##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---

FORM 10-Q



---

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 1, 2006

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)

4433 Baldwin Boulevard

Corpus Christi, Texas 78408

(Address of principal executive offices)

Registrants telephone number, including area code: (361) 884-2463



---

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes ̈No  x

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

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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 |  | 16,824,162 SHARES                 
|(Class)                       |  | (Outstanding at November 15, 2006)

---



---

##### 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 |  | 20  
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 34  
|Item 4.                        |  | Controls and Procedures                                                               |  | 35  
|                               | 
|PART II OTHER INFORMATION     |  |                                                                                      
|Item 1.                        |  | Legal Proceedings                                                                     |  | 36  
|Item 1A.                       |  | Risk Factors                                                                          |  | 36  
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 36  
|Item 3.                        |  | Defaults Upon Senior Securities                                                       |  | 36  
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |  | 36  
|Item 5.                        |  | Other Information                                                                     |  | 36  
|Item 6.                        |  | Exhibits                                                                              |  | 37  



i



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

Susser Holdings Corporation

Consolidated Balance Sheets



|                                                                                                                                      |  |                 |         |   |                |   |        
|------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ------- | - | -------------- | - | -------
|                                                                                                                                      |  | January 1, 2006 |         |   | October 1,2006
|                                                                                                                                      |  | audited         |         |   | Unaudited     
|                                                                                                                                      |  | (in thousands) 
|Assets                                                                                                                                |  |                 |         |   |                |   |        
|Current assets:                                                                                                                       |  |                 |         |   |                |   |        
|Cash and cash equivalents                                                                                                             |  | $               | 4,116   |   |                | $ | 1,944  
|Accounts receivable, net of allowance for doubtful accounts of $0 at January 1, 2006 and $181 at October 1, 2006                      |  |                 | 44,173  |   |                |   | 45,684 
|Inventories, net                                                                                                                      |  |                 | 37,278  |   |                |   | 37,170 
|Assets held for sale                                                                                                                  |  |                 | 5,439   |   |                |   | 6,769  
|Other current assets                                                                                                                  |  |                 | 3,126   |   |                |   | 1,780  
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total current assets                                                                                                                  |  |                 | 94,132  |   |                |   | 93,347 
|                                                                                                                                      |  |                
|Property and equipment, net                                                                                                           |  |                 | 224,226 |   |                |   | 233,855
|                                                                                                                                      |  |                
|Other assets:                                                                                                                         |  |                 |         |   |                |   |        
|Supply agreements, net                                                                                                                |  |                 | 5,630   |   |                |   | 5,644  
|Favorable lease arrangements, net                                                                                                     |  |                 | 12,811  |   |                |   | 5,386  
|Goodwill                                                                                                                              |  |                 |        |   |                |   | 20,224 
|Other intangible assets, net                                                                                                          |  |                 | 19,770  |   |                |   | 13,994 
|Notes receivable, long-term portion                                                                                                   |  |                 | 1,493   |   |                |   | 1,704  
|Other assets                                                                                                                          |  |                 | 3,072   |   |                |   | 3,552  
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total other assets                                                                                                                    |  |                 | 42,776  |   |                |   | 50,504 
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total assets                                                                                                                          |  | $               | 361,134 |   |                | $ | 377,706
|                                                                                                                                      |  |                 |         |   |                |   |        
|Liabilities and members interests                                                                                                    |  |                 |         |   |                |   |        
|Current liabilities:                                                                                                                  |  |                 |         |   |                |   |        
|Accounts payable                                                                                                                      |  | $               | 56,632  |   |                | $ | 57,616 
|Accrued expenses                                                                                                                      |  |                 | 32,128  |   |                |   | 35,391 
|Other current liabilities                                                                                                             |  |                 | 1,782   |   |                |   | 2,112  
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total current liabilities                                                                                                             |  |                 | 90,542  |   |                |   | 95,119 
|                                                                                                                                      |  |                
|Revolving line of credit                                                                                                              |  |                 | 6,220   |   |                |   | 10,100 
|Senior unsecured notes                                                                                                                |  |                 | 170,000 |   |                |   | 170,000
|Deferred gain, long-term portion                                                                                                      |  |                 | 28,811  |   |                |   | 30,103 
|Other noncurrent liabilities                                                                                                          |  |                 | 7,402   |   |                |   | 6,675  
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total long-term liabilities                                                                                                           |  |                 | 212,433 |   |                |   | 216,878
|                                                                                                                                      |  |                
|Minority interests in consolidated subsidiaries                                                                                       |  |                 | 578     |   |                |   | 615    
|                                                                                                                                      |  |                
|Commitments and contingencies                                                                                                         |  |                 |         |   |                |   |        
|                                                                                                                                      |  |                
|Members interests:                                                                                                                   |  |                 |         |   |                |   |        
|Common shares, no par value, 15,914,639 units authorized, 12,849,660 issued and outstanding as of January 1, 2006 and October 1,
2006 |  |                 |        |   |                |   |       
|Additional paid-in capital                                                                                                            |  |                 | 59,231  |   |                |   | 59,571 
|Retained earnings (deficit)                                                                                                           |  |                 | (1,650  | ) |                |   | 5,523  
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total members interests                                                                                                              |  |                 | 57,581  |   |                |   | 65,094 
|                                                                                                                                      |  |                 |         |   |                |   |        
|Total liabilities and members interests                                                                                              |  | $               | 361,134 |   |                | $ | 377,706
|                                                                                                                                      |  |                 |         |   |                |   |        

See accompanying notes.



1



---

##### Table of Contents

Susser Holdings Corporation

Consolidated Statements of Operations

Unaudited



|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|--------------------------------------------------------------- |  | ------------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | --------------------- | - |  | - | --------- | -
|                                                                |  | Three Months Ended        |         |   | Nine Months Ended     |  
|                                                                |  | PredecessorOctober 2,2005 |         |   | CompanyOctober 1,2006 |   |         | PredecessorOctober 2,2005 |  |   | CompanyOctober 1,2006 |  
|                                                                |  | (in thousands)            |        
|Revenues:                                                       |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Merchandise sales                                               |  | $                         | 86,686  |   |                       | $ | 96,141  |                           |  | $ | 248,810               |   |  | $ | 276,653   |  
|Motor fuel sales                                                |  |                           | 436,412 |   |                       |   | 503,484 |                           |  |   | 1,122,343             |   |  |   | 1,483,537 |  
|Other income                                                    |  |                           | 5,033   |   |                       |   | 5,479   |                           |  |   | 16,026                |   |  |   | 17,383    |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Total revenues                                                  |  |                           | 528,131 |   |                       |   | 605,104 |                           |  |   | 1,387,179             |   |  |   | 1,777,573 |  
|                                                                |  |                           |         |  
|Cost of sales:                                                  |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Merchandise                                                     |  |                           | 58,752  |   |                       |   | 65,163  |                           |  |   | 168,027               |   |  |   | 186,130   |  
|Motor fuel                                                      |  |                           | 413,827 |   |                       |   | 475,479 |                           |  |   | 1,070,353             |   |  |   | 1,418,294 |  
|Other                                                           |  |                           | 116     |   |                       |   | 138     |                           |  |   | 382                   |   |  |   | 471       |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Total cost of sales                                             |  |                           | 472,695 |   |                       |   | 540,780 |                           |  |   | 1,238,762             |   |  |   | 1,604,895 |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Gross profit                                                    |  |                           | 55,436  |   |                       |   | 64,324  |                           |  |   | 148,417               |   |  |   | 172,678   |  
|                                                                |  |                           |         |  
|Operating expenses:                                             |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Personnel                                                       |  |                           | 15,900  |   |                       |   | 17,388  |                           |  |   | 46,501                |   |  |   | 51,746    |  
|General and administrative                                      |  |                           | 5,716   |   |                       |   | 5,120   |                           |  |   | 14,530                |   |  |   | 14,535    |  
|Other operating                                                 |  |                           | 14,137  |   |                       |   | 17,198  |                           |  |   | 38,509                |   |  |   | 48,413    |  
|Rent                                                            |  |                           | 2,265   |   |                       |   | 5,567   |                           |  |   | 6,820                 |   |  |   | 16,651    |  
|Royalties                                                       |  |                           | 890     |   |                       |   | 996     |                           |  |   | 2,567                 |   |  |   | 2,847     |  
|Loss (gain) on disposal of assets                               |  |                           | 107     |   |                       |   | 2       |                           |  |   | (429                  | ) |  |   | (277      | )
|Depreciation, amortization, and accretion                       |  |                           | 7,386   |   |                       |   | 6,115   |                           |  |   | 19,704                |   |  |   | 17,672    |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Total operating expenses                                        |  |                           | 46,401  |   |                       |   | 52,386  |                           |  |   | 128,202               |   |  |   | 151,587   |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Income from operations                                          |  |                           | 9,035   |   |                       |   | 11,938  |                           |  |   | 20,215                |   |  |   | 21,091    |  
|                                                                |  |                           |         |  
|Other income (expense):                                         |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Interest expense                                                |  |                           | (3,786  | ) |                       |   | (4,670  | )                         |  |   | (10,797               | ) |  |   | (14,088   | )
|Other miscellaneous                                             |  |                           | 1,219   |   |                       |   | 106     |                           |  |   | 1,149                 |   |  |   | 217       |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Total other income (expense)                                    |  |                           | (2,567  | ) |                       |   | (4,564  | )                         |  |   | (9,648                | ) |  |   | (13,871   | )
|                                                                |  |                           |         |  
|Minority interest in income (loss) of consolidated subsidiaries |  |                           | 52      |   |                       |   | (14     | )                         |  |   | (60                   | ) |  |   | (47       | )
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Net income                                                      |  | $                         | 6,520   |   |                       | $ | 7,360   |                           |  | $ | 10,507                |   |  | $ | 7,173     |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  
|Net income available to common unitholders                      |  | $                         | 5,394   |   |                       | $ | 7,360   |                           |  | $ | 6,955                 |   |  | $ | 7,173     |  
|                                                                |  |                           |         |   |                       |   |         |                           |  |   |                       |   |  |   |           |  

See accompanying notes.



2



---

##### Table of Contents

Susser Holdings Corporation

Consolidated Statements of Operations (Continued)

Unaudited



|                                                                                      |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|------------------------------------------------------------------------------------- |  | ------------------------- | --------- | --------------------- | ----------------- | ---------- | ------------------------- |  | --------------------- | --------- |  | - | ---------- | -
|                                                                                      |  | Three Months Ended        |           |                       | Nine Months Ended |           
|                                                                                      |  | PredecessorOctober 2,2005 |           | CompanyOctober 1,2006 |                   |            | PredecessorOctober 2,2005 |  | CompanyOctober 1,2006 |          
|Net income available to common unit holders:                                          |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|Basic                                                                                 |  | $                         | 2.31      |                       | $                 | 0.57       |                           |  | $                     | 2.98      |  | $ | 0.56       |  
|Diluted                                                                               |  | $                         | 2.26      |                       | $                 | 0.53       |                           |  | $                     | 2.91      |  | $ | 0.52       |  
|Weighted average units outstanding:                                                   |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|Basic                                                                                 |  |                           | 2,332,726 |                       |                   | 12,849,660 |                           |  |                       | 2,332,726 |  |   | 12,849,660 |  
|Diluted                                                                               |  |                           | 2,390,484 |                       |                   | 13,814,211 |                           |  |                       | 2,390,484 |  |   | 13,814,211 |  
|Pro Forma Data:                                                                       |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|Historical income available to common unit holders before taxes                       |  |                           |           |                       | $                 | 7,360      |                           |  |                       |           |  | $ | 7,173      |  
|Pro forma income tax expense                                                          |  |                           |           |                       |                   | (2,576     | )                         |  |                       |           |  |   | (2,510     | )
|                                                                                      |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|Net income available to common unit holders adjusted for pro forma income tax expense |  |                           |           |                       | $                 | 4,784      |                           |  |                       |           |  | $ | 4,663      |  
|                                                                                      |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|Pro forma net income available to common unit holders after taxes                     |  |                           |           |                       |                   |            |                           |  |                       |           |  |   |            |  
|Basic                                                                                 |  |                           |           |                       | $                 | 0.37       |                           |  |                       |           |  | $ | 0.36       |  
|Diluted                                                                               |  |                           |           |                       | $                 | 0.35       |                           |  |                       |           |  | $ | 0.34       |  

See accompanying notes.



3



---

##### Table of Contents

Susser Holdings Corporation

Consolidated Statements of Cash Flows

Unaudited



|                                                                                  |  |                           |         |   |                       |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | --------------------- | - | ------- | -
|                                                                                  |  | PredecessorOctober 2,2005 |         |   | CompanyOctober 1,2006 |  
|Cash flows from operating activities                                              |  |                           |         |   |                       |   |         |  
|Net Income                                                                        |  | $                         | 10,507  |   |                       | $ | 7,173   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |         |   |                       |   |         |  
|Depreciation, amortization, and accretion                                         |  |                           | 19,704  |   |                       |   | 17,672  |  
|Gain on disposal of property                                                      |  |                           | (429    | ) |                       |   | (277    | )
|Noncash stock-based compensation                                                  |  |                           | 1,188   |   |                       |   | 340     |  
|Minority interest                                                                 |  |                           | 57      |   |                       |   | 37      |  
|Fair market value in nonqualifying derivatives                                    |  |                           | 300     |   |                       |   | (106    | )
|Changes in operating assets and liabilities:                                      |  |                           |         |   |                       |   |         |  
|Receivables                                                                       |  |                           | (12,099 | ) |                       |   | (1,511  | )
|Inventories                                                                       |  |                           | (8,106  | ) |                       |   | 107     |  
|Prepaid expenses and other current assets                                         |  |                           | (2,127  | ) |                       |   | 1,346   |  
|Intangible assets                                                                 |  |                           | 85      |   |                       |   | (420    | )
|Other noncurrent assets                                                           |  |                           | (167    | ) |                       |   | (493    | )
|Accounts payable                                                                  |  |                           | 20,204  |   |                       |   | 985     |  
|Accrued liabilities                                                               |  |                           | 915     |   |                       |   | 3,698   |  
|Other noncurrent liabilities                                                      |  |                           | (362    | ) |                       |   | (64     | )
|                                                                                  |  |                           |         |   |                       |   |         |  
|Net cash provided by operating activities                                         |  |                           | 29,670  |   |                       |   | 28,487  |  
|                                                                                  |  |                          
|Cash flows from investing activities                                              |  |                           |         |   |                       |   |         |  
|Purchases of property and equipment                                               |  |                           | (40,847 | ) |                       |   | (39,462 | )
|Proceeds from disposal of property and equipment                                  |  |                           | 3,878   |   |                       |   | 5,135   |  
|                                                                                  |  |                           |         |   |                       |   |         |  
|Net cash used in investing activities                                             |  |                           | (36,969 | ) |                       |   | (34,327 | )
|                                                                                  |  |                          
|Cash flows from financing activities                                              |  |                           |         |   |                       |   |         |  
|Changes in notes receivable                                                       |  |                           | (20     | ) |                       |   | (212    | )
|Payments on long-term debt                                                        |  |                           | (9,645  | ) |                       |   |        |  
|Revolving line of credit, net                                                     |  |                           | 11,990  |   |                       |   | 3,880   |  
|                                                                                  |  |                           |         |   |                       |   |         |  
|Net cash provided by financing activities                                         |  |                           | 2,325   |   |                       |   | 3,668   |  
|                                                                                  |  |                           |         |   |                       |   |         |  
|Net increase (decrease) in cash                                                   |  |                           | (4,974  | ) |                       |   | (2,172  | )
|Cash and cash equivalents at beginning of year                                    |  |                           | 13,156  |   |                       |   | 4,116   |  
|                                                                                  |  |                           |         |   |                       |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                         | 8,182   |   |                       | $ | 1,944   |  
|                                                                                  |  |                           |         |   |                       |   |         |  
|Supplemental disclosure of cash flow information                                  |  |                           |         |   |                       |   |         |  
|Cash paid for interest                                                            |  | $                         | 8,460   |   |                       | $ | 9,648   |  
|                                                                                  |  |                           |         |   |                       |   |         |  

See accompanying notes.



