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News Release TEPPCO PARTNERS, L.P. REPORTS SOLID FIRST QUARTER RESULTSHOUSTON - TEPPCO Partners, L.P. (NYSE:TPP) today reported first quarter net income for 2008 of $64.1 million, or $0.57 per unit, which included charges to interest expense totaling $12.3 million, comprised of an $8.7 million charge for the early repayment of debt at the TE Products Pipeline Company, LLC subsidiary and a charge of $3.6 million related to financial contracts used to hedge interest rates with respect to debt issued by the partnership in March 2008. Net income for the three months ended March 31, 2007 was $138.2 million, or $1.29 per unit, which included gains totaling $78.5 million from the sale of TEPPCO’s ownership interests in Mont Belvieu Storage Partners, L.P. and Mont Belvieu Venture, LLC (collectively, MBSP) and other assets in March 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter 2008 were $145.1 million, compared with $199.0 million for the first quarter of 2007. Excluding gains from the sale of MBSP and other assets in 2007, EBITDA for the first quarter of 2008 increased 20 percent to $145.1 million compared with $120.5 million for the same quarter of 2007. EBITDA and EBITDA excluding gains from the sale of assets and ownership interests are non-GAAP (non-Generally Accepted Accounting Principles) financial measures which are defined and reconciled to their most directly comparable GAAP financial measures later in this news release. “Our first quarter 2008 results again demonstrated the strength of our diverse asset base,” said Jerry E. Thompson, president and chief executive officer of the general partner of TEPPCO. “The strong cash flow generated in the first quarter enabled our third distribution increase in the last four quarters, bringing the annualized distribution rate to $2.84 per unit, a 3.6 percent increase from the annualized distribution rate for the first quarter of 2007. Our Upstream and Midstream segments posted increases in EBITDA of 29 percent and 22 percent, respectively, over the first quarter of 2007. Our Downstream segment generated solid results in the first quarter, driven by increased propane volumes in March and strong demand for gasoline and jet fuel.” Thompson added, “In the brief time since we have completed the acquisitions from Cenac Towing and Horizon Maritime, these businesses and their personnel have already exceeded our expectations. Our Marine Services segment generated $10.3 million of EBITDA in the first quarter of 2008 and confirmed the value creation potential for our partners of TEPPCO entering the marine transportation business. Combined, these acquisitions totaled $594 million, including the issuance of 4.85 million units. We now rank as the sixth-largest domestic inland marine transportation company for petroleum products based on the number of barges we own.” “During the second quarter, TEPPCO expanded its marine transportation fleet by acquiring four additional 30,000 barrel tank barges and taking delivery of one of the two under construction inland tow boats that we acquired as part of the Horizon transaction. We see additional opportunities to expand this business and continue to build from TEPPCO’s base of assets and reputation in the transportation of crude oil and refined products,” said Thompson. OPERATING RESULTS BY BUSINESS SEGMENT Upstream segment TEPPCO’s share of EBITDA in Seaway Crude Pipeline was $5.0 million for the first quarter of 2008, compared with $4.0 million for the first quarter of 2007. This increase reflects higher revenues from volumes moved on a spot basis, which were transported at higher rates compared with higher volumes moved in 2007 at a lower incentive tariff rate, and reduced operating expenses. Long-haul volumes on Seaway averaged 166,000 bpd in the 2008 quarter, compared with 193,000 bpd in the 2007 quarter. The decrease in Seaway volume was primarily due to increased levels of Canadian sourced product being received into the Cushing market. Downstream segment Downstream EBITDA was $46.1 million for the first quarter of 2008, compared with $49.5 million for the first quarter of 2007, which excludes gains of $78.5 million on the sale of our interest in MBSP and other assets in March 2007. The decrease resulted primarily from $3.4 million of EBITDA from the investment in MBSP prior to its sale in March 2007. Increased expenses for pipeline maintenance and environmental remediation costs were largely offset by increased refined products storage revenues during the first quarter of 2008, compared with the first quarter of 2007. Midstream segment EBITDA for the first quarter of 2008 increased 22 percent to $49.6 million, from $40.6 million for the first quarter of 2007. The increase was due primarily to increased earnings from our investment in Jonah, increased NGL transportation volumes and lower product measurement expense, partially offset by reduced natural gas volumes on the Val Verde gathering system and higher power expense on the NGL pipeline systems. TEPPCO’s share of EBITDA from the investment in Jonah was $31.5 million for the first quarter of 2008, compared to EBITDA of $25.5 million for the first quarter of 2007. The increase was primarily due to higher volumes as a result of the partial completion of the Phase V expansion, which is scheduled for full completion in the second quarter of 2008. Throughput on the Jonah - Pinedale system averaged 1.8 billion cubic feet per day (bcf/d) in the first quarter of 2008, compared to 1.5 bcf/d in the first quarter of 2007. Marine Services segment The segment includes 42 tow boats and 89 tank barges associated with the acquisition from Cenac