<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2000
COMMISSION FILE NO. 1-13603
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
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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,
2000 1999
---------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................... $ 30,658 $ 23,267
Short-term investments ...................................... 1,013 1,475
Accounts receivable, trade .................................. 20,369 22,425
Inventories ................................................. 7,048 8,451
Other ....................................................... 2,832 2,633
---------- ------------
Total current assets ....................................... 61,920 58,251
---------- ------------
Property, plant and equipment, at cost (Net of accumulated
depreciation and amortization of $225,980 and $214,044) .... 631,687 611,695
Investments .................................................. 6,227 5,242
Intangible assets ............................................ 33,969 34,926
Advances to limited partner .................................. 2,354 2,354
Other assets ................................................. 12,254 11,748
---------- ------------
Total assets ............................................... $ 748,411 $ 724,216
========== ============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities .................... $ 9,984 $ 7,413
Accounts payable, general partner ........................... 5,554 3,817
Accrued interest ............................................ 13,573 13,265
Other accrued taxes ......................................... 6,030 6,370
Other ....................................................... 10,194 9,298
---------- ------------
Total current liabilities .................................. 45,335 40,163
---------- ------------
Senior Notes ................................................. 389,768 389,753
Other long-term debt ......................................... 83,000 63,000
Other liabilities and deferred credits ....................... 3,581 3,073
Partners' capital:
General partner's interest .................................. 2,296 2,310
Limited partner's interests ................................. 224,431 225,917
---------- ------------
Total partners' capital .................................... 226,727 228,227
---------- ------------
Total liabilities and partners' capital .................... $ 748,411 $ 724,216
========== ============
</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,
2000 1999 2000 1999
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Operating revenues:
Transportation - Refined products ........ $ 32,685 $ 33,353 $ 60,715 $ 58,949
Transportation - LPGs .................... 10,367 10,094 33,484 36,689
Mont Belvieu operations .................. 2,883 3,358 7,354 6,255
Other- net ............................... 8,353 7,420 16,513 13,482
------------ ------------ ---------- ----------
Total operating revenues .............. 54,288 54,225 118,066 115,375
------------ ------------ ---------- ----------
Costs and expenses:
Operating, general and administrative .... 19,783 18,599 38,895 35,720
Operating fuel and power ................. 7,994 7,771 15,216 14,330
Depreciation and amortization ............ 6,874 6,770 13,657 13,533
Taxes - other than income taxes .......... 2,438 2,484 4,761 4,993
------------ ------------ ---------- ----------
Total costs and expenses .............. 37,089 35,624 72,529 68,576
------------ ------------ ---------- ----------
Operating income ...................... 17,199 18,601 45,537 46,799
Interest expense ........................... (8,422) (7,764) (16,742) (15,300)
Interest costs capitalized ................. 1,255 347 2,265 489
Other income - net ......................... 681 505 1,293 907
------------ ------------ ---------- ----------
Net Income .............................. $ 10,713 $ 11,689 $ 32,353 $ 32,895
============ ============ ========== ==========
</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,
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................................ $ 32,353 $ 32,895
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization ................................... 13,657 13,533
Equity in (income) loss of affiliate ............................ (95) 74
Decrease in accounts receivable, trade .......................... 2,056 810
Decrease in inventories ......................................... 1,403 2,160
Increase in other current assets ................................ (199) (99)
Increase (decrease) in accounts payable and accrued expenses .... 5,172 (1,002)
Other ........................................................... (37) (797)
---------- ----------
Net cash provided by operating activities ................... 54,310 47,574
---------- ----------
Cash flows from investing activities:
Proceeds from cash investments .................................... 1,475 3,840
Purchases of cash investments ..................................... (2,000) (2,235)
Capital expenditures .............................................. (32,690) (38,318)
---------- ----------
Net cash used in investing activities ....................... (33,215) (36,713)
---------- ----------
Cash flows from financing activities:
Proceeds from term loan ........................................... 20,000 25,000
Advances to limited partner ....................................... -- (369)
Distributions ..................................................... (33,704) (29,354)
---------- ----------
Net cash used in financing activities ....................... (13,704) (4,723)
---------- ----------
Net increase in cash and cash equivalents ......................... 7,391 6,138
Cash and cash equivalents at beginning of period .................. 23,267 36,723
---------- ----------
Cash and cash equivalents at end of period ........................ $ 30,658 $ 42,861
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Interest paid during the period (net of capitalized interest) ..... $ 13,977 $ 14,455
========== ==========
</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.
