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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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QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2005



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  x    No ̈



Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



Indicate 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 31,2004 |         |   | September 30,2005 |  
|                                               |  | (As Restated)    |         |   |                   |  
|Assets                                         |  |                  |         |   |                   |   |         |  
|Current assets:                                |  |                  |         |   |                   |   |         |  
|Cash and cash equivalents                      |  | $                | 33,843  |   |                   | $ | 28,886  |  
|Trade accounts receivable, net                 |  |                  | 2,074   |   |                   |   | 6,340   |  
|Inventories, net                               |  |                  | 27,494  |   |                   |   | 38,855  |  
|Other current assets                           |  |                  | 2,491   |   |                   |   | 2,415   |  
|Due from affiliates                            |  |                  | 4,017   |   |                   |   | 4,807   |  
|                                               |  |                  |         |   |                   |   |         |  
|Total current assets                           |  |                  | 69,919  |   |                   |   | 81,303  |  
|                                               |  |                 
|Property and equipment, net                    |  |                  | 194,605 |   |                   |   | 232,663 |  
|Deferred debt issuance costs, net              |  |                  | 10,450  |   |                   |   | 10,698  |  
|Other assets                                   |  |                  | 13,002  |   |                   |   | 13,573  |  
|                                               |  |                  |         |   |                   |   |         |  
|Total assets                                   |  | $                | 287,976 |   |                   | $ | 338,237 |  
|                                               |  |                  |         |   |                   |   |         |  
|Liabilities and Partners Deficit              |  |                  |         |   |                   |   |         |  
|                                               |  |                 
|Current liabilities:                           |  |                  |         |   |                   |   |         |  
|Trade accounts payable                         |  | $                | 15,334  |   |                   | $ | 31,889  |  
|Accrued expenses and other current liabilities |  |                  | 31,484  |   |                   |   | 30,122  |  
|Due to affiliates                              |  |                  | 12,420  |   |                   |   | 14,180  |  
|                                               |  |                  |         |   |                   |   |         |  
|Total current liabilities                      |  |                  | 59,238  |   |                   |   | 76,191  |  
|                                               |  |                 
|Other liabilities                              |  |                  | 765     |   |                   |   | 795     |  
|Long-term debt                                 |  |                  | 246,250 |   |                   |   | 271,250 |  
|                                               |  |                  |         |   |                   |   |         |  
|Total long-term liabilities                    |  |                  | 247,015 |   |                   |   | 272,045 |  
|                                               |  |                  |         |   |                   |   |         |  
|Total liabilities                              |  |                  | 306,253 |   |                   |   | 348,236 |  
|                                               |  |                  |         |   |                   |   |         |  
|Commitments and contingencies                  |  |                  |         |   |                   |   |         |  
|                                               |  |                 
|Partners deficit:                             |  |                  |         |   |                   |   |         |  
|General partners                              |  |                  | (200    | ) |                   |   | (172    | )
|Limited partners                              |  |                  | (18,077 | ) |                   |   | (9,827  | )
|                                               |  |                  |         |   |                   |   |         |  
|Total partners deficit                        |  |                  | (18,277 | ) |                   |   | (9,999  | )
|                                               |  |                  |         |   |                   |   |         |  
|Total liabilities and partners deficit        |  | $                | 287,976 |   |                   | $ | 338,237 |  
|                                               |  |                  |         |   |                   |   |         |  



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, |  
|                                    |  | 2004                            |         |   | 2005                           |   |         | 2004          |  |   | 2005    |  
|                                    |  | (As Restated)                   |         |   |                                |   |         | (As Restated) |  |   |         |  
|Net revenues:                       |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Fuel (including motor fuel taxes)   |  | $                               | 270,145 |   |                                | $ | 431,357 |               |  | $ | 743,662 |   |  | $ | 1,093,769 |  
|Non-fuel                            |  |                                 | 68,046  |   |                                |   | 77,711  |               |  |   | 196,469 |   |  |   | 214,652   |  
|                                    |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Total net revenues                  |  |                                 | 338,191 |   |                                |   | 509,068 |               |  |   | 940,131 |   |  |   | 1,308,421 |  
|                                    |  |                                 |         |  
|Costs and expenses:                 |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Cost of sales                       |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Fuel (including motor fuel taxes)   |  |                                 | 257,861 |   |                                |   | 410,388 |               |  |   | 709,731 |   |  |   | 1,048,990 |  
|Non-fuel                            |  |                                 | 27,249  |   |                                |   | 31,765  |               |  |   | 78,683  |   |  |   | 86,380    |  
|Operating expenses                  |  |                                 | 35,357  |   |                                |   | 41,749  |               |  |   | 103,695 |   |  |   | 114,016   |  
|General and administrative          |  |                                 | 4,630   |   |                                |   | 6,261   |               |  |   | 12,664  |   |  |   | 15,526    |  
|Depreciation and amortization       |  |                                 | 3,880   |   |                                |   | 4,239   |               |  |   | 11,568  |   |  |   | 12,241    |  
|Loss on disposition of fixed assets |  |                                 | 33      |   |                                |   | 15      |               |  |   | 66      |   |  |   | 44        |  
|                                    |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Total costs and expenses            |  |                                 | 329,010 |   |                                |   | 494,417 |               |  |   | 916,407 |   |  |   | 1,277,197 |  
|                                    |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Operating income                    |  |                                 | 9,181   |   |                                |   | 14,651  |               |  |   | 23,724  |   |  |   | 31,224    |  
|                                    |  |                                 |         |  
|Loss on retirement of debt          |  |                                 |        |   |                                |   |        |               |  |   | (6,164  | ) |  |   |          |  
|Retired debt restructuring costs    |  |                                 |        |   |                                |   |        |               |  |   | (794    | ) |  |   |          |  
|Equity in income of affiliate       |  |                                 | 240     |   |                                |   | 320     |               |  |   | 398     |   |  |   | 142       |  
|Interest income                     |  |                                 | 49      |   |                                |   | 66      |               |  |   | 100     |   |  |   | 185       |  
|Interest expense                    |  |                                 | (5,976  | ) |                                |   | (6,440  | )             |  |   | (17,688 | ) |  |   | (18,185   | )
|                                    |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  
|Net income (loss)                   |  | $                               | 3,494   |   |                                | $ | 8,597   |               |  | $ | (424    | ) |  | $ | 13,366    |  
|                                    |  |                                 |         |   |                                |   |         |               |  |   |         |   |  |   |           |  



See accompanying notes
to unaudited consolidated condensed financial statements.



2



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PETRO STOPPING CENTERS, L.P.

UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN

PARTNERS
DEFICIT

For the Nine Months Ended September 30, 2005

(in thousands)



|                                                     |  |                         |      |   |                         |   |         |                       |  |   |         |  
|---------------------------------------------------- |  | ----------------------- | ---- | - | ----------------------- | - | ------- | --------------------- |  | - | ------- | -
|                                                     |  | GeneralPartnersDeficit |      |   | LimitedPartnersDeficit |   |         | TotalPartnersDeficit | 
|Balances, December 31, 2004 (As Previously Reported) |  | $                       | (198 | ) |                         | $ | (17,274 | )                     |  | $ | (17,472 | )
|Restatement adjustments - Note 2                     |  |                         | (2   | ) |                         |   | (803    | )                     |  |   | (805    | )
|                                                     |  |                         |      |   |                         |   |         |                       |  |   |         |  
|Balances, December 31, 2004 (As Restated)            |  |                         | (200 | ) |                         |   | (18,077 | )                     |  |   | (18,277 | )
|Net income                                           |  |                         | 34   |   |                         |   | 13,332  |                       |  |   | 13,366  |  
|Partners operating distributions                    |  |                         |     |   |                         |   | (4,852  | )                     |  |   | (4,852  | )
|Partners minimum tax distributions                  |  |                         | (6   | ) |                         |   | (230    | )                     |  |   | (236    | )
|                                                     |  |                         |      |   |                         |   |         |                       |  |   |         |  
|Balances, September 30, 2005                         |  | $                       | (172 | ) |                         | $ | (9,827  | )                     |  | $ | (9,999  | )
|                                                     |  |                         |      |   |                         |   |         |                       |  |   |         |  