4



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements

Unaudited

1. Organization and Principles of Consolidation

These consolidated financial statements are composed of Susser Holdings Corporation (Susser or Company), a Delaware corporation, and its consolidated subsidiaries. As discussed more fully in Note 2, on October 24, 2006, Susser
completed an initial public offering (IPO). Prior to the IPO, the Company conducted its business through Stripes Holdings LLC and its direct and indirect subsidiaries. The Company operates convenience stores and distributes motor fuels in Texas and
Oklahoma. Susser, through its subsidiaries and predecessors, has been acquiring, operating, and supplying motor fuel to convenience stores since 1988. Since this transaction was completed subsequent to the end of the third quarter 2006, the
financial statements included herein reflect the results of operations and financial position of Stripes, its subsidiaries and predecessors.

Stripes was formed in December 2005 to acquire the interests of Susser Holdings, L.L.C. (Predecessor). On December 21, 2005, Stripes Acquisition LLC, an affiliate of Wellspring Capital Partners III, L.P. (Wellspring), merged with and
into Susser Holdings, L.L.C., with Susser Holdings, L.L.C. remaining as the surviving entity. Wellspring and its affiliates invested approximately $91.9 million in cash equity, and Sam L. Susser, along with certain other members of management and
board of directors, rolled over approximately $36.6 million in equity interests in Susser Holdings L.L.C., each pursuant to an exchange agreement with Stripes. At October 1, 2006, Wellspring and its affiliates owned approximately 72% of the
voting equity interests of the Company, and Sam L. Susser and other members of management owned approximately 28%. (see Notes 3 and 11)

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:



| |  |  | SSP Partners (SSP), a Texas general partnership, operates convenience stores located primarily in South Texas and North Texas/Southern Oklahoma.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Susser Petroleum Company, LP (SPC), a Texas limited partnership, distributes motor fuels in Texas and Oklahoma.
| | - |  | ---------------------------------------------------------------------------------------------------------------

The Company also offers environmental, maintenance, and construction management services to the petroleum industry (including its own sites) through its
consolidated subsidiary, Applied Petroleum Technologies, Ltd. (APT), a Texas limited partnership.

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 the third quarter of 2005 and 2006 refer to the 13-week periods ended October 2, 2005 and October 1, 2006, respectively. All references to the first nine months of 2005 and 2006 refer to the 39-week
periods ended October 2, 2005 and October 1, 2006, respectively.

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 October 1, 2006 and for the three and nine months ended October 2, 2005 and October 1, 2006 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.



5



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



The interim consolidated financial statements included
herein should be read in conjunction with the consolidated financial statements and the notes thereto included in our audited consolidated financial statements for the fiscal year ended January 1, 2006, included in our registration statement on
Form S-1 (Registration No. 333-134033), as amended. A full description of our critical accounting policies is included in the notes to consolidated financial statements for the year ended January 1, 2006.

2. Subsequent Event - Initial Public Offering

On
October 24, 2006, Susser completed an IPO of 7,475,000 shares of its common stock at a price of $16.50 per share for an aggregate offering price of $123.3 million. The Company received approximately $113.0 million in net proceeds from the IPO
after payment of fees, expenses and underwriting discounts of approximately $10.3 million or $1.38 per share. The proceeds are being used to redeem $50.0 million of the 10 5/8% senior notes due 2013, plus accrued interest and premium thereon, to
repay outstanding borrowings under the revolving credit facility and for general corporate purposes, including growth capital.

Susser
became, immediately prior to the IPO, the holding company of Stripes, which together with each of its direct and indirect subsidiaries, comprise all of the Companys operations. In connection with the corporate formation transactions, each
holder of Class A units of Stripes received 0.718339 share of Susser common stock for each Class A unit held, and each holder of Class B units of Stripes received 0.130104 restricted share of common stock for each Class B unit held. All
outstanding options to purchase Class A units were converted into options to purchase an aggregate of 205,285 shares of common stock on an equivalent basis at an exercise price of $13.92. See Corporate Formation Transactions in the
Companys registration statement on Form S-1 (Registration No. 333-134033), as amended, for more details on the corporation formation transactions.

Immediately prior to the corporate formation transactions, the Board of Managers of Stripes Holdings LLC declared a $3.0 million dividend to its members to enable them to meet their estimated income tax obligations
for the period prior to the merger, and authorized any additional amounts to be distributed to the members upon final determination of the tax liability. It is currently estimated that an additional $0.6 million will be required to be distributed in
accordance with the Stripes Holdings LLC Agreement, and this amount will be reflected as a liability in the opening balance sheet of Susser. However, the final amount to be distributed could be more or less depending on the final determination of
taxable income attributable to members of Stripes up to the time of the corporate formation transactions.

After completion of the IPO, the
former equity owners of Stripes, which includes the direct and indirect holders of the Class A units and Class B units of Stripes, received shares of common stock of Susser representing approximately 56% of the voting power of the outstanding
capital stock. In addition to the converted options described above, concurrent with the IPO, the Company granted options under the Susser Holdings Corporation 2006 Equity Incentive Plan to purchase 1,023,006 shares of common stock at an exercise
price of $16.50 per share.

The IPO by the Company, the receipt of proceeds and the use of proceeds received by the Company are not
reflected in the Companys financial statements as of October 1, 2006 included in this report as the offering was completed after the end of the third quarter 2006. Presented below are the unaudited pro forma condensed consolidated balance
sheet as of October 1, 2006, as if the IPO had occurred at that date, and the unaudited pro forma condensed consolidated statements of operations for the three and nine months ended October 1, 2006 as if the IPO had occurred at the
beginning of the respective periods.

Additionally, we have presented comparative unaudited pro forma condensed consolidated statements of
operations for 2005, which give effect to the December 2005 transactions described in Note 3 below as well as the IPO, as if the transactions had occurred at the beginning of the respective periods. Additional discussion of these pro forma
adjustments is contained in our registration statement on Form S-1 (Registration No. 333-134033), as amended.



6



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



Susser Holdings Corporation

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As Of October 1, 2006

(Dollars In Thousands)



|                                                |  |   |         |    
|----------------------------------------------- |  | - | ------- | ---
|Assets:                                         |  |   |         |    
|Cash                                            |  | $ | 44,340  | (a)
|Other current assets                            |  |   | 97,605  | (b)
|Property, plant & equipment, net                |  |   | 233,855 |    
|Other assets                                    |  |   | 55,945  | (c)
|                                                |  |   |         |    
|Total assets                                    |  | $ | 431,745 |    
|                                                |  |   |         |    
|Liabilities and Stockholders Equity:            |  |   |         |    
|Current liabilities                             |  | $ | 93,510  | (d)
|Revolving line of credit                        |  |   |        | (e)
|Senior unsecured notes                          |  |   | 120,000 | (f)
|Other long term liabilities                     |  |   | 36,778  |    
|Minority interests in consolidated subsidiaries |  |   | 615     |    
|Stockholders equity                             |  |   | 180,842 | (g)
|                                                |  |   |         |    
|Total liabilities and stockholders equity       |  | $ | 431,745 |    
|                                                |  |   |         |    

---

|(a) | Reflects the net proceeds from the IPO, less redemption of notes, repayment of revolving line of credit, and $3.6 million estimated tax distribution to members.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Reflects an estimated $6.2 million short-term deferred tax asset to be recorded.
|--- | --------------------------------------------------------------------------------

|(c) | Reflects the write-off of $1.8 million unamortized debt issuance costs related to the note redemption, and $7.2 million estimated long-term deferred tax asset to be recorded.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Reflects the payment of $1.6 million accrued interest related to the note redemption.
|--- | -------------------------------------------------------------------------------------

|(e) | Reflects the repayment of the outstanding balance on the revolving line of credit.
|--- | ----------------------------------------------------------------------------------

|(f) | Reflects the redemption of $50.0 million of senior notes
|--- | --------------------------------------------------------

|(g) | Reflects the net proceeds from the IPO and the effect of recording the opening balances of deferred income taxes, reduced by $7.1 million penalties and write-off of unamortized debt
issuance costs related to the note redemption, and the tax distribution to members.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



Susser Holdings Corporation

Unaudited Pro Forma Condensed Consolidated Statements of Operations

(Dollars in thousands)



|                                                         |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|-------------------------------------------------------- |  | ------------------ | ---------- | ---- | ----------------- | - | ---------- | -------------- |  | - | -------------- | ----- |  | - | ---------- | ----
|                                                         |  | Three Months Ended |            |      | Nine Months Ended |  
|                                                         |  | October 2,2005     |            |      | October 1,2006    |   |            | October 2,2005 |  |   | October 1,2006 |      
|Total revenues                                           |  | $                  | 528,131    |      |                   | $ | 605,104    |                |  | $ | 1,387,179      |       |  | $ | 1,777,573  |     
|Total cost of sales                                      |  |                    | 472,695    |      |                   |   | 540,780    |                |  |   | 1,238,762      |       |  |   | 1,604,895  |     
|Total gross profit                                       |  |                    | 55,436     |      |                   |   | 64,324     |                |  |   | 148,417        |       |  |   | 172,678    |     
|                                                         |  |                    |            |     
|Operating expenses:                                      |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Personnel                                                |  |                    | 15,900     |      |                   |   | 17,388     |                |  |   | 46,501         |       |  |   | 51,746     |     
|General and administrative                               |  |                    | 5,457      | (a)  |                   |   | 4,945      | (f)            |  |   | 13,754         | (a)   |  |   | 13,988     | (f) 
|Operating                                                |  |                    | 14,137     |      |                   |   | 17,198     |                |  |   | 38,509         |       |  |   | 48,413     |     
|Rent                                                     |  |                    | 5,535      | (b)  |                   |   | 5,567      |                |  |   | 16,630         | (b)   |  |   | 16,651     |     
|Royalties                                                |  |                    | 890        |      |                   |   | 996        |                |  |   | 2,567          |       |  |   | 2,847      |     
|Loss (gain) on disposal of assets and impairment charge  |  |                    | 107        |      |                   |   | 2          |                |  |   | (429           | )     |  |   | (277       | )   
|Depreciation, amortization, and accretion                |  |                    | 7,004      | (c)  |                   |   | 6,053      | (g)            |  |   | 18,523         | (c)   |  |   | 17,484     | (g) 
|                                                         |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Total operating expenses                                 |  |                    | 49,030     |      |                   |   | 52,149     |                |  |   | 136,055        |       |  |   | 150,852    |     
|                                                         |  |                    |            |     
|Income from operations                                   |  |                    | 6,406      |      |                   |   | 12,175     |                |  |   | 12,362         |       |  |   | 21,826     |     
|                                                         |  |                    |            |     
|Other income (expense):                                  |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Interest expense, net                                    |  |                    | (3,532     | )(d) |                   |   | (3,342     | )(h)           |  |   | (9,954         | ) (d) |  |   | (10,104    | )(h)
|Other miscellaneous                                      |  |                    | 1,219      |      |                   |   | 106        |                |  |   | 1,149          |       |  |   | 217        |     
|                                                         |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Total other income (expense)                             |  |                    | (2,313     | )    |                   |   | (3,236     | )              |  |   | (8,805         | )     |  |   | (9,887     | )   
|                                                         |  |                    |            |     
|Minority Interest in income of consolidated subsidiaries |  |                    | 52         |      |                   |   | (14        | )              |  |   | (60            | )     |  |   | (47        | )   
|                                                         |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Net income before income taxes                           |  |                    | 4,145      |      |                   |   | 8,925      |                |  |   | 3,497          |       |  |   | 11,892     |     
|                                                         |  |                    |            |     
|Income taxes                                             |  |                    | (1,451     | )(e) |                   |   | (3,124     | )(e)           |  |   | (1,224         | )(e)  |  |   | (4,162     | )(e)
|                                                         |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Net Income                                               |  | $                  | 2,694      |      |                   | $ | 5,801      |                |  | $ | 2,273          |       |  | $ | 7,730      |     
|                                                         |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Pro forma earnings per share:                            |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Basic                                                    |  |                    | 0.16       |      |                   |   | 0.34       |                |  |   | 0.14           |       |  |   | 0.46       |     
|Diluted                                                  |  |                    | 0.16       |      |                   |   | 0.34       |                |  |   | 0.13           |       |  |   | 0.46       |     
|Weighted average number of shares outstanding:           |  |                    |            |      |                   |   |            |                |  |   |                |       |  |   |            |     
|Basic                                                    |  |                    | 16,824,162 |      |                   |   | 16,824,162 |                |  |   | 16,824,162     |       |  |   | 16,824,162 |     
|Diluted                                                  |  |                    | 16,856,261 |      |                   |   | 16,856,261 |                |  |   | 16,856,261     |       |  |   | 16,856,261 |     



8



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



|(a) | Reflects elimination of $1.0 million annual consulting expenses.
|--- | ----------------------------------------------------------------

|(b) | Reflects additional rent expense resulting from the sale/leaseback transaction of $3.3 million for the quarter and $9.8 million for the nine months.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Reflects the depreciation and amortization impacts of the sale/leaseback transaction, the step-up in basis of assets, the repayment of existing debt, the issuance of $170.0 million
senior notes and the redemption of $50.0 million senior notes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Reflects the issuance of $170.0 million senior notes, the repayment of existing debt, and the redemption of $50.0 million senior notes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(e) | Reflects the estimated pro forma income tax provision.
|--- | ------------------------------------------------------

|(f) | Reflects the elimination of management fees.
|--- | --------------------------------------------

|(g) | Reflects the reduction in amortization expense related to the redemption of notes.
|--- | ----------------------------------------------------------------------------------

|(h) | Reflects the redemption of $50.0 million senior notes.
|--- | ------------------------------------------------------

3.
Acquisitions and Related Transactions

On December 21, 2005, Stripes Acquisition LLC, an affiliate of Wellspring Capital Partners
III, L.P., (Wellspring) merged with and into Susser Holdings, L.L.C., with Susser Holdings, L.L.C. remaining as the surviving entity. Pursuant to the terms of the merger agreement, the preferred and common unitholders of Susser Holdings, L.L.C.
received $276.8 million in aggregate merger consideration for their interests. Wellspring and its affiliates invested approximately $91.9 million in cash equity and Sam L. Susser, along with certain other members of management and board of
directors, rolled over approximately $36.6 million in equity interests in Susser Holdings, L.L.C., each pursuant to an exchange agreement with Stripes Holdings LLC. We refer to the merger and the rollover transactions collectively as the
Acquisition. As a result of the Acquisition, Susser Holdings, L.L.C. became a wholly owned subsidiary of Stripes Holdings LLC.

In addition
to the Acquisition, SSP sold 74 retail stores to affiliates of National Retail Properties, Inc. for $170 million and entered into leaseback agreements for each of the stores; Susser Holdings, L.L.C. and Susser Finance Corporation issued $170 million
10 5/8 Senior Notes, due 2013; all existing indebtedness of Susser Holdings, L.L.C. and its subsidiaries was repaid and Susser Holdings L.L.C. entered into a new $50.0 million revolving credit facility. We refer to the Acquisition and these related
financings as the December 2005 transactions. The historical financial statements presented herein reflect the results of Susser Holdings, L.L.C. (Predecessor) for the three and nine months ended October 2, 2005, and of Stripes Holdings LLC for
the three and nine months ended October 1, 2006.

Stripes used the purchase method of accounting to record assets and liabilities
acquired from Susser Holdings, L.LC. The balance sheet as of January 1, 2006, reflects preliminary estimates of purchase price allocation. The balance sheet as of October 1, 2006, reflects the final purchase price allocation, based on
third party valuations and managements fair value assessments. Following is a summary of the preliminary and final purchase price allocations:



|                                                                                                 |  |   |          |  
|------------------------------------------------------------------------------------------------ |  | - | -------- | -
|Total Consideration:                                                                             |  |   |          |  
|Cash consideration, net of sale/leaseback proceeds, debt repayment, and seller transaction costs |  | $ | 100,806  |  
|$170 million notes                                                                               |  |   | 170,000  |  
|Transaction costs                                                                                |  |   | 11,500   |  
|Deemed dividend to previous owners in excess of predecessor basis                                |  |   | (65,690  | )
|                                                                                                 |  |   |          |  
|                                                                                                 |  | $ | 216,616  |  
|                                                                                                 |  |   |          |  
|Preliminary Allocation of Purchase Price:                                                        |  |   |          |  
|Current assets                                                                                   |  | $ | 92,701   |  
|Property and equipment                                                                           |  |   | 224,964  |  
|Intangible assets                                                                                |  |   | 38,280   |  
|Other assets                                                                                     |  |   | 4,533    |  
|Current liabilities                                                                              |  |   | (107,273 | )
|Other liabilities                                                                                |  |   | (36,589  | )
|                                                                                                 |  |   |          |  
|                                                                                                 |  | $ | 216,616  |  
|                                                                                                 |  |   |          |  



9



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



|                                    |  |   |          |  
|----------------------------------- |  | - | -------- | -
|Final Allocation of Purchase Price: |  |   |          |  
|Current Assets                      |  | $ | 95,332   |  
|Property and equipment              |  |   | 212,355  |  
|Intangible assets                   |  |   | 28,460   |  
|Goodwill                            |  |   | 20,224   |  
|Other assets                        |  |   | 4,533    |  
|Current liabilities                 |  |   | (107,313 | )
|Other liabilities                   |  |   | (36,975  | )
|                                    |  |   |          |  
|                                    |  | $ | 216,616  |  
|                                    |  |   |          |  

4. New Accounting Pronouncements

SFAS No. 123(R)

On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004)
(SFAS No. 123(R), Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends SFAS
No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the income statements based on their fair values. The Company adopted SFAS No. 123(R) at the beginning of fiscal 2006. Because we used the minimum value method for pro forma disclosures under SFAS
No. 123, we will apply SFAS No. 123(R) prospectively to newly issued stock options. Existing stock options will continue to be accounted for in accordance with APB Opinion No. 25 unless such options are modified, repurchased or
cancelled after the effective date.

