........................         747,704          455,351        1,498,396          741,441
                                                          ------------     ------------     ------------     ------------

Costs and expenses:
  Purchases of crude oil and petroleum products ......         682,891          391,333        1,360,304          608,030
  Operating, general and administrative ..............          25,334           24,090           49,568           45,303
  Operating fuel and power ...........................           8,326            8,094           15,839           14,987
  Depreciation and amortization ......................           8,339            8,154           16,586           16,293
  Taxes - other than income taxes ....................           2,663            2,664            5,181            5,343
                                                          ------------     ------------     ------------     ------------
    Total costs and expenses .........................         727,553          434,335        1,447,478          689,956
                                                          ------------     ------------     ------------     ------------

    Operating income .................................          20,151           21,016           50,918           51,485

Interest expense .....................................          (8,548)          (7,780)         (16,982)         (15,322)
Interest capitalized .................................           1,255              347            2,265              489
Other income - net ...................................             850              590            1,632            1,131
                                                          ------------     ------------     ------------     ------------
    Income before minority interest ..................          13,708           14,173           37,833           37,783
Minority interest ....................................            (138)            (144)            (382)            (382)
                                                          ------------     ------------     ------------     ------------

    Net Income .......................................    $     13,570     $     14,029     $     37,451     $     37,401
                                                          ============     ============     ============     ============

Net Income Allocation:
Limited Partner Unitholders ..........................    $      9,963     $     11,102     $     27,496     $     29,598
Class B Unitholder ...................................           1,346            1,428            3,714            3,997
General Partner ......................................           2,261            1,499            6,241            3,806
                                                          ------------     ------------     ------------     ------------
    Total net income allocated .......................    $     13,570     $     14,029     $     37,451     $     37,401
                                                          ============     ============     ============     ============

Basic and diluted net income per Limited Partner
      and Class B Unit: ..............................    $       0.35     $       0.38     $       0.95     $       1.02
                                                          ============     ============     ============     ============

Weighted average Limited Partner and Class B Units
   outstanding .......................................          32,917           32,917           32,917           32,917
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.



                                       3

<PAGE>   4


                              TEPPCO PARTNERS, L.P.

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

<TABLE>
<CAPTION>
                                                                                     SIX MONTHS     SIX MONTHS
                                                                                       ENDED          ENDED
                                                                                      JUNE 30,       JUNE 30,
                                                                                        2000           1999
                                                                                     ----------     ----------
<S>                                                                                  <C>            <C>
Cash flows from operating activities:
 Net income .....................................................................    $   37,451     $   37,401
 Adjustments to reconcile net income to cash provided
  by operating activities:
  Depreciation and amortization .................................................        16,586         16,293
  Equity in (income) loss of affiliate ..........................................           (95)           149
  Increase in accounts receivable, trade ........................................       (28,580)       (39,808)
  Decrease (increase) in inventories ............................................         6,027         (1,083)
  Decrease (increase) in other current assets ...................................         1,044            (49)
  Increase in accounts payable and accrued expenses .............................        32,574         33,562
  Other .........................................................................          (526)        (1,081)
                                                                                     ----------     ----------
    Net cash provided by operating activities ...................................        64,481         45,384
                                                                                     ----------     ----------

Cash flows from investing activities:
  Proceeds from cash investments ................................................         1,475          3,840
  Purchases of cash investments .................................................        (2,000)        (2,235)
  Purchase of crude oil system ..................................................            --         (2,250)
  Capital expenditures ..........................................................       (39,147)       (40,313)
                                                                                     ----------     ----------
    Net cash used in investing activities .......................................       (39,672)       (40,958)
                                                                                     ----------     ----------

Cash flows from financing activities:
  Proceeds from term loan .......................................................        20,000         25,000
  Proceeds from revolving credit agreement ......................................            --          5,000
  Distributions .................................................................       (38,256)       (32,649)
                                                                                     ----------     ----------
    Net cash used in financing activities .......................................       (18,256)        (2,649)
                                                                                     ----------     ----------

Net increase in cash and cash equivalents .......................................         6,553          1,777

Cash and cash equivalents at beginning of period ................................        32,593         47,423
                                                                                     ----------     ----------
Cash and cash equivalents at end of period ......................................    $   39,146     $   49,200
                                                                                     ==========     ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Interest paid during the period (net of capitalized interest) ...................    $   14,090     $   14,455
                                                                                     ==========     ==========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                        4

<PAGE>   5



                              TEPPCO PARTNERS, L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1.  ORGANIZATION AND BASIS OF PRESENTATION

         TEPPCO Partners, L.P. (the "Partnership"), a Delaware limited
partnership, was formed in March 1990. The Partnership operates through TE
Products Pipeline Company, Limited Partnership (the "Products OLP") and TCTM,
L.P. (the "Crude Oil OLP"). Collectively the Products OLP and the Crude Oil OLP
are referred to as "the Operating Partnerships." The Partnership owns a 99%
interest as the sole limited partner interest in both the Products OLP and the
Crude Oil OLP.

         On March 31, 2000, Texas Eastern Products Pipeline Company, a Delaware
corporation and general partner of the Partnership and the Operating
Partnerships, was reorganized into Texas Eastern Products Pipeline Company, LLC
(the "Company" or "General Partner"), a Delaware limited liability company.
Additionally on March 31, 2000, Duke Energy Corporation ("Duke Energy"),
contributed its ownership of the General Partner to Duke Energy Field Services,
LLC ("DEFS"). DEFS is a joint venture between Duke Energy and Phillips Petroleum
Company. Duke Energy holds a majority interest in DEFS.

         The Company owns a 1% general partner interest in the Partnership and
1% general partner interest in each Operating Partnership. The Company, as
general partner, performs all management and operating functions required for
the Partnership pursuant to the Agreements of Limited Partnership of TEPPCO
Partners, L.P., TE Products Pipeline Company, Limited Partnership and TCTM, L.P.
(the "Partnership Agreements"). The General Partner is reimbursed by the
Partnership for all reasonable direct and indirect expenses incurred in managing
the Partnership.

         The accompanying unaudited consolidated financial statements reflect
all adjustments, which are, in the opinion of management, of a normal and
recurring nature and necessary for a fair statement of the financial position of
the Partnership as of June 30, 2000, and the results of operations and cash
flows for the periods presented. The results of operations for the six months
ended June 30, 2000, are not necessarily indicative of results of operations for
the full year 2000. The interim financial statements should be read in
conjunction with the Partnership's consolidated financial statements and notes
thereto presented in the TEPPCO Partners, L.P. Annual Report on Form 10-K for
the year ended December 31, 1999. Certain amounts from the prior year have been
reclassified to conform to current presentation.

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

         Basic net income per Unit is computed by dividing net income, after
deduction of the general partner's interest, by the weighted average number of
Limited Partner Units and Class B Units outstanding (a total of 32,916,547 Units
as of June 30, 2000 and 1999). The General Partner's percentage interest in net
income is based on its percentage of cash distributions from Available Cash for
each period (see Note 6. Cash Distributions). The General Partner was allocated
$6.2 million (representing 16.66%) and $3.8 million (representing 10.18%) of net
income for the six months ended June 30, 2000, and 1999, respectively.


                                       5

<PAGE>   6


                              TEPPCO PARTNERS, L.P.

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

         Diluted net income per Unit is similar to the computation of basic net
income per Unit above, except that the denominator was increased to include the
dilutive effect of outstanding Unit options by application of the treasury stock
method. For the quarters ended June 30, 2000 and 1999, the denominator was
increased by 19,746 Units and 27,963 Units, respectively. For the six months
ended June 30, 2000 and 1999, the denominator was increased by 14,333 Units and
25,242 Units, respectively.

NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS

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

NOTE 3. INVESTMENTS

SHORT-TERM INVESTMENTS

         The Partnership routinely invests cash in liquid short-term investments
as part of its cash management program. Investments with maturities at date of
purchase of 90 days or less are considered cash equivalents. At June 30, 2000,
short-term investments included $1.0 million of investment-grade corporate
notes, which mature within one year. All short-term investments are classified
as held-to-maturity securities and are stated at amortized cost. The aggregate
fair value of such securities approximates amortized cost at June 30, 2000.

LONG-TERM INVESTMENTS

         At June 30, 2000, the Partnership had $6.2 million invested in
investment-grade corporate notes, which have varying maturities through 2004.
These securities are classified as held-to-maturity securities and are stated at
amortized cost. The aggregate fair value of such securities approximates
amortized cost at June 30, 2000.

NOTE 4. INVENTORIES

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

<TABLE>
<CAPTION>
                                 JUNE 30,     DECEMBER 31,
                                   2000          1999
                                ----------    ----------
<S>                             <C>           <C>
Gasolines ..................    $      500    $    3,270
Propane ....................            51           223
Butanes ....................         1,474           605
Fuel oil ...................           544           386
Crude oil ..................         3,691         6,627
Other products .............           927         2,301
Materials and supplies .....         3,552         3,354
                                ----------    ----------
          Total ............    $   10,739    $   16,766
                                ==========    ==========
</TABLE>

         The costs of inventories were lower than market at June 30, 2000, and
December 31, 1999.

                                       6

<PAGE>   7

                              TEPPCO PARTNERS, L.P.

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


NOTE 5. LONG TERM DEBT

SENIOR NOTES

         On January 27, 1998, the Products OLP completed the issuance of $180
million principal amount of 6.45% Senior Notes due 2008, and $210 million
principal amount of 7.51% Senior Notes due 2028 (collectively the "Senior
Notes"). The 6.45% Senior Notes due 2008 are not subject to redemption prior to
January 15, 2008. The 7.51% Senior Notes due 2028 may be redeemed at any time
after January 15, 2008, at the option of the Products OLP, in whole or in part,
at a premium.

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

OTHER LONG TERM DEBT AND CREDIT FACILITIES

         In connection with the purchase of fractionation assets from DEFS as of
March 31, 1998, TEPPCO Colorado received a $38 million bank loan from SunTrust
Bank ("SunTrust"). The interest rate on this loan is 6.53%, which is payable
quarterly. The original maturity date was April 21, 2001. This loan was
refinanced by the Partnership on July 21, 2000, through the credit facility
discussed below. Accordingly, the principal amount was included in other
long-term debt at June 30, 2000, as the Partnership had the intent and ability
to refinance such balance at June 30, 2000.

         On May 17, 1999, the Products OLP entered into a five-year $75 million
term loan agreement to finance construction of three new pipelines between the
Partnership's terminal in Mont Belvieu, Texas and Port Arthur, Texas. The loan
agreement has a term of five years. SunTrust is the administrator of the loan.
At June 30, 2000, $45 million was outstanding under the term loan agreement.
This loan was refinanced by the Partnership on July 21, 2000, through the credit
facility discussed below.

         On May 17, 1999, the Products OLP entered into a five-year $25 million
revolving credit agreement and TEPPCO Crude Oil, LLC ("TCO") entered into a
three-year $30 million revolving credit agreement. SunTrust is the
administrative agent on both revolving credit agreements. The interest rate on
both agreements is based on the borrower's option of either SunTrust's prime
rate, the federal funds rate or LIBOR rate in effect at the time of the
borrowings and is payable quarterly. The Products OLP has not made any
borrowings under this revolving credit facility. TCO had a $3 million principal
amount outstanding under its revolving credit agreement as of June 30, 2000,
which was refinanced on July 21, 2000, through the credit facility discussed
below. Both of the credit facilities were terminated in connection with the
refinancing on July 21, 2000.

         On July 14, 2000, the Partnership entered into a $75 million term loan
and a $475 million revolving credit facility. On July 21, 2000, the Partnership
borrowed $75 million under the term loan and $340 million under the revolving
credit facility. The funds were used to finance the acquisition of assets from
ARCO (see Note. 9 Current Developments) and to refinance existing credit
facilities, other than the Senior Notes. The term loan has a eighteen month
maturity and the revolving facility has a three year maturity. The interest rate
for the credit agreements is based on the Partnership's option of either
SunTrust's prime rate, the federal funds rate or LIBOR rate in effect at the
time of the borrowings and is adjusted monthly, bimonthly, quarterly or
semi-annually. The credit agreements


                                       7

<PAGE>   8
                              TEPPCO PARTNERS, L.P.

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


contain restrictive financial covenants that require the Partnership to maintain
a minimum level of partners' capital as well as debt-to-earnings, interest
coverage and capital expenditure coverage ratios.

         On July 21, 2000, the Partnership entered into a three year swap
agreement to hedge its exposure on the variable rate credit facilities. The swap
agreement is based on a notional amount of $250 million. Under the swap
agreement, the Partnership will pay a fixed rate of interest of 7.17% and will
receive a floating rate based on a three month USD LIBOR rate.

NOTE 6. CASH DISTRIBUTIONS

         The Partnership makes quarterly cash distributions of all of its
Available Cash, generally defined as consolidated cash receipts less
consolidated cash disbursements and cash reserves established by the General
Partner in its sole discretion. Pursuant to the Partnership Agreement, the
Company receives incremental incentive cash distributions on the portion that
cash distributions on a per Unit basis exceed certain target thresholds as
follows:

<TABLE>
<CAPTION>
                                                                                                 GENERAL
                                                                             UNITHOLDERS         PARTNER
                                                                             -----------         -------
<S>                                                                         <C>                  <C>
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%
   Second Target - $0.326 per Unit up to $0.45 per Unit  ...................     75%               25%
   Over Second Target - Cash distributions greater than $0.45 per Unit......     50%               50%
</TABLE>


         The following table reflects the allocation of total distributions paid
for the six month period ended June 30, 2000 and 1999 (in thousands, except per
Unit amounts).

<TABLE>
<CAPTION>
                                                        SIX MONTHS ENDED JUNE 30,
                                                        ------------------------
                                                           2000          1999
                                                        ----------    ----------
<S>                                                     <C>           <C>
Limited Partner Units ..............................    $   28,275    $   26,100
1% General Partner Interest ........................           324           293
General Partner Incentive ..........................         5,452         2,996
                                                        ----------    ----------
      Total Partners' Capital Cash Distributions ...        34,051        29,389
Class B Units ......................................         3,819         2,931
Minority Interest ..................................           386           329
                                                        ----------    ----------
      Total Cash Distributions Paid ................    $   38,256    $   32,649
                                                        ==========    ==========
Total Cash Distributions Paid Per Unit .............    $    0.975    $    0.900
                                                        ==========    ==========
</TABLE>


         The above table includes the fourth quarter 1998 pro rata cash
distribution paid on February 5, 1999, to the Class B Limited Partner Units for
the 61-day period from the issuance on November 1, 1998. On July 17, 2000, the
Partnership declared a cash distribution of $0.50 per Limited Partner Unit and
Class B Unit for the quarter ended June 30, 2000. The distribution was paid on
August 4, 2000, to Unitholders of record on July 31, 2000.

NOTE 7. SEGMENT DATA

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



                                       8

<PAGE>   9
                              TEPPCO PARTNERS, L.P.

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


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

         The Crude Oil OLP gathers, stores, transports and markets crude oil
principally in Oklahoma, Texas and the Rocky Mountain region; operates two
trunkline NGL pipelines in South Texas; and distributes lube oils and specialty
chemicals to industrial and commercial accounts. The Crude Oil OLP's gathering,
transportation and storage assets include approximately 2,400 miles of pipeline
and 1.6 million barrels of storage.

