##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

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

For the Quarterly Period Ended: July 4, 2010

or



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

For the transition period from  to

Commission File Number: 001-33084





SUSSER HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 01-0864257                             
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

4525 Ayers Street

Corpus Christi, Texas 78415

(Address of principal executive offices)

(361) 884-2463

(Registrants telephone number, including area code)

N/A

(Former Name, former address and former fiscal year, if changed since last report)





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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.





|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  | x
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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:



|                              |  |                                
|----------------------------- |  | -------------------------------
|COMMON STOCK, $0.01 PAR VALUE |  | 17,362,951 SHARES              
|(Class)                       |  | (Outstanding at August 9, 2010)









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##### Table of Contents

SUSSER HOLDINGS CORPORATION

FORM 10-Q

TABLE OF CONTENTS



|                                                                                              |  |     
|--------------------------------------------------------------------------------------------- |  | ----
|                                                                                              |  | Page
|PART I  FINANCIAL INFORMATION                                                                |  |     
|Item 1. Financial Statements                                                                  |  | 1   
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 18  
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |  | 32  
|Item 4. Controls and Procedures                                                               |  | 33  
|                                                                                              | 
|PART II  OTHER INFORMATION                                                                   |  |     
|Item 1. Legal Proceedings                                                                     |  | 34  
|Item 1A. Risk Factors                                                                         |  | 34  
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 34  
|Item 3. Defaults Upon Senior Securities                                                       |  | 34  
|Item 4. (Removed and Reserved)                                                                |  | 34  
|Item 5. Other Information                                                                     |  | 34  
|Item 6. Exhibits                                                                              |  | 34  



i



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##### Table of Contents

PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

Susser Holdings Corporation

Consolidated Balance Sheets



|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------- | - | ----------- | - | -------
|                                                                                                                                                                                                 |  | January 3,2010 |         |   | July 4,2010
|                                                                                                                                                                                                 |  |                |         |   | unaudited  
|                                                                                                                                                                                                 |  | (in thousands)
|                                                                                                                                                                                                 |  |               
|Assets                                                                                                                                                                                           |  |                |         |   |             |   |        
|                                                                                                                                                                                                 |  |               
|Current assets:                                                                                                                                                                                  |  |                |         |   |             |   |        
|Cash and cash equivalents                                                                                                                                                                        |  | $              | 17,976  |   |             | $ | 44,178 
|Accounts receivable, net of allowance for doubtful accounts of $903 at January 3, 2010 and $980 at July 4,
2010                                                                                  |  |                | 65,510  |   |             |   | 74,415 
|Inventories, net                                                                                                                                                                                 |  |                | 78,788  |   |             |   | 81,901 
|Other current assets                                                                                                                                                                             |  |                | 9,507   |   |             |   | 7,547  
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total current assets                                                                                                                                                                             |  |                | 171,781 |   |             |   | 208,041
|Property and equipment, net                                                                                                                                                                      |  |                | 408,771 |   |             |   | 387,845
|Other assets:                                                                                                                                                                                    |  |                |         |   |             |   |        
|Goodwill                                                                                                                                                                                         |  |                | 242,295 |   |             |   | 240,158
|Intangible assets, net                                                                                                                                                                           |  |                | 33,144  |   |             |   | 33,787 
|Other noncurrent assets                                                                                                                                                                          |  |                | 17,027  |   |             |   | 16,766 
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total other assets                                                                                                                                                                               |  |                | 292,466 |   |             |   | 290,711
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total assets                                                                                                                                                                                     |  | $              | 873,018 |   |             | $ | 886,597
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|                                                                                                                                                                                                 |  |               
|Liabilities and shareholders equity                                                                                                                                                             |  |                |         |   |             |   |        
|Current liabilities:                                                                                                                                                                             |  |                |         |   |             |   |        
|Accounts payable                                                                                                                                                                                 |  | $              | 129,425 |   |             | $ | 142,620
|Accrued expenses and other current liabilities                                                                                                                                                   |  |                | 26,565  |   |             |   | 30,218 
|Current maturities of long-term debt                                                                                                                                                             |  |                | 10,545  |   |             |   | 517    
|Deferred gain, short-term portion                                                                                                                                                                |  |                | 2,067   |   |             |   | 2,067  
|Deferred purchase price  TCFS acquisition                                                                                                                                                       |  |                | 5,180   |   |             |   | 5,180  
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total current liabilities                                                                                                                                                                        |  |                | 173,782 |   |             |   | 180,602
|Long-term debt                                                                                                                                                                                   |  |                | 384,574 |   |             |   | 429,559
|Revolving line of credit                                                                                                                                                                         |  |                | 25,800  |   |             |   |       
|Deferred gain, long-term portion                                                                                                                                                                 |  |                | 33,786  |   |             |   | 34,485 
|Deferred tax liability, long-term portion                                                                                                                                                        |  |                | 28,846  |   |             |   | 20,962 
|Other noncurrent liabilities                                                                                                                                                                     |  |                | 15,812  |   |             |   | 15,396 
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total long-term liabilities                                                                                                                                                                      |  |                | 488,818 |   |             |   | 500,402
|Commitments and contingencies:                                                                                                                                                                   |  |                |         |   |             |   |        
|                                                                                                                                                                                                 |  |               
|Shareholders equity:                                                                                                                                                                            |  |                |         |   |             |   |        
|Susser Holdings Corporation shareholders equity:                                                                                                                                                |  |                |         |   |             |   |        
|Common stock, $.01 par value; 125,000,000 shares authorized; 17,158,717 issued and 17,141,393 outstanding as of January 3,
2010; 17,392,995 issued and 17,358,711 outstanding as of July 4, 2010 |  |                | 170     |   |             |   | 171    
|Additional paid-in capital                                                                                                                                                                       |  |                | 183,880 |   |             |   | 185,575
|Retained earnings                                                                                                                                                                                |  |                | 25,956  |   |             |   | 19,055 
|Accumulated other comprehensive loss                                                                                                                                                             |  |                | (358    | ) |             |   |       
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total Susser Holdings Corporation shareholders equity                                                                                                                                           |  |                | 209,648 |   |             |   | 204,801
|Noncontrolling interest                                                                                                                                                                          |  |                | 770     |   |             |   | 792    
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total shareholders equity                                                                                                                                                                       |  |                | 210,418 |   |             |   | 205,593
|                                                                                                                                                                                                 |  |                |         |   |             |   |        
|Total liabilities and shareholders equity                                                                                                                                                       |  | $              | 873,018 |   |             | $ | 886,597
|                                                                                                                                                                                                 |  |                |         |   |             |   |        

See accompanying notes.



1



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##### Table of Contents

Susser Holdings Corporation

Consolidated Statements of Operations

Unaudited



|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|------------------------------------------------------------------------ |  | ------------------------------------------------ | ---------- | - | ---------------- | - | ---------- | ------------ |  | - | ----------- | - |  | - | ---------- | -
|                                                                         |  | Three Months Ended                               |            |   | Six Months Ended |  
|                                                                         |  | (dollars in thousands, except per share amounts) |           
|                                                                         |  | June 28,2009                                     |            |   | July 4,2010      |   |            | June 28,2009 |  |   | July 4,2010 |  
|                                                                         |  |                                                  |            |  
|Revenues:                                                                |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Merchandise sales                                                        |  | $                                                | 199,940    |   |                  | $ | 208,276    |              |  | $ | 381,859     |   |  | $ | 399,314    |  
|Motor fuel sales                                                         |  |                                                  | 613,929    |   |                  |   | 799,170    |              |  |   | 1,103,328   |   |  |   | 1,535,984  |  
|Other income                                                             |  |                                                  | 9,297      |   |                  |   | 11,093     |              |  |   | 18,787      |   |  |   | 21,366     |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Total revenues                                                           |  |                                                  | 823,166    |   |                  |   | 1,018,539  |              |  |   | 1,503,974   |   |  |   | 1,956,664  |  
|Cost of sales:                                                           |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Merchandise                                                              |  |                                                  | 133,444    |   |                  |   | 137,603    |              |  |   | 252,947     |   |  |   | 266,258    |  
|Motor fuel                                                               |  |                                                  | 581,911    |   |                  |   | 745,808    |              |  |   | 1,045,855   |   |  |   | 1,457,303  |  
|Other                                                                    |  |                                                  | (5         | ) |                  |   | 1,226      |              |  |   | 95          |   |  |   | 1,580      |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Total cost of sales                                                      |  |                                                  | 715,350    |   |                  |   | 884,637    |              |  |   | 1,298,897   |   |  |   | 1,725,141  |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Gross profit                                                             |  |                                                  | 107,816    |   |                  |   | 133,902    |              |  |   | 205,077     |   |  |   | 231,523    |  
|                                                                         |  |                                                  |            |  
|Operating expenses:                                                      |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Personnel                                                                |  |                                                  | 36,865     |   |                  |   | 36,869     |              |  |   | 72,252      |   |  |   | 72,876     |  
|General and administrative                                               |  |                                                  | 8,227      |   |                  |   | 10,210     |              |  |   | 17,091      |   |  |   | 18,751     |  
|Other operating                                                          |  |                                                  | 29,649     |   |                  |   | 32,426     |              |  |   | 55,090      |   |  |   | 62,284     |  
|Rent                                                                     |  |                                                  | 9,030      |   |                  |   | 10,542     |              |  |   | 18,043      |   |  |   | 20,593     |  
|Loss on disposal of assets                                               |  |                                                  | 106        |   |                  |   | 578        |              |  |   | 158         |   |  |   | 842        |  
|Depreciation, amortization, and accretion                                |  |                                                  | 10,549     |   |                  |   | 11,365     |              |  |   | 20,512      |   |  |   | 22,573     |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Total operating expenses                                                 |  |                                                  | 94,426     |   |                  |   | 101,990    |              |  |   | 183,146     |   |  |   | 197,919    |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Income from operations                                                   |  |                                                  | 13,390     |   |                  |   | 31,912     |              |  |   | 21,931      |   |  |   | 33,604     |  
|Other income (expense):                                                  |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Interest expense, net                                                    |  |                                                  | (9,456     | ) |                  |   | (34,272    | )            |  |   | (19,089     | ) |  |   | (43,960    | )
|Other miscellaneous                                                      |  |                                                  | (59        | ) |                  |   | (69        | )            |  |   | 18          |   |  |   | (65        | )
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Total other expense, net                                                 |  |                                                  | (9,515     | ) |                  |   | (34,341    | )            |  |   | (19,071     | ) |  |   | (44,025    | )
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Income (loss) before income taxes                                        |  |                                                  | 3,875      |   |                  |   | (2,429     | )            |  |   | 2,860       |   |  |   | (10,421    | )
|Income tax (expense) benefit                                             |  |                                                  | (1,703     | ) |                  |   | 524        |              |  |   | (1,607      | ) |  |   | 3,542      |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Net income (loss)                                                        |  |                                                  | 2,172      |   |                  |   | (1,905     | )            |  |   | 1,253       |   |  |   | (6,879     | )
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Less: Net income attributable to noncontrolling interests                |  |                                                  | 7          |   |                  |   | 11         |              |  |   | 19          |   |  |   | 22         |  
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Net income (loss) attributable to Susser Holdings Corporation            |  | $                                                | 2,165      |   |                  | $ | (1,916     | )            |  | $ | 1,234       |   |  | $ | (6,901     | )
|                                                                         |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Net income (loss) per share attributable to Susser Holdings Corporation: |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Basic                                                                    |  | $                                                | 0.13       |   |                  | $ | (0.11      | )            |  | $ | 0.07        |   |  | $ | (0.41      | )
|Diluted                                                                  |  | $                                                | 0.13       |   |                  | $ | (0.11      | )            |  | $ | 0.07        |   |  | $ | (0.41      | )
|Weighted average shares outstanding:                                     |  |                                                  |            |   |                  |   |            |              |  |   |             |   |  |   |            |  
|Basic                                                                    |  |                                                  | 16,931,173 |   |                  |   | 17,016,067 |              |  |   | 16,927,848  |   |  |   | 17,005,078 |  
|Diluted                                                                  |  |                                                  | 17,006,903 |   |                  |   | 17,016,067 |              |  |   | 16,995,549  |   |  |   | 17,005,078 |  

See accompanying
notes.



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##### Table of Contents

Susser Holdings Corporation

Consolidated Statements of Cash Flows

Unaudited



|                                                                                         |  |                  |         |   |             |   |          |  
|---------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ----------- | - | -------- | -
|                                                                                         |  | Six Months Ended |        
|                                                                                         |  | June 28,2009     |         |   | July 4,2010 |  
|                                                                                         |  | (in thousands)   |        
|                                                                                         |  |                 
|Cash flows from operating activities:                                                    |  |                  |         |   |             |   |          |  
|                                                                                         |  |                 
|Net income (loss)                                                                        |  | $                | 1,253   |   |             | $ | (6,879   | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                  |         |   |             |   |          |  
|Depreciation, amortization, and accretion                                                |  |                  | 20,512  |   |             |   | 22,573   |  
|Loss on disposal of property                                                             |  |                  | 158     |   |             |   | 842      |  
|Noncash stock based compensation                                                        |  |                  | 1,586   |   |             |   | 1,631    |  
|Deferred income tax                                                                      |  |                  | (167    | ) |             |   | (6,586   | )
|Early extinguishment of debt                                                             |  |                  |        |   |             |   | 21,449   |  
|Amortization of debt premium and discount, net                                           |  |                  | (301    | ) |             |   | (128     | )
|Changes in operating assets and liabilities:                                             |  |                  |         |   |             |   |          |  
|Receivables                                                                              |  |                  | (7,823  | ) |             |   | (8,905   | )
|Inventories                                                                              |  |                  | (8,258  | ) |             |   | (3,113   | )
|Other current assets                                                                     |  |                  | (47     | ) |             |   | 814      |  
|Intangible assets, net                                                                   |  |                  | 1,135   |   |             |   | 1,532    |  
|Other noncurrent assets                                                                  |  |                  | 204     |   |             |   | (201     | )
|Accounts payable                                                                         |  |                  | 26,290  |   |             |   | 13,197   |  
|Accrued liabilities                                                                      |  |                  | (1,423  | ) |             |   | 3,653    |  
|Other noncurrent liabilities                                                             |  |                  | (2,784  | ) |             |   | (489     | )
|                                                                                         |  |                  |         |   |             |   |          |  
|Net cash provided by operating activities                                                |  |                  | 30,335  |   |             |   | 39,390   |  
|                                                                                         |  |                 
|Cash flows from investing activities:                                                    |  |                  |         |   |             |   |          |  
|Capital expenditures                                                                     |  |                  | (23,417 | ) |             |   | (22,564  | )
|Proceeds from disposal of property and equipment                                         |  |                  | 176     |   |             |   | 7,123    |  
|Proceeds from sale/leaseback transactions                                                |  |                  | 2,838   |   |             |   | 16,966   |  
|                                                                                         |  |                  |         |   |             |   |          |  
|Net cash provided by (used in) investing activities                                      |  |                  | (20,403 | ) |             |   | 1,525    |  
|                                                                                         |  |                 
|Cash flows from financing activities:                                                    |  |                  |         |   |             |   |          |  
|Proceeds from issuance of long-term debt                                                 |  |                  |        |   |             |   | 430,091  |  
|Change in notes receivable                                                               |  |                  | (145    | ) |             |   | 317      |  
|Payments on long-term debt                                                               |  |                  | (3,327  | ) |             |   | (408,011 | )
|Revolving line of credit, net                                                            |  |                  | (580    | ) |             |   | (25,800  | )
|Loan origination costs                                                                   |  |                  | (227    | ) |             |   | (11,375  | )
|Proceeds from issuance of equity                                                         |  |                  | 142     |   |             |   | 65       |  
|                                                                                         |  |                  |         |   |             |   |          |  
|Net cash used in financing activities                                                    |  |                  | (4,137  | ) |             |   | (14,713  | )
|Net increase in cash                                                                     |  |                  | 5,795   |   |             |   | 26,202   |  
|Cash and cash equivalents at beginning of year                                           |  |                  | 8,284   |   |             |   | 17,976   |  
|                                                                                         |  |                  |         |   |             |   |          |  
|Cash and cash equivalents at end of period                                               |  | $                | 14,079  |   |             | $ | 44,178   |  
|                                                                                         |  |                  |         |   |             |   |          |  

See accompanying notes.



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Susser Holdings Corporation

Notes to Consolidated Financial Statements

Unaudited



|1. | Organization and Principles of Consolidation
|-- | --------------------------------------------

The consolidated financial statements are composed of Susser Holdings Corporation (Susser or the Company), a
Delaware corporation, and its consolidated subsidiaries, which operate convenience stores and distribute motor fuels in Texas, New Mexico, Oklahoma and Louisiana. The Company was formed in May 2006, and in October 2006 completed an initial public
offering (IPO). Susser, through its subsidiaries and predecessors, has been acquiring, operating, and supplying motor fuel to service stations and convenience stores since the 1930s.

