FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended September 30, 1999

                                                                  OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                For the transition period from _______ to _______


Commission file number: 1-14323

                        Enterprise Products Partners L.P.
             (Exact name of Registrant as specified in its charter)

               Delaware                                            76-0568219
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)

                              2727 North Loop West
                                 Houston, Texas
                                   77008-1037
               (Address of principal executive offices) (Zip code)

                                 (713) 880-6500
               (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 ___

     The registrant had 45,552,915  Common Units  outstanding as of November 15,
1999.




<PAGE>
               Enterprise Products Partners L.P. and Subsidiaries

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                 Page
                                                                                                  No.
<S>                                                                                              <C>
Part I.  Financial Information

Item 1.  Consolidated Financial Statements

Enterprise Products Partners L.P. Unaudited Consolidated Financial Statements:

         Consolidated Balance Sheets,  September 30, 1999 and December 31, 1998                  1

         Statements of Consolidated Operations
                  for the Three and Nine Months ended September 30, 1999 and 1998                2

         Statements of Consolidated Cash Flows
                  for the Nine Months ended September 30, 1999 and 1998                          3

         Notes to Unaudited Consolidated Financial Statements                                    4-12

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                                   13-27

Item 3.   Quantitative and Qualitative Disclosures about Market Risk                             27-28

Part II.  Other Information

Item 6.   Exhibits and Reports on Form 8-K                                                       29-32

         Signature Page                                                                          33
</TABLE>




<PAGE>

                         PART 1. FINANCIAL INFORMATION.
                   Item 1. CONSOLIDATED FINANCIAL STATEMENTS.

                        Enterprise Products Partners L.P.
                           Consolidated Balance Sheets
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                                                                 September 30,
                                                                                               December 31,           1999
                                           ASSETS                                                  1998           (Unaudited)
                                                                                             -------------------------------------
<S>                                                                                            <C>                <C>
Current Assets
       Cash and cash equivalents                                                               $   24,103         $    21,647
       Accounts receivable - trade                                                                 57,288             187,615
       Accounts receivable - affiliates                                                            15,546              50,562
       Inventories                                                                                 17,574             102,992
       Current maturities of participation in notes receivable from
           unconsolidated affiliates                                                               14,737               9,778
       Prepaid and other current assets                                                             8,445              11,283
                                                                                             -------------------------------------
                        Total current assets                                                      137,693             383,877
Property, Plant and Equipment, Net                                                                499,793             772,157
Investments in and Advances to Unconsolidated Affiliates                                           91,121             235,864
Participation in Notes Receivable from Unconsolidated Affiliates                                   11,760
Intangible assets, net of amortization of $702                                                                         79,187
Other Assets                                                                                          670               1,515
                                                                                             =====================================
                        Total                                                                  $  741,037         $ 1,472,600
                                                                                             =====================================

                              LIABILITIES AND PARTNERS' EQUITY
Current Liabilities
       Current maturities of long-term debt                                                                       $   175,000
       Accounts payable - trade                                                                $   36,586             139,851
       Accrued gas payables                                                                        27,183             143,397
       Accrued expenses                                                                             7,540              13,071
       Other current liabilities                                                                   11,462              15,017
                                                                                             -------------------------------------
                        Total current liabilities                                                  82,771             486,336
Long-Term Debt                                                                                     90,000             215,000
Other Long-Term Liabilities                                                                                               539
Minority Interest                                                                                   5,730               7,801
Commitments and Contingencies
Partners' Equity
       Common Units (45,552,915 Units outstanding at December 31, 1998 and
            September 30, 1999)                                                                   433,082             417,651
       Subordinated Units (21,409,870 Units outstanding at December 31, 1998 and                  123,829             126,496
            September 30, 1999)
       Special Units  (14,500,000 Units outstanding at September 30, 1999)                                            215,828
       Units acquired by Trust, at cost (267,200 Units outstanding at September 30, 1999)                              (4,727)
       General Partner                                                                              5,625               7,676
                                                                                             -------------------------------------
                        Total Partners' Equity                                                    562,536             762,924
                                                                                             =====================================
                        Total                                                                  $  741,037         $ 1,472,600
                                                                                             =====================================
</TABLE>

            See Notes to Unaudited Consolidated Financial Statements

                                       1
<PAGE>

                        Enterprise Products Partners L.P.
                      Statements of Consolidated Operations
           (Unaudited, Amounts in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
                                                                        Three Months Ended                   Nine Months Ended
                                                                          September 30,                        September 30,
                                                                      1998              1999               1998              1999
                                                               --------------------------------------------------------------------
<S>                                                             <C>               <C>                <C>               <C>
REVENUES
Revenues from consolidated operations                           $  164,620        $  441,880         $  562,703        $  763,793
Equity income in unconsolidated affiliates                           4,171             3,148             10,824             7,591
                                                               --------------------------------------------------------------------
         Total                                                     168,791           445,028            573,527           771,384
                                                               --------------------------------------------------------------------
COST AND EXPENSES
Operating costs and expenses                                       153,197           401,155            521,428           688,250
Selling, general and administrative                                  3,751             3,200             15,362             9,200
                                                               --------------------------------------------------------------------
         Total                                                     156,948           404,355            536,790           697,450
                                                               --------------------------------------------------------------------
OPERATING INCOME                                                    11,843            40,673             36,737            73,934
                                                               --------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Interest expense                                                    (2,500)           (4,036)           (13,304)           (7,995)
Interest income from unconsolidated affiliates                         340               407                340             1,096
Interest income - other                                                 85               682                645             1,114
Other, net                                                              34            (1,010)               464            (1,522)
                                                               --------------------------------------------------------------------
          Other income  (expense)                                   (2,041)           (3,957)           (11,855)           (7,307)
                                                               --------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM
    AND MINORITY INTEREST                                            9,802            36,716             24,882            66,627
Extraordinary charge on early extinguishment of debt               (27,176)                             (27,176)
                                                               --------------------------------------------------------------------
INCOME (LOSS) BEFORE MINORITY INTEREST                             (17,374)           36,716             (2,294)           66,627
MINORITY INTEREST                                                      174              (370)                23              (672)
                                                               ====================================================================
NET INCOME (LOSS)                                               $  (17,200)       $   36,346         $   (2,271)       $   65,955
                                                               ====================================================================

ALLOCATION OF NET INCOME (LOSS) TO:
          Limited partners                                      $  (17,028)       $   35,983         $   (2,248)       $   65,295
                                                               ====================================================================
          General partner                                       $     (172)       $      363         $      (23)       $      660
                                                               ====================================================================

Number of Units Used in Computing
   Basic Earnings per Common Unit                                   63,441            66,696             57,830            66,715
                                                               ====================================================================
BASIC EARNINGS PER COMMON UNIT
          Income before extraordinary item and
              minority interest per common unit                 $     0.15        $     0.54         $     0.43        $     0.99
                                                               ====================================================================
          Net income (loss) per common unit                     $    (0.27)       $     0.54         $    (0.04)       $     0.98
                                                               ====================================================================
Number of Units Used in Computing
   Diluted Earnings per Common Unit                                 63,441            76,310             57,830            69,955
                                                               ====================================================================
DILUTED EARNINGS PER COMMON UNIT
          Income before extraordinary item and
              minority interest per common unit                 $     0.15        $     0.48         $     0.43        $     0.94
                                                               ====================================================================
          Net income (loss) per common unit                     $    (0.27)       $     0.47         $    (0.04)       $     0.93
                                                               ====================================================================
</TABLE>
            See Notes to Unaudited Consolidated Financial Statements

                                       2
<PAGE>

                        Enterprise Products Partners L.P
                      Statements of Consolidated Cash Flows
                        (Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                September 30,
                                                                             1998           1999
                                                                         -----------------------------
<S>                                                                          <C>            <C>
OPERATING ACTIVITIES
Net income (loss)                                                            ($2,271)       $65,955
Adjustments to reconcile net income (loss) to cash flows provided by
      (used for) operating activities:
      Extraordinary item - early extinguishment of debt                       27,176
      Depreciation and amortization                                           14,796         17,280
      Equity in income of unconsolidated affiliates                          (10,824)        (7,591)
      Leases paid by EPCO                                                      3,327          7,918
      Minority interest                                                          (23)           672
      (Gain) loss on sale of assets                                             (274)           122
      Net effect of changes in operating accounts                            (75,824)       (34,246)
                                                                         -----------------------------
Operating activities cash flows                                              (43,917)        50,110
                                                                         -----------------------------
INVESTING ACTIVITIES
Capital expenditures                                                          (7,159)       (10,603)
Proceeds from sale of assets                                                   1,890              8
Acquisitions                                                                               (208,095)
Participation in notes receivable from unconsolidated affiliates:
      Purchase of notes receivable                                           (33,724)
      Collection of notes receivable                                           3,542         16,719
Unconsolidated affiliates:
      Investments in and advances to                                         (19,988)       (58,460)
      Distributions received                                                   6,601          4,607
                                                                         -----------------------------
Investing activities cash flows                                              (48,838)      (255,824)
                                                                         -----------------------------
FINANCING ACTIVITIES
Net proceeds from sale of common units                                       243,309
Long-term debt borrowings                                                     75,000        350,000
Long-term debt repayments                                                   (256,493)       (59,923)
Net decrease in restricted cash                                                4,522
Cash dividends paid to partners                                                             (81,321)
Cash dividends paid to minority interest                                                       (830)
Units acquired by consolidated trusts                                                        (4,727)
Cash contributions from EPCO to minority interest                                                59
                                                                         -----------------------------
Financing activities cash flows                                               66,338        203,258
                                                                         -----------------------------
CASH CONTRIBUTIONS FROM EPCO                                                  18,468
NET CHANGE IN CASH AND CASH EQUIVALENTS                                       (7,949)        (2,456)
CASH AND CASH EQUIVALENTS, JANUARY 1                                          18,941         24,103
                                                                         =============================
CASH AND CASH EQUIVALENTS, SEPTEMBER 30                                     $ 10,992       $ 21,647
                                                                         =============================
</TABLE>
            See Notes to Unaudited Consolidated Financial Statements

                                       3
<PAGE>


                        Enterprise Products Partners L.P.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.   GENERAL

In the  opinion of  Enterprise  Products  Partners  L.P.  (the  "Company"),  the
accompanying unaudited consolidated financial statements include all adjustments
consisting of normal recurring accruals necessary for a fair presentation of the
Company's consolidated financial position as of September 30, 1999, consolidated
results of operations  for the three and nine month periods ended  September 30,
1999 and 1998, and its consolidated  cash flows for the nine month periods ended
September 30, 1999 and 1998.  Although the Company  believes the  disclosures in
these financial  statements are adequate to make the  information  presented not
misleading,  certain information and footnote  disclosures  normally included in
annual  financial  statements  prepared in accordance  with  generally  accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations of the Securities and Exchange Commission. These unaudited financial
statements should be read in conjunction with the financial statements and notes
thereto  included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 ("Form 10-K").

The results of operations  for the three and nine month periods ended  September
30, 1999 are not  necessarily  indicative  of the results to be expected for the
full year.

Dollar amounts presented in the tabulations within the notes to the consolidated
financial  statements  are stated in  thousands  of  dollars,  unless  otherwise
indicated.

2.   INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

At September  30, 1999,  the  Company's  significant  unconsolidated  affiliates
accounted for by the equity method included the following:

          Belvieu Environmental Fuels ("BEF") - a 33-1/3% economic interest in a
          Methyl Tertiary Butyl Ether ("MTBE")  production  facility  located in
          southeast Texas.

          Baton Rouge  Fractionators LLC ("BRF") - a 31.25% economic interest in
          a  natural  gas  liquid  ("NGL")  fractionation  facility  located  in
          southeastern Louisiana.

          Baton Rouge  Propylene  Concentrator,  LLC ("BRPC") - a 30.0% economic
          interest in a propylene  concentration  unit  located in  southeastern
          Louisiana  which  is  under   construction  and  scheduled  to  become
          operational in the third quarter of 2000.

          EPIK  Terminalling  L.P.  and EPIK  Gas  Liquids,  LLC  (collectively,
          "EPIK") - a 50%  aggregate  economic  interest in a  refrigerated  NGL
          marine terminal loading facility located in southeast Texas.

          Wilprise  Pipeline  Company,  LLC  ("Wilprise")  - a 33-1/3%  economic
          interest in a NGL pipeline system located in southeastern Louisiana.

          Tri-States  NGL Pipeline  LLC  ("Tri-States")  - an aggregate  33-1/3%
          economic  interest  in a NGL  pipeline  system  located in  Louisiana,
          Mississippi,  and Alabama.  In  connection  with the Tejas Natural Gas
          Liquids,  LLC ("TNGL")  acquisition  (discussed in Note 3) the Company
          acquired an additional  16-2/3% interest bringing the total investment
          in Tri-States to the current 33-1/3%.

          Belle Rose NGL Pipeline LLC ("Belle Rose") - a 41.7% economic interest
          in a NGL pipeline  system  located in south  Louisiana.  The Company's
          interest  in  Belle  Rose was  acquired  in  connection  with the TNGL
          acquisition which is discussed in Note 3.


                                      4
<PAGE>

          K/D/S  Promix LLC  ("Promix") - a 33-1/3%  economic  interest in a NGL
          fractionation facility and related storage facilities located in south
          Louisiana. The Company's interest in Promix was acquired in connection
          with the TNGL acquisition which is discussed in Note 3.

The Company's  investments  in and advances to  unconsolidated  affiliates  also
includes  Venice Energy  Services  Company,  LLC  ("VESCO")  and Dixie  Pipeline
Company ("Dixie"). The VESCO investment consists of a 13.1% economic interest in
a LLC owning a natural gas processing plant, fractionation facilities,  storage,
and gas gathering  pipelines in Louisiana.  The Dixie investment  consists of an
11.5%  interest in a corporation  owning a 1,300-mile  propane  pipeline and the
associated  facilities  extending  from Mont Belvieu,  Texas to North  Carolina.
These  investments  are accounted  for using the cost method in accordance  with
generally accepted accounting principles.

Effective July 1, 1999, a subsidiary of Enterprise  Products Operating L.P. (the
"Operating  Partnership")  acquired the remaining 51% economic  interest of Mont
Belvieu  Associates  ("MBA") from Kinder  Morgan Energy  Partners L.P.  ("Kinder
Morgan") and  Enterprise  Products  Company  ("EPCO")  (see Note 3 for a general
discussion  regarding  this  acquisition).  As a  consequence,  the  results  of
operations since July 1, 1999 are included in consolidated  operations.  The 49%
economic  interest in income of MBA held by the Company prior to the acquisition
was recorded as equity income.

In  conjunction  with the  acquisition  of TNGL from Tejas  Energy,  LLC ("Tejas
Energy")  effective  August 1,  1999,  the  Company  currently  owns 100% of the
economic  interest  in Entell NGL  Services,  LLC  ("Entell")  (see Note 3 for a
general discussion regarding the TNGL acquisition). As a result, Entell is now a
wholly-owned   subsidiary   of  the   Operating   Partnership.   The   Operating
Partnership's  50%  economic  interest  in the  income  of  Entell  prior to the
acquisition has been recorded as equity income.

Investments in and advances to unconsolidated affiliates at:

                                                December 31,       September 30,
                                                    1998               1999
                                             -----------------------------------

                    BEF                         $   50,079          $   56,493
                    MBA                             12,551
                    BRF                             17,896              34,656
                    BRPC                                                 8,400
                    EPIK                             5,667              12,974
                    Wilprise                         4,873               8,063
                    Tri-States                          55              28,324
                    Promix                                              29,590
                    Dixie                                               20,000
                    VESCO                                               25,000
                    Belle Rose                                          12,364
                                             ===================================
                    Total                       $   91,121          $  235,864
                                             ===================================


                                       5
<PAGE>

Equity in income of unconsolidated affiliates for the:

                     Three Months ended               Nine Months ended
                       September 30,                    September 30,
                   1998             1999            1998             1999
              ------------------------------------------------------------------

BEF             $   3,355        $   2,519       $   6,609        $   4,756
MBA                   862               72           4,305            1,256
BRF                                   (258)                            (544)
BRPC                                     4                                4
EPIK                  (46)              59             (90)             236
Entell                                 258                            1,389
Wilprise                              (130)                            (130)
Tri-States                             472                              472
Belle Rose                             245                              245
Promix                                 (93)                             (93)
              ==================================================================
Total           $   4,171        $   3,148       $  10,824        $   7,591
              ==================================================================


3.  ACQUISITIONS

Acquisition of Tejas Natural Gas Liquids, LLC

Effective  August 1, 1999, the Company  acquired TNGL from a subsidiary of Tejas
Energy, an affiliate of Shell Oil Company ("Shell"). TNGL engages in natural gas
processing  and NGL  fractionation,  transportation,  storage and  marketing  in
Louisiana  and  Mississippi.   TNGL's  assets  include  a  20-year  natural  gas
processing agreement with Shell for the rights to process its current and future
natural gas  production  from the state and federal waters of the Gulf of Mexico
and varying  interests in eleven  natural gas processing  plants  (including one
under  construction)  with a combined  gross capacity of 11.0 billion cubic feet
per day (Bcfd) and a net capacity of 3.1 Bcfd; four NGL fractionation facilities
with a combined gross capacity of 281,000 barrels per day (BPD) and net capacity
of 131,500 BPD;  four NGL storage  facilities  with  approximately  29.5 million
barrels of gross  capacity  and 8.8 million  barrels of net  capacity;  and over
2,100 miles of NGL pipelines (including an 11.5% interest in Dixie Pipeline).

As discussed in Note 5, the TNGL acquisition was purchased with a combination of
$166  million in cash and 14.5  million  issuance  of  non-distribution  bearing
convertible  Special Units.  The $166 million cash portion of the purchase price
was funded with  borrowings  under the  Company's  new $350  million bank credit
facility led by The Chase Manhattan Bank. The Special Units were valued within a
range provided by an independent  investment banker using both present value and
Black Scholes Model  methodologies.  The  consideration  for the acquisition was
determined by arms-length negotiation among the parties.

The  acquisition  was accounted for under the purchase method of accounting and,
accordingly,  the purchase price has been  allocated to the assets  acquired and
liabilities  assumed  based on their  estimated  fair value at August 1, 1999 as
follows:

         Current Assets                      $127.5
         Investments                           97.7
         Property, net                        225.8
         Intangible asset                      71.1
         Liabilities                         (145.7)
                                           ==========
         Total purchase price               $ 376.3
                                           ==========


                                       6
<PAGE>

The $71.1 million  intangible  asset is associated  with the 20-year natural gas
processing agreement with Shell ("Shell Contract") and is being amortized over a
period of 20 years,  approximating  the life of the  agreement.  For the quarter
ending September 30, 1999,  approximately  $0.6 million of such amortization was
charged to expense.  The assets,  liabilities  and results of operations of TNGL
are  included  with  those of the  Company  as of  August  1,  1999.  Historical
information  for  periods  prior to  August 1, 1999 do not  reflect  any  impact
associated with the TNGL acquisition.

As described in Note 5, Tejas Energy has the  opportunity  to earn an additional
6.0 million non-distribution bearing, convertible special Contingency Units over
the next two years upon the  achievement  of certain gas  production  thresholds
under the Shell  Contract.  If such special  Contingency  Units are issued,  the
purchase price will be adjusted accordingly.

Acquisition  of Kinder  Morgan and EPCO  interest in Mont Belvieu  Fractionation
Facility

Effective  July 1, 1999,  the Company  acquired  Kinder Morgan  Energy  Partners
L.P.'s  ("Kinder  Morgan")  25%  indirect  ownership  interest  and EPCO's  0.5%
indirect ownership interest in a 210,000 BPD NGL fractionation  facility located
in Mont Belvieu,  Texas for approximately $41 million in cash and the assumption
of  approximately  $ 4 million of debt.  The $41 million in cash was funded with
borrowings  under the Company's new $350 million bank credit facility led by The
Chase Manhattan Bank.

The  acquisition  was accounted for under the purchase method of accounting and,
accordingly,  the purchase price has been allocated to the assets  purchased and
liabilities  assumed  based on their  estimated  fair  value at July 1,  1999 as
follows:

         Property, net                         $36.3
         Intangible asset                        8.7
         Liabilities                            (3.8)
                                             ==========
         Total purchase price               $   41.2
                                             ==========


The intangible  asset represents the excess cost of purchase price over the fair
market value of the assets  acquired and is being  amortized over 20 years.  For
the quarter  ending  September  30,  1999,  approximately  $0.1  million of such
amortization was charged to expense.

Prior to this  transaction,  the Company  held a 25% indirect and a 12.5% direct
ownership  interest  in  the  fractionation  facility.  The  indirect  ownership
interests of the Company, Kinder Morgan and EPCO were held through MBA. Prior to
the  acquisition,  the  12.5%  direct  ownership  interest  and the  49%  equity
ownership  of  MBA  were  held  by  Enterprise  Products  Texas  Operating  L.P.
("EPTexas").  Upon completion of the transaction,  EPTexas held 100% of MBA and,
as a result,  MBA was  merged  into  EPTexas.  The net  assets  and  results  of
operations of MBA are included with those of EPTexas  beginning with the July 1,
1999 acquisition date. Historical  information for periods prior to July 1, 1999
does not reflect any impact  associated with the acquisition of the Mont Belvieu
Fractionation  Facility.  The  Company's  equity in the earnings of MBA prior to
July 1, 1999 is included in equity in income of unconsolidated affiliates.

Pro Forma Financial Information

The balances included in the consolidated  balance sheets related to the current
year  acquisitions  are based upon  preliminary  information  and are subject to
change  as  additional   information  is  obtained.   Material  changes  in  the
preliminary allocations are not anticipated by management.

The following pro forma  information gives effect to the acquisition of TNGL and
MBA as if the business  combination had occurred at the beginning of each period
presented.  The pro  forma  adjustments  which  have  been made are based on the
preliminary  allocation of the purchase price to assets acquired and liabilities


                                       7
<PAGE>

assumed.  This pro  forma  information  should be read in  conjunction  with the
accompanying interim Consolidated Financial Statements,  Management's Discussion
and Analysis of Financial  Condition and Results of  Operations.  This pro forma
information is not necessarily  indicative of the financial  results which would
have occurred had the acquisition taken place on the dates indicated,  nor is it
necessarily indicative of future financial results.



<TABLE>
<CAPTION>
                                                  Three Months Ended                   Nine Months Ended
(Amounts in millions)                               September 30,                        September 30,
                                                1998              1999               1998              1999
                                            -----------------------------------------------------------------------
<S>                                         <C>               <C>                <C>               <C>
Unaudited Pro Forma Financial Information
Revenues                                    $   282.6         $   505.7          $ 1,043.9         $ 1,153.7
Income before extraordinary items                 0.6              40.8               29.0              78.0
Net Income                                      (26.6)             40.8                1.9              78.0
Earnings per Unit:
      Basic                                 $    (0.40)       $     0.61         $    0.03         $    1.17
      Diluted                               $   (0.33)        $     0.50         $    0.02         $    0.96
</TABLE>


4.   LONG-TERM DEBT

Existing Bank Credit facility.  In July 1998, the Operating  Partnership entered
into a $200.0 million bank credit  facility  ("Bank Revolver A") that includes a
$50.0 million working capital facility and a $150.0 million  revolving term loan
facility. The $150.0 million revolving term loan facility includes a sublimit of
$30.0 million for letters of credit.  As of September 30, 1999,  the Company has
borrowed  $175.0  million  under the bank credit  facility  which is due in July
2000.  Management is currently exploring options to convert this short-term debt
into long-term debt.

The Company's  obligations  under the bank credit facility are unsecured general
obligations and are  non-recourse to the General  Partner.  Borrowings under the
bank credit  facility  will bear interest at either the bank's prime rate or the
Eurodollar rate plus the applicable margin as defined in the facility.  The bank
credit  facility  will expire in July 2000 and all amounts  borrowed  thereunder
shall be due and payable at that time. There must be no amount outstanding under
the working capital facility for at least 15 consecutive days during each fiscal
year.

As amended on July 28,  1999,  the  existing  credit  agreement  relating to the
facility contains a prohibition on distributions on, or purchases or redemptions
of, Units if any event of default is  continuing.  In addition,  the bank credit
facility contains various  affirmative and negative covenants  applicable to the
ability of the Company to,  among other  things,  (i) incur  certain  additional
indebtedness,  (ii) grant certain liens,  (iii) sell assets in excess of certain
limitations,  (iv) make investments,  (v) engage in transactions with affiliates
and (vi) enter into a merger,  consolidation or sale of assets.  The bank credit
facility requires that the Operating Partnership satisfy the following financial
covenants at the end of each fiscal quarter: (i) maintain  Consolidated Tangible
Net Worth (as defined in the bank credit  facility) of at least $250.0  million,
(ii)  maintain a ratio of EBITDA (as  defined in the bank  credit  facility)  to
Consolidated  Interest  Expense (as defined in the bank credit facility) for the
previous  12-month  period of at least 3.5 to 1.0 and (iii)  maintain a ratio of
Total Indebtedness (as defined in the bank credit facility) to EBITDA of no more
than 3.0 to 1.0.

A "Change of  Control"  constitutes  an Event of Default  under the bank  credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates  of EPCO or Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

New Bank Credit facility.  On July 28, 1999, the Operating  Partnership  entered
into a $350.0 million bank credit  facility  ("Bank Revolver B") that includes a


                                       8
<PAGE>

$50.0 million working capital facility and a $300.0 million  revolving term loan
facility. The $300.0 million revolving term loan facility includes a sublimit of
$10.0  million  for  letters of credit.  The  proceeds of this loan were used to
finance the acquisition of TNGL and the MBA ownership interests.  Future uses of
the remaining credit line include the purchase of the Lou-Tex pipeline (see Note
10).

Borrowings  under the bank  credit  facility  will bear  interest  at either the
bank's prime rate or the Eurodollar  rate plus the applicable  margin as defined
in the  facility.  The bank  credit  facility  will  expire in July 2001 and all
amounts borrowed thereunder shall be due and payable at that time. There must be
no  amount  outstanding  under  the  working  capital  facility  for at least 15
consecutive days during each fiscal year.

The credit  agreement  relating to the new facility  contains a  prohibition  on
distributions  on, or purchases or  redemptions of Units if any event of default
is  continuing.   In  addition,   the  bank  credit  facility  contains  various
affirmative and negative covenants  applicable to the ability of the Company to,
among  other  things,  (i) incur  certain  additional  indebtedness,  (ii) grant
certain  liens,  (iii) sell assets in excess of certain  limitations,  (iv) make
investments,  (v) engage in  transactions  with affiliates and (vi) enter into a
merger, consolidation, or sale of assets. The bank credit facility requires that
the Operating  Partnership  satisfy the following financial covenants at the end
of each fiscal quarter: (i) maintain Consolidated Tangible Net Worth (as defined
in the bank credit  facility) of at least $250.0 million,  (ii) maintain a ratio
of EBITDA (as  defined in the bank credit  facility)  to  Consolidated  Interest
Expense (as  defined in the bank  credit  facility)  for the  previous  12-month
period of at least 3.5 to 1.0 and (iii)  maintain a ratio of Total  Indebtedness
(as defined in the bank credit facility) to EBITDA of no more than 3.0 to 1.0.

