<PAGE>
 
================================================================================


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                   FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997


                        Commission file number 1-13018
                                                -------

                         PETRO STOPPING CENTERS, L.P.

          (Exact name of the registrant as specified in its charter)

         DELAWARE                                             74-2628339 
(State or other jurisdiction of                             (IRS Employer  
incorporation or organization)                             Identification No.) 
                                                          
   6080 SURETY DR.
   EL PASO, TEXAS                                                 79905      
(Address of principal executive offices)                        (Zip Code)    
                                                                    
Registrant's telephone number, including area code:         (915) 779-4711


          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__
      -       

================================================================================
<PAGE>
 
                         PETRO STOPPING CENTERS, L.P.

                                     Index

<TABLE> 
<CAPTION> 
                                                                                                           Page No.

<S>       <C>                                                                                              <C> 
PART I.   FINANCIAL INFORMATION
 
Item 1.   Financial Statements

          Unaudited Consolidated Balance Sheets
          as of December 31, 1996 and September 30, 1997                                                          3
                                                                                                        
          Unaudited Consolidated Statements of Operations                                               
          for the Three and Nine Months Ended September 27, 1996 and September 30, 1997                           4
                                                                                                        
          Unaudited Consolidated Statement of Changes in Partners' Capital (Deficit)                    
          for the Nine Months Ended September 30, 1997                                                            5
                                                                                                        
          Unaudited Consolidated  Statements of Cash Flows                                              
          for the Nine Months Ended September 27, 1996 and September 30, 1997                                     6
                                                                                                        
          Notes to Unaudited Consolidated Financial Statements                                                  7-9
                                                                                                        
 Item 2.  Management's Discussion and Analysis of                                                       
          Financial Condition and Results of Operations                                                       10-15
                                                                                                        
                                                                                                        
                                                                                                        
PART II.  OTHER INFORMATION                                                                             
                                                                                                        
 Item 1.  Legal Proceedings                                                                                      16
                                                                                                        
 Item 6.  Exhibits and Reports on Form 8-K                                                                       16
                                                                                                        
SIGNATURES                                                                                                       17
</TABLE>

                                       2
<PAGE>
 
                         PART 1.  Financial Information

Item 1.  Financial Statements

                          PETRO STOPPING CENTERS, L.P.
                     UNAUDITED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                    December 31,  September 30, 
                                                        1996           1997     
                                                        ----           ----     
<S>                                                 <C>           <C>           
                   ASSETS                                                       
Current assets:                                                                 
  Cash and cash equivalents                           $  3,182       $ 20,357   
  Accounts receivable, net of allowance for 
   uncollectible accounts of $321 at December 31, 
   1996 and $313 at September 30, 1997                  10,401         11,723   
  Inventories                                           15,195         14,437   
  Other current assets                                   1,404          2,228   
  Due from affiliates                                    2,091          1,003   
                                                      --------       --------   
     Total current assets                               32,273         49,748   
                                                                                
  Property and equipment, net                          159,539        164,897   
  Deferred debt issuance and organization costs, 
   net of accumulated amortization of $6,728 at      
   December 31, 1996 and $5,438 at September 30, 
   1997                                                 11,305         16,740   
  Other assets                                           5,983          5,171   
                                                      --------       --------   
                                                                                
     Total assets                                     $209,100       $236,556   
                                                      ========       ========   
                                                                                
                                                                                
      LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)    
Current liabilities:                                                            
 Current portion of long-term debt                    $  6,928       $  4,250   
 Trade accounts payable                                 15,723         24,078   
 Accrued expenses and other liabilities                 21,160         22,895   
 Due to affiliates                                       2,325          2,124   
                                                      --------       --------   
     Total current liabilities                          46,136         53,347   
                                                                                
 Notes payable                                          21,639              -   
 Long-term debt, excluding current portion             138,160        179,940   
                                                      --------       --------   
     Total liabilities                                 205,935        233,287   
                                                      --------       --------   
                                                                                
 Mandatorily redeemable preferred                                              
  partnership interests                                      -         20,765   
                                                                                
  Commitments and contingencies                                                 
                                                                                
  Partners' capital (deficit)                            3,165        (17,496)  
                                                      --------       --------   
                                                                                
     Total liabilities and partners' 
      capital (deficit)                               $209,100       $236,556   
                                                      ========       ======== 
</TABLE>

     See accompanying notes to unaudited consolidated financial statements

                                       3
<PAGE>
 
                          PETRO STOPPING CENTERS, L.P.
                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (in thousands)


<TABLE>
<CAPTION>
                                                    Three Months Ended                       Nine Months Ended
                                             September 27,         September 30,        September 27,        September 30, 
                                                 1996                  1997                   1996               1997
                                                 ----                  ----                   ----               ----
<S>                                          <C>                   <C>                  <C>                  <C>
Net revenues (including motor fuel taxes)
  Fuel                                            $119,066              $123,090             $346,426             $366,186        
  Non-Fuel                                          29,351                32,190               82,739               88,923        
  Restaurant                                        12,113                12,929               35,367               36,424        
                                                  --------              --------             --------             --------        
     Total net revenues                            160,530               168,209              464,532              491,533        
                                                  --------              --------             --------             --------        
                                                                                                                                  