On March 31, 2000, Texas Eastern Products Pipeline Company, a Delaware
corporation and general partner of the Partnership, was reorganized into Texas
Eastern Products Pipeline Company, LLC (the "Company" or "General Partner"), a
Delaware limited liability company. Additionally on March 31, 2000, Duke Energy
Corporation ("Duke Energy"), contributed its ownership of the General Partner to
Duke Energy Field Services, LLC ("DEFS"). DEFS is a joint venture between Duke
Energy and Phillips Petroleum Company. Duke Energy holds a majority interest in
DEFS.
The Company, an indirect wholly-owned subsidiary of DEFS, 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, 2000, and the results of operations and cash
flows for the periods presented. The results of operations for the six months
ended June 30, 2000, are not necessarily indicative of results of operations for
the full year 2000. The interim financial statements should be read in
conjunction with the Partnership's consolidated financial statements and notes
thereto presented in the TE Products Pipeline Company, Limited Partnership
Annual Report on Form 10-K for the year ended December 31, 1999. Certain amounts
from the prior year have been reclassified to conform to current presentation.
The Partnership 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. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
This statement establishes standards for and disclosures of derivative
instruments and hedging activities. In July 1999, the FASB issued SFAS No. 137
to delay the effective date of SFAS No. 133 until fiscal years beginning after
June 15, 2000. The Partnership expects to adopt this standard, as amended,
effective January 1, 2001. The Partnership is currently evaluating the impact of
this statement on its financial condition and results of operations.
NOTE 3. INVESTMENTS
SHORT-TERM INVESTMENTS
The Partnership routinely invests cash in liquid short-term investments
as part of its cash management program. Investments with maturities at date of
purchase of 90 days or less are considered cash equivalents. At June 30, 2000,
short-term investments included $1.0 million of investment-grade corporate
notes, which mature
5
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TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
within one year. All short-term investments are classified as held-to-maturity
securities and are stated at amortized cost. The aggregate fair value of such
securities approximates amortized cost at June 30, 2000.
LONG-TERM INVESTMENTS
At June 30, 2000, the Partnership had $6.2 million invested in
investment-grade corporate notes, which have varying maturities through 2004.
These securities are classified as held-to-maturity securities and are stated at
amortized cost. The aggregate fair value of such securities approximates
amortized cost at June 30, 2000.
NOTE 4. INVENTORIES
Inventories are carried at the lower of cost (based on weighted average
cost method) or market. The major components of inventories were as follows (in
thousands):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
---------- ------------
<S> <C> <C>
Gasolines ................................. $ 500 $ 3,270
Propane ................................... 51 223
Butanes ................................... 1,474 605
Fuel oil .................................. 544 386
Other products ............................ 927 613
Materials and supplies .................... 3,552 3,354
---------- ------------
Total ........................... $ 7,048 $ 8,451
========== ============
</TABLE>
The costs of inventories were lower than market at June 30, 2000, and
December 31, 1999.
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.
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.
OTHER LONG TERM DEBT AND CREDIT FACILITIES
In connection with the purchase of fractionation assets from DEFS as of
March 31, 1998, TEPPCO Colorado received a $38 million bank loan from SunTrust
Bank ("SunTrust"). The interest rate on this loan is 6.53%, which is payable
quarterly. The original maturity date was April 21, 2001. This loan was
refinanced
6
<PAGE> 7
TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
through the Parent Partnership on July 21, 2000, with the credit facility
discussed below. Accordingly, the principal amount was included in other
long-term debt at June 30, 2000, as the Partnership had the intent and ability
to refinance such balance at June 30, 2000.
On May 17, 1999, the 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 is the administrator of the loan.
At June 30, 2000, $45 million was outstanding under the term loan agreement.
This loan was refinanced through the Parent Partnership on July 21, 2000, with
the credit facility discussed below.
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.
This credit facility was replaced on July 14, 2000 through the credit facility
discussed below.
On July 14, 2000, the Parent Partnership entered into a $75 million
term loan and a $475 million revolving credit facility. On July 21, 2000, the
Parent Partnership borrowed $75 million under the term loan and $340 million
under the revolving credit facility. The funds were used to finance the
acquisition of assets from ARCO (see Note 8. Current Developments) and to
refinance existing credit facilities, other than the Senior Notes. The term loan
has an eighteen month maturity and the revolving facility has a three year
maturity. The interest rate for the credit agreements is based on the Parent
Partnership's option of either SunTrust's prime rate, the federal funds rate or
LIBOR rate in effect at the time of the borrowings and is adjusted monthly,
bimonthly, quarterly or semi-annually.
