<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, 1999


                           COMMISSION FILE NO. 1-13603

                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         DELAWARE                                              76-0329620
 (STATE OF INCORPORATION                                    (I.R.S. EMPLOYER
     OR ORGANIZATION)                                    IDENTIFICATION NUMBER)

                               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

                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               JUNE 30,    DECEMBER 31,
                                                                 1999         1998
                                                               --------    ------------
                                                              (UNAUDITED)
<S>                                                            <C>          <C>

                                     ASSETS
Current assets:
  Cash and cash equivalents ..............................     $ 42,861     $ 36,723
  Short-term investments .................................        3,909        3,269
  Accounts receivable, trade .............................       16,930       17,740
  Inventories ............................................       11,232       13,392
  Other ..................................................        1,608        1,509
                                                               --------     --------
    Total current assets .................................       76,540       72,633
                                                               --------     --------
Property, plant and equipment, at cost (Net of
  accumulated depreciation and amortization of
  $204,104 and $192,960) .................................      593,547      567,566
Investments ..............................................        4,246        6,490
Intangible assets ........................................       35,884       36,842
Advances to limited partner ..............................        2,358        1,989
Other assets .............................................       11,303       10,966
                                                               --------     --------
    Total assets .........................................     $723,878     $696,486
                                                               ========     ========

                        LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
  Accounts payable and accrued liabilities ...............     $  6,740     $  8,513
  Accounts payable, general partner ......................        3,349        2,815
  Accrued interest .......................................       13,226       13,039
  Other accrued taxes ....................................        5,908        5,878
  Other ..................................................        6,994        6,974
                                                               --------     --------
    Total current liabilities ............................       36,217       37,219
                                                               --------     --------
Senior Notes .............................................      398,737      389,722
Other long-term debt .....................................       63,000       38,000
Other liabilities and deferred credits ...................        3,352        3,407
Partners' capital:
  General partner's interest .............................        2,343        2,306
  Limited partner's interests ............................      229,229      225,832
                                                               --------     --------
    Total partners' capital ..............................      231,572      228,138
                                                               --------     --------
    Total liabilities and partners' capital ..............     $723,878     $696,486
                                                               ========     ========
</TABLE>


          See accompanying Notes to Consolidated Financial Statements.



                                       2
<PAGE>   3

                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                      THREE MONTHS   THREE MONTHS    SIX MONTHS     SIX MONTHS
                                                         ENDED          ENDED          ENDED          ENDED
                                                        JUNE 30,       JUNE 30,       JUNE 30,       JUNE 30,
                                                         1999           1998            1999          1998
                                                      ------------   ------------    ----------     ----------
<S>                                                    <C>            <C>            <C>            <C>
Operating revenues:
  Transportation - Refined products ..............     $  33,353      $  32,755      $  58,949      $  55,217
  Transportation - LPGs ..........................        10,094          9,762         36,689         31,577
  Mont Belvieu operations ........................         3,358          2,418          6,255          5,088
  Other- net .....................................         7,420          6,625         13,482          9,883
                                                       ---------      ---------      ---------      ---------
     Total operating revenues ....................        54,225         51,560        115,375        101,765
                                                       ---------      ---------      ---------      ---------

Costs and expenses:
  Operating, general and administrative ..........        18,599         16,972         35,720         32,816
  Operating fuel and power .......................         7,771          6,575         14,330         12,765
  Depreciation and amortization ..................         6,770          6,625         13,533         12,705
  Taxes - other than income taxes ................         2,484          2,459          4,993          5,036
                                                       ---------      ---------      ---------      ---------
     Total costs and expenses ....................        35,624         32,631         68,576         63,322
                                                       ---------      ---------      ---------      ---------

     Operating income ............................        18,601         18,929         46,799         38,443

Interest expense .................................        (7,764)        (7,521)       (15,300)       (14,677)
Interest costs capitalized .......................           347            233            489            517
Other income - net ...............................           505          1,033            907          1,680
                                                       ---------      ---------      ---------      ---------
     Income before extraordinary loss on debt
      extinguishment .............................        11,689         12,674         32,895         25,963
                                                       ---------      ---------      ---------      ---------

  Extraordinary loss on debt extinguishment ......            --             --             --        (73,509)
                                                       ---------      ---------      ---------      ---------

     Net income (loss) ...........................     $  11,689      $  12,674      $  32,895      $ (47,546)
                                                       =========      =========      =========      =========
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.