Costs and expenses:                                                                                                               
  Cost of sales (including motor fuel taxes)       127,026               131,716              368,971              389,960        
  Operating expenses                                20,941                21,680               60,282               62,642  
  General and administrative                         3,473                 4,416                9,652               12,293        
  Depreciation and amortization                      2,874                 3,155                8,832                9,299       
                                                  --------              --------             --------             --------  
     Total costs and expenses                      154,314               160,967              447,737              474,194  
                                                  --------              --------             --------             --------        
                                                  
     Operating income                                6,216                 7,242               16,795               17,339        
                                                                                                                                  
Interest expense                                     5,247                 5,122               15,875               15,537        
                                                  --------              --------             --------             --------

Income before extraordinary item                       969                 2,120                  920                1,802        
                                                                                                                                  
Extraordinary item - loss from                         
 extinguishment of debt                                  -                     -                    -              (12,745) 
                                                  --------              --------             --------             --------  
                                                                                                                                  
     Net income (loss)                            $    969              $  2,120             $    920             $(10,943)       
                                                  ========              ========             ========             ========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements

                                       4
<PAGE>
 
                          PETRO STOPPING CENTERS, L.P.
   UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                  For the Nine Months Ended September 30, 1997
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                         Total  
                                                                       Partners'
                                                  General    Limited    Capital 
                                                 Partners   Partners   (Deficit)
                                                 --------   --------   ---------
<S>                                              <C>        <C>        <C>      
Balances, December 31, 1996                      $(8,477)   $ 11,642   $  3,165 
                                                                                
Capital contributions                                  -      11,047     11,047 
                                                                                
Assignment of mandatorily                                                      
 redeemable preferred partnership interests            -     (19,600)   (19,600)
                                                                                
Accrual of preferred return on mandatorily
 redeemable preferred partnership interests            -      (1,165)    (1,165)
                                                                                
Net loss                                            (657)    (10,286)   (10,943)
                                                 --------   --------   ---------
                                                                                
Balances, September 30, 1997                     $(9,134)   $ (8,362)  $(17,496)
                                                 ========   ========   =========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements

                                       5
<PAGE>
 
                          PETRO STOPPING CENTERS, L.P.
                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                Nine Months Ended
                                          September 27,   September 30,
                                               1996            1997
                                          --------------  --------------
<S>                                       <C>             <C>
Cash flows  (used in) provided by
 operating activities:
  Net loss                                     $    920      $  (10,943)
  Adjustments to reconcile net loss to
   net cash provided by operating
   activities:
      Loss from extinguishment of debt                -          12,745
      Depreciation and amortization               8,832           9,299
      Deferred debt issuance cost                 
       amortization                               1,048           1,320 
      Accretion of original issue                   
       discount                                     710              47 
      Provision for losses on accounts              
       receivable                                   171             192  
Increase (decrease) from changes in :
      Accounts receivable                        (1,609)         (1,514)
      Inventories                                (1,542)            758
      Other current assets                         (262)           (824)
      Due from affiliates                          (474)          1,088
      Due to affiliates                              82            (201)
      Trade accounts payable                      3,157           8,355
      Accrued expenses and other               
       liabilities                                6,136           1,735
                                               --------       --------- 
          Net cash provided by                 
           operating activities                  17,155          22,057
                                               --------       --------- 
Cash flows (used in) provided by               
 investing activities:
  Purchases of property and equipment            (4,771)        (12,013)
  (Increase) decrease in other assets,           
   net                                             (257)         (1,150)  
                                               --------       --------- 
          Net cash used in investing           
           activities                            (5,028)        (13,163)
                                               --------       --------- 
Cash flows (used in) provided by               
 financing activities:
  Repayments of notes payable                   (21,000)        (23,639)
  Proceeds from notes payable                    16,061           2,000
  Repayments of long-term debt                   (2,469)       (151,800)
  Proceeds from long-term debt                        -         185,190
  Capital contributions                               -          11,047
  Payment of debt issuance costs                   (201)        (14,517)
  Decrease in cash overdrafts                    (6,314)              -
                                               --------       ---------
           Net cash (used in) provided         
            by financing activities             (13,923)          8,281
                                               --------       --------- 
Net increase in cash and cash                    
 equivalents                                     (1,795)         17,175 

Cash and cash equivalents, beginning of        
 period                                           5,688           3,182
                                               --------       ---------  
Cash and cash equivalents, end of period       $  3,893       $  20,357  
                                               ========       =========   

===============================================================================
 Supplemental cash flow information -
    Interest paid during the period            $  9,894       $  12,640
    Non-cash financing activity
         Assignment of Preferred               
          Partnership Interests                       -          19,600 
         Accrual of Preferred Return                  -           1,165
</TABLE>

     See accompanying notes to unaudited consolidated financial statements

                                       6
<PAGE>
 
1)   BASIS OF PRESENTATION

          The interim consolidated financial statements of Petro Stopping
Centers, L.P. (the "Company") are unaudited, and certain information and
footnote disclosures normally included in the annual consolidated financial
statements have been omitted. While management of the Company believes that the
disclosures presented are adequate to make the information not misleading, it is
suggested that these statements be read in conjunction with the Company's 1996
annual report on Form 10-K. In the opinion of management, the accompanying
unaudited consolidated financial statements contain all necessary adjustments
(consisting of only normal recurring adjustments) for 1996 and 1997. The results
of operations for the nine-month period ended September 30, 1997 are not
necessarily indicative of the results to be expected for the full year.