         The below table includes interim financial information by business
segment for the interim periods ended June 30, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED JUNE 30, 2000             THREE MONTHS ENDED JUNE 30, 1999
                                  ------------------------------------------   ------------------------------------------
                                    PRODUCTS       CRUDE OIL                     PRODUCTS      CRUDE OIL
                                      OLP            OLP        CONSOLIDATED       OLP            OLP        CONSOLIDATED
                                  ------------   ------------   ------------   ------------   ------------   ------------
<S>                               <C>            <C>            <C>            <C>            <C>            <C>
Unaffiliated revenues ..........  $     54,288   $    693,416   $    747,704   $     54,225   $    401,126   $    455,351
Operating expenses, including
   power .......................        30,215        688,999        719,214         28,854        397,327        426,181
Depreciation and amortization
   expense .....................         6,874          1,465          8,339          6,770          1,384          8,154
                                  ------------   ------------   ------------   ------------   ------------   ------------
   Operating income ............        17,199          2,952         20,151         18,601          2,415         21,016
Interest expense, net ..........        (7,167)          (126)        (7,293)        (7,417)           (16)        (7,433)
Other income, net ..............           573            139            712            386             60            446
                                  ------------   ------------   ------------   ------------   ------------   ------------
   Net income ..................  $     10,605   $      2,965   $     13,570   $     11,570   $      2,459   $     14,029
                                  ============   ============   ============   ============   ============   ============

<CAPTION>

                                        SIX MONTHS ENDED JUNE 30, 2000               SIX MONTHS ENDED JUNE 30, 1999
                                  ------------------------------------------   ------------------------------------------
                                    PRODUCTS       CRUDE OIL                     PRODUCTS      CRUDE OIL
                                      OLP            OLP        CONSOLIDATED       OLP            OLP        CONSOLIDATED
                                  ------------   ------------   ------------   ------------   ------------   ------------
<S>                               <C>            <C>            <C>            <C>            <C>            <C>
Unaffiliated revenues ..........  $    118,066   $  1,380,330   $  1,498,396   $    115,375   $    626,066   $    741,441
Operating expenses,
   including power .............        58,872      1,372,020      1,430,892         55,043        618,620        673,663
Depreciation and
   amortization expense ........        13,657          2,929         16,586         13,533          2,760         16,293
                                  ------------   ------------   ------------   ------------   ------------   ------------
   Operating income ............        45,537          5,381         50,918         46,799          4,686         51,485
Interest expense, net ..........       (14,477)          (240)       (14,717)       (14,811)           (22)       (14,833)
Other income, net ..............           966            284          1,250            574            175            749
                                  ------------   ------------   ------------   ------------   ------------   ------------
   Net income ..................  $     32,026   $      5,425   $     37,451   $     32,562   $      4,839   $     37,401
                                  ============   ============   ============   ============   ============   ============

<CAPTION>

                                              AS OF JUNE 30, 2000                         AS OF JUNE 30, 1999
                                  ------------------------------------------   ------------------------------------------
                                    PRODUCTS       CRUDE OIL                     PRODUCTS      CRUDE OIL
                                      OLP            OLP        CONSOLIDATED       OLP            OLP        CONSOLIDATED
                                  ------------   ------------   ------------   ------------   ------------   ------------
<S>                               <C>            <C>            <C>            <C>            <C>            <C>
Identifiable assets ............  $    746,058   $    347,841   $  1,093,899   $    721,373   $    262,144   $    983,517
Accounts receivable, trade .....        20,369        213,977        234,346         16,783        136,566        153,349
Accounts payable and
   accrued liabilities .........  $      9,984   $    221,873   $    231,857   $      6,740   $    139,947   $    146,687
</TABLE>



                                        9

<PAGE>   10


NOTE 8. CONTINGENCIES

         In the fall of 1999, the Company and the Partnership were named as
defendants in a lawsuit in Jackson County Circuit Court, Jackson County,
Indiana. In Ryan E. McCleery and Marcia S. McCleery, et al. v. Texas Eastern
Corporation, et al. (including the Company and Partnership), plaintiffs contend,
among other things, that the Company and other defendants stored and disposed of
toxic and hazardous substances and hazardous wastes in a manner that caused the
materials to be released into the air, soil and water. They further contend that
the release caused damages to the plaintiffs. In their Complaint, the plaintiffs
allege strict liability for both personal injury and property damage together
with gross negligence, continuing nuisance, trespass, criminal mischief and loss
of consortium. The plaintiffs are seeking compensatory, punitive and treble
damages. The Company has filed an Answer to the Complaint, denying the
allegations, as well as various other motions. This case is in the early stages
of discovery and is not covered by insurance. The Company is defending itself
vigorously against this lawsuit. The Partnership cannot estimate the loss, if
any, associated with this pending lawsuit.

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

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

         The Partnership and the Indiana Department of Environmental Management
("IDEM") have entered into an Agreed Order that will ultimately result in a
remediation program for any on-site and off-site groundwater contamination
attributable to the Partnership's operations at the Seymour, Indiana, terminal.
A Feasibility Study, which includes the Partnership's proposed remediation
program, has been approved by IDEM. IDEM is expected to issue a Record of
Decision formally approving the remediation program. After the Record of
Decision has been issued, the Partnership will enter into an Agreed Order for
the continued operation and maintenance of the program. The Partnership has
accrued $0.9 million at June 30, 2000 for future costs of the remediation
program for the Seymour terminal. In the opinion of the Company, the completion
of the remediation program will not have a material adverse impact on the
Partnership's financial condition, results of operations or liquidity.

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

         In May 1999, the Products OLP filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. Such application is currently under review by the FERC. The FERC
approved a request of the Products OLP waiving the requirement to adjust refined
products

                                       10

<PAGE>   11


transportation tariffs pursuant to the PPI Index while its Market Based Rates
application is under review. Under the PPI Index, refined products
transportation rates in effect on June 30, 1999 would have been reduced by
approximately 1.83% effective July 1, 1999. If any portion of the Market Based
Rates application is denied by the FERC, the Products OLP has agreed to refund,
with interest, amounts collected after June 30, 1999, under the tariff rates in
excess of the PPI Index. As a result of the refund obligation potential, the
Partnership has deferred all revenue recognition of rates charged in excess of
the PPI Index. At June 30, 2000, the amount deferred for possible rate refunds,
including interest, totaled approximately $1.6 million.

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

         Substantially all of the petroleum products transported and stored by
the Partnership are owned by the Partnership's customers. At June 30, 2000, the
Partnership had approximately 17.1 million barrels of products in its custody
owned by customers. The Partnership is obligated for the transportation, storage
and delivery of such products on behalf of its customers. The Partnership
maintains insurance adequate to cover product losses through circumstances
beyond its control.

NOTE 9.  CURRENT DEVELOPMENTS

         On July 21, 2000, the Company completed its previously announced
acquisition of certain assets of ARCO Pipe Line Company ("ARCO"), a wholly owned
subsidiary of Atlantic Richfield Company, for $318.5 million. The purchase
included ARCO's 50-percent ownership interest in Seaway Pipeline Company's
("Seaway") 500-mile, 30-inch diameter pipeline that carries mostly imported
crude oil from a marine terminal at Freeport, Texas, to Cushing, Oklahoma. The
line has a capacity of 350,000 barrels per day. The Partnership assumed ARCO's
role as operator of this pipeline. The Company also acquired: (i) ARCO's crude
oil terminal facilities in Cushing and Midland, Texas, including the line
transfer and pumpover business at each location; (ii) an undivided ownership
interest in both the Rancho Pipeline, a 400-mile, 24-inch diameter, crude oil
pipeline from West Texas to Houston, and the Basin Pipeline, a 416-mile, crude
oil pipeline running from Jal, New Mexico, through Midland to Cushing, both of
which are operated by another joint owner; and (iii) the receipt and delivery
pipelines known as the West Texas Trunk System, which is located around the
Midland terminal. The transaction will be accounted for under the purchase
method for accounting purposes.