The consolidated financial statements include the accounts of the Company and all of its subsidiaries. The Companys primary
operations are conducted by the following consolidated subsidiaries:



| |  |  | Stripes LLC (Stripes), a Texas Limited Liability Company, operates convenience stores located in Texas, New Mexico, and Oklahoma.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Susser Petroleum Company LLC (SPC), a Texas Limited Liability Company, distributes motor fuels primarily in Texas, New Mexico, Oklahoma and
Louisiana. SPC is a wholly owned subsidiary of Stripes.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company also offers environmental, maintenance,
and construction management services to the petroleum industry (including its own sites) through its subsidiary, Applied Petroleum Technologies, Ltd. (APT), a Texas limited partnership. Two wholly owned subsidiaries, Susser Holdings,
L.L.C. and Susser Finance Corporation, are the issuers of the $425 million of senior notes outstanding at July 4, 2010, but do not conduct any operations (See Note 7). A subsidiary, C&G Investments, LLC, owns a 50% interest in
Cash & Go, Ltd. and Cash & Go Management, LLC. Cash & Go, Ltd. currently operates 39 units, located primarily inside Stripes retail stores, which provide short-term loan services and check cashing services. The
Company accounts for this investment under the equity method, and reflects its share of net earnings in other miscellaneous income and its investment in other noncurrent assets.

All significant intercompany accounts and transactions have been eliminated in consolidation. Transactions and balances of other
subsidiaries are not material to the consolidated financial statements. The Companys fiscal year is 52 or 53 weeks and ends on the Sunday closest to December 31. All references to fiscal 2009 refer to the 53-week period ended
January 3, 2010. All references to the first half and second quarter of 2009 and 2010 refer to the 26-week and 13-week periods ended June 28, 2009 and July 4, 2010, respectively. Stripes and APT follow the same accounting calendar as
the Company. SPC uses calendar month accounting periods, and end their fiscal year on December 31.

The consolidated
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The interim consolidated financial
statements have been prepared from the accounting records of the Company and its subsidiaries, and all amounts at July 4, 2010 and for the three and six months ended June 28, 2009 and July 4, 2010 are unaudited. Pursuant to Regulation
S-X, certain information and note disclosures normally included in annual financial statements have been condensed or omitted. The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair statement
of the results for the interim periods presented, and which are of a normal, recurring nature.

Our results of operations for
the three and six months ended June 28, 2009 and July 4, 2010 are not necessarily indicative of results to be expected for the full fiscal year. Our business is seasonal and we generally experience higher levels of revenues during the
summer months than during the winter months.

The interim consolidated financial statements included herein should be read in
conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2010.



4



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##### Table of Contents

In preparing the accompanying unaudited condensed consolidated financial statements, the
Company has reviewed, as determined necessary by the Companys management, events that have occurred after July 4, 2010, up until the issuance of these financial statements.



|2. | New Accounting Pronouncements
|-- | -----------------------------

FASB
ASU No. 2010-06.

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures
(Topic 820)  Improving Disclosures about Fair Value Measurements.This guidance will require reporting entities to provide information about movements of assets among Levels 1 and 2 of the three-tier fair value hierarchy established by ASC
820 and provide a reconciliation of purchases, sales, issuance, and settlements of financial instruments valued with a Level 3 method, which is used to price the hardest to value instruments. Entities will have to provide fair value measurement
disclosures for each class of financial assets and liabilities. The ASU was generally effective for interim and annual reporting periods beginning after December 15, 2009; however the requirement to disclose separately purchases, sales,
issuances and settlements in the Level 3 reconciliation are effective for fiscal years beginning after December 15, 2010 (and for interim period within such years). Our adoption of the applicable sections of this ASU did not have a material
impact on our financial statements.



|3. | Accounts Receivable
|-- | -------------------

Accounts receivable consisted of the following:



|                                                    |  |                |        |   |             |   |        |  
|--------------------------------------------------- |  | -------------- | ------ | - | ----------- | - | ------ | -
|                                                    |  | January 3,2010 |        |   | July 4,2010 |  
|                                                    |  | (in thousands) |       
|Accounts receivable, trade                          |  | $              | 49,954 |   |             | $ | 54,726 |  
|Receivable from state reimbursement funds           |  |                | 1,212  |   |             |   | 1,155  |  
|Vendor receivables for rebates, branding and others |  |                | 6,103  |   |             |   | 6,788  |  
|ATM fund receivables                                |  |                | 5,530  |   |             |   | 6,335  |  
|Notes receivable, short term                        |  |                | 325    |   |             |   | 284    |  
|Other receivables                                   |  |                | 3,289  |   |             |   | 6,107  |  
|Allowance for uncollectible accounts, trade         |  |                | (609   | ) |             |   | (681   | )
|Allowance for uncollectible accounts, environmental |  |                | (294   | ) |             |   | (299   | )
|                                                    |  |                |        |   |             |   |        |  
|                                                    |  |               
|Accounts receivables, net                           |  | $              | 65,510 |   |             | $ | 74,415 |  
|                                                    |  |                |        |   |             |   |        |  



5



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##### Table of Contents

|4. | Inventories
|-- | -----------

Inventories
consisted of the following:



|                                                   |  |                |        |   |             |   |        |  
|-------------------------------------------------- |  | -------------- | ------ | - | ----------- | - | ------ | -
|                                                   |  | January 3,2010 |        |   | July 4,2010 |  
|                                                   |  | (in thousands) |       
|Merchandise                                        |  | $              | 47,567 |   |             | $ | 47,855 |  
|Fuel-retail                                        |  |                | 19,347 |   |             |   | 20,996 |  
|Fuel-wholesale consignment                         |  |                | 2,908  |   |             |   | 2,356  |  
|Fuel-wholesale bulk                                |  |                | 3,168  |   |             |   | 3,939  |  
|Lottery                                            |  |                | 1,928  |   |             |   | 2,007  |  
|Equipment and maintenance spare parts              |  |                | 4,534  |   |             |   | 5,309  |  
|Allowance for inventory, shortage and obsolescence |  |                | (664   | ) |             |   | (561   | )
|                                                   |  |                |        |   |             |   |        |  
|                                                   |  |               
|Inventories, net                                   |  | $              | 78,788 |   |             | $ | 81,901 |  
|                                                   |  |                |        |   |             |   |        |  



|5. | Property and Equipment
|-- | ----------------------

Property and equipment consisted of the following:



|                                     |  |                |         |             |   |        
|------------------------------------ |  | -------------- | ------- | ----------- | - | -------
|                                     |  | January 3,2010 |         | July 4,2010
|                                     |  | (in thousands)
|Land                                 |  | $              | 125,806 |             | $ | 122,387
|Buildings and leasehold improvements |  |                | 215,793 |             |   | 215,576
|Equipment                            |  |                | 175,910 |             |   | 176,857
|Construction in progress             |  |                | 11,239  |             |   | 10,771 
|                                     |  |                |         |             |   |        
|                                     |  |                | 528,748 |             |   | 525,591
|Less accumulated depreciation        |  |                | 119,977 |             |   | 137,746
|                                     |  |                |         |             |   |        
|                                     |  |               
|Property and equipment, net          |  | $              | 408,771 |             | $ | 387,845
|                                     |  |                |         |             |   |        



|6. | Goodwill and Other Intangible Assets
|-- | ------------------------------------

Goodwill is not being amortized, but is tested annually for impairment, and is tested for impairment more frequently if events and
circumstances indicate that the asset might be impaired. The annual impairment test is performed as of the first day of the fourth quarter of the fiscal year. At January 3, 2010 and July 4, 2010, we had $242.3 million and $240.2 million,
respectively, of goodwill recorded in conjunction with past business combinations. The 2009 impairment analysis indicated no impairment in goodwill. As of July 4, 2010 we evaluated potential impairment indicators pursuant to the requirements of
ASC 350-20-35-30. We believe no indicators of impairment occurred during the second quarter of 2010, and believe the assumptions used in the analysis performed in 2009 are still relevant and indicative of our current operating environment. As a
result, no impairment was recorded to goodwill during the second quarter of 2010 and no additions were recorded during this period. In conjunction with the sale of the Village Market stores, we wrote off $2.1 million of goodwill during the second
quarter of 2010.



6



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##### Table of Contents

In accordance with ASC 350Intangibles  Goodwill and Other, the
Company has finitelived intangible assets recorded that are amortized and indefinite-lived assets that do not amortize. The finitelived assets consist of supply agreements, favorable/unfavorable leasehold arrangements, loan origination
costs and trade names, all of which are amortized over the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Companys future cash flows. Supply agreements are
being amortized over a weighted average period of approximately nine years. Favorable/unfavorable leasehold arrangements are being amortized over a weighted average period of approximately eleven years. The Laredo Taco Company trade name is being
amortized over fifteen years. The Town & Country Food Stores trade name is being amortized over five years. Loan origination costs are amortized over the life of the underlying debt as an increase to interest expense. The following table
presents the gross carrying amount and accumulated amortization for each major class of intangible assets, excluding goodwill, at January 3, 2010 and July 4, 2010:



|                                  |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |        |  |   |       
|--------------------------------- |  | ------------------- | ------ | ----------------------- | - | --------- |  | ------------------- | ------ | ----------------------- | - | --------- |  | - | ------ |  | - | ------
|                                  |  | January 3, 2010     |        | July 4, 2010           
|                                  |  | GrossCarryingAmount |        | AccumulatedAmortization |   | NetAmount |  | GrossCarryingAmount |        | AccumulatedAmortization |   | NetAmount
|                                  |  | (in thousands)     
|                                  |  |                     |        |                         |   |          
|Unamortized                       |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |        |  |   |       
|                                  |  |                     |        |                         |   |          
|Trade name                        |  | $                   | 615    |                         | $ |          |  | $                   | 615    |                         | $ | 45        |  | $ |       |  | $ | 45    
|                                  |  |                     |        |                         |   |          
|Franchise rights                  |  |                     | 389    |                         |   |          |  |                     | 389    |                         |   | 389       |  |   |       |  |   | 389   
|                                  |  |                     |        |                         |   |          
|Liquor licenses                   |  |                     | 11,600 |                         |   |          |  |                     | 11,600 |                         |   | 12,038    |  |   |       |  |   | 12,038
|                                  |  |                     |        |                         |   |          
|Amortized                         |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |        |  |   |       
|                                  |  |                     |        |                         |   |          
|Supply agreements                 |  |                     | 8,772  |                         |   | 3,322     |  |                     | 5,450  |                         |   | 8,999     |  |   | 3,731  |  |   | 5,268 
|Favorable lease arrangements, net |  |                     | 2,622  |                         |   | 2,368     |  |                     | 254    |                         |   | 2,497     |  |   | 2,363  |  |   | 134   
|                                  |  |                     |        |                         |   |          
|Loan origination costs            |  |                     | 18,367 |                         |   | 7,623     |  |                     | 10,744 |                         |   | 13,765    |  |   | 1,599  |  |   | 12,166
|                                  |  |                     |        |                         |   |          
|Trade names                       |  |                     | 5,756  |                         |   | 1,761     |  |                     | 3,995  |                         |   | 5,756     |  |   | 2,054  |  |   | 3,702 
|                                  |  |                     |        |                         |   |          
|Other                             |  |                     | 520    |                         |   | 423       |  |                     | 97     |                         |   | 320       |  |   | 275    |  |   | 45    
|                                  |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |        |  |   |       
|                                  |  |                     |        |                         |   |          
|Intangible assets, net            |  | $                   | 48,641 |                         | $ | 15,497    |  | $                   | 33,144 |                         | $ | 43,809    |  | $ | 10,022 |  | $ | 33,787
|                                  |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |        |  |   |       



|7. | Long -Term Debt
|-- | ---------------

Long-term debt consisted of the following:



|                                                                                                                                            |  |                |         |             |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ----------- | - | ------- | -
|                                                                                                                                            |  | January 3,2010 |         | July 4,2010 |  
|                                                                                                                                            |  | (in thousands) |        
|105/8%
 senior unsecured notes due 2013                                                                                                     |  | $              | 300,000 |             | $ |        |  
|                                                                                                                                            |  |               
|8.5% senior unsecured notes due 2016                                                                                                        |  |                |        |             |   | 425,000 |  
|                                                                                                                                            |  |               
|Term loan facility, bearing interest at LIBOR plus applicable margin (2.23% at January 3, 2010)                                             |  |                | 91,875  |             |   |        |  
|                                                                                                                                            |  |               
|Revolving credit agreement, bearing interest at Prime or LIBOR plus applicable margin, (3.25% at January 3, 2010 and 4.50%
at July 4, 2010) |  |                | 25,800  |             |   |        |  
|                                                                                                                                            |  |               
|Other notes payable                                                                                                                         |  |                | 90      |             |   | 9,893   |  
|                                                                                                                                            |  |               
|Unamortized premium (discount)                                                                                                              |  |                | 3,154   |             |   | (4,817  | )
|                                                                                                                                            |  |                |         |             |   |         |  
|                                                                                                                                            |  |               
|Total debt                                                                                                                                  |  |                | 420,919 |             |   | 430,076 |  
|                                                                                                                                            |  |               
|Less: current maturities                                                                                                                    |  |                | 10,545  |             |   | 517     |  
|                                                                                                                                            |  |                |         |             |   |         |  
|                                                                                                                                            |  |               
|Longterm debt, net of current maturities                                                                                                   |  | $              | 410,374 |             | $ | 429,559 |  
|                                                                                                                                            |  |                |         |             |   |         |  

The fair value of debt as of July 4, 2010, is estimated to be approximately $434.9 million, based on
the reported trading activity of the Senior Notes at that time, and the par value of the revolving credit facility and other notes payable.



7



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##### Table of Contents

Senior Unsecured Notes

On May 7, 2010, the Company, through its subsidiaries Susser Holdings, L.L.C. and Susser Finance Corporation, issued $425 million
8.50% Senior Notes due 2016 (the 2016 Notes). The 2016 Notes pay interest semiannually in arrears on May 15 and November 15 of each year, commencing on November 15, 2010. The 2016 Notes mature on May 15, 2016 and are
guaranteed by the Company and each existing and future domestic subsidiary of the Company other than certain non-operating subsidiaries and Susser Company, Ltd. The net proceeds from the sale of the 2016 Notes, together with cash on hand and
borrowings under the Amended and Restated Credit Agreement, were used to redeem and discharge all of the outstanding 10 5/8 % senior unsecured notes due 2013 (the 2013 Notes) including a call premium of $15.9 million, to repay the
outstanding indebtedness under the term credit facility and to pay other related fees and expenses.

At any time prior to
May 15, 2013, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2016 Notes at a redemption price of 108.500% of the principal amount, plus accrued and unpaid interest and liquidated damages,
if any, to the redemption date, with the net cash proceeds of certain public equity offerings. The 2016 Notes may also be redeemed prior to May 15, 2013, in whole or in part, at the option of the Company at a redemption price equal to 100% of
the principal amount of the 2016 Notes redeemed plus a make-whole premium and accrued and unpaid interest and liquidated damages, if any, to the applicable redemption date.

On or after May 15, 2013, the Company may redeem all or any part of the 2016 Notes at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid interest and liquidated damages, if any, to the applicable redemption date, if redeemed during the twelve month period beginning on May 15 of the years indicated below:



|     |  |         |  
|---- |  | ------- | -
|Year |  | Price   |  
|2013 |  | 104.250 | %
|2014 |  | 102.125 | %
|2015 |  | 100.000 | %

The Company must
offer to purchase the 2016 Notes at 101% of the aggregate principal amount of the notes, plus accrued and unpaid interest, in the event of certain kinds of changes of control. The Company must offer to purchase the Notes at 100% of the aggregate
principal amount of the notes, plus accrued and unpaid interest, if excess proceeds remain after the consummation of assets sales.

The 2016 Notes indenture contains customary covenants that limit, among other things, the ability of the Company and its restricted
subsidiaries to: incur additional debt; make restricted payments (including paying dividends on, redeeming or repurchasing their capital stock); dispose of its assets; grant liens on its assets, engage in transactions with affiliates; merge or
consolidate or transfer substantially all of its assets; and enter into certain sale/leaseback transactions. The indenture also includes certain customary events of default (subject to customary exceptions, baskets and qualifications) including, but
not limited to: failure to pay principal, interest, premium or liquidated damages when due; failure to comply with certain covenants; default on certain other indebtedness; certain monetary judgment defaults; bankruptcy and insolvency defaults; and
actual or asserted impairment of any note guarantee.

In accordance with a registration rights agreement with the initial
purchasers of the 2016 Notes, the Company filed a registration statement with the Securities and Exchange Commission on July 27, 2010, registering an offer to exchange the 2016 Notes for notes having identical terms in all material respects to
the 2016 Notes, but which would generally be freely transferable.

Credit Facilities

On May 7, 2010, Susser Holdings, L.L.C. entered into an Amended and Restated Credit Agreement (the Credit Agreement) with
a syndicate of financial institutions providing for a new four year revolving credit facility (the Revolver) in an aggregate principal amount of up to $120 million. The Credit Agreement changed certain terms of the existing credit
facilities, among others: cancellation of the term loan facility (of which $89.3 million was outstanding) and release of a majority of the real property securing the term loans (with the remainder to continue to secure the new Revolver); addition of
a $40 million facility increase option; extension of maturity date from November 2012 until May 2014; reduction in fixed charge coverage ratio; increase in senior secured leverage ratio; and increase in margins and commitment fees, subject, in the
case of the margins for loans and letters of credit, to adjustment based on leverage grids. The Company and each of its existing and future direct and indirect subsidiaries (other than (i) any subsidiary that is a controlled foreign
corporation under the Internal Revenue Code or a subsidiary that is held directly or indirectly by a controlled foreign corporation, (ii) Susser Company, Ltd. and (iii) certain future non-operating subsidiaries) will be
guarantors under the Credit Agreement.