          On January 30, 1997 the Company completed a recapitalization (the
"Recapitalization").  As part of the recapitalization, affiliates of Chartwell
Investments, Inc. ("Chartwell") became limited and general partners of the
Company, an affiliate of Mobil Oil Corporation ("Mobil Long Haul") became a
limited partner of the Company and Sequoia Ventures, Inc. and Roadside, Inc.
(collectively, the "Fremont Partners") sold all of their partnership interests
in the Company (See Note 2).

2)   RECAPITALIZATION

          On January 30, 1997, the Company consummated a transaction, in which
Chartwell and Mobil Long Haul invested $20.7 million and $15.0 million,
respectively (the "Equity Investment"), in order to directly acquire the
partnership interests of the Company owned by the Fremont Partners for
approximately $25.6 million and invested approximately $10.1 million in the
Company. James A. Cardwell, Sr., James A. Cardwell, Jr. and certain of their
affiliates (collectively, the "Cardwell Group") maintained their capital
investment in the Company. Kirschner Investments ("Kirschner"), a Company
franchisee, invested $1.0 million in the Company (the "Kirschner Investment").
Following the Equity Investment and the Kirschner Investment, the common
partnership interests of the Company are owned by Chartwell (approximately
50.8%), the Cardwell Group (approximately 39.9%), Mobil Long Haul (approximately
7.4%), and Kirschner (approximately 2.0%), and the preferred partnership
interests are owned by Mobil Long Haul ($12.0 million) and the Cardwell Group
($7.6 million). Chartwell and the Cardwell Group own both general and limited
partnership interests in the Company, and Mobil Long Haul and Kirschner own only
limited partnership interests in the Company. Mobil Oil Company and the Company
also entered into certain supply and marketing agreements in connection with the
Recapitalization.

          As part of the Recapitalization, the Company issued $135 million of 10
1/2% Senior Notes due 2007 (the "New Notes"), and repurchased approximately 94%
of its Existing 12 1/2% Senior Notes due 2002 (the "Old Notes") and
approximately 99% of its outstanding debt warrants (the "Debt Warrants").

          The Company also amended its senior collateralized credit facility
(the "Old Credit Agreement" and, as amended, the "New Credit Agreement"). The
New Credit Agreement consists of a $25.0 million revolving credit facility (the
"Revolving Credit Facility"), a $14.0 million Term Loan A, a $30.0 million Term
Loan B and a $40.0 million Expansion Facility (the "Expansion Facility"). The
New Credit Agreement is collateralized by substantially all of the Company's
assets and the partnership interests of Mobil Long Haul and Chartwell and
guaranteed by each of the Company's subsidiaries, whose guarantees in turn are
collateralized by substantially all of such subsidiaries' assets.

          In the first quarter of 1997, the Company recognized an extraordinary
charge of $12.7 million relating to amendment of the Old Credit Agreement,
retirement of the Old Notes and Debt Warrants and the write-off of deferred debt
issuance costs.

          Aggregate yearly term loan principal payments under the New Credit
Agreement are as follows: (i) $2.0 million in 1997; (ii) $3.0 million in 1998;
(iii) $4.5 million in 1999; (iv) $5.5 million in 2000; (v) $1.5 million in 2001;
(vi) $13.5 million in 2002; and (vii) $14.0 million in 2003.

                                       7
<PAGE>
 
3)   ENVIRONMENTAL LIABILITIES AND EXPENDITURES

          Accruals for environmental matters are recorded in operating expenses
when it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated.  The measurement of environmental
liabilities is based on an evaluation of currently available facts with respect
to each individual site and considers factors such as existing technology,
presently enacted laws and regulations and prior experience in remediation of
contaminated sites.  Such liabilities are exclusive of claims against third
parties and are not discounted.
 
4)   INVENTORIES
          The following is a summary of inventories at December 31, 1996 and
September 30, 1997:

<TABLE>
<CAPTION>
                                     1996       1997
                                   ---------  ---------
                                      (IN THOUSANDS)
<S>                                <C>        <C>
Motor fuels and lubricants          $ 5,074    $ 4,481
Tires and tubes                       2,993      3,191
Merchandise and accessories           7,531      7,063
Restaurant and other                    726        831
  Less reserve for obsolescence      (1,129)    (1,129)
                                    -------    -------
  Total inventories                 $15,195    $14,437
                                    =======    =======
</TABLE> 


          In connection with new systems implemented in 1996, the Company
identified items that were excess or obsolete inventory.  The criteria
established is merchandise in excess of a one year supply.  The Company has
established a reserve for obsolete and excess inventory amounting to
approximately $1.1 million.