                                       3
<PAGE>   4



                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

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

<TABLE>
<CAPTION>
                                                                                SIX MONTHS     SIX MONTHS
                                                                                  ENDED          ENDED
                                                                                 JUNE 30,       JUNE 30,
                                                                                  1999           1998
                                                                                ---------      ---------
<S>                                                                             <C>            <C>
Cash flows from operating activities:
  Net income (loss) .......................................................     $  32,895      $ (47,546)
  Adjustments to reconcile net income (loss) to cash provided by
   operating activities:
    Depreciation and amortization .........................................        13,533         12,705
    Extraordinary loss on early extinguishment of debt ....................            --         73,509
    Equity in loss of affiliate ...........................................            74             94
    Gain on sale of property, plant and equipment .........................            --           (356)
    Decrease in accounts receivable, trade ................................           810          5,993
    Decrease (increase) inventories .......................................         2,160         (1,052)
    Decrease (increase) in other current assets ...........................           (99)           984
    Decrease in accounts payable and accrued expenses .....................        (1,002)          (874)
    Other .................................................................          (797)          (781)
                                                                                ---------      ---------
        Net cash provided by operating activities .........................        47,574         42,676
                                                                                ---------      ---------

Cash flows from investing activities:
  Proceeds from cash investments ..........................................         3,840          2,105
  Purchases of cash investments ...........................................        (2,235)            --
  Purchase of fractionator assets and related intangible assets ...........            --        (40,000)
  Proceeds from the sale of property, plant and equipment .................            --            525
  Capital expenditures ....................................................       (38,318)        (9,530)
                                                                                ---------      ---------
        Net cash used in investing activities .............................       (36,713)       (46,900)
                                                                                ---------      ---------

Cash flows from financing activities:
  Principal payment, First Mortgage Notes .................................            --       (326,512)
  Prepayment premium, First Mortgage Notes ................................            --        (70,093)
  Issuance of Senior Notes ................................................            --        389,694
  Debt issuance costs, Senior Notes .......................................            --         (3,651)
  Proceeds from term loan .................................................        25,000         38,000
  Advances to limited partner .............................................          (369)            --
  Distributions ...........................................................       (29,354)       (27,420)
                                                                                ---------      ---------
        Net cash provided by (used in) financing activities ...............        (4,723)            18
                                                                                ---------      ---------

Net increase (decrease) in cash and cash equivalents ......................         6,138         (4,206)

Cash and cash equivalents at beginning of period ..........................        36,723         43,961
                                                                                ---------      ---------
Cash and cash equivalents at end of period ................................     $  42,861      $  39,755
                                                                                =========      =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Interest paid during the period (net of capitalized interest) .............        14,455      $  12,292
                                                                                =========      =========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.



                                       4
<PAGE>   5


                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1.  ORGANIZATION AND BASIS OF PRESENTATION

         TE Products Pipeline Company, Limited Partnership (the "Partnership"),
a Delaware limited partnership, was formed in March 1990. TEPPCO Partners, L.P.
(the "Parent Partnership") owns a 98.9899% interest as the sole limited partner
interest and Texas Eastern Products Pipeline Company (the "Company" or "General
Partner"), an indirect wholly-owned subsidiary of Duke Energy Corporation ("Duke
Energy"), owns a 1.0101% general partner interest in the Partnership. The
Company, as general partner, performs all management and operating functions
required for the Partnership pursuant to the Agreement of Limited Partnership of
TE Products Pipeline Company, Limited Partnership (the "Partnership Agreement").
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, 1999, and the results of operations and cash
flows for the periods presented. The results of operations for the six months
ended June 30, 1999, are not necessarily indicative of results of operations for
the full year 1999. The interim financial statements should be read in
conjunction with the Partnership's consolidated financial statements and notes
thereto presented in the TE Products Pipeline Company, Limited Partnership
Annual Report on Form 10-K for the year ended December 31, 1998. Certain amounts
from the prior year have been reclassified to conform to current presentation.

         The Partnership has one business segment: the transportation, storage
and terminaling of refined products and liquefied petroleum gases ("LPGs"). 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 and LPGs are referred to
herein, collectively, as "petroleum products" or "products."

NOTE 2. RELATED PARTY TRANSACTIONS

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

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, 1999,
short-term investments included $3.9 million of investment-grade corporate
notes, which mature within one year. Such investments at June 30, 1999 included
a $0.9 million investment in Duke Power Company corporate notes. All short-term
investments are classified as held-to-maturity securities and are stated at
amortized cost. The aggregate fair value of such securities approximates
amortized cost at June 30, 1999.


                                       5
<PAGE>   6


                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

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

LONG-TERM INVESTMENTS

         At June 30, 1999, the Partnership had $4.2 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, 1999.