On July 21, 2000, the Parent Partnership entered into a three year swap
agreement to partially hedge its exposure on the new variable rate credit
facilities. The swap agreement is based on a notional amount of $250 million.
Under the swap agreement, the Parent Partnership will pay a fixed rate of
interest of 7.17% and will receive a floating rate based on a three month USD
LIBOR rate. It is the Parent Partnership's intent to initiate intercompany notes
payable of $83 million to cover the debt service requirements for such amounts
paid on behalf of the Partnership on July 21, 2000.
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 5, 2000, the Partnership paid a cash distribution of $17.6
million for the first quarter of 2000. Additionally, on July 17, 2000, the
Partnership declared a cash distribution of $17.6 million for the quarter ended
June 30, 2000. The second quarter distribution was paid on August 4, 2000.
NOTE 7. COMMITMENTS AND CONTINGENCIES
In the fall of 1999, the Company and the Partnership were named as
defendants in a lawsuit in Jackson County Circuit Court, Jackson County,
Indiana. In Ryan E. McCleery and Marcia S. McCleery, et al. v. Texas Eastern
Corporation, et al. (including the Company and Partnership), plaintiffs contend,
among other things, that
7
<PAGE> 8
TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
the Company and other defendants stored and disposed of toxic and hazardous
substances and hazardous wastes in a manner that caused the materials to be
released into the air, soil and water. They further contend that the release
caused damages to the plaintiffs. In their Complaint, the plaintiffs allege
strict liability for both personal injury and property damage together with
gross negligence, continuing nuisance, trespass, criminal mischief and loss of
consortium. The plaintiffs are seeking compensatory, punitive and treble
damages. The Company has filed an Answer to the Complaint, denying the
allegations, as well as various other motions. This case is in the early stages
of discovery and is not covered by insurance. The Company is defending itself
vigorously against this lawsuit. The Partnership cannot estimate the loss, if
any, associated with this pending lawsuit.
The Partnership is involved in various 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 is expected to issue a Record of
Decision formally approving the remediation program. After the Record of
Decision has been issued, the Partnership will enter into an Agreed Order for
the continued operation and maintenance of the program. The Partnership has
accrued $0.9 million at June 30, 2000 for future costs of the remediation
program for the Seymour terminal. In the opinion of the Company, the completion
of the remediation program will not have a material adverse impact on the
Partnership's financial condition, results of operations or liquidity.
Tariff rates of interstate oil pipeline companies are currently
regulated by the FERC, primarily through an index methodology, whereby a
pipeline company is allowed to change its rates based on the change from year to
year in the Producer Price Index for finished goods less 1% ("PPI Index"). In
the alternative, interstate oil pipeline companies may elect to support rate
filings by using a cost-of-service methodology, competitive market showings
("Market Based Rates") or agreements between shippers and the oil pipeline
company that the rate is acceptable ("Settlement Rates").
In May 1999, the Partnership filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. Such application is currently under review by the FERC. The FERC
approved a request of the 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. If any portion of the Market Based
Rates application is denied by the FERC, the Partnership has agreed to refund,
with interest, amounts collected after June 30, 1999, under the tariff rates in
excess of the PPI Index. As a result of the refund obligation potential, the
Partnership has deferred all revenue recognition of rates
8
<PAGE> 9
TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
charged in excess of the PPI Index. At June 30, 2000, the amount deferred for
possible rate refunds, including interest, totaled approximately $1.6 million.
In July 1999, certain shippers filed protests with the FERC on the
Partnership's application for Market Based Rates in four destination markets.
The Partnership believes it will prevail in a competitive market determination
in those destination markets under protest.
Substantially all of the petroleum products transported and stored by
the Partnership are owned by the Partnership's customers. At June 30, 2000, the
Partnership had approximately 16.3 million barrels of products in its custody
owned by customers. The Partnership is obligated for the transportation, storage
and delivery of such products on behalf of its customers. The Partnership
maintains insurance adequate to cover product losses through circumstances
beyond its control.
NOTE 8. CURRENT DEVELOPMENTS
On July 21, 2000, the Company completed its previously announced
acquisition of certain assets of ARCO Pipe Line Company ("ARCO"), a wholly owned
subsidiary of Atlantic Richfield Company, for $318.5 million. The assets will be
held through TCTM, L.P. (the "Crude Oil OLP"), a 98.9899% owned entity of the
Parent Partnership.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The following information is provided to facilitate increased
understanding of the 2000 and 1999 interim consolidated financial statements and
accompanying notes presented in Item 1. Material period-to-period variances in
the consolidated statements of income are discussed under "Results of
Operations." The "Financial Condition and Liquidity" section analyzes cash flows
and financial position. Discussion included in "Other Matters" addresses key
trends, future plans and contingencies. Throughout these discussions, management
addresses items that are reasonably likely to materially affect future liquidity
or earnings.