5)   PROPERTY AND EQUIPMENT
            Property and equipment is summarized at December 31, 1996 and
September 30, 1997 as follows:

<TABLE>
<CAPTION>
                                          ESTIMATED
                                            USEFUL
                                            LIVES
                                           (YEARS)      1996      1997
                                          ----------  --------  --------
                                                        (IN THOUSANDS)
 
<S>                                       <C>         <C>       <C>
Land                                             --   $ 34,970  $ 36,079
Buildings and improvements                       30     94,244    99,675
Furniture and equipment                        3-10     40,396    45,866
Leasehold improvements                         7-30     20,238    20,234
Facilities under development                     --        141       148
                                                      --------  --------
                                                       189,989   202,002
Less accumulated depreciation and                       30,450    37,105
 amortization                                         --------  --------
   Net property and equipment                         $159,539  $164,897
                                                      ========  ========
</TABLE>

          Facilities under development include costs associated with new
facilities and major renovations of existing facilities.  Future commitments
associated with major renovations of existing facilities totaled approximately
$1.4 million at September 30, 1997.  There were no future commitments associated
with new construction of facilities at September 30, 1997.

6)   NOTES PAYABLE

          Notes payable at December 31, 1996 consisted of a five-year revolving
credit facility under the Old Credit Agreement under which up to $35,000,000 was
available (the "Old Facility"). The Old Credit Facility was to mature in June
1999. Interest was paid monthly at 1.5% over the bank's prime rate or 2.75% over
the Eurodollar rate (the choice of which is determined by the Company at time of
borrowing). Borrowings under the Old Facility were collateralized by
substantially all of the Company's assets. The balance outstanding on the Old
Facility was $21,639,000 as of December 31, 1996, all of which was repaid in
connection with the amendment and restatement of the Old Credit Agreement in the
Recapitalization.
There were no borrowings under the Revolving Credit Facility, as described in
Note 2, as of September 30, 1997.

                                       8
<PAGE>
 
6)   NOTES PAYABLE (CONTINUED)


          Also outstanding at December 31, 1996 under the Old Facility and at
September 30, 1997 under the Revolving Credit Facility were standby letters of
credit principally related to unfunded insurance claims in the amounts of
$3,150,000 and $3,632,000, respectively, in addition to other various standby
letters of credit of approximately $500,000 and  $405,000, respectively.
                                                                               
7)   COMMITMENTS AND CONTINGENCIES
          The Company is involved in various litigation incidental to the
business for which estimates of losses have been accrued, when appropriate.  In
the opinion of management, such proceedings will not have a material adverse
effect on financial position or results of operations.

8)   MANDATORILY REDEEMABLE PREFERRED PARTNERSHIP INTERESTS

          On January 30, 1997, the Company issued mandatorily redeemable
preferred partnership interests with an assigned value of $19,600,000 to Mobil
Long Haul ($12.0 million) and the Cardwell Group ($7.6 million).  The
mandatorily redeemable preferred partnership interests are entitled to
cumulative preferred returns of 9.5% for preferred interests owned by Mobil Long
Haul and 8.0% for preferred interests owned by the Cardwell Group, and are
subject to mandatory redemption 270 days after the tenth anniversary of the date
of closing of the Recapitalization, which is subsequent to the maturity date of
the New Notes.

          The preferred returns on the mandatorily redeemable preferred
partnership interest accrue, but are only payable in cash if permitted by the
Company's then existing debt instruments.  The Indenture governing the New Notes
and the New Credit Agreement restrict the payment of dividends on mandatorily
redeemable preferred partnership interests.

          At September 30, 1997, the Company had accrued preferred returns on
the mandatorily redeemable preferred partnership interests amounting to
$1,165,000, with a corresponding increase in partners' deficit.

9)   RELATED PARTY TRANSACTIONS
          Included in the costs of the Recapitalization discussed at Note 2 are
fees and expenses paid to Chartwell of approximately $3.1 million pursuant to
the terms of the financial advisory agreement between the Company and Chartwell.

                                       9
<PAGE>
 
Item 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations
                                                                                
GENERAL

Recapitalization

     On January 30, 1997, Petro Stopping Centers, L.P., (the "Company")
consummated a transaction in which Chartwell Investments, Inc. ("Chartwell") and
Mobil Long Haul, Inc. ("Mobil Long Haul") invested $20.7 million and $15.0
million, respectively (the "Equity Investment"), in order to directly acquire
the partnership interests of the Company owned by Sequoia Ventures, Inc. and
Roadside, Inc. (collectively the "Fremont Partners") for approximately $25.6
million and to invest approximately $10.1 million in the Company. James A.
Cardwell Sr., James A. Cardwell Jr. and certain of their affiliates
(collectively, the "Cardwell Group") maintained their capital investment in the
Company. Kirschner Investments ("Kirschner"), a Company franchisee, invested
$1.0 million in the Company (the "Kirschner Investment"). Following their Equity
Investment and the Kirschner Investment, the common partnership interests of the
Company are owned by Chartwell (approximately 50.8%), the Cardwell Group
(approximately 39.9%), Mobil Long Haul (approximately 7.4%), and Kirschner
(2.0%), and the preferred partnership interests of the Company are owned by
Mobil Long Haul ($12.0 million) and the Cardwell Group ($7.6 million). Chartwell
and the Cardwell Group own both general and limited partnership interests in the
Company, and Mobil Long Haul and Kirschner own only limited partnership
interests in the Company. Mobil and the Company also entered into certain supply
and marketing agreements in connection with the Recapitalization (as defined).