A "Change of  Control"  constitutes  an Event of Default  under the bank  credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates of EPCO and Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

Long-term debt consisted of the following:

                                                               September 30,
                                            December 31,           1999
                                                1998           (Unaudited)
                                          -------------------------------------
Bank Revolver A                               $90,000           $175,000
Bank Revolver B                                                  215,000
                                          -------------------------------------
Total                                          90,000            390,000
Less current maturities of long-term debt                       (175,000)
                                          =====================================
Long-term debt                                $90,000           $215,000
                                          =====================================


5.  CAPITAL STRUCTURE

At September 30, 1999,  the Company had  33,552,915  Common Units and 21,409,870
Subordinated  Units  outstanding held by EPCO (the Company's  ultimate  parent),
12,000,000  Common  Units  outstanding  held by third  parties,  and  14,500,000
non-distribution bearing, convertible Special Units held by Tejas Energy. During
the first quarter of 1999,  the Company  established  a revocable  grantor trust
(the  "Trust") to fund future  liabilities  of a long-term  incentive  plan.  At
September 30, 1999, the Trust had purchased a total of 267,200 Common Units (the
"Trust  Units") which are accounted  for in a manner  similar to treasury  stock
under the cost method of accounting.  The Trust Units are considered outstanding
and will receive distributions;  however, they are excluded from the calculation
of net  income  per  Unit  in  accordance  with  generally  accepted  accounting
principles.


                                       9
<PAGE>

On August 1, 1999,  in exchange for its NGL business  (see Note 3), Tejas Energy
received 14.5 million non-distribution bearing, convertible Special Units in the
Company and $166  million in cash.  The 14.5 million  non-distribution  bearing,
convertible  Special  Units  received by Tejas Energy  represent an  approximate
17.6% equity ownership in the Company.  These  convertible  Special Units do not
accrue  distributions  and are not  entitled to cash  distributions  until their
conversion  into Common Units,  which occurs  automatically  with respect to 1.0
million  Units on August  1,  2000 (or the day  following  the  record  date for
determining  units  entitled to receive  distributions  in the second quarter of
2000),  5.0 million  Units on August 1, 2001 and 8.5 million  Units on August 1,
2002.

Tejas   Energy   has  the   opportunity   to  earn  an   additional   6  million
non-distribution bearing,  convertible Contingency Units over the next two years
based on certain  performance  criteria.  Shell will earn 3 million  convertible
Contingency  Units if at any point  during  calendar  year  2000 (or  extensions
thereto due to force majeure events),  gas production by Shell from its offshore
Gulf of Mexico producing properties and leases is 950 million cubic feet per day
for  180  not-necessarily-consecutive  days  or  375  billion  cubic  feet  on a
cumulative  basis.  Shell will earn  another 3 million  convertible  Contingency
Units if at any point during  calendar year 2001 (or  extensions  thereto due to
force majuere  events) such gas production is 900 million cubic feet per day for
180  not-necessarily-consecutive  days or 350 billion cubic feet on a cumulative
basis.  If  either  or both of the  preceding  performance  tests is not met but
Shell's Offshore Gulf of Mexico gas production reaches 725 billion cubic feet on
a cumulative basis in calendar years 2000 and 2001 (or extensions thereto due to
force  majuere  events),  Shell  would  still  earn 6  million  non-distribution
bearing,  convertible  Contingency  Units. If all of the  Contingency  Units are
earned, 1 million Contingency Units would convert into Common Units on August 1,
2002 and 5 million  Contingency  Units would convert into Common Units on August
1, 2003. The Contingency Units do not accrue  distributions and are not entitled
to cash  distributions  until  conversion  into  Common  Units.  Tejas  Energy's
ownership interest in the Company would then increase to approximately 23.2%.

Under the rules of the New York Stock Exchange,  conversion of the Special Units
into Common Units requires  approval of the Company's  Unitholders.  The General
Partner has agreed to call a special  meeting of the Unitholders for the purpose
of soliciting  such approval.  EPC Partners II, Inc.  ("EPC II"),  which owns in
excess of 81% of the outstanding  Common Units,  has agreed to vote its Units in
favor of such approval, which will satisfy the approval requirement.


6.  DISTRIBUTIONS

On January 12, 1999, the Company  declared a quarterly  distribution of $.45 per
Unit for the fourth quarter of 1998,  which was paid on February 11, 1999 to all
Unitholders of record on January 29, 1999. The Company declared its distribution
for the first quarter of 1999 on April 16, 1999 in the amount of $.45 per Common
Unit.  The first  quarter 1999  distribution  was paid on May 12, 1999 to Common
Unitholders of record on April 30, 1999. The Company  declared a $.45 per Common
Unit  distribution  for the second  quarter of 1999 on July 16, 1999. The second
quarter 1999  distribution was paid on August 11, 1999 to Common  Unitholders of
record on July 30, 1999.  The third quarter 1999  distribution  of $.45 per Unit
was  declared  on October  15,  1999 and was paid on  November  10,  1999 to all
Unitholders of record at the close of business on October 29, 1999.


                                       10
<PAGE>

7.   SUPPLEMENTAL CASH FLOW DISCLOSURE

The net effect of changes in operating assets and liabilities is as follows:


                                                       Nine Months Ended
                                                         September 30,
                                                      1998            1999
                                                --------------------------------
(Increase) decrease in:
      Accounts receivable                          $  19,879      $ (48,448)
      Inventories                                   (41,985)        (64,992)
      Prepaid and other current assets                 (550)         (4,647)
      Other assets                                     (494)         (1,757)
Increase (decrease) in:
      Accounts payable - trade                      (27,255)          43,944
      Accrued gas payable                            (8,437)          61,474
      Accrued expenses                               (4,503)           1,236
      Other current liabilities                     (12,479)        (21,595)
      Other liabilities                                                  539
                                                ================================
Net effect of changes in operating accounts       $ (75,824)      $  (34,246)
                                                ================================



8.   RECENTLY ISSUED ACCOUNTING STANDARDS

On June 6, 1999,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 137,  "Accounting for
Derivative Instruments and Hedging  Activities-Deferral of the Effective Date of
FASB Statement No. 133-an amendment of FASB Statement No. 133" which effectively
delays and amends the  application  of SFAS No. 133  "Accounting  for Derivative
Instruments  and Hedging  Activities"  for one year,  to fiscal years  beginning
after June 15, 2000. Management is currently studying both SFAS No. 137 and SFAS
No. 133 for possible impact on the consolidated financial statements.

On April 3, 1998, the American  Institute of Certified Public Accountants issued
Statement  of  Position  ("SOP")  98-5, "Reporting  on the  Costs  of  Start-Up
Activities."  For years  beginning  after  December 15, 1998, SOP 98-5 generally
requires that all start-up costs of a business activity be charged to expense as
incurred and any start-up costs  previously  deferred should be written off as a
cumulative  effect of a change in  accounting  principle.  Adoption  of SOP 98-5
during  1999  did not  have a  material  impact  on the  consolidated  financial
statements  except for a $4.5 million noncash write-off that occurred on January
1, 1999 of the unamortized  balance of deferred  start-up costs of BEF, in which
the  Company  owns a 33-1/3%  interest.  This  write-off  caused a $1.5  million
reduction in the equity in income of  unconsolidated  affiliates  for 1999 and a
corresponding   reduction  in  the  Company's   investment   in   unconsolidated
affiliates.


9.  CONCENTRATION OF CREDIT RISK

A  substantial  portion of the  Company's  revenues are derived from natural gas
processing  and  the   fractionation,   isomerization,   propylene   production,
marketing,  storage and  transportation  of NGLs to various companies in the NGL
industry,  primarily located in the United States.  Although this  concentration
could affect the Company's overall exposure to credit risk since these customers
might be affected by similar economic or other conditions,  management  believes
the  Company is  exposed  to minimal  credit  risk,  since the  majority  of its
business is conducted with major  companies  within the industry and much of the
business is conducted with companies with whom the Company has joint operations.
The Company generally does not require collateral for its accounts receivable.

                                       11
<PAGE>

The Company is subject to a number of risks inherent in the industry in which it
operates,  primarily  fluctuating  gas and liquids  prices and gas  supply.  The
Company's   financial   condition   and  results  of   operations   will  depend
significantly  on the  prices  received  for  NGLs  and the  price  paid for gas
consumed in the NGL extraction process. These prices are subject to fluctuations
in response to changes in supply, market uncertainty and a variety of additional
factors  that are beyond the control of the Company.  In  addition,  the Company
must continually connect new wells through  third-party  gathering systems which
serve the gas  plants in order to  maintain  or  increase  throughput  levels to
offset  natural  declines in dedicated  volumes.  The number of wells drilled by
third parties will depend on, among other factors, the price of gas and oil, the
energy policy of the federal government, and the availability of foreign oil and
gas, none of which is in the Company's control.

10.  SUBSEQUENT EVENT

Purchase of Lou-Tex Pipeline

On July 27, 1999,  the Company  announced the execution of a letter of intent to
acquire a  Louisiana  and Texas  pipeline  asset from Concha  Chemical  Pipeline
Company  ("Concha"),  an affiliate of Shell, for an undisclosed  amount of cash.
The pipeline being acquired,  referred to as the Lou-Tex pipeline,  is 263 miles
of 10" pipeline from  Sorrento,  Louisiana to Mont Belvieu,  Texas.  The Lou-Tex
pipeline  is  currently  dedicated  to  the  transportation  of  chemical  grade
propylene from Sorrento to the Mont Belvieu area. The acquisition of the Lou-Tex
pipeline  is the first  step in the  Company's  development  of a $210  million,
160,000 barrel per day gas liquids pipeline system. This larger system will link
growing  supplies  of NGLs  produced  in  Louisiana  and  Mississippi  with  the
principal  NGL markets on the United  States Gulf Coast.  The  completion of the
Lou-Tex  transaction  is subject to the  successful  negotiation  of  definitive
agreements,  approval of those  agreements  by the  respective  managements  and
regulatory  approvals.  This  purchase  of the  pipeline  asset  from  Concha is
expected to be completed in the fourth quarter of 1999.  The  development of the
expanded  Lou-Tex gas liquids pipeline system is expected to be completed in the
second half of 2000.

                                       12
<PAGE>

       Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS.

            For the Interim Periods ended September 30, 1999 and 1998

     The following  discussion and analysis  should be read in conjunction  with
the unaudited  consolidated financial statements and notes thereto of Enterprise
Products  Partners  L.P.  ("Enterprise"  or the  "Company")  included  elsewhere
herein.

The Company

     The Company is a leading  integrated North American  provider of processing
and  transportation  services to domestic  and foreign  producers of natural gas
liquids  ("NGLs")  and  other  liquid  hydrocarbons  and  domestic  and  foreign
consumers of NGLs and liquid hydrocarbon  products.  The Company manages a fully
integrated and diversified  portfolio of midstream  energy assets and is engaged
in NGL processing and  transportation  through direct and indirect ownership and
operation  of NGL  fractionators.  It also  manages NGL  processing  facilities,
storage facilities,  pipelines, and rail transportation  facilities,  and methyl
tertiary  butyl ether  ("MTBE")  and  propylene  production  and  transportation
facilities in which it has a direct and indirect  ownership.  As a result of the
recent Tejas Natural Gas Liquids, LLC ("TNGL") acquisition  described below, the
Company is also engaged in natural gas processing in Louisiana and Mississippi.

     The Company is a publicly traded master limited  partnership (NYSE,  symbol
"EPD")  that  conducts  substantially  all of its  business  through  Enterprise
Products   Operating   L.P.  (the   "Operating   Partnership"),   the  Operating
Partnership's  subsidiaries,  and a  number  of  joint  ventures  with  industry
partners.  The Company was formed in April 1998 to acquire, own, and operate all
of the NGL processing and  distribution  assets of Enterprise  Products  Company
("EPCO").

     The principal executive office of the Company is located at 2727 North Loop
West,  Houston,  Texas,  77008-1038,  and the telephone number of that office is
713-880-6500.  References to, or  descriptions  of, assets and operations of the
Company in this  quarterly  report  include  the assets  and  operations  of the
Operating  Partnership and its  subsidiaries as well as the  predecessors of the
Company.

General

     The Company (i) processes  natural gas; (ii)  fractionates for a processing
fee mixed NGLs produced as by-products  of oil and natural gas  production  into
their component products: ethane, propane,  isobutane, normal butane and natural
gasoline;  (iii)  converts  normal  butane to  isobutane  through the process of
isomerization;   (iv)  produces  MTBE  from  isobutane  and  methanol;  and  (v)
transports  NGL products to end users by pipeline and railcar.  The Company also
separates high purity propylene from refinery-sourced  propane/propylene mix and
transports high purity propylene to plastics manufacturers by pipeline. Products
processed  by the Company  generally  are used as  feedstocks  in  petrochemical
manufacturing,  in the production of motor gasoline and as fuel for  residential
and commercial heating.

     The Company's NGL  processing  operations  are  concentrated  in the Texas,
Louisiana,  and Mississippi  Gulf Coast area. A large portion is concentrated in
Mont  Belvieu,  Texas,  which is the hub of the  domestic  NGL  industry  and is
adjacent to the largest  concentration of refineries and petrochemical plants in
the United States. The facilities we operate at Mont Belvieu include: (i) one of
the largest NGL  fractionation  facilities  in the United States with an average
production  capacity  of  210,000  barrels  per  day;  (ii) the  largest  butane
isomerization  complex in the United States with an average isobutane production
capacity of 80,000  barrels per day;  (iii) one of the largest  MTBE  production
facilities  in the United States with an average  production  capacity of 14,800
barrels  per day;  and (iv) two  propylene  fractionation  units with an average
combined  production capacity of 31,000 barrels per day. The Company owns all of
the  assets  at its  Mont  Belvieu  facility  except  for the NGL  fractionation
facility,  in which it owns an effective  62.5%  economic  interest  (see Recent
Acquisitions below); one of the propylene  fractionation units, in which it owns
a 54.6% interest and controls the remaining  interest through a long-term lease;
the MTBE production  facility,  in which it owns a 33-1/3% interest;  and one of
its three  isomerization  units  and one  deisobutanizer  which  are held  under
long-term  leases with  purchase  options.  The Company  also owns and  operates


                                       13
<PAGE>

approximately  35 million  barrels  of  storage  capacity  at Mont  Belvieu  and
elsewhere that are an integral part of its processing  operations,  a network of
approximately   500  miles  of  pipelines   along  the  Gulf  Coast  and  a  NGL
fractionation facility in Petal, Mississippi with an average production capacity
of 7,000  barrels per day.  The Company also leases and operates one of only two
commercial NGL import/export terminals on the Gulf Coast.

     As a result of the Tejas Natural Gas Liquids, LLC ("TNGL") acquisition, the
Company  acquired,  effective  August 1, 1999, a 20-year  natural gas processing
agreement with Shell Oil Company ("Shell") for the rights to process its current
and future natural gas production  from the state and federal waters of the Gulf
of Mexico and varying  interests in 11 natural gas processing  plants (including
one under  construction)  with a combined  gross  capacity of 11.0 billion cubic
feet per day  ("Bcfd")  and net  capacity  of 3.1 Bcfd;  four NGL  fractionation
facilities  with a combined  gross  capacity of 281,000 BPD and net  capacity of
131,500 BPD; four NGL storage facilities with approximately 29.5 million barrels
of gross capacity and 8.8 million barrels of net capacity;  and over 2,100 miles
of NGL pipelines (including a 11.5% interest in Dixie Pipeline).

     Recent Acquisitions

     Tejas Natural Gas Liquids,  LLC. As noted above,  effective August 1, 1999,
the Company acquired TNGL from Tejas Energy, LLC ("Tejas Energy"),  an affiliate
of Shell,  in exchange for 14.5 million  non-distribution  bearing,  convertible
special  partner  units of the Company and a cash payment of $166  million.  The
Company  has also agreed to issue up to 6.0  million  non-distribution  bearing,
convertible  special  units to Tejas  Energy  in the  future if the  volumes  of
natural  gas that the  Company  processes  for  Shell and its  affiliates  reach
certain agreed upon levels in 2000 and 2001. The businesses  acquired from Tejas
Energy include natural gas processing and NGL fractionation,  transportation and
storage in Louisiana and Mississippi and its NGL supply and marketing  business.
As described in General above, the assets acquired include varying  interests in
11 natural gas processing plants,  four NGL fractionation  facilities,  four NGL
storage facilities and over 2,100 miles of NGL pipelines.

     The Company's major customer related to the TNGL assets is Shell. Under the
terms of a 20-year processing agreement with Shell, the Company has the right to
process  substantially  all of Shell's current and future natural gas production
from  the  Gulf of  Mexico.  This  includes  natural  gas  production  from  the
developments currently referred to as deepwater.

     Natural gas  processing  plants are generally  located near the  production
area. When produced at the wellhead,  natural gas generally must be processed to
separate the merchantable,  pipeline quality natural gas (principally  methane),
from  NGLs and  other  impurities.  Wet or rich  natural  gas  normally  must be
processed  to render the natural gas  acceptable  for  transport in the nation's
pipeline  system  and to meet  specifications  required  by  local  natural  gas
distribution  companies.  After  being  extracted  in  the  field,  mixed  NGLs,
sometimes referred to as "y-grade" or "raw make" are typically  transported to a
central facility for fractionation and subsequent sale.

     Mont  Belvieu  NGL  Fractionation  facility.  Effective  July  1,  1999,  a
subsidiary of the Operating  Partnership  acquired an additional 25% interest in
the Mont Belvieu NGL  fractionation  facility  from Kinder Morgan for a purchase
price of  approximately  $41 million in cash and the assumption of $4 million in
debt. An additional  0.5% interest in the same facility was purchased  from EPCO
for a cash purchase  price of $0.9  million.  These  acquisitions  increased our
effective economic interest in the Mont Belvieu NGL fractionation  facility from
37.0% to 62.5%.

         Industry Environment

     Because certain NGL products compete with other refined petroleum  products
in the fuel and petrochemical  feedstock markets,  NGL product prices are set by
or in competition  with refined  petroleum  products.  Increased  production and
importation  of NGLs and NGL  products  in the United  States may  decrease  NGL
product  prices in  relation  to  refined  petroleum  alternatives  and  thereby
increase  consumption of NGL products as NGL products are  substituted for other
more  expensive  refined  petroleum  products.  Conversely,  a  decrease  in the
production  and  importation of NGLs and NGL products could increase NGL product
prices in  relation to refined  petroleum  product  prices and thereby  decrease
consumption  of NGLs.  However,  because  of the  relationship  of crude oil and
natural gas production to NGL production,  the Company believes any imbalance in
the prices of NGLs and NGL products and alternative products would be temporary.



                                       14
<PAGE>

     Historically,  when the price of crude oil is a multiple  of ten or more to
the price of natural gas (i.e.,  crude oil $20 per barrel and natural gas $2 per
thousand cubic feet  ("MCF")),  NGL pricing has been strong due to increased use
in manufacturing petrochemicals. In 1998, the industry experienced an annualized
multiple of approximately six (i.e., crude oil $12 per barrel and natural gas $2
per MCF),  which  caused  petrochemical  manufacturing  demand  to  change  from
reliance on NGLs to a preference for crude oil derivatives. This change resulted
in the lowering of both the production and pricing of NGLs. In the NGL industry,
revenues and cost of goods sold can fluctuate  significantly up or down based on
current NGL prices.  However,  operating  margins will generally remain constant
except for the effect of inventory  price  adjustments  or  increased  operating
expenses.

         NGL Fractionation

     The profitability of this business unit depends on the volume of mixed NGLs
that  the  Company  processes  for its  toll  customers  and the  level  of toll
processing fees charged to its customers.  The most significant variable cost of
fractionation  is the cost of energy  required  to operate the units and to heat
the mixed NGLs to effect separation of the NGL products.  The Company is able to
reduce  its  energy  costs  by  capturing  excess  heat and  re-using  it in its
operations.  Additionally,  the Company's NGL fractionation processing contracts
typically  contain  escalation  provisions  for cost  increases  resulting  from
increased variable costs, including energy costs.

     Effective  July 1,  1999,  the  Company's  ownership  interest  in the Mont
Belvieu NGL fractionation  facility  increased to an effective 62.5% from 37.0%.
Since the acquisition, the Company's 62.5% interest in the results of operations
of the  fractionation  facility have been included in  consolidated  operations.
Prior to the  acquisition,  the  Company's  12.5% direct  economic  interest was
included in consolidated  operations,  and its effective 24.5% economic interest
was recorded as equity income.

         Isomerization

     The  profitability  of this  business  unit depends on the volume of normal
butane that the Company isomerizes (i.e.,  converts) into isobutane for its toll
processing  customers,  the  level  of  toll  processing  fees  charged  to  its
customers,  and  the  margins  generated  from  selling  isobutane  to  merchant
customers.  The Company's  toll  processing  customers pay the Company a fee for
isomerizing their normal butane into isobutane.  In addition,  the Company sells
isobutane  that  it  obtains  by  isomerizing   normal  butane  into  isobutane,
fractionating  mixed butane into  isobutane  and normal  butane,  or  purchasing
isobutane in the spot market.  The Company  determines  the optimal  sources for
isobutane to meet sales  obligations based on current and expected market prices
for isobutane and normal butane, volumes of mixed butane held in inventory,  and
estimated costs of isomerization and mixed butane fractionation.

     The Company purchases most of its imported mixed butanes between the months
of February and October.  During these  months,  the Company is able to purchase
imported  mixed  butanes at prices that are often at a discount to posted market
prices.  Because of its  storage  capacity,  the  Company is able to store these
imports  until the summer  months when the spread  between  isobutane and normal
butane  typically widens or until winter months when the prices of isobutane and
normal butane typically rise. As a result,  inventory investment is generally at
its  highest  level at the end of the third  quarter  of the year.  Should  this
spread  not  materialize,  or in the  event  absolute  prices  decline,  margins
generated  from  selling  isobutane  to  merchant  customers  may be  negatively
affected.

         Propylene Fractionation

     The  profitability  of  this  business  unit  depends  on  the  volumes  of
refinery-sourced  propane/propylene  mix that the Company processes for its toll
customers,  the level of toll  processing  fees charged to its customers and the
margins  associated  with  buying  refinery-sourced  propane/propylene  mix  and
selling  high  purity   propylene  to  meet  sales  contracts  with  non-tolling
customers.

         Pipelines

     The  Company  operates  both  interstate  and  intrastate  NGL  product and
propylene pipelines.  The Company's interstate pipelines are common carriers and


                                       15
<PAGE>

must  provide  service to any shipper who  requests  transportation  services at
rates  regulated  by the Federal  Energy  Regulatory  Commission  ("FERC").  The
Company's  intrastate  common  carrier  pipelines  are regulated by the State of
Louisiana.  The  profitability  of this business unit is primarily  dependent on
pipeline throughput volumes.

         Gas Processing

     As a result of the TNGL acquisition,  the Company is now engaged in natural
gas processing in Louisiana and  Mississippi  via ownership  interests in eleven
plants.  The  profitability  of the natural gas  processing  plants is primarily
dependent on the volume of NGLs  extracted  from the natural gas streams and the
pricing of NGLs and natural gas in the marketplace.

         Unconsolidated Affiliates

     At September 30, 1999, the Company's significant  unconsolidated affiliates
accounted  for using the equity  method were BEF,  BRF,  BRPC,  EPIK,  Wilprise,
Tri-States,  Belle  Rose,  and  Promix.  BEF owns the MTBE  production  facility
operated  by  the  Company  at  its  Mont  Belvieu  complex.   BRF  owns  a  NGL
fractionation  facility in southeastern  Louisiana that began  operations in the
third  quarter of 1999.  BRPC is a  newly-formed  joint  venture  (August  1999)
between the Operating  Partnership  and Exxon Chemical  Company  ("Exxon") which
owns  a  propylene   concentration   unit  under  construction  in  southeastern
Louisiana.  The  Company  holds a 30%  economic  interest  in  BRPC.  Management
anticipates  that operations will commence at this plant in the third quarter of
2000. EPIK owns a refrigerated  NGL marine terminal  loading facility located on
the Houston ship  channel.  An expansion of EPIK's NGL marine  terminal  loading
facility is under way and is scheduled for  completion in the fourth  quarter of
1999.  Wilprise owns a NGL pipeline in Louisiana which started operations in the
third quarter of 1999 in conjunction with the start-up of the BRF  fractionator.
Tri-States  owns a NGL pipeline in  Louisiana,  Mississippi,  and Alabama  which
became  operational  in March 1999.  Effective  with the TNGL  acquisition,  the
Company acquired an equity interest in Belle Rose and Promix.  Belle Rose owns a
NGL pipeline  system in south  Louisiana.  The Company owns 41.7% of Belle Rose.
Promix  owns  a NGL  fractionation  and  related  storage  facilities  in  south
Louisiana.  The Company holds a 33-1/3%  interest in Promix.  In connection with
the TNGL acquisition,  the Company acquired an additional  16-2/3% of Tri-States
bringing the total ownership interest to the current 33-1/3%.

     As of September  30, 1999,  the Company had two  investments  accounted for
using the cost  method.  These were VESCO and  Dixie.  VESCO owns a natural  gas
processing  plant,  fractionation  and storage  facilities,  and a gas gathering
pipeline  system in Louisiana.  The Company holds a 13.1%  economic  interest in
VESCO.  The Dixie  investment  consists of an 11.5%  interest  in a  corporation
owning a 1,300 mile propane  pipeline and the  associated  facilities  extending
from Mont Belvieu, Texas to North Carolina.

Results of Operations

     Historically,  the  Company  has  had  only  one  reportable  segment:  NGL
Operations. The operating margin of this segment has been reported on under five
distinct   business   units:   NGL   Fractionation,   Isomerization,   Propylene
Fractionation,  Pipeline,  and Storage and Other Plants. With the acquisition of
TNGL,  management has opted to add a sixth business unit:  TNGL  Operations.  In
addition, with the growth of the Company's equity method investments,  Equity in
income of  unconsolidated  affiliates  has been included in operating  margin in
order  to  provide  a more  comprehensive  view  of  the  Company's  results  of
operations.  For the future,  due to the  growing  complexity  of the  Company's
operations  with the  acquisition  of TNGL  late in the third  quarter  of 1999,
management is currently studying alternative reporting methods such as reporting
results of operations using multiple segments.


                                       16
<PAGE>

     The  Company's  operating  margins by business  unit for the three and nine
month periods ended September 30, 1998 and 1999 were as follows:
<TABLE>
<CAPTION>
                                                                 Three Months Ended           Nine Months Ended
                                                                    September 30,               September 30,
                                                                 1998          1999           1998          1999
                                                             ---------------------------------------------------------
<S>                                                          <C>           <C>            <C>           <C>    <C>
Operating Margin:
      NGL Fractionation                                      $  1,274      $  1,369       $  2,812      $  2,901
      Isomerization                                             2,267        17,731         15,729        35,727
      Propylene Fractionation                                   3,538         5,374          8,004        16,813
      Pipeline                                                  3,221         2,553         10,268         6,268
      TNGL Operations                                                        13,648                       13,648
      Storage and Other Plants                                  1,123            51          4,462           185
      Equity in Income of Unconsolidated Affiliates             4,171         3,148          7,591        10,824

                                                             =========================================================
Total                                                        $ 15,594      $ 43,874       $ 52,099      $ 83,133
                                                             =========================================================
</TABLE>

     The  Company's  plant  production  data (in thousands of barrels per day or
"MBPD") for the three and nine month periods  ended  September 30, 1998 and 1999
were as follows:

                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,
                                      1998          1999     1998          1999
                                  ----------------------------------------------
Plant Production Data :
      TNGL Equity NGL Production                     63                     63
      NGL Fractionation               180           149      197           155
      Isomerization                    65            77       65            73
      MTBE                             14            12       13            13
      Propylene Fractionation          26            26       26            27

     The Company's equity in income of unconsolidated  affiliates (in thousands)
for the three and nine month periods  ended  September 30, 1998 and 1999 were as
follows:


                        Three Months ended               Nine Months ended
                          September 30,                    September 30,
                      1998             1999            1998             1999
                 ---------------------------------------------------------------
BEF               $   3,355        $   2,519       $   6,609        $   4,756
MBA                     862               72           4,305            1,256
BRF                                     (258)                            (544)
BRPC                                       4                                4
EPIK                   (46)               59             (90)             236
Entell                                   258                            1,389
Wilprise                                (130)                            (130)
Tri-States                               472                              472
Belle Rose                               245                              245
Promix                                   (93)                             (93)
                 ===============================================================
Total            $   4,171         $   3,148       $  10,824        $   7,591
                 ===============================================================


Three Months Ended September 30, 1999 Compared with Three Months Ended September
30, 1998


                                       17
<PAGE>

         Revenues; Costs and Expenses

     The  Company's  revenues  increased to $445.0  million in 1999  compared to
$168.8  million in 1998.  The Company's  costs and expenses  increased to $404.4
million in 1999 compared to $156.9 million in 1998.  Operating  margin increased
to $43.9 million in 1999 compared to $15.6 million in 1998. The primary  reasons
for the increase in operating  margins are an improvement  in the  isomerization
business and the addition of the operating results of the TNGL assets.