                                       11

<PAGE>   12



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS1GENERAL

         The following information is provided to facilitate increased
understanding of the 2000 and 1999 interim consolidated financial statements and
accompanying notes presented in Item 1. Material period-to-period variances in
the consolidated statements of income are discussed under "Results of
Operations." The "Financial Condition and Liquidity" section analyzes cash flows
and financial position. Discussion included in "Other Matters" addresses key
trends, future plans and contingencies. Throughout these discussions, management
addresses items that are reasonably likely to materially affect future liquidity
or earnings.

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

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

         The Crude Oil OLP segment is involved in the transportation,
aggregation and marketing of crude oil and NGLs; and the distribution of lube
oils and specialty chemicals. Revenues are earned from the gathering, storage,
transportation and marketing of crude oil and NGLs; and the distribution of lube
oils and specialty chemicals principally in Oklahoma, Texas and the Rocky
Mountain region. Marketing operations consist primarily of purchasing and
aggregating crude oil along its and third party gathering and pipeline systems
and arranging the necessary logistics for the ultimate sale of crude oil to
local refineries, marketers or other end users.

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                          QUARTER ENDED JUNE 30,  SIX MONTHS ENDED JUNE 30,
                                                         -----------------------  -------------------------
                                                            2000         1999         2000         1999
                                                         ----------   ----------  -----------   -----------
<S>                                                      <C>          <C>          <C>          <C>
Operating revenues:
    Refined Products and LPGs Transportation .........   $   54,288   $   54,225   $  118,066   $  115,375
    Crude Oil and NGLs Transportation and Marketing ..      693,416      401,126    1,380,330      626,066
                                                         ----------   ----------   ----------   ----------
       Total operating revenues ......................      747,704      455,351    1,498,396      741,441
                                                         ----------   ----------   ----------   ----------

Operating income:
   Refined Products and LPGs Transportation ..........       17,199       18,601       45,537       46,799
   Crude Oil and NGLs Transportation and Marketing ...        2,952        2,415        5,381        4,686
                                                         ----------   ----------   ----------   ----------
       Total operating income ........................       20,151       21,016       50,918       51,485
                                                         ----------   ----------   ----------   ----------

Net income:
    Refined Products and LPGs Transportation .........       10,605       11,570       32,026       32,562
    Crude Oil and NGLs Transportation and Marketing ..        2,965        2,459        5,425        4,839
                                                         ----------   ----------   ----------   ----------
      Total net income ...............................   $   13,570   $   14,029   $   37,451   $   37,401
                                                         ----------   ----------   ----------   ----------
</TABLE>


                                       12

<PAGE>   13



RESULTS OF OPERATIONS - (CONTINUED)

         Net income for the quarter ended June 30, 2000, was $13.6 million,
compared with net income of $14.0 million for the 1999 second quarter. The
decrease in net income resulted from a $1.0 million decrease of net income by
the refined products and LPGs transportation segment, partially offset by a $0.5
million increase of net income by the crude oil and NGLs transportation and
marketing segment. The decrease in net income of the refined products and LPGs
transportation segment was primarily due to a $1.5 million increase in total
costs and expenses, partially offset by a $0.3 million decrease in interest
expense (net of capitalized interest) and a $0.2 million increase in other
income - net. The increase in net income of the crude oil and NGLs
transportation and marketing segment was primarily due to a $0.7 million
increase in margin, partially offset by a $0.2 million increase in total costs
and expenses, excluding expenses associated with purchases of crude oil and
petroleum products.

         For the six months ended June 30, 2000, the Partnership reported net
income of $37.5 million, compared with net income of $37.4 million for the first
six months of 1999. Net income by the crude oil and NGLs transportation and
marketing segment increased $0.6 million, which was partially offset by a $0.5
million decrease of net income by the refined products and LPGs transportation
segment. The increase in net income by the crude oil and NGLs transportation and
marketing segment was primarily due to a $2.0 million increase in margin,
partially offset by a $1.3 million increase in total costs and expenses,
excluding expenses associated with purchases of crude oil and petroleum
products. The decrease in net income by the refined products and LPGs
transportation segment was primarily due to a $4.0 million increase in total
costs and expenses, partially offset by a $2.7 million increase in operating
revenues, a $0.3 million decrease in interest expense (net of capitalized
interest) and a $0.4 million increase in other income - net. See discussion
below of factors affecting net income for the comparative periods by business
segment.

REFINED PRODUCTS AND LPGS TRANSPORTATION SEGMENT

         Volume and average tariff information for 2000 and 1999 is presented
below:


<TABLE>
<CAPTION>
                                        QUARTER ENDED                           SIX MONTHS ENDED
                                           JUNE 30,           PERCENTAGE            JUNE 30,            PERCENTAGE
                                   ------------------------    INCREASE     ------------------------     INCREASE
                                      2000          1999      (DECREASE)      2000           1999       (DECREASE)
                                   ---------     ----------   ----------    ---------     ----------    -----------
<S>                                <C>           <C>          <C>           <C>           <C>           <C>
 VOLUMES DELIVERED
 (in thousands of barrels)
     Refined products ...........     35,113         35,818           (2)%     64,726         63,973              1%
     LPGs .......................      6,634          6,367            4%      18,327         19,539             (6)%
     Mont Belvieu operations ....      6,576          5,882           12%      13,648         12,767              7%
                                   ---------     ----------   ----------    ---------     ----------    -----------
       Total ....................     48,323         48,067            1%      96,701         96,279             --
                                   =========     ==========   ==========    =========     ==========    ===========

 AVERAGE TARIFF PER BARREL
     Refined products ...........  $    0.93(a)  $     0.93           --    $    0.94(a)  $     0.92              2%
     LPGs .......................       1.56           1.59           (2)%       1.83           1.88             (3)%
     Mont Belvieu operations ....       0.14           0.15           (7)%       0.15           0.16             (6)%
                                   ---------     ----------   ----------    ---------     ----------    -----------
       Average system tariff per
         barrel .................  $    0.91     $     0.92           (1)%  $    1.00     $     1.01             (1)%
                                   =========     ==========   ==========    =========     ==========    ===========
</TABLE>

         (a) Net of amounts deferred related to potential refund obligation.

         Refined products transportation revenues decreased $0.7 million for the
quarter ended June 30, 2000, compared with the prior-year quarter, due to a 2%
decrease in total refined products volumes delivered. Motor fuel volumes
delivered decreased 7% as a result of lower Gulf Coast supply and increased
competing refinery production in the south central markets of Louisiana and
Arkansas. Additionally, natural gasoline volumes delivered decreased 6% from the
1999 second quarter as a result of unfavorable blending economics for Midwest
area refineries. These decreases were partially offset by a 9% increase in jet
fuel volumes delivered due primarily to increased demand in the Chicago market,
favorable Gulf Coast price differentials and lower competing pipeline supply
into the Chicago market. The refined products average tariff per barrel reflects
the 1.83% general tariff reduction pursuant to the Producer Price Index for
finished goods less 1% ("PPI Index"), effective July 1, 1999. The


                                       13

<PAGE>   14

RESULTS OF OPERATIONS - (CONTINUED)

Partnership deferred recognition of approximately $0.4 million of revenue during
the second quarter of 2000 with respect to potential refund obligations for
rates charged in excess of the PPI Index. See further discussion regarding
Market Based Rates included in "Other Matters." The general tariff reduction was
offset by the increased percentage of long-haul jet fuel deliveries.

         LPGs transportation revenues increased $0.3 million for the quarter
ended June 30, 2000, compared with the second quarter of 1999, due primarily to
increased deliveries of isobutane to Midwest area refineries as a result of
favorable Gulf Coast price differentials. Short haul propane deliveries along
the upper Texas Gulf Coast increased 14% as a result of increased petrochemical
demand. The decrease in the average tariff per barrel resulted from the
increased percentage of short-haul deliveries during the second quarter of 2000.

         Revenues generated from Mont Belvieu operations decreased $0.5 million
during the quarter ended June 30, 2000, compared with the second quarter of
1999, primarily due to timing of revenue recognition on storage contracts.