EITF No. 06-3

In June 2006, the FASB ratified the consensus reached by the EITF on Issue No. 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross versus Net Presentation). The consensus requires disclosure of either the gross or net presentation, and any such taxes reported on a gross basis should be disclosed in the interim and annual financial
statements. This Issue is effective for financial reports beginning after December 15, 2006. We do not expect to change our presentation of such taxes, and we will provide additional disclosure upon the adoption of this Issue.

SFAS No. 157

In September 2006,
the FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. We use fair value measurements to
measure, among other items, purchased assets and investments, leases, derivative contracts and financial guarantees. We also use them to assess impairment of properties, plants and equipment, intangible assets and goodwill. The Statement
does not apply to share-based payment transactions and inventory pricing. This Statement is effective January 1, 2008. We are currently evaluating the impact on our financial statements.



10



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

5. Inventories

Inventories
consisted of the following:



|                                                       |  |                 |        |                 |   |        |  
|------------------------------------------------------ |  | --------------- | ------ | --------------- | - | ------ | -
|                                                       |  | January 1, 2006 |        | October 1, 2006 |  
|                                                       |  | (in thousands)  |       
|Merchandise                                            |  | $               | 23,191 |                 | $ | 22,766 |  
|Fuel                                                   |  |                 | 11,089 |                 |   | 11,051 |  
|Lottery                                                |  |                 | 1,405  |                 |   | 1,382  |  
|Maintenance spare parts and equipment                  |  |                 | 1,593  |                 |   | 2,383  |  
|Less allowance for inventory shortage and obsolescence |  |                 |       |                 |   | (412   | )
|                                                       |  |                 |        |                 |   |        |  
|Total                                                  |  | $               | 37,278 |                 | $ | 37,170 |  
|                                                       |  |                 |        |                 |   |        |  

6. Property, Plant, and Equipment

Property, plant, and equipment consisted of the following:



|                                     |  |                |         |                |   |        
|------------------------------------ |  | -------------- | ------- | -------------- | - | -------
|                                     |  | January 1,2006 |         | October 1,2006
|                                     |  | (in thousands)
|Land                                 |  | $              | 107,034 |                | $ | 114,569
|Buildings and leasehold improvements |  |                | 60,894  |                |   | 49,119 
|Equipment                            |  |                | 51,449  |                |   | 63,741 
|Construction in progress             |  |                | 5,587   |                |   | 21,333 
|                                     |  |                |         |                |   |        
|                                     |  |                | 224,964 |                |   | 248,762
|Less accumulated depreciation        |  |                | 738     |                |   | 14,907 
|                                     |  |                |         |                |   |        
|Total                                |  | $              | 224,226 |                | $ | 233,855
|                                     |  |                |         |                |   |        

7. Intangible Assets

The Company has finite-lived intangible assets recorded that are amortized in accordance with SFAS No. 142. These assets consist primarily of supply agreements, favorable leasehold arrangements and loan
origination costs, all of which are amortized over the respective lives of the agreements. The following table presents the gross carrying amount and accumulated amortization for each major class of finite-lived intangible assets as of
January 1, 2006 and October 1, 2006:



|                             |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |       |  |   |       
|---------------------------- |  | ------------------- | ------ | ----------------------- | - | --------- |  | ------------------- | ------ | ----------------------- | - | --------- |  | - | ----- |  | - | ------
|                             |  | January 1, 2006     |        | October 1, 2006        
|                             |  | GrossCarryingAmount |        | AccumulatedAmortization |   | NetAmount |  | GrossCarryingAmount |        | AccumulatedAmortization |   | NetAmount
|Supply agreements            |  | $                   | 5,655  |                         | $ | 25        |  | $                   | 5,630  |                         | $ | 6,384     |  | $ | 740   |  | $ | 5,644 
|Favorable lease arrangements |  |                     | 12,821 |                         |   | 10        |  |                     | 12,811 |                         |   | 6,907     |  |   | 1,521 |  |   | 5,386 
|Loan origination costs       |  |                     | 7,630  |                         |   | 33        |  |                     | 7,597  |                         |   | 7,565     |  |   | 812   |  |   | 6,753 
|Other                        |  |                     | 200    |                         |   | 144       |  |                     | 56     |                         |   | 200       |  |   | 158   |  |   | 42    
|                             |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |       |  |   |       
|Total                        |  | $                   | 26,306 |                         | $ | 212       |  | $                   | 26,094 |                         | $ | 21,056    |  | $ | 3,231 |  | $ | 17,825
|                             |  |                     |        |                         |   |           |  |                     |        |                         |   |           |  |   |       |  |   |       



11



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

As of January 1, 2006, the Company had recorded an indefinite-lived intangible asset of $12.1 million for the Laredo Taco Company
brand name, based on the preliminary purchase price allocation. The final purchase price allocation has been subsequently finalized, and as of October 1, 2006, the Company recorded $7.2 million for the Laredo Taco Company brand name and also
recorded $20.2 million of goodwill. These indefinite-lived intangible assets are not being amortized and will be evaluated for future impairment in accordance with SFAS No. 142.

8. Long-Term Debt

Long-term debt consisted of the following:



|                                                                                      |  |                 |         |                 |   |        
|------------------------------------------------------------------------------------- |  | --------------- | ------- | --------------- | - | -------
|                                                                                      |  | January 1, 2006 |         | October 1, 2006
|                                                                                      |  | (in thousands) 
|Revolving credit agreement, bearing interest at Prime or LIBOR plus applicable margin |  | $               | 6,220   |                 | $ | 10,100 
|10 5/8% senior unsecured notes due 2013                                               |  |                 | 170,000 |                 |   | 170,000
|                                                                                      |  |                 |         |                 |   |        
|Total long-term debt                                                                  |  | $               | 176,220 |                 | $ | 180,100
|                                                                                      |  |                 |         |                 |   |        

Revolving Credit Agreement

In December 2005, Susser Holdings, L.L.C. and SSP entered into a new five-year revolving credit facility (the Revolver) in an aggregate principal amount of up to $50.0 million with a syndicate of financial
institutions. The Company and each of its existing and future domestic subsidiaries, with the exception of one non wholly-owned subsidiary, are guarantors of the Revolver. The loans are secured by a perfected first priority security interest in
inventory, accounts receivable, and certain ownership interests.

At October 1, 2006, our borrowing base was sufficient to support the
$50.0 million availability under the Revolver, under which $10.1 million in loans were outstanding and letters of credit commitments were $2.9 million, leaving $37.0 million of availability. The interest rates under the Revolver are calculated at
our option at either a prime rate or a LIBOR rate plus, in each case, a margin. As of October 1, 2006, the interest on the Revolver was 9.0%. As of October 1, 2006, the Company was in compliance with all covenants required by the Revolver.

Senior Unsecured Notes

In December
2005, the Company, through its subsidiaries Susser Holdings, L.L.C. and Susser Finance Corporation, issued $170 million 10 5/8% senior unsecured notes (the Senior Notes). The Senior Notes pay interest semiannually in cash in arrears on June 15
and December 15 of each year, commencing on June 15, 2006. The Senior Notes mature on December 15, 2013, and are redeemable, in whole or in part, at any time on or after December 15, 2009, at specified redemption prices plus
accrued and unpaid interest. In addition, the Company may redeem up to 35% of the aggregate principal amount of the Senior Note before December 15, 2008, with the net proceeds of certain equity offerings. The Senior Notes are guaranteed by the
Company and each existing and future domestic subsidiaries with the exception of one non wholly-owned subsidiary. The Senior Notes rank equally in right of payment to all existing and future unsecured senior debt and senior in right of payment to
existing and future senior subordinated and subordinated debt.

On October 24, 2006, the Company gave notice to the holders of the
Senior Notes that it intends to use a portion of the proceeds of its initial public offering to redeem $50.0 million of the Senior Notes, plus accrued interest of $2.3 million and premium of $5.3 million. The redemption will be completed on
November 24, 2006. On September 18, 2006, the Company filed a registration statement with respect to an offer to exchange each of the Senior Notes for a new issue of debt securities registered under the Securities Act, with terms identical
to those of the Senior Notes (except for provisions relating to transfer restrictions and payment of additional interest). The Company intends to make the exchange offer following the redemption discussed above and subject to having the registration
statement relating to such exchange offer first delivered effective by the Securities and Exchange Commission.



12



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Derivative Financial Instruments

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 November 2003, the Company entered into an interest rate swap, which exchanged a 3.48% fixed rate for a variable LIBOR rate on a notional principal amount of $25 million, with a maturity date of December 29, 2006. On a
semiannual basis, the Company settles with the bank on the difference between the fixed and floating rates multiplied by the notional principal amount of $25 million for that period. As of October 1, 2006, LIBOR was at 5.3%. As of
January 1, 2006, and October 1, 2006, the estimated fair value of the swap was a loss of $330,000 and $224,000, respectively, which was recorded on the accompanying balance sheets in accrued expenses. Net proceeds paid or received and the
change in value of the swap are recorded as a reduction to or increase in interest expense.

9. Commitments and Contingencies

Material Contracts

On July 28, 2006, the Company
entered into a new fuel supply agreement with Valero Marketing and Supply Company to supply substantially all of our retail stores and certain wholesale locations that were supplied by CITGO. The agreement expires July 31, 2018, but
subsequently provides for automatic one-year renewals unless cancelled by either party upon 365 days notice. In connection with this new supply agreement, the Company is rebranding, at its expense, substantially all of its existing retail stores
supplied by CITGO to the Valero or Shamrock brand, or to the Stripes brand. Stripes branded locations will also be supplied by Valero under this agreement. The transition from the CITGO brand to the Valero brands began in September 2006, and is
expected to take six to nine months.

Leases

The Company leases a portion of its convenience store properties under noncancelable 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 volume. The Company is typically responsible for payment of real estate taxes,
maintenance expenses and insurance.

Letters of Credit

The Company was contingently liable for $2.9 million related to irrevocable letters of credit required by various insurers and suppliers at October 1, 2006.

Environmental Remediation

The Company is currently
involved in the remediation of gasoline store sites where releases of regulated substances have been detected. The Company accrues for anticipated future costs and the related probable state reimbursement amounts for its remediation activities.
Accordingly, the Company has recorded estimated undiscounted liabilities for these sites totaling $3.4 million, of which $2.0 million are classified as accrued expenses as of October 1, 2006, with the balance included in other noncurrent
liabilities. Approximately $0.6 million of the environmental reserve represents our estimate of deductibles under insurance policies that we anticipate being required to pay for remediation not covered under the state reimbursement programs. Under
state reimbursement programs, the Company is eligible to receive reimbursement for the majority of future remediation costs, as well as the remediation costs previously paid. Accordingly, the Company has recorded a net receivable of $4.5 million and
$5.0 million for the estimated probable state reimbursements as of January 1, 2006 and October 1, 2006, respectively.



13



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Self-Insurance

The Company is
partially self-insured for its general liability and employee health insurance. The Company maintains insurance coverage at levels that are customary and consistent with industry standards for companies of similar size. The Company is a
nonsubscriber under Texas Workers Compensation Act and maintains an ERISA-based employee injury plan, which is partially self insured. As of October 1, 2006, there were a number of outstanding claims that are of a routine nature, as well
as open claims under previous policies that have not been resolved. The estimated incurred but unpaid liabilities relating to these claims are included in other accrued expenses. While the ultimate outcome of these claims cannot presently be
determined, management believes that the accrued liability of $4.1 million will be sufficient to cover the related liability and that the ultimate disposition of these claims will have no material effect on the financial position and results of
operations of the Company.

Refiner Rebates

The Company receives refiner rebates and other incentive payments from a number of its major fuel suppliers. A portion of the refiner rebates is passed on to the Companys wholesale branded dealers under the same terms as required by
its fuel suppliers. Many of the agreements require repayment of all or a portion of the amount received if the Company (or its branded dealers) elects to discontinue selling the specified brand of fuel at certain locations. As of October 1,
2006, the estimated amount of fuel rebates that would have to be repaid upon de-branding at these locations was $6.9 million. Of this amount, approximately $4.3 million would be the responsibility of SPCs branded dealers under reimbursement
agreements with the dealers. In the event a dealer were to default on this reimbursement obligation, SPC would be required to make this payment. The Company has $3.1 million recorded on the balance sheet as deferred revenue.

10. Interest Expense and Interest Income

The
components of interest expense and interest income are as follows:



|                                        |  |                           |       |   |                       |   |       |                           |  |   |                       |   |  |   |        |  
|--------------------------------------- |  | ------------------------- | ----- | - | --------------------- | - | ----- | ------------------------- |  | - | --------------------- | - |  | - | ------ | -
|                                        |  | Three Months Ended        |       |   | Nine Months Ended     |  
|                                        |  | PredecessorOctober 2,2005 |       |   | CompanyOctober 1,2006 |   |       | PredecessorOctober 2,2005 |  |   | CompanyOctober 1,2006 |  
|                                        |  | (in thousands)            |      
|Cash interest expense                   |  | $                         | 4,243 |   |                       | $ | 4,838 |                           |  | $ | 11,295                |   |  | $ | 14,603 |  
|Noncash interest expense                |  |                           | 121   |   |                       |   |      |                           |  |   | 260                   |   |  |   |       |  
|Fair market value change in derivatives |  |                           | (205  | ) |                       |   | (39   | )                         |  |   | (300                  | ) |  |   | (106   | )
|Capitalized interest                    |  |                           | (246  | ) |                       |   | (77   | )                         |  |   | (246                  | ) |  |   | (262   | )
|                                        |  |                           |       |   |                       |   |       |                           |  |   |                       |   |  |   |        |  
|Total interest expense                  |  | $                         | 3,913 |   |                       | $ | 4,722 |                           |  | $ | 11,009                |   |  | $ | 14,235 |  
|                                        |  |                           |       |   |                       |   |       |                           |  |   |                       |   |  |   |        |  
|Cash interest income                    |  | $                         | 127   |   |                       | $ | 52    |                           |  | $ | 212                   |   |  | $ | 147    |  
|                                        |  |                           |       |   |                       |   |       |                           |  |   |                       |   |  |   |        |  
|Interest expense, net                   |  | $                         | 3,786 |   |                       | $ | 4,670 |                           |  | $ | 10,797                |   |  | $ | 14,088 |  
|                                        |  |                           |       |   |                       |   |       |                           |  |   |                       |   |  |   |        |  

11. Members interests

On December 21, 2005, Wellspring and its affiliates invested approximately $91.9 million in cash equity in Stripes and Sam L. Susser, along with certain other members of management and board of directors, rolled
over approximately $36.6 million in equity interests in Susser Holdings, L.L.C., each pursuant to an exchange agreement with Stripes. Wellspring and its affiliates owned approximately 72% of the voting equity interests of Stripes, and Sam L. Susser
and other members of management owned approximately 28%.

As of January 1, 2006 and October 1, 2006, Stripes had authorized the
issuance of 15,914,639 units, of which (i) 14,400,000 units were designated as Class A units (the Class A units), 12,849,660 of which were issued and outstanding and 1,440,796 of which were reserved for issuance under the Stripes
Holdings LLC Unit Option Plan (the Unit Option Plan) in accordance with its terms, and (ii) 1,514,639 units were designated as Class B units.