     NGL Fractionation.  Operating margin from NGL fractionation, which reflects
earnings  from the Company's  Mont Belvieu NGL  fractionation  assets,  was $1.4
million for the third  quarter of 1999  compared  to $1.3  million for the third
quarter of 1998.  For the  quarter,  NGL  fractionation  volumes at Mont Belvieu
averaged 149 MBPD  compared to 180 MBPD for the same period in 1998.  The slight
increase  in  operating  margin  for  the  quarter  was  principally  due to the
Company's  acquisition of an additional  ownership interest in the fractionation
from Kinder  Morgan and EPCO,  offset by lower volumes  fractionated.  The lower
fractionation  rates are  attributable  to the short-term  diversion of customer
volumes to competitors. The Company fully expects that the diverted volumes will
be recovered.

     Isomerization.  The Company's margin in isomerization was $17.7 million for
the third  quarter of 1999  versus $2.3  million for the third  quarter of 1998.
Plant  production  volumes  for the third  quarter of 1999  averaged  77 MBPD as
compared  to 65 MBPD for the same  period in 1998.  The margin  improvement  was
attributable  to the  increase in plant  production  volumes,  a stronger  price
environment  for normal  butane and  isobutane  during the third quarter of 1999
which  benefited  the  merchant  portion  of  this  business  and  non-recurring
inventory  write-downs  which impaired margins in the third quarter of 1998. The
operating  margin for 1999 included a $0.7 million benefit from the amortization
of the  deferred  gain  associated  with the sale  and  leaseback  of one of the
Company's  isomerization units. Excluding this benefit, the operating margin for
1999 would have been $17.0 million as compared to $2.3 million in 1998.

     Isobutane  volumes  from  tolling  and  merchant  activities  for the third
quarter of 1999  averaged 98 MBPD as compared to 107 MBPD for the same period in
1998.  Average  daily  toll  processing  volumes  were 58 MBPD in 1999 and 1998.
Isobutane  volumes  related to merchant  activities  were 40 MBPD in 1999 and 49
MBPD in 1998.  Isobutane merchant volumes decreased in the third quarter of 1999
compared  to third  quarter  of 1998 due to lower  margins  on  isobutane  sales
relative to normal butane sales. The average spread between isobutane and normal
butane  decreased  from a  positive  2.3 cents per  gallon  ("CPG") in the third
quarter of 1998 to a negative 1.2 CPG in the third quarter of 1999.

     Propylene  Fractionation.  The Company's  operating  margin from  propylene
fractionation  for the third quarter of 1999 increased to $5.4 million from $3.5
million for the third quarter of 1998. Propylene  fractionation for both periods
averaged 26 MBPD. The earnings  improvement  was primarily  attributable  to the
Company's  actions in the merchant  portion of the business to match the volume,
timing and price of feedstock purchases with sales of the product. Polymer grade
propylene  prices for the third quarter of 1999 were  significantly  stronger at
15.7 cents per pound ("CPP")  versus 13.7 CPP in the third quarter of 1998.  The
increase in propylene prices in general for 1999 is attributable to higher crude
oil prices and increased global propylene demand.

     Pipeline.  Operating margin from pipeline  operations for the third quarter
of 1999 was $2.6  million as compared to $3.2  million for the third  quarter of
1998. The decrease in operating margin is primarily attributable to lower butane
import  volume in the  third  quarter  of 1999 as  compared  to 1998.  The lower
volumes led to a $0.3 million  decrease in the  operating  margin in 1999 versus
1998. A strengthening of normal butane prices worldwide has led to a decrease in
the availability of import volumes coming to the U.S. Gulf Coast. Throughput for
the third quarter of 1999 averaged 192 MBPD as compared to 193 MBPD for the same
period in 1998.

     TNGL Operations. The operating margin from the assets acquired from TNGL in
the third quarter 1999 was $13.6  million.  Since the effective date of the TNGL
acquisition  was August 1, 1999, the operating  margin included in the Company's
results of operations was for the months of August and September. Gas Processing
produced an operating margin of approximately  $9.2 million.  NGL  fractionation
generated an operating  margin of $4.1  million.  The Pipelines and Other assets
produced an operating margin of $0.3 million.


                                       18
<PAGE>

     Gas  Processing is comprised of interests in eleven  natural gas processing
plants (one of which is under  construction)  with 11 billion cubic feet per day
("Bcfd")  of  gross  capacity  and 3.1  Bcfd of net  capacity  to the  Company's
interest anchored by a 20-year natural gas processing  agreement with Shell (the
"Shell  Agreement").  The Company is operator of four of these  facilities.  Its
major customer is Shell. Under the terms of a 20-year processing  agreement with
Shell, the Company has the right to process substantially all of Shell's current
and future natural gas production from the Gulf of Mexico. This includes natural
gas production from the developments  currently  referred to as deepwater.  Also
included  in Gas  Processing  is the Tebone  NGL  fractionation  facility.  This
fractionation facility is an integral part of the Tebone and North Terrebone Gas
Processing facility.  The Tebone NGL fractionation facility was built to receive
raw make  from the  North  Terrebone  Gas  Processing  facility  and has a rated
capacity  of 30 MBPD.  During  the  months  of  August  and  September,  the Gas
Processing  facilities  produced  NGLs  at a rate  of 63 MBPD  with  the  Tebone
fractionator operating at 29 MBPD.

     NGL  fractionation  business is  comprised  of the Norco NGL  fractionation
facility located in Louisiana.  This facility is wholly owned by the Company and
has a capacity of 60 MBPD. During the months of August and September,  the Norco
NGL fractionation plants operated a rate of 47 MBPD.

     Pipeline and Other TNGL assets is primarily  composed of varying  ownership
interests  in NGL and NGL  product  pipelines  and  storage  assets  located  in
southern Louisiana.

         Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased $0.6 million to $3.2
million  in 1999 from $3.8  million  in 1998.  The 1998  charges  included  $0.8
million in  one-time  expenses  related to the initial  public  offering in July
1998.  This amount was offset by a $0.2 million  increase in the monthly  charge
from EPCO.  On July 7, 1999,  the Audit and  Conflicts  Committee of  Enterprise
Products  GP,  LLC  (the  "general  partner")  authorized  an  increase  in  the
administrative  services  fee to $1.1 million per month in  accordance  with the
EPCO  Agreement  from the initial rate of $1.0 million per month.  The increased
fees were effective August 1, 1999.

         Interest Expense

     Interest  expense for the second  quarter was $4.0 million in 1999 and $2.5
million in 1998.  This increase is  principally  due to the  increased  level of
average debt  outstanding  during the third quarter of 1999  attributable to the
borrowings  associated  with the TNGL and Mont  Belvieu  fractionation  facility
acquisitions.  Of the total  debt  outstanding  at  September  30,  1999 of $390
million, approximately $208 million is directly related to these two acquisition
transactions.

         Equity Income in Unconsolidated Affiliates

     Equity  income  in  unconsolidated  affiliates  was  $3.1  million  in 1999
compared to $4.2 million in 1998.  Equity  income from BEF  decreased  from $3.4
million in the third  quarter of 1998 to $2.5 million in the  comparable  period
for 1999.  The decrease of $0.9 million is  primarily  attributable  to downtime
associated  with  maintenance  activities  in  July  1999.  As a  result  of the
acquisition  of the  remaining  MBA  ownership  interests  in the  Mont  Belvieu
fractionator on July 1, 1999 and subsequent  consolidation of operating results,
equity  income from MBA ceased  effective on that date.  The third  quarter 1998
equity  income  amount  includes  $0.9  million  from MBA.  EPIK showed a slight
increase  over the third  quarter  of 1998 with $0.1  million  in equity  income
versus a loss of $0.1 million in the prior period. Wilprise showed a slight loss
during  the  quarter  of  $0.1  million  with  the  BRF  fractionation  facility
evidencing a loss as well of $0.3  million.  Both the Wilprise  pipeline and the
BRF fractionation facility started operations in the third quarter of 1999.

     The Company  acquired equity interests in other entities as a result of the
TNGL  acquisition.  Among these  entities were Belle Rose (equity income of $0.2
million) and Promix  (equity loss of $0.1 million).  With the  acquisition of an
additional  16-2/3% in Tri-States,  the Company  obtained an equity  interest of
33-1/3%. This investment contributed $0.5 million in equity income.


                                       19
<PAGE>

Nine Months Ended  September 30, 1999 Compared with Nine Months Ended  September
30, 1998

Revenues; Costs and Expenses

     The Company's  revenues increased by 35% to $771.4 million in 1999 compared
to $573.5 million in 1998. The Company's costs and expenses  decreased by 32% to
$688.3  million in 1999  compared to $521.4  million in 1998.  Operating  margin
increased by 60% to $83.1 million in 1999 compared to $52.1 million in 1998. The
primary reasons for the increase in operating  margins are an improvement in the
isomerization and propylene fractionation business areas and the addition of the
operating results of the TNGL assets.

     NGL Fractionation. The Company's operating margin for NGL fractionation was
$2.9 million for 1999 versus $2.8 million for 1998. Average daily  fractionation
volumes  decreased  from 197  MBPD in 1998 to 155  MBPD in  1999.  Fractionation
volumes are lower in 1999 as compared to 1998 due primarily to ethane rejection,
downtime associated with preventative maintenance activities,  lower natural gas
production  caused  by  depressed  oil and gas  prices  in early  1999,  and the
short-term  diversion  of  customer  volumes to a  competitor.  During the first
quarter  of 1999,  natural  gas prices  remained  higher  than the  energy  unit
equivalent of ethane; therefore, upstream natural gas processing plants rejected
ethane  which  reduced  the  volumes   delivered  to  Company   facilities   for
fractionation services. The Company took advantage of the reduced demand for its
fractionation  services  during the first  quarter  of 1999 to  perform  certain
preventative  maintenance procedures on one of its fractionation facilities that
are generally  required  every two to three years.  During the second quarter of
1999,  volumes were reduced due to the short-term  diversion of customer volumes
to a competitor. Management expects that these volumes will be fully recovered.

     Isomerization.  The Company's operating margin for isomerization  increased
to $35.8 million in 1999 compared to $15.7 million in 1998. The operating margin
for 1999 included a $2.0 million  benefit from the  amortization of the deferred
gain   associated   with  the  sale  and  leaseback  of  one  of  the  Company's
isomerization  units.  The margin  improvement  is primarily  attributable  to a
stronger  price  environment  for normal butane and isobutane  during 1999 which
benefited  the merchant  portion of this  business and  non-recurring  inventory
write-downs  which  impaired  margins  in  1998.  Excluding  this  benefit,  the
operating  margin for 1999 would have been $33.8  million as  compared  to $15.7
million in 1998. Isobutane volumes from tolling and merchant activities for 1999
averaged  100 MBPD as compared to 102 MBPD for the same period in 1998.  Average
daily toll  processing  volumes  were 57 MBPD in 1999,  or 73% of total  volumes
produced,  compared  to 56 MBPD  in  1998,  or 86% of  total  volumes  produced.
Isobutane  volumes  related to merchant  activities  were 43 MBPD in 1999 and 45
MBPD in 1998.

     Propylene Fractionation.  The Company's operating margin increased to $16.8
million in 1999 from $8.0 million in 1998. Propylene production averaged 27 MBPD
in 1999 as compared to 26 MBPD in 1998. The earnings  improvement  was primarily
attributable to the Company's  actions to minimize risk in the merchant  portion
of this business by matching the volume, timing and price of feedstock purchases
with sales of end products. The operating margin also benefited from an increase
in production  volumes  associated with spot business caused by increased demand
for polymer grade propylene.

     Pipeline.  The Company's operating margin from pipeline operations was $6.3
million in 1999 compared to $10.3 million in 1998.  Throughput for 1999 averaged
184 MBPD as compared to 198 MBPD for the same  period in 1998.  The  decrease in
throughput  was  primarily  attributable  to a decrease in import  volumes.  The
decrease in Pipeline margin is principally related to the Company's contribution
of certain  wholly-owned  pipeline assets, in the first quarter of 1999, and its
export  loading  facility,  in June 1998 to joint  ventures in which the Company
owns a 50% interest.  As a result, the earnings from these assets since the time
of  their  contribution  are  included  in  equity  income  from  unconsolidated
affiliates  as  prescribed  by the equity  method of  accounting  rather than in
earnings  from  consolidated  pipeline  operations.  This  change in  accounting
treatment accounts for approximately $2.8 million of the decrease.

     TNGL Operations. The operating margin from the assets acquired from TNGL in
the third quarter 1999 was $13.6  million.  Since the effective date of the TNGL
acquisition  was August 1, 1999, the operating  margin included in the Company's
results of operations was for the months of August and September. Gas Processing
produced an operating margin of approximately  $9.2 million.  NGL  fractionation
generated an operating  margin of $4.1  million.  The Pipelines and Other assets
produced an operating margin of $0.3 million.


                                       20
<PAGE>

     Gas  Processing is comprised of interests in eleven  natural gas processing
plants (one of which is under  construction)  with 11 billion cubic feet per day
("Bcfd")  of  gross  capacity  and 3.1  Bcfd of net  capacity  to the  Company's
interest anchored by a 20-year natural gas processing  agreement with Shell (the
"Shell  Agreement").  The Company is operator of four of these  facilities.  Its
major customer is Shell. Under the terms of a 20-year processing  agreement with
Shell, the Company has the right to process substantially all of Shell's current
and future natural gas production from the Gulf of Mexico. This includes natural
gas production from the developments  currently  referred to as deepwater.  Also
included  in Gas  Processing  is the Tebone  NGL  fractionation  facility.  This
fractionation facility is an integral part of the Tebone and North Terrebone Gas
Processing facility.  The Tebone NGL fractionation facility was built to receive
raw make  from the  North  Terrebone  Gas  Processing  facility  and has a rated
capacity  of 30 MBPD.  During  the  months  of  August  and  September,  the Gas
Processing  facilities  produced  NGLs  at a rate  of 63 MBPD  with  the  Tebone
fractionator operating at 29 MBPD.

     NGL  fractionation  business is  comprised  of the Norco NGL  fractionation
facility located in Louisiana.  This facility is wholly owned by the Company and
has a capacity of 60 MBPD. During the months of August and September,  the Norco
NGL fractionation plants operated a rate of 47 MBPD.

     Pipeline and Other TNGL assets is primarily  composed of varying  ownership
interests  in NGL and NGL  product  pipelines  and  storage  assets  located  in
southern Louisiana.

         Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased $6.2 million to $9.2
million in 1999 from $15.4  million in 1998.  This decrease was primarily due to
the  adoption  of the  EPCO  Agreement  in July  1998 in  conjunction  with  the
Company's  initial public  offering  ("IPO") which fixed  reimbursable  selling,
general, and administrative expenses at an initial $1.0 million per month.

     On July 7, 1999, the Audit and Conflicts  Committee of the general  partner
authorized  an increase in the  administrative  services fee to $1.1 million per
month in accordance  with the EPCO  Agreement.  The increased fees are effective
August 1, 1999.

         Interest Expense

     Interest  expense was $8.0 million in 1999 and $13.3 million in 1998.  This
decrease was  principally  due to the reduced level of average debt  outstanding
during the first quarter of 1999  attributable to the retirement of debt in July
1998 using proceeds from the Company's IPO. The decrease was muted, however, due
to a substantial  increase in the average debt  outstanding in the third quarter
of 1999  due to the  borrowings  associated  with  the  TNGL  and  Mont  Belvieu
fractionation facility acquisitions.

         Equity Income in Unconsolidated Affiliates

     Equity  income  in  unconsolidated  affiliates  was  $7.6  million  in 1999
compared to $10.8 million in 1998.  Equity  income from BEF decreased  from $6.6
million in 1998 to $4.8 million in 1999. Equity income from BEF for both periods
was affected by required annual  maintenance on the Company's MTBE facility that
generally takes the unit out of production for approximately three weeks. Equity
income from BEF during 1999 also includes a $1.5 million non-cash charge for the
cumulative  effect of a change in accounting  principal related to the write-off
of deferred  start-up  costs as  prescribed  by  generally  accepted  accounting
principles.  Equity  income from MBA decreased to $1.3 million in 1999 from $4.3
million  in 1998 due to  decreased  throughput  caused by ethane  rejection  and
downtime associated with preventative maintenance activities.  In addition, as a
result of the  acquisition of the remaining MBA ownership  interests in the Mont
Belvieu  fractionator on July 1, 1999 and subsequent  consolidation of operating
results,  equity income from MBA ceased effective on that date. The 1998 results
for MBA are for a nine-month period whereas the 1999 results reflect a six-month
period.  The third  quarter  results  of  operations  are now  consolidated  and
included in NGL Fractionation.  EPIK showed a slight increase over the 1998 with
$0.2 million in equity income versus a loss of $0.1 million in the prior period.
The 1998 results for EPIK  reflected its first quarter in existence  whereas the
1999 results are for nine months.  Wilprise showed a slight loss of $0.1 million



                                       21
<PAGE>

with the BRF fractionation  facility generating a loss of $0.5 million. Both the
Wilprise pipeline and the BRF fractionation  facility started  operations in the
third quarter of 1999.  Equity income from Entell was $1.4 million  through July
31, 1999.  Effective  August 1, 1999, as a result of the TNGL  acquisition,  the
results of  operations  for Entell are now  included  in  consolidated  pipeline
revenues.  Consolidation  of  operating  results is  necessary  under  generally
accepted  accounting  principles since the combined interests of the Company now
equal 100% (prior to August 1, 1999,  the Company held a 50% interest  with TNGL
holding the remaining 50%).

     The Company  acquired equity interests in other entities as a result of the
TNGL  acquisition.  Among these  entities were Belle Rose (equity income of $0.2
million) and Promix  (equity loss of $0.1 million).  With the  acquisition of an
additional  16-2/3% in Tri-States,  the Company  obtained an equity  interest of
33-1/3%. This investment contributed $0.5 million in equity income.


Financial Condition and Liquidity

General

     The Company's  primary cash  requirements,  in addition to normal operating
expenses, are debt service, maintenance capital expenditures,  expansion capital
expenditures,  and quarterly  distributions to the partners. The Company expects
to fund future cash distributions and maintenance capital expenditures with cash

flows from  operating  activities.  Capital  expenditures  for future  expansion
activities and asset acquisitions are expected to be funded with cash flows from
operating activities and borrowings under the revolving bank credit facilities.

     Cash flows from  operating  activities  were a $50.1 million inflow for the
first nine months of 1999 compared to a $43.9 million outflow for the comparable
period of 1998.  Cash flows from  operating  activities  primarily  reflect  the
effects of net  income,  depreciation  and  amortization,  extraordinary  items,
equity income of unconsolidated  affiliates and changes in working capital.  Net
income  increased  significantly as a result of improved overall margins and the
TNGL  acquisition.  Depreciation and  amortization  increased by $2.5 million in
1999 primarily as a result of additional  capital  expenditures and the TNGL and
Mont Belvieu fractionator acquisitions (the "acquisitions") in the third quarter
of 1999.  Amortization expense increased by $0.7 million due to the amortization
of the excess cost recorded in  connection  with  acquisitions.  The excess cost
associated  with the  acquisitions  will be amortized  over a 20-year  period at
approximately  $0.4  million per month.  The net effect of changes in  operating
accounts  from year to year is  generally  the result of timing of NGL sales and
purchases near the end of the period.

     Cash  outflows for  investing  activities  were $255.8  million in 1999 and
$48.8 million for the comparable  period of 1998. Cash outflows included capital
expenditures  of $10.6  million for 1999 and $7.2 million for 1998.  Included in
the capital  expenditures  amounts are maintenance capital  expenditures of $1.7
million for 1999 and $5.6 million for 1998. Investing cash outflows in 1999 also
included  $58.4  million  in  advances  to  and  investments  in  unconsolidated
affiliates  versus $20.0 million for the  comparable  period of 1998.  The $38.4
million  increase  stems  primarily  from  contributions  made to the  Wilprise,
Tri-States, BRF, and BRPC joint ventures located in Louisiana. Also, the Company
received  $16.7  million in  payments on notes  receivable  from the BEF and MBA
notes  purchased  during  1998  with  the  proceeds  of the  Company's  IPO.  In
conjunction  with  the  acquisition  of the MBA  interest  in the  Mont  Belvieu
fractionation  facility, $5.8 million was received during the third quarter 1999
from MBA for the balance of the  Company's  note  receivable.  The $9.8  million
outstanding balance of notes receivable from  unconsolidated  affiliates relates
to the  participation  in the BEF note.  This balance will be collected in equal
installments  of  approximately  $3.3 million each at the end of November  1999,
February 2000 and May 2000.

     Cash  outflows for  investing  activities  also  include the cash  payments
related  to the  acquisitions.  Per the  terms of the TNGL  acquisition,  $166.0
million was paid to Tejas Energy in September 1999. Likewise,  $42.1 million was
paid to Kinder Morgan and EPCO to purchase their collective 51% interest in MBA.
As described in Note 10 of the notes to the consolidated  financial  statements,
the Company  expects to complete a third  significant  acquisition in the fourth
quarter of 1999 - the  purchase  of a pipeline  from  Concha  Chemical  Pipeline
Company  ("Concha"),  an affiliate of Shell, for  approximately  $100 million in
cash.  The purchase of the Lou-Tex  pipeline is the first step in the  Company's
development  of a $210  million,  160,000  barrel per day gas  liquids  pipeline
system.  The completion of the Lou-Tex  transaction is subject to the successful


                                       22
<PAGE>

negotiation  of  definitive  agreements,  approval  of those  agreements  by the
respective managements and regulatory approvals. The development of the expanded
Lou-Tex gas liquids  pipeline  system is expected to be  completed in the second
half of 2000.

     Cash flows from financing  activities  were a $203.3 million inflow in 1999
versus a $66.3 million inflow for the comparable period of 1998. Cash flows from
financing  activities  are affected  primarily by repayments of long-term  debt,
borrowings  under  the  long-term  debt  agreements  and  distributions  to  the
partners.  The 1998 period reflects the transactions that occurred in the IPO in
July 1998. The 1999 period  includes $215 million in long-term  debt  borrowings
associated with the TNGL and Mont Belvieu  fractionation  facility  acquisition.
Cash flows from financing activities for 1999 also reflected the net purchase of
$4.7 million of Common Units by a consolidated trust.

         Future Capital Expenditures

     The Company  currently  estimates that its share of remaining  expenditures
for  significant  capital  projects  in fiscal 1999 will be  approximately  $8.6
million  (including  $6.2 million for the BRPC  propylene  concentrator).  These
expenditures  relate to the construction of joint venture projects which will be
recorded as additional  investments in  unconsolidated  affiliates.  The Company
forecasts  that an  additional  $24.3  million  will be spent in 1999 on capital
projects  that will be recorded as property,  plant,  and  equipment  (including
$10.9 million for the Lou-Tex  pipeline and $5.6 million for the construction of
gas  plants   acquired  from  TNGL).   The  Company  expects  to  finance  these
expenditures  out of operating cash flows and  borrowings  under its bank credit
facilities.  As of  September  30,  1999,  the  Company  had  $13.2  million  in
outstanding purchase commitments  attributable to its capital projects.  Of this
amount,  $4.7 million is associated with significant capital projects which will
be  recorded  as  additional   investments  in  unconsolidated   affiliates  for
accounting purposes.

         Distributions from Unconsolidated Affiliates

     Distributions  to the Company  from MBA were $1.9  million in 1999 and $4.7
million in 1998. The level of  distributions is lower in 1999 versus 1998 due to
lower fractionation  margins and the acquisition of the MBA interest in the Mont
Belvieu fractionation  facility on July 1, 1999.  Distributions from BEF in 1999
were $0.3 million versus $1.9 million in 1998.  Distributions  from BEF are down
from  1998  levels  due to  downtime  associated  with  maintenance  activities.
Distributions from EPIK in 1999 were $1.6 million. EPIK was formed in the second
quarter of 1998 and had no distributions until the third quarter of 1998.

         Bank Credit Facility

     Existing Bank Credit  facility.  In July 1998,  the  Operating  Partnership
entered into a $200.0  million  bank credit  facility  ("Bank  Revolver A") that
includes a $50.0 million working capital facility and a $150.0 million revolving
term loan facility.  The $150.0 million  revolving term loan facility includes a
sublimit of $30.0 million for letters of credit.  As of September 30, 1999,  the
Company has borrowed  $175.0 million under the bank credit facility which is due
in July  2000.  Management  is  currently  exploring  options  to  convert  this
short-term debt into long-term debt.

     The  Company's  obligations  under the bank credit  facility are  unsecured
general  obligations  and are  non-recourse to the General  Partner.  Borrowings
under the bank credit  facility  will bear  interest at either the bank's  prime
rate or the  Eurodollar  rate  plus the  applicable  margin  as  defined  in the
facility.  The bank  credit  facility  will  expire in July 2000 and all amounts
borrowed  thereunder  shall be due and  payable at that  time.  There must be no
amount   outstanding  under  the  working  capital  facility  for  at  least  15
consecutive days during each fiscal year.

     As amended on July 28, 1999, the existing credit agreement  relating to the
facility contains a prohibition on distributions on, or purchases or redemptions
of, Units if any event of default is  continuing.  In addition,  the bank credit
facility contains various  affirmative and negative covenants  applicable to the
ability of the Company to,  among other  things,  (i) incur  certain  additional
indebtedness,  (ii) grant certain liens,  (iii) sell assets in excess of certain
limitations,  (iv) make investments,  (v) engage in transactions with affiliates
and (vi) enter into a merger,  consolidation or sale of assets.  The bank credit
facility requires that the Operating Partnership satisfy the following financial
covenants at the end of each fiscal quarter: (i) maintain  Consolidated Tangible
Net Worth (as defined in the bank credit  facility) of at least $250.0  million,
(ii)  maintain a ratio of EBITDA (as  defined in the bank  credit  facility)  to


                                       23
<PAGE>

Consolidated  Interest  Expense (as defined in the bank credit facility) for the
previous  12-month  period of at least 3.5 to 1.0 and (iii)  maintain a ratio of
Total Indebtedness (as defined in the bank credit facility) to EBITDA of no more
than 3.0 to 1.0.

