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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

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 1-13018



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PETRO STOPPING CENTERS, L.P.

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



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 74-2628339                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer 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



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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 ̈No  x

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large accelerated filer ̈ |  | Accelerated filer ̈ |  | Non-accelerated filer  x

Indicated by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes ̈No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest
practicable date. Not applicable.



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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PETRO STOPPING CENTERS, L.P.

UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)



|                                                  |  |                  |         |   |                   |   |         |  
|------------------------------------------------- |  | ---------------- | ------- | - | ----------------- | - | ------- | -
|                                                  |  | December 31,2005 |         |   | September 30,2006 |  
|Assets                                            |  |                  |         |   |                   |   |         |  
|Current assets:                                   |  |                  |         |   |                   |   |         |  
|Cash and cash equivalents                         |  | $                | 27,048  |   |                   | $ | 48,354  |  
|Trade accounts receivable, net                    |  |                  | 7,318   |   |                   |   | 9,388   |  
|Inventories, net                                  |  |                  | 32,223  |   |                   |   | 34,887  |  
|Other current assets                              |  |                  | 3,827   |   |                   |   | 2,597   |  
|Due from affiliates                               |  |                  | 3,981   |   |                   |   | 4,074   |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total current assets                              |  |                  | 74,397  |   |                   |   | 99,300  |  
|                                                  |  |                 
|Property and equipment, net                       |  |                  | 235,220 |   |                   |   | 236,536 |  
|Deferred debt issuance costs, net                 |  |                  | 10,536  |   |                   |   | 9,259   |  
|Other assets                                      |  |                  | 15,539  |   |                   |   | 15,531  |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total assets                                      |  | $                | 335,692 |   |                   | $ | 360,626 |  
|                                                  |  |                  |         |   |                   |   |         |  
|Liabilities and Partners Capital (Deficit)       |  |                  |         |   |                   |   |         |  
|Current liabilities:                              |  |                  |         |   |                   |   |         |  
|Other short-term borrowings                       |  | $                | 572     |   |                   | $ |        |  
|Trade accounts payable                            |  |                  | 27,212  |   |                   |   | 39,736  |  
|Accrued expenses and other current liabilities    |  |                  | 37,251  |   |                   |   | 30,747  |  
|Due to affiliates                                 |  |                  | 7,051   |   |                   |   | 10,846  |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total current liabilities                         |  |                  | 72,086  |   |                   |   | 81,329  |  
|                                                  |  |                 
|Other liabilities                                 |  |                  | 797     |   |                   |   | 1,134   |  
|Long-term debt                                    |  |                  | 271,250 |   |                   |   | 271,250 |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total long-term liabilities                       |  |                  | 272,047 |   |                   |   | 272,384 |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total liabilities                                 |  |                  | 344,133 |   |                   |   | 353,713 |  
|                                                  |  |                  |         |   |                   |   |         |  
|Commitments and contingencies                     |  |                  |         |   |                   |   |         |  
|                                                  |  |                 
|Partners capital (deficit)                       |  |                  |         |   |                   |   |         |  
|General partners                                 |  |                  | (167    | ) |                   |   | (132    | )
|Limited partners                                 |  |                  | (8,274  | ) |                   |   | 7,045   |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total partners capital (deficit)                 |  |                  | (8,441  | ) |                   |   | 6,913   |  
|                                                  |  |                  |         |   |                   |   |         |  
|Total liabilities and partners capital (deficit) |  | $                | 335,692 |   |                   | $ | 360,626 |  
|                                                  |  |                  |         |   |                   |   |         |  

See accompanying notes to unaudited consolidated condensed financial statements.



1



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PETRO STOPPING CENTERS, L.P.

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(in thousands)



|                                    |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|----------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                    |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|                                    |  | 2005                            |         |   | 2006                           |   |         | 2005 |  |   | 2006      |  
|Net revenues:                       |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Fuel (including motor fuel taxes)   |  | $                               | 431,357 |   |                                | $ | 489,333 |      |  | $ | 1,093,769 |   |  | $ | 1,418,599 |  
|Non-fuel                            |  |                                 | 77,711  |   |                                |   | 82,372  |      |  |   | 214,652   |   |  |   | 238,589   |  
|                                    |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Total net revenues                  |  |                                 | 509,068 |   |                                |   | 571,705 |      |  |   | 1,308,421 |   |  |   | 1,657,188 |  
|                                    |  |                                 |         |  
|Costs and expenses:                 |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Cost of sales                       |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Fuel (including motor fuel taxes)   |  |                                 | 410,388 |   |                                |   | 466,234 |      |  |   | 1,048,990 |   |  |   | 1,364,437 |  
|Non-fuel                            |  |                                 | 31,765  |   |                                |   | 33,963  |      |  |   | 86,380    |   |  |   | 97,294    |  
|Operating expenses                  |  |                                 | 41,749  |   |                                |   | 44,025  |      |  |   | 114,016   |   |  |   | 127,664   |  
|General and administrative          |  |                                 | 6,261   |   |                                |   | 6,150   |      |  |   | 15,526    |   |  |   | 15,719    |  
|Depreciation and amortization       |  |                                 | 4,239   |   |                                |   | 4,557   |      |  |   | 12,241    |   |  |   | 13,563    |  
|Loss on disposition of fixed assets |  |                                 | 15      |   |                                |   | 7       |      |  |   | 44        |   |  |   | 26        |  
|                                    |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Total costs and expenses            |  |                                 | 494,417 |   |                                |   | 554,936 |      |  |   | 1,277,197 |   |  |   | 1,618,703 |  
|                                    |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Operating income                    |  |                                 | 14,651  |   |                                |   | 16,769  |      |  |   | 31,224    |   |  |   | 38,485    |  
|                                    |  |                                 |         |  
|Write-down of land held for sale    |  |                                 |        |   |                                |   |        |      |  |   |          |   |  |   | (16       | )
|Equity in income of affiliate       |  |                                 | 320     |   |                                |   | 540     |      |  |   | 142       |   |  |   | 808       |  
|Interest income                     |  |                                 | 66      |   |                                |   | 256     |      |  |   | 185       |   |  |   | 472       |  
|Interest expense                    |  |                                 | (6,440  | ) |                                |   | (6,664  | )    |  |   | (18,185   | ) |  |   | (19,692   | )
|                                    |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  
|Net income                          |  | $                               | 8,597   |   |                                | $ | 10,901  |      |  | $ | 13,366    |   |  | $ | 20,057    |  
|                                    |  |                                 |         |   |                                |   |         |      |  |   |           |   |  |   |           |  

See accompanying notes to unaudited consolidated condensed financial statements.



2



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PETRO STOPPING CENTERS, L.P.