14



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

In connection with the IPO, which was completed on October 24, 2006, each holder of Class A units of Stripes received
0.718339 share of Susser Holdings Corporation common stock for each Class A unit held by them immediately prior to the corporate formation transactions, and each holder of Class B units of Stripes received 0.130104 restricted share of common
stock for each Class B unit held by them (see Note 2). In total, the Class A and Class B units were exchanged for 9,349,162 shares of common stock. The Company sold 7,475,000 shares in its IPO, resulting in total outstanding shares of common
stock of 16,824,162. Additionally, all outstanding options to purchase Class A units were converted into options to purchase an aggregate of 205,285 shares of common stock on an equivalent basis at an exercise price of $13.92, and the Company
granted additional options under the Susser Holdings Corporation 2006 Equity Incentive Plan to purchase 1,023,006 shares of common stock at an exercise price of $16.50.

12. Share-Based Compensation

Stripes granted a total of 912,823 Class B Units to members of
management and directors on December 21, 2005, concurrent with the closing of the Acquisition. The units vested over five years, with 33.3% of such units vesting on the third, fourth, and fifth anniversary of grant date. The Class B units were
nonvoting interests and ranked behind the Class A units in terms of priority on distribution, and therefore had no immediate liquidation value on the date of grant. Management has estimated the fair value of the Class B units granted to be
$1.93 per unit using the minimum value method.

The following table summarizes certain information regarding the Class B unit grants:



|                                    |  |                        |  |                              |     
|----------------------------------- |  | ---------------------- |  | ---------------------------- | ----
|                                    |  | Number of UnitsGranted |  | Grant-DateFair Valueper Unit
|Nonvested amount at January 1, 2006 |  | 912,823                |  | $                            | 1.93
|Granted                             |  |                       |  |                              |    
|Vested                              |  |                       |  |                              |    
|Forfeited                           |  |                       |  |                              |    
|                                    |  |                        |  |                              |     
|Nonvested amount at October 1, 2006 |  | 912,823                |  | $                            | 1.93
|                                    |  |                        |  |                              |     

The Company is recognizing non-cash compensation expense over the vesting period of these unit
grants, beginning in the first quarter of 2006. Stock-based compensation expense of $339,000 was recognized for the first nine months of 2006. The remaining compensation expense to be recognized over the next 51 months is a total of $1.4 million.
Subsequent to the end of the third quarter 2006, in connection with the IPO, the Class B unit holders received 0.130104 restricted shares of Susser common stock for each Class B unit held by them immediately prior to the corporate formation
transactions, with such shares of restricted stock having vesting and forfeiture terms similar to the terms of the Class B units (see Note 2).

On December 26, 2005, the Company adopted the Stripes Holdings LLC Unit Option Plan (the Stripes Option Plan), under which 328,506 options were issued to employees and directors. The exercise price was set at the fair value at date of
issue. The options had a ten-year life, and vested over five years, with 33.3% of such units vesting on the third, fourth, and fifth anniversary of grant date. The Company adopted SFAS No. 123(R ) during the first quarter of 2006. Because we
used the minimum value method for pro forma disclosures under SFAS No. 123, we will apply SFAS No. 123(R) prospectively to newly issued stock options. Existing stock options will continue to be accounted for in accordance with APB Opinion
No. 25 unless such options are modified, repurchased or cancelled after the effective date.



15



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



The following table summarizes certain information
regarding the Stripes Option Plan activity:



|                            |  |                          |   |  |                               |       |                        |   |      
|--------------------------- |  | ------------------------ | - |  | ----------------------------- | ----- | ---------------------- | - | -----
|                            |  | NumberOptionsOutstanding |   |  | WeightedAverageExercise Price |       | Range ofExercisePrices
|Balances at January 1, 2006 |  | 328,506                  |   |  | $                             | 10.00 |                        | $ | 10.00
|Granted                     |  |                         |   |  |                               |      |                        |   |     
|Exercised                   |  |                         |   |  |                               |      |                        |   |     
|Forfeited or expired        |  | (42,716                  | ) |  | $                             | 10.00 |                        | $ | 10.00
|                            |  |                          |   |  |                               |       |                        |   |      
|Balances at October 1, 2006 |  | 285,790                  |   |  | $                             | 10.00 |                        | $ | 10.00
|                            |  |                          |   |  |                               |       |                        |   |      

The weighted-average fair value of options granted during fiscal 2005 was $1.93 per incentive
option. The fair value of each incentive option grant was estimated on the grant date using the minimum value method. Because the Company accounts for its incentive options using the prospective approach, no compensation cost has been recognized in
the statements of income for the Companys fixed incentive option plan as all options granted had an exercise price equal to or greater than the fair value of the underlying units on the date of grant. Had compensation cost for the management
incentive option plan been determined based on the grant-date fair value of awards consistent with the method set forth in SFAS No. 123(R), the Companys net income for the periods presented would have been reduced as follows:



|                                                                                        |  |                    |       |                |                   |       |                |  |                |        |  |   |       |  
|--------------------------------------------------------------------------------------- |  | ------------------ | ----- | -------------- | ----------------- | ----- | -------------- |  | -------------- | ------ |  | - | ----- | -
|                                                                                        |  | Three Months Ended |       |                | Nine Months Ended |      
|                                                                                        |  | Predecessor        |       | Company        |                   |       | Predecessor    |  | Company        |       
|                                                                                        |  | October 2,2005     |       | October 1,2006 |                   |       | October 2,2005 |  | October 1,2006 |       
|                                                                                        |  | (in thousands)     |      
|Net income (loss), as reported                                                          |  | $                  | 6,520 |                | $                 | 7,360 |                |  | $              | 10,507 |  | $ | 7,173 |  
|Deduct:                                                                                 |  |                    |       |                |                   |       |                |  |                |        |  |   |       |  
|Compensation expense on options determined under fair value based method for all awards |  |                    |      |                |                   | (25   | )              |  |                |       |  |   | (108  | )
|                                                                                        |  |                    |       |                |                   |       |                |  |                |        |  |   |       |  
|Pro forma net income                                                                    |  | $                  | 6,520 |                | $                 | 7,335 |                |  | $              | 10,507 |  | $ | 7,065 |  
|                                                                                        |  |                    |       |                |                   |       |                |  |                |        |  |   |       |  

Subsequent to the end of the third quarter 2006, in connection with the IPO, the options under the
Stripes Option Plan were converted into options to purchase an aggregate of 205,285 shares of Susser common stock on an equivalent basis at an exercise price of $13.92, with such converted options having similar vesting and forfeiture terms to those
of the options originally granted under the Stripes Option Plan In addition, the Company adopted the Susser Holdings Corporation 2006 Equity Incentive Plan, under which options to purchase 1,023,006 shares of common stock were granted at an exercise
price of $16.50 per share. (see Note 2).

13. Segment Reporting

The Company operates its business in two primary segments. The retail segment, SSP, operates retail convenience stores in Texas and Oklahoma that sell merchandise, prepared food and motor fuel, and also offer a
variety of services including car washes, lottery, ATM, money orders, check cashing, and pay phones. The wholesale segment, SPC (a subsidiary of SSP), 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 commercial consumers 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.



16



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



Predecessor

Segment Financial Data for the Three Months Ended October 2, 2005

(dollars and gallons in thousands)



|                                          |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|----------------------------------------- |  | -------------- | ------- | ----------------- | - | ------------------------- |  | - | --------- | - |  | ------ | ------ | - |  | - | -------
|                                          |  | Retail Segment |         | Wholesale Segment |   | Intercompany Eliminations |  |   | All Other |   |  | Totals
|Revenue:                                  |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Merchandise                               |  | $              | 86,686  |                   | $ |                          |  | $ |          |   |  | $      |       |   |  | $ | 86,686 
|Fuel                                      |  |                | 215,257 |                   |   | 392,910                   |  |   | (171,755  | ) |  |        |       |   |  |   | 436,412
|Other                                     |  |                | 4,066   |                   |   | 913                       |  |   | (114      | ) |  |        | 168    |   |  |   | 5,033  
|                                          |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Total revenue                             |  |                | 306,009 |                   |   | 393,823                   |  |   | (171,869  | ) |  |        | 168    |   |  |   | 528,131
|Gross profit:                             |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Merchandise                               |  |                | 27,934  |                   |   |                          |  |   |          |   |  |        |       |   |  |   | 27,934 
|Fuel                                      |  |                | 15,799  |                   |   | 6,786                     |  |   |          |   |  |        |       |   |  |   | 22,585 
|Other                                     |  |                | 4,066   |                   |   | 913                       |  |   | (114      | ) |  |        | 52     |   |  |   | 4,917  
|                                          |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Total gross profit                        |  |                | 47,799  |                   |   | 7,699                     |  |   | (114      | ) |  |        | 52     |   |  |   | 55,436 
|                                          |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Selling, general, and administrative      |  |                | 34,132  |                   |   | 2,868                     |  |   | (114      | ) |  |        | 2,022  |   |  |   | 38,908 
|Depreciation, amortization, and accretion |  |                | 5,445   |                   |   | 1,209                     |  |   |          |   |  |        | 732    |   |  |   | 7,386  
|Other operating expenses (income)         |  |                | 107     |                   |   |                          |  |   |          |   |  |        |       |   |  |   | 107    
|                                          |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Operating income (loss)                   |  | $              | 8,115   |                   | $ | 3,622                     |  | $ |          |   |  | $      | (2,702 | ) |  | $ | 9,035  
|                                          |  |                |         |                   |   |                           |  |   |           |   |  |        |        |   |  |   |        
|Gallons                                   |  |                | 88,728  |                   |   | 200,604                   |  |   | (89,670   | ) |  |        |       |   |  |   | 199,662
|Total assets                              |  | $              | 269,452 |                   | $ | 89,512                    |  | $ | (7,108    | ) |  | $      | 5,654  |   |  | $ | 357,510
|Capital expenditures                      |  | $              | 6,244   |                   | $ | 2,676                     |  | $ |          |   |  | $      | 73     |   |  | $ | 8,993  

Company

Segment Financial Data for the Three Months Ended October 1, 2006

(dollars and gallons in
thousands)



|                                          |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|----------------------------------------- |  | -------------- | ------- | ----------------- | - | ------- | ------------------------- |  | - | --------- | - |  | ------ | ------ | - |  | - | -------
|                                          |  | Retail Segment |         | Wholesale Segment |   |         | Intercompany Eliminations |  |   | All Other |   |  | Totals
|Revenue:                                  |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Merchandise                               |  | $              | 96,141  |                   | $ |        |                           |  | $ |          |   |  | $      |       |   |  | $ | 96,141 
|Fuel                                      |  |                | 253,300 |                   |   | 452,292 |                           |  |   | (202,108  | ) |  |        |       |   |  |   | 503,484
|Other                                     |  |                | 4,436   |                   |   | 988     |                           |  |   | (111      | ) |  |        | 166    |   |  |   | 5,479  
|                                          |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Total revenue                             |  |                | 353,877 |                   |   | 453,280 |                           |  |   | (202,219  | ) |  |        | 166    |   |  |   | 605,104
|Gross profit                              |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Merchandise                               |  |                | 30,978  |                   |   |        |                           |  |   |          |   |  |        |       |   |  |   | 30,978 
|Fuel                                      |  |                | 20,225  |                   |   | 7,780   |                           |  |   |          |   |  |        |       |   |  |   | 28,005 
|Other                                     |  |                | 4,435   |                   |   | 988     |                           |  |   | (111      | ) |  |        | 29     |   |  |   | 5,341  
|                                          |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Total gross profit                        |  |                | 55,638  |                   |   | 8,768   |                           |  |   | (111      | ) |  |        | 29     |   |  |   | 64,324 
|                                          |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Selling, general, and administrative      |  |                | 42,592  |                   |   | 2,836   |                           |  |   | (111      | ) |  |        | 952    |   |  |   | 46,269 
|Depreciation, amortization, and accretion |  |                | 4,647   |                   |   | 1,181   |                           |  |   |          |   |  |        | 287    |   |  |   | 6,115  
|Other operating expenses (income)         |  |                | 20      |                   |   | (21     | )                         |  |   |          |   |  |        | 3      |   |  |   | 2      
|                                          |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Operating income (loss)                   |  | $              | 8,379   |                   | $ | 4,772   |                           |  | $ |          |   |  | $      | (1,213 | ) |  | $ | 11,938 
|                                          |  |                |         |                   |   |         |                           |  |   |           |   |  |        |        |   |  |   |        
|Gallons                                   |  |                | 96,249  |                   |   | 208,738 |                           |  |   | (95,794   | ) |  |        |       |   |  |   | 209,193
|Total assets                              |  | $              | 274,362 |                   | $ | 93,517  |                           |  | $ | (2,809    | ) |  | $      | 12,636 |   |  | $ | 377,706
|Capital expenditures                      |  | $              | 17,724  |                   | $ | 831     |                           |  | $ |          |   |  | $      | 26     |   |  | $ | 18,581 



17



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



Predecessor

Segment Financial Data for the Nine Months Ended October 2, 2005

(dollars and gallons in thousands)



|                                          |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|----------------------------------------- |  | -------------- | ------- | - | ----------------- | - | ------------------------- |  | - | --------- | - |  | ------ | ------ | - |  | - | --------- | -
|                                          |  | Retail Segment |         |   | Wholesale Segment |   | Intercompany Eliminations |  |   | All Other |   |  | Totals |       
|Revenue:                                  |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Merchandise                               |  | $              | 248,810 |   |                   | $ |                          |  | $ |          |   |  | $      |       |   |  | $ | 248,810   |  
|Fuel                                      |  |                | 572,253 |   |                   |   | 990,463                   |  |   | (440,373  | ) |  |        |       |   |  |   | 1,122,343 |  
|Other                                     |  |                | 12,925  |   |                   |   | 2,797                     |  |   | (341      | ) |  |        | 645    |   |  |   | 16,026    |  
|                                          |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Total revenue                             |  |                | 833,988 |   |                   |   | 993,260                   |  |   | (440,714  | ) |  |        | 645    |   |  |   | 1,387,179 |  
|Gross profit:                             |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Merchandise                               |  |                | 80,783  |   |                   |   |                          |  |   |          |   |  |        |       |   |  |   | 80,783    |  
|Fuel                                      |  |                | 36,026  |   |                   |   | 15,964                    |  |   |          |   |  |        |       |   |  |   | 51,990    |  
|Other                                     |  |                | 12,925  |   |                   |   | 2,797                     |  |   | (341      | ) |  |        | 263    |   |  |   | 15,644    |  
|                                          |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Total gross profit                        |  |                | 129,734 |   |                   |   | 18,761                    |  |   | (341      | ) |  |        | 263    |   |  |   | 148,417   |  
|                                          |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Selling, general, and administrative      |  |                | 98,514  |   |                   |   | 7,339                     |  |   | (341      | ) |  |        | 3,415  |   |  |   | 108,927   |  
|Depreciation, amortization, and accretion |  |                | 15,408  |   |                   |   | 3,477                     |  |   |          |   |  |        | 819    |   |  |   | 19,704    |  
|Other operating expenses (income)         |  |                | (43     | ) |                   |   |                          |  |   |          |   |  |        | (386   | ) |  |   | (429      | )
|                                          |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Operating income (loss)                   |  | $              | 15,855  |   |                   | $ | 7,945                     |  | $ |          |   |  | $      | (3,585 | ) |  | $ | 20,215    |  
|                                          |  |                |         |   |                   |   |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Gallons                                   |  |                | 273,713 |   |                   |   | 598,066                   |  |   | (271,554  | ) |  |        |       |   |  |   | 600,225   |  
|Total assets                              |  | $              | 269,452 |   |                   | $ | 89,512                    |  | $ | (7,108    | ) |  | $      | 5,654  |   |  | $ | 357,510   |  
|Capital expenditures                      |  | $              | 37,079  |   |                   | $ | 3,670                     |  | $ |          |   |  | $      | 98     |   |  | $ | 40,847    |  