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, |         
|                                                                                         |  | 2004                           |          |   | 2005 |  
|                                                                                         |  | (As Restated)                  |          |   |      |  
|Cash flows from operating activities:                                                    |  |                                |          |   |      |   |         |  
|Net income (loss)                                                                        |  | $                              | (424     | ) |      | $ | 13,366  |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                                |          |   |      |   |         |  
|Depreciation and amortization                                                            |  |                                | 11,568   |   |      |   | 12,241  |  
|Write-off of deferred financing costs associated with retired debt                       |  |                                | 4,009    |   |      |   |        |  
|Deferred debt issuance cost amortization                                                 |  |                                | 1,697    |   |      |   | 1,209   |  
|Provision for bad debt                                                                   |  |                                | 119      |   |      |   | 521     |  
|Equity in income of affiliate                                                            |  |                                | (398     | ) |      |   | (142    | )
|Loss on disposition of fixed assets                                                      |  |                                | 66       |   |      |   | 44      |  
|Other operating activities                                                               |  |                                | 29       |   |      |   | 33      |  
|Increase (decrease) from changes in:                                                     |  |                                |          |   |      |   |         |  
|Trade accounts receivable                                                                |  |                                | (2,556   | ) |      |   | (4,787  | )
|Inventories                                                                              |  |                                | (3,636   | ) |      |   | (11,361 | )
|Other current assets                                                                     |  |                                | (665     | ) |      |   | 76      |  
|Due from affiliates                                                                      |  |                                | 1,452    |   |      |   | (802    | )
|Due to affiliates                                                                        |  |                                | (3,399   | ) |      |   | 1,543   |  
|Trade accounts payable                                                                   |  |                                | 8,653    |   |      |   | 13,627  |  
|Accrued expenses and other liabilities                                                   |  |                                | 2,045    |   |      |   | (1,380  | )
|                                                                                         |  |                                |          |   |      |   |         |  
|Net cash provided by operating activities                                                |  |                                | 18,560   |   |      |   | 24,188  |  
|                                                                                         |  |                                |          |   |      |   |         |  
|Cash flows from investing activities:                                                    |  |                                |          |   |      |   |         |  
|Proceeds from disposition of fixed assets and land held for sale                         |  |                                | 983      |   |      |   | 83      |  
|Purchases of property and equipment                                                      |  |                                | (3,684   | ) |      |   | (50,377 | )
|Increase in other assets, net                                                            |  |                                | (277     | ) |      |   | (507    | )
|                                                                                         |  |                                |          |   |      |   |         |  
|Net cash used in investing activities                                                    |  |                                | (2,978   | ) |      |   | (50,801 | )
|                                                                                         |  |                                |          |   |      |   |         |  
|Cash flows from financing activities:                                                    |  |                                |          |   |      |   |         |  
|Repayments of bank revolver                                                              |  |                                | (4,500   | ) |      |   | (43,200 | )
|Proceeds from bank revolver                                                              |  |                                | 4,500    |   |      |   | 43,200  |  
|Repayments of long-term debt                                                             |  |                                | (179,535 | ) |      |   |        |  
|Proceeds from long-term debt issuance                                                    |  |                                | 250,000  |   |      |   | 25,000  |  
|Repayments of capital lease obligations                                                  |  |                                | (4,116   | ) |      |   |        |  
|Change in book cash overdraft                                                            |  |                                | (8,323   | ) |      |   | 2,887   |  
|Partners operating distribution                                                         |  |                                | (57,117  | ) |      |   | (4,852  | )
|Partners minimum tax distribution                                                       |  |                                | (13      | ) |      |   | (7      | )
|Payment of debt issuance costs                                                           |  |                                | (11,931  | ) |      |   | (1,372  | )
|                                                                                         |  |                                |          |   |      |   |         |  
|Net cash provided by (used in) financing activities                                      |  |                                | (11,035  | ) |      |   | 21,656  |  
|                                                                                         |  |                                |          |   |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                                | 4,547    |   |      |   | (4,957  | )
|Cash and cash equivalents, beginning of period                                           |  |                                | 17,806   |   |      |   | 33,843  |  
|                                                                                         |  |                                |          |   |      |   |         |  
|Cash and cash equivalents, end of period                                                 |  | $                              | 22,353   |   |      | $ | 28,886  |  
|                                                                                         |  |                                |          |   |      |   |         |  
|Supplemental cash flow information -                                                     |  |                                |          |   |      |   |         |  
|Interest paid during the period                                                          |  | $                              | 19,720   |   |      | $ | 21,741  |  
|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. (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 Amended Annual Report of the Company on Form 10-K/A for the year ended December 31, 2004 (2004 Form 10-K/A). Capitalized terms used in this report and
not defined herein have the meanings ascribed to such terms in the 2004 Form 10-K/A. 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, 2004 (as restated) and September 30, 2005, the consolidated condensed results of operations for the three and nine months ended September 30, 2004 (as
restated) and 2005, the changes in partners deficit for the nine months ended September 30, 2005, and the consolidated condensed cash flows for the nine months ended September 30, 2004 (as restated) and 2005. The results of
operations for the three and nine months ended September 30, 2005 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 $66.5
million and $76.5 million for the three months ended September 30, 2004 and 2005, respectively, and $196.2 million and $217.0 million for the nine months ended September 30, 2004 and 2005, respectively.



Reclassifications



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



(2) Restatement of Consolidated Condensed Financial Statements



Restatement  Accounting for leases



Following a review of its accounting policies, the Company determined that
it had incorrectly calculated its depreciation expenses on certain leasehold improvements and misclassified a capital lease as an operating lease. As a result, the Company has restated its financial statements for the three-year period ended
December 31, 2004.



The restatement relates to the
Companys previous depreciation of its leasehold improvements, in some cases, over a period greater than both the initial term of the lease and its option periods, but not longer than the useful life of the asset. The Company has concluded that
it should use the shorter of (1) the initial lease term unless it believes that the penalty for not renewing the lease would be substantial enough that it was reasonably assured that the Company would exercise the renewal, or
(2) the useful life of the asset. The restatement relates, in part, to the February 7, 2005 letter issued by the Office of the Chief Accountant of the Securities and Exchange Commission to the American Institute of Certified Public
Accountants, which clarified the existing generally accepted accounting principles applicable to leases.



These non-cash adjustments have no material impact on the Companys previously reported cash flows, cash position, revenues, or EBITDA in any period,
or on compliance with the covenants under its senior secured credit facilities or the Indenture for the 9.0% senior secured notes due 2012 (the 9% Notes).



(continued)

5



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PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



The following tables present the adjustments to the Unaudited Consolidated Condensed Statements of
Operations for the three and nine months ended September 30, 2004 and the Consolidated Balance Sheet as of December 31, 2004 as a result of the restatement:



Unaudited Consolidated Condensed Statement of Operations



|                                    |  |                                       |         |   |             |   |     |             |  |   |         |  
|----------------------------------- |  | ------------------------------------- | ------- | - | ----------- | - | --- | ----------- |  | - | ------- | -
|                                    |  | Three Months Ended September 30, 2004 |        
|                                    |  | As PreviouslyReported                 |         |   | Adjustments |   |     | As Restated | 
|                                    |  | (in thousands)                        |        
|Net revenues:                       |  |                                       |         |   |             |   |     |             |  |   |         |  
|Fuel (including motor fuel taxes)   |  | $                                     | 270,145 |   |             | $ |    |             |  | $ | 270,145 |  
|Non-fuel                            |  |                                       | 68,046  |   |             |   |    |             |  |   | 68,046  |  
|                                    |  |                                       |         |   |             |   |     |             |  |   |         |  
|Total net revenues                  |  |                                       | 338,191 |   |             |   |    |             |  |   | 338,191 |  
|                                    |  |                                       |        
|Costs and expenses:                 |  |                                       |         |   |             |   |     |             |  |   |         |  
|Cost of sales                       |  |                                       |         |   |             |   |     |             |  |   |         |  
|Fuel (including motor fuel taxes)   |  |                                       | 257,861 |   |             |   |    |             |  |   | 257,861 |  
|Non-fuel                            |  |                                       | 27,249  |   |             |   |    |             |  |   | 27,249  |  
|Operating expenses                  |  |                                       | 35,380  |   |             |   | (23 | )           |  |   | 35,357  |  
|General and administrative          |  |                                       | 4,630   |   |             |   |    |             |  |   | 4,630   |  
|Depreciation and amortization       |  |                                       | 3,870   |   |             |   | 10  |             |  |   | 3,880   |  
|Loss on disposition of fixed assets |  |                                       | 33      |   |             |   |    |             |  |   | 33      |  
|                                    |  |                                       |         |   |             |   |     |             |  |   |         |  
|Total costs and expenses            |  |                                       | 329,023 |   |             |   | (13 | )           |  |   | 329,010 |  
|                                    |  |                                       |         |   |             |   |     |             |  |   |         |  
|Operating income                    |  |                                       | 9,168   |   |             |   | 13  |             |  |   | 9,181   |  
|                                    |  |                                       |        
|Equity in income of affiliate       |  |                                       | 240     |   |             |   |    |             |  |   | 240     |  
|Interest income                     |  |                                       | 49      |   |             |   |    |             |  |   | 49      |  
|Interest expense                    |  |                                       | (5,953  | ) |             |   | (23 | )           |  |   | (5,976  | )
|                                    |  |                                       |         |   |             |   |     |             |  |   |         |  
|Net income                          |  | $                                     | 3,504   |   |             | $ | (10 | )           |  | $ | 3,494   |  
|                                    |  |                                       |         |   |             |   |     |             |  |   |         |  