         Other operating revenues increased $0.9 million during the quarter
ended June 30, 2000, compared with the prior year quarter, due primarily to a
$0.5 million increase on gains realized from product sales attributable to
higher market prices in 2000, a $0.3 million increase related to higher amounts
of butane received for summer storage, and increased refined products
terminaling revenue. These increases were partially offset by decreased refined
products rental revenue.

         For the six months ended June 30, 2000, refined products transportation
revenues increased $1.8 million, or 3%, compared with the corresponding period
in 1999. Continued strong jet fuel demand and favorable Gulf Coast differentials
resulted in a 11% increase in jet fuel volumes delivered. The increase in jet
fuel deliveries was partially offset by the decrease in motor fuel deliveries
during the second quarter noted above, which was partially offset by higher
motor fuel volumes delivered during the first quarter of 2000 as a result of
lower Midwest refinery production. The Partnership deferred recognition of
approximately $0.8 million of revenue during the six months ended June 30, 2000
with respect to potential refund obligations for rates charged in excess of the
PPI Index. The increase in the refined products average tariff per barrel
resulted primarily from a higher percentage of long-haul deliveries in the upper
Midwest market areas.

         LPGs transportation revenues decreased $3.2 million during the six
months ended June 30, 2000, compared with the same period in 1999, due primarily
to lower propane volumes delivered. Propane deliveries in Midwest and Northeast
market areas decreased 18% and 7%, respectively, from the prior year as a result
of warmer winter weather during the first quarter of 2000. These decreases were
partially offset by a 13% increase in propane deliveries along the upper Texas
Gulf Coast as a result of increased petrochemical demand. The decrease in the
average tariff per barrel resulted from the decreased percentage of longer-haul
propane deliveries to the Midwest and Northeast market areas, coupled with the
increase in Gulf Coast propane deliveries during 2000.

         Revenues generated from Mont Belvieu operations increased $1.1 million
for the six months ended June 30, 2000, compared with the corresponding period
in 1999, due primarily to increased contract storage revenue.

         During the six months ended June 30, 2000, other operating revenues
increased $3.0 million, as compared to the same period in 1999, due primarily to
a $2.5 million increase on gains realized from product sales attributable to
higher market prices in 2000. Also contributing to the increase were increased
refined products terminaling revenue and higher amounts of butane received for
summer storage. Partially offsetting these increases were decreased refined
products rental revenue.

         Costs and expenses increased $1.5 million for the quarter ended June
30, 2000, compared with the second quarter of 1999, primarily due to a $1.2
million increase in operating, general and administrative expenses and a $0.2
million increase in operating fuel and power expense. The increase in operating,
general and administrative


                                       14

<PAGE>   15

RESULTS OF OPERATIONS - (CONTINUED)

expenses was attributable to a $0.7 million increase in labor and benefit costs,
a $0.6 million increase in general and administrative consulting and legal
services, and a $0.2 million volume-related increase in lease cost associated
with higher product receipts through the connection with Colonial Pipeline at
Beaumont, Texas. These increases were partially offset by a $0.3 million
decrease in supplies and materials expense.

         Costs and expenses increased $4.0 million for the six months ended June
30, 2000, compared with the same period in 1999, due to a $3.2 million increase
in operating, general and administrative expenses and a $0.9 million increase in
operating fuel and power expense. The increase in operating, general and
administrative expenses was primarily attributable to $0.9 million of expense
recognized in the first quarter of 2000 to write-off project evaluation costs,
increased labor and benefit costs, and increased contract labor and consulting
services. The write-off of project evaluation costs resulted from the
announcement in March 2000 of the Partnership's abandonment of its plan to
construct a pipeline from Beaumont, Texas, to Little Rock, Arkansas, in favor of
participation in the Centennial Pipeline ("Centennial") joint venture with CMS
Energy Corporation and Marathon Ashland Petroleum LLC. Each partner in the
Centennial joint venture will own a one-third interest in a 790-mile pipeline
system from the Texas Gulf Cost to the Midwest. The increase in operating fuel
and power expense resulted from increased refined products transportation
volumes delivered, which generally require more power to transport than LPGs
volumes.

         Interest expense increased $0.7 million during the quarter and $1.4
million during the six months ended June 30, 2000, compared with the
corresponding prior year periods, due to interest expense on the SunTrust term
loan to finance construction of the pipelines between Mont Belvieu and Port
Arthur, Texas. The increase in interest expense was offset by increased interest
cost capitalized of $0.9 million during the quarter and $1.8 million during the
six months ended June 30, 2000, compared with the corresponding prior year
periods, as a result of higher balances associated with construction in progress
of the pipelines between Mont Belvieu and Port Arthur.

         Other income - net increased during both the quarter and six months
ended June 30, 2000, compared with the corresponding periods in 1999, due to
gains on the sale of right-of-way easements during the second quarter of 2000,
coupled with increased interest income earned on cash investments.



                                       15

<PAGE>   16

RESULTS OF OPERATIONS - (CONTINUED)

CRUDE OIL AND NGLS TRANSPORTATION AND MARKETING SEGMENT

         Margin of the Crude Oil OLP is calculated as revenues generated from
crude oil and lube oil sales and crude oil and NGLs transportation less the cost
of crude oil and lube oil purchases. Margin is a more meaningful measure of
financial performance than operating revenues and operating expenses due to the
significant fluctuations in revenues and expense that may occur with changes in
the level of marketing activity and the underlying price of crude oil and lube
oils.

         Margin and volume information is presented below:

<TABLE>
<CAPTION>
                                          QUARTER ENDED                            SIX MONTHS ENDED
                                             JUNE 30,           PERCENTAGE             JUNE 30,          PERCENTAGE
                                      -----------------------    INCREASE      -----------------------    INCREASE
                                         2000         1999      (DECREASE)        2000         1999      (DECREASE)
                                      ----------   ----------   ----------     ----------   ----------   ----------
<S>                                   <C>          <C>          <C>            <C>          <C>          <C>
Margins (dollars in thousands)
   Crude oil transportation .......   $    4,861   $    4,653            4%    $    9,727   $    8,950            9%
   Crude oil marketing ............        3,338        2,993           12%         5,588        4,989           12%

   NGL transportation .............        1,580        1,556            2%         3,340        2,962           13%

   Lubrication oil sales ..........          746          591           26%         1,371        1,135           21%
                                      ----------   ----------   ----------     ----------   ----------   ----------
     Total margin .................   $   10,525   $    9,793            7%    $   20,026   $   18,036           11%
                                      ==========   ==========   ==========     ==========   ==========   ==========

Barrels per day:
  Crude oil transportation ........       98,468       94,397            4%        97,409       92,508            5%
  Crude oil marketing .............      287,547      253,213           14%       286,525      246,229           16%
  NGL transportation ..............       13,250       13,205           --         13,394       12,054           11%

Lubrication oil volume
(total gallons) ...................    1,295,596    2,150,415          (40)%    3,567,720    4,109,331          (13)%

Margin per barrel:
  Crude oil transportation ........   $    0.543   $    0.542           --     $    0.549   $    0.535            3%
  Crude oil marketing .............   $    0.128   $    0.130           (2)%   $    0.107   $    0.112           (4)%
  NGL transportation ..............   $    1.311   $    1.295            1%    $    1.370   $    1.358            1%

Lubrication oil margin
(per gallon) ......................   $    0.576   $    0.275          109%    $    0.385   $    0.276           39%
</TABLE>


         Margin increased $0.7 million during the second quarter of 2000,
compared with the second quarter of 1999, comprised of a $0.3 million increase
in crude oil marketing activity, a $0.2 million increase in crude oil
transportation, and a $0.2 million increase in lubrication oil sales. The
increase in crude oil marketing margin resulted from the 14% increase in volumes
marketed and gains realized on volumes held in third party pipeline systems. The
increase in crude oil transportation margin was primarily attributable to
increased volume on the South Texas system which benefited from higher crude oil
market prices. The increase in lubrication oil sales and margin resulted from
increased volumes of lube products sold, which carry a higher margin. Total
lubrication oil volumes decreased 40% from the prior year second quarter due
primarily to the discontinuation of fuel oil sales, effective April 2000, as a
result of lower margins realized on such products.