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,
                                              1999        1998
                                             -------   -----------
<S>                                          <C>         <C>
Gasolines ..............................     $ 1,677     $ 4,224
Propane ................................         655       1,503
Butanes ................................       2,333       1,654
Fuel oil ...............................         579         564
Other products .........................       2,110       1,781
Materials and supplies .................       3,878       3,666
                                             -------     -------
          Total ........................     $11,232     $13,392
                                             =======     =======
</TABLE>


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

NOTE 5.  LONG TERM DEBT

SENIOR NOTES

         On January 27, 1998, the Partnership 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 Partnership, in whole or in part,
at a premium. Net proceeds from the issuance of the Senior Notes totaled
approximately $386 million and was used to repay in full the $61.0 million
principal amount of the 9.60% Series A First Mortgage Notes, due 2000, and the
$265.5 million principal amount 10.20% Series B First Mortgage Notes, due 2010.
The premium for the early redemption of the First Mortgage Notes totaled $70.1
million. The Partnership recorded an extraordinary charge of $73.5 million
during the first quarter of 1998, which represents the redemption premium of
$70.1 million and unamortized debt issue costs related to the First Mortgage
Notes of $3.4 million.

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


                                       6
<PAGE>   7

                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

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


OTHER LONG TERM DEBT

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

         On May 17, 1999, the Partnership entered into a $75 million term loan
agreement to finance construction of three new pipelines between the
Partnership's terminal in Mont Belvieu, Texas and Port Arthur, Texas. The term
loan agreement has a term of five years. SunTrust Bank is the administrator of
the loan. Approximately $28.0 million of construction cost was included in
capital expenditures during the first six months of 1999, with a total of
approximately $44.5 million expected to be incurred in 1999, and the remainder
in 2000. At June 30, 1999, $25 million has been borrowed under the term loan
agreement. Principal will be paid quarterly as follows, with the remaining
principal balance payable on May 17, 2004.

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

         The interest rate for the $75 million term loan is based on the
Partnership's option of either SunTrust Bank's prime rate, the federal funds
rate or LIBOR rate in effect at the time of the borrowings and is adjusted
monthly, bimonthly, quarterly or semi-annually. Interest is payable quarterly
from the time of borrowing. The current interest rate for amounts outstanding
under the term loan is 6.33%. Commitment fees for the term loan totaled
approximately $15,000 for the quarter ended June 30, 1999.

WORKING CAPITAL FACILITIES

         On May 17, 1999, the Partnership entered into a five-year $25 million
revolving credit agreement. SunTrust Bank is the administrative agent on the
revolving credit agreement. The interest rate is based on the Partnership's
option of either SunTrust Bank's prime rate, the federal funds rate or LIBOR
rate in effect at the time of the borrowings and is payable quarterly. Interest
rates are adjusted monthly, bimonthly, quarterly or semi-annually. The
Partnership has not made any borrowings under this revolving credit facility.
Commitment fees for the revolving credit agreement totaled approximately $7,500
for the quarter ended June 30, 1999.

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. Generally, distributions are made 98.9899% to
the Parent Partnership and 1.0101% to the general partner.

         On May 7, 1999, the Partnership paid a cash distribution of $14.7
million for the first quarter of 1999. Additionally, on July 19, 1999, the
Partnership declared a cash distribution of $16.1 million for the quarter ended
June 30, 1999. The distribution increase reflects increased income and cash
flows generated by the Partnership's operations. The second quarter distribution
was paid on August 6, 1999.



                                       7
<PAGE>   8

                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

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

NOTE 7. COMMITMENTS AND CONTINGENCIES

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

         The operations of the Partnership are subject to federal, state and
local laws and regulations relating to protection of the environment. Although
the Partnership believes 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 will issue a Record of Decision
formally approving the remediation program. After the Record of Decision has
been issued, the Partnership will enter into an Agreed Order for the continued
operation and maintenance of the program. The Partnership will evaluate the
conditions of the Record of Decision and make adjustments to the program as
required. The amount accrued for the program was approximately $0.5 million at
June 30, 1999. In the opinion of the Company, the completion of the remediation
program being proposed by the Partnership, if such program is approved by IDEM,
will not have a material adverse impact on the Partnership's financial
condition, results of operations or liquidity.

         In 1997, the Company initiated a program to prepare the Partnership's
process controls and business computer systems for the "Year 2000" issue.
Process controls are the automated equipment including hardware and software
systems which run operational activities. Business computer systems are the
computer hardware and software used by the Partnership. The Partnership is
utilizing both internal and external resources to identify, test, remediate or
replace all critical known or discovered non-compliant computerized systems and
applications. The Company continues to evaluate appropriate courses of
corrective action, including replacement of certain systems whose associated
costs would be recorded as assets and amortized. The Partnership has incurred
approximately $2.8 million of costs related to the Year 2000 issue. The Company
estimates the remaining amounts required to address the Year 2000 issue will be
as much as approximately $2.4 million. A portion of such costs would have been
incurred as part of normal system and application upgrades. In certain cases,
the timing of expenditures has been accelerated due to the Year 2000 issue.
Although the Company believes this estimate to be reasonable, due to the
complexities of the Year 2000 issue, there can be no assurance that the actual
costs related to the Year 2000 issue will not be significantly greater.