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN

PARTNERS
CAPITAL (DEFICIT)

For the Nine Months Ended September 30, 2005 and 2006

(in thousands)



|                                  |  |                         |      |   |                                  |   |         |                                |  |   |         |  
|--------------------------------- |  | ----------------------- | ---- | - | -------------------------------- | - | ------- | ------------------------------ |  | - | ------- | -
|                                  |  | GeneralPartnersDeficit |      |   | LimitedPartnersCapital(Deficit) |   |         | TotalPartnersCapital(Deficit) | 
|Balances, December 31, 2004       |  | $                       | (200 | ) |                                  | $ | (18,077 | )                              |  | $ | (18,277 | )
|                                  |  |                         |     
|Net income                        |  |                         | 34   |   |                                  |   | 13,332  |                                |  |   | 13,366  |  
|Partners operating distributions |  |                         |     |   |                                  |   | (4,852  | )                              |  |   | (4,852  | )
|Partners tax distributions       |  |                         | (6   | ) |                                  |   | (230    | )                              |  |   | (236    | )
|                                  |  |                         |      |   |                                  |   |         |                                |  |   |         |  
|Balances, September 30, 2005      |  | $                       | (172 | ) |                                  | $ | (9,827  | )                              |  | $ | (9,999  | )
|                                  |  |                         |      |   |                                  |   |         |                                |  |   |         |  
|Balances, December 31, 2005       |  | $                       | (167 | ) |                                  | $ | (8,274  | )                              |  | $ | (8,441  | )
|                                  |  |                         |     
|Net income                        |  |                         | 51   |   |                                  |   | 20,006  |                                |  |   | 20,057  |  
|Partners operating distributions |  |                         |     |   |                                  |   | (1,269  | )                              |  |   | (1,269  | )
|Partners tax distributions       |  |                         | (16  | ) |                                  |   | (3,418  | )                              |  |   | (3,434  | )
|                                  |  |                         |      |   |                                  |   |         |                                |  |   |         |  
|Balances, September 30, 2006      |  | $                       | (132 | ) |                                  | $ | 7,045   |                                |  | $ | 6,913   |  
|                                  |  |                         |      |   |                                  |   |         |                                |  |   |         |  

See accompanying notes to unaudited consolidated condensed financial statements.



3



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PETRO STOPPING CENTERS, L.P.

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                  |  |                                |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Nine Months EndedSeptember 30, |        
|                                                                                  |  | 2005                           |         |   | 2006 |  
|Cash flows from operating activities:                                             |  |                                |         |   |      |   |         |  
|Net income                                                                        |  | $                              | 13,366  |   |      | $ | 20,057  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                |         |   |      |   |         |  
|Depreciation and amortization                                                     |  |                                | 12,241  |   |      |   | 13,563  |  
|Deferred debt issuance cost amortization                                          |  |                                | 1,209   |   |      |   | 1,388   |  
|Provision for bad debt                                                            |  |                                | 521     |   |      |   | 122     |  
|Equity in income of affiliate                                                     |  |                                | (142    | ) |      |   | (808    | )
|Loss on disposition of fixed assets                                               |  |                                | 44      |   |      |   | 26      |  
|Write-down of land held for sale                                                  |  |                                |        |   |      |   | 16      |  
|Other operating activities                                                        |  |                                | 33      |   |      |   | 148     |  
|Increase (decrease) from changes in:                                              |  |                                |         |   |      |   |         |  
|Trade accounts receivable                                                         |  |                                | (5,022  | ) |      |   | (2,192  | )
|Inventories                                                                       |  |                                | (11,361 | ) |      |   | (2,664  | )
|Other current assets                                                              |  |                                | 76      |   |      |   | 1,230   |  
|Due from affiliates                                                               |  |                                | (802    | ) |      |   | (93     | )
|Due to affiliates                                                                 |  |                                | 1,778   |   |      |   | 3,795   |  
|Trade accounts payable                                                            |  |                                | 13,627  |   |      |   | 9,214   |  
|Accrued expenses and other current liabilities                                    |  |                                | (1,380  | ) |      |   | (6,194  | )
|                                                                                  |  |                                |         |   |      |   |         |  
|Net cash provided by operating activities                                         |  |                                | 24,188  |   |      |   | 37,608  |  
|                                                                                  |  |                                |         |   |      |   |         |  
|Cash flows from investing activities:                                             |  |                                |         |   |      |   |         |  
|Proceeds from disposition of fixed assets                                         |  |                                | 83      |   |      |   |        |  
|Purchases of property and equipment                                               |  |                                | (50,377 | ) |      |   | (14,421 | )
|(Increase) decrease in other assets, net                                          |  |                                | (507    | ) |      |   | 320     |  
|                                                                                  |  |                                |         |   |      |   |         |  
|Net cash used in investing activities                                             |  |                                | (50,801 | ) |      |   | (14,101 | )
|                                                                                  |  |                                |         |   |      |   |         |  
|Cash flows from financing activities:                                             |  |                                |         |   |      |   |         |  
|Repayments of bank revolver                                                       |  |                                | (43,200 | ) |      |   | (17,600 | )
|Proceeds from bank revolver                                                       |  |                                | 43,200  |   |      |   | 17,600  |  
|Repayments of other short-term borrowings                                         |  |                                |        |   |      |   | (572    | )
|Proceeds from long-term debt issuance                                             |  |                                | 25,000  |   |      |   |        |  
|Change in book cash overdraft                                                     |  |                                | 2,887   |   |      |   | 3,193   |  
|Partners operating distributions                                                 |  |                                | (4,852  | ) |      |   | (1,269  | )
|Partners minimum tax distributions                                               |  |                                | (7      | ) |      |   | (3,434  | )
|Payment of debt issuance costs                                                    |  |                                | (1,372  | ) |      |   | (119    | )
|                                                                                  |  |                                |         |   |      |   |         |  
|Net cash provided by (used in) financing activities                               |  |                                | 21,656  |   |      |   | (2,201  | )
|                                                                                  |  |                                |         |   |      |   |         |  
|Net (decrease) increase in cash and cash equivalents                              |  |                                | (4,957  | ) |      |   | 21,306  |  
|Cash and cash equivalents, beginning of period                                    |  |                                | 33,843  |   |      |   | 27,048  |  
|                                                                                  |  |                                |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                          |  | $                              | 28,886  |   |      | $ | 48,354  |  
|                                                                                  |  |                                |         |   |      |   |         |  
|Supplemental cash flow information - Interest paid during the period              |  | $                              | 21,741  |   |      | $ | 24,147  |  
|                                                                                  |  |                               
|Accrued tax distributions                                                         |  |                                | 229     |   |      |   |        |  

See accompanying notes to unaudited consolidated condensed financial statements.



4



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PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



(1) Basis of Presentation

The accompanying unaudited consolidated condensed financial statements, which include the accounts of Petro Stopping Centers, L.P. and its wholly owned subsidiaries, Petro Financial Corporation and Petro Distributing,
Inc. (collectively, the Company), have been prepared in accordance with the instructions to Form 10-Q and, therefore, certain financial information has been condensed and certain footnote disclosures have been omitted. Such information
and disclosures are normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles.

These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Annual Report of the Company on Form 10-K for the year ended December 31,
2005 (2005 Form 10-K). Capitalized terms used in this report and not defined herein have the meanings ascribed to such terms in the 2005 Form 10-K. In the opinion of management of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments necessary to present fairly the consolidated condensed financial position of the Company at December 31, 2005 and September 30, 2006, the consolidated condensed results of operations
for the three and nine months ended September 30, 2005 and 2006, and the changes in partners capital (deficit) and the consolidated condensed cash flows for the nine months ended September 30, 2005 and 2006. The results of operations
for the three and nine months ended September 30, 2006 are not necessarily indicative of the results to be expected for the full calendar year.