         Costs and expenses, excluding expenses associated with purchases of
crude oil and petroleum products, increased $0.2 million for the quarter ended
June 30, 2000, compared with the second quarter of 1999, as a result of a $0.1
million increase in operating, general, and administrative expenses and a $0.1
million increase in charges for depreciation and amortization. The increase in
operating, general, and administrative expenses resulted primarily from
increased labor and benefit costs, partially offset by decreased pipeline
maintenance costs. The increase in depreciation and amortization expense was due
to capital additions.


                                       16

<PAGE>   17

RESULTS OF OPERATIONS - (CONTINUED)

         Margin increased $2.0 million during the six months ended June 30,
2000, compared with the corresponding period of 1999, comprised of a $0.8
million increase in crude oil transportation, a $0.6 million increase in crude
oil marketing, a $0.4 million increase in NGL transportation, and a $0.2 million
increase in lubrication oil sales. The increase in crude oil transportation
margin was attributable to increased volumes on the South Texas system coupled
with higher transportation rates. The increase in crude oil marketing margin
resulted from increased volumes marketed. The increase in NGL transportation
margin was primarily due to higher prices on loss allowance barrels received on
the Dean Pipeline. The increase in lubrication oil sales margin resulted from
the reasons described in the second quarter noted above.

         Costs and expenses, excluding expenses associated with purchases of
crude oil and petroleum products, increased $1.3 million for the six months
ended June 30, 2000, compared with the corresponding period of 1999, as a result
of a $1.1 million increase in operating, general, and administrative expenses
and a $0.2 million increase in charges for depreciation and amortization. The
increase in operating, general, and administrative expenses resulted primarily
from increased labor and benefit costs, increased telecommunication costs and
increased consulting charges. The increase in depreciation and amortization
expense resulted from capital additions placed in service.

FINANCIAL CONDITION AND LIQUIDITY

         Net cash from operations for the six-month period ended June 30, 2000,
totaled $64.5 million, comprised of $54.0 million of income before charges for
depreciation and amortization and $10.5 million of cash provided by working
capital changes. This compares with cash flows from operations of $45.4 million
for the corresponding period in 1999, which was comprised of $53.7 million of
income before charges for depreciation and amortization, partially offset by
$8.3 million of cash used for working capital changes. The increase of cash from
working capital changes during the six-month period ended June 30, 2000, as
compared with the same period in 1999, resulted primarily from timing of
payments related to crude oil marketing activity and lower inventory balances at
June 30, 2000. Net cash from operations for the six months ended June 30, 2000
and 1999, included interest payments related to the Senior Notes and term loans
of $16.4 million and $14.9 million, respectively.

         Cash flows used in investing activities during the first six months of
2000 was comprised of $39.1 million of capital expenditures and $2.0 million of
additional cash investments. These decreases of cash were partially offset by
$1.5 million of proceeds from investment maturities. Cash flows used in
investing activities during the first six months of 1999 included $40.3 million
of capital expenditures, $2.3 million for the purchase of a 125-mile crude oil
system in Southeast Texas, and $2.2 million of additional cash investments.
These decreases of cash were offset by $3.8 million of proceeds from maturities
of cash investments. During the first six months of 2000 and 1999, capital
expenditures included $23.2 million and $28.0 million, respectively, for
construction of three new pipelines between the Partnership's terminal in Mont
Belvieu, Texas and Port Arthur, Texas. The project includes three 12-inch
diameter common-carrier pipelines and associated facilities. Each pipeline will
be approximately 70 miles in length. Upon completion, the new pipelines will
transport ethylene, propylene and natural gasoline. The anticipated completion
date is the fourth quarter of 2000. The Partnership has entered into an
agreement for turnkey construction of the pipelines and related facilities and
has separately entered into agreements for guaranteed throughput commitments.
The cost of this project is expected to total approximately $74.5 million.

         The Partnership estimates that capital expenditures for 2000 will total
approximately $139 million (including capitalized interest of $4 million). Such
amount excludes the Partnership's acquisition of certain assets from ARCO as
described below. Approximately $30 million is expected to be used to complete
construction of the three new pipelines between Mont Belvieu and Port Arthur and
approximately $10 million will be used to replace seven pipelines under the
Houston Ship Channel as required by the United States Army Corp of Engineers for
the deepening of the channel. Approximately $77 million of planned expenditures
are expected to be used in revenue-generating projects, including pipeline
acquisitions and construction; with the remaining $18 million being used for
life-cycle replacements and upgrading current facilities. Capital expenditures
may be financed through internally generated funds, external debt or the
issuance of additional limited partner Units.


                                       17

<PAGE>   18


FINANCIAL CONDITION AND LIQUIDITY - (CONTINUED)


         The Partnership paid cash distributions of $38.3 million ($0.975 per
Limited Partner Unit and Class B Unit) during the six months ended June 30,
2000. Additionally, on July 17, 2000, the Partnership declared a cash
distribution of $0.50 per Limited Partner Unit and Class B Unit. The
distribution was paid on August 4, 2000 to Unitholders of record on July 31,
2000.

OTHER MATTERS

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

         The Partnership and the Indiana Department of Environmental Management
("IDEM") have entered into an Agreed Order that will ultimately result in a
remediation program for any on-site and off-site groundwater contamination
attributable to the Partnership's operations at the Seymour, Indiana, terminal.
A Feasibility Study, which includes the Partnership's proposed remediation
program, has been approved by IDEM. IDEM is expected to issue a Record of
Decision formally approving the remediation program. After the Record of
Decision has been issued, the Partnership will enter into an Agreed Order for
the continued operation and maintenance of the program. The Partnership has
accrued $0.9 million at June 30, 2000, for future costs of the remediation
program for the Seymour terminal. In the opinion of the Company, the completion
of the remediation program will not have a material adverse impact on the
Partnership's financial condition, results of operations or liquidity.

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

         In May 1999, the Products OLP filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. Such application is currently under review by the FERC. The FERC
approved a request of the Products OLP waiving the requirement to adjust refined
products transportation tariffs pursuant to the PPI Index while its Market Based
Rates application is under review. Under the PPI Index, refined products
transportation rates in effect on June 30, 1999 would have been reduced by
approximately 1.83% effective July 1, 1999. If any portion of the Market Based
Rates application is denied by the FERC, the Products OLP has agreed to refund,
with interest, amounts collected after June 30, 1999, under the tariff rates in
excess of the PPI Index. As a result of the refund obligation potential, the
Partnership has deferred all revenue recognition of rates charged in excess of
the PPI Index. At June 30, 2000, the amount deferred for possible rate refunds,
including interest, totaled approximately $1.6 million.

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


                                       18

<PAGE>   19



OTHER MATTERS - (CONTINUED)


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

         In February 2000, the Partnership and Louis Dreyfus Plastics
Corporation ("Louis Dreyfus") announced a joint development alliance whereby the
Partnership's Mont Belvieu petroleum liquids storage and transportation shuttle
system services will be marketed by Louis Dreyfus. The alliance will expand
services to the upper Texas Gulf Coast energy marketplace. The alliance is a
service-oriented, fee-based venture with no commodity trading.

         In March 2000, the Partnership, CMS Energy Corporation and Marathon
Ashland Petroleum LLC announced an agreement to form a limited liability company
that will own and operate an interstate refined petroleum products pipeline
extending from the upper Texas Gulf Coast to Illinois. Each of the companies
will own a one-third interest in the limited liability company. The
Partnership's participation in this joint venture is in lieu of its previously
announced expansion plan to construct a new pipeline from Beaumont, Texas, to
Little Rock, Arkansas. The Partnership recognized $0.9 million of expense in
March 2000 to write-off project evaluation costs related to the abandoned
construction plan.