(continued)

6



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PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



Unaudited Consolidated Condensed Statement of Operations



|                                    |  |                                      |         |   |             |   |     |             |  |   |         |  
|----------------------------------- |  | ------------------------------------ | ------- | - | ----------- | - | --- | ----------- |  | - | ------- | -
|                                    |  | Nine Months Ended September 30, 2004 |        
|                                    |  | As PreviouslyReported                |         |   | Adjustments |   |     | As Restated | 
|                                    |  | (in thousands)                       |        
|Net revenues:                       |  |                                      |         |   |             |   |     |             |  |   |         |  
|Fuel (including motor fuel taxes)   |  | $                                    | 743,662 |   |             | $ |    |             |  | $ | 743,662 |  
|Non-fuel                            |  |                                      | 196,469 |   |             |   |    |             |  |   | 196,469 |  
|                                    |  |                                      |         |   |             |   |     |             |  |   |         |  
|Total net revenues                  |  |                                      | 940,131 |   |             |   |    |             |  |   | 940,131 |  
|                                    |  |                                      |        
|Costs and expenses:                 |  |                                      |         |   |             |   |     |             |  |   |         |  
|Cost of sales                       |  |                                      |         |   |             |   |     |             |  |   |         |  
|Fuel (including motor fuel taxes)   |  |                                      | 709,731 |   |             |   |    |             |  |   | 709,731 |  
|Non-fuel                            |  |                                      | 78,683  |   |             |   |    |             |  |   | 78,683  |  
|Operating expenses                  |  |                                      | 103,779 |   |             |   | (84 | )           |  |   | 103,695 |  
|General and administrative          |  |                                      | 12,664  |   |             |   |    |             |  |   | 12,664  |  
|Depreciation and amortization       |  |                                      | 11,540  |   |             |   | 28  |             |  |   | 11,568  |  
|Loss on disposition of fixed assets |  |                                      | 66      |   |             |   |    |             |  |   | 66      |  
|                                    |  |                                      |         |   |             |   |     |             |  |   |         |  
|Total costs and expenses            |  |                                      | 916,463 |   |             |   | (56 | )           |  |   | 916,407 |  
|                                    |  |                                      |         |   |             |   |     |             |  |   |         |  
|Operating income                    |  |                                      | 23,668  |   |             |   | 56  |             |  |   | 23,724  |  
|                                    |  |                                      |        
|Loss on retirement of debt          |  |                                      | (6,164  | ) |             |   |    |             |  |   | (6,164  | )
|Retired debt restructuring costs    |  |                                      | (794    | ) |             |   |    |             |  |   | (794    | )
|Equity in income of affiliate       |  |                                      | 398     |   |             |   |    |             |  |   | 398     |  
|Interest income                     |  |                                      | 100     |   |             |   |    |             |  |   | 100     |  
|Interest expense                    |  |                                      | (17,604 | ) |             |   | (84 | )           |  |   | (17,688 | )
|                                    |  |                                      |         |   |             |   |     |             |  |   |         |  
|Net loss                            |  | $                                    | (396    | ) |             | $ | (28 | )           |  | $ | (424    | )
|                                    |  |                                      |         |   |             |   |     |             |  |   |         |  



(continued)

7



---

PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



Consolidated Balance Sheet



|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|---------------------------------------------- |  | ----------------------- | ------- | - | ----------- | - | ---- | ----------- |  | - | ------- | -
|                                               |  | As of December 31, 2004 |        
|                                               |  | As PreviouslyReported   |         |   | Adjustments |   |      | As Restated | 
|                                               |  | (in thousands)          |        
|Assets                                         |  |                         |         |   |             |   |      |             |  |   |         |  
|Current assets:                                |  |                         |         |   |             |   |      |             |  |   |         |  
|Cash and cash equivalents                      |  | $                       | 33,843  |   |             | $ |     |             |  | $ | 33,843  |  
|Trade accounts receivable, net                 |  |                         | 2,074   |   |             |   |     |             |  |   | 2,074   |  
|Inventories, net                               |  |                         | 27,494  |   |             |   |     |             |  |   | 27,494  |  
|Other current assets                           |  |                         | 2,491   |   |             |   |     |             |  |   | 2,491   |  
|Due from affiliates                            |  |                         | 4,017   |   |             |   |     |             |  |   | 4,017   |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total current assets                           |  |                         | 69,919  |   |             |   |     |             |  |   | 69,919  |  
|                                               |  |                         |        
|Property and equipment, net                    |  |                         | 195,410 |   |             |   | (805 | )           |  |   | 194,605 |  
|Deferred debt issuance costs, net              |  |                         | 10,450  |   |             |   |     |             |  |   | 10,450  |  
|Other assets                                   |  |                         | 13,002  |   |             |   |     |             |  |   | 13,002  |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total assets                                   |  | $                       | 288,781 |   |             | $ | (805 | )           |  | $ | 287,976 |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Liabilities and Partners Deficit              |  |                         |         |   |             |   |      |             |  |   |         |  
|                                               |  |                         |        
|Current liabilities:                           |  |                         |         |   |             |   |      |             |  |   |         |  
|Trade accounts payable                         |  | $                       | 15,334  |   |             | $ |     |             |  | $ | 15,334  |  
|Accrued expenses and other current liabilities |  |                         | 31,484  |   |             |   |     |             |  |   | 31,484  |  
|Due to affiliates                              |  |                         | 12,420  |   |             |   |     |             |  |   | 12,420  |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total current liabilities                      |  |                         | 59,238  |   |             |   |     |             |  |   | 59,238  |  
|                                               |  |                         |        
|Other liabilities                              |  |                         | 765     |   |             |   |     |             |  |   | 765     |  
|Long-term debt                                 |  |                         | 246,250 |   |             |   |     |             |  |   | 246,250 |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total long-term liabilities                    |  |                         | 247,015 |   |             |   |     |             |  |   | 247,015 |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total liabilities                              |  |                         | 306,253 |   |             |   |     |             |  |   | 306,253 |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Commitments and contingencies                  |  |                         |         |   |             |   |      |             |  |   |         |  
|                                               |  |                         |        
|Partners deficit                              |  |                         |         |   |             |   |      |             |  |   |         |  
|General partners                              |  |                         | (198    | ) |             |   | (2   | )           |  |   | (200    | )
|Limited partners                              |  |                         | (17,274 | ) |             |   | (803 | )           |  |   | (18,077 | )
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total partners deficit                        |  |                         | (17,472 | ) |             |   | (805 | )           |  |   | (18,277 | )
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  
|Total liabilities and partners deficit        |  | $                       | 288,781 |   |             | $ | (805 | )           |  | $ | 287,976 |  
|                                               |  |                         |         |   |             |   |      |             |  |   |         |  



The restatement had no
impact on net cash provided by operating activities for the nine months ended September 30, 2004.



