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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                         PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) : MAY 9, 2001

                           COMMISSION FILE NO. 1-10403

                              TEPPCO PARTNERS, L.P.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

       DELAWARE                                                76-0291058
(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)

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ITEM 5. OTHER EVENTS

     On July 20, 2000, TEPPCO Partners, L.P. (the "Partnership") completed an
acquisition of certain assets from ARCO Pipe Line Company ("ARCO"), a wholly
owned subsidiary of Atlantic Richfield Company, for $322.6 million, which
included $4.1 million of acquisition related costs. The purchase included ARCO's
50-percent ownership interest in Seaway Crude Pipeline Company ("Seaway").
Seaway's crude pipeline carries mostly imported crude oil from a marine terminal
at Freeport, Texas, to Cushing, Oklahoma and from a marine terminal at Texas
City, Texas to the refineries in the Texas City and Houston areas. The
Partnership assumed ARCO's role as operator of this pipeline. The Partnership
also acquired ARCO's crude oil terminal facilities in Cushing and Midland,
Texas, including the line transfer and pumpover business at each location; an
undivided ownership interest in both the Rancho Pipeline, a crude oil pipeline
from West Texas to Houston, and the Basin Pipeline, a crude oil pipeline running
from Jal, New Mexico, through Midland to Cushing, both of which are operated by
another joint owner; and the receipt and delivery pipelines known as the West
Texas Trunk System, which is located around the Midland terminal. The
acquisition was accounted for under the purchase method of accounting.

     On October 16, 2000 the Partnership received a settlement notice from ARCO
for payment of a net aggregate amount of approximately $12.9 million in
post-closing adjustments related to the purchase of the ARCO assets. A large
portion of the requested adjustment relates to ARCO's indemnity for payment of
accrued income taxes. The Partnership is disputing a substantial portion of the
adjustments. The Partnership does not believe that payment of any amount
ultimately determined would have a material adverse impact on the Partnership's
financial condition and results of operations.

     The Partnership is filing this document to update the pro forma information
previously filed on Form 8-K/A on October 3, 2000.

                                    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 hereunto duly authorized.

                               TEPPCO Partners, L.P.
                               (Registrant)

                               By: Texas Eastern Products Pipeline Company, LLC,
                                   General Partner

                                            /s/ CHARLES H. LEONARD
                                   ---------------------------------------------
                                              Charles H. Leonard
                                    Sr. Vice President, Chief Financial Officer
                                                and Treasurer


Date: May 9, 2001

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ITEM 7. STATEMENTS AND EXHIBITS

     b)   PRO FORMA FINANCIAL INFORMATION

     The following table sets forth the summary unaudited pro forma condensed
combined statement of income which is presented to give effect to the July 20,
2000 purchase of certain assets from ARCO by the Partnership, which was
accounted for pursuant to the purchase method of accounting. The information was
prepared based on the following assumptions:

     o    The statement of income assumes that the purchase was consummated on
          January 1, 2000.

     o    The expected cost savings through the consolidation of the corporate
          headquarters of the two entities, the elimination of duplicate staffs
          and expenses, and improved operating efficiencies are excluded from
          the pro forma condensed combined statement of income. A significant
          portion of the savings is expected to be realized in the year ending
          December 31, 2001 and substantially all of the amount is expected to
          be realized in the year ending December 31, 2002.

     The unaudited pro forma condensed combined statement of income is presented
for illustration purposes only and is not necessarily indicative of the results
of operations which would have occurred had the acquisition been consummated on
the date indicated above, nor is it necessarily indicative of future results of
operations. The unaudited pro forma condensed combined income statement should
be read in conjunction with the historical consolidated financial statements of
the Partnership and the historical combined financial statements of ARCO Pipe
Line Company's APL Business ("APL Business") and Seaway Crude Pipeline Company,
each as previously filed with the Securities and Exchange Commission. Certain
reclassifications have been made to the APL Business' historical statement of
income to reflect the Partnership's presentation of financial information. A pro
forma consolidated balance sheet is not provided because the acquisition has
been reflected in the Partnership's consolidated balance sheet at December 31,
2000 included in the Partnership's 2000 Form 10-K for the year ended
December 31, 2000.

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                              TEPPCO PARTNERS, L.P.
           UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
                          YEAR ENDED DECEMBER 31, 2000
                     (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