The Companys fuel revenues and related cost of sales include a significant amount of federal and state motor fuel taxes. Such taxes were $76.5 million and $78.0 million for the three months ended
September 30, 2005 and 2006, respectively, and $217.0 million and $237.5 million for the nine months ended September 30, 2005 and 2006, respectively.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current year presentation.

(2) Partners Capital (Deficit)

Under the Indenture for the 9.0% senior secured notes due 2012 and the agreement governing the Companys senior secured credit facilities, the Company is permitted to make distributions to Petro Stopping Centers Holdings, L.P. (the
Holding Partnership) in amounts sufficient to allow the Holding Partnership to pay interest on the Holding Partnerships senior third secured discount notes due 2014 and to pay for taxes and administrative expenses. For the nine
months ended September 30, 2006, the Company paid approximately $4.7 million with respect to these distributions. The Company believes it will distribute approximately $3.4 million in additional distributions to the Holding Partnership during
the remainder of 2006 for interest payments, taxes, and administrative expenses.

(3) Segments

The Company has two reportable operating segments, company-operated truck stops and franchise operations.

As of September 30, 2005 and 2006, the Company operated 41 and 43 multi-service truck stops in the United States, respectively. The Company has
aggregated its company-operated truck stops into one reportable operating segment based on the distribution of products and services under one common site facility, classified as a multi-service truck stop. The revenues generated from the
Companys company-operated truck stops were $507.3 million and $570.2 million for the three months ended September 30, 2005 and 2006, respectively, and $1.3 billion and $1.7 billion for the nine months ended September 30, 2005 and
2006, respectively.



(continued)

5



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PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



As of September 30, 2005 and 2006, the Company was a franchisor to 22 and 23 Petro Stopping
Center locations, respectively. The Company collects royalties and fees in exchange for the use of its tradenames and trademarks and for certain services provided to the franchisees. Franchise fees are based generally upon a percentage of the
franchisees sales. The revenues generated from the Companys franchise operations were $1.8 million and $1.5 million for the three months ended September 30, 2005 and 2006, respectively, and $4.6 million for each of the nine months
ended September 30, 2005 and 2006. Franchise operations revenues, which include initial franchise fees and other revenue types, are combined in non-fuel revenues reported on the accompanying unaudited consolidated condensed statements of
operations. The Company does not allocate any expenses in measuring this segments profit and loss, nor does it believe there are any significant financial commitments or obligations resulting from these franchise agreements.

The following table contains financial information of the Companys reportable operating segments:

REPORTABLE OPERATING SEGMENT INFORMATION



|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|---------------------------- |  | -------------------------------- | ------- | ------------------------------- | - | ------- |  | ---- | --------- |  | - | ---------
|                             |  | Three Months Ended September 30, |         | Nine Months Ended September 30,
|                             |  | 2005                             |         | 2006                            |   | 2005    |  | 2006
|                             |  | (in thousands)                  
|Income Statement Data:       |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Net revenues:                |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Company-operated truck stops |  | $                                | 507,278 |                                 | $ | 570,221 |  | $    | 1,303,780 |  | $ | 1,652,633
|Franchise operations         |  |                                  | 1,790   |                                 |   | 1,484   |  |      | 4,641     |  |   | 4,555    
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total net revenues           |  | $                                | 509,068 |                                 | $ | 571,705 |  | $    | 1,308,421 |  | $ | 1,657,188
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Operating income:            |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Company-operated truck stops |  | $                                | 12,861  |                                 | $ | 15,285  |  | $    | 26,583    |  | $ | 33,930   
|Franchise operations         |  |                                  | 1,790   |                                 |   | 1,484   |  |      | 4,641     |  |   | 4,555    
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total operating income       |  | $                                | 14,651  |                                 | $ | 16,769  |  | $    | 31,224    |  | $ | 38,485   
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Balance Sheet Data:          |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|(at end of period)           |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total assets:                |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Company-operated truck stops |  |                                  |         |                                 |   |         |  | $    | 339,593   |  | $ | 360,626  
|Franchise operations         |  |                                  |         |                                 |   |         |  |      |          |  |   |         
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total assets                 |  |                                  |         |                                 |   |         |  | $    | 339,593   |  | $ | 360,626  
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          

(4) Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 123 (revised
2004), Share-Based Payment, which replaces the original Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, issued in October 1995. This standard addresses the accounting for
transactions where an entity obtains employee services in share-based payment transactions. The effective dates vary depending on the type of reporting entity. Non-public companies, such as the Company, must apply the revised standard as of the
beginning of the first annual reporting period that begins after December 15, 2005. Management has adopted this revised standard and concluded that it had no impact on its consolidated financial position or results of operations.

In March 2006, the FASB issued Statement of Financial Accounting Standards No. 156, Accounting for Servicing of Financial Assets (as
amended), an amendment of FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This standard focuses on the recognition and valuation for all separately
recognized servicing assets and liabilities. It requires that entities



(continued)

6



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PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



separately recognize a servicing asset or liability when they undertake, through a servicing contract, an obligation to service a financial asset. The
effective date for this standard is for fiscal years that begin after September 15, 2006. Management is evaluating the impact of this standard on its consolidated financial statements. Management does not believe that the adoption of this
standard will have a significant impact on the Companys results of operations.

In September 2006, the FASB issued Statement of
Financial Accounting Standards No. 157, Fair Value Measurements. The purpose of this standard is to define fair value and to establish a framework for measuring fair value in generally accepted accounting principles. Although the
standard does expand disclosure requirements about fair value measurements, it does not require any new fair value measurements. The effective date for this standard is for financial statements issued for fiscal years beginning after
November 15, 2007, and interim period within those fiscal years. Management is evaluating the impact of this standard on its consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  An Amendment of FASB
Statements No. 87, 88, 106, and 132(R). This standard requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability and to recognize changes in that funded status
through comprehensive income. The standard also provides guidance as to when to measure the funded status of such plans. The effective date for this standard for companies without publicly traded equity securities, such as the Company, is for fiscal
years ending after June 15, 2007. Management has evaluated this standard and concluded that it had no impact on its consolidated financial statements.



7



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain
sections of this report, including Managements Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market Risk, contain various forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which represent managements expectations or beliefs concerning future events that involve risks and
uncertainties. These statements may be accompanied by words such as believe, intend, estimate, may, could, project, anticipate, expect, or
predict, that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ
materially from the results referred to in the forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties that may cause our actual results to be materially different from any future
results expressed or implied by us in those statements. Some of these risks are described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2005 (the 2005 Form 10-K). These risk factors should
be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

All statements, other than statements of historical facts included in this report, may be considered forward-looking statements. The forward-looking statements are included in, without limitation, Overview of Operating
Results, Consolidated Revenues, Results of Operations, Network Development, Liquidity and Capital Resources, and Critical Accounting Policies. In
addition, in the preparation of our unaudited consolidated condensed financial statements, we make various estimates and assumptions that are by their nature forward-looking statements.

Reporting Format

We have two reportable operating segments, company-operated truck stops and
franchise operations.