     As part of the Recapitalization, the Company issued $135 million of 10 1/2%
Senior Notes due 2007, (the "New Notes") and made a tender offer (the "Tender
Offer") for all of, and repurchased approximately 94% of, its 12 1/2% Senior
Notes due 2002 (the "Old Notes") and approximately 99% of the outstanding debt
warrants (the "Debt Warrants").
 
     The Company also amended its senior collateralized credit facility (the
"Old Credit Agreement" and, as amended, the "New Credit Agreement"). The New
Credit Agreement consists of a $25.0 million revolving credit facility (the
"Revolving Credit Facility"), a $14.0 million Term Loan A, a $30.0 million Term
Loan B and a $40.0 million Expansion Facility (the "Expansion Facility"). The
New Credit Agreement is collateralized by substantially all of the Company's
assets and the partnership interests of Mobil Long Haul and Chartwell and
guaranteed by each of the Company's subsidiaries, whose guarantees in turn are
collateralized by substantially all of such subsidiaries' assets.

     The Recapitalization consists of the Equity Investment, the Tender Offer,
the Kirschner Investment, the issuance of the New Notes and the entering into of
the New Credit Agreement.

     In the first quarter of 1997, the Company recognized an extraordinary
charge of $12.7 million relating to amendment of the Old Credit Agreement,
retirement of the Old Notes and Debt Warrants and the write-off of deferred
financing costs.

                                       10
<PAGE>
 
Ongoing Operations

            The following table sets forth the development of the Company's
Stopping Center network since 1993.

<TABLE>
<CAPTION> 
                                                            
                                                    AS OF SEPTEMBER 30
                                                    ------------------
                                               1993  1994  1995  1996  1997
                                               ----  ----  ----  ----  ----
     <S>                                       <C>   <C>   <C>   <C>   <C> 
     Company-operated Stopping Centers:
      Full-sized......................           20    21    23    23    25   
      Petro:2 :.......................            3     3     3     3     3   
     Franchised.......................           12    12    14    15    17   
     Independently operated...........            1     1     1     -     -   
                                               ----  ----  ----  ----  ----   
                                                                              
      Total Stopping Centers..........           36    37    41    41    45   
                                               ====  ====  ====  ====  ====   
</TABLE>

          The following table sets forth information on Stopping Centers opened
since January 1, 1993, all of which were full-sized facilities.

 
                         LOCATION                              DATE OPENED
               Company-operated Stopping Centers:
                    Laramie, Wyoming                           October 1993 
                    Medford, Oregon                           February 1995 
                    Ocala, Florida                              June 1995   
                    N. Baltimore, Ohio                         August 1997  
                    N. Little Rock, Arkansas                  September 1997
                                                                            
                    Franchised:                                             
                    Fargo, North Dakota                       November 1994 
                    Carnesville, Georgia                       January 1995 
                    York, Nebraska                            December 1996 
                    Scranton, Pennsylvania                       May 1997   

 
          During the third quarter of 1997 the Company acquired two locations.
The new sites acquired were North Baltimore, Ohio and North Little Rock,
Arkansas. The sites acquired were existing truck stops. The North Baltimore site
is leased at $560,000 per year. The North Little Rock site was purchased for
$5.5 million. The Company opened a stand-alone Petro:Lube in Franklin, Kentucky
in August 1996 in addition to new Petro:Lubes at its San Antonio, Beaumont and
Medford locations in June 1994, January 1995 and April 1996, respectively. At
September 30, 1997, the Company had no new Stopping Centers under construction.
The approximate construction cost of a new stopping center (exclusive of land)
is between $7.0 and $9.5 million.

          The Company operates 28 truck stop facilities selling diesel fuel and
gasoline, of which 25 are full size facilities. Full sized facilities include a
Diesel Fuel Island, the Iron Skillet Restaurant, a Petro:Lube and a Travel
Center. In addition, nine of the 25 facilities also have separate convenience
stores. The Company also operates three Petro:2 facilities which are a smaller
version of the full size facility with various fast food offerings. The Company
has 17 additional locations which operate under franchise agreements.