Availability under the Revolver is subject to a borrowing base equal to the lesser of
(x) (a) 85% of eligible accounts receivable plus (b) 55% of eligible inventory plus (c) 60% of the fair market value of certain designated eligible real property, which shall not exceed 45% of the aggregate borrowing base amount,
minus (d) such reserves as the administrative agent may establish in its reasonable credit judgment acting in good faith (including, without limitation, reserves for exposure under swap contracts and obligations relating to treasury management
products) and (y) the greater of (i) $160 million and (ii) (A) 85% of gross accounts receivable plus (B) 60% of gross inventory.



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##### Table of Contents

The interest rates under the Revolver are calculated, at the Companys option, at
either a base rate or a LIBOR rate plus, in each case, a margin. With respect to LIBOR rate loans, interest will be payable at the end of each selected interest period, but no less frequently than quarterly. With respect to base rate loans, interest
will be payable quarterly in arrears. The Revolver may be prepaid at any time in whole or in part without premium or penalty, other than breakage costs if applicable, and requires the maintenance of a maximum senior secured leverage ratio and a
minimum fixed charge coverage ratio. We were in compliance with the required leverage and fixed charge coverage ratios as of July 4, 2010.

The Revolver contains customary representations and warranties (subject to customary exceptions, thresholds and qualifications) as well
as certain customary covenants (subject to customary exceptions, thresholds and qualifications) that impose certain affirmative obligations upon and restrict the ability of the Company and its subsidiaries to, among other things: incur liens; incur
additional indebtedness, guarantees or other contingent obligations; engage in mergers and consolidations; make sales, transfers and other dispositions of property and assets; make loans, acquisitions, joint ventures and other investments; declare
dividends; redeem and repurchase shares of equity holders; create new subsidiaries; become a general partner in any partnership; prepay, redeem or repurchase debt; make capital expenditures; grant negative pledges; change the nature of business;
amend organizational documents and other material agreements; change accounting policies or reporting practices; and permit Stripes Holdings LLC to be other than a passive holding company.

The Revolver also includes certain customary events of default (subject to customary exceptions, baskets and qualifications) including,
but not limited to: failure to pay principal, interest, fees or other amounts when due; any representation or warranty proving to have been materially incorrect when made or confirmed; failure to perform or observe covenants set forth in the loan
documentation; default on certain other indebtedness; certain monetary judgment defaults and material non-monetary judgment defaults; bankruptcy and insolvency defaults; actual or asserted impairment of loan documentation or security; a change of
control; and customary ERISA defaults.

As of July 4, 2010, we had no outstanding borrowings under the Revolver and $17.1
million in standby letters of credit. Our borrowing base in effect at July 4, 2010 allowed a maximum borrowing, including outstanding letters of credit, of $120.0 million. Our unused availability on the revolver at July 4, 2010 was $102.9
million.

Losses on Early Extinguishment of Debt

In conjunction with the prepayment of outstanding debt in May 2010, the Company incurred losses on early extinguishment of debt that are
non-recurring in nature. Losses on early extinguishment of debt at July 4, 2010 totaled $21.4 million and included the $15.9 million call premium and write-off of $7.0 million in unamortized loan costs associated with the call of the 2013
Notes, $2.9 million write off of unamortized premium on the 2013 Notes, and $1.4 million write off of unamortized deferred financing costs on the term note. These amounts are included in interest expense in the statements of operations for the three
and six months ended July 4, 2010. We followed ASC 470 Modifications and Extinguishments in accounting for this refinancing transaction and its associated deferred debt issuance costs.

In addition to the losses on early extinguishment of debt, the Company also incurred additional interest costs that were related to the
redemption of debt and were non-recurring in nature. These included $1.0 million to cancel interest rate swaps on the term note and $1.8 million interest for the 20-day period that both the 2013 Notes and 2016 Notes were outstanding. See Note 9 for
additional information related to interest expense.

Fair Value Measurements

We use fair value measurements to measure, among other items, purchased assets and investments, leases and derivative contracts. We also
use them to assess impairment of properties, equipment, intangible assets and goodwill. Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A liabilitys fair
value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or
parameters, or are derived from such prices or parameters. Where observable prices or inputs are not available, use of unobservable prices or inputs are used to estimate the current fair value, often using an internal valuation model. These
valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the item being valued.



9



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##### Table of Contents

ASC 820Fair Value Measurements and Disclosures prioritizes the inputs
used in measuring fair value into the following hierarchy:



|        |  |                                                                                                                                                                                                    
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 1 |  | Quoted prices (unadjusted) in active markets for identical assets or liabilities;                                                                                                                  
|        | 
|Level 2 |  | Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;                                                                                         
|        | 
|Level 3 |  | Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would
use in pricing.

From time to time, the Company enters into interest rate swaps to either reduce the impact of
changes in interest rates on its floating rate long-term debt or to take advantage of favorable variable interest rates compared to its fixed rate long-term debt in order to manage interest rate risk exposure. During the second quarter of 2010, in
connection with the repayment of the term loan facility, the Company cancelled its outstanding $70 million interest rate swaps at a cost of $1.0 million. The swaps had been designated as cash flow hedges, and the Company recognized $1.4 million in
additional interest expense (effective portion) during the first six months of 2010 and recognized a $1.3 million loss, net of tax, in other comprehensive income.

The Company also periodically enters into derivatives, such as futures and options, to manage its fuel price risk, primarily related to
bulk purchases of fuel. We hedge this inventory risk through the use of fuel futures contracts which are matched in quantity and timing to the anticipated usage of the inventory. Bulk fuel purchases and fuel hedging positions have not been material
to our operations. These positions have been designated as fair value hedges. The fair value of our derivative contracts are measured using Level 2 inputs, and are determined by either market prices on an active market for similar assets or by
prices quoted by a broker or other market-corroborated prices. This price does not differ materially from the amount that would be paid to transfer the liability to a new obligor due to the short term nature of these contracts. At January 3,
2010, the Company held fuel futures contracts with a fair value of ($174,000), (22 contracts representing 0.9 million gallons). At July 4, 2010, the Company held fuel futures contracts with a fair value of ($56,000) (18 contracts
representing 0.8 million gallons), which is classified in other current assets in the Companys consolidated balance sheets. The Company recognized a loss during the second quarter of 2010 related to these contracts of $0.2 million. The
loss realized on hedging contracts is substantially offset by increased profitability on sale of fuel inventory.



|8. | Commitments and Contingencies
|-- | -----------------------------

Leases

The Company leases a portion of its convenience store properties under non-cancellable operating leases, whose initial
terms are typically 10 to 20 years, along with options that permit renewals for additional periods. Minimum rent is expensed on a straight-line basis over the term of the lease. In addition to minimum rental payments, certain leases require
additional payments based on sales or motor fuel volume. The Company is typically responsible for payment of real estate taxes, maintenance expenses and insurance.



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##### Table of Contents

The components of net rent expense are as follows:



|                              |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|----------------------------- |  | ------------------ | ----- | - | ---------------- | - | ------ | ------------ |  | - | ----------- | - |  | - | ------ | -
|                              |  | Three Months Ended |       |   | Six Months Ended |  
|                              |  | June 28,2009       |       |   | July 4,2010      |   |        | June 28,2009 |  |   | July 4,2010 |  
|                              |  | (in thousands)     |      
|Cash rent:                    |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Store base rent               |  | $                  | 9,092 |   |                  | $ | 10,479 |              |  | $ | 18,125      |   |  | $ | 20,605 |  
|Equipment rent                |  |                    | 146   |   |                  |   | 347    |              |  |   | 347         |   |  |   | 555    |  
|Contingent rent               |  |                    | 54    |   |                  |   | 69     |              |  |   | 94          |   |  |   | 133    |  
|                              |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Total cash rent               |  | $                  | 9,292 |   |                  | $ | 10,895 |              |  | $ | 18,566      |   |  | $ | 21,293 |  
|                              |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Noncash rent:                |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Straight-line rent            |  |                    | 249   |   |                  |   | 186    |              |  |   | 499         |   |  |   | 374    |  
|Amortization of deferred gain |  |                    | (511  | ) |                  |   | (539   | )            |  |   | (1,022      | ) |  |   | (1,074 | )
|                              |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Net rent expense              |  | $                  | 9,030 |   |                  | $ | 10,542 |              |  | $ | 18,043      |   |  | $ | 20,593 |  
|                              |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  

Letters of Credit

We were contingently liable for $17.1 million related to irrevocable letters of credit required by various insurers and suppliers at
July 4, 2010.



|9. | Interest Expense and Interest Income
|-- | ------------------------------------

The components of net interest expense are as follows:



|                                                         |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|-------------------------------------------------------- |  | ------------------ | ----- | - | ---------------- | - | ------ | ------------ |  | - | ----------- | - |  | - | ------ | -
|                                                         |  | Three Months Ended |       |   | Six Months Ended |  
|                                                         |  | June 28,2009       |       |   | July 4,2010      |   |        | June 28,2009 |  |   | July 4,2010 |  
|                                                         |  | (in thousands)     |      
|Cash interest expense                                    |  | $                  | 8,748 |   |                  | $ | 26,947 |              |  | $ | 17,689      |   |  | $ | 35,834 |  
|Cash paid on interest rate swap                          |  |                    | 236   |   |                  |   | 1,127  |              |  |   | 374         |   |  |   | 1,397  |  
|Capitalized interest                                     |  |                    | (92   | ) |                  |   | (50    | )            |  |   | (101        | ) |  |   | (91    | )
|Amortization of loan costs and issuance premium/discount |  |                    | 621   |   |                  |   | 6,274  |              |  |   | 1,249       |   |  |   | 6,881  |  
|Cash interest income                                     |  |                    | (57   | ) |                  |   | (26    | )            |  |   | (122        | ) |  |   | (61    | )
|                                                         |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Interest expense, net                                    |  | $                  | 9,456 |   |                  | $ | 34,272 |              |  | $ | 19,089      |   |  | $ | 43,960 |  
|                                                         |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  

Included in the amounts above for the three and six months ended July 4, 2010, are the following
non-recurring charges related to the May 2010 debt refinancing (See Note 7) in thousands:



|                                                              |  |      |        |          |   |       |  |   |       
|------------------------------------------------------------- |  | ---- | ------ | -------- | - | ----- |  | - | ------
|                                                              |  | Cash |        | Non-Cash |   | Total
|Call premium on redemption of 10 5/8% notes                   |  | $    | 15,939 |          | $ |      |  | $ | 15,939
|Cancel interest rate swaps on term loan                       |  |      | 1,025  |          |   |      |  |   | 1,025 
|Interest overlap on old and new notes from May 7 to May 27    |  |      | 1,771  |          |   |      |  |   | 1,771 
|Write off unamortized premium and loan costs on redeemed debt |  |      |       |          |   | 5,510 |  |   | 5,510 
|                                                              |  |      |        |          |   |       |  |   |       
|Total non-recurring charges                                   |  | $    | 18,735 |          | $ | 5,510 |  | $ | 24,245
|                                                              |  |      |        |          |   |       |  |   |       



11



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##### Table of Contents

|10. | Income Tax
|--- | ----------

A
reconciliation of the statutory federal income tax rate to the Companys effective tax rate for the three and six months ended July 4, 2010 and June 28, 2009 is as follows:



|                                              |  |                                 |       |   |                               |       |   |                |   |        |            |  |      |  
|--------------------------------------------- |  | ------------------------------- | ----- | - | ----------------------------- | ----- | - | -------------- | - | ------ | ---------- |  | ---- | -
|                                              |  | Three Months EndedJuly 4, 2010  |       |   | Six Months EndedJuly 4, 2010  |      
|                                              |  | (in thousands)                  |       |   | Tax rate %                    |       |   | (in thousands) |   |        | Tax rate % | 
|Tax at statutory federal rate                 |  | $                               | (854  | ) |                               | 35.0  | % |                | $ | (3,655 | )          |  | 35.0 | %
|State and local tax, net of federal benefit   |  |                                 | 293   |   |                               | (12.0 | ) |                |   | 576    |            |  | (5.5 | )
|                                              |  |                                 |       |  
|Other                                         |  |                                 | 37    |   |                               | (1.5  | ) |                |   | (463   | )          |  | 4.4  |  
|                                              |  |                                 |       |   |                               |       |   |                |   |        |            |  |      |  
|Tax expense (benefit) per financial statement |  | $                               | (524  | ) |                               | 21.5  | % |                | $ | (3,542 | )          |  | 33.9 | %
|                                              |  |                                 |       |   |                               |       |   |                |   |        |            |  |      |  
|                                              |  |                                
|                                              |  | Three Months EndedJune 28,
2009 |       |   | Six Months EndedJune 28, 2009 |      
|                                              |  | (in thousands)                  |       |   | Tax rate %                    |       |   | (in thousands) |   |        | Tax rate % | 
|Tax at statutory federal rate                 |  | $                               | 1,353 |   |                               | 35.0  | % |                | $ | 994    |            |  | 35.0 | %
|State and local tax, net of federal benefit   |  |                                 | 326   |   |                               | 8.4   |   |                |   | 599    |            |  | 21.1 |  
|Other                                         |  |                                 | 24    |   |                               | 0.6   |   |                |   | 14     |            |  | 0.5  |  
|                                              |  |                                 |       |   |                               |       |   |                |   |        |            |  |      |  
|Tax expense per financial statement           |  | $                               | 1,703 |   |                               | 44.0  | % |                | $ | 1,607  |            |  | 56.6 | %
|                                              |  |                                 |       |   |                               |       |   |                |   |        |            |  |      |  

Included in our provision for income tax is a tax imposed by the state of Texas of 0.5% of gross margin in
Texas (margin tax). The margin tax accrued for the six months ended June 28, 2009 and July 4, 2010 was $1.0 million and $0.9 million, respectively.

It is the Companys policy to recognize interest and penalties related to uncertain tax positions in general and administrative
expense. The Company became a taxpayer at October 24, 2006 with the conversion to a C corporation, and the statute of limitations remains open on all years since then. The Company files income and gross margin tax returns in the
U.S. federal jurisdiction, Texas, Oklahoma, New Mexico and Louisiana. The Company is subject to examinations in all jurisdictions for all returns filed since October 24, 2006.

As of July 4, 2010, all tax positions taken by the Company are considered highly certain. There are no positions the Company
reasonably anticipates will significantly increase or decrease within 12 months of the reporting date, and therefore no adjustments have been recorded related to unrecognized tax benefits.



|11. | Shareholders Equity
|--- | --------------------

On October 24, 2006, Susser Holdings Corporation completed an IPO of 7,475,000 shares of its common stock at a price of $16.50 per
share. A total of 125,000,000 shares of common stock have been authorized, $0.01 par value, of which 17,158,717 were issued and 17,141,393 were outstanding as of January 3, 2010, and 17,392,995 were issued and 17,358,711 were outstanding as of
July 4, 2010, respectively. Included in these amounts are 163,115 and 342,644 shares, respectively, which represent restricted shares and are not yet vested and have no voting rights. Treasury shares consist of 17,324 and 34,284 shares,
respectively, issued as restricted shares which were forfeited prior to vesting or were withheld to pay taxes upon vesting. A total of 25,000,000 preferred shares have also been authorized, par value $0.01 per share, although none have been issued.
Options to purchase 809,935 shares of common stock are outstanding as of July 4, 2010, 52,972 of which are vested (See Note 12).



12



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##### Table of Contents

|12. | Share-Based Compensation
|--- | ------------------------

The Company has granted options and restricted stock subject to vesting requirements under its 2006 Equity Incentive Plan. Vesting of most
grants are over two to five years. Following is a summary of options, restricted stock and restricted stock units which have been granted under the Companys plan:



|                               |  |                          |   |  |                                      |      
|------------------------------ |  | ------------------------ | - |  | ------------------------------------ | -----
|                               |  | Stock Options           
|                               |  | NumberOptionsOutstanding |   |  | WeightedAverageExercisePrice        
|Balances at December 30, 2007  |  | 1,550,217                |   |  | $                                    | 18.11
|Granted                        |  | 475,480                  |   |  |                                      | 17.14
|Forfeited or expired           |  | (316,855                 | ) |  |                                      | 21.70
|                               |  |                          |   |  |                                      |      
|Balances at December 28, 2008  |  | 1,708,842                |   |  |                                      | 17.17
|Granted                        |  | 91,158                   |   |  |                                      | 12.12
|Forfeited or expired           |  | (56,978                  | ) |  |                                      | 19.19
|                               |  |                          |   |  |                                      |      
|Balances at January 3, 2010    |  | 1,743,022                |   |  |                                      | 16.84
|Granted                        |  | 390,750                  |   |  |                                      | 11.03
|Forfeited or expired           |  | (1,323,837               | ) |  |                                      | 18.03
|                               |  |                          |   |  |                                      |      
|Balances at July 4, 2010       |  | 809,935                  |   |  |                                      | 12.09
|                               |  |                          |   |  |                                      |      
|Exercisable at July 4, 2010    |  | 52,972                   |   |  | $                                    | 16.10
|                               |  |                          |   |  |                                      |      
|                               | 
|                               |  | Restricted Stock        
|                               |  | Number ofUnits           |   |  | Grant
DateAverageFair ValuePer 
Unit
|Nonvested at December 30, 2007 |  | 114,934                  |   |  | $                                    | 15.03
|Granted                        |  | 40,000                   |   |  |                                      | 20.86
|Vested                         |  | (35,804                  | ) |  |                                      | 14.83
|                               |  |                          |   |  |                                      |      
|Nonvested at December 28, 2008 |  | 119,130                  |   |  |                                      | 17.05
|Granted                        |  | 85,800                   |   |  |                                      | 12.22
|Vested                         |  | (35,815                  | ) |  |                                      | 14.83
|Forfeited                      |  | (6,000                   | ) |  |                                      | 22.23
|                               |  |                          |   |  |                                      |      
|Nonvested at January 3, 2010   |  | 163,115                  |   |  |                                      | 14.80
|Granted                        |  | 219,318                  |   |  |                                      | 9.64 
|Vested                         |  | (28,055                  | ) |  |                                      | 12.25
|Forfeited                      |  | (11,734                  | ) |  |                                      | 10.91
|                               |  |                          |   |  |                                      |      
|Nonvested at July 4, 2010      |  | 342,644                  |   |  | $                                    | 11.80
|                               |  |                          |   |  |                                      |      
|                               | 
|                               |  | Restricted Stock Units  
|                               |  | Number ofUnits           |   |  | Grant 
DateAverageFair ValuePer Unit
|Nonvested at January 3, 2010   |  |                         |   |  | $                                    |     
|Granted                        |  | 121,000                  |   |  |                                      | 8.75 
|Vested                         |  |                         |   |  |                                      |     
|Forfeited                      |  | (6,000                   | ) |  |                                      | 8.75 
|                               |  |                          |   |  |                                      |      
|Nonvested at July 4, 2010      |  | 115,000                  |   |  | $                                    | 8.75 
|                               |  |                          |   |  |                                      |      

In accordance with the stock option exchange program
approved by the Shareholders on May 26, 2010, on June 27, 2010, Eligible Optionholders tendered, and the Company accepted for cancellation, Eligible Options to purchase an aggregate of 852,910 shares of the Companys common
stock. On June 27, 2010, the Company granted Exchange Options to purchase an aggregate of 362,250 shares of the Companys common stock and an aggregate of 75,818 shares of Exchange Stock in exchange for the cancellation of the
tendered Eligible Options. The exchange was on an estimated fair value neutral basis, but resulted in $372,000 in incremental compensation expense to be recognized over the requisite service period of the Exchange Options and Exchange Stock related
to options that had previously been accounted for under APB No. 25. The exercise price per share of each Exchange Option is $11.19, which was the closing price of the common stock on June 25, 2010. During the second quarter of 2010, Sam L.
Susser voluntarily forfeited his 363,953 outstanding stock options and did not derive any benefit from the stock option exchange program.