     A "Change of Control" constitutes an Event of Default under the bank credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates  of EPCO or Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

     New Bank Credit  facility.  On July 28,  1999,  the  Operating  Partnership
entered into a $350.0  million  bank credit  facility  ("Bank  Revolver B") that
includes a $50.0 million working capital facility and a $300.0 million revolving
term loan facility.  The $300.0 million  revolving term loan facility includes a
sublimit of $10.0 million for letters of credit.  The proceeds of this loan were
used to finance the acquisition of TNGL and the MBA ownership interests.  Future
uses of the remaining  credit line include the purchase of the Lou-Tex  pipeline
(see Note 10).

     Borrowings  under the bank credit facility will bear interest at either the
bank's prime rate or the Eurodollar  rate plus the applicable  margin as defined
in the  facility.  The bank  credit  facility  will  expire in July 2001 and all
amounts borrowed thereunder shall be due and payable at that time. There must be
no  amount  outstanding  under  the  working  capital  facility  for at least 15
consecutive days during each fiscal year.

     The credit agreement relating to the new facility contains a prohibition on
distributions  on, or purchases or  redemptions of Units if any event of default
is  continuing.   In  addition,   the  bank  credit  facility  contains  various
affirmative and negative covenants  applicable to the ability of the Company to,
among  other  things,  (i) incur  certain  additional  indebtedness,  (ii) grant
certain  liens,  (iii) sell assets in excess of certain  limitations,  (iv) make
investments,  (v) engage in  transactions  with affiliates and (vi) enter into a
merger, consolidation, or sale of assets. The bank credit facility requires that
the Operating  Partnership  satisfy the following financial covenants at the end
of each fiscal quarter: (i) maintain Consolidated Tangible Net Worth (as defined
in the bank credit  facility) of at least $250.0 million,  (ii) maintain a ratio
of EBITDA (as  defined in the bank credit  facility)  to  Consolidated  Interest
Expense (as  defined in the bank  credit  facility)  for the  previous  12-month
period of at least 3.5 to 1.0 and (iii)  maintain a ratio of Total  Indebtedness
(as defined in the bank credit facility) to EBITDA of no more than 3.0 to 1.0.

     A "Change of Control" constitutes an Event of Default under the bank credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates of EPCO and Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

MTBE Production

     The Company owns a 33-1/3%  economic  interest in the BEF partnership  that
owns the MTBE  production  facility  located  within the Compan's  Mont Belvieu
complex.  The production of MTBE is driven by oxygenated  fuels programs enacted
under the federal Clean Air Act  Amendments of 1990 and other  legislation.  Any
changes to these programs that enable  localities to opt out of these  programs,
lessen the requirements  for oxygenates or favor the use of non-isobutane  based
oxygenated  fuels reduce the demand for MTBE and could have an adverse effect on
the Company's results of operations.


                                       24
<PAGE>

     On March 25, 1999, the Governor of California ordered the phase-out of MTBE
in that state by the end of 2002 due to allegations  by several public  advocacy
and protest groups that MTBE contaminates water supplies, causes health problems
and  has not  been  as  beneficial  in  reducing  air  pollution  as  originally
contemplated.  The  order  also  seeks  to  obtain  a  waiver  of the  oxygenate
requirement from the federal Environmental Protection Agency ("EPA") in order to
facilitate  the  phase-out;  however,  due  to  increasing  concerns  about  the
viability of alternative  fuels, the California  legislature on October 10, 1999
passed  the Sher Bill (SB 989)  stating  that  MTBE  should be banned as soon as
feasible rather than by the end of 2002.

     In  addition,  legislation  to amend the federal  Clean Air Act of 1990 has
been introduced in the U.S. House of Representatives to ban the use of MTBE as a
fuel additive  within three years.  Legislation  introduced  in the U.S.  Senate
would eliminate the Clean Air Act's oxygenate requirement in order to assist the
elimination  of MTBE in fuel.  No  assurance  can be given as to whether this or
similar federal  legislation  ultimately will be adopted or whether  Congress or
the EPA might takes steps to override the MTBE ban in California.

     In November 1998, U.S. EPA Administrator  Carol M. Browner appointed a Blue
Ribbon Panel (the  "Panel") to  investigate  the air quality  benefits and water
quality  concerns  associated  with  oxygenates  in  gasoline,  and  to  provide
independent  advice and  recommendations  on ways to maintain air quality  while
protecting  water  quality.  The  Panel  issued a report on their  findings  and
recommendations  in July 1999. The Panel urged the  widespread  reduction in the
use of MTBE due to the growing  threat to drinking  water  sources  despite that
fact that use of  reformulated  gasolines have  contributed  to significant  air
quality improvements. The Panel credited reformulated gasoline with "substantial
reductions"  in  toxic  emissions  from  vehicles  and  recommended  that  those
reductions  be  maintained  by the use of  cleaner-burning  fuels  that  rely on
additives  other than MTBE and  improvements  in refining  processes.  The Panel
stated  that  the  problems  associated  with  MTBE  can be  characterized  as a
low-level,  widespread  problem that had not reached the state of being a public
health threat. The Panel's  recommendations  are geared towards  confronting the
problems  associated  with MTBE now rather  than  letting  the issue grow into a
larger and worse problem. The Panel did not call for an outright ban on MTBE but
stated that its use should be curtailed significantly. The Panel also encouraged
a public  educational  campaign on the potential  harm posed by gasoline when it
leaks into ground water from storage tanks or while in use. Based on the Panel's
recommendations,  the EPA will ask  Congress for a revision of the Clean Air Act
of 1990 that  maintains  air  quality  gains and allows  for the  removal of the
oxygenate demand in gasoline.

     In light of these  developments,  the Company is  formulating a contingency
plan for use of the BEF MTBE  facility  if MTBE  were  banned  or  significantly
curtailed.  Management  is exploring a possible  conversion  of the BEF facility
from MTBE production to alkylate production.  At present, the forecasted cost to
the Company of this conversion  would be in the $20 million to $25 million range
with  the  Company's  share  being  $6.7  million  to $8.3  million.  Management
anticipates that if MTBE is banned alkylate demand will rise as producers use it
to replace MTBE as an octane enhancer.  Alkylate production would be expected to
generate margins comparable to those of MTBE. Greater alkylate  production would
be expected to increase isobutane consumption  nationwide and result in improved
isomerization margins for the Company.

Year 2000 Readiness Disclosure

     Pursuant to the EPCO  Agreement,  any selling,  general and  administrative
expenses  related  to Year 2000  compliance  issues  are  covered  by the annual
administrative  services  fee paid by the  Company to EPCO.  Consequently,  only
those costs  incurred in connection  with Year 2000  compliance  which relate to
operational  information  systems  and  hardware  will be paid  directly  by the
Company.

     Since  1997,  EPCO has been  assessing  the impact of Year 2000  compliance
issues on the software and hardware used by the Company. A team was assembled to
review and document the status of EPCO's and the Company's systems for Year 2000
compliance.  The key information systems reviewed include the Company's pipeline
Supervisory Control and Data Acquisition  ("SCADA") system,  plant, storage, and
other  pipeline  operating  systems.  In  connection  with each of these  areas,
consideration was given to hardware, operating systems, applications,  data base
management, system interfaces,  electronic transmission, and outside vendors. As
of October 31, 1999 work is approximately 99% complete in all areas.


                                       25
<PAGE>

     As of  September  30,  1999,  EPCO  had  spent  approximately  $326,500  in
connection  with Year 2000  compliance  and has  estimated  the future  costs to
approximate  $12,000.  This cost  estimate  does not include  internal  costs of
EPCO's previously  existing resources and personnel that might be partially used
for Year 2000  compliance or cost of normal system  upgrades which also included
various Year 2000  compliance  features or fixes.  Such internal costs have been
determined to be materially  insignificant  to the total  estimated cost of Year
2000  compliance.  These  amounts are current cost  estimates  and actual future
costs could potentially be higher or lower than the estimates.

     At this time, the Company  believes its total cost for known or anticipated
remediation of its information systems to make them Year 2000 compliant will not
be material to its financial position or its ability to sustain  operations.  As
of September 30, 1999, the Company had incurred  expenditures  of  approximately
$1,026,000  in  connection  with  finalizing  its Year 2000  compliance  project
(principally  the SCADA  system).  The  Company  does not expect any  additional
material  expenditures.  This  approximate  cost does not include the  Company's
internal costs related to previously existing resources and personnel that might
be partially used for remediation of Year 2000 compliance issues.  Such internal
costs have been determined to be materially insignificant to the total estimated
cost of Year 2000 compliance.

     The Company relies on third-party  suppliers for certain systems,  products
and services, including  telecommunications.  There can be no assurance that the
systems of other companies on which the Company's  systems rely also will timely
be compliant or that any such failure to be compliant by another  company  would
not have an adverse  effect on the Company's  systems.  The Company has received
certain  information  concerning  Year 2000  compliance  status  from a group of
critical  suppliers and vendors.  This  information  has assisted the Company in
determining  the extent to which it may be  vulnerable  to the  failure of third
parties to address  their Year 2000  compliance  issues.  Based on the responses
received to date, the Company  believes that its critical  suppliers and vendors
will be Year 2000 compliant.

     Management  believes it has a program to address  the Year 2000  compliance
issue  in a  timely  manner.  Final  completion  of  the  plan  and  testing  of
replacement   or  modified   systems  is   anticipated  by  November  30,  1999.
Nevertheless,  since  it is not  possible  to  anticipate  all  possible  future
outcomes,   especially   when  third  parties  are  involved,   there  could  be
circumstances  in which the  Company  would be unable to  invoice  customers  or
collect payments. The failure to correct a material Year 2000 compliance problem
could  result in an  interruption  in or  failure  of  certain  normal  business
activities  or operations  of the Company.  Such failures  could have a material
adverse  effect on the  Company.  The  amount of  potential  liability  and lost
revenue has not been estimated.

     The  Company  and  EPCO  have  developed  a  contingency  plan  to  address
unavoidable  risks associated with Year 2000 compliance  issues.  Management has
examined  the Year  2000  compliance  issue  and  determined  that a  worst-case
scenario would be a total,  unexpected  facility shutdown caused by a disruption
of  third-party  utilities   (principally  a  total  electrical  power  outage).
Enterprise  personnel  are  trained to respond  timely and  effectively  to such
emergencies;  however,  because  of the  uncertainty  surrounding  the Year 2000
problem,  the Company  will have  additional  resources  available to assist the
operations,  maintenance,  and various  other  groups on  December  31, 1999 and
January 1, 2000.  The Company will have extra  operating,  maintenance,  process
control, computer support,  environmental and safety personnel on site and/or on
standby in the event that a Year 2000 problem arises.  The Company and EPCO will
have a defined team of trained personnel available for the rollover into January
1, 2000,  so that any  disruption to Company or EPCO  facilities  can be handled
safely and so that a return to normal  operations can be commenced as soon as is
practicable.

Accounting Standards

     On June 6, 1999, the Financial  Accounting  Standards Board ("FASB") issued
Statement of  Financial  Accounting  Standard  ("SFAS No. 137,  "Accounting  for
Derivative Instruments and Hedging  Activities-Deferral of the Effective Date of
FASB Statement No. 133-an amendment of FASB Statement No. 133" which effectively
delays and amends the  application  of SFAS No. 133  "Accounting  for Derivative
Instruments  and Hedging  Activities"  for one year,  to fiscal years  beginning
after June 15, 2000. Management is currently studying both SFAS No. 137 and SFAS
No. 133 for possible impact on the consolidated financial statements.



                                       26
<PAGE>

     On April 3, 1998, the American  Institute of Certified  Public  Accountants
issued Statement of Position  ("SOP") 98-5,  "Reporting on the Costs of Start-Up
Activities."  For years  beginning  after  December 15, 1998, SOP 98-5 generally
requires that all start-up costs of a business activity be charged to expense as
incurred and any start-up costs  previously  deferred should be written off as a
cumulative  effect of a change in  accounting  principle.  Adoption  of SOP 98-5
during  1999  did not  have a  material  impact  on the  consolidated  financial
statements  except for a $4.5 million noncash write-off that occurred on January
1, 1999 of the unamortized  balance of deferred  start-up costs of BEF, in which
the  Company  owns a 33-1/3%  interest.  This  write-off  caused a $1.5  million
reduction in the equity in income of  unconsolidated  affiliates  for 1999 and a
corresponding   reduction  in  the  Company's   investment   in   unconsolidated
affiliates.


Uncertainty of Forward-Looking Statements and Information.

     This  quarterly  report  contains  various  forward-looking  statements and
information that are based on the belief of the Company and the General Partner,
as well  as  assumptions  made by and  information  currently  available  to the
Company  and the  General  Partner.  When used in this  document,  words such as
"anticipate,"  "estimate,"  "project,"  "expect," "plan," "forecast,"  "intend,"
"could," and "may," and similar  expressions and statements  regarding the plans
and  objectives of the Company for future  operations,  are intended to identify
forward-looking statements. Although the Company and the General Partner believe
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  they can give no assurance that such  expectations will prove to be
correct.  Such  statements  are  subject to certain  risks,  uncertainties,  and
assumptions.  If one or more of these risks or uncertainties materialize,  or if
underlying assumptions prove incorrect,  actual results may vary materially from
those anticipated, estimated, projected, or expected. Among the key risk factors
that may have a direct  bearing  on the  Company's  results  of  operations  and
financial  condition are: (a)  competitive  practices in the industries in which
the Company  competes,  (b)  fluctuations  in oil,  natural gas, and NGL product
prices and  production,  (c) operational  and systems risks,  (d)  environmental
liabilities  that are not covered by indemnity or  insurance,  (e) the impact of
current and future laws and governmental  regulations  (including  environmental
regulations) affecting the NGL industry in general, and the Company's operations
in particular,  (f) loss of a significant customer,  and (g) failure to complete
one or more new projects on time or within budget.

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Historically,  the  Company has been  exposed to  financial  market  risks,
including changes in interest rates with respect to its investments in financial
instruments and changes in commodity  prices.  The Company could,  but generally
did not, use derivative financial instruments (i.e., futures,  forwards,  swaps,
options,  and other  financial  instruments  with  similar  characteristics)  or
derivative commodity instruments (i.e., commodity futures,  forwards,  swaps, or
options, and other commodity  instruments with similar  characteristics that are
permitted  by contract or business  custom to be settled in cash or with another
financial  instrument)  to  mitigate  either of these  risks.  The return on the
Company's  financial  investments was generally not affected by foreign currency
fluctuations.  Through  the third  quarter of 1999,  the Company did not use any
material derivative financial instruments for speculative purposes. At September
30, 1999, the Company had no material  derivative  instruments in place to cover
any potential  interest rate,  foreign  currency or other  financial  instrument
risk.

     At September 30, 1999,  the Company had $21.6 million  invested in cash and
cash  equivalents.  All cash equivalent  investments  other than cash are highly
liquid,  have original  maturities of less than three months, and are considered
to have  insignificant  interest rate risk. The Company's  inventory of NGLs and
NGL products at September 30, 1999, was $103.0 million.  Inventories are carried
at the lower of cost or market.  A 10% adverse change in commodity  prices would
result  in an  approximate  $10.3  million  decrease  in the  fair  value of the
Company's  inventory,  based on a  sensitivity  analysis at September  30, 1999.
Actual  results may differ  materially.  All the Company's  long-term debt is at
variable  interest  rates;  a 10% change in the base rate selected would have an
approximate  $2.1 million effect on the amount of interest  expense for the year
based upon amounts outstanding at September 30, 1999.

     Beginning with the fourth quarter of 1999, the Company adopted a commercial
policy to manage  exposures  to the risks  generated  by the NGL  business.  The
objective of the policy is to assist the Company in achieving its  profitability
goals while maintaining a portfolio of conservative  risk,  defined as remaining



                                       27
<PAGE>

within the position limits  established by the Board of Directors of the general
partner.  The Company  will enter into risk  management  transactions  to manage
price  risk,  basis  risk,  physical  risk or  other  risks  related  to  energy
commodities on both a short-term (less than 30 days) and long-term basis, not to
exceed 18 months.  The general  partner has  established a Risk  Committee  (the
"committee") that will oversee overall  strategies  associated with physical and
financial risks. The committee will approve specific  commercial policies of the
Company subject to this policy,  including authorized products,  instruments and
markets. The committee is also charged with establishing specific guidelines and
procedures for implementing the policy and ensuring  compliance with the policy.
This policy will affect transactions beginning with the fourth quarter of 1999.


                                       28
<PAGE>

PART II.    OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

         (a) Exhibits

     *3.1 Form of Amended  and  Restated  Agreement  of Limited  Partnership  of
          Enterprise   Products  Partners  L.P.  (Exhibit  3.1  to  Registration
          Statement on Form S-1, File No. 333-52537, filed on May 13, 1998).

     *3.2 Form of Amended  and  Restated  Agreement  of Limited  Partnership  of
          Enterprise  Products  Operating  L.P.  (Exhibit  3.2  to  Registration
          Statement on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *3.3 LLC Agreement of Enterprise  Products GP (Exhibit 3.3 to  Registration
          Statement on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *3.4 Second  Amended  and  Restated  Agreement  of Limited  Partnership  of
          Enterprise  Products  Partners L.P.  dated  September  17, 1999.  (The
          Company  incorporates by reference the above document  included in the
          Schedule 13D filed  September  27, 1999 by Tejas Energy LLC ; filed as
          Exhibit 99.7 on Form 8-K dated October 4, 1999).

     *3.5 First  Amended and Restated  Limited  Liability  Company  Agreement of
          Enterprise Products GP, LLC dated September 17, 1999. (Exhibit 99.8 on
          Form 8-K/A-1 filed October 27, 1999).

     *4.1 Form of Common Unit certificate (Exhibit 4.1 to Registration Statement
          on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *4.2 $200 million Credit  Agreement  among  Enterprise  Products  Operating
          L.P., the Several Banks from Time to Time Parties  Hereto,  Den Norske
          Bank  ASA,  and Bank of  Tokyo-Mitsubishi,  Ltd.,  Houston  Agency  as
          Co-Arrangers,   The  Bank  of  Nova  Scotia,  as  Co-Arranger  and  as
          Documentation Agent and The Chase Manhattan Bank as Co-Arranger and as
          Agent  dated  as of  July  27,  1998 as  Amended  and  Restated  as of
          September 30, 1998.  (Exhibit 4.2 on Form 10-K for year ended December
          31, 1998, filed March 17, 1999).

     *4.3 First  Amendment to $200 million Credit  Agreement dated July 28, 1999
          among  Enterprise  Products  Operating  L.P.  and  the  several  banks
          thereto. (Exhibit 99.9 on Form 8-K/A-1 filed October 27, 1999).

     *4.4 $350 million Credit  Agreement  among  Enterprise  Products  Operating
          L.P., BankBoston,  N.A., Societe Generale,  Southwest Agency and First
          Union National Bank, as  Co-Arrangers,  The Chase  Manhattan  Bank, as
          Co-Arranger and as  Administrative  Agent,  The First National Bank of
          Chicago,  as Co-Arranger and as Documentation  Agent, The Bank of Nova
          Scotia,  as Co-Arranger and Syndication  Agent,  and the Several Banks
          from Time to Time  parties  hereto  with First Union  Capital  Markets
          acting as  Managing  Agent and Chase  Securities  Inc.  acting as Lead
          Arranger and Book Manager dated July 28, 1999  (Exhibit  99.10 on Form
          8-K/A-1 filed October 27, 1999).

     *4.5 Unitholder  Rights  Agreement  among Tejas Energy LLC, Tejas Midstream
          Enterprises,   LLC,  Enterprise  Products  Partners  L.P.,  Enterprise
          Products  Operating  L.P.,  Enterprise  Products  Company,  Enterprise
          Products GP, LLC and EPC Partners II, Inc.  dated  September 17, 1999.
          (The Company  incorporates by reference the above document included in
          the Schedule 13D filed  September 27, 1999 by Tejas Energy LLC ; filed
          as Exhibit 99.5 on Form 8-K dated October 4, 1999).

                                       29
<PAGE>

     *10.1Articles  of Merger  of  Enterprise  Products  Company,  HSC  Pipeline
          Partnership, L.P., Chunchula Pipeline Company, LLC, Propylene Pipeline
          Partnership, L.P., Cajun Pipeline Company, LLC and Enterprise Products
          Texas  Operating L.P. dated June 1, 1998 (Exhibit 10.1 to Registration
          Statement on Form S-1/A, File No: 333-52537, filed on July 8, 1998).

     *10.2Form of EPCO  Agreement  between  Enterprise  Products  Partners L.P.,
          Enterprise  Products Operating L.P.,  Enterprise  Products GP, LLC and
          Enterprise Products Company (Exhibit 10.2 to Registration Statement on
          Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *10.3Transportation  Contract between  Enterprise  Products  Operating L.P.
          and Enterprise Transportation Company dated June 1, 1998 (Exhibit 10.3
          to Registration Statement on Form S-1/A, File No. 333-52537,  filed on
          July 8, 1998).

     *10.4Venture  Participation  Agreement  between Sun  Company,  Inc.  (R&M),
          Liquid Energy Corporation and Enterprise Products Company dated May 1,
          1992  (Exhibit  10.4 to  Registration  Statement on Form S-1, File No.
          333-52537, filed on May 13, 1998).

     *10.5Partnership  Agreement  between Sun BEF,  Inc.,  Liquid  Energy  Fuels
          Corporation and Enterprise Products Company dated May 1, 1992 (Exhibit
          10.5 to Registration Statement on Form S-1, File No. 333-52537,  filed
          on May 13, 1998).

     *10.6Amended  and  Restated  MTBE  Off-Take   Agreement   between   Belvieu
          Environmental Fuels and Sun Company,  Inc. (R&M) dated August 16, 1995
          (Exhibit  10.6  to  Registration  Statement  on  Form  S-1,  File  No.
          333-52537, filed on May 13, 1998).

     *10.7Articles of  Partnership  of Mont  Belvieu  Associates  dated July 17,
          1985  (Exhibit  10.7 to  Registration  Statement on Form S-1, File No.
          333-52537, filed on May 13, 1998).

     *10.8First Amendment to Articles of Partnership of Mont Belvieu  Associates
          dated July 15, 1996  (Exhibit 10.8 to  Registration  Statement on Form
          S-1, File No. 333-52537, filed on May 13, 1998).

     *10.9Propylene   Facility  and  Pipeline   Agreement   between   Enterprise
          Petrochemical  Company and Hercules  Incorporated  dated  December 13,
          1978  (Exhibit  10.9 to  Registration  Statement on Form S-1, File No.
          333-52537, dated May 13, 1998).

     *10.10 Restated  Operating  Agreement  for the Mont  Belvieu  Fractionation
          Facilities Chambers County, Texas between Enterprise Products Company,
          Texaco  Producing  Inc.,  El Paso  Hydrocarbons  Company and  Champlin
          Petroleum  Company dated July 17, 1985 (Exhibit 10.10 to  Registration
          Statement on Form S-1/A, File No. 333-52537, filed on July 8, 1998).

     *10.11  Ratification  and  Joinder  Agreement   relating  to  Mont  Belvieu
          Associates  Facilities  between  Enterprise  Products Company,  Texaco
          Producing  Inc.,  El Paso  Hydrocarbons  Company,  Champlin  Petroleum
          Company and Mont Belvieu Associates dated July 17, 1985 (Exhibit 10.11
          to Registration Statement on Form S-1/A, File No. 333-52537,  filed on
          July 8, 1998).

                                       30
<PAGE>

     *10.12 Amendment to Propylene Facility and Pipeline Sales Agreement between
          HIMONT U.S.A.,  Inc. and Enterprise  Products Company dated January 1,
          1993 (Exhibit 10.12 to Registration  Statement on Form S-1/A, File No.
          333-52537, filed on July 8, 1998).

     *10.13 Amendment to  Propylene  Facility  and  Pipeline  Agreement  between
          HIMONT U.S.A.,  Inc. and Enterprise  Products Company dated January 1,
          1995 (Exhibit 10.13 to Registration  Statement on Form S-1/A, File No.
          333-52537, filed on July 8, 1998).

     10.14Fourth Amendment to Conveyance of Gas Processing  Rights between Tejas
          Natural Gas Liquids,  LLC and Shell Oil Company,  Shell  Exploration &
          Production Company,  Shell Offshore Inc., Shell Deepwater  Development
          Inc.,  Shell Land & Energy  Company and Shell  Frontier Oil & Gas Inc.
          dated August 1, 1999.

     *99.1Contribution  Agreement  between  Tejas  Energy LLC,  Tejas  Midstream
          Enterprises,   LLC,  Enterprise  Products  Partners  L.P.,  Enterprise
          Products  Operating  L.P.,  Enterprise  Products  Company,  Enterprise
          Products GP, LLC and EPC Partners II, Inc.  dated  September 17, 1999.
          (The Company  incorporates by reference the above document included in
          the Schedule 13D filed  September 27, 1999 by Tejas Energy LLC ; filed
          as Exhibit 99.4 on Form 8-K dated October 4, 1999).

     *99.2Registration  Rights Agreement between Tejas Energy LLC and Enterprise
          Products   Partners  L.P.  dated  September  17,  1999.  (The  Company
          incorporates by reference the above document  included in the Schedule
          13D filed  September  27, 1999 by Tejas  Energy LLC ; filed as Exhibit
          99.6 on Form 8-K dated October 4, 1999).


     27.1 Financial Data Schedule

     *    Asterisk indicates exhibits incorporated by reference as indicated

     (b)  Reports on Form 8-K

     Three  reports  on Form 8-K were  filed  during  the third  quarter of 1999
     associated with the Tejas acquisition.

          On  September  20,  1999 a Form  8-K was  filed  whereby  the  Company
     announced it had completed its acquisition of TNGL,  from Tejas Energy,  an
     affiliate of Shell. In exchange for its NGL business, Tejas Energy received
     14.5 million  convertible special partnership units in the Company and $166
     million in cash. Tejas Energy has the opportunity to earn an additional 6.0
     million  convertible  contingency units over the next two years. As part of
     the  transaction,  the Company has entered into a long-term gas  processing
     agreement  with  Shell  for  its  Gulf of  Mexico  production.  TNGL's  NGL
     businesses   include   natural  gas  processing   and  NGL   fractionation,
     transportation,  storage and  marketing.  All of TNGL's assets in Louisiana
     and  Mississippi  are  included  under the terms of the  transaction.  This
     acquisition  by the  Company  forms  a  fully  integrated  Gulf  Coast  NGL
     processing, fractionation, storage, transportation and marketing business.

          On  October  4,  1999,  a Form  8-K  was  filed  whereby  the  Company
     summarized the Unitholder  Rights  Agreement and other material  agreements
     associated with the TNGL acquisition. This filing incorporated by reference
     certain material documents associated with the acquisition.


                                    31
<PAGE>

          On October 27,  1999,  a Form  8-K/A-1  was filed  whereby the Company
     disclosed certain  historical  financial  information of TNGL for the years
     ended 1996,  1997,  and 1998.  In  addition,  this filing  contained  other
     documentation relating to the TNGL acquisition.






                                       32
<PAGE>


                                   Signatures


     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 thereunto duly authorized.