         The limited liability company will build a 70-mile, 24-inch diameter
pipeline connecting the Partnership's facility in Beaumont, Texas, with the
start of an existing 720-mile, 26-inch diameter pipeline extending from
Longville, Louisiana, to Bourbon, Illinois. The pipeline, which has been named
Centennial Pipeline, will pass through portions of Texas, Louisiana, Arkansas,
Mississippi, Tennessee, Kentucky and Illinois. CMS Panhandle Pipe Line
Companies, which owns the existing 720-mile pipeline, has made a filing with the
FERC to take the line out of natural gas service as part of the regulatory
process. Conversion of the pipeline to refined products service is expected to
be completed by the end of 2001. The Centennial Pipeline will intersect the
Partnership's existing mainline near Lick Creek, Illinois, where a new two
million barrel refined petroleum products storage terminal will be built.

         On July 21, 2000, the Company completed its previously announced
acquisition of certain assets of ARCO Pipe Line Company ("ARCO"), a wholly owned
subsidiary of Atlantic Richfield Company, for $318.5 million. The purchase
included ARCO's 50-percent ownership interest in Seaway Pipeline Company's
("Seaway") 500-mile, 30-inch diameter pipeline that carries mostly imported
crude oil from a marine terminal at Freeport, Texas, to Cushing, Oklahoma. The
line has a capacity of 350,000 barrels per day. The Partnership assumed ARCO's
role as operator of this pipeline. The Company also acquired: (i) ARCO's crude
oil terminal facilities in Cushing and Midland, Texas, including the line
transfer and pumpover business at each location; (ii) an undivided ownership
interest in both the Rancho Pipeline, a 400-mile, 24-inch diameter, crude oil
pipeline from West Texas to Houston, and the Basin Pipeline, a 416-mile, crude
oil pipeline running from Jal, New Mexico, through Midland to Cushing, both of
which are operated by another joint owner; and (iii) the receipt and delivery
pipelines known as the West Texas Trunk System, which is located around the
Midland terminal. The transaction will be accounted for under the purchase
method for accounting purposes.

         On July 14, 2000, the Partnership entered into a $75 million term loan
and a $475 million revolving credit facility. On July 21, 2000, the Partnership
borrowed $75 million under the term loan and $340 million under the revolving
credit facility. The funds were used to finance the acquisition of assets from
ARCO and to repay principal and interest on existing credit facilities, other
than the Senior Notes (see Note 5. Long Term Debt). The term loan has a eighteen
month maturity and the revolving facility has a three year maturity. The
interest rate for the credit agreements is based on the Partnership's option of
either SunTrust's prime rate, the federal funds rate or LIBOR rate in effect at
the time of the borrowings and is adjusted monthly, bimonthly, quarterly or
semi-annually.


                                       19

<PAGE>   20

OTHER MATTERS - (CONTINUED)

The credit agreements contain restrictive financial covenants that require the
Partnership to maintain a minimum level of partners' capital as well as
debt-to-earnings, interest coverage and capital expenditure coverage ratios.

         The matters discussed herein include "forward-looking statements"
within the meaning of various provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included in this document that address activities, events or
developments that the Partnership expects or anticipates will or may occur in
the future, including such things as estimated future capital expenditures
(including the amount and nature thereof), business strategy and measures to
implement strategy, competitive strengths, goals, expansion and growth of the
Partnership's business and operations, plans, references to future success,
references to intentions as to future matters and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Partnership in light of its experience and its
perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate under the
circumstances. However, whether actual results and developments will conform
with the Partnership's expectations and predictions is subject to a number of
risks and uncertainties, including general economic, market or business
conditions, the opportunities (or lack thereof) that may be presented to and
pursued by the Partnership, competitive actions by other pipeline companies,
changes in laws or regulations, and other factors, many of which are beyond the
control of the Partnership. Consequently, all of the forward-looking statements
made in this document are qualified by these cautionary statements and there can
be no assurance that actual results or developments anticipated by the
Partnership will be realized or, even if substantially realized, that they will
have the expected consequences to or effect on the Partnership or its business
or operations. For additional discussion of such risks and uncertainties, see
TEPPCO Partners, L.P.'s 1999 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

         The Partnership mitigates exposure to commodity price fluctuations by
maintaining a balanced position between crude oil purchases and sales. As a
hedging strategy to manage crude oil price fluctuations, the Partnership enters
into futures contracts on the New York Mercantile Exchange, and makes limited
use of other derivative instruments. However, certain basis risks (the risk that
price relationships between delivery points, classes of products or delivery
periods will change) cannot be completely hedged or eliminated. It is the
Partnership's general policy not to acquire crude oil futures contracts or other
derivative products for the purpose of speculating on price changes, however,
the Partnership may take limited speculative positions to capitalize on crude
oil price fluctuations. Any contracts held for trading purposes or speculative
positions are accounted for using the mark-to-market method. Under this
methodology, contracts are adjusted to market value, and the gains and losses
are recognized in current period income. Risk management policies have been
established by the Risk Management Committee to monitor and control these market
risks. The Risk Management Committee is comprised of senior executives of the
Partnership. Market risks associated with commodity derivatives were not
material at June 30, 2000.

         At June 30, 2000, the Products OLP had outstanding $180 million
principal amount of 6.45% Senior Notes due 2008, and $210 million principal
amount of 7.51% Senior Notes due 2028 (collectively the "Senior Notes").
Additionally, the Products OLP had a $38 million bank loan outstanding from
SunTrust Bank. The SunTrust loan bears interest at a fixed rate of 6.53% and is
payable in full in April 2001. At June 30, 2000, the estimated fair value of the
Senior Notes and the SunTrust loan was approximately $363.5 million and $37.7
million, respectively.

         At June 30, 2000, the Products OLP had $45.0 million outstanding under
a variable interest rate term loan and the Crude Oil OLP had $3.0 million
outstanding under its revolving credit agreement. The interest rates for these
credit facilities are based on the borrower's option of either SunTrust Bank's
prime rate, the federal funds rate


                                       20

<PAGE>   21


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - (CONTINUED)

or LIBOR rate in effect at the time of the borrowings and is adjusted monthly,
bimonthly, quarterly or semi-annually. Utilizing the balances of variable
interest rate debt outstanding at June 30, 2000, and assuming market interest
rates increase 100 basis points, the potential annual increase in interest
expense is approximately $0.5 million.

         On July 14, 2000, the Partnership entered into a $75 million term loan
and a $475 million revolving credit facility. Under these credit facilities, the
Partnership refinanced all outstanding amounts related to fixed rate and
variable rate credit facilities, other than the Senior Notes, on July 21, 2000.
The interest rate under the new credit facilities is based on the borrower's
option of either SunTrust Bank's prime rate, the federal funds rate or LIBOR
rate in effect at the time of the borrowings and is adjusted monthly, bimonthly,
quarterly or semi-annually. On July 21, 2000, the Partnership entered into a
three year swap agreement to partially hedge its exposure on the new variable
rate credit facilities. The swap agreement is based on a notional amount of $250
million. Under the swap agreement, the Partnership will pay a fixed rate of
interest of 7.17% and will receive a floating rate based on a three month USD
LIBOR rate.

                           PART II. OTHER INFORMATION

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

         (a)      Exhibits:

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

                  2.1      Amended and Restated Purchase Agreement By and
                           Between Atlantic Richfield Company and Texas Eastern
                           Products Pipeline Company With Respect to the Sale of
                           ARCO Pipeline Company, dated as of May 10, 2000.

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

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

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

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

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

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

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


                                       21

<PAGE>   22

EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)

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

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

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

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

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

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

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

                  10.7     Duke Energy Corporation Executive Savings Plan (Filed
                           as Exhibit 10.7 to the Partnership's Form 10-K
                           (Commission File No. 1-10403) for the year ended
                           December 31, 1999 and incorporated herein by
                           reference).