         The Partnership has adopted a three-phase Year 2000 program consisting
of: Phase I - Preliminary Assessment; Phase II - Detailed Assessment and
Remediation Planning; and Phase III - Remediation Activities and Testing. The
Partnership has completed Phase I; Phase II is 99% complete; and Phase III is
84% complete. The Remediation Activities and Testing of all process controls and
business computer systems are scheduled to be completed by mid-fourth quarter of
1999.



                                       8
<PAGE>   9

                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

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


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

         Despite the Partnership's determined efforts to address and remediate
its Year 2000 issue, there can be no assurance that all process controls and
business computer systems will continue without interruption through January 1,
2000, and beyond. The complexity of identifying and testing all embedded
microprocessors that are installed in hardware throughout the pipeline system
used for process or flow control, transportation, security, communication and
other systems may result in unforeseen operational system shutdowns. Although
the amount of potential liability and lost revenue cannot be estimated, failures
that result in substantial disruptions of business activities could have a
material adverse effect on the Partnership. In order to mitigate potential
disruptions, the Partnership will prepare contingency plans for its critical
systems, processes and external relationships by mid-fourth quarter of 1999.

         Substantially all of the petroleum products transported and stored by
the Partnership are owned by the Partnership's customers. At June 30, 1999, the
Partnership had approximately 15.1 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.




                                       9
<PAGE>   10

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


GENERAL

         The Partnership's operations consist primarily of the transportation,
storage and terminaling of petroleum products. 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 Partnership's revenues are derived primarily 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 Partnership. Effective March 31,
1998, the Partnership's operations included the fractionation of natural gas
liquids (see Note 2 in Item 1. Related Party Transactions).

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

RESULTS OF OPERATIONS

         Net income for the quarter ended June 30, 1999 was $11.7 million,
compared with net income of $12.7 million for the 1998 second quarter. The
decrease in net income resulted primarily from a $3.0 million increase in costs
and expenses and a $0.5 million decrease in other income - net, partially offset
by a $2.7 million increase in operating revenues.

         For the six months ended June 30, 1999, the Partnership reported net
income of $32.9 million, compared with a net loss of $47.5 million for the first
six months of 1998. The net loss in 1998 included an extraordinary charge of
$73.5 million for early extinguishment of debt. Excluding the extraordinary
loss, net income would have been $26.0 million for the first six months of 1998.
The $6.9 million increase in income before loss on debt extinguishment resulted
primarily from a $13.6 million increase in operating revenues, partially offset
by a $5.3 million increase in costs and expenses, a $0.6 million increase in
interest expense and a $0.8 million decrease in other income - net. See
discussion below of factors affecting net income for the comparative periods.

         See volume and average tariff information below:

<TABLE>
<CAPTION>
                                          QUARTER ENDED                          SIX MONTHS ENDED
                                             JUNE 30,          PERCENTAGE            JUNE 30,          PERCENTAGE
                                    -------------------------   INCREASE    -------------------------   INCREASE
                                       1999           1998     (DECREASE)      1999           1998     (DECREASE)
                                    ----------     ----------  ----------   ----------     ----------  ----------
<S>                                 <C>            <C>         <C>           <C>            <C>         <C>
VOLUMES DELIVERED
(in thousands of barrels)
      Refined products                  35,818         35,183       2%          63,973         59,694       7%
      LPGs                               6,367          5,660      12%          19,539         15,811      24%
      Mont Belvieu operations            5,882          5,518       7%          12,767         11,462      11%
                                    ----------     ----------     ---       ----------     ----------    ----
          Total                         48,067         46,361       4%          96,279         86,967      11%
                                    ==========     ==========    ====       ==========     ==========    ====

AVERAGE TARIFF PER BARREL
      Refined products              $     0.93     $     0.93      --       $     0.92     $     0.93      (1%)
      LPGs                                1.59           1.72      (8%)           1.88           2.00      (6%)
      Mont Belvieu operations             0.15           0.15      --             0.16           0.16      --
          Average system tariff
            per barrel              $     0.92     $     0.94      (2%)     $     1.01     $     1.02      (1%)
                                    ==========     ==========    ====       ==========     ==========    ====
</TABLE>




                                       10
<PAGE>   11



RESULTS OF OPERATIONS - (CONTINUED)


         Refined products transportation revenues increased $0.6 million for the
quarter ended June 30, 1999, compared with the prior-year quarter, due to a 2%
increase in total refined products volumes delivered. Deliveries of jet fuel and
distillates in the Indianapolis, Chicago and Ohio markets served by the
Partnership increased as a result of strong demand and favorable price
differentials. Partially offsetting these increases were lower deliveries of
motor fuel as a result of reduced refinery production received into the
Ark-La-Tex system and decreased gasoline blending demand for methyl tertiary
butyl ether ("MTBE").