Company

Segment Financial Data for the Nine Months Ended October 1, 2006

(dollars and gallons in
thousands)



|                                          |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|----------------------------------------- |  | -------------- | --------- | - | ----------------- | - | --------- | ------------------------- |  | - | --------- | - |  | ------ | ------ | - |  | - | --------- | -
|                                          |  | Retail Segment |           |   | Wholesale Segment |   |           | Intercompany Eliminations |  |   | All Other |   |  | Totals |       
|Revenue:                                  |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Merchandise                               |  | $              | 276,653   |   |                   | $ |          |                           |  | $ |          |   |  | $      |       |   |  | $ | 276,653   |  
|Fuel                                      |  |                | 752,619   |   |                   |   | 1,333,307 |                           |  |   | (602,389  | ) |  |        |       |   |  |   | 1,483,537 |  
|Other                                     |  |                | 14,166    |   |                   |   | 2,939     |                           |  |   | (332      | ) |  |        | 610    |   |  |   | 17,383    |  
|                                          |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Total revenue                             |  |                | 1,043,438 |   |                   |   | 1,336,246 |                           |  |   | (602,721  | ) |  |        | 610    |   |  |   | 1,777,573 |  
|Gross profit                              |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Merchandise                               |  |                | 90,523    |   |                   |   |          |                           |  |   |          |   |  |        |       |   |  |   | 90,523    |  
|Fuel                                      |  |                | 45,233    |   |                   |   | 20,010    |                           |  |   |          |   |  |        |       |   |  |   | 65,243    |  
|Other                                     |  |                | 14,166    |   |                   |   | 2,939     |                           |  |   | (332      | ) |  |        | 139    |   |  |   | 16,912    |  
|                                          |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Total gross profit                        |  |                | 149,922   |   |                   |   | 22,949    |                           |  |   | (332      | ) |  |        | 139    |   |  |   | 172,678   |  
|                                          |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Selling, general, and administrative      |  |                | 124,159   |   |                   |   | 7,732     |                           |  |   | (332      | ) |  |        | 2,633  |   |  |   | 134,192   |  
|Depreciation, amortization, and accretion |  |                | 12,932    |   |                   |   | 3,897     |                           |  |   |          |   |  |        | 843    |   |  |   | 17,672    |  
|Other operating expenses (income)         |  |                | (247      | ) |                   |   | (30       | )                         |  |   |          |   |  |        |       |   |  |   | (277      | )
|                                          |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Operating income (loss)                   |  | $              | 13,078    |   |                   | $ | 11,350    |                           |  | $ |          |   |  | $      | (3,337 | ) |  | $ | 21,091    |  
|                                          |  |                |           |   |                   |   |           |                           |  |   |           |   |  |        |        |   |  |   |           |  
|Gallons                                   |  |                | 300,568   |   |                   |   | 637,670   |                           |  |   | (297,052  | ) |  |        |       |   |  |   | 641,186   |  
|Total assets                              |  | $              | 274,362   |   |                   | $ | 93,517    |                           |  | $ | (2,809    | ) |  | $      | 12,636 |   |  | $ | 377,706   |  
|Capital expenditures                      |  | $              | 37,256    |   |                   | $ | 2,135     |                           |  | $ |          |   |  | $      | 71     |   |  | $ | 39,462    |  



18



---

##### Table of Contents

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited



13. Net Income and Loss per Unit

The Company is presenting net income or loss per unit, using the guidance provided in SFAS No. 128, Earnings per Share(EPS). Under
SFAS No. 128, basic EPS, which excludes dilution, is computed by dividing income or loss available to common unitholders by the weighted average number of common units outstanding for the period. Since the Company was organized as a partnership
for the periods presented, we are presenting historical EPS as earnings per common unit for Susser Holdings, L.L.C. for the three and six months ended October 2, 2005, and as earnings per common Class A unit for Stripes Holdings LLC for
the three and six months ended October 1, 2006. Net income or loss available to common unit holders represents reported net income or loss less dividends accrued on the Series B and Series C redeemable preferred stock.

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. Diluted EPS includes in-the-money stock options using the treasury stock method. During a net loss period, the assumed exercise of in-the-money stock options 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 units outstanding during each period for the basic computation and, if dilutive, the weighted average number of potential common units resulting from the
assumed conversion of outstanding stock options for the diluted computation.

A reconciliation of the numerators and denominators of the
basic and diluted per share computations is as follows (in thousands, except share and per share data):



|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | --------- | --------------------- | - | ------------------------- |  | --------------------- | --------- |  | - | ----------
|                                                                                                                           |  | Three Months Ended        |           | Nine Months Ended    
|                                                                                                                           |  | PredecessorOctober 2,2005 |           | CompanyOctober 1,2006 |   | PredecessorOctober 2,2005 |  | CompanyOctober 1,2006
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Net income                                                                                                                 |  | $                         | 6,520     |                       | $ | 7,360                     |  | $                     | 10,507    |  | $ | 7,173     
|Dividends Accrued on Series B and Series C Preferred Stock                                                                 |  |                           | 1,126     |                       |   |                          |  |                       | 3,552     |  |   |          
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Net income available to common unit holders                                                                                |  | $                         | 5,394     |                       | $ | 7,360                     |  | $                     | 6,955     |  | $ | 7,173     
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Denominator for basic earnings per share - weighted average number of common units outstanding during the period           |  |                           | 2,332,726 |                       |   | 12,849,660                |  |                       | 2,332,726 |  |   | 12,849,660
|Incremental common units attributable to exercise of outstanding dilutive options and restricted units                     |  |                           | 57,758    |                       |   | 964,551                   |  |                       | 57,758    |  |   | 964,551   
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Denominator for diluted earnings per comon unit                                                                            |  |                           | 2,390,484 |                       |   | 13,814,211                |  |                       | 2,390,484 |  |   | 13,814,211
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Net income available to common unit holders:                                                                               |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Basic                                                                                                                      |  | $                         | 2.31      |                       | $ | 0.57                      |  | $                     | 2.98      |  | $ | 0.56      
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Diluted                                                                                                                    |  | $                         | 2.26      |                       | $ | 0.53                      |  | $                     | 2.91      |  | $ | 0.52      
|                                                                                                                           |  |                           |           |                       |   |                           |  |                       |           |  |   |           
|Units not included in diluted net income available to common unit holders because the effect would have been anti-dilutive |  |                           | 145,473   |                       |   |                          |  |                       | 145,473   |  |   |          



19



---

##### Table of Contents

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 registration statement on Form S-1 (File No. 333-134033), as amended, including the audited consolidated financial statements for the fiscal year ended
January 1, 2006. Our fiscal year contains either 52 or 53 weeks and ends on the Sunday closest to December 31. All references to the third quarter and first nine months of 2006 refer to the 13-week and 39-week periods, respectively, ended
October1, 2006. All references to the third quarter and first nine months of 2005 refer to the 13-week and 39-week periods, respectively, ended October 2, 2005. 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 1 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.

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. 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, costs of our store rebranding initiatives, expansion of our foodservice offerings, potential acquisitions, and potential new store openings and dealer
locations, 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, supermarkets, hypermarkets, other non-traditional retailers located in our markets, and other wholesale fuel
distributors;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Changes in economic conditions generally and in the markets we serve;
| | - |  | ---------------------------------------------------------------------



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



| |  |  | Political conditions in crude oil producing regions, including South America and the Middle East;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | Wholesale cost increases of tobacco products;
| | - |  | ---------------------------------------------



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



| |  |  | Consumer behavior, travel and tourism trends;
| | - |  | ---------------------------------------------



| |  |  | Devaluation of the Mexican peso or imposition of restrictions on access of Mexican citizens to the United States;
| | - |  | -----------------------------------------------------------------------------------------------------------------



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



| |  |  | Changes in state and federal environmental and other regulations;
| | - |  | -----------------------------------------------------------------



| |  |  | Dependence on one principal supplier for merchandise, two principal suppliers for gasoline and one principal provider for the transportation of substantially all of our motor fuel;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Financial leverage and debt covenants;
| | - |  | --------------------------------------



| |  |  | Changes in the credit ratings assigned to our debt securities, credit facilities and trade credit;
| | - |  | --------------------------------------------------------------------------------------------------



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



| |  |  | Dependence on senior management;
| | - |  | --------------------------------



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



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

For a discussion of these and
other risks and uncertainties, please refer to Item 1A. Risk Factors in Part II of this document, and those contained in our registration statement on Form S-1 (File No. 333-134033). 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



20



---

##### Table of Contents

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 October 1, 2006, our retail segment operated 323 convenience stores in Texas and Oklahoma, offering merchandise,
foodservice, motor fuel and other services. During the first nine months of 2006, our wholesale motor fuel segment purchased 641.2 million gallons of branded and unbranded motor fuel from refiners and distributed it to our retail convenience
stores, contracted independent operators of convenience stores, unbranded convenience stores and commercial users. Our total revenues, net income and Adjusted EBITDA for the third quarter 2006 were $605.1 million, $7.4 million and $18.3 million,
respectively, compared to $528.1 million, $6.5 million and $17.8 million, respectively, for the third quarter 2005. Total revenues, net income and Adjusted EBITDA for the first nine months of 2006 were $1,777.6 million, $7.2 million and $39.3
million, respectively, compared to $1,387.2 million, $10.5 million and $40.6 million, respectively, for the first nine months of 2005. Adjusted EBITDA for third quarter and first nine months of 2006 includes an additional $3.3 million and $9.8
million, respectively, in rent expense related to the sale leaseback transaction completed in December 2005. 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 of this Item 2.

On July 28, 2006, we entered into a new fuel supply agreement with Valero Marketing and Supply Company to supply all of our retail stores and
certain wholesale locations that are currently supplied by CITGO. The agreement expires July 31, 2018, but subsequently provides for automatic one-year renewals unless cancelled by either party upon 365 days notice. In connection with
this new supply agreement, we are rebranding all of our existing retail stores supplied by CITGO to the Valero or Shamrock brand, or to the Stripes brand. Stripes branded locations will also be supplied by Valero under this agreement. We began
the transition from the CITGO brand to the Valero brands in late September 2006, and expect this transition to take six to nine months. As of the end of the third quarter, we had converted 6 stores from CITGO to Valero, with another 81
conversions completed during October 2006. This is a significant undertaking that impacts a variety of operational procedures, marketing initiatives and credit card programs. Based on initial feedback, the company is confident the end result will be
worth the cost and effort and will be well received by our consumers.

In addition to the fuel rebranding initiative, we are continuing
with the retail store rebranding from Circle K to Stripes, which we expect to have substantially completed by year-end. In addition to the 5 existing Stripes stores in Houston, we have opened 4 new locations as Stripes and converted 48 stores,
for a total of 57 retail stores operating as Stripes as of October 1, 2006. We completed the conversion of an additional 39 stores during the month of October 2006. We have seen no measurable deterioration in sales as a result of such
rebranding.



21



---

##### Table of Contents

Results of Operations

The following table presents, for the periods indicated, selected items in the consolidated statements of operations as a percentage of our total revenue:



|                                             |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|-------------------------------------------- |  | -------------------------- | - |  | ----------------------- | -- |  | --------------------- | -- |  | ---------------------- | -
|                                             |  | Three Months Ended         |   |  | Nine Months Ended       |   
|                                             |  | PredecessorOctober 2, 2005 |   |  | Company October 1, 2006 |    |  | CompanyOctober 2,2005 |    |  | Company October 1,2006 |  
|Revenues:                                    |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|Merchandise Sales                            |  | 16.4                       | % |  | 15.9                    | %  |  | 17.9                  | %  |  | 15.5                   | %
|Fuel Sales                                   |  | 82.6                       | % |  | 83.2                    | %  |  | 80.9                  | %  |  | 83.5                   | %
|Service Revenue and other                    |  | 1.0                        | % |  | 0.9                     | %  |  | 1.2                   | %  |  | 1.0                    | %
|                                             |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|Total Revenues                               |  | 100.0                      | % |  | 100.0                   | %  |  | 100.0                 | %  |  | 100.0                  | %
|                                             |  |                            |   | 
|Cost of Sales                                |  | 89.5                       | % |  | 89.4                    | %  |  | 89.3                  | %  |  | 90.3                   | %
|Gross Profit:                                |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|Merchandise                                  |  | 5.3                        | % |  | 5.1                     | %  |  | 5.8                   | %  |  | 5.1                    | %
|Fuel                                         |  | 4.3                        | % |  | 4.6                     | %  |  | 3.8                   | %  |  | 3.7                    | %
|Service gross profit and other               |  | 0.9                        | % |  | 0.9                     | %  |  | 1.1                   | %  |  | 0.9                    | %
|                                             |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|Total gross profit                           |  | 10.5                       | % |  | 10.6                    | %  |  | 10.7                  | %  |  | 9.7                    | %
|Selling, general and administrative expenses |  | 7.4                        | % |  | 7.7                     | %  |  | 7.9                   | %  |  | 7.5                    | %
|Depreciation, amortization and accretion     |  | 1.4                        | % |  | 1.0                     | %  |  | 1.4                   | %  |  | 1.0                    | %
|Other operating expenses (income)            |  | 0.0                        | % |  | (0.1                    | )% |  | (0.1                  | )% |  | 0.0                    | %
|                                             |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|Income from operations                       |  | 1.7                        | % |  | 2.0                     | %  |  | 1.5                   | %  |  | 1.2                    | %
|Interest and other                           |  | 0.5                        | % |  | 0.8                     | %  |  | 0.7                   | %  |  | 0.8                    | %
|                                             |  |                            |   |  |                         |    |  |                       |    |  |                        |  
|Net Income                                   |  | 1.2                        | % |  | 1.2                     | %  |  | 0.8                   | %  |  | 0.4                    | %
|                                             |  |                            |   |  |                         |    |  |                       |    |  |                        |  



22



---

##### 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                 |         |    | Nine Months Ended     |  
|                                          |  | PredecessorOctober 2, 2005         |         |    | CompanyOctober 1,2006 |   |         | PredecessorOctober 2, 2005 |  |   | Company October 1,2006 |  
|                                          |  | (dollars and gallons in thousands) |        
|Revenue:                                  |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Merchandise sales                         |  | $                                  | 86,686  |    |                       | $ | 96,141  |                            |  | $ | 248,810                |   |  | $ | 276,653   |  
|Motor fuelretail                         |  |                                    | 215,257 |    |                       |   | 253,300 |                            |  |   | 572,253                |   |  |   | 752,619   |  
|Motor fuelwholesale                      |  |                                    | 221,155 |    |                       |   | 250,184 |                            |  |   | 550,090                |   |  |   | 730,918   |  
|Other                                     |  |                                    | 5,033   |    |                       |   | 5,479   |                            |  |   | 16,026                 |   |  |   | 17,383    |  
|                                          |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Total revenue                             |  | $                                  | 528,131 |    |                       | $ | 605,104 |                            |  | $ | 1,387,179              |   |  | $ | 1,777,573 |  
|Gross profit:                             |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Merchandise                               |  | $                                  | 27,934  |    |                       | $ | 30,978  |                            |  | $ | 80,783                 |   |  | $ | 90,523    |  
|Motor fuelretail                         |  |                                    | 15,799  |    |                       |   | 20,225  |                            |  |   | 36,026                 |   |  |   | 45,233    |  
|Motor fuelwholesale                      |  |                                    | 6,786   |    |                       |   | 7,780   |                            |  |   | 15,964                 |   |  |   | 20,010    |  
|Other                                     |  |                                    | 4,917   |    |                       |   | 5,341   |                            |  |   | 15,644                 |   |  |   | 16,912    |  
|                                          |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Total gross profit                        |  | $                                  | 55,436  |    |                       | $ | 64,324  |                            |  | $ | 148,417                |   |  | $ | 172,678   |  
|Adjusted EBITDA (1):                      |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Retail                                    |  | $                                  | 13,666  |    |                       | $ | 13,046  |                            |  | $ | 31,220                 |   |  | $ | 25,763    |  
|Wholesale                                 |  |                                    | 4,831   |    |                       |   | 5,936   |                            |  |   | 11,422                 |   |  |   | 15,217    |  
|Other                                     |  |                                    | (729    | )  |                       |   | (653    | )                          |  |   | (2,024                 | ) |  |   | (1,654    | )
|                                          |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Total Adjusted EBITDA                     |  | $                                  | 17,768  |    |                       | $ | 18,329  |                            |  | $ | 40,618                 |   |  | $ | 39,326    |  
|                                          |  |                                    |         |   
|Retail merchandise margin                 |  |                                    | 32.2    | %  |                       |   | 32.2    | %                          |  |   | 32.5                   | % |  |   | 32.7      | %
|Merchandise same store sales growth       |  |                                    | (0.5    | )% |                       |   | 8.0     | %                          |  |   | 4.0                    | % |  |   | 6.0       | %
|Average per retail store per week:        |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Merchandise sales                         |  | $                                  | 21.0    |    |                       | $ | 23.0    |                            |  | $ | 20.6                   |   |  | $ | 22.2      |  
|Motor fuel gallons                        |  |                                    | 21.7    |    |                       |   | 23.2    |                            |  |   | 22.8                   |   |  |   | 24.3      |  
|Motor fuel gallons sold:                  |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Retail                                    |  |                                    | 88,728  |    |                       |   | 96,249  |                            |  |   | 273,713                |   |  |   | 300,568   |  
|Wholesale                                 |  |                                    | 110,934 |    |                       |   | 112,944 |                            |  |   | 326,512                |   |  |   | 340,618   |  
|Average retail price of motor fuel        |  | $                                  | 2.43    |    |                       | $ | 2.63    |                            |  | $ | 2.09                   |   |  | $ | 2.50      |  
|Motor fuel gross profit cents per gallon: |  |                                    |         |    |                       |   |         |                            |  |   |                        |   |  |   |           |  
|Retail                                    |  |                                    | 17.81   | ¢  |                       |   | 21.01   | ¢                          |  |   | 13.16                  | ¢ |  |   | 15.05     | ¢
|Wholesale                                 |  |                                    | 6.12    | ¢  |                       |   | 6.89    | ¢                          |  |   | 4.89                   | ¢ |  |   | 5.87      | ¢