          Historically, the Company's revenues at each of its full-sized
Stopping Centers were recorded through the following divisions; diesel fuel
island, restaurant, Petro:Lube, and travel and convenience store. Beginning with
the first quarter of 1997 and in connection with new management, the
presentation format for results of operation has been changed to reflect
revenues from fuel, non-fuel and restaurant. The Company derives its revenues
from the sale of fuels, diesel and gasoline, non-fuel items including the sale
of merchandise and offering of services including truck tire sales and
preventative maintenance, weighing scales, showers, laundry, video games and
other operations, and its restaurant operations which 

                                       11
<PAGE>
 
includes Iron Skillet and certain fast-food operations. The presentation will
allow management to focus more closely on the major sources of revenues of the
business. The other operations included in non-fuel revenue includes franchise
royalties, rental revenue from video poker operations in Louisiana and a motel
and RV park in Oregon.

          The Company's fuel revenues and cost of sales include federal and
state motor fuel taxes.  Such taxes were $44,190,000 and $47,967,000 for the
three-month periods ended September 27, 1996 and September 30, 1997,
respectively, and $129,470,000 and $137,062,000 for the nine-month periods ended
September 27, 1996 and September 30, 1997, respectively.

          Taxes.  No provision for income taxes is reflected in the financial
statements as the Company is a partnership for which taxable income and tax
deductions are passed through to the individual partners.

RESULTS OF OPERATIONS

NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTH PERIOD ENDED
SEPTEMBER 27, 1996

          Overview.  The Company's net revenues increased 5.8% to $491,533,000
in the first nine months of 1997 from $464,532,000 in the first nine months of
1996.  The increase was due principally to a 6.1% increase in fuel gallons and
an increase of 7.5% and 3.0% in non fuel and restaurant sales, respectively,
from the prior year.  The increases in revenues were offset by product costs,
associated with higher levels of revenue, higher general and administrative
expenses and slightly higher operating expenses over the prior year.  General
and administrative expenses increased to approximately $12.3 million from $9.7
million for the same period in the prior year.  This increase was principally
due to an increase in the accrual of certain employee expenses, certain
transition costs for new programs, professional and travel related expenses in
the current year.

          Fuel.  Revenues increased 5.7% to $366,186,000 in 1997 from
$346,426,000 in 1996.  Fuel revenues increased due to a 6.1% increase in fuel
volumes.  On a comparable unit basis fuel volumes increased 5.6%.  Fuel costs
were up in the first quarter, but have declined in the second and third
quarters.  On a per gallon basis, margins remained relatively flat compared to
fuel margins in the prior year's period.

          Non-Fuel. Revenues increased 7.5% to $88,923,000 in 1997 from
$82,739,000 in 1996. On a comparable unit basis sales increased 7.2%. Gross
margins increased 7.4% to $48,613,000 in 1997 from $45,281,000 in 1996. This
increase was due to improved cost management.

          Restaurant. Revenues increased 3.0% to $36,424,000 in 1997 from
$35,367,000 in 1996. On a comparable unit basis revenues increased 1.9%.
Management implemented certain menu changes at its Iron Skillet Restaurants in
the first quarter designed to enhance revenues, which is contributing to the
increased sales. Gross margin in the restaurants improved by approximately 4.0%
in total and approximately 3.0% on a comparable unit basis. The improvement is
due in part to management focus on costs and implementation of menu changes.

          Costs and Expenses.  Total costs and expenses increased 5.9% to
$474,194,000 in the first nine months of 1997 from $447,737,000 for the same
period in 1996.  On a comparable unit basis, total costs and expenses increased
5.6% in the first nine months of 1997.  Costs of sales increased $20,989,000 or
5.7% in 1997 from 1996.  The increase is due to higher fuel and product costs
for both fuel and non-fuel revenue streams.  Operating expenses increased
$2,360,000 or 3.9% to $62,642,000 in 1997.  The increase is primarily due to
employee related expenses.  General and administrative expenses increased to
approximately $12.3 million from $9.7 million in the prior year period.  This
increase was principally due to an increase in the accrual of certain employee
expenses, certain transition costs for new programs, professional and travel
related expenses in the current year.

                                       12
<PAGE>
 
          Interest Expense.  Interest expense decreased $338,000 to $15,537,000
during the first nine months of 1997 compared to 1996 due to lower interest
rates, combined with a reduction in amortization of deferred debt issuance
costs, offset by a higher level of debt outstanding.

          Income before extraordinary item. The Company reported income before
extraordinary item of $1,802,000 in 1997 as compared to $920,000 for 1996.

          Extraordinary item. Extraordinary item reflects a charge to earnings
of approximately $12.7 million relating to amendment of the Old Credit
Agreement, retirement of Old Notes and Debt Warrants and the write-off of
deferred debt issuance costs.

          Net loss. Net loss reflects loss of $10,943,000 for 1997 after the
extraordinary item compared to a reported net income of $920,000 for 1996.