Towing, Inc. and affiliates on February 1, 2008, and the addition of 9 tow boats (including one under construction) and 17 tank barges with the acquisition from Horizon Maritime on February 29, 2008. Revenues during the quarter totaled $25.6 million, partially offset by operating, general and administrative expenses of $15.3 million, resulting in an aggregate EBITDA contribution of $10.3 million from the dates of the acquisitions. Operations reflect very high utilization of all inland tow boats and tank barges under contracted day-rates. CAPITALIZATION AND LIQUIDITY In March 2008, the partnership completed the issuance of $1.0 billion of senior debt in an underwritten public offering. The proceeds were applied to the repayment and termination of the $1.0 billion short-term credit facility that was used to finance the redemption of $355 million of debt at the TE Products Pipeline subsidiary, to fund the cash portion of the purchase of assets of the Marine Services segment and to fund other capital expenditures and working capital needs of the partnership. The new debt issuance consisted of $250 million principal amount of 5.90 percent senior notes due 2013, $350 million principal amount of 6.65 percent senior notes due 2018 and $400 million principal amount of 7.55 percent senior notes due 2038. NON-GAAP FINANCIAL MEASURES We define EBITDA as net income plus interest expense – net, income tax expense, depreciation and amortization, and a pro-rata portion, based on our equity ownership, of the interest expense and depreciation and amortization of each of our joint ventures. We have included EBITDA and related adjusted EBITDA measures in our disclosures because we believe they are used by our investors as supplemental financial measures to assess the financial performance of our assets without regard to financing methods, capital structures or historical costs basis; to compare the operating performance of our assets with the performance of other companies that have different financing and capital structures; and to value our limited partners’ equity using EBITDA multiples. A reconciliation of these measures to net income is provided in the Financial Highlights table and the Business Segment Data table. Margin of our Upstream segment is calculated as revenues generated from the sale of crude oil and lubrication oil, and transportation of crude oil, less the costs of purchases of crude oil and lubrication oil, in each case prior to the elimination of intercompany sales, revenues and purchases between wholly owned subsidiaries. We believe margin is a more meaningful measure of financial performance than sales and purchases of crude oil and lubrication oil due to the significant fluctuations in sales and purchases caused by variations in the level of marketing activity and prices for products marketed. Additionally, we use margin internally to evaluate the financial performance of the Upstream segment because it excludes expenses that are not directly related to the marketing and sales activities being evaluated. A reconciliation of margin to operating income is provided in the Operating Data table. TEPPCO will host a conference call related to earnings performance today, Tuesday April 29, 2008 at 10:30 a.m. CDT. Interested parties may listen live over the Internet through the partnership’s Web site at www.teppco.com. Those interested in listening to the webcast should log in at least ten minutes prior to the start of the conference call to download and install any necessary audio software. An audio replay of the conference call will be accessible for seven days at 888-203-1112, confirmation code 2290848. The replay and transcript will also be available on the TEPPCO website. TEPPCO Partners, L.P. is a publicly traded partnership with an enterprise value of approximately $5 billion, which conducts business through various subsidiary operating companies. TEPPCO owns and operates one of the largest common carrier pipelines of refined petroleum products and liquefied petroleum gases in the United States; owns and operates petrochemical and natural gas liquid pipelines; is engaged in transportation, storage, gathering and marketing of crude oil; owns and operates natural gas gathering systems; owns and operates a marine transportation business for refined products, crude oil, condensate, asphalt, bunker fuels and other heated oil products; and has ownership interests in Jonah Gas Gathering Company, Seaway Crude Pipeline Company, Centennial Pipeline LLC, and an undivided ownership interest in the Basin Pipeline. Texas Eastern Products Pipeline Company, LLC, the general partner of TEPPCO Partners, L.P., is owned by Enterprise GP Holdings L.P. (NYSE: EPE), which also owns the general partner of Enterprise Products Partners L.P. (NYSE: EPD). For more information, visit TEPPCO’s Web site at www.teppco.com. This news release includes forward-looking statements. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties, such as the partnership’s expectations regarding future results, increases in distributable cash or expenditures. These risks and uncertainties include, among other things, insufficient cash from operations, market conditions, governmental regulations and factors discussed in TEPPCO Partners, L.P.’s filings with the Securities and Exchange Commission. If any of these risks or uncertainties materializes, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those expected. The partnership disclaims any intention or obligation to update publicly or reverse such statements, whether as a result of new information, future events or otherwise. ### Contacts: Rick Rainey - Media Relations Source: TEPPCO P. O. Box 2521, Houston, Texas 77252-2521 |