---

|(1) | We define EBITDA as net income before interest expense, net, income taxes and depreciation, amortization and accretion. Adjusted EBITDA further adjusts EBITDA by excluding
cumulative effect of changes in accounting principles, discontinued operations, 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 transaction expenses associated with the December 2005 transactions 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 (along with our royalty expenses, marketing expenses, management fees and other items) are also excluded in measuring our covenants under our revolving credit facility and the indenture governing our senior notes.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23



---

##### Table of Contents

We believe that Adjusted EBITDA is useful to investors in evaluating our operating performance because



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



| |  |  | securities analysts and other interested parties use it as a measure of financial performance and debt service capabilities;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | it facilitates managements ability to measure operating performance of our business because it assists us in comparing our operating performance on a consistent basis since it
removes the impact of items not directly resulting from our retail convenience stores and wholesale motor fuel distribution operations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | it 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
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | it is used by our board of directors 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 an alternative to net income as a measure 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 a substitute 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 revolving credit facility or senior 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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24



---

##### Table of Contents

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



|                                          |  |                            |        |   |                       |   |        |                            |  |   |                       |   |  |   |        |  
|----------------------------------------- |  | -------------------------- | ------ | - | --------------------- | - | ------ | -------------------------- |  | - | --------------------- | - |  | - | ------ | -
|                                          |  | Three Months Ended         |        |   | Nine Months Ended     |  
|                                          |  | PredecessorOctober 2, 2005 |        |   | CompanyOctober 1,2006 |   |        | PredecessorOctober 2, 2005 |  |   | CompanyOctober 1,2006 |  
|                                          |  | (in thousands)             |       
|Net income                                |  | $                          | 6,520  |   |                       | $ | 7,360  |                            |  | $ | 10,507                |   |  | $ | 7,173  |  
|Depreciation, amortization, and accretion |  |                            | 7,386  |   |                       |   | 6,115  |                            |  |   | 19,704                |   |  |   | 17,672 |  
|Interest expense, net                     |  |                            | 3,786  |   |                       |   | 4,670  |                            |  |   | 10,797                |   |  |   | 14,088 |  
|                                          |  |                            |        |   |                       |   |        |                            |  |   |                       |   |  |   |        |  
|EBITDA                                    |  | $                          | 17,692 |   |                       | $ | 18,145 |                            |  | $ | 41,008                |   |  | $ | 38,933 |  
|Non-cash stock based compensation         |  |                            | 1,188  |   |                       |   | 113    |                            |  |   | 1,188                 |   |  |   | 339    |  
|Management fee                            |  |                            |       |   |                       |   | 175    |                            |  |   |                      |   |  |   | 547    |  
|Loss (gain) on disposal of assets         |  |                            | 107    |   |                       |   | 2      |                            |  |   | (429                  | ) |  |   | (277   | )
|Other miscellaneous                       |  |                            | (1,219 | ) |                       |   | (106   | )                          |  |   | (1,149                | ) |  |   | (216   | )
|                                          |  |                            |        |   |                       |   |        |                            |  |   |                       |   |  |   |        |  
|Adjusted EBITDA                           |  | $                          | 17,768 |   |                       | $ | 18,329 |                            |  | $ | 40,618                |   |  | $ | 39,326 |  
|                                          |  |                            |        |   |                       |   |        |                            |  |   |                       |   |  |   |        |  

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



|                                               |  |                            |        |   |                       |   |        |  
|---------------------------------------------- |  | -------------------------- | ------ | - | --------------------- | - | ------ | -
|                                               |  | Nine Months Ended          |       
|                                               |  | PredecessorOctober 2, 2005 |        |   | CompanyOctober 1,2006 |  
|                                               |  | (in thousands)             |       
|Net cash provided by operating activities      |  | $                          | 29,670 |   |                       | $ | 28,487 |  
|Changes in operating assets & liabilities      |  |                            | 1,657  |   |                       |   | (3,649 | )
|Gain on disposal of assets                     |  |                            | 429    |   |                       |   | 277    |  
|Non-cash stock based compensation expense      |  |                            | (1,188 | ) |                       |   | (339   | )
|Minority interest                              |  |                            | (57    | ) |                       |   | (37    | )
|Fair market value in nonqualifying derivatives |  |                            | (300   | ) |                       |   | 106    |  
|Interest expense, net                          |  |                            | 10,797 |   |                       |   | 14,088 |  
|                                               |  |                            |        |   |                       |   |        |  
|EBITDA                                         |  | $                          | 41,008 |   |                       | $ | 38,933 |  
|Non-cash stock based compensation              |  |                            | 1,188  |   |                       |   | 339    |  
|Management fee                                 |  |                            |       |   |                       |   | 547    |  
|Gain on disposal of assets                     |  |                            | (429   | ) |                       |   | (277   | )
|Other miscellaneous                            |  |                            | (1,149 | ) |                       |   | (216   | )
|                                               |  |                            |        |   |                       |   |        |  
|Adjusted EBITDA                                |  | $                          | 40,618 |   |                       | $ | 39,326 |  
|                                               |  |                            |        |   |                       |   |        |  



25



---

##### Table of Contents

The following table presents a reconciliation of our segment operating income to EBITDA and Adjusted
EBITDA:



|                                                        |  |                                  |        |   |                                     |   |        |                             |  |   |                         |   |  |                            |        |   |                       |   |        |                            |  |   |                        |   |  |   |        |   |  |   |        |  
|------------------------------------------------------- |  | -------------------------------- | ------ | - | ----------------------------------- | - | ------ | --------------------------- |  | - | ----------------------- | - |  | -------------------------- | ------ | - | --------------------- | - | ------ | -------------------------- |  | - | ---------------------- | - |  | - | ------ | - |  | - | ------ | -
|                                                        |  | Retail Segment Nine Months Ended |        |   | Wholesale Segment Nine Months Ended |   |        | All Other Nine Months Ended |  |   | Total Nine Months Ended |  
|                                                        |  | PredecessorOctober 2, 2005       |        |   | CompanyOctober 1, 2006              |   |        | PredecessorOctober 2, 2005  |  |   | CompanyOctober 1,2006   |   |  | PredecessorOctober 2, 2005 |        |   | CompanyOctober 1,2006 |   |        | PredecessorOctober 2, 2005 |  |   | CompanyOctober 1, 2006 |  
|Operating income (loss)                                 |  | $                                | 15,889 |   |                                     | $ | 13,078 |                             |  | $ | 8,260                   |   |  | $                          | 11,350 |   |                       | $ | (3,934 | )                          |  | $ | (3,337                 | ) |  | $ | 20,215 |   |  | $ | 21,091 |  
|Depreciation, amortization, and accretion               |  |                                  | 15,408 |   |                                     |   | 12,932 |                             |  |   | 3,477                   |   |  |                            | 3,898  |   |                       |   | 819    |                            |  |   | 843                    |   |  |   | 19,704 |   |  |   | 17,673 |  
|Other miscellaneous                                     |  |                                  |       |   |                                     |   |       |                             |  |   |                        |   |  |                            |       |   |                       |   | 1,149  |                            |  |   | 216                    |   |  |   | 1,149  |   |  |   | 216    |  
|Minority interest                                       |  |                                  |       |   |                                     |   |       |                             |  |   |                        |   |  |                            |       |   |                       |   | (60    | )                          |  |   | (47                    | ) |  |   | (60    | ) |  |   | (47    | )
|                                                        |  |                                  |        |   |                                     |   |        |                             |  |   |                         |   |  |                            |        |   |                       |   |        |                            |  |   |                        |   |  |   |        |   |  |   |        |  
|EBITDA                                                  |  |                                  | 31,297 |   |                                     |   | 26,010 |                             |  |   | 11,737                  |   |  |                            | 15,248 |   |                       |   | (2,026 | )                          |  |   | (2,325                 | ) |  |   | 41,008 |   |  |   | 38,933 |  
|Non-cash stock based compensation                       |  |                                  |       |   |                                     |   |       |                             |  |   |                        |   |  |                            |       |   |                       |   | 1,188  |                            |  |   | 339                    |   |  |   | 1,188  |   |  |   | 339    |  
|Management fee                                          |  |                                  |       |   |                                     |   |       |                             |  |   |                        |   |  |                            |       |   |                       |   |       |                            |  |   | 547                    |   |  |   |       |   |  |   | 547    |  
|Loss (gain) on disposal of assets and impairment charge |  |                                  | (77    | ) |                                     |   | (247   | )                           |  |   | (315                    | ) |  |                            | (31    | ) |                       |   | (37    | )                          |  |   | 1                      |   |  |   | (429   | ) |  |   | (277   | )
|Other operating expenses                                |  |                                  |       |   |                                     |   |       |                             |  |   |                        |   |  |                            |       |   |                       |   | (1,149 | )                          |  |   | (216                   | ) |  |   | (1,149 | ) |  |   | (216   | )
|                                                        |  |                                  |        |   |                                     |   |        |                             |  |   |                         |   |  |                            |        |   |                       |   |        |                            |  |   |                        |   |  |   |        |   |  |   |        |  
|Adjusted EBITDA                                         |  | $                                | 31,220 |   |                                     | $ | 25,763 |                             |  | $ | 11,422                  |   |  | $                          | 15,217 |   |                       | $ | (2,024 | )                          |  | $ | (1,654                 | ) |  | $ | 40,618 |   |  | $ | 39,326 |  
|                                                        |  |                                  |        |   |                                     |   |        |                             |  |   |                         |   |  |                            |        |   |                       |   |        |                            |  |   |                        |   |  |   |        |   |  |   |        |  

Third Quarter 2006 Compared to Third Quarter 2005

The following discussion of results for third quarter 2006 compared to third quarter 2005 compares the 13-week period of operations ended October 1,
2006, of Stripes Holdings LLC, to the 13-week period of operations ended October 2, 2005, of Susser Holdings, L.L.C. as predecessor company. The December 2005 transactions did not have a material impact on our core retail and wholesale
operations, and therefore the results of operations of the Company and Predecessor are comparable, with the exception of lease expense and interest expense which were impacted by the financing transactions.

Total Revenue. Total revenue for third quarter 2006 was $605.1 million, an increase of $77.0 million, or 14.6%, over 2005. The increase in
total revenue was driven by a 10.1% increase in the average sales price of motor fuel, a 10.9% increase in merchandise sales and an 4.8% increase in motor fuel gallons sold, each as further described below.

Total Gross Profit. Total gross profit for third quarter 2006 was $64.3 million, an increase of $8.9 million, or 16.0%, over
2005. The increase was primarily attributable to increases in merchandise sales, motor fuel margins and motor fuel volumes as further discussed below.

Merchandise Sales and Gross Profit. Merchandise sales were $96.1 million for 2006, a $9.5 million, or 10.9%, increase over 2005. Our performance was due to an 8.0% merchandise same store
sales increase, accounting for $6.9 million of the increase, with the balance due to the addition of 8 new retail stores. Key categories contributing to the same store sales increase were Laredo Taco Company, beer, and packaged and fountain
beverages. Merchandise gross profit was $31.0 million for 2006, a $3.0 million, or 10.9%, increase over 2005, which was driven by the increase in merchandise sales. Merchandise margins were 32.2% in both 2006 and 2005. Our merchandise margins do not
include other income.



26



---

##### Table of Contents

Retail Motor Fuel Sales, Gallons and Gross Profit. Retail sales of motor fuel
for 2006 were $253.3 million, an increase of 17.7% over 2005, driven by an 8.5% increase in the average retail price of motor fuel and an 8.5% increase in retail gallons sold. The increase in gallons was attributable to a 6.9% increase in average
gallons per site and the opening of 8 new retail stores. Retail motor fuel gross profit increased by 28.0% over 2005, due to the increased gallons and an increase in the gross profit per gallon. Gross profit cents per gallon of 21.0 cents was 18.0%
higher than 2005.

Wholesale Motor Fuel Sales, Gallons and Gross Profit. Wholesale motor fuel revenues to third
parties for 2006 were $250.2 million, a 13.1% increase over 2005. The increase was attributable to a 11.1% increase in average wholesale motor fuel prices and a 1.8% increase in gallons sold. Wholesale motor fuel gross profit of $7.8 million
increased 14.7% over 2005 as gross profit cents per gallon increased to 6.9 cents for 2006 compared to 6.1 cents for 2005. The increase in gross profit cents per gallon was attained across all categories of gallons sold with the highest increases
attributed to consignment motor fuel sales and unbranded motor fuel sales.

Other Revenue and Gross Profit.
Other revenue of $5.5 million for third quarter 2006 increased by 8.9% over 2005. Gross profit associated with other revenue was $5.3 million, an increase of 8.6% over 2005. The retail segment had other revenue of $4.4 million in 2006 compared to
$4.1 million in 2005. Retail segment other gross profit was $4.4 million and $4.1 million, respectively, as we record these service revenues on a net basis. The increase over last year was partially driven by an increase in income from prepaid
services and lottery due to the introduction of a state lottery in Oklahoma in October 2005. The prepaid services and lottery increases were partly offset by the continuing decline in payphone and money order income. Other revenues and related gross
profit for the wholesale segment were $1.0 million in 2006 and $0.9 million in 2005.

Personnel Expense. The
largest component of our operating expense is retail store personnel expense. For the third quarter 2006, personnel expense was $17.4 million, an increase of $1.5 million, or 9.4%, over 2005. The increase in personnel expense was primarily
attributable to increases in our group health insurance expense and our new store openings, which all have restaurants requiring incremental labor. Additionally, our restaurant sales, which require more labor, are growing at a much higher rate than
our other merchandise sales categories and therefore are contributing to the increase in personnel expense.

General and
Administrative Expenses. For third quarter 2006, general and administrative expenses decreased by $0.6 million, or 10.4%, from 2005. The decrease was primarily due to non-cash stock based compensation that was recognized in third
quarter 2005.

Other Operating Expenses. Other operating expenses increased by $3.1 million, or 21.7% over
2005, which was largely driven by increased utility expense from higher energy costs ($0.7 million), credit card fees from the increase in the average retail price of motor fuel ($1.3 million), marketing and advertising costs associated with our
Stripes rebranding initiative ($0.3 million) and maintenance costs ($0.4 million).

Rent Expense. Rent expense
for third quarter 2006 of $5.6 million was $3.3 million or 145.8% higher than 2005, due to the December 2005 sale-leaseback transaction.

Royalty Expense. Royalty expense for the quarter of $1.0 million, was up $0.1 million or 11.9% over 2005 due to the increase in merchandise sales. We began rebranding our stores to the
Stripes brand during the third quarter of 2006. As of October 1, 2006, in addition to the 5 existing Stripes stores in Houston, we have opened 4 new stores under the Stripes banner and have converted another 48 for a total of 57 Stripes branded
retail stores. We expect that substantially all retail stores will be converted to the Stripes brand by the end of 2006. Upon the completion of our Stripes rebranding, royalty expense will be eliminated for all stores previously branded Circle K. To
support our proprietary Stripes brand, we intend to increase our annual marketing expense by approximately $0.8 million per year.

Depreciation, Amortization and Accretion. Depreciation and amortization expense for third quarter 2006 of $6.1 million was down $1.3 million or 17.2% from 2005 due to the December 2005 transactions.

Income from Operations. Income from operations for third quarter 2006 was $11.9 million, compared to $9.0 million for
2005. The increase was attributable to the increase in sales and gross profit, which were partially offset by the higher rents and energy-related operating expenses discussed above.