Historical Pro Forma ---------------------------- ------------------------------- TEPPCO APL Partners, LP Business Adjustments Combined ------------ ----------- ----------- ----------- Operating revenues: Sales of crude oil and petroleum products $ 2,821,943 $ -- $ 2,821,943 Transportation - Refined products 119,331 -- 119,331 Transportation - LPGs 73,896 -- 73,896 Transportation - Crude oil and NGLs 24,533 10,341 34,874 Mont Belvieu operations 13,334 -- 13,334 Pipeline services -- 5,724 5,724 Other 34,904 171 35,075 ----------- ----------- ----------- ----------- Total operating revenues 3,087,941 16,236 -- 3,104,177 ----------- ----------- ----------- ----------- Costs and expenses: Purch. of crude oil and petrol. products 2,794,604 -- 2,794,604 Operating, general and administrative 104,918 9,963 2,041 (a) 116,922 Operating fuel and power 34,655 -- 34,655 Depreciation and amortization 35,163 2,043 107 (b) 36,707 1,437 (b) (1,094)(c) (949)(c) Taxes - other than income taxes 10,576 -- 10,576 Other -- 575 575 ----------- ----------- ----------- ----------- Total costs and expenses 2,979,916 12,581 1,542 2,994,039 ----------- ----------- ----------- ----------- Operating income 108,025 3,655 (1,542) 110,138 Interest expense (48,982) -- (15,098)(d) (65,629) (1,549)(d) Interest capitalized 4,559 -- 4,559 Equity in earnings of Seaway Crude Pipeline Co. 12,214 13,794 (830)(b) 25,178 Other income - net 2,349 -- 2,349 ----------- ----------- ----------- ----------- Income before minority interest and income tax provision 78,165 17,449 (19,019) 76,595 Minority interest (789) -- 15 (e) (774) Income tax provision -- 5,379 (5,379)(f) -- ----------- ----------- ----------- ----------- Net income $ 77,376 $ 12,070 $ (13,625) $ 75,821 =========== =========== =========== =========== Net Income Allocation: Limited Partner Unitholders 56,091 54,963 Class B Unitholder 7,385 7,237 General Partner 13,900 13,621 ----------- ----------- Total net income allocated $ 77,376 $ 75,821 =========== =========== Basic and diluted net income per Limited Partner and Class B Units $ 1.89 $ 1.85 =========== =========== Weighted Average Limited Partner and Class B Units outstanding 33,594 33,594 =========== ===========
See accompanying notes to unaudited pro forma condensed combined statement of income. 4 5 TEPPCO PARTNERS, L.P. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME The acquisition was accounted for using the purchase method of accounting with the Partnership acquiring the APL Business. Under this method of accounting, the Partnership recorded the assets and liabilities of the APL Business at fair market value as of the date of closing, with any excess purchase price reflected as goodwill. The following notes set forth the explanations and assumptions used in the preparation of the unaudited pro forma condensed combined statement of income. The pro forma adjustments are based on the best estimate of the Partnership's management using information currently available. The allocation of the purchase price paid and the financing of the acquisition are summarized as follows (in thousands): Purchase price paid: Proceeds of bank debt issued for purchase price $ 318,500 Acquisition costs 4,140 --------- 322,640 --------- Allocated to: Working capital, net (6,177) Property, plant and equipment 95,252 Investment in Seaway Crude Pipeline Company 228,312 Other assets 30 --------- Total allocation to identifiable assets and liabilities 317,417 --------- Goodwill (excess purchase price over allocation to identifiable assets and liabilities) $ 5,223 =========
The historical amounts for the APL Business represent activity for the period January 1, 2000 through July 20, 2000, the acquisition date. The pro forma adjustments relate to this period, as the effects of the acquisition subsequent to July 20, 2000 are included in the historical results of the Partnership. On October 16, 2000 the Partnership received a settlement notice from ARCO for payment of a net aggregate amount of approximately $12.9 million in post-closing adjustments related to the purchase of the ARCO assets. A large portion of the requested adjustment relates to ARCO's indemnity for payment of accrued income taxes. The Partnership is disputing a substantial portion of the adjustments. The Partnership does not believe that payment of any amount ultimately determined would have a material adverse impact on the Partnership's financial condition and results of operations. No pro forma effect has been made for this post-closing dispute. The following adjustments were made to the unaudited pro forma condensed combined statement of income pursuant to the purchase method of accounting: (a) To reverse the historical APL Business employee benefits income and record estimated employee benefits expense for the APL Business employees assuming participation in the Partnership's benefit plans. (b) To record pro forma depreciation expense ($1,437) and amortization of goodwill ($107) and excess cost for Seaway ($830) resulting from the purchase price allocation. Goodwill and excess cost for Seaway over the underlying equity in net assets are assumed to be amortized over a period of 20 years and property, plant, and equipment depreciated over estimated remaining lives ranging from five years to 40 years. 5 6 TEPPCO PARTNERS, L.P. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME - (CONTINUED) (c) To reverse the historical amortization expense resulting from ARCO's excess investment in Seaway ($1,094) and the historical depreciation expense of the APL Business ($949). (d) To reflect the increase in interest expense resulting from the issuance of debt for the cash portion of the purchase price ($15,098) and the related estimated debt issuance costs ($1,549). The interest rate on the credit facilities used to initially finance the acquisition is assumed to be 8.3%. Debt issue costs of approximately $7.1 million are assumed to be amortized over the anticipated life of the credit facilities. Assuming market interest rates change by 1/8 percent, the potential annual change in interest expense is approximately $0.4 million. (e) To record the effect of the pro forma statement of income adjustments on minority interest expense. (f) To eliminate the APL Business income tax provision as the Partnership is not a taxable entity. 6