As of September 30, 2005 and 2006, we operated 41 and 43 multi-service truck stops in the United States,
respectively. We have aggregated our company-operated truck stops into one reportable operating segment based on the distribution of products and services under one common site facility, classified as a multi-service truck stop. The revenues
generated from our company-operated truck stops were $507.3 million and $570.2 million for the three months ended September 30, 2005 and 2006, respectively, and $1.3 billion and $1.7 billion for the nine months ended September 30, 2005 and
2006, respectively.

As of September 30, 2005 and 2006, we were a franchisor to 22 and 23 Petro Stopping Center locations,
respectively. We collect royalties and fees in exchange for the use of our tradenames and trademarks and for certain services provided to the franchisees. Franchise fees are based generally upon a percentage of the franchisees sales. The
revenues generated from our franchise operations were $1.8 million and $1.5 million for the three months ended September 30, 2005 and 2006, respectively, and $4.6 million for each of the nine months ended September 30, 2005 and 2006.
Franchise operations revenues, which include initial franchise fees and other revenue types, are combined in non-fuel revenues reported on our accompanying unaudited consolidated condensed statements of operations. We do not allocate any expenses in
measuring this segments profit and loss, nor do we believe there are any significant financial commitments or obligations resulting from these franchise agreements.

No provision for federal income taxes is reflected in the accompanying unaudited consolidated condensed financial statements because we are a partnership for which federal taxable income and federal tax deductions are
passed through to our individual partners.



8



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The following table contains financial information of our reportable operating segments:

REPORTABLE OPERATING SEGMENT INFORMATION



|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|---------------------------- |  | -------------------------------- | ------- | ------------------------------- | - | ------- |  | ---- | --------- |  | - | ---------
|                             |  | Three Months Ended September 30, |         | Nine Months Ended September 30,
|                             |  | 2005                             |         | 2006                            |   | 2005    |  | 2006
|                             |  | (in thousands)                  
|Income Statement Data:       |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Net revenues:                |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Company-operated truck stops |  | $                                | 507,278 |                                 | $ | 570,221 |  | $    | 1,303,780 |  | $ | 1,652,633
|Franchise operations         |  |                                  | 1,790   |                                 |   | 1,484   |  |      | 4,641     |  |   | 4,555    
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total net revenues           |  | $                                | 509,068 |                                 | $ | 571,705 |  | $    | 1,308,421 |  | $ | 1,657,188
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Operating income:            |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Company-operated truck stops |  | $                                | 12,861  |                                 | $ | 15,285  |  | $    | 26,583    |  | $ | 33,930   
|Franchise operations         |  |                                  | 1,790   |                                 |   | 1,484   |  |      | 4,641     |  |   | 4,555    
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total operating income       |  | $                                | 14,651  |                                 | $ | 16,769  |  | $    | 31,224    |  | $ | 38,485   
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Balance Sheet Data:          |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|(at end of period)           |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total assets:                |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Company-operated truck stops |  |                                  |         |                                 |   |         |  | $    | 339,593   |  | $ | 360,626  
|Franchise operations         |  |                                  |         |                                 |   |         |  |      |          |  |   |         
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          
|Total assets                 |  |                                  |         |                                 |   |         |  | $    | 339,593   |  | $ | 360,626  
|                             |  |                                  |         |                                 |   |         |  |      |           |  |   |          

Overview of Operating Results

During the nine months ended September 30, 2006, our net revenues were $1.7 billion, a 26.7% increase over the prior year period. The increase was mainly due to higher fuel revenues, as a result of an increase in
our average retail-selling price of fuel and increased fuel gallons sold, improved non-fuel sales, and the addition of six new sites, five of which were opened during 2005. Our net income of $20.1 million was $6.7 million higher than our net income
for the nine months ended September 30, 2005, due primarily to a $7.3 increase in operating income, offset by a $1.5 million increase in interest expense caused by an increase in our total outstanding debt.

During the third quarter of 2006, our net revenues were $571.7 million, a 12.3% increase over prior years quarter. The increase was mainly due to
higher fuel revenues, as a result of an increase in our average retail-selling price of fuel, improved non-fuel sales, and the addition of our new sites. Our net income of $10.9 million was $2.3 million higher compared to the prior years
quarter.

We derive our revenues from:



| |  |  | The sale of diesel and gasoline fuels;
| | - |  | --------------------------------------



| |  |  | Non-fuel items, including the sale of merchandise and offering of services such as truck tire sales and installation, truck maintenance and repair services, on-site vendor lease
income, showers, laundry, video games, franchise revenues, fast-food operations, and other operations; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Iron Skillet restaurant operations.
| | - |  | -----------------------------------



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Consolidated Revenues

The following table sets forth our total consolidated revenues by major source:



|                                |  |                                  |         |  |                                 |   |  |      |         |  |       |   |  |   |           |  |       |   |  |   |           |  |       |  
|------------------------------- |  | -------------------------------- | ------- |  | ------------------------------- | - |  | ---- | ------- |  | ----- | - |  | - | --------- |  | ----- | - |  | - | --------- |  | ----- | -
|                                |  | Three Months Ended September 30, |         |  | Nine Months Ended September 30, |  
|                                |  | 2005                             |         |  | 2006                            |   |  | 2005 |         |  | 2006  |  
|                                |  | (dollars in thousands)           |        
|Fuel                            |  | $                                | 431,357 |  | 84.7                            | % |  | $    | 489,333 |  | 85.6  | % |  | $ | 1,093,769 |  | 83.6  | % |  | $ | 1,418,599 |  | 85.6  | %
|Non-Fuel (excluding restaurant) |  |                                  | 57,828  |  | 11.4                            | % |  |      | 61,334  |  | 10.7  | % |  |   | 158,366   |  | 12.1  | % |  |   | 177,041   |  | 10.7  | %
|Restaurant                      |  |                                  | 19,883  |  | 3.9                             | % |  |      | 21,038  |  | 3.7   | % |  |   | 56,286    |  | 4.3   | % |  |   | 61,548    |  | 3.7   | %
|                                |  |                                  |         |  |                                 |   |  |      |         |  |       |   |  |   |           |  |       |   |  |   |           |  |       |  
|Total Net Revenues              |  | $                                | 509,068 |  | 100.0                           | % |  | $    | 571,705 |  | 100.0 | % |  | $ | 1,308,421 |  | 100.0 | % |  | $ | 1,657,188 |  | 100.0 | %
|                                |  |                                  |         |  |                                 |   |  |      |         |  |       |   |  |   |           |  |       |   |  |   |           |  |       |  

Our fuel revenues and related cost of sales include a significant amount of federal and state
motor fuel taxes. Such taxes were $76.5 million and $78.0 million for the three months ended September 30, 2005 and 2006, respectively, and $217.0 million and $237.5 million for the nine months ended September 30, 2005 and 2006,
respectively.