                                   Enterprise Products Partners L.P.
                                   (A Delaware Limited Partnership)

                                   By:    Enterprise Products GP, LLC
                                          as General Partner


Date:   November 15, 1999          By:    /s/  Gary L. Miller
                                          Executive Vice President
                                          Chief Financial Officer and Treasurer











                                       33
[{"type": "10-Q", "sequence": "1", "description": "FORM 10-Q", "secsgml_size_bytes": 143928}]
{"company-data": {"conformed-name": "ENTERPRISE PRODUCTS PARTNERS L P", "cik": "0001061219", "assigned-sic": "1311", "irs-number": "760568219", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-14323", "film-number": "99752589"}, "business-address": {"street1": "2727 NORTH LOOP WEST", "city": "HOUSTON", "state": "TX", "zip": "77008", "phone": "7138806500"}}
FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended September 30, 1999

                                                                  OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                For the transition period from _______ to _______

Commission file number: 1-14323

                        Enterprise Products Partners L.P.
             (Exact name of Registrant as specified in its charter)

               Delaware                                            76-0568219
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)

                              2727 North Loop West
                                 Houston, Texas
                                   77008-1037
               (Address of principal executive offices) (Zip code)

                                 (713) 880-6500
               (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 ___

     The registrant had 45,552,915  Common Units  outstanding as of November 15,
1999.
Enterprise Products Partners L.P. and Subsidiaries

                                TABLE OF CONTENTS
Page
                                                                                                  No.
Part I.  Financial Information

Item 1.  Consolidated Financial Statements

Enterprise Products Partners L.P. Unaudited Consolidated Financial Statements:

         Consolidated Balance Sheets,  September 30, 1999 and December 31, 1998                  1

         Statements of Consolidated Operations
                  for the Three and Nine Months ended September 30, 1999 and 1998                2

         Statements of Consolidated Cash Flows
                  for the Nine Months ended September 30, 1999 and 1998                          3

         Notes to Unaudited Consolidated Financial Statements                                    4-12

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                                   13-27

Item 3.   Quantitative and Qualitative Disclosures about Market Risk                             27-28

Part II.  Other Information

Item 6.   Exhibits and Reports on Form 8-K                                                       29-32

         Signature Page                                                                          33
PART 1. FINANCIAL INFORMATION.
                   Item 1. CONSOLIDATED FINANCIAL STATEMENTS.

                        Enterprise Products Partners L.P.
                           Consolidated Balance Sheets
                             (Amounts in thousands)
September 30,
                                                                                               December 31,           1999
                                           ASSETS                                                  1998           (Unaudited)
                                                                                             -------------------------------------
Current Assets
       Cash and cash equivalents                                                               $   24,103         $    21,647
       Accounts receivable - trade                                                                 57,288             187,615
       Accounts receivable - affiliates                                                            15,546              50,562
       Inventories                                                                                 17,574             102,992
       Current maturities of participation in notes receivable from
           unconsolidated affiliates                                                               14,737               9,778
       Prepaid and other current assets                                                             8,445              11,283
                                                                                             -------------------------------------
                        Total current assets                                                      137,693             383,877
Property, Plant and Equipment, Net                                                                499,793             772,157
Investments in and Advances to Unconsolidated Affiliates                                           91,121             235,864
Participation in Notes Receivable from Unconsolidated Affiliates                                   11,760
Intangible assets, net of amortization of $702                                                                         79,187
Other Assets                                                                                          670               1,515
                                                                                             =====================================
                        Total                                                                  $  741,037         $ 1,472,600
                                                                                             =====================================

                              LIABILITIES AND PARTNERS' EQUITY
Current Liabilities
       Current maturities of long-term debt                                                                       $   175,000
       Accounts payable - trade                                                                $   36,586             139,851
       Accrued gas payables                                                                        27,183             143,397
       Accrued expenses                                                                             7,540              13,071
       Other current liabilities                                                                   11,462              15,017
                                                                                             -------------------------------------
                        Total current liabilities                                                  82,771             486,336
Long-Term Debt                                                                                     90,000             215,000
Other Long-Term Liabilities                                                                                               539
Minority Interest                                                                                   5,730               7,801
Commitments and Contingencies
Partners' Equity
       Common Units (45,552,915 Units outstanding at December 31, 1998 and
            September 30, 1999)                                                                   433,082             417,651
       Subordinated Units (21,409,870 Units outstanding at December 31, 1998 and                  123,829             126,496
            September 30, 1999)
       Special Units  (14,500,000 Units outstanding at September 30, 1999)                                            215,828
       Units acquired by Trust, at cost (267,200 Units outstanding at September 30, 1999)                              (4,727)
       General Partner                                                                              5,625               7,676
                                                                                             -------------------------------------
                        Total Partners' Equity                                                    562,536             762,924
                                                                                             =====================================
                        Total                                                                  $  741,037         $ 1,472,600
                                                                                             =====================================
See Notes to Unaudited Consolidated Financial Statements

                                       1
Enterprise Products Partners L.P.
                      Statements of Consolidated Operations
           (Unaudited, Amounts in thousands, except per Unit amounts)
Three Months Ended                   Nine Months Ended
                                                                          September 30,                        September 30,
                                                                      1998              1999               1998              1999
                                                               --------------------------------------------------------------------
REVENUES
Revenues from consolidated operations                           $  164,620        $  441,880         $  562,703        $  763,793
Equity income in unconsolidated affiliates                           4,171             3,148             10,824             7,591
                                                               --------------------------------------------------------------------
         Total                                                     168,791           445,028            573,527           771,384
                                                               --------------------------------------------------------------------
COST AND EXPENSES
Operating costs and expenses                                       153,197           401,155            521,428           688,250
Selling, general and administrative                                  3,751             3,200             15,362             9,200
                                                               --------------------------------------------------------------------
         Total                                                     156,948           404,355            536,790           697,450
                                                               --------------------------------------------------------------------
OPERATING INCOME                                                    11,843            40,673             36,737            73,934
                                                               --------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Interest expense                                                    (2,500)           (4,036)           (13,304)           (7,995)
Interest income from unconsolidated affiliates                         340               407                340             1,096
Interest income - other                                                 85               682                645             1,114
Other, net                                                              34            (1,010)               464            (1,522)
                                                               --------------------------------------------------------------------
          Other income  (expense)                                   (2,041)           (3,957)           (11,855)           (7,307)
                                                               --------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM
    AND MINORITY INTEREST                                            9,802            36,716             24,882            66,627
Extraordinary charge on early extinguishment of debt               (27,176)                             (27,176)
                                                               --------------------------------------------------------------------
INCOME (LOSS) BEFORE MINORITY INTEREST                             (17,374)           36,716             (2,294)           66,627
MINORITY INTEREST                                                      174              (370)                23              (672)
                                                               ====================================================================
NET INCOME (LOSS)                                               $  (17,200)       $   36,346         $   (2,271)       $   65,955
                                                               ====================================================================

ALLOCATION OF NET INCOME (LOSS) TO:
          Limited partners                                      $  (17,028)       $   35,983         $   (2,248)       $   65,295
                                                               ====================================================================
          General partner                                       $     (172)       $      363         $      (23)       $      660
                                                               ====================================================================

Number of Units Used in Computing
   Basic Earnings per Common Unit                                   63,441            66,696             57,830            66,715
                                                               ====================================================================
BASIC EARNINGS PER COMMON UNIT
          Income before extraordinary item and
              minority interest per common unit                 $     0.15        $     0.54         $     0.43        $     0.99
                                                               ====================================================================
          Net income (loss) per common unit                     $    (0.27)       $     0.54         $    (0.04)       $     0.98
                                                               ====================================================================
Number of Units Used in Computing
   Diluted Earnings per Common Unit                                 63,441            76,310             57,830            69,955
                                                               ====================================================================
DILUTED EARNINGS PER COMMON UNIT
          Income before extraordinary item and
              minority interest per common unit                 $     0.15        $     0.48         $     0.43        $     0.94
                                                               ====================================================================
          Net income (loss) per common unit                     $    (0.27)       $     0.47         $    (0.04)       $     0.93
                                                               ====================================================================
See Notes to Unaudited Consolidated Financial Statements

                                       2
Enterprise Products Partners L.P
                      Statements of Consolidated Cash Flows
                        (Unaudited, Dollars in Thousands)
Nine Months Ended
                                                                                September 30,
                                                                             1998           1999
                                                                         -----------------------------
OPERATING ACTIVITIES
Net income (loss)                                                            ($2,271)       $65,955
Adjustments to reconcile net income (loss) to cash flows provided by
      (used for) operating activities:
      Extraordinary item - early extinguishment of debt                       27,176
      Depreciation and amortization                                           14,796         17,280
      Equity in income of unconsolidated affiliates                          (10,824)        (7,591)
      Leases paid by EPCO                                                      3,327          7,918
      Minority interest                                                          (23)           672
      (Gain) loss on sale of assets                                             (274)           122
      Net effect of changes in operating accounts                            (75,824)       (34,246)
                                                                         -----------------------------
Operating activities cash flows                                              (43,917)        50,110
                                                                         -----------------------------
INVESTING ACTIVITIES
Capital expenditures                                                          (7,159)       (10,603)
Proceeds from sale of assets                                                   1,890              8
Acquisitions                                                                               (208,095)
Participation in notes receivable from unconsolidated affiliates:
      Purchase of notes receivable                                           (33,724)
      Collection of notes receivable                                           3,542         16,719
Unconsolidated affiliates:
      Investments in and advances to                                         (19,988)       (58,460)
      Distributions received                                                   6,601          4,607
                                                                         -----------------------------
Investing activities cash flows                                              (48,838)      (255,824)
                                                                         -----------------------------
FINANCING ACTIVITIES
Net proceeds from sale of common units                                       243,309
Long-term debt borrowings                                                     75,000        350,000
Long-term debt repayments                                                   (256,493)       (59,923)
Net decrease in restricted cash                                                4,522
Cash dividends paid to partners                                                             (81,321)
Cash dividends paid to minority interest                                                       (830)
Units acquired by consolidated trusts                                                        (4,727)
Cash contributions from EPCO to minority interest                                                59
                                                                         -----------------------------
Financing activities cash flows                                               66,338        203,258
                                                                         -----------------------------
CASH CONTRIBUTIONS FROM EPCO                                                  18,468
NET CHANGE IN CASH AND CASH EQUIVALENTS                                       (7,949)        (2,456)
CASH AND CASH EQUIVALENTS, JANUARY 1                                          18,941         24,103
                                                                         =============================
CASH AND CASH EQUIVALENTS, SEPTEMBER 30                                     $ 10,992       $ 21,647
                                                                         =============================
See Notes to Unaudited Consolidated Financial Statements

                                       3
Enterprise Products Partners L.P.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.   GENERAL

In the  opinion of  Enterprise  Products  Partners  L.P.  (the  "Company"),  the
accompanying unaudited consolidated financial statements include all adjustments
consisting of normal recurring accruals necessary for a fair presentation of the
Company's consolidated financial position as of September 30, 1999, consolidated
results of operations  for the three and nine month periods ended  September 30,
1999 and 1998, and its consolidated  cash flows for the nine month periods ended
September 30, 1999 and 1998.  Although the Company  believes the  disclosures in
these financial  statements are adequate to make the  information  presented not
misleading,  certain information and footnote  disclosures  normally included in
annual  financial  statements  prepared in accordance  with  generally  accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations of the Securities and Exchange Commission. These unaudited financial
statements should be read in conjunction with the financial statements and notes
thereto  included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 ("Form 10-K").

The results of operations  for the three and nine month periods ended  September
30, 1999 are not  necessarily  indicative  of the results to be expected for the
full year.

Dollar amounts presented in the tabulations within the notes to the consolidated
financial  statements  are stated in  thousands  of  dollars,  unless  otherwise
indicated.

2.   INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

At September  30, 1999,  the  Company's  significant  unconsolidated  affiliates
accounted for by the equity method included the following:

          Belvieu Environmental Fuels ("BEF") - a 33-1/3% economic interest in a
          Methyl Tertiary Butyl Ether ("MTBE")  production  facility  located in
          southeast Texas.

          Baton Rouge  Fractionators LLC ("BRF") - a 31.25% economic interest in
          a  natural  gas  liquid  ("NGL")  fractionation  facility  located  in
          southeastern Louisiana.

          Baton Rouge  Propylene  Concentrator,  LLC ("BRPC") - a 30.0% economic
          interest in a propylene  concentration  unit  located in  southeastern
          Louisiana  which  is  under   construction  and  scheduled  to  become
          operational in the third quarter of 2000.

          EPIK  Terminalling  L.P.  and EPIK  Gas  Liquids,  LLC  (collectively,
          "EPIK") - a 50%  aggregate  economic  interest in a  refrigerated  NGL
          marine terminal loading facility located in southeast Texas.

          Wilprise  Pipeline  Company,  LLC  ("Wilprise")  - a 33-1/3%  economic
          interest in a NGL pipeline system located in southeastern Louisiana.

          Tri-States  NGL Pipeline  LLC  ("Tri-States")  - an aggregate  33-1/3%
          economic  interest  in a NGL  pipeline  system  located in  Louisiana,
          Mississippi,  and Alabama.  In  connection  with the Tejas Natural Gas
          Liquids,  LLC ("TNGL")  acquisition  (discussed in Note 3) the Company
          acquired an additional  16-2/3% interest bringing the total investment
          in Tri-States to the current 33-1/3%.

          Belle Rose NGL Pipeline LLC ("Belle Rose") - a 41.7% economic interest
          in a NGL pipeline  system  located in south  Louisiana.  The Company's
          interest  in  Belle  Rose was  acquired  in  connection  with the TNGL
          acquisition which is discussed in Note 3.

                                      4
K/D/S  Promix LLC  ("Promix") - a 33-1/3%  economic  interest in a NGL
          fractionation facility and related storage facilities located in south
          Louisiana. The Company's interest in Promix was acquired in connection
          with the TNGL acquisition which is discussed in Note 3.

The Company's  investments  in and advances to  unconsolidated  affiliates  also
includes  Venice Energy  Services  Company,  LLC  ("VESCO")  and Dixie  Pipeline
Company ("Dixie"). The VESCO investment consists of a 13.1% economic interest in
a LLC owning a natural gas processing plant, fractionation facilities,  storage,
and gas gathering  pipelines in Louisiana.  The Dixie investment  consists of an
11.5%  interest in a corporation  owning a 1,300-mile  propane  pipeline and the
associated  facilities  extending  from Mont Belvieu,  Texas to North  Carolina.
These  investments  are accounted  for using the cost method in accordance  with
generally accepted accounting principles.

Effective July 1, 1999, a subsidiary of Enterprise  Products Operating L.P. (the
"Operating  Partnership")  acquired the remaining 51% economic  interest of Mont
Belvieu  Associates  ("MBA") from Kinder  Morgan Energy  Partners L.P.  ("Kinder
Morgan") and  Enterprise  Products  Company  ("EPCO")  (see Note 3 for a general
discussion  regarding  this  acquisition).  As a  consequence,  the  results  of
operations since July 1, 1999 are included in consolidated  operations.  The 49%
economic  interest in income of MBA held by the Company prior to the acquisition
was recorded as equity income.

In  conjunction  with the  acquisition  of TNGL from Tejas  Energy,  LLC ("Tejas
Energy")  effective  August 1,  1999,  the  Company  currently  owns 100% of the
economic  interest  in Entell NGL  Services,  LLC  ("Entell")  (see Note 3 for a
general discussion regarding the TNGL acquisition). As a result, Entell is now a
wholly-owned   subsidiary   of  the   Operating   Partnership.   The   Operating
Partnership's  50%  economic  interest  in the  income  of  Entell  prior to the
acquisition has been recorded as equity income.

Investments in and advances to unconsolidated affiliates at:

                                                December 31,       September 30,
                                                    1998               1999
                                             -----------------------------------

                    BEF                         $   50,079          $   56,493
                    MBA                             12,551
                    BRF                             17,896              34,656
                    BRPC                                                 8,400
                    EPIK                             5,667              12,974
                    Wilprise                         4,873               8,063
                    Tri-States                          55              28,324
                    Promix                                              29,590
                    Dixie                                               20,000
                    VESCO                                               25,000
                    Belle Rose                                          12,364
                                             ===================================
                    Total                       $   91,121          $  235,864
                                             ===================================

                                       5
Equity in income of unconsolidated affiliates for the:

                     Three Months ended               Nine Months ended
                       September 30,                    September 30,
                   1998             1999            1998             1999
              ------------------------------------------------------------------

BEF             $   3,355        $   2,519       $   6,609        $   4,756
MBA                   862               72           4,305            1,256
BRF                                   (258)                            (544)
BRPC                                     4                                4
EPIK                  (46)              59             (90)             236
Entell                                 258                            1,389
Wilprise                              (130)                            (130)
Tri-States                             472                              472
Belle Rose                             245                              245
Promix                                 (93)                             (93)
              ==================================================================
Total           $   4,171        $   3,148       $  10,824        $   7,591
              ==================================================================

3.  ACQUISITIONS

Acquisition of Tejas Natural Gas Liquids, LLC

Effective  August 1, 1999, the Company  acquired TNGL from a subsidiary of Tejas
Energy, an affiliate of Shell Oil Company ("Shell"). TNGL engages in natural gas
processing  and NGL  fractionation,  transportation,  storage and  marketing  in
Louisiana  and  Mississippi.   TNGL's  assets  include  a  20-year  natural  gas
processing agreement with Shell for the rights to process its current and future
natural gas  production  from the state and federal waters of the Gulf of Mexico
and varying  interests in eleven  natural gas processing  plants  (including one
under  construction)  with a combined  gross capacity of 11.0 billion cubic feet
per day (Bcfd) and a net capacity of 3.1 Bcfd; four NGL fractionation facilities
with a combined gross capacity of 281,000 barrels per day (BPD) and net capacity
of 131,500 BPD;  four NGL storage  facilities  with  approximately  29.5 million
barrels of gross  capacity  and 8.8 million  barrels of net  capacity;  and over
2,100 miles of NGL pipelines (including an 11.5% interest in Dixie Pipeline).

As discussed in Note 5, the TNGL acquisition was purchased with a combination of
$166  million in cash and 14.5  million  issuance  of  non-distribution  bearing
convertible  Special Units.  The $166 million cash portion of the purchase price
was funded with  borrowings  under the  Company's  new $350  million bank credit
facility led by The Chase Manhattan Bank. The Special Units were valued within a
range provided by an independent  investment banker using both present value and
Black Scholes Model  methodologies.  The  consideration  for the acquisition was
determined by arms-length negotiation among the parties.

The  acquisition  was accounted for under the purchase method of accounting and,
accordingly,  the purchase price has been  allocated to the assets  acquired and
liabilities  assumed  based on their  estimated  fair value at August 1, 1999 as
follows:

         Current Assets                      $127.5
         Investments                           97.7
         Property, net                        225.8
         Intangible asset                      71.1
         Liabilities                         (145.7)
                                           ==========
         Total purchase price               $ 376.3
                                           ==========

                                       6
The $71.1 million  intangible  asset is associated  with the 20-year natural gas
processing agreement with Shell ("Shell Contract") and is being amortized over a
period of 20 years,  approximating  the life of the  agreement.  For the quarter
ending September 30, 1999,  approximately  $0.6 million of such amortization was
charged to expense.  The assets,  liabilities  and results of operations of TNGL
are  included  with  those of the  Company  as of  August  1,  1999.  Historical
information  for  periods  prior to  August 1, 1999 do not  reflect  any  impact
associated with the TNGL acquisition.

As described in Note 5, Tejas Energy has the  opportunity  to earn an additional
6.0 million non-distribution bearing, convertible special Contingency Units over
the next two years upon the  achievement  of certain gas  production  thresholds
under the Shell  Contract.  If such special  Contingency  Units are issued,  the
purchase price will be adjusted accordingly.

Acquisition  of Kinder  Morgan and EPCO  interest in Mont Belvieu  Fractionation
Facility

Effective  July 1, 1999,  the Company  acquired  Kinder Morgan  Energy  Partners
L.P.'s  ("Kinder  Morgan")  25%  indirect  ownership  interest  and EPCO's  0.5%
indirect ownership interest in a 210,000 BPD NGL fractionation  facility located
in Mont Belvieu,  Texas for approximately $41 million in cash and the assumption
of  approximately  $ 4 million of debt.  The $41 million in cash was funded with
borrowings  under the Company's new $350 million bank credit facility led by The
Chase Manhattan Bank.

The  acquisition  was accounted for under the purchase method of accounting and,
accordingly,  the purchase price has been allocated to the assets  purchased and
liabilities  assumed  based on their  estimated  fair  value at July 1,  1999 as
follows:

         Property, net                         $36.3
         Intangible asset                        8.7
         Liabilities                            (3.8)
                                             ==========
         Total purchase price               $   41.2
                                             ==========

The intangible  asset represents the excess cost of purchase price over the fair
market value of the assets  acquired and is being  amortized over 20 years.  For
the quarter  ending  September  30,  1999,  approximately  $0.1  million of such
amortization was charged to expense.

Prior to this  transaction,  the Company  held a 25% indirect and a 12.5% direct
ownership  interest  in  the  fractionation  facility.  The  indirect  ownership
interests of the Company, Kinder Morgan and EPCO were held through MBA. Prior to
the  acquisition,  the  12.5%  direct  ownership  interest  and the  49%  equity
ownership  of  MBA  were  held  by  Enterprise  Products  Texas  Operating  L.P.
("EPTexas").  Upon completion of the transaction,  EPTexas held 100% of MBA and,
as a result,  MBA was  merged  into  EPTexas.  The net  assets  and  results  of
operations of MBA are included with those of EPTexas  beginning with the July 1,
1999 acquisition date. Historical  information for periods prior to July 1, 1999
does not reflect any impact  associated with the acquisition of the Mont Belvieu
Fractionation  Facility.  The  Company's  equity in the earnings of MBA prior to
July 1, 1999 is included in equity in income of unconsolidated affiliates.

Pro Forma Financial Information

The balances included in the consolidated  balance sheets related to the current
year  acquisitions  are based upon  preliminary  information  and are subject to
change  as  additional   information  is  obtained.   Material  changes  in  the
preliminary allocations are not anticipated by management.

The following pro forma  information gives effect to the acquisition of TNGL and
MBA as if the business  combination had occurred at the beginning of each period
presented.  The pro  forma  adjustments  which  have  been made are based on the
preliminary  allocation of the purchase price to assets acquired and liabilities

                                       7
assumed.  This pro  forma  information  should be read in  conjunction  with the
accompanying interim Consolidated Financial Statements,  Management's Discussion
and Analysis of Financial  Condition and Results of  Operations.  This pro forma
information is not necessarily  indicative of the financial  results which would
have occurred had the acquisition taken place on the dates indicated,  nor is it
necessarily indicative of future financial results.
Three Months Ended                   Nine Months Ended
(Amounts in millions)                               September 30,                        September 30,
                                                1998              1999               1998              1999
                                            -----------------------------------------------------------------------
Unaudited Pro Forma Financial Information
Revenues                                    $   282.6         $   505.7          $ 1,043.9         $ 1,153.7
Income before extraordinary items                 0.6              40.8               29.0              78.0
Net Income                                      (26.6)             40.8                1.9              78.0
Earnings per Unit:
      Basic                                 $    (0.40)       $     0.61         $    0.03         $    1.17
      Diluted                               $   (0.33)        $     0.50         $    0.02         $    0.96
4.   LONG-TERM DEBT

Existing Bank Credit facility.  In July 1998, the Operating  Partnership entered
into a $200.0 million bank credit  facility  ("Bank Revolver A") that includes a
$50.0 million working capital facility and a $150.0 million  revolving term loan
facility. The $150.0 million revolving term loan facility includes a sublimit of
$30.0 million for letters of credit.  As of September 30, 1999,  the Company has
borrowed  $175.0  million  under the bank credit  facility  which is due in July
2000.  Management is currently exploring options to convert this short-term debt
into long-term debt.

The Company's  obligations  under the bank credit facility are unsecured general
obligations and are  non-recourse to the General  Partner.  Borrowings under the
bank credit  facility  will bear interest at either the bank's prime rate or the
Eurodollar rate plus the applicable margin as defined in the facility.  The bank
credit  facility  will expire in July 2000 and all amounts  borrowed  thereunder
shall be due and payable at that time. There must be no amount outstanding under
the working capital facility for at least 15 consecutive days during each fiscal
year.

As amended on July 28,  1999,  the  existing  credit  agreement  relating to the
facility contains a prohibition on distributions on, or purchases or redemptions
of, Units if any event of default is  continuing.  In addition,  the bank credit
facility contains various  affirmative and negative covenants  applicable to the
ability of the Company to,  among other  things,  (i) incur  certain  additional
indebtedness,  (ii) grant certain liens,  (iii) sell assets in excess of certain
limitations,  (iv) make investments,  (v) engage in transactions with affiliates
and (vi) enter into a merger,  consolidation or sale of assets.  The bank credit
facility requires that the Operating Partnership satisfy the following financial
covenants at the end of each fiscal quarter: (i) maintain  Consolidated Tangible
Net Worth (as defined in the bank credit  facility) of at least $250.0  million,
(ii)  maintain a ratio of EBITDA (as  defined in the bank  credit  facility)  to
Consolidated  Interest  Expense (as defined in the bank credit facility) for the
previous  12-month  period of at least 3.5 to 1.0 and (iii)  maintain a ratio of
Total Indebtedness (as defined in the bank credit facility) to EBITDA of no more
than 3.0 to 1.0.

A "Change of  Control"  constitutes  an Event of Default  under the bank  credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates  of EPCO or Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

New Bank Credit facility.  On July 28, 1999, the Operating  Partnership  entered
into a $350.0 million bank credit  facility  ("Bank Revolver B") that includes a

                                       8
$50.0 million working capital facility and a $300.0 million  revolving term loan
facility. The $300.0 million revolving term loan facility includes a sublimit of
$10.0  million  for  letters of credit.  The  proceeds of this loan were used to
finance the acquisition of TNGL and the MBA ownership interests.  Future uses of
the remaining credit line include the purchase of the Lou-Tex pipeline (see Note
10).

Borrowings  under the bank  credit  facility  will bear  interest  at either the
bank's prime rate or the Eurodollar  rate plus the applicable  margin as defined
in the  facility.  The bank  credit  facility  will  expire in July 2001 and all
amounts borrowed thereunder shall be due and payable at that time. There must be
no  amount  outstanding  under  the  working  capital  facility  for at least 15
consecutive days during each fiscal year.

The credit  agreement  relating to the new facility  contains a  prohibition  on
distributions  on, or purchases or  redemptions of Units if any event of default
is  continuing.   In  addition,   the  bank  credit  facility  contains  various
affirmative and negative covenants  applicable to the ability of the Company to,
among  other  things,  (i) incur  certain  additional  indebtedness,  (ii) grant
certain  liens,  (iii) sell assets in excess of certain  limitations,  (iv) make
investments,  (v) engage in  transactions  with affiliates and (vi) enter into a
merger, consolidation, or sale of assets. The bank credit facility requires that
the Operating  Partnership  satisfy the following financial covenants at the end
of each fiscal quarter: (i) maintain Consolidated Tangible Net Worth (as defined
in the bank credit  facility) of at least $250.0 million,  (ii) maintain a ratio
of EBITDA (as  defined in the bank credit  facility)  to  Consolidated  Interest
Expense (as  defined in the bank  credit  facility)  for the  previous  12-month
period of at least 3.5 to 1.0 and (iii)  maintain a ratio of Total  Indebtedness
(as defined in the bank credit facility) to EBITDA of no more than 3.0 to 1.0.