The Partnership's operations consist primarily of the transportation,
storage and terminaling of petroleum products and the fractionation of natural
gas liquids ("NGLs"). Revenues are derived from the transportation of refined
products and LPGs, the storage and short-haul shuttle transportation of LPGs at
the Mont Belvieu, Texas, complex, sale of product inventory and other ancillary
services. Labor and electric power costs comprise the two largest operating
expense items of the Partnership. 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.
RESULTS OF OPERATIONS
Net income for the quarter ended June 30, 2000 was $10.7 million,
compared with net income of $11.7 million for the 1999 second quarter. The
decrease in net income resulted primarily from a $1.5 million increase in costs
and expenses, partially offset by a $0.3 million decrease in interest expense
(net of capitalized interest) and a $0.2 million increase in other income-net.
For the six months ended June 30, 2000, the Partnership reported net
income of $32.4 million, compared with net income of $32.9 million for the first
six months of 1999. The $0.5 million decrease in net income resulted primarily
from a $4.0 million increase in costs and expenses, partially offset by a $2.7
million increase in operating revenues, a $0.4 million increase in other
income-net and a $0.3 million decrease in interest expense (net of capitalized
interest). See discussion below of factors affecting net income for the
comparative periods.
Volume and average tariff information:
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, PERCENTAGE JUNE 30, PERCENTAGE
-------------------------- INCREASE -------------------------- INCREASE
2000 1999 (DECREASE) 2000 1999 (DECREASE)
---------- ----------- ------------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
VOLUMES DELIVERED
(in thousands of barrels)
Refined products ............. 35,113 35,818 (2%) 64,726 63,973 1%
LPGs ......................... 6,634 6,367 4% 18,327 19,539 (6%)
Mont Belvieu operations ...... 6,576 5,882 12% 13,648 12,767 7%
---------- ----------- ------------- ---------- ----------- --------------
Total .................... 48,323 48,067 1% 96,701 96,279 --
========== =========== ============= ========== =========== ==============
AVERAGE TARIFF PER BARREL
Refined products ............. $ 0.93(a) $ 0.93 -- $ 0.94(a) $ 0.92 2%
LPGs ......................... 1.56 1.59 (2%) 1.83 1.88 (3%)
Mont Belvieu operations ...... 0.14 0.15 (7%) 0.15 0.16 (6%)
---------- ----------- ------------- ---------- ----------- --------------
Average system tariff
per barrel .............. $ 0.91 $ 0.92 (1%) $ 1.00 $ 1.01 (1%)
========== =========== ============= ========== =========== ==============
</TABLE>
(a) Net of amounts deferred related to potential refund obligation.
10
<PAGE> 11
RESULTS OF OPERATIONS - (CONTINUED)
Refined products transportation revenues decreased $0.7 million for the
quarter ended June 30, 2000, compared with the prior-year quarter, due to a 2%
decrease in total refined products volumes delivered. Motor fuel volumes
delivered decreased 7% as a result of lower Gulf Coast supply and increased
competing refinery production in the south central markets of Louisiana and
Arkansas. Additionally, natural gasoline volumes delivered decreased 6% from the
1999 second quarter as a result of unfavorable blending economics for Midwest
area refineries. These decreases were partially offset by a 9% increase in jet
fuel volumes delivered due primarily to increased demand in the Chicago market,
favorable Gulf Coast price differentials and lower competing pipeline supply
into the Chicago market. The refined products average tariff per barrel reflects
the 1.83% general tariff reduction pursuant to the Producer Price Index for
finished goods less 1% ("PPI Index"), effective July 1, 1999. The Partnership
deferred recognition of approximately $0.4 million of revenue during the second
quarter of 2000 with respect to potential refund obligations for rates charged
in excess of the PPI Index. See further discussion regarding Market Based Rates
included in "Other Matters." The general tariff reduction was offset by the
increased percentage of long-haul jet fuel deliveries.
LPGs transportation revenues increased $0.3 million for the quarter
ended June 30, 2000, compared with the second quarter of 1999, due primarily to
increased deliveries of isobutane to Midwest area refineries as a result of
favorable Gulf Coast price differentials. Short haul propane deliveries along
the upper Texas Gulf Coast increased 14% as a result of increased petrochemical
demand. The decrease in the average tariff per barrel resulted from the
increased percentage of short-haul deliveries during the second quarter of 2000.