QUARTER ENDED SEPTEMBER 30, 1997 COMPARED TO QUARTER ENDED SEPTEMBER 27, 1996

          Overview: The Company's net revenues increased 4.8% to $168,209,000 in
the third quarter of 1997 from $160,530,000 in the third quarter of 1996. This
increase was due principally to a 9.6% increase in fuel gallons and increases in
non fuel sales, partially offset by a decline in fuel selling price per gallon.
On a comparable unit basis fuel gallons increased 8.2%. The increase in revenues
was offset by volume related costs and slightly higher operating expenses over
the prior year period. General and administrative expenses increased to
approximately $4.4 million from $3.5 million in the prior year period. This
increase was principally due to an increase in the accrual of certain employee
expenses, professional and travel related expenses in the current period.

          Fuel. Revenues increased 3.4% to $123,090,000 in 1997 from
$119,066,000 in 1996. The increase was due to a 9.6% increase in fuel volumes,
offset by a 5.7% decrease in selling price per gallon sold. On a comparable unit
basis fuel volumes increased 8.2%. The decline in selling price was the result
of a reduction in wholesale product costs. On a per gallon basis, margins
increased approximately 2.8% compared to the prior year.

          Non-Fuel. Revenues increased 9.7% to $32,190,000 in 1997 from
$29,351,000 in 1996. On a comparable unit basis sales increased approximately
8.8%. Gross margins increased 8.1% to $17,599,000 in 1997 from $16,281,000 in
1996.

          Restaurant. Revenues increased 6.7% to $12,929,000 for the current
year period compared to $12,113,000 in the prior year. On a comparable unit
basis revenues increased 3.6%. Management implemented certain menu changes at
its Iron Skillet Restaurants in the first quarter designed to enhance revenues,
which is contributing to the increased sales. Gross margin in the restaurants
improved by approximately 3.8% on a comparable unit basis. The increase is due
in part to management focus on costs.

          Costs and Expenses.  Total costs and expenses increased 4.3% to
$160,967,000 in the third quarter of 1997 from $154,314,000 in 1996.  On a
comparable unit basis total costs and expenses increased 4.1% in the third
quarter of 1997.  Costs of sales increased  3.7% to $131,716,000 in 1997 from
$127,026,000 in 1996. The increase is due to volume costs associated with higher
revenue levels and the two acquired sites.  Operating expenses increased
$739,000 or 3.5% to $21,680,000 in 1997.  On a comparable unit basis operating
expenses increased 1.9% in 1997.  The increase is primarily due to employee
related expenses.  General and administrative expenses increased to
approximately $4.4 million from $3.5 million in the prior year period. This
increase was principally due to an increase in the accrual of certain employee
expenses, professional and travel related expenses in the current period.

          Interest Expense.  Interest expense decreased $125,000 to $5,125,000
during the third quarter of 1997 compared to 1996 due to lower interest rates,
combined with a reduction in amortization of deferred debt issuance costs,
offset by a higher level of debt outstanding.

                                       13
<PAGE>
 
          Income before extraordinary item. The Company reported income before
extraordinary item of $2,120,000 in 1997 as compared to $969,000 for 1996.

          Extraordinary item.  No extraordinary items were reflected during the
third quarter of 1997 or the third quarter of 1996.

          Net income.  Net income for the third quarter of 1997 was $2,120,000,
compared to $969,000 for the comparable period in  1996.

LIQUIDITY AND CAPITAL RESOURCES

          Capital expenditures totaled $12,013,000 for the first nine months of
1997 and $4,771,000 for 1996.  Included in the capital expenditures for 1997
were funds spent on the acquisition of the North Baltimore, Ohio and North
Little Rock, Arkansas locations.  Additional expenditures were due to rebranding
and fuel automation at various locations and the Company's information systems.
Capital expenditures for 1996 included funds spent on the construction of the
new Petro:Lube facilities in Medford, Oregon and Franklin, Kentucky.

          The Company has a $25.0 million revolving line of credit, that at
September 30, 1997 had letters of credit issued for approximately $4.1 million,
resulting in an availability of approximately $20.9 million.  As of  September
30, 1997 there were no borrowings on the line of credit.

          The term loans made to the Company under the Credit Facility Agreement
require the Company to make quarterly payments of principal.  Aggregate yearly
term loan principal payments under the New Credit Agreement are as follows: (i)
$2.0 million in 1997; (ii) $3.0 million in 1998; (iii) $4.5 million in 1999;
(iv) $5.5 million in 2000; (v) $1.5 million in 2001; (vi) $13.5 million in 2002;
and (vii) $14.0 million in 2003.

          The Company had negative working capital of $3,599,000 at September
30, 1997 and negative working capital of $13,863,000 at December 31, 1996.
Negative working capital is normal in the truckstop industry.  Diesel fuel
inventory turns every two to three days, which is significantly faster than
payment is required. The truckstop business is an industry that generates a
large amount of cash business with relatively low levels of inventories and
receivables as a percentage of revenues.  A substantial majority of the
Company's sales are cash (or the equivalent in the case of credit card sales or
sales paid for by check on a daily basis by third-party billing companies).

          Accrual of dividends on mandatorily redeemable preferred partnership
interests amounted to $1,165,000 for the nine months ended September 30, 1997.
The dividends are only payable in cash if permitted by the Company's then
existing debt instruments.  The Indenture governing the New Notes and New Credit
Agreement restrict payment of dividends on mandatorily redeemable preferred
partnership interests.

