TEPPCO Partners, L.P. Reports Results for Fourth Quarter and Year 2007

Business Wire, Feb 4, 2008

CAPITALIZATION AND LIQUIDITY

Total principal amount of debt outstanding at December 31, 2007 was approximately $1.8 billion, which includes $490 million of principal outstanding under the multi-year $700 million revolving credit facility. In December 2007, the partnership entered into a $1.0 billion, 364-day credit facility. No amounts were outstanding under this facility at December 31, 2007. The 364-day facility was entered into to fund the payment of the $355 million of senior notes in January 2008 and to fund the approximate $320 million of debt related to the acquisition of the marine transportation business on February 1, 2008, as well as other general partnership purposes. Interest expense increased $6.7 million in the fourth quarter of 2007, compared with the 2006 fourth quarter, primarily due to the 7.00 percent fixed-rate junior subordinated notes issued in June 2007, and $1.1 million of prepayment premiums on an early redemption of a portion of the senior notes. The junior subordinated notes receive an average equity content treatment of 50 percent from both Moody's and Standard and Poor's, and 75 percent equity content from Fitch Ratings.

During the year ended December 31, 2007, TEPPCO spent $176.2 million on revenue-generating projects and $52.1 million to maintain existing assets. In addition, TEPPCO spent $187.5 million for its share of capital expenditures primarily related to the Jonah phase V expansion.

NON-GAAP FINANCIAL MEASURES

The Financial Highlights table accompanying this earnings release and other disclosures herein include the following non-GAAP measures under the rules of the Securities and Exchange Commission (SEC): EBITDA, EBITDA from continuing operations and EBITDA from continuing operations, excluding gains from sales of assets and ownership interests; income from continuing operations, excluding gains from sales of assets and ownership interests; and margin of the Upstream segment. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or income from continuing operations, operating income, cash flow from operating activities or any other measure of financial performance calculated and presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to similarly-titled measures of other entities because other entities may not calculate such measures in the same manner as we do.

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 in the evaluation of our business. Further, we believe EBITDA and related adjusted EBITDA measures provide useful information regarding the performance of our assets without regard to financing methods, capital structures or historical costs basis. As a result, these measures provide investors with a helpful tool for comparing the operating performance of our assets with the performance of other companies that have different financing and capital structures. EBITDA multiples are also used by our investors in assisting in the valuation of our limited partners' equity. A reconciliation of these measures to net income is provided in the Financial Highlights table and the Business Segment Data table.