Item 2.02 Results of Operations and Financial Condition.

On February 6, 2007, TEPPCO Partners, L.P. (“TEPPCO”) issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2006, and will hold a conference call discussing those results. A copy of the earnings press release is filed as Exhibit 99.1 to this report, which is hereby incorporated by reference into this Item 2.02. The webcast conference call will be available for replay on TEPPCO’s website at www.teppco.com. The webcast conference call will be archived on its website for 90 days.

Unless the context requires otherwise, references to “we,” “us,” “our,” or “TEPPCO” within the context of this Current Report on Form 8-K refer to the consolidated business and operations of TEPPCO. In addition, as generally used in the energy industry and in the attached press release and accompanying exhibits, the identified terms have the following meanings:

Use of Non-GAAP financial measures

Our press release and/or the webcast conference call discussions include the non-generally accepted accounting principle (“non-GAAP”) financial measures of margin of the Upstream segment and EBITDA. The press release provides reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). 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.

Margin of the Upstream segment. We evaluate Upstream segment performance based on the non-GAAP financial measure of margin. Margin 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 accompanying the earnings release. Our non-GAAP financial measure of Upstream segment margin should not be considered an alternative to GAAP operating income.

EBITDA. We define EBITDA as net income plus interest expense - net, deferred 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 as a supplemental disclosure because we believe EBITDA is used by our investors as a supplemental financial measure in the evaluation of our business. A reconciliation of EBITDA to net income is provided in the Financial Highlights table accompanying the earnings release.

We believe EBITDA provide useful information regarding the performance of our assets without regard to financing methods, capital structures or historical costs basis. As a result, EBITDA provides investors with a helpful measure 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. EBITDA should not be considered as an alternative to net income or income from continuing operations, operating income, cash flows from operating activities or any other measure of

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EBITDA is a non-GAAP financial measure which is defined and reconciled to its most directly comparable GAAP financial measure later in this news release.

“Led by a particularly strong performance within our Upstream segment, each of our business segments contributed to the best fourth quarter net income and EBITDA results the partnership has ever had,” said Jerry E. Thompson, president and chief executive officer of TEPPCO. “Our results were even more impressive given the challenges our Downstream segment faced as a result of one of the warmest winters on record in the Northeast, which reduced propane demand in the region during 2006. Our outstanding performance, despite the impact of the weather, highlights the benefits of the diversity of TEPPCO’s asset base,” Thompson noted that 2006 was a transition year for TEPPCO as the partnership completed several critical initiatives which are expected to position the partnership for future long-term growth, including:

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