Results of Operations

Nine Months
Ended September 30, 2006 Compared to Nine Months Ended September 30, 2005

Overview.Net income increased 50.1% to
$20.1 million for the nine months ended September 30, 2006 compared to net income of $13.4 million for the nine months ended September 30, 2005, due primarily to higher operating income, offset by higher interest expense caused by an
increase in our total outstanding debt. Our net revenues increased 26.7% to $1.7 billion for the nine months ended September 30, 2006 from $1.3 billion in the prior year period. The increase was mainly due to (i) higher fuel revenues, as a
result of an increase in our average retail-selling price of fuel related to market conditions and an increase in fuel gallons sold, (ii) improved non-fuel sales, and (iii) the addition of six new sites. On a comparable unit basis, net
revenues increased by 20.8% to $1.5 billion for the nine months ended September 30, 2006 from $1.2 billion in the prior year period. The increase was mainly due to (i) higher fuel revenues, as a result of an increase in our average
retail-selling price of fuel and increased fuel gallons sold and (ii) improved non-fuel sales. A Petro Stopping Center is considered a comparable unit in 2006 if we operated it for twelve months in 2005. During the nine months ended
September 30, 2006, we had 36 company-operated comparable units out of a total of 42 company-operated units, in each case excluding our jointly-owned Wheeler Ridge facility, which is reflected in equity in income of affiliates. Operating
expenses increased 12.0% to $127.7 million from $114.0 million in the prior year period, due primarily to the addition of our six new sites, higher employee-related costs, higher credit card fees associated with the increased fuel revenues, and
increased utility costs.

Fuel.Revenues increased 29.7% to $1.4 billion for the nine months ended September 30, 2006 compared
to $1.1 billion for the nine months ended September 30, 2005. Fuel revenues increased due to a 19.8% increase in our average retail-selling price per gallon compared to the prior year period related to market conditions, as well as an 8.3%
increase in our total fuel gallons sold from the prior year period, which was partially due to the addition of our six new sites. Gross profit increased by 21.0% to $54.2 million for the nine months ended September 30, 2006 compared to $44.8
million in the prior year period, despite a 30.1% increase in our cost of fuel. On a comparable unit basis, fuel revenues increased 24.1% due to a 20.0% increase in our average retail-selling price per gallon, as well as a 3.4% increase in our total
fuel gallons sold compared to the prior year period. On a comparable unit basis, gross profit increased by 14.1%, or $6.0 million, for the nine months ended September 30, 2006 compared to the prior year period.

Non-Fuel (excluding Restaurant). Revenues increased 11.8% to $177.0 million for the nine months ended September 30, 2006 compared to $158.4
million in the prior year period. Gross profit increased 11.1% to $99.2 million for the nine months ended September 30, 2006 compared to $89.3 million in the prior year period. The increases in revenues and gross profit were due primarily to a
12.6%, or $18.6 million, increase in general merchandise sales at our retail stores and increased sales at our Petro:Lubes, which were primarily due to the addition of our six new sites. On a comparable unit basis, revenues increased 5.2%, or $7.8
million, and gross profit increased 4.6%, or $3.9 million, compared to the prior year period.



10



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Restaurant. Revenues increased 9.3% to $61.5 million for the nine months ended September 30,
2006 compared to $56.3 million in the prior year period, due primarily to the addition of six new sites, five of which had restaurant operations. Gross profits in the restaurant increased by 8.1%, or $3.1 million, compared to the prior year period,
due primarily to the increase in revenues due to the addition of our new sites, partially offset by an increase in food costs. On a comparable unit basis, revenues increased 2.0%, or $1.0 million, for the nine months ended September 30, 2006
compared to $53.1 million in the prior year period, mostly due to an increase of 2.0% in our average ticket selling price and slight increase in our customer count. On a comparable unit basis, gross profit increased 0.8%, or $286,000, from the prior
year period.

Costs and Expenses. Total costs and expenses increased 26.7% to $1.6 billion for the nine months ended
September 30, 2006 compared to $1.3 billion in the prior year period. Cost of sales increased 28.7%, or $326.4 million, from the prior year period mainly due to a 30.1% increase in our cost of fuel, partially due to the addition of our six new
sites. Operating expenses increased 12.0%, or $13.6 million, to $127.7 million compared to the prior year period, due primarily to the addition of our six new sites, higher employee-related costs, higher credit card fees associated with the
increased fuel revenues, and increased utility costs. General and administrative expenses increased by 1.2%, or $194,000, from the prior year period, due primarily to higher employee-related costs, offset by lower professional services. On a
comparable unit basis, total costs and expenses increased 20.9%, or $253.7 million, from the prior year period. On a comparable unit basis, cost of sales increased 23.1%, or $249.4 million, from the prior year period, due primarily to a 24.5%
increase in our cost of fuel. On a comparable unit basis, operating expenses increased 3.3%, or $3.5 million, to $110.4 million compared to the prior year period, due primarily to higher employee-related costs, higher credit card fees associated
with the increased fuel revenues, and increased utility costs.

Equity in Income of Affiliate.For the nine months ended
September 30, 2006, we recognized income of $808,000 related to our investment in the Wheeler Ridge facility in Southern California compared to income of $142,000 for the prior year period.

Interest Expense. Interest expense increased 8.3% to $19.7 million compared to $18.2 million in the prior year period, due primarily to an
increase in our total debt outstanding in the current period related to the additional $25.0 million 9% Senior Secured Notes due 2012 issued on July 26, 2005.

Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005

Overview.Net
income increased 26.8% to $10.9 million for the quarter ended September 30, 2006 compared to net income of $8.6 million for the quarter ended September 30, 2005. Our net revenues increased 12.3% to $571.7 million for the quarter ended
September 30, 2006 from $509.1 million in the prior year quarter. The increase was mainly due to (i) higher fuel revenues, as a result of an increase in our average retail-selling price of fuel related to market conditions,
(ii) improved non-fuel sales, and (iii) the addition of our new sites. On a comparable unit basis, net revenues increased by 8.9% to $516.5 million for the quarter ended September 30, 2006 from $474.4 million in the prior year
quarter. The increase was mainly due to (i) higher fuel revenues, as a result of an increase in our average retail-selling price of fuel, offset by decreased fuel gallons sold and (ii) improved non-fuel sales. A Petro Stopping Center is
considered a comparable unit in 2006 if we operated it for twelve months in 2005. During the quarter ended September 30, 2006, we had 36 company-operated comparable units out of a total of 42 company-operated units, in each case excluding our
jointly-owned Wheeler Ridge facility, which is reflected in equity in income of affiliates. Operating expenses increased 5.5% to $44.0 million from $41.7 million in the prior year quarter, due primarily to the addition of our new sites.

Fuel.Revenues increased 13.4% to $489.3 million for the quarter ended September 30, 2006 compared to $431.4 million for the quarter ended
September 30, 2005. Fuel revenues increased due to a 12.5% increase in our average retail-selling price per gallon compared to the prior year quarter related to market conditions, as well as a 0.8% increase in our total fuel gallons sold from
the prior year quarter, which was due to the addition of our new sites. Gross profit increased by 10.2% to $23.1 million for the quarter



11



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ended September 30, 2006 compared to $21.0 million in the prior year quarter, despite a 13.6% increase in our cost of fuel. On a comparable unit basis,
fuel revenues increased 10.1% due to a 12.5% increase in our average retail-selling price per gallon compared to the prior year quarter. On a comparable unit basis, gross profit increased by 8.4%, or $1.6 million, for the quarter ended
September 30, 2006 compared to the prior year quarter.