Revenues generated from Mont Belvieu operations decreased $0.5 million
during the quarter ended June 30, 2000, compared with the second quarter of
1999, primarily due to timing of revenue recognition on storage contracts.
Other operating revenues increased $0.9 million during the quarter
ended June 30, 2000, compared with the prior year quarter, due primarily to a
$0.5 million increase on gains realized from product sales attributable to
higher market prices in 2000, a $0.3 million increase related to higher amounts
of butane received for summer storage, and increased refined products
terminaling revenue. These increases were partially offset by decreased refined
products rental revenue.
For the six months ended June 30, 2000, refined products transportation
revenues increased $1.8 million, or 3%, compared with the corresponding period
in 1999. Continued strong jet fuel demand and favorable Gulf Coast differentials
resulted in a 11% increase in jet fuel volumes delivered. The increase in jet
fuel deliveries was partially offset by the decrease in motor fuel deliveries
during the second quarter noted above, which was partially offset by higher
motor fuel volumes delivered during the first quarter of 2000 as a result of
lower Midwest refinery production. The Partnership deferred recognition of
approximately $0.8 million of revenue during the six months ended June 30, 2000
with respect to potential refund obligations for rates charged in excess of the
PPI Index. The increase in the refined products average tariff per barrel
resulted primarily from a higher percentage of long-haul deliveries in the upper
Midwest market areas.
LPGs transportation revenues decreased $3.2 million during the six
months ended June 30, 2000, compared with the same period in 1999, due primarily
to lower propane volumes delivered. Propane deliveries in Midwest and Northeast
market areas decreased 18% and 7%, respectively, from the prior year as a result
of warmer winter weather during the first quarter of 2000. These decreases were
partially offset by a 13% increase in propane deliveries along the upper Texas
Gulf Coast as a result of increased petrochemical demand. The decrease in the
average tariff per barrel resulted from the decreased percentage of longer-haul
propane deliveries to the Midwest and Northeast market areas, coupled with the
increase in Gulf Coast propane deliveries during 2000.
Revenues generated from Mont Belvieu operations increased $1.1 million
for the six months ended June 30, 2000, compared with the corresponding period
in 1999, due primarily to increased contract storage revenue.
11
<PAGE> 12
RESULTS OF OPERATIONS - (CONTINUED)
During the six months ended June 30, 2000, other operating revenues
increased $3.0 million, as compared to the same period in 1999, due primarily to
a $2.5 million increase on gains realized from product sales attributable to
higher market prices in 2000. Also contributing to the increase were increased
refined products terminaling revenue and higher amounts of butane received for
summer storage. Partially offsetting these increases were decreased refined
products rental revenue.
Costs and expenses increased $1.5 million for the quarter ended June
30, 2000, compared with the second quarter of 1999, primarily due to a $1.2
million increase in operating, general and administrative expenses and a $0.2
million increase in operating fuel and power expense. The increase in operating,
general and administrative expenses was attributable to a $0.7 million increase
in labor and benefit costs, a $0.6 million increase in general and
administrative consulting and legal services, and a $0.2 million volume-related
increase in lease cost associated with higher product receipts through the
connection with Colonial Pipeline at Beaumont, Texas. These increases were
partially offset by a $0.3 million decrease in supplies and materials expense.
Costs and expenses increased $4.0 million for the six months ended June
30, 2000, compared with the same period in 1999, due to a $3.2 million increase
in operating, general and administrative expenses and a $0.9 million increase in
operating fuel and power expense. The increase in operating, general and
administrative expenses was primarily attributable to $0.9 million of expense
recognized in the first quarter of 2000 to write-off project evaluation costs,
increased labor and benefit costs, and increased contract labor and consulting
services. The write-off of project evaluation costs resulted from the
announcement in March 2000 of the Partnership's abandonment of its plan to
construct a pipeline from Beaumont, Texas, to Little Rock, Arkansas, in favor of
participation in the Centennial Pipeline ("Centennial") joint venture with CMS
Energy Corporation and Marathon Ashland Petroleum LLC. Each partner in the
Centennial joint venture will own a one-third interest in a 790-mile pipeline
system from the Texas Gulf Cost to the Midwest. The increase in operating fuel
and power expense resulted from increased refined products transportation
volumes delivered, which generally require more power to transport than LPGs
volumes.