A "Change of  Control"  constitutes  an Event of Default  under the bank  credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates of EPCO and Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

Long-term debt consisted of the following:

                                                               September 30,
                                            December 31,           1999
                                                1998           (Unaudited)
                                          -------------------------------------
Bank Revolver A                               $90,000           $175,000
Bank Revolver B                                                  215,000
                                          -------------------------------------
Total                                          90,000            390,000
Less current maturities of long-term debt                       (175,000)
                                          =====================================
Long-term debt                                $90,000           $215,000
                                          =====================================

5.  CAPITAL STRUCTURE

At September 30, 1999,  the Company had  33,552,915  Common Units and 21,409,870
Subordinated  Units  outstanding held by EPCO (the Company's  ultimate  parent),
12,000,000  Common  Units  outstanding  held by third  parties,  and  14,500,000
non-distribution bearing, convertible Special Units held by Tejas Energy. During
the first quarter of 1999,  the Company  established  a revocable  grantor trust
(the  "Trust") to fund future  liabilities  of a long-term  incentive  plan.  At
September 30, 1999, the Trust had purchased a total of 267,200 Common Units (the
"Trust  Units") which are accounted  for in a manner  similar to treasury  stock
under the cost method of accounting.  The Trust Units are considered outstanding
and will receive distributions;  however, they are excluded from the calculation
of net  income  per  Unit  in  accordance  with  generally  accepted  accounting
principles.

                                       9
On August 1, 1999,  in exchange for its NGL business  (see Note 3), Tejas Energy
received 14.5 million non-distribution bearing, convertible Special Units in the
Company and $166  million in cash.  The 14.5 million  non-distribution  bearing,
convertible  Special  Units  received by Tejas Energy  represent an  approximate
17.6% equity ownership in the Company.  These  convertible  Special Units do not
accrue  distributions  and are not  entitled to cash  distributions  until their
conversion  into Common Units,  which occurs  automatically  with respect to 1.0
million  Units on August  1,  2000 (or the day  following  the  record  date for
determining  units  entitled to receive  distributions  in the second quarter of
2000),  5.0 million  Units on August 1, 2001 and 8.5 million  Units on August 1,
2002.

Tejas   Energy   has  the   opportunity   to  earn  an   additional   6  million
non-distribution bearing,  convertible Contingency Units over the next two years
based on certain  performance  criteria.  Shell will earn 3 million  convertible
Contingency  Units if at any point  during  calendar  year  2000 (or  extensions
thereto due to force majeure events),  gas production by Shell from its offshore
Gulf of Mexico producing properties and leases is 950 million cubic feet per day
for  180  not-necessarily-consecutive  days  or  375  billion  cubic  feet  on a
cumulative  basis.  Shell will earn  another 3 million  convertible  Contingency
Units if at any point during  calendar year 2001 (or  extensions  thereto due to
force majuere  events) such gas production is 900 million cubic feet per day for
180  not-necessarily-consecutive  days or 350 billion cubic feet on a cumulative
basis.  If  either  or both of the  preceding  performance  tests is not met but
Shell's Offshore Gulf of Mexico gas production reaches 725 billion cubic feet on
a cumulative basis in calendar years 2000 and 2001 (or extensions thereto due to
force  majuere  events),  Shell  would  still  earn 6  million  non-distribution
bearing,  convertible  Contingency  Units. If all of the  Contingency  Units are
earned, 1 million Contingency Units would convert into Common Units on August 1,
2002 and 5 million  Contingency  Units would convert into Common Units on August
1, 2003. The Contingency Units do not accrue  distributions and are not entitled
to cash  distributions  until  conversion  into  Common  Units.  Tejas  Energy's
ownership interest in the Company would then increase to approximately 23.2%.

Under the rules of the New York Stock Exchange,  conversion of the Special Units
into Common Units requires  approval of the Company's  Unitholders.  The General
Partner has agreed to call a special  meeting of the Unitholders for the purpose
of soliciting  such approval.  EPC Partners II, Inc.  ("EPC II"),  which owns in
excess of 81% of the outstanding  Common Units,  has agreed to vote its Units in
favor of such approval, which will satisfy the approval requirement.

6.  DISTRIBUTIONS

On January 12, 1999, the Company  declared a quarterly  distribution of $.45 per
Unit for the fourth quarter of 1998,  which was paid on February 11, 1999 to all
Unitholders of record on January 29, 1999. The Company declared its distribution
for the first quarter of 1999 on April 16, 1999 in the amount of $.45 per Common
Unit.  The first  quarter 1999  distribution  was paid on May 12, 1999 to Common
Unitholders of record on April 30, 1999. The Company  declared a $.45 per Common
Unit  distribution  for the second  quarter of 1999 on July 16, 1999. The second
quarter 1999  distribution was paid on August 11, 1999 to Common  Unitholders of
record on July 30, 1999.  The third quarter 1999  distribution  of $.45 per Unit
was  declared  on October  15,  1999 and was paid on  November  10,  1999 to all
Unitholders of record at the close of business on October 29, 1999.

                                       10
7.   SUPPLEMENTAL CASH FLOW DISCLOSURE

The net effect of changes in operating assets and liabilities is as follows:

                                                       Nine Months Ended
                                                         September 30,
                                                      1998            1999
                                                --------------------------------
(Increase) decrease in:
      Accounts receivable                          $  19,879      $ (48,448)
      Inventories                                   (41,985)        (64,992)
      Prepaid and other current assets                 (550)         (4,647)
      Other assets                                     (494)         (1,757)
Increase (decrease) in:
      Accounts payable - trade                      (27,255)          43,944
      Accrued gas payable                            (8,437)          61,474
      Accrued expenses                               (4,503)           1,236
      Other current liabilities                     (12,479)        (21,595)
      Other liabilities                                                  539
                                                ================================
Net effect of changes in operating accounts       $ (75,824)      $  (34,246)
                                                ================================

8.   RECENTLY ISSUED ACCOUNTING STANDARDS

On June 6, 1999,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 137,  "Accounting for
Derivative Instruments and Hedging  Activities-Deferral of the Effective Date of
FASB Statement No. 133-an amendment of FASB Statement No. 133" which effectively
delays and amends the  application  of SFAS No. 133  "Accounting  for Derivative
Instruments  and Hedging  Activities"  for one year,  to fiscal years  beginning
after June 15, 2000. Management is currently studying both SFAS No. 137 and SFAS
No. 133 for possible impact on the consolidated financial statements.

On April 3, 1998, the American  Institute of Certified Public Accountants issued
Statement  of  Position  ("SOP")  98-5, "Reporting  on the  Costs  of  Start-Up
Activities."  For years  beginning  after  December 15, 1998, SOP 98-5 generally
requires that all start-up costs of a business activity be charged to expense as
incurred and any start-up costs  previously  deferred should be written off as a
cumulative  effect of a change in  accounting  principle.  Adoption  of SOP 98-5
during  1999  did not  have a  material  impact  on the  consolidated  financial
statements  except for a $4.5 million noncash write-off that occurred on January
1, 1999 of the unamortized  balance of deferred  start-up costs of BEF, in which
the  Company  owns a 33-1/3%  interest.  This  write-off  caused a $1.5  million
reduction in the equity in income of  unconsolidated  affiliates  for 1999 and a
corresponding   reduction  in  the  Company's   investment   in   unconsolidated
affiliates.

9.  CONCENTRATION OF CREDIT RISK

A  substantial  portion of the  Company's  revenues are derived from natural gas
processing  and  the   fractionation,   isomerization,   propylene   production,
marketing,  storage and  transportation  of NGLs to various companies in the NGL
industry,  primarily located in the United States.  Although this  concentration
could affect the Company's overall exposure to credit risk since these customers
might be affected by similar economic or other conditions,  management  believes
the  Company is  exposed  to minimal  credit  risk,  since the  majority  of its
business is conducted with major  companies  within the industry and much of the
business is conducted with companies with whom the Company has joint operations.
The Company generally does not require collateral for its accounts receivable.

                                       11
The Company is subject to a number of risks inherent in the industry in which it
operates,  primarily  fluctuating  gas and liquids  prices and gas  supply.  The
Company's   financial   condition   and  results  of   operations   will  depend
significantly  on the  prices  received  for  NGLs  and the  price  paid for gas
consumed in the NGL extraction process. These prices are subject to fluctuations
in response to changes in supply, market uncertainty and a variety of additional
factors  that are beyond the control of the Company.  In  addition,  the Company
must continually connect new wells through  third-party  gathering systems which
serve the gas  plants in order to  maintain  or  increase  throughput  levels to
offset  natural  declines in dedicated  volumes.  The number of wells drilled by
third parties will depend on, among other factors, the price of gas and oil, the
energy policy of the federal government, and the availability of foreign oil and
gas, none of which is in the Company's control.

10.  SUBSEQUENT EVENT

Purchase of Lou-Tex Pipeline

On July 27, 1999,  the Company  announced the execution of a letter of intent to
acquire a  Louisiana  and Texas  pipeline  asset from Concha  Chemical  Pipeline
Company  ("Concha"),  an affiliate of Shell, for an undisclosed  amount of cash.
The pipeline being acquired,  referred to as the Lou-Tex pipeline,  is 263 miles
of 10" pipeline from  Sorrento,  Louisiana to Mont Belvieu,  Texas.  The Lou-Tex
pipeline  is  currently  dedicated  to  the  transportation  of  chemical  grade
propylene from Sorrento to the Mont Belvieu area. The acquisition of the Lou-Tex
pipeline  is the first  step in the  Company's  development  of a $210  million,
160,000 barrel per day gas liquids pipeline system. This larger system will link
growing  supplies  of NGLs  produced  in  Louisiana  and  Mississippi  with  the
principal  NGL markets on the United  States Gulf Coast.  The  completion of the
Lou-Tex  transaction  is subject to the  successful  negotiation  of  definitive
agreements,  approval of those  agreements  by the  respective  managements  and
regulatory  approvals.  This  purchase  of the  pipeline  asset  from  Concha is
expected to be completed in the fourth quarter of 1999.  The  development of the
expanded  Lou-Tex gas liquids pipeline system is expected to be completed in the
second half of 2000.

                                       12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS.

            For the Interim Periods ended September 30, 1999 and 1998

     The following  discussion and analysis  should be read in conjunction  with
the unaudited  consolidated financial statements and notes thereto of Enterprise
Products  Partners  L.P.  ("Enterprise"  or the  "Company")  included  elsewhere
herein.

The Company

     The Company is a leading  integrated North American  provider of processing
and  transportation  services to domestic  and foreign  producers of natural gas
liquids  ("NGLs")  and  other  liquid  hydrocarbons  and  domestic  and  foreign
consumers of NGLs and liquid hydrocarbon  products.  The Company manages a fully
integrated and diversified  portfolio of midstream  energy assets and is engaged
in NGL processing and  transportation  through direct and indirect ownership and
operation  of NGL  fractionators.  It also  manages NGL  processing  facilities,
storage facilities,  pipelines, and rail transportation  facilities,  and methyl
tertiary  butyl ether  ("MTBE")  and  propylene  production  and  transportation
facilities in which it has a direct and indirect  ownership.  As a result of the
recent Tejas Natural Gas Liquids, LLC ("TNGL") acquisition  described below, the
Company is also engaged in natural gas processing in Louisiana and Mississippi.

     The Company is a publicly traded master limited  partnership (NYSE,  symbol
"EPD")  that  conducts  substantially  all of its  business  through  Enterprise
Products   Operating   L.P.  (the   "Operating   Partnership"),   the  Operating
Partnership's  subsidiaries,  and a  number  of  joint  ventures  with  industry
partners.  The Company was formed in April 1998 to acquire, own, and operate all
of the NGL processing and  distribution  assets of Enterprise  Products  Company
("EPCO").

     The principal executive office of the Company is located at 2727 North Loop
West,  Houston,  Texas,  77008-1038,  and the telephone number of that office is
713-880-6500.  References to, or  descriptions  of, assets and operations of the
Company in this  quarterly  report  include  the assets  and  operations  of the
Operating  Partnership and its  subsidiaries as well as the  predecessors of the
Company.

General

     The Company (i) processes  natural gas; (ii)  fractionates for a processing
fee mixed NGLs produced as by-products  of oil and natural gas  production  into
their component products: ethane, propane,  isobutane, normal butane and natural
gasoline;  (iii)  converts  normal  butane to  isobutane  through the process of
isomerization;   (iv)  produces  MTBE  from  isobutane  and  methanol;  and  (v)
transports  NGL products to end users by pipeline and railcar.  The Company also
separates high purity propylene from refinery-sourced  propane/propylene mix and
transports high purity propylene to plastics manufacturers by pipeline. Products
processed  by the Company  generally  are used as  feedstocks  in  petrochemical
manufacturing,  in the production of motor gasoline and as fuel for  residential
and commercial heating.

     The Company's NGL  processing  operations  are  concentrated  in the Texas,
Louisiana,  and Mississippi  Gulf Coast area. A large portion is concentrated in
Mont  Belvieu,  Texas,  which is the hub of the  domestic  NGL  industry  and is
adjacent to the largest  concentration of refineries and petrochemical plants in
the United States. The facilities we operate at Mont Belvieu include: (i) one of
the largest NGL  fractionation  facilities  in the United States with an average
production  capacity  of  210,000  barrels  per  day;  (ii) the  largest  butane
isomerization  complex in the United States with an average isobutane production
capacity of 80,000  barrels per day;  (iii) one of the largest  MTBE  production
facilities  in the United States with an average  production  capacity of 14,800
barrels  per day;  and (iv) two  propylene  fractionation  units with an average
combined  production capacity of 31,000 barrels per day. The Company owns all of
the  assets  at its  Mont  Belvieu  facility  except  for the NGL  fractionation
facility,  in which it owns an effective  62.5%  economic  interest  (see Recent
Acquisitions below); one of the propylene  fractionation units, in which it owns
a 54.6% interest and controls the remaining  interest through a long-term lease;
the MTBE production  facility,  in which it owns a 33-1/3% interest;  and one of
its three  isomerization  units  and one  deisobutanizer  which  are held  under
long-term  leases with  purchase  options.  The Company  also owns and  operates

                                       13
approximately  35 million  barrels  of  storage  capacity  at Mont  Belvieu  and
elsewhere that are an integral part of its processing  operations,  a network of
approximately   500  miles  of  pipelines   along  the  Gulf  Coast  and  a  NGL
fractionation facility in Petal, Mississippi with an average production capacity
of 7,000  barrels per day.  The Company also leases and operates one of only two
commercial NGL import/export terminals on the Gulf Coast.

     As a result of the Tejas Natural Gas Liquids, LLC ("TNGL") acquisition, the
Company  acquired,  effective  August 1, 1999, a 20-year  natural gas processing
agreement with Shell Oil Company ("Shell") for the rights to process its current
and future natural gas production  from the state and federal waters of the Gulf
of Mexico and varying  interests in 11 natural gas processing  plants (including
one under  construction)  with a combined  gross  capacity of 11.0 billion cubic
feet per day  ("Bcfd")  and net  capacity  of 3.1 Bcfd;  four NGL  fractionation
facilities  with a combined  gross  capacity of 281,000 BPD and net  capacity of
131,500 BPD; four NGL storage facilities with approximately 29.5 million barrels
of gross capacity and 8.8 million barrels of net capacity;  and over 2,100 miles
of NGL pipelines (including a 11.5% interest in Dixie Pipeline).

     Recent Acquisitions

     Tejas Natural Gas Liquids,  LLC. As noted above,  effective August 1, 1999,
the Company acquired TNGL from Tejas Energy, LLC ("Tejas Energy"),  an affiliate
of Shell,  in exchange for 14.5 million  non-distribution  bearing,  convertible
special  partner  units of the Company and a cash payment of $166  million.  The
Company  has also agreed to issue up to 6.0  million  non-distribution  bearing,
convertible  special  units to Tejas  Energy  in the  future if the  volumes  of
natural  gas that the  Company  processes  for  Shell and its  affiliates  reach
certain agreed upon levels in 2000 and 2001. The businesses  acquired from Tejas
Energy include natural gas processing and NGL fractionation,  transportation and
storage in Louisiana and Mississippi and its NGL supply and marketing  business.
As described in General above, the assets acquired include varying  interests in
11 natural gas processing plants,  four NGL fractionation  facilities,  four NGL
storage facilities and over 2,100 miles of NGL pipelines.

     The Company's major customer related to the TNGL assets is Shell. Under the
terms of a 20-year processing agreement with Shell, the Company has the right to
process  substantially  all of Shell's current and future natural gas production
from  the  Gulf of  Mexico.  This  includes  natural  gas  production  from  the
developments currently referred to as deepwater.

     Natural gas  processing  plants are generally  located near the  production
area. When produced at the wellhead,  natural gas generally must be processed to
separate the merchantable,  pipeline quality natural gas (principally  methane),
from  NGLs and  other  impurities.  Wet or rich  natural  gas  normally  must be
processed  to render the natural gas  acceptable  for  transport in the nation's
pipeline  system  and to meet  specifications  required  by  local  natural  gas
distribution  companies.  After  being  extracted  in  the  field,  mixed  NGLs,
sometimes referred to as "y-grade" or "raw make" are typically  transported to a
central facility for fractionation and subsequent sale.

     Mont  Belvieu  NGL  Fractionation  facility.  Effective  July  1,  1999,  a
subsidiary of the Operating  Partnership  acquired an additional 25% interest in
the Mont Belvieu NGL  fractionation  facility  from Kinder Morgan for a purchase
price of  approximately  $41 million in cash and the assumption of $4 million in
debt. An additional  0.5% interest in the same facility was purchased  from EPCO
for a cash purchase  price of $0.9  million.  These  acquisitions  increased our
effective economic interest in the Mont Belvieu NGL fractionation  facility from
37.0% to 62.5%.

         Industry Environment

     Because certain NGL products compete with other refined petroleum  products
in the fuel and petrochemical  feedstock markets,  NGL product prices are set by
or in competition  with refined  petroleum  products.  Increased  production and
importation  of NGLs and NGL  products  in the United  States may  decrease  NGL
product  prices in  relation  to  refined  petroleum  alternatives  and  thereby
increase  consumption of NGL products as NGL products are  substituted for other
more  expensive  refined  petroleum  products.  Conversely,  a  decrease  in the
production  and  importation of NGLs and NGL products could increase NGL product
prices in  relation to refined  petroleum  product  prices and thereby  decrease
consumption  of NGLs.  However,  because  of the  relationship  of crude oil and
natural gas production to NGL production,  the Company believes any imbalance in
the prices of NGLs and NGL products and alternative products would be temporary.

                                       14
Historically,  when the price of crude oil is a multiple  of ten or more to
the price of natural gas (i.e.,  crude oil $20 per barrel and natural gas $2 per
thousand cubic feet  ("MCF")),  NGL pricing has been strong due to increased use
in manufacturing petrochemicals. In 1998, the industry experienced an annualized
multiple of approximately six (i.e., crude oil $12 per barrel and natural gas $2
per MCF),  which  caused  petrochemical  manufacturing  demand  to  change  from
reliance on NGLs to a preference for crude oil derivatives. This change resulted
in the lowering of both the production and pricing of NGLs. In the NGL industry,
revenues and cost of goods sold can fluctuate  significantly up or down based on
current NGL prices.  However,  operating  margins will generally remain constant
except for the effect of inventory  price  adjustments  or  increased  operating
expenses.

         NGL Fractionation

     The profitability of this business unit depends on the volume of mixed NGLs
that  the  Company  processes  for its  toll  customers  and the  level  of toll
processing fees charged to its customers.  The most significant variable cost of
fractionation  is the cost of energy  required  to operate the units and to heat
the mixed NGLs to effect separation of the NGL products.  The Company is able to
reduce  its  energy  costs  by  capturing  excess  heat and  re-using  it in its
operations.  Additionally,  the Company's NGL fractionation processing contracts
typically  contain  escalation  provisions  for cost  increases  resulting  from
increased variable costs, including energy costs.

     Effective  July 1,  1999,  the  Company's  ownership  interest  in the Mont
Belvieu NGL fractionation  facility  increased to an effective 62.5% from 37.0%.
Since the acquisition, the Company's 62.5% interest in the results of operations
of the  fractionation  facility have been included in  consolidated  operations.
Prior to the  acquisition,  the  Company's  12.5% direct  economic  interest was
included in consolidated  operations,  and its effective 24.5% economic interest
was recorded as equity income.

         Isomerization

     The  profitability  of this  business  unit depends on the volume of normal
butane that the Company isomerizes (i.e.,  converts) into isobutane for its toll
processing  customers,  the  level  of  toll  processing  fees  charged  to  its
customers,  and  the  margins  generated  from  selling  isobutane  to  merchant
customers.  The Company's  toll  processing  customers pay the Company a fee for
isomerizing their normal butane into isobutane.  In addition,  the Company sells
isobutane  that  it  obtains  by  isomerizing   normal  butane  into  isobutane,
fractionating  mixed butane into  isobutane  and normal  butane,  or  purchasing
isobutane in the spot market.  The Company  determines  the optimal  sources for
isobutane to meet sales  obligations based on current and expected market prices
for isobutane and normal butane, volumes of mixed butane held in inventory,  and
estimated costs of isomerization and mixed butane fractionation.

     The Company purchases most of its imported mixed butanes between the months
of February and October.  During these  months,  the Company is able to purchase
imported  mixed  butanes at prices that are often at a discount to posted market
prices.  Because of its  storage  capacity,  the  Company is able to store these
imports  until the summer  months when the spread  between  isobutane and normal
butane  typically widens or until winter months when the prices of isobutane and
normal butane typically rise. As a result,  inventory investment is generally at
its  highest  level at the end of the third  quarter  of the year.  Should  this
spread  not  materialize,  or in the  event  absolute  prices  decline,  margins
generated  from  selling  isobutane  to  merchant  customers  may be  negatively
affected.

         Propylene Fractionation

     The  profitability  of  this  business  unit  depends  on  the  volumes  of
refinery-sourced  propane/propylene  mix that the Company processes for its toll
customers,  the level of toll  processing  fees charged to its customers and the
margins  associated  with  buying  refinery-sourced  propane/propylene  mix  and
selling  high  purity   propylene  to  meet  sales  contracts  with  non-tolling
customers.

         Pipelines

     The  Company  operates  both  interstate  and  intrastate  NGL  product and
propylene pipelines.  The Company's interstate pipelines are common carriers and

                                       15
must  provide  service to any shipper who  requests  transportation  services at
rates  regulated  by the Federal  Energy  Regulatory  Commission  ("FERC").  The
Company's  intrastate  common  carrier  pipelines  are regulated by the State of
Louisiana.  The  profitability  of this business unit is primarily  dependent on
pipeline throughput volumes.

         Gas Processing

     As a result of the TNGL acquisition,  the Company is now engaged in natural
gas processing in Louisiana and  Mississippi  via ownership  interests in eleven
plants.  The  profitability  of the natural gas  processing  plants is primarily
dependent on the volume of NGLs  extracted  from the natural gas streams and the
pricing of NGLs and natural gas in the marketplace.

         Unconsolidated Affiliates

     At September 30, 1999, the Company's significant  unconsolidated affiliates
accounted  for using the equity  method were BEF,  BRF,  BRPC,  EPIK,  Wilprise,
Tri-States,  Belle  Rose,  and  Promix.  BEF owns the MTBE  production  facility
operated  by  the  Company  at  its  Mont  Belvieu  complex.   BRF  owns  a  NGL
fractionation  facility in southeastern  Louisiana that began  operations in the
third  quarter of 1999.  BRPC is a  newly-formed  joint  venture  (August  1999)
between the Operating  Partnership  and Exxon Chemical  Company  ("Exxon") which
owns  a  propylene   concentration   unit  under  construction  in  southeastern
Louisiana.  The  Company  holds a 30%  economic  interest  in  BRPC.  Management
anticipates  that operations will commence at this plant in the third quarter of
2000. EPIK owns a refrigerated  NGL marine terminal  loading facility located on
the Houston ship  channel.  An expansion of EPIK's NGL marine  terminal  loading
facility is under way and is scheduled for  completion in the fourth  quarter of
1999.  Wilprise owns a NGL pipeline in Louisiana which started operations in the
third quarter of 1999 in conjunction with the start-up of the BRF  fractionator.
Tri-States  owns a NGL pipeline in  Louisiana,  Mississippi,  and Alabama  which
became  operational  in March 1999.  Effective  with the TNGL  acquisition,  the
Company acquired an equity interest in Belle Rose and Promix.  Belle Rose owns a
NGL pipeline  system in south  Louisiana.  The Company owns 41.7% of Belle Rose.
Promix  owns  a NGL  fractionation  and  related  storage  facilities  in  south
Louisiana.  The Company holds a 33-1/3%  interest in Promix.  In connection with
the TNGL acquisition,  the Company acquired an additional  16-2/3% of Tri-States
bringing the total ownership interest to the current 33-1/3%.

     As of September  30, 1999,  the Company had two  investments  accounted for
using the cost  method.  These were VESCO and  Dixie.  VESCO owns a natural  gas
processing  plant,  fractionation  and storage  facilities,  and a gas gathering
pipeline  system in Louisiana.  The Company holds a 13.1%  economic  interest in
VESCO.  The Dixie  investment  consists of an 11.5%  interest  in a  corporation
owning a 1,300 mile propane  pipeline and the  associated  facilities  extending
from Mont Belvieu, Texas to North Carolina.

Results of Operations

     Historically,  the  Company  has  had  only  one  reportable  segment:  NGL
Operations. The operating margin of this segment has been reported on under five
distinct   business   units:   NGL   Fractionation,   Isomerization,   Propylene
Fractionation,  Pipeline,  and Storage and Other Plants. With the acquisition of
TNGL,  management has opted to add a sixth business unit:  TNGL  Operations.  In
addition, with the growth of the Company's equity method investments,  Equity in
income of  unconsolidated  affiliates  has been included in operating  margin in
order  to  provide  a more  comprehensive  view  of  the  Company's  results  of
operations.  For the future,  due to the  growing  complexity  of the  Company's
operations  with the  acquisition  of TNGL  late in the third  quarter  of 1999,
management is currently studying alternative reporting methods such as reporting
results of operations using multiple segments.

                                       16
The  Company's  operating  margins by business  unit for the three and nine
month periods ended September 30, 1998 and 1999 were as follows:
Three Months Ended           Nine Months Ended
                                                                    September 30,               September 30,
                                                                 1998          1999           1998          1999
                                                             ---------------------------------------------------------
Operating Margin:
      NGL Fractionation                                      $  1,274      $  1,369       $  2,812      $  2,901
      Isomerization                                             2,267        17,731         15,729        35,727
      Propylene Fractionation                                   3,538         5,374          8,004        16,813
      Pipeline                                                  3,221         2,553         10,268         6,268
      TNGL Operations                                                        13,648                       13,648
      Storage and Other Plants                                  1,123            51          4,462           185
      Equity in Income of Unconsolidated Affiliates             4,171         3,148          7,591        10,824

                                                             =========================================================
Total                                                        $ 15,594      $ 43,874       $ 52,099      $ 83,133
                                                             =========================================================
The  Company's  plant  production  data (in thousands of barrels per day or
"MBPD") for the three and nine month periods  ended  September 30, 1998 and 1999
were as follows:

                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,
                                      1998          1999     1998          1999
                                  ----------------------------------------------
Plant Production Data :
      TNGL Equity NGL Production                     63                     63
      NGL Fractionation               180           149      197           155
      Isomerization                    65            77       65            73
      MTBE                             14            12       13            13
      Propylene Fractionation          26            26       26            27

     The Company's equity in income of unconsolidated  affiliates (in thousands)
for the three and nine month periods  ended  September 30, 1998 and 1999 were as
follows:

                        Three Months ended               Nine Months ended
                          September 30,                    September 30,
                      1998             1999            1998             1999
                 ---------------------------------------------------------------
BEF               $   3,355        $   2,519       $   6,609        $   4,756
MBA                     862               72           4,305            1,256
BRF                                     (258)                            (544)
BRPC                                       4                                4
EPIK                   (46)               59             (90)             236
Entell                                   258                            1,389
Wilprise                                (130)                            (130)
Tri-States                               472                              472
Belle Rose                               245                              245
Promix                                   (93)                             (93)
                 ===============================================================
Total            $   4,171         $   3,148       $  10,824        $   7,591
                 ===============================================================

Three Months Ended September 30, 1999 Compared with Three Months Ended September
30, 1998

                                       17
Revenues; Costs and Expenses

     The  Company's  revenues  increased to $445.0  million in 1999  compared to
$168.8  million in 1998.  The Company's  costs and expenses  increased to $404.4
million in 1999 compared to $156.9 million in 1998.  Operating  margin increased
to $43.9 million in 1999 compared to $15.6 million in 1998. The primary  reasons
for the increase in operating  margins are an improvement  in the  isomerization
business and the addition of the operating results of the TNGL assets.