13



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##### Table of Contents

In addition to the stock options granted as part of the exchange offer, during the second
quarter of 2010 we granted 28,500 options to purchase stock at an exercise price equal to the closing price of the common stock on the date the options were granted. These options had an aggregate fair value of $0.1 million, which will be amortized
to expense over the options requisite service periods. In addition to the restricted stock granted as part of the exchange offer, during the second quarter of 2010, we granted 143,500 shares of restricted stock with an aggregate fair value of
$1.3 million which will be amortized to expense over the requisite service period. Also, during the second quarter of 2010, we granted 121,000 performance stock units with an aggregate fair value of $1.1 million which will be amortized to expense
over the requisite service period. The performance stock units must also satisfy performance criteria based upon the Companys 2010 EBITDAR in order to vest.

We adopted ASC 718 Compensation  Stock Compensation at the beginning of fiscal 2006 when we were still a private
company. Because we used the minimum value method for pro forma disclosures under ASC 718, we have applied ASC 718 prospectively to newly issued stock options. Stock options granted during 2005 have been accounted for in accordance with APB Opinion
No. 25. through June 2010, at which time most of these options were tendered in the stock option exchange program and cancelled. Replacement options and restricted stock will be accounted for in accordance with ASC 718. Stock options initially
granted during 2005 that were not tendered will continue to be accounted for under APB Opinion No. 25. We recognized non-cash stock compensation expense of $0.8 million and $0.9 million during the three months ended June 28, 2009 and
July 4, 2010, respectively, and $1.6 million and $1.6 million during the six months ended June 28, 2009 and July 4, 2010, respectively, which is included in general and administrative expense.

Had compensation cost for the options granted in 2005 been determined based on the grant-date fair value of awards consistent with the
method set forth in ASC 718 the Companys net profits and losses for the periods presented would have been affected as follows:



|                                                                                                    |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|--------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | - | ---------------- | - | ------ | ------------ |  | - | ----------- | - |  | - | ------ | -
|                                                                                                    |  | Three Months Ended |       |   | Six Months Ended |  
|                                                                                                    |  | June 28,2009       |       |   | July 4,2010      |   |        | June 28,2009 |  |   | July 4,2010 |  
|                                                                                                    |  | (in thousands)     |      
|Net income (loss) attributable to Susser Holdings Corporation, as reported                          |  | $                  | 2,165 |   |                  | $ | (1,916 | )            |  | $ | 1,234       |   |  | $ | (6,901 | )
|Deduct:                                                                                             |  |                    |       |   |                  |   |        |              |  |   |             |  
|Compensation expense on options determined under fair value based method for all awards, net of tax |  |                    | (11   | ) |                  |   | (6     | )            |  |   | (22         | ) |  |   | 7      |  
|                                                                                                    |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  
|Pro forma net income (loss) attributable to Susser Holdings Corporation                             |  | $                  | 2,154 |   |                  | $ | (1,922 | )            |  | $ | 1,212       |   |  | $ | (6,894 | )
|                                                                                                    |  |                    |       |   |                  |   |        |              |  |   |             |   |  |   |        |  



14



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##### Table of Contents

|13. | Other Comprehensive Loss:
|--- | -------------------------

Accumulated other comprehensive loss is comprised of the following:



|                                                                                                                              |  |                |      |   |                 |   |       |  
|----------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---- | - | --------------- | - | ----- | -
|                                                                                                                              |  | Year Ended     |      |   | Six MonthsEnded |  
|                                                                                                                              |  | January 3,2010 |      |   | July 4,2010     |  
|                                                                                                                              |  | (in thousands) |     
|Balance at the beginning of the period                                                                                        |  | $              |     |   |                 | $ | (358  | )
|Amount reclassified to income, net of tax expense of $323 as of January 3, 2010 and $489 as of July 4,
2010                   |  |                | (600 | ) |                 |   | (908  | )
|Net change in fair value of interest rate swaps, net of tax benefit of $131 as of January 3, 2010 and $650 as of
July 4, 2010 |  |                | 242  |   |                 |   | 1,266 |  
|                                                                                                                              |  |                |      |   |                 |   |       |  
|Balance at end of the period                                                                                                  |  | $              | (358 | ) |                 | $ |      |  
|                                                                                                                              |  |                |      |   |                 |   |       |  

Other comprehensive income (loss) is comprised of the following:



|                                                                                                                                 |  |                    |       |             |                  |        |              |  |   |             |   |  |   |        |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | ----------- | ---------------- | ------ | ------------ |  | - | ----------- | - |  | - | ------ | -
|                                                                                                                                 |  | Three Months Ended |       |             | Six Months Ended |       
|                                                                                                                                 |  | June 28,2009       |       | July 4,2010 |                  |        | June 28,2009 |  |   | July 4,2010 |  
|Net income (loss)                                                                                                                |  | $                  | 2,172 |             | $                | (1,905 | )            |  | $ | 1,253       |   |  | $ | (6,879 | )
|Net unrealized loss in fair value of cash flow hedges, net of tax expense (benefit) of $168, $0, ($22), and ($161), respectively |  |                    | 312   |             |                  | 658    |              |  |   | (41         | ) |  |   |       |  
|                                                                                                                                 |  |                    |       |             |                  |        |              |  |   |             |   |  |   |        |  
|Total comprehensive income, net of tax expense                                                                                   |  |                    | 2,484 |             |                  | (1,247 | )            |  |   | 1,212       |   |  |   | (6,879 | )
|                                                                                                                                 |  |                    |       |            
|Less:                                                                                                                            |  |                    |       |             |                  |        |              |  |   |             |   |  |   |        |  
|                                                                                                                                 |  |                    |       |            
|Comprehensive income attributable to noncontrolling interest                                                                     |  |                    | 7     |             |                  | 11     |              |  |   | 19          |   |  |   | 22     |  
|                                                                                                                                 |  |                    |       |             |                  |        |              |  |   |             |   |  |   |        |  
|Comprehensive income (loss) attributable to Susser Holdings Corporation                                                          |  | $                  | 2,477 |             | $                | (1,258 | )            |  | $ | 1,193       |   |  | $ | (6,901 | )
|                                                                                                                                 |  |                    |       |             |                  |        |              |  |   |             |   |  |   |        |  



|14. | Segment Reporting
|--- | -----------------

The
Company operates its business in two primary operating segments, both of which are included as reportable segments. No operating segments have been aggregated in identifying the two reportable segments. The retail segment, Stripes, operates retail
convenience stores in Texas, New Mexico and Oklahoma that sell merchandise, prepared food and motor fuel, and also offer a variety of services including car washes, lottery, ATM, money orders, prepaid phone cards and wireless services, and movie
rentals. The wholesale segment, SPC, purchases fuel from a number of refiners and supplies it to the Companys retail stores, to independently-owned dealer stations under long-term supply agreements and to other end users of motor fuel. Sales
of fuel from the wholesale to retail segment are at delivered cost, including tax and freight. This amount is reflected in intercompany eliminations of fuel revenue. There are no customers who are individually material. Amounts in the All
Other column include APT, corporate overhead and other costs not allocated to the two primary segments.



15



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##### Table of Contents

Segment Financial Data for the Three Months Ended June 28, 2009

(dollars and gallons in thousands)



|                                          |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|----------------------------------------- |  | ------------- | ------- | ---------------- | - | ------- | ------------------------ |  | - | --------- | - |  | ------ | ------ | - |  | - | -------
|                                          |  | RetailSegment |         | WholesaleSegment |   |         | IntercompanyEliminations |  |   | All Other |   |  | Totals
|Revenue:                                  |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Merchandise                               |  | $             | 199,940 |                  | $ |        |                          |  | $ |          |   |  | $      |       |   |  | $ | 199,940
|                                          |  |               |         |                  |  
|Fuel                                      |  |               | 392,593 |                  |   | 521,650 |                          |  |   | (300,314  | ) |  |        |       |   |  |   | 613,929
|                                          |  |               |         |                  |  
|Other                                     |  |               | 7,323   |                  |   | 4,106   |                          |  |   | (2,248    | ) |  |        | 116    |   |  |   | 9,297  
|                                          |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Total revenue                             |  |               | 599,856 |                  |   | 525,756 |                          |  |   | (302,562  | ) |  |        | 116    |   |  |   | 823,166
|                                          |  |               |         |                  |  
|Gross profit:                             |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Merchandise                               |  |               | 66,496  |                  |   |        |                          |  |   |          |   |  |        |       |   |  |   | 66,496 
|                                          |  |               |         |                  |  
|Fuel                                      |  |               | 26,988  |                  |   | 5,030   |                          |  |   |          |   |  |        |       |   |  |   | 32,018 
|                                          |  |               |         |                  |  
|Other                                     |  |               | 7,323   |                  |   | 1,974   |                          |  |   | (16       | ) |  |        | 21     |   |  |   | 9,302  
|                                          |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Total gross profit                        |  |               | 100,807 |                  |   | 7,004   |                          |  |   | (16       | ) |  |        | 21     |   |  |   | 107,816
|                                          |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Selling, general and administrative       |  |               | 79,335  |                  |   | 2,290   |                          |  |   | (16       | ) |  |        | 2,162  |   |  |   | 83,771 
|                                          |  |               |         |                  |  
|Depreciation, amortization, and accretion |  |               | 9,402   |                  |   | 1,019   |                          |  |   |          |   |  |        | 128    |   |  |   | 10,549 
|                                          |  |               |         |                  |  
|Other operating expenses (income)         |  |               | 109     |                  |   | (3      | )                        |  |   |          |   |  |        |       |   |  |   | 106    
|                                          |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Operating income (loss)                   |  | $             | 11,961  |                  | $ | 3,698   |                          |  | $ |          |   |  | $      | (2,269 | ) |  | $ | 13,390 
|                                          |  |               |         |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |        
|                                          |  |               |         |                  |  
|Gallons                                   |  |               | 177,887 |                  |   | 302,650 |                          |  |   | (176,818  | ) |  |        |       |   |  |   | 303,719
|                                          |  |               |         |                  |  
|Gross capital expenditures                |  | $             | 16,281  |                  | $ | 861     |                          |  | $ |          |   |  | $      |       |   |  | $ | 17,142 

Segment Financial
Data for the Three Months Ended July 4, 2010

(dollars and gallons in thousands)



|                                          |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|----------------------------------------- |  | ------------- | ------- | ---------------- | - | ------------------------ |  | - | --------- | - |  | ------ | ------ | - |  | - | ---------
|                                          |  | RetailSegment |         | WholesaleSegment |   | IntercompanyEliminations |  |   | All Other |   |  | Totals
|Revenue:                                  |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Merchandise                               |  | $             | 208,276 |                  | $ |                         |  | $ |          |   |  | $      |       |   |  | $ | 208,276  
|                                          |  |               |         |                  |  
|Fuel                                      |  |               | 511,646 |                  |   | 687,054                  |  |   | (399,530  | ) |  |        |       |   |  |   | 799,170  
|                                          |  |               |         |                  |  
|Other                                     |  |               | 7,575   |                  |   | 4,490                    |  |   | (2,417    | ) |  |        | 1,445  |   |  |   | 11,093   
|                                          |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Total revenue                             |  |               | 727,497 |                  |   | 691,544                  |  |   | (401,947  | ) |  |        | 1,445  |   |  |   | 1,018,539
|                                          |  |               |         |                  |  
|Gross profit:                             |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Merchandise                               |  |               | 70,673  |                  |   |                         |  |   |          |   |  |        |       |   |  |   | 70,673   
|                                          |  |               |         |                  |  
|Fuel                                      |  |               | 45,863  |                  |   | 7,499                    |  |   |          |   |  |        |       |   |  |   | 53,362   
|                                          |  |               |         |                  |  
|Other                                     |  |               | 7,575   |                  |   | 2,175                    |  |   | (281      | ) |  |        | 398    |   |  |   | 9,867    
|                                          |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Total gross profit                        |  |               | 124,111 |                  |   | 9,674                    |  |   | (281      | ) |  |        | 398    |   |  |   | 133,902  
|                                          |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Selling, general and administrative       |  |               | 83,331  |                  |   | 3,972                    |  |   | (281      | ) |  |        | 3,025  |   |  |   | 90,047   
|                                          |  |               |         |                  |  
|Depreciation, amortization, and accretion |  |               | 10,030  |                  |   | 1,030                    |  |   |          |   |  |        | 305    |   |  |   | 11,365   
|                                          |  |               |         |                  |  
|Other operating expenses (income)         |  |               | 507     |                  |   | 89                       |  |   |          |   |  |        | (18    | ) |  |   | 578      
|                                          |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Operating income (loss)                   |  | $             | 30,243  |                  | $ | 4,583                    |  | $ |          |   |  | $      | (2,914 | ) |  | $ | 31,912   
|                                          |  |               |         |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |         |                  |  
|Gallons                                   |  |               | 185,192 |                  |   | 315,312                  |  |   | (186,483  | ) |  |        |       |   |  |   | 314,021  
|                                          |  |               |         |                  |  
|Gross capital expenditures                |  | $             | 12,561  |                  | $ | 797                      |  | $ |          |   |  | $      |       |   |  | $ | 13,358   



16



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##### Table of Contents

Segment Financial Data for the Six Months Ended June 28, 2009

(dollars and gallons in thousands)



|                                          |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|----------------------------------------- |  | ------------- | --------- | ---------------- | - | ------- | ------------------------ |  | - | --------- | - |  | ------ | ------ | - |  | - | ---------
|                                          |  | RetailSegment |           | WholesaleSegment |   |         | IntercompanyEliminations |  |   | All Other |   |  | Totals
|Revenue:                                  |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Merchandise                               |  | $             | 381,859   |                  | $ |        |                          |  | $ |          |   |  | $      |       |   |  | $ | 381,859  
|                                          |  |               |           |                  |  
|Fuel                                      |  |               | 714,666   |                  |   | 919,649 |                          |  |   | (530,987  | ) |  |        |       |   |  |   | 1,103,328
|                                          |  |               |           |                  |  
|Other                                     |  |               | 14,674    |                  |   | 8,366   |                          |  |   | (4,479    | ) |  |        | 226    |   |  |   | 18,787   
|                                          |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Total revenue                             |  |               | 1,111,199 |                  |   | 928,015 |                          |  |   | (535,466  | ) |  |        | 226    |   |  |   | 1,503,974
|                                          |  |               |           |                  |  
|Gross profit:                             |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Merchandise                               |  |               | 128,912   |                  |   |        |                          |  |   |          |   |  |        |       |   |  |   | 128,912  
|                                          |  |               |           |                  |  
|Fuel                                      |  |               | 48,192    |                  |   | 9,281   |                          |  |   |          |   |  |        |       |   |  |   | 57,473   
|                                          |  |               |           |                  |  
|Other                                     |  |               | 14,674    |                  |   | 4,055   |                          |  |   | (32       | ) |  |        | (5     | ) |  |   | 18,692   
|                                          |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Total gross profit                        |  |               | 191,778   |                  |   | 13,336  |                          |  |   | (32       | ) |  |        | (5     | ) |  |   | 205,077  
|                                          |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Selling, general and administrative       |  |               | 152,874   |                  |   | 5,252   |                          |  |   | (32       | ) |  |        | 4,382  |   |  |   | 162,476  
|                                          |  |               |           |                  |  
|Depreciation, amortization, and accretion |  |               | 18,221    |                  |   | 2,042   |                          |  |   |          |   |  |        | 249    |   |  |   | 20,512   
|                                          |  |               |           |                  |  
|Other operating expenses (income)         |  |               | 164       |                  |   | (6      | )                        |  |   |          |   |  |        |       |   |  |   | 158      
|                                          |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Operating income (loss)                   |  | $             | 20,519    |                  | $ | 6,048   |                          |  | $ |          |   |  | $      | (4,636 | ) |  | $ | 21,931   
|                                          |  |               |           |                  |   |         |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Gallons                                   |  |               | 357,299   |                  |   | 602,788 |                          |  |   | (354,487  | ) |  |        |       |   |  |   | 605,600  
|                                          |  |               |           |                  |  
|Gross capital expenditures                |  | $             | 21,425    |                  | $ | 1,992   |                          |  | $ |          |   |  | $      |       |   |  | $ | 23,417   