Interest expense increased $0.7 million during the quarter and $1.4
million during the six months ended June 30, 2000, compared with the
corresponding prior year periods, due to interest expense on the SunTrust term
loan to finance construction of the pipelines between Mont Belvieu and Port
Arthur, Texas. The increase in interest expense was offset by increased interest
cost capitalized of $0.9 million during the quarter and $1.8 million during the
six months ended June 30, 2000, compared with the corresponding prior year
periods, as a result of higher balances associated with construction in progress
of the pipelines between Mont Belvieu and Port Arthur.
Other income - net increased during both the quarter and six months
ended June 30, 2000, compared with the corresponding periods in 1999, due to
gains on the sale of right-of-way easements during the second quarter of 2000,
coupled with increased interest income earned on cash investments.
FINANCIAL CONDITION AND LIQUIDITY
Net cash from operations for the six-month period ended June 30, 2000,
totaled $54.3 million, comprised of $46.0 million of income before charges for
depreciation and amortization and $8.3 million provided by working capital
changes. This compares with cash flows from operations of $47.6 million for the
corresponding period in 1999, comprised of $46.4 million of income before
charges for depreciation and amortization and $1.2 million provided by working
capital changes. The increase in cash provided by working capital changes during
the six month period ended June 30, 2000, as compared with the same period in
1999, resulted primarily from accrued liability balances existing at June 30,
2000. Net cash from operations for the six months ended June 30, 2000 and 1999,
included interest payments related to the Senior Notes and term loans of $16.2
million and $14.9 million, respectively.
12
<PAGE> 13
FINANCIAL CONDITION AND LIQUIDITY - (CONTINUED)
Cash flows used in investing activities during the first six months of
2000 was comprised of $32.7 million of capital expenditures and $2.0 million of
additional cash investments. These decreases of cash were partially offset by
$1.5 million of proceeds from investment maturities. Cash flows used in
investing activities during the first six months of 1999 included $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. During
the first six months of 2000 and 1999, capital expenditures included $23.2
million and $28.0 million, respectively, for construction of three new pipelines
between the Partnership's terminal in Mont Belvieu, Texas and Port Arthur,
Texas. The project includes three 12-inch diameter common-carrier pipelines and
associated facilities. Each pipeline will be approximately 70 miles in length.
Upon completion, the new pipelines will transport ethylene, propylene and
natural gasoline. The anticipated completion date is the fourth quarter of 2000.
The Partnership has entered into an agreement for turnkey construction of the
pipelines and related facilities and has separately entered into agreements for
guaranteed throughput commitments. The cost of this project is expected to total
approximately $74.5 million.
The Partnership estimates that capital expenditures for 2000 will total
approximately $77 million (including capitalized interest of $4 million).
Approximately $30 million is expected to be used to complete construction of the
three new pipelines between Mont Belvieu and Port Arthur and approximately $8
million will be used to replace seven pipelines under the Houston Ship Channel
as required by the United States Army Corp of Engineers for the deepening of the
channel. Approximately $21 million of planned expenditures are expected to be
used in revenue-generating projects, with the remaining $14 million being used
for life-cycle replacements and upgrading current facilities. Capital
expenditures may be financed through internally generated funds, external debt
or the issuance of additional limited partner Units
The Partnership paid cash distributions of $33.7 million during the six
months ended June 30, 2000. Additionally, on July 17, 2000, the Partnership
declared a cash distribution of $17.6 million for the quarter ended June 30,
2000. The second quarter cash distribution was paid on August 4, 2000.
OTHER MATTERS
The operations of the Partnership are subject to federal, state and
local laws and regulations relating to protection of the environment. Although
the Partnership believes the operations of the Pipeline System are in material
compliance with applicable environmental regulations, risks of significant costs
and liabilities are inherent in pipeline operations, and there can be no
assurance that significant costs and liabilities will not be incurred. Moreover,
it is possible that other developments, such as increasingly strict
environmental laws and regulations and enforcement policies thereunder, and
claims for damages to property or persons resulting from the operations of the
Pipeline System, could result in substantial costs and liabilities to the
Partnership. The Partnership does not anticipate that changes in environmental
laws and regulations will have a material adverse effect on its financial
position, operations or cash flows in the near term.
The Partnership and the Indiana Department of Environmental Management
("IDEM") have entered into an Agreed Order that will ultimately result in a
remediation program for any on-site and off-site groundwater contamination
attributable to the Partnership's operations at the Seymour, Indiana, terminal.