         LPGs transportation revenues increased $0.3 million for the quarter
ended June 30, 1999, compared with the second quarter of 1998, due primarily to
increased feed stock deliveries of isobutane to a Midwest refinery that was on a
turnaround during the second quarter of 1998 and increased propane demand from
petrochemical facilities along the upper Texas Gulf Coast and in the Midwest
market areas. These increases were partially offset by lower propane demand in
the Northeast due to unfavorable price differentials. The decrease in the
average tariff per barrel resulted from the increased percentage of short-haul
deliveries in the Midwest and Gulf Coast market areas in 1999.

         For the six months ended June 30, 1999, refined products transportation
revenues increased $3.7 million, or 7%, compared with the corresponding period
in 1998. Lower refinery production and strong economic demand for motor fuel,
distillates and jet fuel resulted in increased volumes delivered in the Midwest
market areas. Offsetting these increases was decreased demand for gasoline blend
stocks, primarily MTBE, and gasoline feed stocks, primarily natural gasoline.
Additionally, jet fuel deliveries increased as a result of new military supply
agreements that became effective in the fourth quarter of 1998.

         LPGs transportation revenues increased $5.1 million, or 16%, during the
six months ended June 30, 1999, compared with the same period in 1998, due to a
24% increase in volumes delivered, partially offset by a 6% decrease in the
average tariff per barrel. Propane deliveries in the Northeast and upper Midwest
increased from higher weather-related demand in the first quarter of 1999.
Additionally, increased petrochemical demand throughout the first and second
quarters resulted in increased propane deliveries along the upper Texas Gulf
Coast and the Midwest market areas. The 6% decrease in the average tariff per
barrel resulted from the increased percentage of short-haul deliveries in the
Midwest and Gulf Coast market areas in 1999.

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

         Other operating revenues increased $0.8 million during the second
quarter of 1999, as compared with the second quarter of 1998, due primarily to a
$1.2 million increase in gains on the sale of product inventory attributable to
favorable market prices, partially offset by lower refined products rental
revenue and lower amounts of butane received for summer storage.

         During the six months ended June 30, 1999, other operating revenues
increased $3.6 million, as compared to the same period in 1998, due primarily to
a $1.8 million increase in operating revenues from the fractionator facilities
acquired on March 31, 1998, a $1.1 million increase due to higher product
inventory volumes sold and a $0.3 million increase due to higher propane imports
received at the marine terminal at Providence, Rhode Island.

         Costs and expenses increased $3.0 million for the quarter ended June
30, 1999, compared with the second quarter of 1998, primarily due to a $1.6
million increase in operating, general and administrative expenses and a $1.2
million increase in operating fuel and power expense. The increase in operating,
general and administrative expenses was primarily attributable to a $0.6 million
increase in expenses associated with Year 2000 activities, a $0.5 million
increase in rental fees from higher volume through the connection from Colonial
Pipeline at Beaumont, increased operating supplies and expenses and insurance
reimbursement of past litigation costs related to the Partnership's Seymour,
Indiana, terminal received in June 1998. These increases were partially offset
by the $0.5 million of expense to write down the book-value of product inventory
to market-value at June 30, 1998. The



                                       11
<PAGE>   12

RESULTS OF OPERATIONS - (CONTINUED)

increase in operating fuel and power expense reflects the increased refined
products and LPGs volumes delivered in the second quarter of 1999, compared to
the prior year second quarter.

         Costs and expenses increased $5.3 million for the six-months ended June
30, 1999, compared with the same period in 1998, due to a $2.9 million increase
in operating, general and administrative expenses, a $1.6 million volume-related
increase in operating fuel and power expense and a $0.8 million increase in
depreciation and amortization expense. The increase in operating, general and
administrative expenses was primarily attributable to a $1.1 million increase in
expenses associated with Year 2000 activities, a $0.9 million increase in rental
fees from higher volume through the connection from Colonial Pipeline at
Beaumont, increased product measurement losses, higher labor costs in 1999, six
months of fractionation fees in 1999 related to the facilities acquired on March
31, 1998 and the factors occurring in the second quarter noted previously.
Depreciation and amortization expense increased as a result of the completion of
capital projects, coupled with six-months of expense in 1999 for amortization of
the value assigned to the Fractionation Agreement.

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

         Interest expense increased during the six-months ended June 30, 1999,
compared with the prior year period, due primarily to six months of interest
expense in 1999 on the $38 million term-loan used to finance the purchase of the
fractionation assets on March 31, 1998.