Segment Financial
Data for the Six Months Ended July 4, 2010

(dollars and gallons in thousands)



|                                          |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|----------------------------------------- |  | ------------- | --------- | ---------------- | - | ------------------------ |  | - | --------- | - |  | ------ | ------ | - |  | - | ---------
|                                          |  | RetailSegment |           | WholesaleSegment |   | IntercompanyEliminations |  |   | All Other |   |  | Totals
|Revenue:                                  |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Merchandise                               |  | $             | 399,314   |                  | $ |                         |  | $ |          |   |  | $      |       |   |  | $ | 399,314  
|                                          |  |               |           |                  |  
|Fuel                                      |  |               | 990,265   |                  |   | 1,324,873                |  |   | (779,154  | ) |  |        |       |   |  |   | 1,535,984
|                                          |  |               |           |                  |  
|Other                                     |  |               | 15,251    |                  |   | 9,048                    |  |   | (4,622    | ) |  |        | 1,689  |   |  |   | 21,366   
|                                          |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Total revenue                             |  |               | 1,404,830 |                  |   | 1,333,921                |  |   | (783,776  | ) |  |        | 1,689  |   |  |   | 1,956,664
|                                          |  |               |           |                  |  
|Gross profit:                             |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Merchandise                               |  |               | 133,056   |                  |   |                         |  |   |          |   |  |        |       |   |  |   | 133,056  
|                                          |  |               |           |                  |  
|Fuel                                      |  |               | 66,154    |                  |   | 12,527                   |  |   |          |   |  |        |       |   |  |   | 78,681   
|                                          |  |               |           |                  |  
|Other                                     |  |               | 15,251    |                  |   | 4,384                    |  |   | (428      | ) |  |        | 579    |   |  |   | 19,786   
|                                          |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Total gross profit                        |  |               | 214,461   |                  |   | 16,911                   |  |   | (428      | ) |  |        | 579    |   |  |   | 231,523  
|                                          |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Selling, general and administrative       |  |               | 162,148   |                  |   | 7,282                    |  |   | (428      | ) |  |        | 5,502  |   |  |   | 174,504  
|                                          |  |               |           |                  |  
|Depreciation, amortization, and accretion |  |               | 19,807    |                  |   | 2,247                    |  |   |          |   |  |        | 519    |   |  |   | 22,573   
|                                          |  |               |           |                  |  
|Other operating expenses (income)         |  |               | 773       |                  |   | 89                       |  |   |          |   |  |        | (20    | ) |  |   | 842      
|                                          |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Operating income (loss)                   |  | $             | 31,733    |                  | $ | 7,293                    |  | $ |          |   |  | $      | (5,422 | ) |  | $ | 33,604   
|                                          |  |               |           |                  |   |                          |  |   |           |   |  |        |        |   |  |   |          
|                                          |  |               |           |                  |  
|Gallons                                   |  |               | 368,260   |                  |   | 616,272                  |  |   | (367,430  | ) |  |        |       |   |  |   | 617,102  
|                                          |  |               |           |                  |  
|Gross capital expenditures                |  | $             | 21,263    |                  | $ | 1,301                    |  | $ |          |   |  | $      |       |   |  | $ | 22,564   



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|15. | Earnings Per Share
|--- | ------------------

The
Company is presenting earnings per share for the historical periods using the guidance provided in ASC 260, Earnings per Share (EPS). Under ASC 260, basic EPS, which excludes dilution, is computed by dividing income or loss
available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or
converted into common units. Dilutive EPS includes in-the-money stock options and unvested stock using the treasury stock method. During a net loss period, the assumed exercise of in-the-money stock options and unvested stock has an anti-dilutive
effect, and therefore such options are excluded from the diluted EPS computation.

Per unit information is based on the
weighted average number of common shares outstanding during each period for the basic computation and, if dilutive, the weighted average number of potential common shares resulting from the assumed conversion of outstanding stock options for the
diluted computation. Units not included in the denominator for basic EPS, but evaluated for inclusion in the denominator for diluted EPS, included options and restricted stock granted under the 2006 Equity Incentive Plan (See Note 12).

A reconciliation of the numerators and denominators of the basic and diluted per share computations is as follows:



|                                                                                                                                                                                      |  |                                               |            |             |                  |            |              |  |             |            |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ---------- | ----------- | ---------------- | ---------- | ------------ |  | ----------- | ---------- |  | - | ---------- | -
|                                                                                                                                                                                      |  | Three Months Ended                            |            |             | Six Months Ended |           
|                                                                                                                                                                                      |  | June 28,2009                                  |            | July 4,2010 |                  |            | June 28,2009 |  | July 4,2010 |           
|                                                                                                                                                                                      |  | (dollars in thousands, except per share data) |           
|Net income (loss) attributable to Susser Holdings Corporation                                                                                                                         |  | $                                             | 2,165      |             | $                | (1,916     | )            |  | $           | 1,234      |  | $ | (6,901     | )
|Denominator for basic earnings per share:                                                                                                                                             |  |                                               |            |             |                  |            |              |  |             |            |  |   |            |  
|Weighted average number of common shares outstanding during the period                                                                                                                |  |                                               | 16,931,173 |             |                  | 17,016,067 |              |  |             | 16,927,848 |  |   | 17,005,078 |  
|Incremental common shares attributable to exercise of outstanding dilutive options and restricted shares                                                                              |  |                                               | 75,730     |             |                  |           |              |  |             | 67,701     |  |   |           |  
|Denominator for diluted earnings per common share                                                                                                                                     |  |                                               | 17,006,903 |             |                  | 17,016,067 |              |  |             | 16,995,549 |  |   | 17,005,078 |  
|Net income (loss) per share, attributable to Susser Holdings Corporation:                                                                                                             |  |                                               |            |             |                  |            |              |  |             |            |  |   |            |  
|                                                                                                                                                                                      |  |                                               |            |            
|Per common share  basic                                                                                                                                                              |  | $                                             | 0.13       |             | $                | (0.11      | )            |  | $           | 0.07       |  | $ | (0.41      | )
|                                                                                                                                                                                      |  |                                               |            |             |                  |            |              |  |             |            |  |   |            |  
|Per common share  diluted                                                                                                                                                            |  | $                                             | 0.13       |             | $                | (0.11      | )            |  | $           | 0.07       |  | $ | (0.41      | )
|                                                                                                                                                                                      |  |                                               |            |             |                  |            |              |  |             |            |  |   |            |  
|Options and non-vested restricted shares not included in diluted net income attributable to Susser Holdings Corporation common
shareholders because the effect would be anti-dilutive |  |                                               | 1,750,615  |             |                  | 1,412,068  |              |  |             | 1,762,685  |  |   | 1,596,415  |  

Excluding the impact
of non-recurring interest charges related to the May 2010 refinancing, which was $15.7 million net of tax, we would have reported EPS of $0.81 and $0.52 per share for the three months and six months ended July 4, 2010, respectively.



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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
consolidated financial statements and notes to consolidated financial statements included elsewhere in this report. Additional discussion and analysis related to our company is contained in our Annual Report on Form 10-K, including the audited
consolidated financial statements for the fiscal year ended January 3, 2010. Our fiscal year contains either 52 or 53 weeks and ends on the Sunday closest to December 31. All references to the second quarter of 2009 and 2010 refer to the
13-week periods ended June 28, 2009 and July 4, 2010, respectively. All references to the first half of 2009 and 2010 refer to the 26-week periods ended June 28, 2009 and July 4, 2010, respectively. EBITDA and Adjusted
EBITDA are non-GAAP financial measures of performance and liquidity that have limitations and should not be considered as a substitute for net income or cash provided by (used in) operating activities. Please see footnote 2 under Key Operating
Metrics below for a discussion of our use of EBITDA and Adjusted EBITDA in this Managements Discussion and Analysis of Financial Condition and Results of Operations and a reconciliation to net income and cash provided by
(used in) operating activities for the periods presented.



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Forward-Looking Statements

This report, including without limitation, our discussion and analysis of our financial condition and results of operations, contains
statements that we believe are forward-looking statements under the Private Securities Litigation Reform Act of 1995 and are intended to enjoy protection under the safe harbor for forward-looking statements provided by that Act. These
forward-looking statements generally can be identified by use of phrases such as believe, plan, expect, anticipate, intend, forecast or other similar words or phrases.
Descriptions of our objectives, goals, targets, plans, strategies, costs, anticipated capital expenditures, expected cost savings and benefits are also forward-looking statements. These forward-looking statements are based on our current plans and
expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially from the results and events anticipated or implied by such forward-looking statements, including:



| |  |  | Competitive pressures from convenience stores, gasoline stations, other non-traditional retailers located in our markets and other wholesale fuel
distributors;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Volatility in crude oil and wholesale petroleum costs;
| | - |  | ------------------------------------------------------



| |  |  | Currently unknown liabilities in connection with the acquisition of Town & Country;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | Wholesale cost increases of tobacco products or future legislation or campaigns to discourage smoking;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | Litigation or adverse publicity concerning food quality, food safety or other health concerns related to our restaurant facilities;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Intense competition and fragmentation in the wholesale motor fuel distribution industry;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | The operation of our stores in close proximity to stores of our dealers;
| | - |  | ------------------------------------------------------------------------



| |  |  | Changes in economic conditions, generally, and in the markets we serve, consumer behavior, and travel and tourism trends;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | Seasonal trends in the industries in which we operate;
| | - |  | ------------------------------------------------------



| |  |  | Sensitive economic conditions that impact consumer spending;
| | - |  | ------------------------------------------------------------



| |  |  | Unfavorable weather conditions;
| | - |  | -------------------------------



| |  |  | Cross-border risks associated with the concentration of our stores in markets bordering Mexico;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | Inability to identify, acquire and integrate new stores;
| | - |  | --------------------------------------------------------



| |  |  | Our ability to comply with federal and state regulations including those related to environmental matters and the sale of alcohol and cigarettes;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Dangers inherent in storing and transporting motor fuel;
| | - |  | --------------------------------------------------------



| |  |  | Pending or future consumer or other litigation;
| | - |  | -----------------------------------------------



| |  |  | Our ability to insure our motor fuel operations;
| | - |  | ------------------------------------------------



| |  |  | Dependence on one principal supplier for merchandise;
| | - |  | -----------------------------------------------------



| |  |  | Dependence on two principal suppliers for motor fuel and one principal provider for third-party transportation of substantially all motor fuel;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Dependence on suppliers for credit terms;
| | - |  | -----------------------------------------



| |  |  | Dependence on senior management and the ability to attract qualified employees;
| | - |  | -------------------------------------------------------------------------------



| |  |  | Acts of war and terrorism;
| | - |  | --------------------------



| |  |  | Risks relating to our substantial indebtedness;
| | - |  | -----------------------------------------------



| |  |  | Dependence on our information technology systems;
| | - |  | -------------------------------------------------



| |  |  | Changes in accounting standards, policies or estimates;
| | - |  | -------------------------------------------------------



| |  |  | Impairment of goodwill or indefinite lived assets; and
| | - |  | ------------------------------------------------------



| |  |  | Other unforeseen factors.
| | - |  | -------------------------



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##### Table of Contents

For a full discussion of these and other risks and uncertainties, please refer to Item
1ARisk Factors in our Annual Report on Form 10-K for the year ended January 3, 2010, and in each subsequent quarterly report on Form 10-Q, including this filing. The list of factors that could affect future performance and the
accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in this
report are based on, and include, our estimates as of the date hereof. We anticipate that subsequent events and market developments will cause our estimates to change. However, while we may elect to update these forward-looking statements at some
point in the future, we specifically disclaim any obligation to do so, even if new information becomes available in the future.

Overview

We are the largest non-refining operator in Texas of convenience stores based on store count and we believe we are the
largest non-refining motor fuel distributor by gallons in Texas. Our operations include retail convenience stores and wholesale motor fuel distribution. As of July 4, 2010, our retail segment operated 521 convenience stores in Texas, New Mexico
and Oklahoma offering merchandise, foodservice, motor fuel and other services.

For the six months ended July 4, 2010, we
sold 617.1 million gallons of branded and unbranded motor fuel. We purchase fuel directly from refiners and distribute it to our retail convenience stores, contracted independent operators of convenience stores (dealers), unbranded
convenience stores and other end users. We believe our combined retail/wholesale business model makes it possible for us to pursue strategic acquisition opportunities and operate acquired properties under either format, providing an optimized return
on investment. Our market share and scale allows the integration of new or acquired stores while minimizing overhead costs. In addition, we believe our foodservice and merchandising offerings distinguish us from our competition, providing the
opportunity for increased traffic in our stores.

During the second quarter of 2010, we added one new store to the retail
segment. We have opened one more retail store to date in the third quarter and currently have six stores under construction. In May 2010, we sold the seven Village Markets grocery stores that had been acquired in the TCFS, Inc. acquisition in
November 2007. The divesture is not material to our operations, and will allow our retail segment to focus on our core convenience store format. We added three dealer sites to our wholesale segment and discontinued eight for a total of 387 wholesale
dealers at the end of the quarter.

Our total revenues, net income/(loss) attributable to Susser Holdings Corporation and
Adjusted EBITDA were $1,018.5 million, $(1.9) million and $44.7 million, respectively, for second quarter 2010, compared to $823.2 million, $2.2 million and $24.9 million, respectively, for second quarter 2009. Total revenues, net income/(loss)
attributable to Susser Holdings Corporation and Adjusted EBITDA were $1,956.7 million, $(6.9) million and $58.6 million, respectively, for the first half of 2010, compared to $1,504.0 million, $1.2 million and $44.2 million, respectively, for the
first half of 2009. Our business is seasonal, and we generally experience higher sales and profitability in the second and third quarters during the summer activity months and lowest during the winter months. For a description of our results of
operations on a quarterly basis see Quarterly Results of Operations and Seasonality.

In May 2010 we issued $425
million 8.5% unsecured notes due May 2016, the proceeds of which were used to redeem the $300 million 10 5/8% unsecured notes and the $89.3 million outstanding term loan. Additionally, we amended and restated our credit facility to, among other
things, extend the maturity to May 2014, add a $40 million facility increase option, and reduce certain financial covenants. We have remained in full compliance with all debt covenants. Additional details on these refinancing transactions can be
found in Note 7 of the accompanying Notes to Financial Statements and in our Form 8-K filed with the Securities and Exchange Commission on May 7, 2010. In conjunction with the refinancing, we recognized $24.2 million in non-recurring interest
expense during the second quarter that reduced net income by $15.7 million. Excluding the impact of these non-recurring charges, we would have reported net income and EPS for the second quarter of $13.8 million and $0.81, respectively, and $8.9
million and $0.52, respectively, for the six month period.

The cost of crude oil steadily increased from the first quarter of
2009 average of approximately $43 per barrel through the first quarter of 2010, reaching an average of just under $80 per barrel. The cost of crude oil declined in the month of May to a low of approximately $65 per barrel, before increasing during
the month of June to approximately $75 per barrel at the end of June. We generally experience lower fuel margins when the cost of fuel is increasing gradually over a longer period and higher fuel margins when the cost of fuel is more volatile over a
shorter period of time. The decline in fuel costs during the second quarter allowed us to realize improved fuel margins.



20



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##### Table of Contents

The economy in Texas, where the majority of our operations are conducted, continued to fare
better than many other parts of the nation during early 2009, partly buoyed by a relatively stable housing market, a healthy regional banking market and relatively strong population growth. However, our markets experienced a sharp increase in
unemployment and reduced economic activity in the second half of 2009, and we reported a 1.2% decrease in same store merchandise sales during the fourth quarter of 2009. In spite of these economic trends, our business remained generally more
resilient than many other retail formats, and we continued to increase our market share in key merchandise categories, based on supplier information. We began to see stabilization and/or improvement in key economic indicators in our markets in early
2010 and for the first quarter of 2010 we reported 2.5% positive comparable merchandise results over first quarter 2009. Continued improvement in the economies in our markets was further reflected in our 3.1% increase in comparable merchandise
results for the second quarter 2010 over second quarter 2009.

After a tightening in the nations credit markets
beginning in 2008, we have seen improved availability of financing sources. We completed sale/leaseback transactions during the second quarter for total net proceeds of $11.1 million. In addition, we completed the debt refinancing discussed above
which extended maturities, is accretive to cash flow and further improves our financial flexibility. We believe we have adequate liquidity and financial flexibility to continue to operate and grow our business. As of July 4, 2010, we had no
borrowings outstanding on our $120 million revolving credit facility. With $17.1 million in standby letters of credit, our unused availability under the revolver was $102.9 million. We also have $44.2 million of cash on the Balance Sheet as of
July 4, 2010.