(3) Properties



During
the first quarter of 2005, the Company entered into agreements for the acquisition of four sites. The Company completed the purchase of the New Paris, Ohio site in February 2005, the York, Nebraska and



(continued)

8



---

PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



Kingsland, Georgia sites in March 2005, and the Bordentown, New Jersey site in July 2005. The New Paris, Ohio, York,
Nebraska, and Bordentown, New Jersey sites were existing Petro Stopping Centers owned by two of the Companys franchisees and became company-operated sites following the closing of the related transactions. The Kingsland, Georgia truck stop was
independently owned and is a Petro:2 format site. The four sites were purchased for cash consideration totaling $45.9 million. The purchase price was primarily allocated to property and equipment of $42.7 million. The Company has not yet completed
the evaluation and allocation of the purchase price as the analysis associated with the valuation of certain assets are not yet complete. The Company does not believe that the analysis will materially modify the preliminary purchase price
allocation.



On July 19, 2005, a new franchise location
commenced operations in Remington, Indiana.



(4) Long-Term Debt



On July 26, 2005, the Company completed the sale of
$25.0 million aggregate principal amount of 9% Notes in a private placement conducted pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes are part of the Companys outstanding 9% Notes, of which $225.0 million in
aggregate principal amount were issued on February 9, 2004.



On July 26, 2005, the Company amended its senior secured credit agreement to permit the acquisition of the Bordentown Junction Truck Stop in Burlington County, New Jersey.



(5) Partners Deficit



Under the Indenture for the 9% Notes and the agreement governing the 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 15.0% senior discount notes due 2008 (15% Notes) and its
senior third secured discount notes due 2014 and to pay for taxes and administrative expenses. For the nine months ended September 30, 2005, the Company paid approximately $4.9 million with respect to these distributions. The Company believes
it will distribute an additional $1.3 million to the Holding Partnership during the remainder of 2005 for interest payments, taxes, and administrative expenses. All but $50,000 of the 15% Notes were repurchased in the three month period ending
March 31, 2005, and the remaining $50,000 of the 15% Notes were repurchased in May 2005.



Under the terms of the Partnership Agreement, the Company is required to make distributions to each of its partners in an amount sufficient to allow each partner to pay federal, state, and local taxes with respect to
the allocation of taxable income to such partner by the Company. Tax distributions are based on separate pro-rata share of taxable income of the Company. Amounts distributable for the nine months ended September 30, 2005, were $236,000.



(6) Segments



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



As of September 30, 2004
and 2005, the Company operated 37 and 41 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 $336.6 million and $507.3 million for the three months ended September 30, 2004
and 2005, respectively, and $935.8 million and $1.3 billion for the nine months ended September 30, 2004 and 2005, respectively. The Company added three company-operated truck stops in the three months ended March 31, 2005 and one
company-operated truck stop in the three months ended September 30, 2005, three of which were previously operated by Company franchisees.



(continued)

9



---

PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



As of September 30, 2004 and 2005, the Company was a franchisor to 23 and 22 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 $1.6 million and $1.8 million for the three months ended September 30, 2004 and 2005, respectively, and $4.3 million and $4.6 million for the nine
months ended September 30, 2004 and 2005, respectively. 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 EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                       |  | 2004                            |         | 2005                           |   | 2004          |  | 2005
|                                       |  | (As Restated)                   |         |                                |   | (As Restated) |  |     
|                                       |  | (in thousands)                 
|Income Statement Data:                 |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Net revenues:                          |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Company-operated truck stops           |  | $                               | 336,604 |                                | $ | 507,278       |  | $    | 935,785 |  | $ | 1,303,780
|Franchise operations                   |  |                                 | 1,587   |                                |   | 1,790         |  |      | 4,346   |  |   | 4,641    
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total net revenues                     |  | $                               | 338,191 |                                | $ | 509,068       |  | $    | 940,131 |  | $ | 1,308,421
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Operating income:                      |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Company-operated truck stops           |  | $                               | 7,594   |                                | $ | 12,861        |  | $    | 19,378  |  | $ | 26,583   
|Franchise operations                   |  |                                 | 1,587   |                                |   | 1,790         |  |      | 4,346   |  |   | 4,641    
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total operating income                 |  | $                               | 9,181   |                                | $ | 14,651        |  | $    | 23,724  |  | $ | 31,224   
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Balance Sheet Data: (at end of period) |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total assets:                          |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Company-operated truck stops           |  |                                 |         |                                |   |               |  | $    | 282,133 |  | $ | 338,237  
|Franchise operations                   |  |                                 |         |                                |   |               |  |      |        |  |   |         
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total assets                           |  |                                 |         |                                |   |               |  | $    | 282,133 |  | $ | 338,237  
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          



(7) Recently Issued Accounting
Pronouncements



In December 2003, the Financial Accounting
Standards Board issued Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, which replaced the original Interpretation No. 46 issued in January 2003.
This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. The effective dates vary depending on the type of reporting company and the type of entity that the company is
involved with. Companies without publicly traded equity securities, such as the Company, must apply the revised Interpretation immediately to all entities created after December 31, 2003, and to all other entities no later than the beginning of
the first reporting period beginning after December 15, 2004. Management has adopted this revised Interpretation and concluded that the Company does not own interests in any entities that meet the consolidation requirements.



(continued)

10



---

PETRO STOPPING CENTERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



In December 2004, the Financial Accounting Standards Board 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 does not believe that the adoption of this revised standard will have a significant impact on the Companys financial position or results of operations.



In March 2005, the Financial Accounting Standards Board issued
Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations. This Interpretation clarifies that the term conditional as used in Statement of Financial Accounting Standards No. 143,
Accounting for Asset Retirement Obligations, which refers to a legal obligation to perform an asset retirement activity even if the timing and/or settlement are conditional on a future event that may or may not be within the control of
an entity. Accordingly, the entity must record a liability for the conditional asset retirement obligation if the fair value of the obligation can be reasonably estimated. The Interpretation is effective for companies no later than the end of the
fiscal year ending after December 15, 2005. Management is evaluating the impact of this Interpretation on its consolidated financial statements.



In May 2005, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error
Corrections, which replaced Accounting Principles Board Opinion No. 20 Accounting Changes and Statement of Financial Accounting Standards No. 3, Reporting Accounting Changes in Interim Financial Statements.
This standard provides guidance on the accounting and reporting for accounting changes and correction of errors, requiring changes in accounting principles be recognized on a retrospective approach rather than treating them as cumulative effect of
changes in accounting principle. The standard is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Management does not believe that the adoption of this standard will have a
significant impact on the Companys financial position or results of operations.



(8) Subsequent Events



On November 1,
2005, the Company entered into a lease agreement to convert a franchise location in Waterloo, New York, into a company-operated site. Additionally, on November 1, 2005, the Company entered into a lease agreement to be effective October 19,
2005 for a company-operated site located in Spokane, Washington. The initial term of this lease shall commence upon the Companys occupancy of the site, and that date shall not be later than June 1, 2006.



11



---

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



Forward-Looking Statements



Certain sections of this Form 10-Q, 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, 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 II,
Item 7 of our Annual Report on Form 10-K/A for the year ended December 31, 2004 (2004 Form 10-K/A). 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 fact included in this Form 10-Q, 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.



Restatement



We restated our financial statements for the three-year period ended December 31, 2004. For a discussion on this restatement, see Note 2 of our
unaudited consolidated condensed financial statements.



Reporting Format



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



As of
September 30, 2004, and 2005, we operated 37 and 41 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 $336.6 million and $507.3 million for the three months ended September 30, 2004 and 2005,
respectively, and $935.8 million and $1.3 billion for the nine months ended September 30, 2004 and 2005, respectively. We added three company-operated truck stops in the three months ended March 31, 2005 and one company-operated truck stop
in the three months ended September 30, 2005, three of which were previously operated by franchisees.



As of September 30, 2004 and 2005, we were a franchisor to 23 and 22 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 $1.6 million and $1.8 million for the three months ended September 30, 2004 and 2005, and $4.3 million and $4.6 million for the nine months ended September 30, 2004 and 2005, respectively. 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 income taxes is reflected in the accompanying unaudited consolidated condensed financial statements because we are a partnership for
which taxable income and tax deductions are passed through to our partners.