FINANCIAL CONDITION AND LIQUIDITY

         Net cash from operations for the six-month period ended June 30, 1999,
totaled $47.6 million, comprised of $46.4 million of income before charges for
depreciation and amortization and $1.2 million provided by working capital
changes. This compares with cash flows from operations of $42.7 million for the
corresponding period in 1998, comprised of $38.7 million of income before
extraordinary loss on early extinguishment of debt and charges for depreciation
and amortization and $4.0 million provided by working capital changes. The
decrease in cash provided by working capital changes during the six month period
ended June 30, 1999, as compared with the same period in 1998, resulted
primarily from higher trade receivable balances existing at June 30, 1999. Net
cash from operations for the six months ended June 30, 1999 included interest
payments related to the Senior Notes and the term loan of $14.9 million. Net
cash from operations for the six months ended June 30, 1998 included interest
payments related to the First Mortgage Notes of $12.8 million paid on January
27, 1998 in connection with repayment of the outstanding balance of the First
Mortgage Notes.

         Cash flows used in investing activities during the first six months of
1999 included $38.3 million of capital expenditures and $2.2 million of
additional cash investments. These decreases of cash were offset by $3.8 million
from investment maturities. Cash flows used in investing activities during the
first six months of 1998 included $40.0 million for the purchase price of the
fractionation assets and related intangible assets and $9.5 million of capital
expenditures, partially offset by $2.1 million from investment maturities and
$0.5 million received from the sale of non-carrier assets.

         In February 1999, the Partnership announced plans to construct three
new pipelines between the Partnership's terminal in Mont Belvieu, Texas and Port
Arthur, Texas. The project includes three 12-inch diameter common-carrier
pipelines and associated facilities. Each pipeline will be approximately 70
miles in length. Upon completion, the new pipelines will transport ethylene,
propylene and natural gasoline. The anticipated completion date is the fourth
quarter of 2000. The Partnership has entered into an agreement for turnkey
construction of the pipelines and related facilities and has separately entered
into agreements for guaranteed throughput commitments. The cost of this project
is expected to total approximately $74.5 million. Approximately $28.0 million of



                                       12
<PAGE>   13



FINANCIAL CONDITION AND LIQUIDITY - (CONTINUED)

construction cost was included in capital expenditures during the six month
period ended June 30, 1999, with a total of approximately $44.5 million expected
to be incurred in 1999, and the remainder in 2000.

         Exclusive of the pipeline construction between Mont Belvieu and Port
Arthur, the Partnership estimates that capital expenditures for 1999 will total
approximately $22 million. Approximately $20 million of planned expenditures are
expected to be used for life-cycle replacements and to upgrade current
facilities, with the remaining $2 million expected to be used for
revenue-generating projects. The Partnership revises capital spending estimates
periodically in response to changes in cash flows and operations.

         On January 27, 1998, the Partnership 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 Partnership, in whole or in part,
at a premium. Net proceeds from the issuance of the Senior Notes totaled
approximately $386 million and was used to repay in full the $61.0 million
principal amount of the 9.60% Series A First Mortgage Notes, due 2000, and the
$265.5 million principal amount of the 10.20% Series B First Mortgage Notes, due
2010. The premium for the early redemption of the First Mortgage Notes totaled
$70.1 million. The repayment of the First Mortgage Notes and the issuance of the
Senior Notes reduced the level of cash required for debt service until 2008. The
Partnership recorded an extraordinary charge of $73.5 million during the first
quarter of 1998, which represents the redemption premium of $70.1 million and
unamortized debt issue costs related to the First Mortgage Notes of $3.4
million.

         The Senior Notes do not have sinking fund requirements. Interest on the
Senior Notes is payable semiannually in arrears on January 15 and July 15 of
each year, commencing July 15, 1998. The Senior Notes are unsecured obligations
of the Partnership and rank on a parity with all other unsecured and
unsubordinated indebtedness of the Partnership. The indenture governing the
Senior Notes contains covenants, including, but not limited to, covenants
limiting (i) the creation of liens securing indebtedness and (ii) sale and
leaseback transactions. However, the indenture does not limit the Partnership's
ability to incur additional indebtedness.

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

         On May 17, 1999, the Partnership entered into a $75 million term loan
agreement to finance construction of three new pipelines between the
Partnership's terminal in Mont Belvieu, Texas and Port Arthur, Texas. The loan
agreement has a term of five years. SunTrust Bank is the administrator of the
loan. At June 30, 1999, $25 million has been borrowed under the term loan
agreement. Principal will be paid quarterly beginning in 2001. The interest rate
for the $75 million term loan is based on the Partnership's option of either
SunTrust Bank's prime rate, the federal funds rate or LIBOR rate in effect at
the time of the borrowings and is adjusted monthly, bimonthly, quarterly or
semi-annually. Interest is payable quarterly from the time of borrowing. The
current interest rate for amounts outstanding under the term loan is 6.33%.
Commitment fees for the term loan agreement totaled approximately $15,000 for
the quarter ended June 30, 1999.