A Feasibility Study, which includes the Partnership's proposed remediation
program, has been approved by IDEM. IDEM is expected to issue a Record of
Decision formally approving the remediation program. After the Record of
Decision has beenissued, the Partnership will enter into an Agreed Order for the
continued operation and maintenance of the program. The Partnership has accrued
$0.9 million at June 30, 2000 for future costs of the remediation program for
the Seymour terminal. In the opinion of the Company, the completion of the
remediation program will not have a material adverse impact on the Partnership's
financial condition, results of operations or liquidity.
13
<PAGE> 14
OTHER MATTERS - (CONTINUED)
Tariff rates of interstate oil pipeline companies are currently
regulated by the FERC, primarily through an index methodology, whereby a
pipeline company is allowed to change its rates based on the change from year to
year in the Producer Price Index for finished goods less 1% ("PPI Index"). In
the alternative, interstate oil pipeline companies may elect to support rate
filings by using a cost-of-service methodology, competitive market showings
("Market Based Rates") or agreements between shippers and the oil pipeline
company that the rate is acceptable ("Settlement Rates").
In May 1999, the Partnership filed an application with the FERC to
charge Market Based Rates for substantially all refined products transportation
tariffs. Such application is currently under review by the FERC. The FERC
approved a request of the 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. If any portion of the Market Based
Rates application is denied by the FERC, the Partnership has agreed to refund,
with interest, amounts collected after June 30, 1999, under the tariff rates in
excess of the PPI Index. As a result of the refund obligation potential, the
Partnership has deferred all revenue recognition of rates charged in excess of
the PPI Index. At June 30, 2000, the amount deferred for possible rate refunds,
including interest, totaled approximately $1.6 million.
In July 1999, certain shippers filed protests with the FERC on the
Partnership's application for Market Based Rates in four destination markets.
The Partnership believes it will prevail in a competitive market determination
in those destination markets under protest.
Effective July 1, 1999, the Partnership established Settlement Rates
with certain shippers of LPGs under which the rates in effect on June 30, 1999,
would not be adjusted for a period of either two or three years. Other LPGs
transportation tariff rates were reduced pursuant to the PPI Index
(approximately 1.83%), effective July 1, 1999. Effective July 1, 1999, the
Partnership canceled its tariff for deliveries of MTBE into the Chicago market
area reflecting reduced demand for transportation of MTBE into such area. The
MTBE tariffs were canceled with the consent of MTBE shippers and resulted in
increased pipeline capacity and tankage available for other products.
In February 2000, the Partnership and Louis Dreyfus Plastics
Corporation ("Louis Dreyfus") announced a joint development alliance whereby the
Partnership's Mont Belvieu petroleum liquids storage and transportation shuttle
system services will be marketed by Louis Dreyfus. The alliance will expand
services to the upper Texas Gulf Coast energy marketplace. The alliance is a
service-oriented, fee-based venture with no commodity trading.
In March 2000, the Partnership, CMS Energy Corporation and Marathon
Ashland Petroleum LLC announced an agreement to form a limited liability company
that will own and operate an interstate refined petroleum products pipeline
extending from the upper Texas Gulf Coast to Illinois. Each of the companies
will own a one-third interest in the limited liability company. The
Partnership's participation in this joint venture is in lieu of its previously
announced expansion plan to construct a new pipeline from Beaumont, Texas, to
Little Rock, Arkansas. The Partnership recognized $0.9 million of expense in
March 2000 to write-off project evaluation costs related to the abandoned
construction plan.
The limited liability company will build a 70-mile, 24-inch diameter
pipeline connecting the Partnership's facility in Beaumont, Texas, with the
start of an existing 720-mile, 26-inch diameter pipeline extending from
Longville, Louisiana, to Bourbon, Illinois. The pipeline, which has been named
Centennial Pipeline, will pass through portions of Texas, Louisiana, Arkansas,
Mississippi, Tennessee, Kentucky and Illinois. CMS Panhandle Pipe Line
Companies, which owns the existing 720-mile pipeline, has made a filing with the
FERC to take the line out of natural gas service as part of the regulatory
process. Conversion of the pipeline to refined products service is expected to
be completed by the end of 2001. The Centennial Pipeline will intersect the
Partnership's existing mainline near Lick Creek, Illinois, where a new two
million barrel refined petroleum products storage terminal will be built.
14
<PAGE> 15
OTHER MATTERS - (CONTINUED)
On July 21, 2000, the Company completed its previously announced
acquisition of certain assets of ARCO Pipe Line Company ("ARCO"), a wholly owned
subsidiary of Atlantic Richfield Company, for $318.5 million. The assets will be
held through TCTM, L.P. (the "Crude Oil OLP"), a 98.9899% owned entity of the
Parent Partnership.