12



---

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



REPORTABLE OPERATING SEGMENT INFORMATION



|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|-------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | - | ------------- |  | ---- | ------- |  | - | ---------
|                                       |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                       |  | 2004                            |         | 2005                           |   | 2004          |  | 2005
|                                       |  | (As Restated)                   |         |                                |   | (As Restated) |  |     
|                                       |  | (in thousands)                 
|Income Statement Data:                 |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Net revenues:                          |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Company-operated truck stops           |  | $                               | 336,604 |                                | $ | 507,278       |  | $    | 935,785 |  | $ | 1,303,780
|Franchise operations                   |  |                                 | 1,587   |                                |   | 1,790         |  |      | 4,346   |  |   | 4,641    
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total net revenues                     |  | $                               | 338,191 |                                | $ | 509,068       |  | $    | 940,131 |  | $ | 1,308,421
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Operating income:                      |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Company-operated truck stops           |  | $                               | 7,594   |                                | $ | 12,861        |  | $    | 19,378  |  | $ | 26,583   
|Franchise operations                   |  |                                 | 1,587   |                                |   | 1,790         |  |      | 4,346   |  |   | 4,641    
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total operating income                 |  | $                               | 9,181   |                                | $ | 14,651        |  | $    | 23,724  |  | $ | 31,224   
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Balance Sheet Data: (at end of period) |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total assets:                          |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Company-operated truck stops           |  |                                 |         |                                |   |               |  | $    | 282,133 |  | $ | 338,237  
|Franchise operations                   |  |                                 |         |                                |   |               |  |      |        |  |   |         
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          
|Total assets                           |  |                                 |         |                                |   |               |  | $    | 282,133 |  | $ | 338,237  
|                                       |  |                                 |         |                                |   |               |  |      |         |  |   |          



Overview of Operating Results



During the nine months ended September 30, 2005, our
revenues were $1.3 billion, a 39.2% increase over the prior year period. The increase was mostly 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, in addition to our four new sites. Our net income of $13.4 million was $13.8 million higher than our net loss for the nine months ended September 30, 2004 (as restated), primarily due to costs associated with our 2004 Refinancing
Transactions and higher operating income for the nine months ended September 30, 2005.



During the third quarter of 2005, our net revenues were $509.1 million, a 50.5% increase over the prior year quarter. The increase was mostly 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, in addition to our four new sites. Our net income of $8.6 million was $5.1 million higher compared to the prior year quarter.



We derive our revenues primarily from:



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



| |  |  | Non-fuel items, including the sale of merchandise and offering of services including 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.
| | - |  | -----------------------------------



13



---

Consolidated Revenues



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



|                                |  |                                  |         |  |                                 |   |  |      |         |  |       |   |  |   |         |  |       |   |  |   |           |  |       |  
|------------------------------- |  | -------------------------------- | ------- |  | ------------------------------- | - |  | ---- | ------- |  | ----- | - |  | - | ------- |  | ----- | - |  | - | --------- |  | ----- | -
|                                |  | Three Months Ended September 30, |         |  | Nine Months Ended September 30, |  
|                                |  | 2004                             |         |  | 2005                            |   |  | 2004 |         |  | 2005  |  
|                                |  | (dollars in thousands)           |        
|Fuel                            |  | $                                | 270,145 |  | 79.9                            | % |  | $    | 431,357 |  | 84.7  | % |  | $ | 743,662 |  | 79.1  | % |  | $ | 1,093,769 |  | 83.6  | %
|Non-Fuel (excluding Restaurant) |  |                                  | 49,462  |  | 14.6                            | % |  |      | 57,828  |  | 11.4  | % |  |   | 141,929 |  | 15.1  | % |  |   | 158,366   |  | 12.1  | %
|Restaurant                      |  |                                  | 18,584  |  | 5.5                             | % |  |      | 19,883  |  | 3.9   | % |  |   | 54,540  |  | 5.8   | % |  |   | 56,286    |  | 4.3   | %
|                                |  |                                  |         |  |                                 |   |  |      |         |  |       |   |  |   |         |  |       |   |  |   |           |  |       |  
|Total Net Revenues              |  | $                                | 338,191 |  | 100.0                           | % |  | $    | 509,068 |  | 100.0 | % |  | $ | 940,131 |  | 100.0 | % |  | $ | 1,308,421 |  | 100.0 | %
|                                |  |                                  |         |  |                                 |   |  |      |         |  |       |   |  |   |         |  |       |   |  |   |           |  |       |  



Our fuel revenues and
related cost of sales include a significant amount of federal and state motor fuel taxes. Such taxes were $66.5 million and $76.5 million for the three months ended September 30, 2004 and 2005, respectively, and $196.2 million and $217.0
million for the nine months ended September 30, 2004 and 2005, respectively.



Results of Operations



Nine Months Ended September 30,
2005 Compared to Nine Months Ended September 30, 2004 (As Restated)



Overview.Net income increased by $13.8 to $13.4 million for the nine months ended September 30, 2005 compared to net loss of $424,000 for the nine months ended September 30, 2004, due primarily to
costs of approximately $7.0 million associated with our 2004 Refinancing Transactions and higher fuel revenues. Our net revenues increased 39.2% to $1.3 billion for the nine months ended September 30, 2005 from $940.1 million in 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 related to market conditions and increased fuel gallons sold, in addition to improved non-fuel sales and the addition
of four new sites. As discussed herein, we completed the purchase of three previously franchise operated locations at New Paris, Ohio, York, Nebraska, and Bordentown, New Jersey, and a new Petro:2 location at Kingsland, Georgia during the nine
months ended September 30, 2005. On a comparable unit basis, net revenues increased by 32.5% to $1.2 billion from $940.1 million in the prior year period, due to an increase in our average retail-selling price of fuel and increased fuel gallons
sold and improved non-fuel sales. A Petro Stopping Center is considered a comparable unit in 2005 if we operated it for twelve months in 2004. During the nine months ended September 30, 2005, we had 36 company-operated comparable units out of a
total of 40 company-operated units for the nine months ended September 30, 2005, in each case excluding our jointly-owned Wheeler Ridge facility, which is reflected in equity in income of affiliates. Operating expenses increased 10.0% to $114.0
million from $103.7 million in the prior year period due primarily to the addition of our four new sites.



Fuel.Revenues increased 47.1% to $1.1 billion for the nine months ended September 30, 2005 compared to $743.7 million in the nine months
ended September 30, 2004. Fuel revenues increased due to a 33.8% increase in our average retail-selling price per gallon compared to the prior year period due to market conditions, as well as a 9.9% increase in our total fuel gallons sold from
the prior year period, which was partially due to the addition of our four new sites. Gross profit increased by 32.0% to $44.8 million for the nine months ended September 30, 2005 compared to $33.9 million in the nine months ended
September 30, 2004, despite a 47.8% increase in our cost of fuel. On a comparable unit basis, fuel revenues increased 40.1% due to a 33.5% increase in our average retail-selling price per gallon, as well as a 5.0% increase in our total fuel
gallons sold compared to the prior year period. On a comparable unit basis, gross profit increased by 24.7%, or $8.4 million, for the nine months ended September 30, 2005 compared to the prior year period.



Non-Fuel (excluding Restaurant). Revenues increased 11.6% to $158.4
million for the nine months ended September 30, 2005 compared to $141.9 million in the prior year period. Gross profit increased 11.6% to $89.3 million for the nine months ended September 30, 2005 from $80.0 million in the prior year
period. The increases in revenues and gross profit were due primarily to an 11.8%, or $15.5 million, increase in general merchandise sales at our retail stores and increased sales at our Petro:Lubes, in addition to our four new sites. On a
comparable unit basis, revenues increased 5.8%, or $8.2 million, and gross profit increased 5.9%, or $4.7 million, compared to the prior year period.



14



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Restaurant. Revenues increased 3.2% to $56.3 million for the nine months ended September 30,
2005 compared to $54.5 million in the prior year period, due to the addition of our four new sites. Gross profits in the restaurant increased by 3.1%, or $1.2 million, compared to the prior year period, due to the increase in revenues related to our
four new sites. On a comparable unit basis, revenues decreased 2.6%, or $1.4 million, from the prior year period, due to a 5.1% decrease in our customer count, offset by an increase of 2.9%, or $.24, in our average ticket price. On a comparable unit
basis, gross profit decreased 2.6%, or $973,000, from the prior year period.