     NGL Fractionation.  Operating margin from NGL fractionation, which reflects
earnings  from the Company's  Mont Belvieu NGL  fractionation  assets,  was $1.4
million for the third  quarter of 1999  compared  to $1.3  million for the third
quarter of 1998.  For the  quarter,  NGL  fractionation  volumes at Mont Belvieu
averaged 149 MBPD  compared to 180 MBPD for the same period in 1998.  The slight
increase  in  operating  margin  for  the  quarter  was  principally  due to the
Company's  acquisition of an additional  ownership interest in the fractionation
from Kinder  Morgan and EPCO,  offset by lower volumes  fractionated.  The lower
fractionation  rates are  attributable  to the short-term  diversion of customer
volumes to competitors. The Company fully expects that the diverted volumes will
be recovered.

     Isomerization.  The Company's margin in isomerization was $17.7 million for
the third  quarter of 1999  versus $2.3  million for the third  quarter of 1998.
Plant  production  volumes  for the third  quarter of 1999  averaged  77 MBPD as
compared  to 65 MBPD for the same  period in 1998.  The margin  improvement  was
attributable  to the  increase in plant  production  volumes,  a stronger  price
environment  for normal  butane and  isobutane  during the third quarter of 1999
which  benefited  the  merchant  portion  of  this  business  and  non-recurring
inventory  write-downs  which impaired margins in the third quarter of 1998. The
operating  margin for 1999 included a $0.7 million benefit from the amortization
of the  deferred  gain  associated  with the sale  and  leaseback  of one of the
Company's  isomerization units. Excluding this benefit, the operating margin for
1999 would have been $17.0 million as compared to $2.3 million in 1998.

     Isobutane  volumes  from  tolling  and  merchant  activities  for the third
quarter of 1999  averaged 98 MBPD as compared to 107 MBPD for the same period in
1998.  Average  daily  toll  processing  volumes  were 58 MBPD in 1999 and 1998.
Isobutane  volumes  related to merchant  activities  were 40 MBPD in 1999 and 49
MBPD in 1998.  Isobutane merchant volumes decreased in the third quarter of 1999
compared  to third  quarter  of 1998 due to lower  margins  on  isobutane  sales
relative to normal butane sales. The average spread between isobutane and normal
butane  decreased  from a  positive  2.3 cents per  gallon  ("CPG") in the third
quarter of 1998 to a negative 1.2 CPG in the third quarter of 1999.

     Propylene  Fractionation.  The Company's  operating  margin from  propylene
fractionation  for the third quarter of 1999 increased to $5.4 million from $3.5
million for the third quarter of 1998. Propylene  fractionation for both periods
averaged 26 MBPD. The earnings  improvement  was primarily  attributable  to the
Company's  actions in the merchant  portion of the business to match the volume,
timing and price of feedstock purchases with sales of the product. Polymer grade
propylene  prices for the third quarter of 1999 were  significantly  stronger at
15.7 cents per pound ("CPP")  versus 13.7 CPP in the third quarter of 1998.  The
increase in propylene prices in general for 1999 is attributable to higher crude
oil prices and increased global propylene demand.

     Pipeline.  Operating margin from pipeline  operations for the third quarter
of 1999 was $2.6  million as compared to $3.2  million for the third  quarter of
1998. The decrease in operating margin is primarily attributable to lower butane
import  volume in the  third  quarter  of 1999 as  compared  to 1998.  The lower
volumes led to a $0.3 million  decrease in the  operating  margin in 1999 versus
1998. A strengthening of normal butane prices worldwide has led to a decrease in
the availability of import volumes coming to the U.S. Gulf Coast. Throughput for
the third quarter of 1999 averaged 192 MBPD as compared to 193 MBPD for the same
period in 1998.

     TNGL Operations. The operating margin from the assets acquired from TNGL in
the third quarter 1999 was $13.6  million.  Since the effective date of the TNGL
acquisition  was August 1, 1999, the operating  margin included in the Company's
results of operations was for the months of August and September. Gas Processing
produced an operating margin of approximately  $9.2 million.  NGL  fractionation
generated an operating  margin of $4.1  million.  The Pipelines and Other assets
produced an operating margin of $0.3 million.

                                       18
Gas  Processing is comprised of interests in eleven  natural gas processing
plants (one of which is under  construction)  with 11 billion cubic feet per day
("Bcfd")  of  gross  capacity  and 3.1  Bcfd of net  capacity  to the  Company's
interest anchored by a 20-year natural gas processing  agreement with Shell (the
"Shell  Agreement").  The Company is operator of four of these  facilities.  Its
major customer is Shell. Under the terms of a 20-year processing  agreement with
Shell, the Company has the right to process substantially all of Shell's current
and future natural gas production from the Gulf of Mexico. This includes natural
gas production from the developments  currently  referred to as deepwater.  Also
included  in Gas  Processing  is the Tebone  NGL  fractionation  facility.  This
fractionation facility is an integral part of the Tebone and North Terrebone Gas
Processing facility.  The Tebone NGL fractionation facility was built to receive
raw make  from the  North  Terrebone  Gas  Processing  facility  and has a rated
capacity  of 30 MBPD.  During  the  months  of  August  and  September,  the Gas
Processing  facilities  produced  NGLs  at a rate  of 63 MBPD  with  the  Tebone
fractionator operating at 29 MBPD.

     NGL  fractionation  business is  comprised  of the Norco NGL  fractionation
facility located in Louisiana.  This facility is wholly owned by the Company and
has a capacity of 60 MBPD. During the months of August and September,  the Norco
NGL fractionation plants operated a rate of 47 MBPD.

     Pipeline and Other TNGL assets is primarily  composed of varying  ownership
interests  in NGL and NGL  product  pipelines  and  storage  assets  located  in
southern Louisiana.

         Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased $0.6 million to $3.2
million  in 1999 from $3.8  million  in 1998.  The 1998  charges  included  $0.8
million in  one-time  expenses  related to the initial  public  offering in July
1998.  This amount was offset by a $0.2 million  increase in the monthly  charge
from EPCO.  On July 7, 1999,  the Audit and  Conflicts  Committee of  Enterprise
Products  GP,  LLC  (the  "general  partner")  authorized  an  increase  in  the
administrative  services  fee to $1.1 million per month in  accordance  with the
EPCO  Agreement  from the initial rate of $1.0 million per month.  The increased
fees were effective August 1, 1999.

         Interest Expense

     Interest  expense for the second  quarter was $4.0 million in 1999 and $2.5
million in 1998.  This increase is  principally  due to the  increased  level of
average debt  outstanding  during the third quarter of 1999  attributable to the
borrowings  associated  with the TNGL and Mont  Belvieu  fractionation  facility
acquisitions.  Of the total  debt  outstanding  at  September  30,  1999 of $390
million, approximately $208 million is directly related to these two acquisition
transactions.

         Equity Income in Unconsolidated Affiliates

     Equity  income  in  unconsolidated  affiliates  was  $3.1  million  in 1999
compared to $4.2 million in 1998.  Equity  income from BEF  decreased  from $3.4
million in the third  quarter of 1998 to $2.5 million in the  comparable  period
for 1999.  The decrease of $0.9 million is  primarily  attributable  to downtime
associated  with  maintenance  activities  in  July  1999.  As a  result  of the
acquisition  of the  remaining  MBA  ownership  interests  in the  Mont  Belvieu
fractionator on July 1, 1999 and subsequent  consolidation of operating results,
equity  income from MBA ceased  effective on that date.  The third  quarter 1998
equity  income  amount  includes  $0.9  million  from MBA.  EPIK showed a slight
increase  over the third  quarter  of 1998 with $0.1  million  in equity  income
versus a loss of $0.1 million in the prior period. Wilprise showed a slight loss
during  the  quarter  of  $0.1  million  with  the  BRF  fractionation  facility
evidencing a loss as well of $0.3  million.  Both the Wilprise  pipeline and the
BRF fractionation facility started operations in the third quarter of 1999.

     The Company  acquired equity interests in other entities as a result of the
TNGL  acquisition.  Among these  entities were Belle Rose (equity income of $0.2
million) and Promix  (equity loss of $0.1 million).  With the  acquisition of an
additional  16-2/3% in Tri-States,  the Company  obtained an equity  interest of
33-1/3%. This investment contributed $0.5 million in equity income.

                                       19
Nine Months Ended  September 30, 1999 Compared with Nine Months Ended  September
30, 1998

Revenues; Costs and Expenses

     The Company's  revenues increased by 35% to $771.4 million in 1999 compared
to $573.5 million in 1998. The Company's costs and expenses  decreased by 32% to
$688.3  million in 1999  compared to $521.4  million in 1998.  Operating  margin
increased by 60% to $83.1 million in 1999 compared to $52.1 million in 1998. The
primary reasons for the increase in operating  margins are an improvement in the
isomerization and propylene fractionation business areas and the addition of the
operating results of the TNGL assets.

     NGL Fractionation. The Company's operating margin for NGL fractionation was
$2.9 million for 1999 versus $2.8 million for 1998. Average daily  fractionation
volumes  decreased  from 197  MBPD in 1998 to 155  MBPD in  1999.  Fractionation
volumes are lower in 1999 as compared to 1998 due primarily to ethane rejection,
downtime associated with preventative maintenance activities,  lower natural gas
production  caused  by  depressed  oil and gas  prices  in early  1999,  and the
short-term  diversion  of  customer  volumes to a  competitor.  During the first
quarter  of 1999,  natural  gas prices  remained  higher  than the  energy  unit
equivalent of ethane; therefore, upstream natural gas processing plants rejected
ethane  which  reduced  the  volumes   delivered  to  Company   facilities   for
fractionation services. The Company took advantage of the reduced demand for its
fractionation  services  during the first  quarter  of 1999 to  perform  certain
preventative  maintenance procedures on one of its fractionation facilities that
are generally  required  every two to three years.  During the second quarter of
1999,  volumes were reduced due to the short-term  diversion of customer volumes
to a competitor. Management expects that these volumes will be fully recovered.

     Isomerization.  The Company's operating margin for isomerization  increased
to $35.8 million in 1999 compared to $15.7 million in 1998. The operating margin
for 1999 included a $2.0 million  benefit from the  amortization of the deferred
gain   associated   with  the  sale  and  leaseback  of  one  of  the  Company's
isomerization  units.  The margin  improvement  is primarily  attributable  to a
stronger  price  environment  for normal butane and isobutane  during 1999 which
benefited  the merchant  portion of this  business and  non-recurring  inventory
write-downs  which  impaired  margins  in  1998.  Excluding  this  benefit,  the
operating  margin for 1999 would have been $33.8  million as  compared  to $15.7
million in 1998. Isobutane volumes from tolling and merchant activities for 1999
averaged  100 MBPD as compared to 102 MBPD for the same period in 1998.  Average
daily toll  processing  volumes  were 57 MBPD in 1999,  or 73% of total  volumes
produced,  compared  to 56 MBPD  in  1998,  or 86% of  total  volumes  produced.
Isobutane  volumes  related to merchant  activities  were 43 MBPD in 1999 and 45
MBPD in 1998.

     Propylene Fractionation.  The Company's operating margin increased to $16.8
million in 1999 from $8.0 million in 1998. Propylene production averaged 27 MBPD
in 1999 as compared to 26 MBPD in 1998. The earnings  improvement  was primarily
attributable to the Company's  actions to minimize risk in the merchant  portion
of this business by matching the volume, timing and price of feedstock purchases
with sales of end products. The operating margin also benefited from an increase
in production  volumes  associated with spot business caused by increased demand
for polymer grade propylene.

     Pipeline.  The Company's operating margin from pipeline operations was $6.3
million in 1999 compared to $10.3 million in 1998.  Throughput for 1999 averaged
184 MBPD as compared to 198 MBPD for the same  period in 1998.  The  decrease in
throughput  was  primarily  attributable  to a decrease in import  volumes.  The
decrease in Pipeline margin is principally related to the Company's contribution
of certain  wholly-owned  pipeline assets, in the first quarter of 1999, and its
export  loading  facility,  in June 1998 to joint  ventures in which the Company
owns a 50% interest.  As a result, the earnings from these assets since the time
of  their  contribution  are  included  in  equity  income  from  unconsolidated
affiliates  as  prescribed  by the equity  method of  accounting  rather than in
earnings  from  consolidated  pipeline  operations.  This  change in  accounting
treatment accounts for approximately $2.8 million of the decrease.

     TNGL Operations. The operating margin from the assets acquired from TNGL in
the third quarter 1999 was $13.6  million.  Since the effective date of the TNGL
acquisition  was August 1, 1999, the operating  margin included in the Company's
results of operations was for the months of August and September. Gas Processing
produced an operating margin of approximately  $9.2 million.  NGL  fractionation
generated an operating  margin of $4.1  million.  The Pipelines and Other assets
produced an operating margin of $0.3 million.

                                       20
Gas  Processing is comprised of interests in eleven  natural gas processing
plants (one of which is under  construction)  with 11 billion cubic feet per day
("Bcfd")  of  gross  capacity  and 3.1  Bcfd of net  capacity  to the  Company's
interest anchored by a 20-year natural gas processing  agreement with Shell (the
"Shell  Agreement").  The Company is operator of four of these  facilities.  Its
major customer is Shell. Under the terms of a 20-year processing  agreement with
Shell, the Company has the right to process substantially all of Shell's current
and future natural gas production from the Gulf of Mexico. This includes natural
gas production from the developments  currently  referred to as deepwater.  Also
included  in Gas  Processing  is the Tebone  NGL  fractionation  facility.  This
fractionation facility is an integral part of the Tebone and North Terrebone Gas
Processing facility.  The Tebone NGL fractionation facility was built to receive
raw make  from the  North  Terrebone  Gas  Processing  facility  and has a rated
capacity  of 30 MBPD.  During  the  months  of  August  and  September,  the Gas
Processing  facilities  produced  NGLs  at a rate  of 63 MBPD  with  the  Tebone
fractionator operating at 29 MBPD.

     NGL  fractionation  business is  comprised  of the Norco NGL  fractionation
facility located in Louisiana.  This facility is wholly owned by the Company and
has a capacity of 60 MBPD. During the months of August and September,  the Norco
NGL fractionation plants operated a rate of 47 MBPD.

     Pipeline and Other TNGL assets is primarily  composed of varying  ownership
interests  in NGL and NGL  product  pipelines  and  storage  assets  located  in
southern Louisiana.

         Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased $6.2 million to $9.2
million in 1999 from $15.4  million in 1998.  This decrease was primarily due to
the  adoption  of the  EPCO  Agreement  in July  1998 in  conjunction  with  the
Company's  initial public  offering  ("IPO") which fixed  reimbursable  selling,
general, and administrative expenses at an initial $1.0 million per month.

     On July 7, 1999, the Audit and Conflicts  Committee of the general  partner
authorized  an increase in the  administrative  services fee to $1.1 million per
month in accordance  with the EPCO  Agreement.  The increased fees are effective
August 1, 1999.

         Interest Expense

     Interest  expense was $8.0 million in 1999 and $13.3 million in 1998.  This
decrease was  principally  due to the reduced level of average debt  outstanding
during the first quarter of 1999  attributable to the retirement of debt in July
1998 using proceeds from the Company's IPO. The decrease was muted, however, due
to a substantial  increase in the average debt  outstanding in the third quarter
of 1999  due to the  borrowings  associated  with  the  TNGL  and  Mont  Belvieu
fractionation facility acquisitions.

         Equity Income in Unconsolidated Affiliates

     Equity  income  in  unconsolidated  affiliates  was  $7.6  million  in 1999
compared to $10.8 million in 1998.  Equity  income from BEF decreased  from $6.6
million in 1998 to $4.8 million in 1999. Equity income from BEF for both periods
was affected by required annual  maintenance on the Company's MTBE facility that
generally takes the unit out of production for approximately three weeks. Equity
income from BEF during 1999 also includes a $1.5 million non-cash charge for the
cumulative  effect of a change in accounting  principal related to the write-off
of deferred  start-up  costs as  prescribed  by  generally  accepted  accounting
principles.  Equity  income from MBA decreased to $1.3 million in 1999 from $4.3
million  in 1998 due to  decreased  throughput  caused by ethane  rejection  and
downtime associated with preventative maintenance activities.  In addition, as a
result of the  acquisition of the remaining MBA ownership  interests in the Mont
Belvieu  fractionator on July 1, 1999 and subsequent  consolidation of operating
results,  equity income from MBA ceased effective on that date. The 1998 results
for MBA are for a nine-month period whereas the 1999 results reflect a six-month
period.  The third  quarter  results  of  operations  are now  consolidated  and
included in NGL Fractionation.  EPIK showed a slight increase over the 1998 with
$0.2 million in equity income versus a loss of $0.1 million in the prior period.
The 1998 results for EPIK  reflected its first quarter in existence  whereas the
1999 results are for nine months.  Wilprise showed a slight loss of $0.1 million

                                       21
with the BRF fractionation  facility generating a loss of $0.5 million. Both the
Wilprise pipeline and the BRF fractionation  facility started  operations in the
third quarter of 1999.  Equity income from Entell was $1.4 million  through July
31, 1999.  Effective  August 1, 1999, as a result of the TNGL  acquisition,  the
results of  operations  for Entell are now  included  in  consolidated  pipeline
revenues.  Consolidation  of  operating  results is  necessary  under  generally
accepted  accounting  principles since the combined interests of the Company now
equal 100% (prior to August 1, 1999,  the Company held a 50% interest  with TNGL
holding the remaining 50%).

     The Company  acquired equity interests in other entities as a result of the
TNGL  acquisition.  Among these  entities were Belle Rose (equity income of $0.2
million) and Promix  (equity loss of $0.1 million).  With the  acquisition of an
additional  16-2/3% in Tri-States,  the Company  obtained an equity  interest of
33-1/3%. This investment contributed $0.5 million in equity income.

Financial Condition and Liquidity

General

     The Company's  primary cash  requirements,  in addition to normal operating
expenses, are debt service, maintenance capital expenditures,  expansion capital
expenditures,  and quarterly  distributions to the partners. The Company expects
to fund future cash distributions and maintenance capital expenditures with cash

flows from  operating  activities.  Capital  expenditures  for future  expansion
activities and asset acquisitions are expected to be funded with cash flows from
operating activities and borrowings under the revolving bank credit facilities.

     Cash flows from  operating  activities  were a $50.1 million inflow for the
first nine months of 1999 compared to a $43.9 million outflow for the comparable
period of 1998.  Cash flows from  operating  activities  primarily  reflect  the
effects of net  income,  depreciation  and  amortization,  extraordinary  items,
equity income of unconsolidated  affiliates and changes in working capital.  Net
income  increased  significantly as a result of improved overall margins and the
TNGL  acquisition.  Depreciation and  amortization  increased by $2.5 million in
1999 primarily as a result of additional  capital  expenditures and the TNGL and
Mont Belvieu fractionator acquisitions (the "acquisitions") in the third quarter
of 1999.  Amortization expense increased by $0.7 million due to the amortization
of the excess cost recorded in  connection  with  acquisitions.  The excess cost
associated  with the  acquisitions  will be amortized  over a 20-year  period at
approximately  $0.4  million per month.  The net effect of changes in  operating
accounts  from year to year is  generally  the result of timing of NGL sales and
purchases near the end of the period.

     Cash  outflows for  investing  activities  were $255.8  million in 1999 and
$48.8 million for the comparable  period of 1998. Cash outflows included capital
expenditures  of $10.6  million for 1999 and $7.2 million for 1998.  Included in
the capital  expenditures  amounts are maintenance capital  expenditures of $1.7
million for 1999 and $5.6 million for 1998. Investing cash outflows in 1999 also
included  $58.4  million  in  advances  to  and  investments  in  unconsolidated
affiliates  versus $20.0 million for the  comparable  period of 1998.  The $38.4
million  increase  stems  primarily  from  contributions  made to the  Wilprise,
Tri-States, BRF, and BRPC joint ventures located in Louisiana. Also, the Company
received  $16.7  million in  payments on notes  receivable  from the BEF and MBA
notes  purchased  during  1998  with  the  proceeds  of the  Company's  IPO.  In
conjunction  with  the  acquisition  of the MBA  interest  in the  Mont  Belvieu
fractionation  facility, $5.8 million was received during the third quarter 1999
from MBA for the balance of the  Company's  note  receivable.  The $9.8  million
outstanding balance of notes receivable from  unconsolidated  affiliates relates
to the  participation  in the BEF note.  This balance will be collected in equal
installments  of  approximately  $3.3 million each at the end of November  1999,
February 2000 and May 2000.

     Cash  outflows for  investing  activities  also  include the cash  payments
related  to the  acquisitions.  Per the  terms of the TNGL  acquisition,  $166.0
million was paid to Tejas Energy in September 1999. Likewise,  $42.1 million was
paid to Kinder Morgan and EPCO to purchase their collective 51% interest in MBA.
As described in Note 10 of the notes to the consolidated  financial  statements,
the Company  expects to complete a third  significant  acquisition in the fourth
quarter of 1999 - the  purchase  of a pipeline  from  Concha  Chemical  Pipeline
Company  ("Concha"),  an affiliate of Shell, for  approximately  $100 million in
cash.  The purchase of the Lou-Tex  pipeline is the first step in the  Company's
development  of a $210  million,  160,000  barrel per day gas  liquids  pipeline
system.  The completion of the Lou-Tex  transaction is subject to the successful

                                       22
negotiation  of  definitive  agreements,  approval  of those  agreements  by the
respective managements and regulatory approvals. The development of the expanded
Lou-Tex gas liquids  pipeline  system is expected to be  completed in the second
half of 2000.

     Cash flows from financing  activities  were a $203.3 million inflow in 1999
versus a $66.3 million inflow for the comparable period of 1998. Cash flows from
financing  activities  are affected  primarily by repayments of long-term  debt,
borrowings  under  the  long-term  debt  agreements  and  distributions  to  the
partners.  The 1998 period reflects the transactions that occurred in the IPO in
July 1998. The 1999 period  includes $215 million in long-term  debt  borrowings
associated with the TNGL and Mont Belvieu  fractionation  facility  acquisition.
Cash flows from financing activities for 1999 also reflected the net purchase of
$4.7 million of Common Units by a consolidated trust.

         Future Capital Expenditures

     The Company  currently  estimates that its share of remaining  expenditures
for  significant  capital  projects  in fiscal 1999 will be  approximately  $8.6
million  (including  $6.2 million for the BRPC  propylene  concentrator).  These
expenditures  relate to the construction of joint venture projects which will be
recorded as additional  investments in  unconsolidated  affiliates.  The Company
forecasts  that an  additional  $24.3  million  will be spent in 1999 on capital
projects  that will be recorded as property,  plant,  and  equipment  (including
$10.9 million for the Lou-Tex  pipeline and $5.6 million for the construction of
gas  plants   acquired  from  TNGL).   The  Company  expects  to  finance  these
expenditures  out of operating cash flows and  borrowings  under its bank credit
facilities.  As of  September  30,  1999,  the  Company  had  $13.2  million  in
outstanding purchase commitments  attributable to its capital projects.  Of this
amount,  $4.7 million is associated with significant capital projects which will
be  recorded  as  additional   investments  in  unconsolidated   affiliates  for
accounting purposes.

         Distributions from Unconsolidated Affiliates

     Distributions  to the Company  from MBA were $1.9  million in 1999 and $4.7
million in 1998. The level of  distributions is lower in 1999 versus 1998 due to
lower fractionation  margins and the acquisition of the MBA interest in the Mont
Belvieu fractionation  facility on July 1, 1999.  Distributions from BEF in 1999
were $0.3 million versus $1.9 million in 1998.  Distributions  from BEF are down
from  1998  levels  due to  downtime  associated  with  maintenance  activities.
Distributions from EPIK in 1999 were $1.6 million. EPIK was formed in the second
quarter of 1998 and had no distributions until the third quarter of 1998.

         Bank Credit Facility

     Existing Bank Credit  facility.  In July 1998,  the  Operating  Partnership
entered into a $200.0  million  bank credit  facility  ("Bank  Revolver A") that
includes a $50.0 million working capital facility and a $150.0 million revolving
term loan facility.  The $150.0 million  revolving term loan facility includes a
sublimit of $30.0 million for letters of credit.  As of September 30, 1999,  the
Company has borrowed  $175.0 million under the bank credit facility which is due
in July  2000.  Management  is  currently  exploring  options  to  convert  this
short-term debt into long-term debt.

     The  Company's  obligations  under the bank credit  facility are  unsecured
general  obligations  and are  non-recourse to the General  Partner.  Borrowings
under the bank credit  facility  will bear  interest at either the bank's  prime
rate or the  Eurodollar  rate  plus the  applicable  margin  as  defined  in the
facility.  The bank  credit  facility  will  expire in July 2000 and all amounts
borrowed  thereunder  shall be due and  payable at that  time.  There must be no
amount   outstanding  under  the  working  capital  facility  for  at  least  15
consecutive days during each fiscal year.

     As amended on July 28, 1999, the existing credit agreement  relating to the
facility contains a prohibition on distributions on, or purchases or redemptions
of, Units if any event of default is  continuing.  In addition,  the bank credit
facility contains various  affirmative and negative covenants  applicable to the
ability of the Company to,  among other  things,  (i) incur  certain  additional
indebtedness,  (ii) grant certain liens,  (iii) sell assets in excess of certain
limitations,  (iv) make investments,  (v) engage in transactions with affiliates
and (vi) enter into a merger,  consolidation or sale of assets.  The bank credit
facility requires that the Operating Partnership satisfy the following financial
covenants at the end of each fiscal quarter: (i) maintain  Consolidated Tangible
Net Worth (as defined in the bank credit  facility) of at least $250.0  million,
(ii)  maintain a ratio of EBITDA (as  defined in the bank  credit  facility)  to

                                       23
Consolidated  Interest  Expense (as defined in the bank credit facility) for the
previous  12-month  period of at least 3.5 to 1.0 and (iii)  maintain a ratio of
Total Indebtedness (as defined in the bank credit facility) to EBITDA of no more
than 3.0 to 1.0.

     A "Change of Control" constitutes an Event of Default under the bank credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates  of EPCO or Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

     New Bank Credit  facility.  On July 28,  1999,  the  Operating  Partnership
entered into a $350.0  million  bank credit  facility  ("Bank  Revolver B") that
includes a $50.0 million working capital facility and a $300.0 million revolving
term loan facility.  The $300.0 million  revolving term loan facility includes a
sublimit of $10.0 million for letters of credit.  The proceeds of this loan were
used to finance the acquisition of TNGL and the MBA ownership interests.  Future
uses of the remaining  credit line include the purchase of the Lou-Tex  pipeline
(see Note 10).