         On May 17, 1999, the Partnership entered into a five-year $25 million
revolving credit agreement. SunTrust Bank is the administrative agent on the
revolving credit agreement. The interest rate is based on the Partnership's
option of either SunTrust Bank's prime rate, the federal funds rate or LIBOR
rate in effect at the time of the borrowings and is payable quarterly. Interest
rates are adjusted monthly, bimonthly, quarterly or semi-annually. The
Partnership has not borrowed any amounts under the revolving credit facility.
Commitment fees for the revolving credit agreement totaled approximately $7,500
for the quarter ended June 30, 1999.



                                       13
<PAGE>   14

FINANCIAL CONDITION AND LIQUIDITY - (CONTINUED)

         The Partnership paid cash distributions of $29.4 million during the six
months ended June 30, 1999. Additionally, on July 19, 1999, the Partnership
declared a cash distribution of $16.1 million for the quarter ended June 30,
1999. The second quarter distribution represents a $5.8 million increase in the
annual distribution. The second quarter cash distribution was paid on August 6,
1999.

OTHER MATTERS

     Environmental

         The operations of the Partnership are subject to federal, state and
local laws and regulations relating to protection of the environment. Although
the Partnership believes the operations of the Pipeline System are in material
compliance with applicable environmental regulations, risks of significant costs
and liabilities are inherent in pipeline operations, and there can be no
assurance that significant costs and liabilities will not be incurred. Moreover,
it is possible that other developments, such as increasingly strict
environmental laws and regulations and enforcement policies thereunder, and
claims for damages to property or persons resulting from the operations of the
Pipeline System, could result in substantial costs and liabilities to the
Partnership. The Partnership does not 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 will issue a Record of Decision
formally approving the remediation program. After the Record of Decision has
been issued, the Partnership will enter into an Agreed Order for the continued
operation and maintenance of the program. The Partnership will evaluate the
conditions of the Record of Decision and make adjustments to the program as
required. The amount accrued for the program was approximately $0.5 million at
June 30, 1999. In the opinion of the Company, the completion of the remediation
program being proposed by the Partnership, if such program is approved by IDEM,
will not have a material adverse impact on the Partnership's financial
condition, results of operations or liquidity.

     Year 2000 Issues

         In 1997, the Company initiated a program to prepare the Partnership's
process controls and business computer systems for the "Year 2000" issue.
Process controls are the automated equipment including hardware and software
systems which run operational activities. Business computer systems are the
computer hardware and software used by the Partnership. The Partnership is
utilizing both internal and external resources to identify, test, remediate or
replace all critical known or discovered non-compliant computerized systems and
applications. The Company continues to evaluate appropriate courses of
corrective action, including replacement of certain systems whose associated
costs would be recorded as assets and amortized. The Partnership has incurred
approximately $2.8 million of costs related to the Year 2000 issue. The Company
estimates the remaining amounts required to address the Year 2000 issue will be
as much as approximately $2.4 million. A portion of such costs would have been
incurred as part of normal system and application upgrades. In certain cases,
the timing of expenditures has been accelerated due to the Year 2000 issue.
Although the Company believes this estimate to be reasonable, due to the
complexities of the Year 2000 issue, there can be no assurance that the actual
costs related to the Year 2000 issue will not be significantly greater.

         The Partnership has adopted a three-phase Year 2000 program consisting
of: Phase I - Preliminary Assessment; Phase II - Detailed Assessment and
Remediation Planning; and Phase III - Remediation Activities and Testing. The
Partnership has completed Phase I; Phase II is 99% complete; and Phase III is
84% complete. The



                                       14
<PAGE>   15


OTHER MATTERS - (CONTINUED)


Remediation Activities and Testing of all process controls and business computer
systems are scheduled to be completed mid-fourth quarter of 1999.

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

         Despite the Partnership's determined efforts to address and remediate
its Year 2000 issue, there can be no assurance that all process controls and
business computer systems will continue without interruption through January 1,
2000, and beyond. The complexity of identifying and testing all embedded
microprocessors that are installed in hardware throughout the pipeline system
used for process or flow control, transportation, security, communication and
other systems may result in unforeseen operational system shutdowns. Although
the amount of potential liability and lost revenue cannot be estimated, failures
that result in substantial disruptions of business activities could have a
material adverse effect on the Partnership. In order to mitigate potential
disruptions, the Partnership will prepare contingency plans for its critical
systems, processes and external relationships by mid-fourth quarter of 1999.