Costs and Expenses. Total costs and expenses increased 39.4% to $1.3 billion for the nine months ended September 30, 2005 compared to $916.4 million in the prior year period. Cost of sales increased 44.0%,
or $347.0 million from the prior year period, mainly due to a 47.8% increase in our cost of fuel, in addition to costs incurred related to the addition of our four new sites. Operating expenses increased 10.0%, or $10.3 million, to $114.1 million
compared to the prior year period, due primarily to the addition of our four new sites. General and administrative expenses increased 22.6% to $15.5 million compared to $12.7 million in the prior year period, due primarily to higher employee-related
costs and an increase in professional expenses related mainly to our preparation for the compliance requirements set forth in Section 404 of the Sarbanes-Oxley Act and legal expenses. On a comparable unit basis, total costs and expenses
increased 32.6%, or $299.2 million, from the prior year period. On a comparable unit basis, cost of sales increased 37.2%, or $293.0 million, from the prior year period, due primarily to a 40.9% increase in our cost of fuel. On a comparable unit
basis, operating expenses increased 3.1%, or $3.2 million, to $106.9 million compared to the prior year period, due primarily to higher credit card fees associated with the increased fuel revenues, increased utility costs, and higher
employee-related costs.



Equity in Income of Affiliate.For the nine months ended September 30, 2005, we recognized income of $142,000 related to our investment in the Wheeler Ridge facility in Southern California compared to income of $398,000 in the prior year period.



Interest Expense. Interest expense increased by 2.8% to $18.2 million
for the nine months ended September 30, 2005 compared to $17.7 million in the prior year period, due to an increase in our total outstanding debt compared to 2004.



Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004 (As Restated)



Overview.Net income increased by $5.1 million to $8.6 million for
the quarter ended September 30, 2005 compared to net income of $3.5 million for the quarter ended September 30, 2004. Our net revenues increased 50.5% to $509.1 million for the quarter ended September 30, 2005 from $338.2 million in
the prior year quarter. The increase was mainly due to higher fuel revenues, as a result of an increase in our average retail-selling price of fuel related to market conditions and increased fuel gallons sold, in addition to improved non-fuel sales
and the addition of four new sites. As discussed herein, we completed the purchase of three previously franchise operated locations at New Paris, Ohio, York, Nebraska, and Bordentown, New Jersey, and a new Petro:2 location at Kingsland, Georgia
during the nine months ended September 30, 2005. On a comparable unit basis, net revenues increased by 40.3% to $474.4 million from $338.2 million in the prior year quarter, due to an increase in our average retail-selling price of fuel and
increased fuel gallons sold and improved non-fuel sales. A Petro Stopping Center is considered a comparable unit in 2005 if we operated it for twelve months in 2004. During the quarter ended September 30, 2005, we had 36 company-operated
comparable units out of a total of 40 company-operated units for the quarter ended September 30, 2005, in each case excluding our jointly-owned Wheeler Ridge facility, which is reflected in equity in income of affiliates. Operating expenses
increased 18.1% to $41.7 million from $35.4 million in the prior year quarter due primarily to the addition of our four new sites.



Fuel.Revenues increased 59.7% to $431.4 million for the quarter ended September 30, 2005 compared to $270.1 million in the quarter ended
September 30, 2004. Fuel revenues increased due to a 39.8% increase in our average retail-selling price per gallon compared to the prior year quarter related to market



15



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conditions, as well as a 14.2% increase in our total fuel gallons sold from the prior year quarter, partially due to the
addition of our four new sites. Gross profit increased by 70.7% to $21.0 million for the quarter ended September 30, 2005 compared to $12.3 million in the prior year quarter, despite a 59.2% increase in our cost of fuel. On a comparable unit
basis, fuel revenues increased 49.2% due to a 39.8% increase in our average retail-selling price per gallon as well as a 6.7% increase in our total fuel gallons sold compared to the prior year quarter. On a comparable unit basis, gross profit
increased by 57.2%, or $7.0 million, for the quarter ended September 30, 2005 compared to the prior year quarter.



Non-Fuel (excluding Restaurant). Revenues increased 16.9% to $57.9 million for the quarter ended September 30, 2005 compared to $49.5 million
in the prior year quarter. Gross profit increased 15.6% to $32.3 million for the quarter ended September 30, 2005 from $27.9 million in the prior year quarter. The increases in revenues and gross profit were due primarily to a 17.4%, or $7.9
million, increase in general merchandise sales at our retail stores and increased sales at our Petro:Lubes, in addition to our four new sites. On a comparable unit basis, revenues increased 7.6%, or $3.8 million, compared to the prior year quarter
and gross profit increased 6.4%, or $1.8 million, compared to the prior year quarter.



Restaurant. Revenues increased 7.0% to $19.9 million for the quarter ended September 30, 2005 compared to $18.6 million in the prior year quarter due to the addition of our four new sites. Gross profits in
the restaurant increased by 6.1%, or $791,000, compared to the prior year quarter due to the increase in revenues related to our four new sites. On a comparable unit basis, revenues decreased 2.4%, or $448,000, from the prior year quarter, due to a
3.7% decrease in our customer count, offset by an increase of 1.8%, or $.15, in our average ticket price. On a comparable unit basis, gross profit decreased 3.0%, or $390,000, from the prior year quarter.



Costs and Expenses. Total costs and expenses increased 50.3% to $494.4
million for the quarter ended September 30, 2005 compared to $329.0 million in the prior year quarter. Cost of sales increased 55.1%, or $157.0 million from the prior year quarter mainly due to a 59.2% increase in our cost of fuel and the
addition to our four new sites. Operating expenses increased 18.1%, or $6.4 million, to $41.7 million compared to the prior year quarter, due primarily to the addition of our four new sites. General and administrative expenses increased 35.2% to
$6.3 million compared to $4.6 million in the prior year quarter, due primarily to an increase in employee-related costs. On a comparable unit basis, total costs and expenses increased 40.1%, or $131.9 million, from the prior year quarter. On a
comparable unit basis, cost of sales increased 44.8%, or $127.8 million, from the prior year quarter, due primarily to a 48.8% increase in our cost of fuel. On a comparable unit basis, operating expenses increased 7.0%, or $2.5 million, to $37.8
million compared to the prior year quarter, due primarily to higher credit card fees associated with the increased fuel revenues, higher employee-related costs, and increased utility costs.



Equity in Income of Affiliate.For the quarter ended
September 30, 2005, we recognized income of $320,000 related to our investment in the Wheeler Ridge facility in Southern California compared to income of $240,000 for the prior year quarter.



Interest Expense. Interest expense increased by 7.8% to $6.4 million
compared to $6.0 million in the prior year quarter, due to an increase in our total outstanding debt compared to 2004.



Network Development



The following table sets forth the development of our Petro Stopping Centers network since 2001:



|                             |  |                     |  |      |  |      |  |      |  |     
|---------------------------- |  | ------------------- |  | ---- |  | ---- |  | ---- |  | ----
|                             |  | As of September 30,
|                             |  | 2001                |  | 2002 |  | 2003 |  | 2004 |  | 2005
|Company-operated             |  | 35                  |  | 36   |  | 37   |  | 37   |  | 41  
|Franchise operation          |  | 19                  |  | 21   |  | 23   |  | 23   |  | 22  
|                             |  |                     |  |      |  |      |  |      |  |     
|Total Petro Stopping Centers |  | 54                  |  | 57   |  | 60   |  | 60   |  | 63  
|                             |  |                     |  |      |  |      |  |      |  |     



16



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The following table sets forth information on currently existing Petro Stopping Centers opened or
acquired from September 30, 2001 through September 30, 2005, all but three of which are full-sized facilities.



|                           |  |              
|-------------------------- |  | -------------
|Location                   |  | Date Opened  
|Company-operated:          |  |              
|Angola, Indiana            |  | August 2002  
|Sparks, Nevada             |  | December 2002
|New Paris, Ohio (1)        |  | February 2005
|York, Nebraska (2)         |  | March 2005   
|Kingsland, Georgia         |  | March 2005   
|Bordentown, New Jersey (2) |  | July 2005    
|                           | 
|Franchise operation:       |  |              
|Glade Spring, Virginia     |  | October 2001 
|Greensburg, Indiana        |  | June 2002    
|Mortons Gap, Kentucky     |  | October 2002 
|Gaston, Indiana            |  | October 2002 
|Waterloo, New York         |  | November 2004
|Remington, Indiana         |  | July 2005    

---

|(1) | Previously a franchised location since 1989.
|--- | --------------------------------------------

|(2) | Previously a franchised location since 1996.
|--- | --------------------------------------------



On July 19, 2005, a new franchise location commenced operations in Remington, Indiana.