On July 14, 2000, the Parent Partnership entered into a $75 million
term loan and a $475 million revolving credit facility. On July 21, 2000, the
Parent Partnership borrowed $75 million under the term loan and $340 million
under the revolving credit facility. The funds were used to finance the
acquisition of assets from ARCO and to refinance existing credit facilities,
other than the Senior Notes. The term loan has an eighteen month maturity and
the revolving facility has a three year maturity. The interest rate for the
credit agreements is based on the Parent Partnership's option of either
SunTrust's prime rate, the federal funds rate or LIBOR rate in effect at the
time of the borrowings and is adjusted monthly, bimonthly, quarterly or
semi-annually.
On July 21, 2000, the Parent Partnership entered into a three year swap
agreement to partially hedge its exposure on the new variable rate credit
facilities. The swap agreement is based on a notional amount of $250 million.
Under the swap agreement, the Parent Partnership will pay a fixed rate of
interest of 7.17% and will receive a floating rate based on a three month USD
LIBOR rate. It is the Parent Partnership's intent to initiate intercompany notes
payable of $83 million to cover the debt service requirements for such amounts
paid on behalf of the Partnership on July 21, 2000.
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 1999 Annual Report on Form
10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Partnership may be exposed to market risk through changes in
interest rates and commodity prices as discussed below. The Partnership has no
foreign exchange risks.
At June 30, 2000, 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, 2000, the estimated fair value of the
Senior Notes and the SunTrust loan was approximately $363.5 million and $37.7
million, respectively.
15
<PAGE> 16
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISTS - (CONTINUED)
At June 30, 2000, the Partnership had $45 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 borrowings and is
adjusted monthly, bimonthly, quarterly or semi-annually. Utilizing the balances
of variable interest rate debt outstanding at June 30, 2000, and assuming market
interest rates increase 100 basis points, the potential annual increase in
interest expense is approximately $0.5 million.
On July 14, 2000, the Parent Partnership entered into a $75 million
term loan and a $475 million revolving credit facility. On July 21, 2000, the
Parent Partnership borrowed $75 million under the term loan and $340 million
under the revolving credit facility. The funds were used to finance the
acquisition of assets from ARCO and to refinance existing credit facilities,
other than the Senior Notes. The term loan has an eighteen month maturity and
the revolving facility has a three year maturity. The interest rate for the
credit agreements is based on the Parent Partnership's option of either
SunTrust's prime rate, the federal funds rate or LIBOR rate in effect at the
time of the borrowings and is adjusted monthly, bimonthly, quarterly or
semi-annually. On July 21, 2000, the Parent Partnership entered into a three
year swap agreement to partially hedge its exposure on the new variable rate
credit facilities. The swap agreement is based on a notional amount of $250
million. Under the swap agreement, the Parent Partnership will pay a fixed rate
of interest of 7.17% and will receive a floating rate based on a three month USD
LIBOR rate. It is the Parent Partnership's intent to initiate intercompany notes
payable of $83 million to cover the debt service requirements for such amounts
paid on behalf of the Partnership on July 21, 2000.
The Partnership periodically enters into futures contracts to hedge its
exposure to price risk on product inventory transactions. For derivative
contracts to qualify as a hedge, the price movements in the commodity derivative
must be highly correlated with the underlying hedged commodity. Contracts that
qualify as hedges and held for non-trading purposes are accounted for using the
deferral method of accounting. Under this method, gains and losses are not
recognized until the underlying physical transaction occurs. Deferred gains and
losses related to such instruments are reported in the consolidated balance
sheet as current assets or current liabilities. At June 30, 2000, there were no
outstanding futures contracts.
16
<PAGE> 17
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
<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>
17
<PAGE> 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
<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>
18
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
<TABLE>
<S> <C>
Form 10-Q of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the quarter ended June 30, 1999 and
incorporated herein by reference).
10.23 Credit Agreement between TEPPCO Partners, L.P., SunTrust
Bank, and Certain Lenders, dated July 14, 2000 (Filed as
Exhibit 10.31 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended June
30, 2000 and incorporated herein by reference).
27* Financial Data Schedule as of and for the six months ended
June 30, 2000.
</TABLE>
----------------------
* 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, LLC
General Partner
/s/ CHARLES H. LEONARD
--------------------------------------------------
Charles H. Leonard
Senior Vice President, Chief Financial Officer
and Treasurer
Date: August 10, 2000
19
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