21



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##### Table of Contents

Key Operating Metrics

The following table sets forth, for the periods indicated, information concerning key measures we rely on to gauge our operating
performance:



|                                          |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|----------------------------------------- |  | ----------------------------------------------------------------------------- | ------- | - | ---------------- | - | --------- | ------------ |  | - | ----------- | - |  | - | --------- | -
|                                          |  | Three Months Ended                                                            |         |   | Six Months Ended |  
|                                          |  | June 28,2009                                                                  |         |   | July 4,2010      |   |           | June 28,2009 |  |   | July 4,2010 |  
|                                          |  | (dollars in thousands, except motor fuel pricing and gross profit per gallon) |        
|Revenue:                                  |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Merchandise sales                         |  | $                                                                             | 199,940 |   |                  | $ | 208,276   |              |  | $ | 381,859     |   |  | $ | 399,314   |  
|Motor fuelretail                         |  |                                                                               | 392,593 |   |                  |   | 511,646   |              |  |   | 714,666     |   |  |   | 990,265   |  
|Motor fuelwholesale                      |  |                                                                               | 221,336 |   |                  |   | 287,524   |              |  |   | 388,662     |   |  |   | 545,719   |  
|Other (1)                                 |  |                                                                               | 9,297   |   |                  |   | 11,093    |              |  |   | 18,787      |   |  |   | 21,366    |  
|                                          |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Total revenue                             |  | $                                                                             | 823,166 |   |                  | $ | 1,018,539 |              |  | $ | 1,503,974   |   |  | $ | 1,956,664 |  
|Gross profit:                             |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Merchandise                               |  | $                                                                             | 66,496  |   |                  | $ | 70,673    |              |  | $ | 128,912     |   |  | $ | 133,056   |  
|Motor fuelretail                         |  |                                                                               | 26,988  |   |                  |   | 45,863    |              |  |   | 48,192      |   |  |   | 66,154    |  
|Motor fuelwholesale                      |  |                                                                               | 5,030   |   |                  |   | 7,499     |              |  |   | 9,281       |   |  |   | 12,527    |  
|Other (1)                                 |  |                                                                               | 9,302   |   |                  |   | 9,867     |              |  |   | 18,692      |   |  |   | 19,786    |  
|                                          |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Total gross profit                        |  | $                                                                             | 107,816 |   |                  | $ | 133,902   |              |  | $ | 205,077     |   |  | $ | 231,523   |  
|Adjusted EBITDA (2):                      |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Retail                                    |  | $                                                                             | 21,471  |   |                  | $ | 40,781    |              |  | $ | 38,904      |   |  | $ | 52,313    |  
|Wholesale                                 |  |                                                                               | 4,714   |   |                  |   | 5,703     |              |  |   | 8,084       |   |  |   | 9,630     |  
|Other                                     |  |                                                                               | (1,334  | ) |                  |   | (1,737    | )            |  |   | (2,820      | ) |  |   | (3,315    | )
|                                          |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Total Adjusted EBITDA                     |  | $                                                                             | 24,851  |   |                  | $ | 44,747    |              |  | $ | 44,168      |   |  | $ | 58,628    |  
|Retail merchandise margin                 |  |                                                                               | 33.3    | % |                  |   | 33.9      | %            |  |   | 33.8        | % |  |   | 33.3      | %
|Merchandise same store sales growth       |  |                                                                               | 4.6     | % |                  |   | 3.1       | %            |  |   | 5.2         | % |  |   | 2.8       | %
|Average per retail store:                 |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Merchandise sales                         |  | $                                                                             | 389.0   |   |                  | $ | 398.5     |              |  | $ | 744.1       |   |  | $ | 762.1     |  
|Motor fuel gallons                        |  |                                                                               | 352.3   |   |                  |   | 358.4     |              |  |   | 708.2       |   |  |   | 713.7     |  
|Motor fuel gallons sold:                  |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Retail                                    |  |                                                                               | 177,887 |   |                  |   | 185,192   |              |  |   | 357,299     |   |  |   | 368,260   |  
|Wholesale                                 |  |                                                                               | 125,832 |   |                  |   | 128,829   |              |  |   | 248,301     |   |  |   | 248,842   |  
|Average retail price of motor fuel        |  | $                                                                             | 2.21    |   |                  | $ | 2.76      |              |  | $ | 2.00        |   |  | $ | 2.69      |  
|Motor fuel gross profit cents per gallon: |  |                                                                               |         |   |                  |   |           |              |  |   |             |   |  |   |           |  
|Retail                                    |  |                                                                               | 15.2    | ¢ |                  |   | 24.8      | ¢            |  |   | 13.5        | ¢ |  |   | 18.0      | ¢
|Wholesale                                 |  |                                                                               | 4.0     | ¢ |                  |   | 5.8       | ¢            |  |   | 3.7         | ¢ |  |   | 5.0       | ¢



|(1) | 2009 reflects reclassifications in operating expense, other revenue and other gross profit.
|--- | -------------------------------------------------------------------------------------------



|(2) | We define EBITDA as net income attributable to Susser Holdings Corporation before net interest expense, income taxes and depreciation, amortization and accretion.
Adjusted EBITDA further adjusts EBITDA by excluding non-cash stock based compensation expense and certain other operating expenses that are reflected in our net income that we do not believe are indicative of our ongoing core operations, such as
significant non-recurring transaction expenses and the gain or loss on disposal of assets and impairment charges. In addition, those expenses that we have excluded from our presentation of Adjusted EBITDA are also excluded in measuring our covenants
under our revolving credit facility and the indenture governing our Senior Notes.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

EBITDA and Adjusted EBITDA are
important measures used by management in evaluating our business because:



| |  |  | Adjusted EBITDA is used as a performance and liquidity measure under our existing revolving credit facility and the indenture governing our existing
notes, including for purposes of determining whether we have satisfied certain financial performance maintenance covenants and our ability to borrow additional indebtedness and pay dividends;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22



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##### Table of Contents

| |  |  | Adjusted EBITDA facilitates managements ability to measure the operating performance of our business on a consistent basis by excluding the
impact of items not directly resulting from our retail convenience stores and wholesale motor fuel distribution operations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Adjusted EBITDA is used by our management for internal planning purposes, including aspects of our consolidated operating budget, capital expenditures
as well as for segment and individual site operating targets; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Adjusted EBITDA is used by our Board and management for determining certain management compensation targets and thresholds.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to net
income as measures of operating performance or to cash flows from operating activities as a measure of liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for
analysis of our results as reported under GAAP. Some of these limitations include:



| |  |  | they do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | they do not reflect changes in, or cash requirements for, working capital;
| | - |  | --------------------------------------------------------------------------



| |  |  | they do not reflect significant interest expense, or the cash requirements necessary to service interest or principal payments on our existing
revolving credit facility or existing notes;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they do not reflect payments made or future requirements for income taxes;
| | - |  | --------------------------------------------------------------------------



| |  |  | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future,
and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | because not all companies use identical calculations, our presentation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures
of other companies.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table presents a reconciliation of net income to EBITDA and Adjusted
EBITDA:



|                                                              |  |                    |        |             |                  |        |              |  |   |             |   |  |   |        |  
|------------------------------------------------------------- |  | ------------------ | ------ | ----------- | ---------------- | ------ | ------------ |  | - | ----------- | - |  | - | ------ | -
|                                                              |  | Three Months Ended |        |             | Six Months Ended |       
|                                                              |  | June 28,2009       |        | July 4,2010 |                  |        | June 28,2009 |  |   | July 4,2010 |  
|                                                              |  | (in thousands)     |       
|                                                              |  |                    |        |            
|Net income (loss) attributable to Susser Holdings Corporation |  | $                  | 2,165  |             | $                | (1,916 | )            |  | $ | 1,234       |   |  | $ | (6,901 | )
|Depreciation, amortization, and accretion                     |  |                    | 10,549 |             |                  | 11,365 |              |  |   | 20,512      |   |  |   | 22,573 |  
|Interest expense, net                                         |  |                    | 9,456  |             |                  | 34,272 |              |  |   | 19,089      |   |  |   | 43,960 |  
|Income tax expense (benefit)                                  |  |                    | 1,703  |             |                  | (524   | )            |  |   | 1,607       |   |  |   | (3,542 | )
|                                                              |  |                    |        |             |                  |        |              |  |   |             |   |  |   |        |  
|                                                              |  |                    |        |            
|EBITDA                                                        |  |                    | 23,873 |             |                  | 43,197 |              |  |   | 42,442      |   |  |   | 56,090 |  
|Non-cash stock based compensation                             |  |                    | 813    |             |                  | 903    |              |  |   | 1,586       |   |  |   | 1,631  |  
|Loss on disposal of assets                                    |  |                    | 106    |             |                  | 578    |              |  |   | 158         |   |  |   | 842    |  
|Other miscellaneous expense (income)                          |  |                    | 59     |             |                  | 69     |              |  |   | (18         | ) |  |   | 65     |  
|                                                              |  |                    |        |             |                  |        |              |  |   |             |   |  |   |        |  
|                                                              |  |                    |        |            
|Adjusted EBITDA                                               |  | $                  | 24,851 |             | $                | 44,747 |              |  | $ | 44,168      |   |  | $ | 58,628 |  
|                                                              |  |                    |        |             |                  |        |              |  |   |             |   |  |   |        |  



23



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##### Table of Contents

The following table presents a reconciliation of net cash provided by operating activities
to EBITDA and Adjusted EBITDA:



|                                               |  |                  |        |   |             |   |         |  
|---------------------------------------------- |  | ---------------- | ------ | - | ----------- | - | ------- | -
|                                               |  | Six Months Ended |       
|                                               |  | June 28,2009     |        |   | July 4,2010 |  
|                                               |  | (in thousands)   |       
|                                               |  |                 
|Net cash provided by operating activities      |  | $                | 30,335 |   |             | $ | 39,390  |  
|Changes in operating assets & liabilities      |  |                  | (7,294 | ) |             |   | (6,488  | )
|Loss on disposal of assets                     |  |                  | (158   | ) |             |   | (842    | )
|Noncash stock based compensation expense      |  |                  | (1,586 | ) |             |   | (1,631  | )
|Noncontrolling interest                        |  |                  | (19    | ) |             |   | (22     | )
|Deferred income tax                            |  |                  | 167    |   |             |   | 6,586   |  
|Amortization of debt premium and discount, net |  |                  | 301    |   |             |   | 128     |  
|Early extinguishment of debt                   |  |                  |       |   |             |   | (21,449 | )
|Income taxes                                   |  |                  | 1,607  |   |             |   | (3,542  | )
|Interest expense, net                          |  |                  | 19,089 |   |             |   | 43,960  |  
|                                               |  |                  |        |   |             |   |         |  
|                                               |  |                 
|EBITDA                                         |  |                  | 42,442 |   |             |   | 56,090  |  
|                                               |  |                 
|Non-cash stock based compensation              |  |                  | 1,586  |   |             |   | 1,631   |  
|                                               |  |                 
|Loss on disposal of assets                     |  |                  | 158    |   |             |   | 842     |  
|Other miscellaneous                            |  |                  | (18    | ) |             |   | 65      |  
|                                               |  |                  |        |   |             |   |         |  
|Adjusted EBITDA                                |  | $                | 44,168 |   |             | $ | 58,628  |  
|                                               |  |                  |        |   |             |   |         |  

Refer to Note 14 of the accompanying Notes to Consolidated Financial Statements for a description of our
segment reporting. The following tables present a reconciliation of our segment operating income to EBITDA and Adjusted EBITDA:



|                                                        |  |                  |        |                   |   |                  |  |   |                  |   |              |   |       |             |   |        |              |  |   |             |   |  |   |        |   |  |   |        |  
|------------------------------------------------------- |  | ---------------- | ------ | ----------------- | - | ---------------- |  | - | ---------------- | - | ------------ | - | ----- | ----------- | - | ------ | ------------ |  | - | ----------- | - |  | - | ------ | - |  | - | ------ | -
|                                                        |  | Retail Segment   |        | Wholesale Segment |   | All Other        |  |   | Total            |  
|                                                        |  | Six Months Ended |        | Six Months Ended  |   | Six Months Ended |  |   | Six Months Ended |  
|                                                        |  | June 28,2009     |        | July 4,2010       |   | June 28,2009     |  |   | July 4,2010      |   | June 28,2009 |   |       | July 4,2010 |   |        | June 28,2009 |  |   | July 4,2010 |  
|                                                        |  | (in thousands)   |       
|Operating income (loss)                                 |  | $                | 20,519 |                   | $ | 31,733           |  | $ | 6,048            |   |              | $ | 7,294 |             | $ | (4,636 | )            |  | $ | (5,423      | ) |  | $ | 21,931 |   |  | $ | 33,604 |  
|Depreciation, amortization, and accretion               |  |                  | 18,221 |                   |   | 19,807           |  |   | 2,042            |   |              |   | 2,247 |             |   | 249    |              |  |   | 519         |   |  |   | 20,512 |   |  |   | 22,573 |  
|                                                        |  |                  |        |                   |   |                  |  |  
|Other miscellaneous                                     |  |                  |       |                   |   |                 |  |   |                 |   |              |   |      |             |   | 18     |              |  |   | (65         | ) |  |   | 18     |   |  |   | (65    | )
|Noncontrolling interest                                 |  |                  |       |                   |   |                 |  |   |                 |   |              |   |      |             |   | (19    | )            |  |   | (22         | ) |  |   | (19    | ) |  |   | (22    | )
|                                                        |  |                  |        |                   |   |                  |  |   |                  |   |              |   |       |             |   |        |              |  |   |             |   |  |   |        |   |  |   |        |  
|EBITDA                                                  |  |                  | 38,740 |                   |   | 51,540           |  |   | 8,090            |   |              |   | 9,541 |             |   | (4,388 | )            |  |   | (4,991      | ) |  |   | 42,442 |   |  |   | 56,090 |  
|Non-cash stock based compensation                       |  |                  |       |                   |   |                 |  |   |                 |   |              |   |      |             |   | 1,586  |              |  |   | 1,631       |   |  |   | 1,586  |   |  |   | 1,631  |  
|(Gain) loss on disposal of assets and impairment charge |  |                  | 164    |                   |   | 773              |  |   | (6               | ) |              |   | 89    |             |   |       |              |  |   | (20         | ) |  |   | 158    |   |  |   | 842    |  
|Other operating expenses                                |  |                  |       |                   |   |                 |  |   |                 |   |              |   |      |             |   | (18    | )            |  |   | 65          |   |  |   | (18    | ) |  |   | 65     |  
|                                                        |  |                  |        |                   |   |                  |  |   |                  |   |              |   |       |             |   |        |              |  |   |             |   |  |   |        |   |  |   |        |  
|                                                        |  |                  |        |                   |   |                  |  |  
|Adjusted EBITDA                                         |  | $                | 38,904 |                   | $ | 52,313           |  | $ | 8,084            |   |              | $ | 9,630 |             | $ | (2,820 | )            |  | $ | (3,315      | ) |  | $ | 44,168 |   |  | $ | 58,628 |  
|                                                        |  |                  |        |                   |   |                  |  |   |                  |   |              |   |       |             |   |        |              |  |   |             |   |  |   |        |   |  |   |        |  



24



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##### Table of Contents

Second Quarter 2010 Compared to Second Quarter 2009

The following discussion of results for second quarter 2010 compared to second quarter 2009 compares the 13-week period of operations
ended July 4, 2010 to the 13-week period of operations ended June 28, 2009. During 2009, we added 15 stores of which 12 opened after the second quarter of 2009 and therefore those stores did not contribute to results in the second quarter
of 2009. In addition, we opened three stores during the first half of 2010.

Total Revenue. Total revenue for
second quarter 2010 was $1.0 billion, an increase of $195.4 million, or 23.7%, from 2009. The increase in total revenue was driven by a 30.3% increase in retail fuel revenue, a 29.9% increase in wholesale fuel revenue and an increase in merchandise
sales of 4.2%, as further discussed below.

Total Gross Profit. Total gross profit for second quarter 2010 was
$133.9 million, an increase of $26.1 million, or 24.2% over 2009. The increase was primarily due to the increase in retail fuel gross profit of $18.9 million, the increase in wholesale fuel gross profit of $2.5 million and the increase in
merchandise gross profit of $4.2 million, as further described below. Included in these increases is the impact of new stores constructed or acquired during 2009 and 2010 ($3.4 million of growth in gross profit).

Merchandise Sales and Gross Profit. Merchandise sales were $208.3 million for second quarter 2010, an $8.3 million, or 4.2%
increase over 2009. Our performance was due to a 3.1% merchandise same store sales increase, accounting for $6.0 million of the increase, with the balance due to new stores built or acquired in 2009 and 2010. Merchandise same-store sales include
foodservice sales but do not include motor fuel sales. Key categories contributing to the merchandise same store sales increase were beer, foodservice, tobacco and cigarettes.

Merchandise gross profit was $70.7 million for the second quarter of 2010, a 6.3% increase over 2009, which was driven by the increase in
merchandise sales and the increase in gross profit margin from 33.3% to 33.9%. A portion of the improvement is attributable to reduced shortage expense. Our reported merchandise margins do not include other income from services such as ATMs,
lottery, prepaid phone cards, movie rental and car washes. If our margins did include other retail income from services, merchandise margins for the second quarter 2010 would have been 36.2%, an increase of 63 basis points from second quarter 2009.