Non-Fuel (excluding Restaurant). Revenues increased 6.1% to $61.3
million for the quarter ended September 30, 2006 compared to $57.8 million in the prior year quarter. Gross profit increased 6.0% to $34.2 million for the quarter ended September 30, 2006 compared to $32.3 million in the prior year
quarter. The increases in revenues and gross profit were due primarily to a 7.2%, or $3.9 million, increase in general merchandise sales at our retail stores and increased sales at our Petro:Lubes, which were partially due to the addition of our new
sites. On a comparable unit basis, revenues increased 2.0%, or $1.1 million, and gross profit increased 2.3%, or $688,000, compared to the prior year quarter.

Restaurant. Revenues increased 5.8% to $21.0 million for the quarter ended September 30, 2006 compared to $19.9 million in the prior year quarter, due primarily to the addition of our new sites. Gross
profits in the restaurant improved by 3.8%, or $516,000, compared to the prior year quarter, due primarily to the increase in revenues due to the addition of our new sites, partially offset by an increase in food costs. On a comparable unit basis,
revenues increased by $257,000 to $18.4 million for the quarter ended September 30, 2006 compared to $18.1 million in the prior year quarter, mostly due to an increase of 3.7% in our average ticket selling price, partially offset by a 2.1%
decrease in our customer count. On a comparable unit basis, gross profits of $12.4 million remained relatively flat compared to the prior year quarter.

Costs and Expenses. Total costs and expenses increased 12.2% to $554.9 million for the quarter ended September 30, 2006 compared to $494.4 million in the prior year quarter. Cost of sales increased 13.1%,
or $58.0 million, from the prior year quarter mainly due to a 13.6% increase in our cost of fuel, partially due to the addition of our new sites. Operating expenses increased 5.5%, or $2.3 million, to $44.0 million compared to the prior year
quarter, due primarily to the addition of our new sites. General and administrative expenses decreased by 1.8%, or $110,000, compared to the prior year quarter, due primarily to lower costs associated with bad debt. On a comparable unit basis, total
costs and expenses increased 8.6%, or $39.8 million, from the prior year quarter. On a comparable unit basis, cost of sales increased 9.7%, or $39.9 million, from the prior year quarter, due primarily to a 10.2% increase in our cost of fuel. On a
comparable unit basis, operating expenses remained relatively flat compared to the prior year quarter.

Equity in Income of Affiliate.For the quarter ended September 30, 2006, we recognized income of $540,000 related to our investment in the Wheeler Ridge facility in Southern California compared to income of $320,000 for the prior year quarter.

Interest Expense. Interest expense increased 3.5% to $6.7 million compared to $6.4 million in the prior year quarter, due primarily to the
increase in our total debt outstanding in the current quarter related to the additional $25.0 million 9% Senior Secured Notes due 2012 issued on July 26, 2005.

Network Development

The following table sets forth the development of our Petro Stopping Centers
network since 2002:



|                             |  |                     |  |      |  |      |  |      |  |     
|---------------------------- |  | ------------------- |  | ---- |  | ---- |  | ---- |  | ----
|                             |  | As of September 30,
|                             |  | 2002                |  | 2003 |  | 2004 |  | 2005 |  | 2006
|Company-operated             |  | 36                  |  | 37   |  | 37   |  | 41   |  | 43  
|Franchise operation          |  | 21                  |  | 23   |  | 23   |  | 22   |  | 23  
|                             |  |                     |  |      |  |      |  |      |  |     
|Total Petro Stopping Centers |  | 57                  |  | 60   |  | 60   |  | 63   |  | 66  
|                             |  |                     |  |      |  |      |  |      |  |     



12



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The following table sets forth information on currently existing Petro Stopping Centers opened or
acquired from September 30, 2002 through September 30, 2006, all but four of which are full-sized facilities.



|                       |  |               
|---------------------- |  | --------------
|Location               |  | Date Opened   
|Company-operated:      |  |               
|Sparks, Nevada         |  | December 2002 
|New Paris, Ohio        |  | February 2005 
|York, Nebraska         |  | March 2005    
|Kingsland, Georgia     |  | March 2005    
|Bordentown, New Jersey |  | July 2005     
|Waterloo, New York     |  | November 2005 
|Spokane, Washington    |  | September 2006
|                       | 
|Franchise operation:   |  |               
|Gaston, Indiana        |  | October 2002  
|Remington, Indiana     |  | July 2005     
|Colby, Kansas          |  | November 2005 
|Gadsden, Alabama       |  | November 2005 
|Napoleon, Ohio         |  | August 2006   

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from our operations and the available borrowings under the revolving credit portion of our senior
secured credit facility.

Cash Flows From Operations

We had cash flows from operations of $24.2 million and $37.6 million for the nine months ended September 30, 2005 and 2006, respectively. The increase in cash flows was due primarily to variations in the timing
of payments for trade accounts payable and due to affiliates for fuel purchases and the increase in operating income for the nine months ended September 30, 2006, partially offset by variations in the timing of payments for other current
liabilities.

We had working capital of $2.3 million and $18.0 million at December 31, 2005 and September 30, 2006, respectively.
Negative working capital is normal in the truck stop industry since diesel fuel inventory turns approximately every two to three days, but payment for fuel purchases can generally be made over a longer period of time; however, due to our senior
secured credit facility and the associated reduction in our current portion of long-term debt, we had positive working capital at December 31, 2005 and September 30, 2006. Approximately 92.2% of our total sales are cash sales (or the
equivalent in the case of sales paid for on credit, which are funded on a daily basis by third-party billing companies).

Available Borrowings Under the
Revolving Credit Facility

Available borrowing capacity under the revolving credit portion of our senior secured credit facility was
$30.0 million and $28.1 million at December 31, 2005 and September 30, 2006, respectively, subject to certain conditions.

On
February 3, 2006, we amended our senior secured credit agreement to permit (i) a joint venture arrangement with Alon USA, Interests, LLC or any of its affiliates or subsidiaries (Alon) for the purpose of developing a travel
center in the area of Midland, Texas (the Asset Joint Venture); (ii) a joint venture arrangement with Alon for the purpose of operating certain aspects of the Asset Joint Venture; and (iii) the transfer of $5,000,000 in cash to
Petro Distributing, Inc. in the form of an equity contribution, for the purpose of facilitating Petro Distributing, Inc.s purchase of gasoline, fuel and similar products from its vendors.

On July 14, 2006, we amended our senior secured credit agreement to, among other things: (i) permit an increase in the maximum amount of
guarantees permitted under our senior secured credit agreement to an aggregate amount not to exceed $15.0 million at any time outstanding, (ii) obtain the release of the Collateral



13



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Agents (as defined in our senior secured credit agreement) lien on approximately 15 acres of raw land located in Girard, Ohio, and (iii) exclude
any future guarantees of indebtedness related to the potential Alon Asset Joint Venture from the calculation of Consolidated Leverage Ratio (as defined in our senior secured credit agreement).

At September 30, 2006, we had senior secured credit facilities in an aggregate principal amount of $61.3 million, consisting of a four-year
revolving credit facility of $40.0 million (of which $35.0 million is available for cash draws and $5.0 million is restricted to the issuance of letters of credit), and a four-year term loan facility of $21.3 million. Any funds drawn on our senior
secured credit facilities are secured by substantially all of our assets and the guarantees of each of our subsidiaries. As of September 30, 2006, we were in compliance with all financial covenants under our senior secured credit facilities.