On November 1, 2005, we entered into a lease agreement to convert a franchise location in Waterloo, New York, into a
company-operated site. Additionally, on November 1, 2005, we entered into a lease agreement to be effective October 19, 2005 for a company-operated site located in Spokane, Washington. The initial term of this lease shall commence upon our
occupancy of the site, and that date shall not be later than June 1, 2006.



Liquidity and Capital Resources



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



Cash Flows from Operations



We had cash flows from operations of $18.6 million and $24.2 million for the nine months ended September 30, 2004 and 2005, respectively. The
increase in cash flows was due primarily to the increase in operating income for the nine months ended September 30, 2005 and to variations in the timing of payments for trade accounts payable, offset by increased inventory due to higher fuel
costs and our four new sites and to the timing of receipts related to trade accounts receivables, to variations in the timing of payments for other current liabilities, and to timing of payments due to affiliates for fuel purchases.



We had working capital of $10.7 million and $5.1 million at December 31,
2004 and September 30, 2005, 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 and the related increase in cash, we had positive working capital at December 31, 2004 and
September 30, 2005. Approximately 91.9% 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 a third-party billing company).



17



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Available Borrowings Under the Revolving Credit Facilities



Available borrowing capacity under the revolving credit portion of our
senior secured credit facility was $14.4 million and $28.8 million at December 31, 2004 and September 30, 2005, respectively, subject to certain conditions.



On January 21, 2005, we amended our senior secured credit agreement to extend the maturity date to February 2008,
increase the size of the revolving commitment from $25.0 million to $40.0 million, eliminate amortization payments, make all principal amounts due on the maturity date, modify covenants to, among other things, permit acquisition of the Kingsland,
Georgia, New Paris, Ohio, and York, Nebraska sites, and decrease the pricing spread on the revolving facility and the term loan.



On July 26, 2005, we amended our senior secured credit agreement to permit the acquisition of the Bordentown Junction Truck Stop in Burlington
County, New Jersey.



At September 30, 2005, we have 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 ($5.0 million of which 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, 2005, 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, subject to certain conditions. Interest on drawn funds is paid at maturity and quarterly
for base rate loans on the last day of each interest period, but at least every three months for Eurodollar rate loans 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, 2005, we had no borrowings outstanding under our revolving credit portion of our senior secured credit facilities and
had $11.2 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 $7.6 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, 2005, we had $21.3 million outstanding under our term loan facility, which matures on February 9, 2008.



9% Senior Secured Notes Due 2012



On July 26, 2005, we completed the sale of $25.0 million aggregate
principal amount of 9% Notes in a private placement conducted pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes are part of the Companys outstanding 9% Notes, of which $225.0 million in aggregate principal amount
were issued on February 9, 2004.



18



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Liquidity and Capital Resource Requirements



The following is a summary of our contractual obligations as of September 30, 2005:



|                                                       |  |                |         |                  |   |           |  |           |        |               |   |        |  |   |        
|------------------------------------------------------ |  | -------------- | ------- | ---------------- | - | --------- |  | --------- | ------ | ------------- | - | ------ |  | - | -------
|Contractual Obligations                                |  | Total          |         | Less Than 1 Year |   | 1-3 Years |  | 4-5 Years |        | After 5 Years
|                                                       |  | (in thousands)
|Long-term debt (including interest)                    |  | $              | 417,567 |                  | $ | 23,690    |  | $         | 67,870 |               | $ | 45,000 |  | $ | 281,007
|Operating distributions to the Holding Partnership (1) |  |                | 46,454  |                  |   | 2,644     |  |           | 5,579  |               |   | 10,039 |  |   | 28,192 
|Operating leases                                       |  |                | 24,957  |                  |   | 4,063     |  |           | 6,388  |               |   | 6,421  |  |   | 8,085  
|Employment agreements (2)                              |  |                | 1,531   |                  |   | 1,531     |  |           |       |               |   |       |  |   |       
|Purchase agreements                                    |  |                | 2,610   |                  |   | 1,160     |  |           | 1,450  |               |   |       |  |   |       
|Other long-term liabilities (3)                        |  |                | 5,562   |                  |   | 70        |  |           | 329    |               |   |       |  |   | 5,163  
|                                                       |  |                |         |                  |   |           |  |           |        |               |   |        |  |   |        
|Total contractual obligations                          |  | $              | 498,681 |                  | $ | 33,158    |  | $         | 81,616 |               | $ | 61,460 |  | $ | 322,447
|                                                       |  |                |         |                  |   |           |  |           |        |               |   |        |  |   |        

---

|(1) | Represents distributions to Petro Stopping Centers Holdings, L.P. (the Holding Partnership), as permitted by our debt agreements, to allow the Holding Partnership to pay
interest on its long-term debt obligations and administrative expenses.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents maximum amounts necessary to satisfy obligations under employment agreements with our Chief Executive Officer and our President and Chief Operating Officer.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents cash outflows by period for certain of our long-term liabilities in which cash outflows could be reasonably estimated. The primary items included are estimates of our
asset retirement obligations for our underground storage tank removal costs and sewage plant waste removal costs, as well as accrued environmental expenditures.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition to the above, we have an annual volume commitment associated with contracts with the ExxonMobil Suppliers (the
ExxonMobil Supply Agreements) as discussed in more detail in Note 8 to notes to consolidated financial statements included in our 2004 Form 10-K/A. These purchase obligations are made by the ExxonMobil Suppliers for us on the open market
at prices determined largely by supply and competitive conditions. We have excluded these purchase obligations from the table above as they cannot reasonably be estimated.



Short-Term Requirements



Our primary short-term cash requirements include the funding of working capital, employment agreements, distributions to the Holding Partnership, and
interest on our debt. We believe that cash flow from operations and our revolving credit facilities should be sufficient to satisfy our short-term operating needs.



During the first quarter of 2005, we entered into agreements for the acquisition of four sites. We completed the purchase of
our New Paris, Ohio site in February 2005, our York, Nebraska and Kingsland, Georgia sites in March 2005, and our Bordentown, New Jersey site in July 2005. The New Paris, Ohio, York, Nebraska, and Bordentown, New Jersey sites were existing Petro
Stopping Centers owned by two of our franchisees and became company-operated sites following the closing of the related transactions. The Kingsland, Georgia truck stop was independently owned and is a Petro:2 format site. The four sites were
purchased for cash consideration totaling $45.9 million. The purchase price was primarily allocated to property and equipment of $42.7 million. We have not yet completed our evaluation and allocation of the purchase price as the analysis associated
with our valuation of certain assets are not yet complete. We do not believe that the analysis will materially modify the preliminary purchase price allocation.



Capital expenditures on our truck stop network totaled $50.4 million for the nine months ended September 30, 2005. These costs were primarily
associated with the acquisition of the four new sites as described above. We currently expect to invest approximately $4.7 million during the remainder of 2005 on capital expenditures related to regular capital maintenance and improvement projects
on existing Petro Stopping Centers, as well as volume building projects. The $4.7 million does not include potential new site acquisitions. These capital outlays will be funded through borrowings under our senior secured credit facilities and
internally generated cash.



19



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Under our Indenture for the 9% Notes 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 the Holding Partnerships 15.0% senior discount notes due 2008 (15% Notes) and their senior
third secured discount notes due 2014 and to pay for taxes and administrative expenses. For the nine months ended September 30, 2005, the Company paid approximately $4.9 million with respect to these distributions. We believe we will distribute
an additional $1.3 million to the Holding Partnership during the remainder of 2005 for interest payments, taxes, and administrative expenses. All but $50,000 of the 15% Notes were repurchased in the three month period ending March 31, 2005, and
the remaining $50,000 of the 15% Notes were repurchased in May 2005.



Long-Term Requirements



Our anticipated
long-term cash requirements include indebtedness and operating leases as set forth in the table above. Other possible long-term uses of cash include:



| |  |  | expansion of our network through constructing 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 2005 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 II, Item 7 of our 2004 Form 10-K/A.