      Market and Regulatory Environment


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

         Rates of interstate oil pipeline companies, like the Partnership, are
currently regulated by the Federal Energy Regulatory Commission ("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 Partnership filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. On June 30, 1999, the FERC approved a previously filed request of the
Partnership 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. In July 1999, certain shippers filed protests with the FERC on the
Partnership's application for Market Based Rates in certain origin and
destination markets. If all or any portion of the Market Based Rates application
is denied by the FERC, the Partnership has agreed to refund, with interest, all
amounts collected under the tariff rates in excess of the PPI Index with respect
to those markets the FERC does not find competitive.

         Effective July 1, 1999, the Partnership established Settlement Rates
with all shippers that utilize certain LPGs transportation tariff rates, whereby
such rates in effect on June 30, 1999, would not be adjusted for a period of



                                       15
<PAGE>   16

OTHER MATTERS - (CONTINUED)

either two or three years. Other LPGs transportation tariff rates under which
such agreements could not be reached with all shippers were reduced pursuant to
the PPI Index effective July 1, 1999. Effective July 1, 1999, the Partnership
canceled its tariff for deliveries of MTBE into the Chicago market area
reflecting reduced demand for transportation of MTBE into such area.


     Other

         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 TE
Products Pipeline Company, Limited Partnership's 1998 Annual Report on Form
10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         At June 30, 1999, the Partnership 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 Partnership 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, 1999, the estimated fair value of the
Senior Notes and the SunTrust loan was approximately $372.1 million and $37.8
million, respectively.

         The Partnership periodically enters into futures contracts to hedge its
exposure to price risk on product inventory transactions. Recognized gains and
losses related to futures contracts which qualify as hedges are recognized in
income when the related inventory transactions are completed. Gains and losses
related to futures contracts, to the extent settled in cash, are reported as a
component of product inventory in the consolidated balance sheet until
recognized as income. At June 30, 1999, there were no outstanding futures
contracts.

         At June 30, 1999, the Partnership had $25 million outstanding under a
variable interest rate term loan. The interest rate for this credit facility is
based on the Partnership's option of either SunTrust Bank's prime rate, the
federal funds rate or LIBOR rate in effect at the time of the borrowing and is
adjusted monthly, bimonthly, quarterly or semi-annually. Utilizing the balances
of variable interest rate debt outstanding at June 30, 1999, and assuming market
interest rates increase 1%, the potential annual increase in interest expense is
approximately $0.3 million.




                                       16
<PAGE>   17


                           PART II. OTHER INFORMATION

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


         (a)      Exhibits:

                  Exhibit
                  Number                    Description

                  3.1      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).

                  3.2      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).

                  4.1      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).

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

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

                  10.9     Panhandle Eastern Corporation Key Executive
                           Retirement Benefit Equalization Plan, adopted
                           December 20, 1993; effective January 1, 1994 (Filed
                           as Exhibit 10.12 to Form


                                       17
<PAGE>   18
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)

                           10-K of Panhandle Eastern Corporation (Commission
                           File No. 1-8157) for the year ended December 31, 1993
                           and incorporated herein by reference).

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

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

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

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

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

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

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

                  10.17    Form of Employment Agreement between the Company and
                           O. Horton Cunningham, Ernest P. Hagan, Thomas R.
                           Harper, David L. Langley, Charles H. Leonard and
                           James C. Ruth, dated December 1, 1998 (Filed as
                           Exhibit 10.20 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    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).

                  10.19    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).

                  10.20    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).

                  10.21    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).

                  10.22    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
                                       18
<PAGE>   19

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


                           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).

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

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

         (b)      Reports on Form 8-K:       None

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

                                    SIGNATURE

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


                                    TE Products Pipeline Company, Limited
                                    Partnership (Registrant)

                                    By:      Texas Eastern Products Pipeline
                                               Company, General Partner



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






Date:  August 9, 1999


                                       19
<PAGE>   20

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                Exhibit
                Number                    Description
                -------                   -----------
<S>                        <C>
                  3.1      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)

                  3.2      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).

                  4.1      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).

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

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

                  10.9     Panhandle Eastern Corporation Key Executive
                           Retirement Benefit Equalization Plan, adopted
                           December 20, 1993; effective January 1, 1994 (Filed
                           as Exhibit 10.12 to Form
</TABLE>

<PAGE>   21




<TABLE>
<S>                        <C>
                           10-K of Panhandle Eastern Corporation (Commission
                           File No. 1-8157) for the year ended December 31, 1993
                           and incorporated herein by reference).

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

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

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

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

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

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

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

                  10.17    Form of Employment Agreement between the Company and
                           O. Horton Cunningham, Ernest P. Hagan, Thomas R.
                           Harper, David L. Langley, Charles H. Leonard and
                           James C. Ruth, dated December 1, 1998 (Filed as
                           Exhibit 10.20 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    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).

                  10.19    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).

                  10.20    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).

                  10.21    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).

                  10.22    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>   22

<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).

                  27*      Financial Data Schedule as of and for the six months
                           ended June 30, 1999.
</TABLE>

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