Under the revolving credit portion of our senior secured credit facilities, $40.0 million is available on a revolving basis until maturity
at February 9, 2008. Interest on drawn funds is paid at maturity or quarterly if the term is greater than three months at a current spread of 1.50% above the banks base rate or 2.25% over the Eurodollar rate (the rate is determined at the
time of borrowing, at our option). Commitment fees of 0.50% per quarter on undrawn funds are paid quarterly. At September 30, 2006, we had no borrowings outstanding under the revolving credit portion of our senior secured credit facilities
and had $11.9 million in standby letters of credit outstanding, which reduce our borrowing capacity under the revolving credit portion of our senior secured credit facilities on a dollar for dollar basis. Approximately $6.8 million of these letters
of credit are required to be posted with our insurance carriers in connection with our obtaining liability and other insurance coverage.

As of September 30, 2006, we had $21.3 million outstanding under our term loan facility, which matures on February 9, 2008.

Short-Term Requirements

Our primary short-term cash requirements include working capital, employment agreements,
distributions to Petro Stopping Centers Holdings, L.P. (the Holding Partnership), interest on our debt, and capital expenditures. We believe that cash flows from operations and our revolving credit facility should be sufficient to
satisfy our short-term operating and capital needs.

On January 31, 2006, we entered into a purchase agreement to acquire real
property located in Fairfield, Virginia for the construction of a future Petro Stopping Center for $1.4 million. On March 1, 2006, this acquisition was completed.

On August 3, 2006, we entered into a purchase agreement to acquire an existing truck stop in Crowley, Louisiana for the operation of a future Petro Stopping Center for $2.9 million. On September 1, 2006,
this acquisition was completed. This non-operational facility is currently undergoing remodeling and is scheduled for completion during the first quarter of 2007.

Capital expenditures for our existing Petro Stopping Centers totaled $8.2 million for the nine months ended September 30, 2006. We currently expect to invest approximately $4.0 million during the remainder of
2006 on capital expenditures related to regular capital maintenance and improvement projects, as well as volume building projects. Capital expenditures related to new sites on our truck stop network totaled $6.2 million for the nine months ended
September 30, 2006, which includes $1.4 million for the acquisition of land in Fairfield, Virginia and $2.9 million for the acquisition of an existing truck stop in Crowley, Louisiana. We currently expect to invest approximately $2.2 million on
capital expenditures related to new sites during the remainder of 2006. These capital outlays will be funded through borrowings under our senior secured credit facilities and internally generated cash.

Under our Indenture for the 9.0% senior secured notes due 2012 and the agreement governing our senior secured credit facilities, we are permitted to make
distributions to the Holding Partnership in amounts sufficient to allow the Holding Partnership to pay interest on its senior third secured discount notes due 2014 and to pay for taxes and administrative expenses. For the nine months ended
September 30, 2006, we paid approximately $4.7 million with respect to these distributions. We believe we will distribute approximately $3.4 million in additional distributions to the Holding Partnership during the remainder of 2006 for
interest payments, taxes, and administrative expenses.



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Long-Term Requirements

Our anticipated long-term cash requirements include indebtedness and operating leases. Other possible long-term uses of cash include:



| |  |  | expansion of our network through building or acquiring new sites;
| | - |  | -----------------------------------------------------------------



| |  |  | distributions to the Holding Partnership; and
| | - |  | ---------------------------------------------



| |  |  | capital improvements to existing locations.
| | - |  | -------------------------------------------

Based on the
foregoing, we believe that internally generated funds, together with amounts available under our senior secured credit facilities, will be sufficient to satisfy our cash requirements for operations and debt service through 2006 and the foreseeable
future thereafter; provided however, that our ability to satisfy such obligations and maintain covenant compliance under our senior secured credit facilities is dependent upon a number of factors, some of which are beyond our control, including
economic, capital market, and competitive conditions. Some of these risks are described in Part I, Item 1A of our 2005 Form 10-K.

Critical
Accounting Policies

The preparation of our unaudited consolidated condensed financial statements in conformity with generally accepted
accounting principles requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in our unaudited consolidated
condensed financial statements and accompanying notes. The U.S. Securities and Exchange Commission has defined a companys critical accounting policies as the ones that are most important to the portrayal of the companys financial
condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Based on this definition, we have
identified our critical accounting policies as including those addressed below. We also have other key accounting policies that involve the use of estimates, judgments, and assumptions. See Note 2 in Notes to Consolidated Financial Statements
included in our 2005 Form 10-K for additional discussion of these accounting policies. We believe that our estimates and assumptions are reasonable, based upon information presently available, however, actual results may differ from these estimates
under different assumptions or conditions.

Partial Self-Insurance

We are partially self-insured, paying our own employment practices, general liability, workers compensation, and group health benefit claims, up to stop-loss amounts ranging from $100,000 to $250,000 on a per
occurrence basis. Provisions established under these partial self-insurance programs are made for both estimated losses on known claims and claims incurred but not reported, in both cases based on claims history. The most significant risk of this
methodology is its dependence on claims history, which is not always indicative of future claims. Revisions of estimates based on historical claims data have the effect of increasing or decreasing the related required provisions and thus may impact
our net income for the period. If our estimates are inaccurate, our expenses and net income will be understated or overstated. Although some variation to actual results occurs, historically such variability has not been material. At
September 30, 2006, the aggregated liability was approximately $9.7 million, which we believe is adequate to cover both reported and incurred but not reported claims.

Loyalty Program

We utilize estimates in accounting for our Petro Passport loyalty program. We
record a liability for the estimated redemption of Petro points based upon our estimates about the future redemption rate of Petro points outstanding. The most significant risk of this methodology is its dependence on using historical redemption
rates, which are not always indicative of future redemption rates. If our estimates are inaccurate, our related



15



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expenses and net income could be understated or overstated. Although some variation to actual results occurs, historically such variability has not been
material. At September 30, 2006, we believe our liability related to our Petro Passport loyalty program is adequate to cover future point redemptions.

Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, which replaces the original Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, issued in October 1995. This standard addresses the accounting for transactions where an entity obtains employee services in share-based payment transactions. The effective dates vary depending on the type of reporting entity.
Non-public companies, such as ourselves, must apply the revised standard as of the beginning of the first annual reporting period that begins after December 15, 2005. We have adopted this revised standard and concluded that it had no impact on
our consolidated financial position or results of operations.

In March 2006, the FASB issued Statement of Financial Accounting Standards
No. 156, Accounting for Servicing of Financial Assets (as amended), an amendment of FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This standard
focuses on the recognition and valuation for all separately recognized servicing assets and liabilities. It requires that entities separately recognize a servicing asset or liability when they undertake, through a servicing contract, an obligation
to service a financial asset. The effective date for this standard is for fiscal years that begin after September 15, 2006. We are evaluating the impact of this standard on our consolidated financial statements. We do not believe that the
adoption of this standard will have a significant impact on our results of operations.