Retail Motor Fuel Sales, Gallons, and Gross Profit. Retail sales of motor fuel for 2010 were $511.6 million, an
increase of $119.1 million, or 30.3% over 2009, primarily driven by a 25.2% increase in the average retail price of motor fuel and a 4.1% increase in retail gallons sold. We sold an average of 0.4 million gallons per retail store, 1.8% more
than last year. Retail motor fuel gross profit increased by $18.9 million or 69.9% over 2009 due to an increase in the gross profit per gallon and an increase in gallons sold. The average retail fuel margin increased from 15.2 cents per gallon to
24.8 cents per gallon for 2009 and 2010, respectively. This increase in fuel margin increased retail fuel gross profit by $17.8 million. After deducting credit card fees, the net margin increased from 11.5 cents per gallon to 20.2 cents per gallon
from second quarter 2009 to second quarter 2010.

Wholesale Motor Fuel Sales, Gallons, and Gross Profit.
Wholesale motor fuel revenues to third parties for the second quarter of 2010 were $287.5 million, a 29.9% increase over 2009. The increase was driven by a 26.9% increase in the wholesale selling price per gallon and a 2.4% increase in gallons sold.
Wholesale motor fuel gross profit of $7.5 million increased $2.5 million or 49.1% from 2009, due to a 45.6% increase in the gross profit per gallon from 4.0 cents per gallon to 5.8 cents per gallon (responsible for a $2.3 million increase) and an
increase in gallons.

Other Revenue and Gross Profit.Other revenue of $11.1 million for second quarter 2010
increased by $1.8 million or 19.3% from 2009, with a 6.1% increase in associated gross profit, primarily attributable to growth in ATM fees and movie rental income.

Personnel Expense.For the second quarter of 2010, personnel expense was flat with second quarter of 2009 in spite of the
additional stores and higher minimum wage rates following the last of three $0.70/hour increases implemented in July 2009. This positive result was achieved primarily through improved labor hour utilization. Retail personnel expense as a percentage
of merchandise sales improved from 18.4% in second quarter 2009 to 17.7% in second quarter 2010.

General and
Administrative Expenses. For second quarter 2010, general and administrative expenses increased by $2.0 million, or 24.1% from 2009, primarily due to the suspension of bonus accrual in second quarter 2009 and the accrual of an additional
$1.5 million in bonus expense in second quarter 2010, each based on results against internal targets. G&A expenses include non-cash stock based compensation expenses which were $0.9 million for the second quarter 2010 and $0.8 million for the
second quarter 2009.



25



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##### Table of Contents

Other Operating Expenses. Other operating expenses increased by $2.8
million or 9.4% over 2009. The increase was primarily due to an increase in credit card expense of $1.8 million, an increase in maintenance expense of $0.4 million and an increase in advertising expense of $0.6 million. Credit card costs are
directly related to the sales price of fuel and we have plans in place to improve our maintenance spending during the balance of the year. Other operating expenses for new stores accounted for $0.4 million of increased costs.

Rent Expense. Rent expense for second quarter 2010 of $10.5 million was $1.5 million or 16.7% higher than 2009 due
primarily to rent expense on additional leased stores.

Depreciation, Amortization, and
Accretion. Depreciation, amortization and accretion expense for second quarter 2010 of $11.4 million was up $0.8 million or 7.7% from 2009, related to an increase in depreciable assets.

Income from Operations. Income from operations for second quarter 2010 was $31.9 million, compared to $13.4 million for
2009. The increase is primarily attributed to higher retail and wholesale fuel margins ($20.1 million), a $1.2 million increase in fuel gross profit due to higher gallons and the $0.6 million increase in other gross profit, partly offset by higher
operating expenses, as described above.

Interest Expense, Net.Net interest expense for second quarter 2010 was
$34.3 million, compared to $9.5 million for 2009. The increase was primarily due to $24.2 million non-recurring charges related to the refinancing completed in May 2010, as follows (in millions):



|                                                                         |  |   |     
|------------------------------------------------------------------------ |  | - | ----
|Call premium on redemption of 10 5/8% notes (cash)                       |  | $ | 15.9
|Cancel interest rate swap on term loan (cash)                            |  |   | 1.0 
|Interest overlap on old and new notes from May 7 to May 27 (cash)        |  |   | 1.8 
|Write off unamortized premium and loan costs on redeemed debt (non-cash) |  |   | 5.5 
|                                                                         |  |   |     
|Total non-recurring charges                                              |  |   | 24.2
|Tax effect at 35%                                                        |  |   | 8.5 
|                                                                         |  |   |     
|After-tax impact of non-recurring charges                                |  | $ | 15.7
|                                                                         |  |   |     

Income Tax.The income tax benefit
accrued for second quarter 2010 was $0.5 million, which consisted of $0.5 million of expense attributable to the Texas margin tax and $1.0 million of income tax benefit related to federal and state income tax. The income tax expense accrued for
second quarter 2009 was $1.7 million, which consisted of $0.5 million of expense attributable to the Texas margin tax and $1.2 million of income tax expense related to federal and state income tax. See Note 10 of the accompanying Notes to
Consolidated Financial Statements for further discussion of our income tax provision.

Net Income (Loss) Attributable to
Susser Holdings Corporation. We recorded net loss attributable to Susser Holdings Corporation for the second quarter 2010 of $1.9 million, compared to net income attributable to Susser Holdings Corporation of $2.2 million for 2009. The
decrease is primarily due to the non-recurring interest charges related to the May 2010 refinancing. Excluding these non-recurring charges, ($15.7 million after tax) we would have reported net income of $13.8 million for the quarter.

Adjusted EBITDA.Adjusted EBITDA for second quarter 2010 was $44.7 million, an increase of $19.9 million, or 80.1% compared
to 2009. Retail segment Adjusted EBITDA of $40.8 million increased by $19.3 million, or 89.9% compared to 2009, primarily due to higher fuel margins slightly offset by increased operating expense. Wholesale segment Adjusted EBITDA of $5.7 million
increased by $1.0 million, or 21.0% from 2009, primarily resulting from the higher fuel gross profit. Other segment Adjusted EBITDA reflects net expenses of $1.7 million for the quarter, compared to $1.3 million for the same period in 2009.

First Half 2010 Compared to First Half 2009

The following discussion of results for first half 2010 compared to first half 2009 compares the 26-week period of operations ended
July 4, 2010 to the 26-week period of operations ended June 28, 2009. Our retail store count at July 4, 2010 was 521 compared to 515 at June 28, 2009.



26



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##### Table of Contents

Total Revenue. Total revenue for first half 2010 was $2.0 billion, an increase
of $452.7 million, or 30.1%, from 2009. The increase in total revenue was driven by a 38.6% increase in retail fuel revenue, a 40.4% increase in wholesale fuel revenue and an increase in merchandise sales of 4.6%, as further discussed below.

Total Gross Profit. Total gross profit for first half 2010 was $231.5 million, an increase of $26.4 million, or
12.9% over 2009. The increase was primarily due to the increase in retail fuel gross profit of $18.0 million, the increase in wholesale fuel gross profit of $3.2 million and the increase in merchandise gross profit of $4.1 million, as further
discussed below. Included in these increases is the impact of new stores constructed or acquired during 2009 and 2010 ($5.3 million of growth in gross profit).

Merchandise Sales and Gross Profit. Merchandise sales were $399.3 million for first half 2010, a $17.5 million, or 4.6%
increase over 2009. Our performance was due to a 2.8% merchandise same store sales increase, accounting for $10.6 million of the increase, with the balance due to new stores built or acquired in 2009 and 2010. Merchandise same-store sales include
foodservice sales but do not include motor fuel sales. Key categories contributing to the merchandise same store sales increase were beer, cigarettes, foodservice and tobacco.

Merchandise gross profit was $133.1 million for the first half of 2010, a 3.2% increase over 2009, which was driven by the increase in
merchandise sales slightly offset by a decrease in gross profit margin from 33.8% to 33.3%. Our reported merchandise margins do not include other income from services such as ATMs, lottery, prepaid phone cards, movie rentals, and car washes.

Retail Motor Fuel Sales, Gallons, and Gross Profit. Retail sales of motor fuel for 2010 were $990.3 million, an
increase of $275.6 million, or 38.6% over 2009, primarily driven by a 34.4% increase in the average retail price of motor fuel and a 3.1% increase in retail gallons sold. We sold an average of 0.7 million gallons per retail store, 0.8% more
than last year. Retail motor fuel gross profit increased by $18.0 million or 37.3% over 2009 due to an increase in the gross profit per gallon and an increase in gallons sold. The average retail fuel margin increased from 13.5 cents per gallon to
18.0 cents per gallon for 2009 and 2010, respectively. This increase in fuel margin increased retail fuel gross profit by $16.5 million. After deducting credit card fees, the net margin increased from 10.3 cents per gallon to 13.7 cents per gallon
from first half 2009 to first half 2010.

Wholesale Motor Fuel Sales, Gallons, and Gross Profit. Wholesale motor
fuel revenues to third parties for the first half of 2010 were $545.7 million, a 40.4% increase over 2009. The increase was driven by a 40.1% increase in the wholesale selling price per gallon, with gallons of 248.8 million just slightly higher
than last year. Wholesale motor fuel gross profit of $12.5 million increased $3.2 million or 35.0% from 2009, due to a 34.7% increase in the gross profit per gallon from 3.7 cents per gallon to 5.0 cents per gallon.

Other Revenue and Gross Profit.Other revenue of $21.4 million for first half 2010 increased by $2.6 million or 13.7% from
2009, with a 5.8% increase in associated gross profit, primarily attributable to growth in ATM fees and movie rental income.

Personnel Expense.For the first half of 2010, personnel expense increased $0.6 million or 0.9% over 2009. Of the increase
in personnel expense, $1.9 million was attributable to the new stores acquired and constructed during 2009 and 2010. Despite increases to the minimum wage in July 2009, personnel expense in existing stores decreased $1.1 million due to focused
efforts on labor usage and overtime management. The retail division direct store personnel expenses were 18.2% to merchandise sales, a 67 basis point decrease from the first half 2009.

General and Administrative Expenses. For first half 2010, general and administrative expenses increased by $1.7 million, or
9.7% from 2009, primarily due to an increased bonus accrual in 2010 compared to a reduced bonus accrual in 2009. G&A expenses include non-cash stock based compensation expenses which were $1.6 million for the first half of 2010 and 2009.

Other Operating Expenses. Other operating expenses increased by $7.2 million or 13.1% over 2009. The
increase was primarily due to an increase in credit card expense of $4.4 million from 2009 and an increase in maintenance expense of $1.6 million. Credit card costs are directly related to the cost of fuel and we have plans in place to improve our
maintenance spending during the balance of the year. Operating expenses for new stores accounted for $0.8 million of increased costs.



27



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##### Table of Contents

Rent Expense. Rent expense for first half 2010 of $20.6 million was $2.6
million or 14.1% higher than 2009 due primarily to rent expense on additional leased stores.

Depreciation,
Amortization, and Accretion. Depreciation, amortization and accretion expense for first half 2010 of $22.6 million increased $2.1 million or 10.1% from 2009, primarily related to an increase in depreciable assets.

Income from Operations. Income from operations for first half 2010 was $33.6 million, compared to $21.9 million for 2009.
The increase is primarily attributed to the higher gross profit partly offset by higher operating expenses, as described above.

Interest Expense, Net.Net interest expense for first half 2010 was $44.0 million, compared to $19.1 million for first half
2009. The increase was primarily due to $24.2 million non-recurring charges related to the refinancing completed in May 2010.

Income Tax.The income tax benefit accrued for first half 2010 was $3.5 million, which consisted of $0.9 million of expense
attributable to the Texas margin tax and $4.4 million of income tax benefit related to federal and state income tax. The income tax expense accrued for first half 2009 was $1.6 million, which consisted of $1.0 million of expense attributable to the
Texas margin tax and $0.6 million of income tax expense related to federal and state income tax. See Note 10 of the accompanying Notes to Consolidated Financial Statements for further discussion of our income tax provision.

Net Income (Loss) Attributable to Susser Holdings Corporation. We recorded net loss attributable to Susser Holdings
Corporation for the first half 2010 of $6.9 million, compared to net income attributable to Susser Holdings Corporation of $1.2 million for 2009. The decrease is primarily due to the non-recurring interest charges related to the May 2010
refinancing. Excluding these non-recurring charges ($15.7 million after tax) we would have reported net income of $8.9 million.

Adjusted EBITDA.Adjusted EBITDA for first half 2010 was $58.6 million, an increase of $14.5 million, or 32.7% compared to
2009. Retail segment Adjusted EBITDA of $52.3 million increased by $13.4 million, or 34.5% compared to 2009, primarily due to higher gross profit slightly offset by increased credit card expense. Wholesale segment Adjusted EBITDA of $9.6 million
increased by $1.5 million, or 19.1% from 2009, primarily resulting from the higher fuel gross profit. Other segment Adjusted EBITDA reflects net expenses of $3.3 million for first half of 2010 compared to $2.8 million for the same period in 2009.

Liquidity and Capital Resources

Cash Flows from Operations. Cash flows from operations are our main source of liquidity. We rely primarily on cash provided
by operating activities, supplemented as necessary from time to time by borrowings under our revolving credit facility, sale leaseback transactions, and other financing transactions to finance our operations, to service our debt obligations, and to
fund our capital expenditures. Due to the seasonal nature of our business, our operating cash flow is typically the lowest during the first quarter of the year since (i) sales tend to be lower during the winter months; (ii) we are building
inventory in preparation for spring break and summer; and (iii) we pay certain annual operating expenses during the first quarter. The summer months are our peak sales months, and therefore our operating cash flow tends to be the highest during
the third quarter.

Cash flows from operations were $39.4 million and $30.3 million for the first six months of 2010 and 2009,
respectively. The change in our cash provided from operating activities for the respective periods was primarily attributable to improved operating results. Our daily working capital requirements fluctuate within each month, primarily in response to
the timing of motor fuel tax, sales tax and rent payments. We had $44.2 million of cash and cash equivalents on hand at July 4, 2010 compared to $14.1 million at June 28, 2009, and $18.0 million at January 3, 2010, of which $5.2
million was restricted at January 3, 2010 and July 4, 2010.

Capital Expenditures. Capital
expenditures, before any sale/leasebacks were $22.6 million and $23.4 million during the first six months of 2010 and 2009, respectively. We sold the seven Village Market grocery stores, and opened one new retail store during second quarter 2010,
bringing our store count to 521 as of July 4, 2010. We have opened one additional retail store to date in the third quarter and have another six stores under construction. We received proceeds of $11.1 million and $17.0 million from
sale-leaseback transactions during the second quarter and first half of 2010, respectively.



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Following is a summary of our recent operating site additions and closures by segment:



|                              |  |                                |   |  |                             |  
|----------------------------- |  | ------------------------------ | - |  | --------------------------- | -
|                              |  | Three MonthsEnded July 
4,2010 |   |  | Six MonthsEnded July 4,2010 |  
|Retail stores:                |  |                                |   |  |                             |  
|Number at beginning of period |  | 527                            |   |  | 525                         |  
|New stores                    |  | 1                              |   |  | 3                           |  
|Closed stores                 |  | (7                             | ) |  | (7                          | )
|                              |  |                                |   |  |                             |  
|Number at end of period       |  | 521                            |   |  | 521                         |  
|                              |  |                                |   |  |                             |  
|Wholesale dealer locations:   |  |                                |   |  |                             |  
|Number at beginning of period |  | 392                            |   |  | 390                         |  
|New locations                 |  | 3                              |   |  | 5                           |  
|Closed stores                 |  | (8                             | ) |  | (8                          | )
|                              |  |                                |   |  |                             |  
|Number at end of period       |  | 387                            |   |  | 387                         |  
|                              |  |                                |   |  |                             |  

During fiscal 2010, we plan to invest approximately $25 to $40 million (net of anticipated lease financing)
in new retail stores, new dealer projects and maintenance, and upgrade of our existing facilities. We plan to finance our capital spending plan with cash flow from operations, cash balances, borrowings under the revolving credit facility, long-term
mortgage debt and additional lease financing. We currently expect we will be able to access financing for a portion of our new store program. However, if we are not able to obtain sale/leaseback, long-term mortgage debt or other financing during
2010, or if our actual cash flows from operations are lower than expected, we may defer a portion of our new store expansion program, our planned rebranding of the Town & Country stores, or other discretionary capital spending.

Cash Flows from Financing Activities. At July 4, 2010, our outstanding debt was $434.9 million, excluding $4.8 million
unamortized issuance discount. We completed a refinancing of substantially all of our debt in May 2010 which allowed us to reduce the coupon on our unsecured bonds, reduce total principal and interest payments, extend maturities, increase the amount
of unencumbered assets and increase flexibility for future operations and growth. As part of that refinancing we redeemed and discharged all outstanding 10 5/8% senior unsecured notes due 2013, we issued $425 million in 8.5% senior unsecured notes
due 2016 and we amended and restated our credit facility to, among other things, cancel the term loan facility (of which $89.3 million was outstanding), extend the maturity date to May 2014, add a $40 million facility increase option and modify and,
in some cases, reduce covenant requirements. For more information regarding the refinancing, including the terms of the 2016 Notes and the credit facility, please refer to Note 7 of the accompanying Notes to Consolidated Financial Statements.

As of July 4, 2010, we had no outstanding borrowings under the revolving credit facility and $17.1 million in standby
letters of credit. Our borrowing base in effect at July 4, 2010, allowed a maximum borrowing, including outstanding letters of credit, of $120.0 million. Our unused availability on the revolver at July 4, 2010 was $102.9 million.