                  10.8     Duke Energy Corporation Executive Cash Balance Plan
                           (Filed as Exhibit 10.8 to the Partnership's Form 10-K
                           (Commission File No. 1-10403) for the year ended
                           December 31, 1999 and incorporated herein by
                           reference).

                  10.9     Duke Energy Corporation Retirement Benefit
                           Equalization Plan (Filed as Exhibit 10.9 to the
                           Partnership's Form 10-K (Commission File No. 1-10403)
                           for the year ended December 31, 1999 and incorporated
                           herein by reference).

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

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

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

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


                                       22

<PAGE>   23
                  10.14    Credit Agreement between TEPPCO Colorado, LLC,
                           SunTrust Bank, Atlanta, and Certain Lenders, dated
                           April 21, 1998 (Filed as Exhibit 10.15 to Form 10-Q
                           of TEPPCO Partners, L.P. (Commission File No.
                           1-10403) for the quarter ended March 31, 1998 and
                           incorporated herein by reference).

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

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

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

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

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

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

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

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

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

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

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

                  10.26    Second Amendment to Credit Agreement between TEPPCO
                           Colorado, LLC, SunTrust Bank, Atlanta, and Certain
                           Lenders, effective May 17, 1999 (Filed as Exhibit
                           10.28 to

                                       23
<PAGE>   24

                           Form 10-Q of TEPPCO Partners, L.P. (Commission File
                           No. 1-10403) for the quarter ended June 30, 1999 and
                           incorporated herein by reference).

                  10.27    Form of Employment and Non-Compete Agreement between
                           the Company and Samuel N. Brown, J. Michael Cockrell,
                           William S. Dickey, and Sharon S. Stratton effective
                           January 1, 1999 (Filed as Exhibit 10.29 to Form 10-Q
                           of TEPPCO Partners, L.P. (Commission File No.
                           1-10403) for the quarter ended September 30, 1999 and
                           incorporated herein by reference).

                  10.28    Texas Eastern Products Pipeline Company Non-employee
                           Directors Unit Accumulation Plan, effective April 1,
                           1999 (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO
                           Partners, L.P. (Commission File No. 1-10403) for the
                           quarter ended September 30, 1999 and incorporated
                           herein by reference).

                  10.29    Texas Eastern Products Pipeline Company Non-employee
                           Directors Deferred Compensation Plan, effective
                           November 1, 1999 (Filed as Exhibit 10.31 to Form 10-Q
                           of TEPPCO Partners, L.P. (Commission File No.
                           1-10403) for the quarter ended September 30, 1999 and
                           incorporated herein by reference).

                  10.30    Texas Eastern Products Pipeline Company Phantom Unit
                           Retention Plan, effective August 25, 1999 (Filed as
                           Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P.
                           (Commission File No. 1-10403) for the quarter ended
                           September 30, 1999 and incorporated herein by
                           reference).

                  *10.31   Credit Agreement between TEPPCO Partners, L.P.,
                           SunTrust Bank, and Certain Lenders, dated July 14,
                           2000.

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

                  *27      Financial Data Schedule as of and for the six months
                           ended June 30, 2000.

                    *  Filed herewith.

         (b)      Reports on Form 8-K filed during the quarter ended June 30,
                  2000: None.

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


                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrants have duly caused this report to be signed on its behalf by the
undersigned duly authorized officer and principal financial officer.

                                TEPPCO Partners, L.P.
                                (Registrant)

                                By: Texas Eastern Products Pipeline Company, LLC
                                    General Partner

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

Date:  August 10, 2000


                                       24



<PAGE>   25


                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
                  Exhibit
                  Number                    Description
                  ------                    -----------
<S>                        <C>
                  2.1      Amended and Restated Purchase Agreement By and
                           Between Atlantic Richfield Company and Texas Eastern
                           Products Pipeline Company With Respect to the Sale of
                           ARCO Pipeline Company, dated as of May 10, 2000.

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

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

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

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

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

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

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


<PAGE>   26
EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)

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

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

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

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

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

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

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

                  10.7     Duke Energy Corporation Executive Savings Plan (Filed
                           as Exhibit 10.7 to the Partnership's Form 10-K
                           (Commission File No. 1-10403) for the year ended
                           December 31, 1999 and incorporated herein by
                           reference).

                  10.8     Duke Energy Corporation Executive Cash Balance Plan
                           (Filed as Exhibit 10.8 to the Partnership's Form 10-K
                           (Commission File No. 1-10403) for the year ended
                           December 31, 1999 and incorporated herein by
                           reference).

                  10.9     Duke Energy Corporation Retirement Benefit
                           Equalization Plan (Filed as Exhibit 10.9 to the
                           Partnership's Form 10-K (Commission File No. 1-10403)
                           for the year ended December 31, 1999 and incorporated
                           herein by reference).

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

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

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

                  10.13    Asset Purchase Agreement between Duke Energy Field
                           Services, Inc. and TEPPCO Colorado, LLC, dated March
                           31, 1998 (Filed as Exhibit 10.14 to Form 10-Q of
                           TEPPCO Partners, L.P. (Commission File No. 1-10403)
                           for the quarter ended March 31, 1998 and incorporated
                           herein by reference).
</TABLE>
<PAGE>   27
<TABLE>
<S>                       <C>
                  10.14    Credit Agreement between TEPPCO Colorado, LLC,
                           SunTrust Bank, Atlanta, and Certain Lenders, dated
                           April 21, 1998 (Filed as Exhibit 10.15 to Form 10-Q
                           of TEPPCO Partners, L.P. (Commission File No.
                           1-10403) for the quarter ended March 31, 1998 and
                           incorporated herein by reference).

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

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

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

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

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

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

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

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

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

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

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

                  10.26    Second Amendment to Credit Agreement between TEPPCO
                           Colorado, LLC, SunTrust Bank, Atlanta, and Certain
                           Lenders, effective May 17, 1999 (Filed as Exhibit
                           10.28 to
</TABLE>
<PAGE>   28


<TABLE>
<S>                       <C>
                           Form 10-Q of TEPPCO Partners, L.P. (Commission File
                           No. 1-10403) for the quarter ended June 30, 1999 and
                           incorporated herein by reference).

                  10.27    Form of Employment and Non-Compete Agreement between
                           the Company and Samuel N. Brown, J. Michael Cockrell,
                           William S. Dickey, and Sharon S. Stratton effective
                           January 1, 1999 (Filed as Exhibit 10.29 to Form 10-Q
                           of TEPPCO Partners, L.P. (Commission File No.
                           1-10403) for the quarter ended September 30, 1999 and
                           incorporated herein by reference).

                  10.28    Texas Eastern Products Pipeline Company Non-employee
                           Directors Unit Accumulation Plan, effective April 1,
                           1999 (Filed as Exhibit 10.30 to Form 10-Q of TEPPCO
                           Partners, L.P. (Commission File No. 1-10403) for the
                           quarter ended September 30, 1999 and incorporated
                           herein by reference).

                  10.29    Texas Eastern Products Pipeline Company Non-employee
                           Directors Deferred Compensation Plan, effective
                           November 1, 1999 (Filed as Exhibit 10.31 to Form 10-Q
                           of TEPPCO Partners, L.P. (Commission File No.
                           1-10403) for the quarter ended September 30, 1999 and
                           incorporated herein by reference).

                  10.30    Texas Eastern Products Pipeline Company Phantom Unit
                           Retention Plan, effective August 25, 1999 (Filed as
                           Exhibit 10.32 to Form 10-Q of TEPPCO Partners, L.P.
                           (Commission File No. 1-10403) for the quarter ended
                           September 30, 1999 and incorporated herein by
                           reference).

                  *10.31   Credit Agreement between TEPPCO Partners, L.P.,
                           SunTrust Bank, and Certain Lenders, dated July 14,
                           2000.

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

                  *27      Financial Data Schedule as of and for the six months
                           ended June 30, 2000.
</TABLE>


                ----------

                    *  Filed herewith.