In September 2006, the FASB issued Statement of
Financial Accounting Standards No. 157, Fair Value Measurements. The purpose of this standard is to define fair value and to establish a framework for measuring fair value in generally accepted accounting principles. Although the
standard does expand disclosure requirements about fair value measurements, it does not require any new fair value measurements. The effective date for this standard is for financial statements issued for fiscal years beginning after
November 15, 2007, and interim period within those fiscal years. We are evaluating the impact of this standard on our consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  An Amendment of FASB
Statements No. 87, 88, 106, and 132(R). This standard requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability and to recognize changes in that funded status
through comprehensive income. The standard also provides guidance as to when to measure the funded status of such plans. The effective date for this standard for companies without publicly traded equity securities, such as ourselves, is for fiscal
years ending after June 15, 2007. We have evaluated this standard and concluded that it had no impact on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk due to changes in
commodity prices and interest rates. For a complete discussion of our market risks and our market risk sensitive assets and liabilities, please refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, included
in our 2005 Form 10-K. During the quarter ended September 30, 2006, there have been no material changes regarding our market risks from the discussion in our 2005 Form 10-K.



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The following table reflects the carrying amount and estimated fair value of our financial instruments,
as of December 31, 2005 and September 30, 2006:



|                                               |  |                        |         |                    |            |   |                |  |   |            |   |  |   |        
|---------------------------------------------- |  | ---------------------- | ------- | ------------------ | ---------- | - | -------------- |  | - | ---------- | - |  | - | -------
|                                               |  | December 31, 2005      |         | September 30, 2006
|                                               |  | CarryingAmount         |         |                    | Fair Value |   | CarryingAmount |  |   | Fair Value
|                                               |  | (dollars in thousands)
|Long-term debt and other short-term borrowings |  |                        |         |                    |            |   |                |  |   |            |   |  |   |        
|Fixed rate                                     |  | $                      | 250,000 |                    |            | $ | 251,250        |  | $ | 250,000    |   |  | $ | 252,500
|Average interest rate                          |  |                        | 9.9     | %                  |            |   |               |  |   | 9.9        | % |  |   |       
|Variable rate                                  |  | $                      | 21,250  |                    |            | $ | 21,250         |  | $ | 21,250     |   |  | $ | 21,250 
|Average interest rate                          |  |                        | 5.7     | %                  |            |   |               |  |   | 7.3        | % |  |   |       
|Fixed rate                                     |  | $                      | 572     |                    |            | $ | 572            |  | $ |           |   |  | $ |       
|Interest rate                                  |  |                        | 7.5     | %                  |            |   |               |  |   |           |   |  |   |       

Item 4. Controls and Procedures

As of September 30, 2006, we completed an evaluation, under the supervision and with the participation of our management, including our Chairman and
Chief Executive Officer and our Chief Financial Officer and Secretary, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chairman and Chief Executive Officer and Chief
Financial Officer and Secretary concluded that our disclosure controls and procedures are effective at a reasonable assurance level in timely alerting them to material information relating to us that is required to be included in our periodic
Securities and Exchange Commission filings.

There have been no changes in our internal controls over financial reporting identified in
connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act during the third fiscal quarter of 2006, that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we are involved in ordinary routine litigation
incidental to our operations. Based on the existence of insurance coverage, we believe that any litigation currently pending or threatened against us will not have a material adverse effect on our unaudited consolidated condensed financial position
or results of operations.

Item 1A. Risk Factors

There have been no material changes in our risk factors as described in Part I, Item 1A of our 2005 Form 10-K.

Item 6. Exhibits

Incorporated herein by reference is a list of exhibits contained in the Exhibit Index on page 19 of
this report.



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.







|                        |  |                              |  |                                                  
|----------------------- |  | ---------------------------- |  | -------------------------------------------------
|                        |  | PETRO STOPPING CENTERS, L.P.
|                        |  | (Registrant)                
|                        |  |                             
|Date: November 13, 2006 |  | By:                          |  | /s/ Edward Escudero                              
|                        |  |                              |  | Edward Escudero                                  
|                        |  |                              |  | Chief Financial Officer and Secretary            
|                        |  |                              |  | (On behalf of the Registrant and as Registrants 
|                        |  |                              |  | Principal Financial and Chief Accounting Officer)

Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Act by
Registrants which have not Registered Securities Pursuant to Section 12 of the Act.

The Company has not sent and will not send a
quarterly report or proxy materials to its limited or general partners.



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|            | 
|3.1         |  | Amended and Restated Certificate of Limited Partnership of Petro Stopping Centers, L.P., incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the year ended December
31, 1996 (File No. 001-13018).                                                                                                                                                                                                                                                                         
|            | 
|3.2         |  | Fourth Amended and Restated Limited Partnership Agreement of Petro Stopping Centers, L.P., dated July 23, 1999, by and among Petro Inc., as a General Partner and Petro Stopping Centers
Holdings, L.P., Petro Holdings GP, L.L.C., and James A. Cardwell, Jr., as Limited Partners, incorporated by reference to Exhibit 10.62 to our Current Report on Form 8-K, filed on August 6, 1999 (File No. 001-13018).                                                                                       
|            | 
|3.3         |  | First Amendment to the Fourth Amended and Restated Limited Partnership Agreement of Petro Stopping Centers, L.P., dated February 9, 2004, incorporated by reference to Exhibit 3.3 to our
Registration Statement on Form S-4, filed on May 10, 2004 (File No. 333-115358).                                                                                                                                                                                                                             
|            | 
|4.1         |  | Indenture, dated as of February 9, 2004, by and among Petro Stopping Centers, L.P. and Petro Financial Corporation, as Issuers, Petro Stopping Centers Holdings, L.P., Petro Holdings Financial
Corporation, and Petro Distributing, Inc., as Guarantors, and The Bank of New York, as Trustee, incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K, filed on February 23, 2004 (File No. 001-13018).                                                                           
|            | 
|4.2         |  | First Supplemental Indenture, dated as of February 9, 2004, by and among Petro Stopping Centers, L.P. and Petro Financial Corporation, as Issuers, Petro Stopping Centers Holdings, L.P., Petro
Holdings Financial Corporation, and Petro Distributing, Inc., as Guarantors, and The Bank of New York, as Trustee, incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K, filed on February 23, 2004 (File No.
001-13018).                                                       
|            | 
|10.43       |  | Fourth Amendment and Consent Relating to Credit Agreement, entered into as of July 14, 2006, among Petro Stopping Centers, L.P., Petro Stopping Centers Holdings, L.P., Petro Holdings
Financial Corporation, Petro Distributing, Inc., and Petro Financial Corporation, the Lenders, and Wells Fargo Bank, N.A., as Administrative Agent, Collateral Agent, and L/C Issuer, incorporated by reference to Exhibit 10.43 to our Current Report on
Form 8-K, filed on July 20, 2006 (File No. 001-13018).
|            | 
|31.1*       |  | Chairman and Chief Executive Officers Certification pursuant to Rule 13a-14(a) or 15d-14(a).                                                                                                                                                                                                                                                                                                                                                                                                          
|            | 
|31.2*       |  | Chief Financial Officer and Secretarys Certification pursuant to Rule 13a-14(a) or 15d-14(a).                                                                                                                                                                                                                                                                                                                                                                                                         
|            | 
|32*         |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                                                                                                                         

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|* | Filed herewith
|- | --------------



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