27



---

##### Table of Contents

Interest Expense, Net. Net interest expense for third quarter 2006 was $4.7
million, an increase of $0.9 million from 2005. The increase was due to the issuance of the 10 5/8% senior notes in December 2005, net of the repayment of all prior indebtedness.

Other Miscellaneous Income and Expense. Other miscellaneous income for third quarter 2006 is $0.1 million compared to $1.2
million in 2005. The decrease was primarily due to the realization of a $1.4 million gain in the third quarter of 2005 on the sale of certain warrants that were granted to Susser Holding LLC.

Net Income or Loss. We recorded net income for third quarter 2006 of $7.4 million, compared to net income of $6.5 million for
2005. The increase is primarily due to increased income from operations as discussed above.

Adjusted EBITDA.Adjusted EBITDA
for third quarter 2006 was $18.3 million, an increase of $0.6 million, or 3.2%, compared to 2005. The increase is primarily due to the increase in income from operations offset by the additional $3.3 million of rent expense in the retail segment
related to the December 2005 sale-leaseback, and to the increases in energy-related costs described above. Retail segment Adjusted EBITDA of $13.0 million decreased by $0.6 million, or 4.5% compared to 2005, primarily due to the additional rent and
energy-related expenses. Wholesale segment Adjusted EBITDA of $5.9 million increased by $1.1 million, or 22.9%, over 2005 primarily due to the increased motor fuel gross profit.

Nine Months Ended October 1, 2006 Compared to Nine Months ended October 2, 2005

The
following discussion of results for the first nine months of 2006 compared to the first nine months of 2005 compares the 39-week period of operations ended October 1, 2006, of Stripes Holdings LLC, to the 39-week period of operations ended
October 2, 2005, of Susser Holdings, L.L.C. as predecessor company. The December 2005 transactions did not have a material impact on our core retail and wholesale operations, and therefore the results of operations of the Company and
Predecessor are comparable, with the exception of lease expense and interest expense which were impacted by the financing transactions.

Total Revenue. Total revenue for the first nine months of 2006 was $1,777.6 million, an increase of $390.4 million, or 28.1%, over 2005. The increase in total revenue was driven by a 23.7% increase in the average
sales price of motor fuel, an 11.2% increase in merchandise sales and a 6.8% increase in motor fuel gallons sold, each as further described below.

Total Gross Profit. Total gross profit for the first nine months of 2006 was $172.7 million, an increase of $24.3 million, or 16.3%, over 2005. The increase was primarily attributable to increases in merchandise
sales, merchandise margins, motor fuel margins and motor fuel volumes as further discussed below.

Merchandise Sales and Gross
Profit. Merchandise sales were $276.7 million for 2006, a $27.8 million, or 11.2%, increase over 2005. Our performance was due to a 6.0% merchandise same store sales increase, accounting for $14.7 million of the increase, with the
balance due to the addition of 8 new retail stores. Key categories contributing to the same store sales increase were Laredo Taco Company, beer, packaged and fountain beverages, and snacks. Merchandise gross profit was $90.5 million for 2006, a $9.7
million, or 12.1%, increase over 2005, which was driven by the increase in merchandise sales and margins. Merchandise margins were 32.7%, up from 32.5% in 2005. Merchandise margin improvements were due to a more favorable product mix emphasizing
Laredo Taco Company and dispensed and packaged beverages as well as improvements to shortages.

Retail Motor Fuel Sales,
Gallons and Gross Profit. Retail sales of motor fuel for 2006 were $752.6 million, an increase of 31.5% over 2005, driven by a 19.8% increase in the average retail price of motor fuel and a 9.8% increase in retail gallons sold. The
increase in gallons was attributable to a 6.6% increase in average gallons per site and the opening of 8 new retail stores. Retail motor fuel gross profit increased by 25.6% over 2005, due to the increased gallons and an increase in the gross profit
per gallon. Gross profit cents per gallon of 15.1 cents was 14.3% higher than 2005.

Wholesale Motor Fuel Sales, Gallons and
Gross Profit.Wholesale motor fuel revenues to third parties for 2006 were $730.9 million, a 32.9% increase over 2005. This increase was attributable to a 27.4% increase in average



28



---

##### Table of Contents

wholesale motor fuel prices and a 4.3% increase in gallons sold. Wholesale motor fuel gross profit of $20.0 million
increased 25.3% over 2005 as gross profit cents per gallon increased to 5.9 cents for 2006 compared to 4.9 cents for 2005. The increase in gross profit cents per gallon was attained across all categories of gallons sold with the highest increases
attributed to consignment motor fuel sales and unbranded motor fuel sales.

Other Revenue and Gross Profit.Other revenue of $17.4 million for the first nine months of 2006 increased by 8.5% over 2005. Gross profit associated with other revenue was $16.9 million, an increase of 8.1% over 2005. The retail segment had other revenue of $14.2 million in
2006 compared to $12.9 million in 2005. Retail segment other gross profit was $14.2 million and $12.9 million, respectively, as we record these service revenues on a net basis. The increase over last year was partially driven by an increase in
income from prepaid services and lottery due to the introduction of a state lottery in Oklahoma in October 2005. The prepaid services and lottery increases were partly offset by the continuing decline in payphone and money order income. Other
revenues and related gross profit for the wholesale segment were $2.9 million in 2006 and 2.8 million in 2005.

Personnel
Expense. The largest component of our operating expense is retail store personnel expense. For the first nine months of 2006, personnel expense was $51.7 million, an increase of $5.2 million, or 11.3%, over 2005. The increase in
personnel expense was primarily attributable to increases in our group health insurance expense and our new store openings, which all have restaurants requiring incremental labor. Additionally, our restaurant sales, which require more labor, are
growing at a much higher rate than our other merchandise sales and therefore are contributing to the increase in personnel expense.

General and Administrative Expenses. For the first nine months of 2006, general and administrative expenses of $14.5 million were the same as the first nine months of 2005.

Other Operating Expenses. Other operating expenses increased by $9.9 million, or 25.7% over 2005, which was largely driven by
increased utility expense from higher energy costs ($2.5 million), credit card fees from the increase in the average retail price of motor fuel ($3.9 million), maintenance expense ($1.2 million) and advertising expense ($0.8 million).

Rent Expense. Rent expense for the first nine months of 2006 of $16.7 million was $9.8 million or 144.1% higher than 2005,
due to the December 2005 sale-leaseback transaction.

Royalty Expense. Royalty expense for the first nine
months of 2006 of $2.8 million, was up $0.3 million or 10.9% over 2005 due to the increase in merchandise sales. We began rebranding our stores to the Stripes brand during the third quarter of 2006. As of October 1, 2006, in addition to the 5
existing Stripes stores in Houston, we have opened 4 new stores under the Stripes banner and have converted another 48, for a total of 57 Stripes branded retail stores. We expect that substantially all retail stores will be converted to the Stripes
brand by the end of 2006. Upon the completion of our rebranding, royalty expense will be eliminated for all stores previously branded Circle K. To support our proprietary Stripes brand, we intend to increase our annual marketing expense by
approximately $0.8 million per year.

Loss (Gain) on Disposal of Assets and Impairment Charges.Gain on
disposal of assets for the first nine months of 2006 of $0.3 million decreased by $0.2 million from 2005 due to fewer sales of property with a gain over net book value.

Depreciation, Amortization and Accretion. Depreciation and amortization expense for the first nine months of 2006 of $17.7 million decreased $2.0 million or 10.3% from 2005 due to the
December 2005 transactions.

Income from Operations. Income from operations for the first nine months of 2006
was $21.1 million, compared to $20.2 million for 2005. The increase was attributable to the increase in sales and gross profit, offset in part by higher rent expense and operating expenses as discussed above.

Interest Expense, Net. Net interest expense for the first nine months of 2006 was $14.1 million, an increase of $3.3 million
from 2005. The increase was due to the issuance of the 10 5/8% senior notes in December 2005, net of the repayment of all prior indebtedness.



29



---

##### Table of Contents

Other Miscellaneous Income and Expense. Other miscellaneous income for the
first nine months of 2006 is $0.2 million compared to $1.1 million in 2005. The decrease was primarily due to the realization of a $1.4 million gain in the third quarter of 2005 on the sale of certain warrants that were granted to Susser Holdings
LLC.

Net Income or Loss. We recorded net income for the first nine months of 2006 of $7.2 million, compared to
net income of $10.5 million for 2005. The decrease is primarily due to increased rent expense of $9.8 million related to the December 2005 transactions and other operating expenses offsetting increases in sales and gross profit as discussed above.

Adjusted EBITDA.Adjusted EBITDA for the first nine months of 2006 was $39.3 million, a decrease of $1.3 million, or
3.2%, compared to 2005. The decrease is primarily due to the additional $9.8 million of rent expense related to the December 2005 sale-leaseback, and to the increases in energy-related costs described above. Retail segment Adjusted EBITDA of $25.8
million decreased by $5.5 million, or 17.5% compared to 2005, primarily due to the $9.8 million additional rent and utility and credit card expenses. Wholesale segment Adjusted EBITDA of $15.2 million increased by $3.8 million, or 33.2%, over 2005
primarily due to the increased motor fuel gross profit.

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 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 (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 $29.7 million and $28.5 million for the first nine months of 2005 and 2006, respectively. The change in our cash provided
from operating activities for the respective periods was primarily attributable to the increased gross profit, net of increased operating expenses, as discussed above, the additional rent expense and interest expense related to the December 2005
transactions, and changes in working capital. We had $1.9 million of cash and cash equivalents on hand at October 1, 2006 compared to $8.2 million at October 2, 2005 and $4.1 million at January 1, 2006.

Capital Expenditures. Capital expenditures, before any sale/leasebacks and asset dispositions, were $9.0 million and $18.6
million during the third quarter of 2005 and 2006, respectively, and $40.8 million and $39.5 for the first nine months of 2005 and 2006, respectively. During third quarter 2006, we opened 4 new retail stores and closed 1 retail store, bringing our
store count to 323 as of October 1, 2006. For the first nine months of 2006 we opened 8 and closed 4 retail stores. We have opened 3 additional retail stores and closed 3 retail stores since the end of the third quarter and have another 5 under
construction. We expect to open a total of 16 to 18 new retail stores during 2006, and 18 to 22 stores for 2007. During fiscal 2006, we plan to invest approximately $38 to $42 million (net of approximately $16 to $18 million of lease financing) in
new retail stores, new dealer projects and maintenance and upgrade of our existing facilities. Additionally, we expect to spend approximately $18.5 to $20.5 million in total on the Stripes and Valero rebranding initiatives, which should be completed
by first quarter 2007. We plan to finance our capital spending plan with cash flow from operations, a portion of the proceeds from our initial public offering, borrowings under the revolving credit facility and additional lease financing.



30



---

##### Table of Contents

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



|                              |  |                                  |   |  |                                   |   |  |                                  |  
|----------------------------- |  | -------------------------------- | - |  | --------------------------------- | - |  | -------------------------------- | -
|                              |  | Fiscal Year EndedJanuary 1, 2006 |   |  | Three Months EndedOctober 1, 2006 |   |  | Nine Months EndedOctober 1, 2006 |  
|Retail stores:                |  |                                  |   |  |                                   |   |  |                                  |  
|Number at beginning of period |  | 306                              |   |  | 320                               |   |  | 319                              |  
|New stores                    |  | 16                               |   |  | 4                                 |   |  | 8                                |  
|Closed stores                 |  | (3                               | ) |  | (1                                | ) |  | (4                               | )
|                              |  |                                  |   |  |                                   |   |  |                                  |  
|Number at end of period       |  | 319                              |   |  | 323                               |   |  | 323                              |  
|                              |  |                                  |   |  |                                   |   |  |                                  |  
|Wholesale dealer locations:   |  |                                  |   |  |                                   |   |  |                                  |  
|Number at beginning of period |  | 333                              |   |  | 352                               |   |  | 346                              |  
|New locations                 |  | 30                               |   |  | 14                                |   |  | 27                               |  
|Closed locations              |  | (17                              | ) |  | (2                                | ) |  | (9                               | )
|                              |  |                                  |   |  |                                   |   |  |                                  |  
|Number at end of period       |  | 346                              |   |  | 364                               |   |  | 364                              |  
|                              |  |                                  |   |  |                                   |   |  |                                  |  

We have begun our rebranding initiative under which we are converting our stores from the Circle K
brand to the Stripes brand, and expect to have substantially all stores rebranded by year-end. We estimate this initiative will require a one-time capital investment of approximately $7.5 million in 2006. To support our Stripes brand, we also intend
to increase our annual marketing expense by $0.8 million. We paid $3.7 million for the use of the Circle K brand for the twelve months ended October 1, 2006. In addition to the 5 existing Stripes stores in Houston, we have opened 4 new
locations under the Stripes banner and converted 48 stores, for a total of 57 Stripes branded stores as of October 1, 2006. We completed the conversion of an additional 39 stores during the month of October 2006. We have seen no measurable
deterioration in sales as a result of the rebranding.

We have recently entered into a long-term fuel supply arrangement with Valero
Marketing and Supply which expires July 13, 2018 and which will replace our CITGO supply to approximately 300 retail stores, in addition to some of our wholesale supply sites. We will be responsible for the capital cost of rebranding each
location. We estimate this rebranding cost to be $11-$13 million in total, and expect it to occur over the 9-month period beginning in September 2006.

Cash Flows from Financing Activities. At October 1, 2006, our outstanding long-term debt was $180.1 million, including $10.1 million drawn on our revolving line of credit.

In December 2005, we issued $170.0 million aggregate principal amount of 10 5/8% senior notes due December 2013. We also executed sale/leaseback
transactions for 74 of our retail convenience store properties for proceeds of $170.0 million. The proceeds of the debt and the concurrent sale/leaseback transaction, cash on balance sheet and new equity contributions were used to fund the aggregate
merger consideration related to the December 2005 transactions, refinance our existing debt and pay related fees and expenses.

On
October 24, 2006, we completed an initial public offering of Susser Holdings Corporations common stock. Immediately prior to the offering, Stripes Holdings LLC and Susser Holdings Corporation completed corporate formation transactions
such that Stripes Holdings LLC and its subsidiaries became wholly-owned subsidiaries of Susser Holdings Corporation. We are using the net proceeds of this offering to redeem $50.0 million of our senior notes, repay the outstanding borrowing under
our revolving credit facility, pay fees and expenses related to the offering and for general corporate purposes, including growth capital.

Revolving Credit Facility.On December 21, 2005, two of our subsidiaries entered into a new five-year revolving credit facility in an aggregate principal amount of up to $50.0 million with a syndicate of financial
institutions. We and each of our existing and future domestic subsidiaries (other than one non-wholly owned subsidiary) are guarantors under the facility. The proceeds from this revolving credit facility are used to finance ongoing working capital
and other general corporate purposes.



31



---

##### Table of Contents

At October 1, 2006, $10.1 million was outstanding under the revolving credit facility, and letters
of credit amounted to $2.9 million, resulting in approximately $37.0 million of available borrowing capacity. As of October 1, 2006, we were in compliance with all covenants related to this facility. On October 24, 2006, we used a portion
of the net proceeds from our initial public offering to repay approximately $18.7 million then outstanding under our revolving credit facility.

Senior Notes. On December 21, 2005, Susser Holdings, L.L.C. and a subsidiary, Susser Finance Corporation sold $170.0 million of 10 5/8% senior unsecured notes due December 15, 2013. Interest on the
senior notes is due on June 15 and December 15 of each year. Proceeds from the sale of the senior notes were used to fund the December 2005 transactions, repay existing indebtedness and pay related fees and expenses. We incurred
approximately $6.9 million in costs associated with the senior notes, which was deferred and is being amortized over the life of the senior notes.

On October 24, 2006, the Company gave notice to the holders of the Senior Notes that it intends to use a portion of the proceeds of its initial public offering to redeem $50.0 million of the Senior Notes, plus accrued and unpaid
interest of $2.3 million and premium of $5.3 million. The redemption will be completed on November 24, 2006. On September 18, 2006, the Company filed a registration statement with respect to an offer to exchange each of the Senior Notes
for a new issue of debt securities registered under the Securities Act, with terms identical to those of the Senior Notes (except for provisions relating to transfer restrictions and payment of additional interest). The Company intends to make the
exchange offer following the redemption discussed above, and subject to having the registration statement relating to such exchange offer first declared effective by the Securities and Exchange Commission.