Long Term Liquidity. We expect that our cash flows from operations, cash on hand, lease
financing, and our revolving credit facility will be adequate to provide for our short-term and long-term liquidity needs. Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, as well as
the cost of potential acquisitions and new store openings, will depend on our future performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are
beyond our control. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may cause us to need to seek additional debt or equity financing in future periods. There can be no guarantee that
financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions. In addition, any of the items discussed in detail under
Risk Factors may also significantly impact our liquidity.



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Contractual Obligations and Commitments

Properties.Most of our leases are net leases requiring us to pay taxes, insurance, and maintenance costs. We believe that
no individual site is material to us. The following table summarizes the number of owned and leased properties:



|                                        |  |              |  |       
|--------------------------------------- |  | ------------ |  | ------
|                                        |  | As of       
|                                        |  | July 4, 2010
|                                        |  | Fee          |  | Leased
|Operating sites:                        |  |              |  |       
|Retail                                  |  | 235          |  | 286   
|Wholesale                               |  | 49           |  | 29    
|                                        |  |              |  |       
|Total                                   |  | 284          |  | 315   
|                                        |  |             
|Office locations                        |  | 4            |  | 3     
|Properties currently under construction |  | 7            |  |      
|Properties held for future development  |  | 25           |  |      
|Income producing properties             |  | 5            |  | 3     
|Surplus properties                      |  | 41           |  | 5     

We lease our corporate
and retail segment headquarters facility, which consists of approximately 83,000 square feet of office and warehouse space located in Corpus Christi. The annual lease expense is approximately $144,000 net of taxes, insurance and maintenance. We own
the headquarters of our wholesale segment, which consists of approximately 43,000 square feet of office and warehouse space in Houston.



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##### Table of Contents

Quarterly Results of Operations and Seasonality

The following table sets forth certain unaudited financial and operating data for each of the last ten quarters. Each quarter consists of
13 weeks, unless noted otherwise. Our business is seasonal and we generally experience higher levels of revenues during the summer months than during the winter months.



|                                                             |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|------------------------------------------------------------ |  | ----------------------------------------------------------- | --------- | - | ------ | - | --------- | ------ |  | - | --------- | - |  | ------ | ------- | - | ------ | - | ------- | ------ |  | - | --------- | - |  | ------ | ------- | - | ------ | - | ------- | - |  | - | ------- | - |  | - | --------- | -
|                                                             |  | 2008                                                        |           |   | 2009   |   |           | 2010   | 
|                                                             |  | (dollars and gallons in thousands except per share amounts) |          
|                                                             |  | 1stQTR                                                      |           |   | 2ndQTR |   |           | 3rdQTR |  |   | 4thQTR    |   |  | 1stQTR |         |   | 2ndQTR |   |         | 3rdQTR |  |   | 4thQTR(c) |   |  | 1stQTR |         |   | 2ndQTR |  
|Merchandise sales                                            |  | $                                                           | 168,771   |   |        | $ | 187,870   |        |  | $ | 189,272   |   |  | $      | 183,944 |   |        | $ | 181,919 |        |  | $ | 199,940   |   |  | $      | 201,190 |   |        | $ | 201,375 |   |  | $ | 191,038 |   |  | $ | 208,276   |  
|Motor fuel sales:                                            |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|                                                             |  |                                                             |           |   |        |   |           |        |  |  
|Retail                                                       |  |                                                             | 519,797   |   |        |   | 618,037   |        |  |   | 619,692   |   |  |        | 393,201 |   |        |   | 322,072 |        |  |   | 392,593   |   |  |        | 427,603 |   |        |   | 463,266 |   |  |   | 478,619 |   |  |   | 511,646   |  
|Wholesale                                                    |  |                                                             | 302,595   |   |        |   | 415,179   |        |  |   | 396,952   |   |  |        | 208,769 |   |        |   | 167,327 |        |  |   | 221,336   |   |  |        | 240,874 |   |        |   | 246,388 |   |  |   | 258,195 |   |  |   | 287,524   |  
|Other income(a)                                              |  |                                                             | 9,543     |   |        |   | 9,376     |        |  |   | 8,253     |   |  |        | 9,394   |   |        |   | 9,490   |        |  |   | 9,297     |   |  |        | 12,433  |   |        |   | 10,205  |   |  |   | 10,273  |   |  |   | 11,093    |  
|                                                             |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|Total revenue                                                |  |                                                             | 1,000,706 |   |        |   | 1,230,462 |        |  |   | 1,214,169 |   |  |        | 795,308 |   |        |   | 680,808 |        |  |   | 823,166   |   |  |        | 882,100 |   |        |   | 921,234 |   |  |   | 938,125 |   |  |   | 1,018,539 |  
|                                                             |  |                                                             |           |   |        |   |           |        |  |  
|Merchandise gross profit                                     |  |                                                             | 56,668    |   |        |   | 64,416    |        |  |   | 65,966    |   |  |        | 63,592  |   |        |   | 62,416  |        |  |   | 66,496    |   |  |        | 66,307  |   |        |   | 65,865  |   |  |   | 62,383  |   |  |   | 70,673    |  
|Motor fuel gross profit:                                     |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|Retail                                                       |  |                                                             | 20,257    |   |        |   | 32,165    |        |  |   | 36,402    |   |  |        | 31,732  |   |        |   | 21,204  |        |  |   | 26,988    |   |  |        | 34,613  |   |        |   | 22,216  |   |  |   | 20,291  |   |  |   | 45,863    |  
|Wholesale                                                    |  |                                                             | 5,580     |   |        |   | 7,429     |        |  |   | 8,888     |   |  |        | 9,037   |   |        |   | 4,251   |        |  |   | 5,030     |   |  |        | 6,388   |   |        |   | 4,538   |   |  |   | 5,028   |   |  |   | 7,499     |  
|Other gross profit(a)                                        |  |                                                             | 9,103     |   |        |   | 8,837     |        |  |   | 7,921     |   |  |        | 9,417   |   |        |   | 9,390   |        |  |   | 9,302     |   |  |        | 12,453  |   |        |   | 9,922   |   |  |   | 9,919   |   |  |   | 9,867     |  
|                                                             |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|Total gross profit                                           |  |                                                             | 91,608    |   |        |   | 112,847   |        |  |   | 119,177   |   |  |        | 113,778 |   |        |   | 97,261  |        |  |   | 107,816   |   |  |        | 119,761 |   |        |   | 102,541 |   |  |   | 97,621  |   |  |   | 133,902   |  
|Income from operations                                       |  |                                                             | 4,972     |   |        |   | 20,291    |        |  |   | 21,137    |   |  |        | 19,499  |   |        |   | 8,541   |        |  |   | 13,390    |   |  |        | 19,826  |   |        |   | 313     |   |  |   | 1,692   |   |  |   | 31,912    |  
|Net income(loss) attributable to Susser Holdings Corporation |  | $                                                           | (3,360    | ) |        | $ | 6,662     |        |  | $ | 6,862     |   |  | $      | 6,313   |   |        | $ | (931    | )      |  | $ | 2,165     |   |  | $      | 6,503   |   |        | $ | (5,669  | ) |  | $ | (4,985  | ) |  | $ | (1,916    | )
|Earnings (loss) per common share:                            |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|Basic                                                        |  | $                                                           | (0.20     | ) |        | $ | 0.39      |        |  | $ | 0.41      |   |  | $      | 0.37    |   |        | $ | (0.05   | )      |  | $ | 0.13      |   |  | $      | 0.38    |   |        | $ | (0.33   | ) |  | $ | (0.29   | ) |  | $ | (0.11     | )
|Diluted                                                      |  | $                                                           | (0.20     | ) |        | $ | 0.39      |        |  | $ | 0.40      |   |  | $      | 0.37    |   |        | $ | (0.05   | )      |  | $ | 0.13      |   |  | $      | 0.38    |   |        | $ | (0.33   | ) |  | $ | (0.29   | ) |  | $ | (0.11     | )
|                                                             |  |                                                             |           |   |        |   |           |        |  |  
|Merchandise margin, net                                      |  |                                                             | 33.6      | % |        |   | 34.3      | %      |  |   | 34.9      | % |  |        | 34.6    | % |        |   | 34.3    | %      |  |   | 33.3      | % |  |        | 33.0    | % |        |   | 32.7    | % |  |   | 32.7    | % |  |   | 33.9      | %
|Fuel gallons:                                                |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|Retail                                                       |  |                                                             | 169,313   |   |        |   | 165,113   |        |  |   | 163,399   |   |  |        | 179,483 |   |        |   | 179,412 |        |  |   | 177,887   |   |  |        | 175,317 |   |        |   | 187,033 |   |  |   | 183,068 |   |  |   | 185,192   |  
|Wholesale.                                                   |  |                                                             | 114,110   |   |        |   | 124,329   |        |  |   | 122,318   |   |  |        | 125,759 |   |        |   | 122,469 |        |  |   | 125,832   |   |  |        | 125,205 |   |        |   | 121,314 |   |  |   | 120,013 |   |  |   | 128,829   |  
|                                                             |  |                                                             |           |   |        |   |           |        |  |  
|Motor fuel margin:                                           |  |                                                             |           |   |        |   |           |        |  |   |           |   |  |        |         |   |        |   |         |        |  |   |           |   |  |        |         |   |        |   |         |   |  |   |         |   |  |   |           |  
|Retail (b)                                                   |  |                                                             | 12.0      | ¢ |        |   | 19.5      | ¢      |  |   | 22.3      | ¢ |  |        | 17.7    | ¢ |        |   | 11.8    | ¢      |  |   | 15.2      | ¢ |  |        | 19.7    | ¢ |        |   | 11.9    | ¢ |  |   | 11.1    | ¢ |  |   | 24.8      | ¢
|Wholesale                                                    |  |                                                             | 4.9       | ¢ |        |   | 6.0       | ¢      |  |   | 7.3       | ¢ |  |        | 7.2     | ¢ |        |   | 3.5     | ¢      |  |   | 4.0       | ¢ |  |        | 5.1     | ¢ |        |   | 3.7     | ¢ |  |   | 4.2     | ¢ |  |   | 5.8       | ¢



|(a) | Reflects reclassifications in operating expense, other income, and other gross profit in 2008 and 2009.
|--- | -------------------------------------------------------------------------------------------------------

|(b) | Before deducting credit card, fuel maintenance and other fuel related expenses.
|--- | -------------------------------------------------------------------------------

|(c) | Includes 14 weeks of operation.
|--- | -------------------------------



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Summary of Significant Accounting Policies

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial
statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Critical accounting policies are those we believe are both most important to the portrayal of our financial condition and results of
operations, and require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Judgments and uncertainties affecting the application of those
policies may result in materially different amounts being reported under different conditions or using different assumptions. Our significant accounting policies are described in our Annual Report on Form 10-K for the year ended January 3,
2010. As discussed in Note 2 to our Consolidated Financial Statements included elsewhere in this report, certain new financial accounting pronouncements have been issued which either have already been reflected in the accompanying consolidated
financial statements, or will become effective for our financial statements at various dates in the future.

Goodwill is not
being amortized, but is tested annually for impairment, and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. There are no indicators of impairment as of July 4, 2010 (See Note 6).



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

We are subject to market risk from exposure to changes in interest rates based on our financing, investing, and cash management
activities. We currently have a $120.0 million revolving credit facility which bears interest at variable rates, but which had no outstanding loans at July 4, 2010. As part of the debt refinancing which occurred on May 7, 2010 (See
Note 7), we repaid our term facility and therefore had no balance outstanding on that facility at the end of the quarter. We had $9.8 million outstanding in other notes payable that is subject to a variable interest rate. The annualized effect of a
one percentage point change in floating interest rates on our variable rate debt obligations outstanding at July 4, 2010 would be to change interest expense by approximately $0.1million.

Our primary exposure relates to:



| |  |  | Interest rate risk on short-term borrowings and
| | - |  | -----------------------------------------------



| |  |  | The impact of interest rate movements on our ability to obtain adequate financing to fund future acquisitions.
| | - |  | --------------------------------------------------------------------------------------------------------------

We manage interest rate risk on our outstanding long-term and short-term debt through the use of fixed and variable rate debt. While we
cannot predict or manage our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, management evaluates our financial position on an ongoing basis.

From time to time, we enter into interest rate swaps to either reduce the impact of changes in interest rates on our floating rate
long-term debt or to take advantage of favorable variable interest rates compared to our fixed rate long-term debt. During 2009 we entered into interest rate swaps on $70 million notional principal for a six-year term. The swap exchanged a floating
to fixed rate against our variable-rate term loan. In conjunction with the prepayment of the term loan on May 7, 2010, we settled the related interest rate swaps.

We also periodically purchase motor fuel in bulk and hold in inventory or transport it to West Texas via pipeline. We hedge this
inventory risk through the use of fuel futures contracts which are matched in quantity and timing to the anticipated usage of the pipeline inventory. These fuel hedging positions have not been material to our operations.

For more information on our hedging activity, please see Note 7 in the accompanying Notes to Consolidated Financial Statements.



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##### Table of Contents

|Item 4. | Controls and Procedures
|------- | -----------------------

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act),
our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this report. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective to ensure
that the information required to be disclosed by the Company in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and such
information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the second quarter of 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we make changes to our internal control over financial reporting that are intended to enhance its effectiveness and
which do not have a material effect on our overall internal control over financial reporting. We will continue to evaluate the effectiveness of our disclosure controls and procedures and internal control over financial reporting on an ongoing basis
and will take action as appropriate.



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##### Table of Contents

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

We are
parties to various legal actions in the ordinary course of our business. We believe these actions are routine in nature and incidental to the operation of our business. While the outcome of these actions cannot be predicted with certainty, we
believe that the ultimate resolutions of these matters will not have a material adverse effect on our business, financial condition or prospects.



|Item 1A. | Risk Factors
|-------- | ------------

You should
carefully consider the risks described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended January 3, 2010, as well as the section within this report entitled Forward-Looking Statements under
Part I. Financial InformationItem 2. Managements Discussion and Analysis of Financial Condition and Results of Operations, before making any investment decision with respect to our securities. The risks and uncertainties described in our
annual report are not the only ones facing us. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, could negatively impact our results of operations or financial condition in the future. If any of such
risks actually occur, our business, financial condition or results of operations could be materially adversely affected.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | (Removed and Reserved)
|------- | ----------------------



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------

The list of
exhibits attached to this Quarterly Report on Form 10-Q is incorporated herein by reference.



34



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##### Table of Contents

SIGNATURES

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



|                      |  |  |  |                             |  |                                                                                                                                                                                          
|--------------------- |  |  |  | --------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                      |  |  |  | SUSSER HOLDINGS CORPORATION
|Date: August 13, 2010 |  |  |  |                             |  |                                                                                                                                                                                          
|                      |  |  | 
|                      |  |  |  | By                          |  | /s/ Mary E. Sullivan                                                                                                                                                                     
|                      |  |  |  |                             |  | Mary E. Sullivan Executive
Vice President and Chief Financial Officer (On behalf of the registrant, and in her capacity as
principal financial officer and principal accounting officer).



35



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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                              
|4.1         |  | Indenture, dated as of May 7, 2010, by and among Susser Holdings, L.LC., Susser Finance Corporation, the guarantors named therein and Wells Fargo Bank, N.A., as Trustee, relating to
the issuance of the 8.50% Senior Notes due 2016. (1)                                                                                               
|            | 
|4.2         |  | Form of 144A Notes. (1)                                                                                                                                                                                                                                                                                                                  
|            | 
|4.3         |  | Form of Regulation S Notes. (1)                                                                                                                                                                                                                                                                                                          
|            | 
|4.4         |  | Form of Guarantee. (1)                                                                                                                                                                                                                                                                                                                   
|            | 
|4.5         |  | Registration Rights Agreement, dated as of May 7, 2010, by and among Susser Holdings, L.L.C., Susser Finance Corporation, Banc of America Securities LLC, BMO Capital Markets Corp.,
Wells Fargo Securities, LLC, RBC Capital Markets Corporation, Morgan Keegan & Company, Inc., BBVA Securities Inc., and Morgan Joseph & Co., Inc. (1)
|            | 
|10.1        |  | Amended and Restated Credit Agreement, dated May 7, 2010, among Susser Holdings, L.L.C., Susser Holdings Corporation, Bank of America, N.A., Wells Fargo Bank, National Association,
BMO Capital Markets, Banc of America Securities LLC, and the other lenders party thereto. (1)                                                       
|            | 
|10.2        |  | Amendment to the 2006 Equity Incentive Plan of Susser Holdings Corporation. (2)                                                                                                                                                                                                                                                          
|            | 
|10.3        |  | Susser Holdings Corporation 2006 Equity Incentive Plan Form of Revised Stock Option Agreement.                                                                                                                                                                                                                                          
|            | 
|10.4        |  | Susser Holdings Corporation 2006 Equity Incentive Plan Form of Revised Restricted Stock Agreement.                                                                                                                                                                                                                                      
|            | 
|10.5        |  | Susser Holdings Corporation 2006 Equity Incentive Plan Form of Restricted Stock Unit Agreement.                                                                                                                                                                                                                                         
|            | 
|31.1        |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act.                                                                                                                                              
|            | 
|31.2        |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act.                                                                                                                                              
|            | 
|32.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.                                                                                                                                                                                               
|            | 
|32.2        |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.                                                                                                                                                                                               



| | Filed herewith.
|- | ---------------

|(1) | Incorporated by reference to the Quarterly Report on Form 10-Q of Susser Holdings Corporation filed May 14, 2010.
|--- | -----------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to the Current Report on Form 8-K of Susser Holdings Corporation filed May 26, 2010.
|--- | --------------------------------------------------------------------------------------------------------------



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