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 those 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 (b) in notes to
consolidated financial statements included in our 2004 Form 10-K/A 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 (loss) for the period. If our
estimates are inaccurate, our expenses and net income (loss) will be understated or overstated. Although some variation to actual results occurs, historically such variability has not been material. At September 30, 2005, the aggregated
liability was approximately $10.1 million, which we believe is adequate to cover both reported and incurred but not reported claims.



20



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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 expenses and net income (loss) could be understated or overstated. Although some variation to actual results occurs, historically such variability has not been material. At September 30, 2005, we believe
our liability related to our Petro Passport loyalty program is adequate to cover future point redemptions.



Recently Issued Accounting Pronouncements



In December 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,
which replaced the original Interpretation No. 46 issued in January 2003. This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. The effective dates vary depending
on the type of reporting company and the type of entity that the company is involved with. Companies without publicly traded equity securities, such as ourselves, must apply the revised Interpretation immediately to all entities created after
December 31, 2003, and to all other entities no later than the beginning of the first reporting period beginning after December 15, 2004. We have adopted this revised Interpretation and concluded that we do not own interests in any
entities that meet the consolidation requirements.



In December
2004, the Financial Accounting Standards Board 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 do not believe that the adoption of this
revised standard will have a significant impact on our consolidated financial position or results of operations.



In March 2005, the Financial Accounting Standards Board issued Interpretation No. 47, Accounting for Conditional Asset Retirement
Obligations. This Interpretation clarifies that the term conditional as used in Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, which refers to a legal obligation
to perform an asset retirement activity even if the timing and/or settlement are conditional on a future event that may or may not be within the control of an entity. Accordingly, the entity must record a liability for the conditional asset
retirement obligation if the fair value of the obligation can be reasonably estimated. The Interpretation is effective for companies no later than the end of the fiscal year ending after December 15, 2005. Management is evaluating the impact of
this Interpretation on our consolidated financial statements.



In May 2005, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, which replaced Accounting Principles Board Opinion No. 20
Accounting Changes and Statement of Financial Accounting Standards No. 3, Reporting Accounting Changes in Interim Financial Statements. This standard provides guidance on the accounting and reporting for accounting
changes and correction of errors, requiring changes in accounting principles be recognized on a retrospective approach rather than treating them as cumulative effect of changes in accounting principle. The standard is effective for accounting
changes and correction of errors made in fiscal years beginning after December 15, 2005. We do not believe that the adoption of this standard will have a significant impact on our financial position or results of operations.



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 2004 Form
10-K/A. During the quarter ended September 30, 2005, there have been no material changes regarding our market risks from the discussion in our 2004 Form 10-K/A.



21



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The following table reflects the carrying amount and estimated fair value of our financial instruments,
as of December 31, 2004 and September 30, 2005:



|                      |  |                        |         |      |            |   |                 |  |   |            |   |  |   |        
|--------------------- |  | ---------------------- | ------- | ---- | ---------- | - | --------------- |  | - | ---------- | - |  | - | -------
|                      |  | 2004                   |         | 2005
|                      |  | Carrying Amount        |         |      | Fair Value |   | Carrying Amount |  |   | Fair Value
|                      |  | (dollars in thousands)
|Long-term debt        |  |                        |         |      |            |   |                 |  |   |            |   |  |   |        
|Fixed rate            |  | $                      | 225,000 |      |            | $ | 237,938         |  | $ | 250,000    |   |  | $ | 245,625
|Average interest rate |  |                        | 9.0     | %    |            |   |                |  |   | 9.0        | % |  |   |       
|Variable rate         |  | $                      | 21,250  |      |            | $ | 21,250          |  | $ | 21,250     |   |  | $ | 21,250 
|Average interest rate |  |                        | 5.8     | %    |            |   |                |  |   | 5.6        | % |  |   |       



Item 4. Controls and
Procedures



As of September 30, 2005, 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 which is required to be included in our periodic Securities and Exchange Commission filings.



There has been no change in our internal control over financial reporting in connection with the evaluation required by the paragraph (d) of the
Securities Exchange Act of 1934, as amended, Rules 13a-15 or 15d-15 during the third fiscal quarter, that has materially affected, or is reasonably likely to materially effect, 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 6. Exhibits



Incorporated herein by reference is a list of exhibits contained in the
Exhibit Index on pages 24 through 25 of this quarterly report.



22



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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 14, 2005 |  | 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)



23



---

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.01(a)     |  | Amended and Restated Certificate of Limited Partnership of Petro Stopping Centers, L.P.                                                                                                                                                                                                                                                                                                                                                  
|            | 
|3.04(f)     |  | 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.                                                                                                                                                     
|            | 
|3.05(t)     |  | First Amendment to the Fourth Amended and Restated Limited Partnership Agreement of Petro Stopping Centers, L.P., dated February 9, 2004, by and among Petro, Inc., as General Partner and
Petro Stopping Centers Holdings, L.P., Petro Holdings GP, L.L.C. and James A. Cardwell, Jr., as Limited Partners.                                                                                                                             
|            | 
|4.01(q)     |  | Revolving Credit and Term Loan Agreement, dated February 9, 2004, among Petro Stopping Centers, L.P., Petro Stopping Centers Holdings, L.P., Petro Holdings Financial Corporation, Petro
Distributing, Inc., and Petro Financial Corporation, Wells Fargo Bank, N.A., as Administrative Agent, Collateral Agent, and L/C Issuer, Bank of America, N.A., as Syndication Agent and the other lenders party thereto.                        
|            | 
|4.02(q)     |  | 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, relating to Petro Stopping Centers, L.P.s $225 million aggregate principal amount 9.0% Senior Secured Notes due 2012.                   
|            | 
|4.03(q)     |  | 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, relating to Petro Stopping Centers, L.P.s $225 million aggregate principal amount 9.0% Senior Secured Notes due
2012.
|            | 
|4.05(r)     |  | First Amendment to Credit Agreement, entered into as of January 21, 2005, 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.                                                                                 
|            | 
|4.06(u)     |  | Second Amendment to Credit Agreement, entered into as of July 26, 2005, 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.                                                                                   
|            | 
|4.07(u)     |  | Registration Rights Agreement, dated as of July 26, 2005, by and among Petro Stopping Centers, L.P., Petro Financial Corporation, Petro Stopping Centers Holdings, L.P., Petro Holdings
Financial Corporation, Petro, Inc., and Banc of America Securities LLC.                                                                                                                                                                          
|            | 
|10.34(v)    |  | Lease Agreement by and between Fairways Commercial Investment, L.L.C. and Petro Stopping Centers, L.P.                                                                                                                                                                                                                                                                                                                                   
|            | 
|10.35(v)    |  | Lease Agreement by and between Thruway Travel Centers, L.L.C. and Petro Stopping Centers, L.P.                                                                                                                                                                                                                                                                                                                                           
|            | 
|31.01*      |  | Chairman and Chief Executive Officers Certification pursuant to Rule 13a-14(a) or 15d-14(a).                                                                                                                                                                                                                                                                                                                                            



24



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|       |  |                                                                                                                                                                               
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.02* |  | 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.

---

|(a) | Incorporated by reference to Petro Stopping Centers, L.P.s Annual Report on Form 10-K for the year ended December 31, 1996.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(f) | Incorporated by reference to Petro Stopping Centers, L.P.s Current Report on Form 8-K, filed on August 6, 1999.
|--- | ----------------------------------------------------------------------------------------------------------------

|(q) | Incorporated by reference to Petro Stopping Centers, L.P.s Current Report on Form 8-K, filed on February 23, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------

|(r) | Incorporated by reference to Petro Stopping Centers, L.P.s Current Report on Form 8-K, filed on January 27, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------

|(t) | Incorporated by reference to Petro Stopping Centers, L.P.s Registration Statement on Form S-4, filed on May 10, 2004.
|--- | ----------------------------------------------------------------------------------------------------------------------

|(u) | Incorporated by reference to Petro Stopping Centers, L.P.s Quarterly Report on Form 10-Q filed on August 12, 2005.
|--- | -------------------------------------------------------------------------------------------------------------------

|(v) | Incorporated by reference to Petro Stopping Centers, L.P.s Current Report on Form 8-K, filed on November 7, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------

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



25