          Insurance:  The Company, up to certain limits, pays its own workers'
compensation and general liability claims.  Through September 30, 1997, the
Company has paid claims aggregating $1,500,000 and $605,000 relating to workers
compensation and general liability claims, respectively.  The Company believes
it provides an accrual adequate to cover both known and incurred, but not
reported, claims.

                                       14
<PAGE>
 
Recapitalization:
 
          In connection with the Recapitalization, the Old Credit Agreement was
amended and borrowings thereunder, 94% of existing Old Notes and 99% of
outstanding Debt Warrants were repaid with borrowings under the New Credit
Agreement, the net proceeds from the sale of the New Notes, a portion of the
proceeds of the Equity Investment and the proceeds of the Kirschner Investment.
The New Credit Agreement provides for a $25.0 million revolving credit facility
(the "Revolving Credit Facility"), a $40.0 million Expansion Facility, a $14.0
million Term Loan A and a $30.0 million Term Loan B.

          The Revolving Credit Facility permits the Company to borrow, repay and
reborrow up to $25.0 million at any time until the fifth anniversary of the date
of the recapitalization, the proceeds of which may be used for working capital
and other corporate purposes.  Up to $5.0 million of the Revolving Credit
Facility is available for the issuance of standby and documentary letters of
credit.  The Expansion Facility permits the Company to borrow, repay and
reborrow up to $40.0 million for the acquisition and development of new Stopping
Centers and stand-alone Petro:Lubes at any time until the third anniversary of
the date of the recapitalization.  Term Loan A is repayable in 15 quarterly
installments, the first of which was made on September 30, 1997.  Term Loan B is
repayable in 26 quarterly installments, the first of which was made on September
30, 1997.

          Borrowings under the New Credit Agreement are collateralized by
substantially all of the Company's assets and the partnership interests in the
Company held by Mobil Long Haul and Chartwell and guaranteed by each of the
Company's subsidiaries, which guarantees in turn are collateralized by
substantially all of such subsidiaries' assets.

          Management of the Company believes that internally generated funds,
together with amounts available under the Revolving Credit Facility, will be
sufficient to satisfy its cash requirements for operations through 1997 and the
foreseeable future thereafter.  The Company also expects that expansion and
future acquisitions would be financed from funds generated from operations,
borrowings under the Revolving Credit Facility and the Expansion Facility and
additional financings.

ENVIRONMENTAL

          Accruals for environmental matters are recorded in operating expenses
when it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated.  The measurement of environmental
liabilities is based on an evaluation of currently available facts with respect
to each individual site and considers factors such as existing technology,
presently enacted laws and regulations and prior experience in remediation of
contaminated sites.  Such liabilities are exclusive of claims against third
parties and are not discounted.

          The Company is subject to contingencies pursuant to environmental laws
and regulations that in the future may require the Company to take action to
correct the effects on the environment of prior disposal practices or releases
of chemical or petroleum substances by the Company or other parties.  The
Company has accrued for certain environmental remediation activities consistent
with the policy set forth in Note 3 to the consolidated financial statements.
At September 30, 1997, such accrual balance amounted to approximately $184,000
and, in management's opinion, was appropriate based on existing facts and
circumstances.  Under the most adverse circumstances, however, this potential
liability could be significantly higher.  In the event that future remediation
expenditures are in excess of amounts accrued, management does not anticipate
that they will have a material adverse effect on the consolidated financial
position or results of operations of the Company.  At September 30, 1997, the
Company has a receivable of approximately $240,000 related to recoveries of
certain remediation costs from third parties.

                                       15
<PAGE>
 
                          PART II.  OTHER INFORMATION

Item  1.    Legal Proceedings

          The Company is involved in various litigation incidental to the
business for which estimates of losses have been accrued, when appropriate.  In
the opinion of management, such proceedings will not have a material adverse
effect on financial position or results of operations.

Item  6.    Exhibits and Reports on Form 8-K

(a) Exhibits
      Exhibit 10 - Operating Lease Agreement between Petro Stopping Centers,
      L.P. and Quadland Corporation dated August 4, 1997

      Exhibit 27-Financial Data Schedule

 (b)  Reports on Form 8-K

      The Registrant filed a Form 8-K report on September 3, 1997 and a Form 8-
      K/A report on September 11, 1997, both related to - Item 4. - Changes in
      Registrant's Certifying Accountant

                                       16
<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.



                                           PETRO STOPPING CENTERS, L.P.
                                                 (Registrant)


Date:  November 12, 1997                      /s/ Larry J. Zine
                                           -----------------------
                                           Larry J. Zine
                                           Executive Vice President
                                           and Chief Financial Officer
                                            (Principal Financial Officer)

                                       17
<PAGE>
 
                                 EXHIBIT INDEX


Exhibit No.                                Exhibit Description
-----------                                -------------------

10                                         Lease Agreement, dated as of
                                           August 4, 1997, between the Company
                                           and Quadland Corporation.

27                                         Financial Data Schedule

                                       18