     Borrowings  under the bank credit facility will bear interest at either the
bank's prime rate or the Eurodollar  rate plus the applicable  margin as defined
in the  facility.  The bank  credit  facility  will  expire in July 2001 and all
amounts borrowed thereunder shall be due and payable at that time. There must be
no  amount  outstanding  under  the  working  capital  facility  for at least 15
consecutive days during each fiscal year.

     The credit agreement relating to the new facility contains a prohibition on
distributions  on, or purchases or  redemptions of Units if any event of default
is  continuing.   In  addition,   the  bank  credit  facility  contains  various
affirmative and negative covenants  applicable to the ability of the Company to,
among  other  things,  (i) incur  certain  additional  indebtedness,  (ii) grant
certain  liens,  (iii) sell assets in excess of certain  limitations,  (iv) make
investments,  (v) engage in  transactions  with affiliates and (vi) enter into a
merger, consolidation, or sale of assets. The bank credit facility requires that
the Operating  Partnership  satisfy the following financial covenants at the end
of each fiscal quarter: (i) maintain Consolidated Tangible Net Worth (as defined
in the bank credit  facility) of at least $250.0 million,  (ii) maintain a ratio
of EBITDA (as  defined in the bank credit  facility)  to  Consolidated  Interest
Expense (as  defined in the bank  credit  facility)  for the  previous  12-month
period of at least 3.5 to 1.0 and (iii)  maintain a ratio of Total  Indebtedness
(as defined in the bank credit facility) to EBITDA of no more than 3.0 to 1.0.

     A "Change of Control" constitutes an Event of Default under the bank credit
facility.  A Change of Control includes any of the following events:  (i) Dan L.
Duncan  (and/or  certain  affiliates)  cease to own (a) at least 51% (on a fully
converted, fully diluted basis) of the economic interest in the capital stock of
EPCO or (b) an aggregate number of shares of capital stock of EPCO sufficient to
elect a majority  of the board of  directors  of EPCO;  (ii) EPCO ceases to own,
through a wholly owned  subsidiary,  at least 65% of the outstanding  membership
interest  in the  General  Partner  and at least a majority  of the  outstanding
Common Units;  (iii) any person or group  beneficially owns more than 20% of the
outstanding  Common Units  (excluding  certain  affiliates of EPCO and Shell Oil
Company);  (iv) the  General  Partner  ceases to be the  general  partner of the
Company or the Operating  Partnership;  or (v) the Company ceases to be the sole
limited partner of the Operating Partnership.

MTBE Production

     The Company owns a 33-1/3%  economic  interest in the BEF partnership  that
owns the MTBE  production  facility  located  within the Compan's  Mont Belvieu
complex.  The production of MTBE is driven by oxygenated  fuels programs enacted
under the federal Clean Air Act  Amendments of 1990 and other  legislation.  Any
changes to these programs that enable  localities to opt out of these  programs,
lessen the requirements  for oxygenates or favor the use of non-isobutane  based
oxygenated  fuels reduce the demand for MTBE and could have an adverse effect on
the Company's results of operations.

                                       24
On March 25, 1999, the Governor of California ordered the phase-out of MTBE
in that state by the end of 2002 due to allegations  by several public  advocacy
and protest groups that MTBE contaminates water supplies, causes health problems
and  has not  been  as  beneficial  in  reducing  air  pollution  as  originally
contemplated.  The  order  also  seeks  to  obtain  a  waiver  of the  oxygenate
requirement from the federal Environmental Protection Agency ("EPA") in order to
facilitate  the  phase-out;  however,  due  to  increasing  concerns  about  the
viability of alternative  fuels, the California  legislature on October 10, 1999
passed  the Sher Bill (SB 989)  stating  that  MTBE  should be banned as soon as
feasible rather than by the end of 2002.

     In  addition,  legislation  to amend the federal  Clean Air Act of 1990 has
been introduced in the U.S. House of Representatives to ban the use of MTBE as a
fuel additive  within three years.  Legislation  introduced  in the U.S.  Senate
would eliminate the Clean Air Act's oxygenate requirement in order to assist the
elimination  of MTBE in fuel.  No  assurance  can be given as to whether this or
similar federal  legislation  ultimately will be adopted or whether  Congress or
the EPA might takes steps to override the MTBE ban in California.

     In November 1998, U.S. EPA Administrator  Carol M. Browner appointed a Blue
Ribbon Panel (the  "Panel") to  investigate  the air quality  benefits and water
quality  concerns  associated  with  oxygenates  in  gasoline,  and  to  provide
independent  advice and  recommendations  on ways to maintain air quality  while
protecting  water  quality.  The  Panel  issued a report on their  findings  and
recommendations  in July 1999. The Panel urged the  widespread  reduction in the
use of MTBE due to the growing  threat to drinking  water  sources  despite that
fact that use of  reformulated  gasolines have  contributed  to significant  air
quality improvements. The Panel credited reformulated gasoline with "substantial
reductions"  in  toxic  emissions  from  vehicles  and  recommended  that  those
reductions  be  maintained  by the use of  cleaner-burning  fuels  that  rely on
additives  other than MTBE and  improvements  in refining  processes.  The Panel
stated  that  the  problems  associated  with  MTBE  can be  characterized  as a
low-level,  widespread  problem that had not reached the state of being a public
health threat. The Panel's  recommendations  are geared towards  confronting the
problems  associated  with MTBE now rather  than  letting  the issue grow into a
larger and worse problem. The Panel did not call for an outright ban on MTBE but
stated that its use should be curtailed significantly. The Panel also encouraged
a public  educational  campaign on the potential  harm posed by gasoline when it
leaks into ground water from storage tanks or while in use. Based on the Panel's
recommendations,  the EPA will ask  Congress for a revision of the Clean Air Act
of 1990 that  maintains  air  quality  gains and allows  for the  removal of the
oxygenate demand in gasoline.

     In light of these  developments,  the Company is  formulating a contingency
plan for use of the BEF MTBE  facility  if MTBE  were  banned  or  significantly
curtailed.  Management  is exploring a possible  conversion  of the BEF facility
from MTBE production to alkylate production.  At present, the forecasted cost to
the Company of this conversion  would be in the $20 million to $25 million range
with  the  Company's  share  being  $6.7  million  to $8.3  million.  Management
anticipates that if MTBE is banned alkylate demand will rise as producers use it
to replace MTBE as an octane enhancer.  Alkylate production would be expected to
generate margins comparable to those of MTBE. Greater alkylate  production would
be expected to increase isobutane consumption  nationwide and result in improved
isomerization margins for the Company.

Year 2000 Readiness Disclosure

     Pursuant to the EPCO  Agreement,  any selling,  general and  administrative
expenses  related  to Year 2000  compliance  issues  are  covered  by the annual
administrative  services  fee paid by the  Company to EPCO.  Consequently,  only
those costs  incurred in connection  with Year 2000  compliance  which relate to
operational  information  systems  and  hardware  will be paid  directly  by the
Company.

     Since  1997,  EPCO has been  assessing  the impact of Year 2000  compliance
issues on the software and hardware used by the Company. A team was assembled to
review and document the status of EPCO's and the Company's systems for Year 2000
compliance.  The key information systems reviewed include the Company's pipeline
Supervisory Control and Data Acquisition  ("SCADA") system,  plant, storage, and
other  pipeline  operating  systems.  In  connection  with each of these  areas,
consideration was given to hardware, operating systems, applications,  data base
management, system interfaces,  electronic transmission, and outside vendors. As
of October 31, 1999 work is approximately 99% complete in all areas.

                                       25
As of  September  30,  1999,  EPCO  had  spent  approximately  $326,500  in
connection  with Year 2000  compliance  and has  estimated  the future  costs to
approximate  $12,000.  This cost  estimate  does not include  internal  costs of
EPCO's previously  existing resources and personnel that might be partially used
for Year 2000  compliance or cost of normal system  upgrades which also included
various Year 2000  compliance  features or fixes.  Such internal costs have been
determined to be materially  insignificant  to the total  estimated cost of Year
2000  compliance.  These  amounts are current cost  estimates  and actual future
costs could potentially be higher or lower than the estimates.

     At this time, the Company  believes its total cost for known or anticipated
remediation of its information systems to make them Year 2000 compliant will not
be material to its financial position or its ability to sustain  operations.  As
of September 30, 1999, the Company had incurred  expenditures  of  approximately
$1,026,000  in  connection  with  finalizing  its Year 2000  compliance  project
(principally  the SCADA  system).  The  Company  does not expect any  additional
material  expenditures.  This  approximate  cost does not include the  Company's
internal costs related to previously existing resources and personnel that might
be partially used for remediation of Year 2000 compliance issues.  Such internal
costs have been determined to be materially insignificant to the total estimated
cost of Year 2000 compliance.

     The Company relies on third-party  suppliers for certain systems,  products
and services, including  telecommunications.  There can be no assurance that the
systems of other companies on which the Company's  systems rely also will timely
be compliant or that any such failure to be compliant by another  company  would
not have an adverse  effect on the Company's  systems.  The Company has received
certain  information  concerning  Year 2000  compliance  status  from a group of
critical  suppliers and vendors.  This  information  has assisted the Company in
determining  the extent to which it may be  vulnerable  to the  failure of third
parties to address  their Year 2000  compliance  issues.  Based on the responses
received to date, the Company  believes that its critical  suppliers and vendors
will be Year 2000 compliant.

     Management  believes it has a program to address  the Year 2000  compliance
issue  in a  timely  manner.  Final  completion  of  the  plan  and  testing  of
replacement   or  modified   systems  is   anticipated  by  November  30,  1999.
Nevertheless,  since  it is not  possible  to  anticipate  all  possible  future
outcomes,   especially   when  third  parties  are  involved,   there  could  be
circumstances  in which the  Company  would be unable to  invoice  customers  or
collect payments. The failure to correct a material Year 2000 compliance problem
could  result in an  interruption  in or  failure  of  certain  normal  business
activities  or operations  of the Company.  Such failures  could have a material
adverse  effect on the  Company.  The  amount of  potential  liability  and lost
revenue has not been estimated.

     The  Company  and  EPCO  have  developed  a  contingency  plan  to  address
unavoidable  risks associated with Year 2000 compliance  issues.  Management has
examined  the Year  2000  compliance  issue  and  determined  that a  worst-case
scenario would be a total,  unexpected  facility shutdown caused by a disruption
of  third-party  utilities   (principally  a  total  electrical  power  outage).
Enterprise  personnel  are  trained to respond  timely and  effectively  to such
emergencies;  however,  because  of the  uncertainty  surrounding  the Year 2000
problem,  the Company  will have  additional  resources  available to assist the
operations,  maintenance,  and various  other  groups on  December  31, 1999 and
January 1, 2000.  The Company will have extra  operating,  maintenance,  process
control, computer support,  environmental and safety personnel on site and/or on
standby in the event that a Year 2000 problem arises.  The Company and EPCO will
have a defined team of trained personnel available for the rollover into January
1, 2000,  so that any  disruption to Company or EPCO  facilities  can be handled
safely and so that a return to normal  operations can be commenced as soon as is
practicable.

Accounting Standards

     On June 6, 1999, the Financial  Accounting  Standards Board ("FASB") issued
Statement of  Financial  Accounting  Standard  ("SFAS No. 137,  "Accounting  for
Derivative Instruments and Hedging  Activities-Deferral of the Effective Date of
FASB Statement No. 133-an amendment of FASB Statement No. 133" which effectively
delays and amends the  application  of SFAS No. 133  "Accounting  for Derivative
Instruments  and Hedging  Activities"  for one year,  to fiscal years  beginning
after June 15, 2000. Management is currently studying both SFAS No. 137 and SFAS
No. 133 for possible impact on the consolidated financial statements.

                                       26
On April 3, 1998, the American  Institute of Certified  Public  Accountants
issued Statement of Position  ("SOP") 98-5,  "Reporting on the Costs of Start-Up
Activities."  For years  beginning  after  December 15, 1998, SOP 98-5 generally
requires that all start-up costs of a business activity be charged to expense as
incurred and any start-up costs  previously  deferred should be written off as a
cumulative  effect of a change in  accounting  principle.  Adoption  of SOP 98-5
during  1999  did not  have a  material  impact  on the  consolidated  financial
statements  except for a $4.5 million noncash write-off that occurred on January
1, 1999 of the unamortized  balance of deferred  start-up costs of BEF, in which
the  Company  owns a 33-1/3%  interest.  This  write-off  caused a $1.5  million
reduction in the equity in income of  unconsolidated  affiliates  for 1999 and a
corresponding   reduction  in  the  Company's   investment   in   unconsolidated
affiliates.

Uncertainty of Forward-Looking Statements and Information.

     This  quarterly  report  contains  various  forward-looking  statements and
information that are based on the belief of the Company and the General Partner,
as well  as  assumptions  made by and  information  currently  available  to the
Company  and the  General  Partner.  When used in this  document,  words such as
"anticipate,"  "estimate,"  "project,"  "expect," "plan," "forecast,"  "intend,"
"could," and "may," and similar  expressions and statements  regarding the plans
and  objectives of the Company for future  operations,  are intended to identify
forward-looking statements. Although the Company and the General Partner believe
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  they can give no assurance that such  expectations will prove to be
correct.  Such  statements  are  subject to certain  risks,  uncertainties,  and
assumptions.  If one or more of these risks or uncertainties materialize,  or if
underlying assumptions prove incorrect,  actual results may vary materially from
those anticipated, estimated, projected, or expected. Among the key risk factors
that may have a direct  bearing  on the  Company's  results  of  operations  and
financial  condition are: (a)  competitive  practices in the industries in which
the Company  competes,  (b)  fluctuations  in oil,  natural gas, and NGL product
prices and  production,  (c) operational  and systems risks,  (d)  environmental
liabilities  that are not covered by indemnity or  insurance,  (e) the impact of
current and future laws and governmental  regulations  (including  environmental
regulations) affecting the NGL industry in general, and the Company's operations
in particular,  (f) loss of a significant customer,  and (g) failure to complete
one or more new projects on time or within budget.

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Historically,  the  Company has been  exposed to  financial  market  risks,
including changes in interest rates with respect to its investments in financial
instruments and changes in commodity  prices.  The Company could,  but generally
did not, use derivative financial instruments (i.e., futures,  forwards,  swaps,
options,  and other  financial  instruments  with  similar  characteristics)  or
derivative commodity instruments (i.e., commodity futures,  forwards,  swaps, or
options, and other commodity  instruments with similar  characteristics that are
permitted  by contract or business  custom to be settled in cash or with another
financial  instrument)  to  mitigate  either of these  risks.  The return on the
Company's  financial  investments was generally not affected by foreign currency
fluctuations.  Through  the third  quarter of 1999,  the Company did not use any
material derivative financial instruments for speculative purposes. At September
30, 1999, the Company had no material  derivative  instruments in place to cover
any potential  interest rate,  foreign  currency or other  financial  instrument
risk.

     At September 30, 1999,  the Company had $21.6 million  invested in cash and
cash  equivalents.  All cash equivalent  investments  other than cash are highly
liquid,  have original  maturities of less than three months, and are considered
to have  insignificant  interest rate risk. The Company's  inventory of NGLs and
NGL products at September 30, 1999, was $103.0 million.  Inventories are carried
at the lower of cost or market.  A 10% adverse change in commodity  prices would
result  in an  approximate  $10.3  million  decrease  in the  fair  value of the
Company's  inventory,  based on a  sensitivity  analysis at September  30, 1999.
Actual  results may differ  materially.  All the Company's  long-term debt is at
variable  interest  rates;  a 10% change in the base rate selected would have an
approximate  $2.1 million effect on the amount of interest  expense for the year
based upon amounts outstanding at September 30, 1999.

     Beginning with the fourth quarter of 1999, the Company adopted a commercial
policy to manage  exposures  to the risks  generated  by the NGL  business.  The
objective of the policy is to assist the Company in achieving its  profitability
goals while maintaining a portfolio of conservative  risk,  defined as remaining

                                       27
within the position limits  established by the Board of Directors of the general
partner.  The Company  will enter into risk  management  transactions  to manage
price  risk,  basis  risk,  physical  risk or  other  risks  related  to  energy
commodities on both a short-term (less than 30 days) and long-term basis, not to
exceed 18 months.  The general  partner has  established a Risk  Committee  (the
"committee") that will oversee overall  strategies  associated with physical and
financial risks. The committee will approve specific  commercial policies of the
Company subject to this policy,  including authorized products,  instruments and
markets. The committee is also charged with establishing specific guidelines and
procedures for implementing the policy and ensuring  compliance with the policy.
This policy will affect transactions beginning with the fourth quarter of 1999.

                                       28
PART II.    OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

         (a) Exhibits

     *3.1 Form of Amended  and  Restated  Agreement  of Limited  Partnership  of
          Enterprise   Products  Partners  L.P.  (Exhibit  3.1  to  Registration
          Statement on Form S-1, File No. 333-52537, filed on May 13, 1998).

     *3.2 Form of Amended  and  Restated  Agreement  of Limited  Partnership  of
          Enterprise  Products  Operating  L.P.  (Exhibit  3.2  to  Registration
          Statement on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *3.3 LLC Agreement of Enterprise  Products GP (Exhibit 3.3 to  Registration
          Statement on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *3.4 Second  Amended  and  Restated  Agreement  of Limited  Partnership  of
          Enterprise  Products  Partners L.P.  dated  September  17, 1999.  (The
          Company  incorporates by reference the above document  included in the
          Schedule 13D filed  September  27, 1999 by Tejas Energy LLC ; filed as
          Exhibit 99.7 on Form 8-K dated October 4, 1999).

     *3.5 First  Amended and Restated  Limited  Liability  Company  Agreement of
          Enterprise Products GP, LLC dated September 17, 1999. (Exhibit 99.8 on
          Form 8-K/A-1 filed October 27, 1999).

     *4.1 Form of Common Unit certificate (Exhibit 4.1 to Registration Statement
          on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *4.2 $200 million Credit  Agreement  among  Enterprise  Products  Operating
          L.P., the Several Banks from Time to Time Parties  Hereto,  Den Norske
          Bank  ASA,  and Bank of  Tokyo-Mitsubishi,  Ltd.,  Houston  Agency  as
          Co-Arrangers,   The  Bank  of  Nova  Scotia,  as  Co-Arranger  and  as
          Documentation Agent and The Chase Manhattan Bank as Co-Arranger and as
          Agent  dated  as of  July  27,  1998 as  Amended  and  Restated  as of
          September 30, 1998.  (Exhibit 4.2 on Form 10-K for year ended December
          31, 1998, filed March 17, 1999).

     *4.3 First  Amendment to $200 million Credit  Agreement dated July 28, 1999
          among  Enterprise  Products  Operating  L.P.  and  the  several  banks
          thereto. (Exhibit 99.9 on Form 8-K/A-1 filed October 27, 1999).

     *4.4 $350 million Credit  Agreement  among  Enterprise  Products  Operating
          L.P., BankBoston,  N.A., Societe Generale,  Southwest Agency and First
          Union National Bank, as  Co-Arrangers,  The Chase  Manhattan  Bank, as
          Co-Arranger and as  Administrative  Agent,  The First National Bank of
          Chicago,  as Co-Arranger and as Documentation  Agent, The Bank of Nova
          Scotia,  as Co-Arranger and Syndication  Agent,  and the Several Banks
          from Time to Time  parties  hereto  with First Union  Capital  Markets
          acting as  Managing  Agent and Chase  Securities  Inc.  acting as Lead
          Arranger and Book Manager dated July 28, 1999  (Exhibit  99.10 on Form
          8-K/A-1 filed October 27, 1999).

     *4.5 Unitholder  Rights  Agreement  among Tejas Energy LLC, Tejas Midstream
          Enterprises,   LLC,  Enterprise  Products  Partners  L.P.,  Enterprise
          Products  Operating  L.P.,  Enterprise  Products  Company,  Enterprise
          Products GP, LLC and EPC Partners II, Inc.  dated  September 17, 1999.
          (The Company  incorporates by reference the above document included in
          the Schedule 13D filed  September 27, 1999 by Tejas Energy LLC ; filed
          as Exhibit 99.5 on Form 8-K dated October 4, 1999).

                                       29
*10.1Articles  of Merger  of  Enterprise  Products  Company,  HSC  Pipeline
          Partnership, L.P., Chunchula Pipeline Company, LLC, Propylene Pipeline
          Partnership, L.P., Cajun Pipeline Company, LLC and Enterprise Products
          Texas  Operating L.P. dated June 1, 1998 (Exhibit 10.1 to Registration
          Statement on Form S-1/A, File No: 333-52537, filed on July 8, 1998).

     *10.2Form of EPCO  Agreement  between  Enterprise  Products  Partners L.P.,
          Enterprise  Products Operating L.P.,  Enterprise  Products GP, LLC and
          Enterprise Products Company (Exhibit 10.2 to Registration Statement on
          Form S-1/A, File No. 333-52537, filed on July 21, 1998).

     *10.3Transportation  Contract between  Enterprise  Products  Operating L.P.
          and Enterprise Transportation Company dated June 1, 1998 (Exhibit 10.3
          to Registration Statement on Form S-1/A, File No. 333-52537,  filed on
          July 8, 1998).

     *10.4Venture  Participation  Agreement  between Sun  Company,  Inc.  (R&M),
          Liquid Energy Corporation and Enterprise Products Company dated May 1,
          1992  (Exhibit  10.4 to  Registration  Statement on Form S-1, File No.
          333-52537, filed on May 13, 1998).

     *10.5Partnership  Agreement  between Sun BEF,  Inc.,  Liquid  Energy  Fuels
          Corporation and Enterprise Products Company dated May 1, 1992 (Exhibit
          10.5 to Registration Statement on Form S-1, File No. 333-52537,  filed
          on May 13, 1998).

     *10.6Amended  and  Restated  MTBE  Off-Take   Agreement   between   Belvieu
          Environmental Fuels and Sun Company,  Inc. (R&M) dated August 16, 1995
          (Exhibit  10.6  to  Registration  Statement  on  Form  S-1,  File  No.
          333-52537, filed on May 13, 1998).

     *10.7Articles of  Partnership  of Mont  Belvieu  Associates  dated July 17,
          1985  (Exhibit  10.7 to  Registration  Statement on Form S-1, File No.
          333-52537, filed on May 13, 1998).

     *10.8First Amendment to Articles of Partnership of Mont Belvieu  Associates
          dated July 15, 1996  (Exhibit 10.8 to  Registration  Statement on Form
          S-1, File No. 333-52537, filed on May 13, 1998).

     *10.9Propylene   Facility  and  Pipeline   Agreement   between   Enterprise
          Petrochemical  Company and Hercules  Incorporated  dated  December 13,
          1978  (Exhibit  10.9 to  Registration  Statement on Form S-1, File No.
          333-52537, dated May 13, 1998).

     *10.10 Restated  Operating  Agreement  for the Mont  Belvieu  Fractionation
          Facilities Chambers County, Texas between Enterprise Products Company,
          Texaco  Producing  Inc.,  El Paso  Hydrocarbons  Company and  Champlin
          Petroleum  Company dated July 17, 1985 (Exhibit 10.10 to  Registration
          Statement on Form S-1/A, File No. 333-52537, filed on July 8, 1998).

     *10.11  Ratification  and  Joinder  Agreement   relating  to  Mont  Belvieu
          Associates  Facilities  between  Enterprise  Products Company,  Texaco
          Producing  Inc.,  El Paso  Hydrocarbons  Company,  Champlin  Petroleum
          Company and Mont Belvieu Associates dated July 17, 1985 (Exhibit 10.11
          to Registration Statement on Form S-1/A, File No. 333-52537,  filed on
          July 8, 1998).

                                       30
*10.12 Amendment to Propylene Facility and Pipeline Sales Agreement between
          HIMONT U.S.A.,  Inc. and Enterprise  Products Company dated January 1,
          1993 (Exhibit 10.12 to Registration  Statement on Form S-1/A, File No.
          333-52537, filed on July 8, 1998).

     *10.13 Amendment to  Propylene  Facility  and  Pipeline  Agreement  between
          HIMONT U.S.A.,  Inc. and Enterprise  Products Company dated January 1,
          1995 (Exhibit 10.13 to Registration  Statement on Form S-1/A, File No.
          333-52537, filed on July 8, 1998).

     10.14Fourth Amendment to Conveyance of Gas Processing  Rights between Tejas
          Natural Gas Liquids,  LLC and Shell Oil Company,  Shell  Exploration &
          Production Company,  Shell Offshore Inc., Shell Deepwater  Development
          Inc.,  Shell Land & Energy  Company and Shell  Frontier Oil & Gas Inc.
          dated August 1, 1999.

     *99.1Contribution  Agreement  between  Tejas  Energy LLC,  Tejas  Midstream
          Enterprises,   LLC,  Enterprise  Products  Partners  L.P.,  Enterprise
          Products  Operating  L.P.,  Enterprise  Products  Company,  Enterprise
          Products GP, LLC and EPC Partners II, Inc.  dated  September 17, 1999.
          (The Company  incorporates by reference the above document included in
          the Schedule 13D filed  September 27, 1999 by Tejas Energy LLC ; filed
          as Exhibit 99.4 on Form 8-K dated October 4, 1999).

     *99.2Registration  Rights Agreement between Tejas Energy LLC and Enterprise
          Products   Partners  L.P.  dated  September  17,  1999.  (The  Company
          incorporates by reference the above document  included in the Schedule
          13D filed  September  27, 1999 by Tejas  Energy LLC ; filed as Exhibit
          99.6 on Form 8-K dated October 4, 1999).

     27.1 Financial Data Schedule

     *    Asterisk indicates exhibits incorporated by reference as indicated

     (b)  Reports on Form 8-K

     Three  reports  on Form 8-K were  filed  during  the third  quarter of 1999
     associated with the Tejas acquisition.

          On  September  20,  1999 a Form  8-K was  filed  whereby  the  Company
     announced it had completed its acquisition of TNGL,  from Tejas Energy,  an
     affiliate of Shell. In exchange for its NGL business, Tejas Energy received
     14.5 million  convertible special partnership units in the Company and $166
     million in cash. Tejas Energy has the opportunity to earn an additional 6.0
     million  convertible  contingency units over the next two years. As part of
     the  transaction,  the Company has entered into a long-term gas  processing
     agreement  with  Shell  for  its  Gulf of  Mexico  production.  TNGL's  NGL
     businesses   include   natural  gas  processing   and  NGL   fractionation,
     transportation,  storage and  marketing.  All of TNGL's assets in Louisiana
     and  Mississippi  are  included  under the terms of the  transaction.  This
     acquisition  by the  Company  forms  a  fully  integrated  Gulf  Coast  NGL
     processing, fractionation, storage, transportation and marketing business.

          On  October  4,  1999,  a Form  8-K  was  filed  whereby  the  Company
     summarized the Unitholder  Rights  Agreement and other material  agreements
     associated with the TNGL acquisition. This filing incorporated by reference
     certain material documents associated with the acquisition.

                                    31
On October 27,  1999,  a Form  8-K/A-1  was filed  whereby the Company
     disclosed certain  historical  financial  information of TNGL for the years
     ended 1996,  1997,  and 1998.  In  addition,  this filing  contained  other
     documentation relating to the TNGL acquisition.

                                       32
Signatures

     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 thereunto duly authorized.

                                   Enterprise Products Partners L.P.
                                   (A Delaware Limited Partnership)

                                   By:    Enterprise Products GP, LLC
                                          as General Partner

Date:   November 15, 1999          By:    /s/  Gary L. Miller
                                          Executive Vice President
                                          Chief Financial Officer and Treasurer

                                       33