Properties.We completed a sale/leaseback of 74 properties in December 2005. 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         
|                                       |  | January 1,2006 |  | October 1,2006
|Operating sites  fee owned:           |  |                |  |               
|Retail                                 |  | 110            |  | 117           
|Wholesale (a)                          |  | 58             |  | 42            
|                                       |  |                |  |               
|Total fee owned                        |  | 168            |  | 159           
|                                       |  |               
|Operating sites  leased:              |  |                |  |               
|Retail                                 |  | 209            |  | 206           
|Wholesale (a)                          |  | 33             |  | 20            
|                                       |  |                |  |               
|Total leased                           |  | 242            |  | 226           
|                                       |  |               
|Office locations  fee owned           |  | 6              |  | 6             
|Properties held for future development |  | 7              |  | 5             
|Surplus properties for sale            |  | 34             |  | 38            

---

|(a) | On June 30, 2006, we sold 12 fee and 13 leased unattended fueling facilities.
|--- | -----------------------------------------------------------------------------

Long Term Liquidity. In addition to the financing completed in the December 2005 transactions and our initial public offering, we expect that our cash flows from operations, lease
financings and 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, new store openings, and our store and fuel rebranding initiatives, 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. As a normal part of our business, depending on market conditions, we from time to time consider opportunities to refinance our existing indebtedness, and although we may refinance all or
part of our existing indebtedness in the future, there can be no assurances that we will do so. Changes in our operating plans, lower than anticipated sales, increased expenses, additional 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. In addition, any of the items discussed in detail (or referred to) under Item 1A. Risk
Factors of Part II of this document may also significantly impact our liquidity.



32



---

##### 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 eleven quarters. Each quarter consists of 13 weeks,
unless noted otherwise. The unaudited quarterly information includes all normal recurring adjustments that we consider necessary for a fair presentation of the information shown.



|                                      |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|------------------------------------- |  | ---------------------------------- | ------- | - | -------------- | - | ------- | ------------- |  | - | ----------------- | ---- |  | - | ------- | ------------- |  |  | -------------- | - | ------- | ------------- |  | - | ----------------- | - |  | - | ------- | ------------- |  | - | -------------- | - |  | ------------ |  | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                      |  | 2004                               |         |   |                |   | 2005    |               |  |   |                   | 2006 | 
|                                      |  | First Quarter                      |         |   | Second Quarter |   |         | Third Quarter |  |   | Fourth Quarter(a) |      |  |   |         | First Quarter |  |  | Second Quarter |   |         | Third Quarter |  |   | Fourth Quarter(b) |   |  |   |         | First Quarter |  |   | Second Quarter |   |  | ThirdQuarter | 
|                                      |  | (dollars and gallons in thousands) |        
|Merchandise sales                     |  | $                                  | 68,691  |   |                | $ | 77,088  |               |  | $ | 81,437            |      |  | $ | 79,774  |               |  |  |                | $ | 76,206  |               |  | $ | 85,918            |   |  | $ | 86,686  |               |  | $ | 80,720         |   |  |              |  | $ | 85,799  |   |  | $ | 94,713  |   |  | $ | 96,141  |  
|Motor fuel sales:                     |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Retail                                |  |                                    | 123,845 |   |                |   | 144,559 |               |  |   | 149,377           |      |  |   | 168,185 |               |  |  |                |   | 165,983 |               |  |   | 191,012           |   |  |   | 215,257 |               |  |   | 208,189        |   |  |              |  |   | 228,295 |   |  |   | 271,024 |   |  |   | 253,300 |  
|Wholesale                             |  |                                    | 111,411 |   |                |   | 133,592 |               |  |   | 145,346           |      |  |   | 150,133 |               |  |  |                |   | 149,662 |               |  |   | 179,274           |   |  |   | 221,155 |               |  |   | 214,668        |   |  |              |  |   | 203,281 |   |  |   | 277,453 |   |  |   | 250,184 |  
|Other income                          |  |                                    | 5,087   |   |                |   | 5,175   |               |  |   | 4,964             |      |  |   | 5,511   |               |  |  |                |   | 5,498   |               |  |   | 5,495             |   |  |   | 5,033   |               |  |   | 5,508          |   |  |              |  |   | 5,936   |   |  |   | 5,968   |   |  |   | 5,479   |  
|                                      |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Total revenue                         |  |                                    | 309,034 |   |                |   | 360,414 |               |  |   | 381,124           |      |  |   | 403,603 |               |  |  |                |   | 397,349 |               |  |   | 461,699           |   |  |   | 528,131 |               |  |   | 509,085        |   |  |              |  |   | 523,311 |   |  |   | 649,158 |   |  |   | 605,104 |  
|Merchandise gross profit              |  |                                    | 22,316  |   |                |   | 25,307  |               |  |   | 26,092            |      |  |   | 25,150  |               |  |  |                |   | 24,190  |               |  |   | 28,659            |   |  |   | 27,934  |               |  |   | 25,667         |   |  |              |  |   | 28,130  |   |  |   | 31,417  |   |  |   | 30,978  |  
|Merchandise gross profit percentage   |  |                                    | 32.5    | % |                |   | 32.8    | %             |  |   | 32.0              | %    |  |   | 31.5    | %             |  |  |                |   | 31.7    | %             |  |   | 33.4              | % |  |   | 32.2    | %             |  |   | 31.8           | % |  |              |  |   | 32.8    | % |  |   | 33.2    | % |  |   | 32.2    | %
|Motor fuel gross profit:              |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Retail                                |  | $                                  | 9,055   |   |                | $ | 11,157  |               |  | $ | 11,012            |      |  | $ | 12,407  |               |  |  |                | $ | 7,897   |               |  | $ | 12,330            |   |  | $ | 15,781  |               |  | $ | 13, 915        |   |  |              |  | $ | 9,488   |   |  | $ | 15,520  |   |  | $ | 20,225  |  
|Wholesale                             |  |                                    | 3,617   |   |                |   | 4,458   |               |  |   | 4,154             |      |  |   | 5,299   |               |  |  |                |   | 3,877   |               |  |   | 5,301             |   |  |   | 6,804   |               |  |   | 8,303          |   |  |              |  |   | 5,242   |   |  |   | 6,988   |   |  |   | 7,780   |  
|Other gross profit                    |  |                                    | 4,931   |   |                |   | 5,034   |               |  |   | 5,097             |      |  |   | 5,429   |               |  |  |                |   | 5,365   |               |  |   | 5,362             |   |  |   | 4,917   |               |  |   | 5,273          |   |  |              |  |   | 5,815   |   |  |   | 5,756   |   |  |   | 5,341   |  
|                                      |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Total gross profit                    |  |                                    | 39,919  |   |                |   | 45,956  |               |  |   | 46,355            |      |  |   | 48,285  |               |  |  |                |   | 41,329  |               |  |   | 51,652            |   |  |   | 55,436  |               |  |   | 53,158         |   |  |              |  |   | 48,673  |   |  |   | 59,681  |   |  |   | 64,324  |  
|Income from operations                |  |                                    | 3,288   |   |                |   | 8,294   |               |  |   | 5,305             |      |  |   | 3,772   |               |  |  |                |   | 1,648   |               |  |   | 9,532             |   |  |   | 9,035   |               |  |   | (13,788        | ) |  |              |  |   | 638     |   |  |   | 8,515   |   |  |   | 11,938  |  
|Net income                            |  | $                                  | (1,228  | ) |                | $ | 4,997   |               |  | $ | 1,835             |      |  | $ | 443     |               |  |  |                | $ | (1,801  | )             |  | $ | 5,789             |   |  | $ | 6,520   |               |  | $ | (31,150        | ) |  |              |  | $ | (3,947  | ) |  | $ | 3,760   |   |  | $ | 7,360   |  
|                                      |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Fuel gallons:                         |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Retail                                |  |                                    | 79,823  |   |                |   | 83,325  |               |  |   | 85,991            |      |  |   | 94,730  |               |  |  |                |   | 90,680  |               |  |   | 94,304            |   |  |   | 88,728  |               |  |   | 94,229         |   |  |              |  |   | 103,210 |   |  |   | 101,109 |   |  |   | 96,249  |  
|Wholesale                             |  |                                    | 100,623 |   |                |   | 104,846 |               |  |   | 111,125           |      |  |   | 110,661 |               |  |  |                |   | 105,561 |               |  |   | 110,018           |   |  |   | 110,934 |               |  |   | 115,030        |   |  |              |  |   | 109,811 |   |  |   | 117,863 |   |  |   | 112,944 |  
|Motor fuel margin (cents per gallon): |  |                                    |         |   |                |   |         |               |  |   |                   |      |  |   |         |               |  |  |                |   |         |               |  |   |                   |   |  |   |         |               |  |   |                |   |  |              |  |   |         |   |  |   |         |   |  |   |         |  
|Retail (c)                            |  |                                    | 11.34   | ¢ |                |   | 13.39   | ¢             |  |   | 12.81             | ¢    |  |   | 13.10   | ¢             |  |  |                |   | 8.71    | ¢             |  |   | 13.08             | ¢ |  |   | 17.81   | ¢             |  |   | 14.77          | ¢ |  |              |  |   | 9.19    | ¢ |  |   | 15.35   | ¢ |  |   | 21.01   | ¢
|Wholesale                             |  |                                    | 3.59    | ¢ |                |   | 4.25    | ¢             |  |   | 3.74              | ¢    |  |   | 4.79    | ¢             |  |  |                |   | 3.67    | ¢             |  |   | 4.82              | ¢ |  |   | 6.12    | ¢             |  |   | 7.22           | ¢ |  |              |  |   | 4.77    | ¢ |  |   | 5.93    | ¢ |  |   | 6.89    | ¢

---

|(a) | 2004 fourth quarter included 14 weeks.
|--- | --------------------------------------

|(b) | 2005 fourth quarter included $33.4 million of expenses related to the December 2005 transactions.
|--- | -------------------------------------------------------------------------------------------------

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



33



---

##### Table of Contents

Recent Accounting Pronouncements

SFAS No. 123(R). On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004) (SFAS No. 123(R), Share-Based Payment, which is a revision of SFAS No. 123, Accounting for
Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the
approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statements based on their fair values. We adopted SFAS
No. 123(R) during the first quarter of 2006. Because we used the minimum value method for pro forma disclosures under SFAS No. 123, we will apply SFAS No. 123(R) prospectively to newly issued stock options. Existing stock options will
continue to be accounted for in accordance with APB Opinion No. 25 unless such options are modified, repurchased or cancelled after the effective date.

EITF No. 06-3. In June 2006, the FASB ratified the consensus reached by the EITF on Issue No. 06-3, How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation). The consensus requires disclosure of either the gross or net presentation, and any such taxes reported on a gross basis should
be disclosed in the interim and annual financial statements. This Issue is effective for financial reports beginning after December 15, 2006. We do not expect to change our presentation of such taxes, and we will provide additional
disclosure upon the adoption of this Issue.

SFAS No. 157. In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements. This Statement defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. We use fair value measurements to measure, among other items,
purchased assets and investments, leases, derivative contracts and financial guarantees. We also use them to assess impairment of properties, plants and equipment, intangible assets and goodwill. The Statement does not apply to share-based
payment transactions and inventory pricing. This Statement is effective January 1, 2008. We are currently evaluating the impact on our financial statements.

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 have a $50.0 million revolving credit facility which bears interest at variable rates. At October 1, 2006, we had variable rate debt of
$10.1 million outstanding. Holding other variables constant, including levels of debt, each 0.125% increase in interest rates would have an estimated impact on our net income and cash flows for the next twelve month period of approximately $12,600.

From time to time, we enter 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 November 2003, we entered into an interest rate swap, which exchanged a 3.48% fixed rate for a variable LIBOR rate on a
notional principal amount of $25.0 million with a maturity date of December 29, 2006. On a semi-annual basis, we settle with the bank on the difference between the fixed and floating rates multiplied by the notional principal amount of $25.0
million for that period. As of October 1, 2006, LIBOR was at 5.3%, and the estimated fair value of the swap was a loss of $224,000.

Our primary
exposure relates to:



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



| |  |  | Our ability to pay or refinance long-term borrowings at maturity at market rates; 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, other than described above, management evaluates our financial position on an ongoing basis.



34



---

##### Table of Contents

Item 4. Controls and Procedures

Our management has evaluated, under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of
1934 (the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 1, 2006, our disclosure controls and procedures are effective. There were no changes in
the Companys internal control over financial reporting that occurred during the quarter ended October 1, 2006 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial
reporting.

We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 by our year ending December 30, 2007.
The evidence of such compliance is due no later than the time we file our annual report on Form 10 K for 2007. We believe adequate resources and expertise, both internal and external, have been put in place to meet this requirement.



35



---

##### 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

There have been no material changes to the risk factors disclosed in the Risk
Factors section of our registration statement on Form S-1 (File No. 333-134033), as amended. You should carefully consider the risks described in our registration statement , 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 a decision to invest in our securities. The risks and
uncertainties described in our registration statement and elsewhere in this 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

Use of Proceeds

On October 24, 2006, we completed the initial public offering of 7,475,000 shares (including the exercise by the underwriters of their over-allotment
option) of our common stock, at an offering price to the public of $16.50 per share, pursuant to a registration statement on Form S-1 (File No. 333-134033), as amended, that was declared effective by the Securities and Exchange Commission on
October 18, 2006. The Company received approximately $113.0 million in net proceeds from the IPO after payment of fees, expenses and underwriting discounts of approximately $10.3 million. The net proceeds are being used to redeem $50.0 million
of the 10 5/8% senior notes due 2013, plus accrued and unpaid interest and premium thereon of approximately $7.7 million, to repay outstanding borrowings of approximately $18.7 million as of October 24, 2006, under the revolving credit facility
and for general corporate purposes, including growth capital.

The offering was made through an underwriting syndicate led by Merrill
Lynch & Co., as sole book running manager for the offering, and JP Morgan, Jefferies & Company and Morgan Keegan & Company, Inc., as co-managers.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.



36



---

##### Table of Contents

Item 6. Exhibits

The following is a list of exhibits filed as part of this Quarterly Report on Form
10-Q, which information is incorporated herein by reference.



|            |  |                                                                                                                                                                                                                                                                                                                                             
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                 
|2.1         |  | Form of Agreement and Plan of Merger, among Susser Holdings Corporation, Susser Holdings Merger LLC, and Stripes Holdings LLC**                                                                                                                                                                                                             
|            | 
|2.2         |  | Agreement and Plan of Merger, dated December 21, 2005, by and among Susser Holdings, L.L.C., Stripes Holdings LLC and Stripes Acquisition LLC***                                                                                                                                                                                            
|            | 
|2.3         |  | Form of Agreement and Plan of Merger, among Susser Holdings Corporation and Stripes Investment Corp.**                                                                                                                                                                                                                                      
|            | 
|3.4         |  | Amended and Restated Certificate of Incorporation of Susser Holdings Corporation                                                                                                                                                                                                                                                           
|            | 
|3.5         |  | Amended and Restated Bylaws of Susser Holdings Corporation                                                                                                                                                                                                                                                                                 
|            | 
|4.1         |  | Specimen of Stock Certificate*                                                                                                                                                                                                                                                                                                              
|            | 
|4.2         |  | Registration Rights Agreement*                                                                                                                                                                                                                                                                                                              
|            | 
|4.3         |  | Indenture, dated December 21, 2005, by and among Susser Holdings, L.L.C., Susser Finance Corporation, the guarantors named therein and the Bank of New York, as Trustee, relating to the
issuance of the 105/8% Senior Notes due 2013**                                                                                                     
|            | 
|10.22       |  | Amendment No. 2, dated July 26, 2006, to that certain Credit Agreement, dated December 21, 2005, by and among Susser Holdings, L.L.C., SSP Partners, Bank of America, N.A., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities, LLC and the lenders named therein*                         
|            | 
|10.25       |  | Unbranded Supply Agreement, dated July 28, 2006, by and between Susser Petroleum Company, LP and Valero Marketing and Supply Company (Asterisks located within the exhibit denote information
which has been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*                              
|            | 
|10.26       |  | Branded Distributor Marketing Agreement (Valero Brand), dated July 28, 2006, by and between Valero Marketing and Supply Company and Susser Petroleum Company, LP (Asterisks located within the
exhibit denote information which has been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*  
|            | 
|10.27       |  | Branded Distributor Marketing Agreement (Shamrock Brand), dated July 28, 2006, by and between Valero Marketing and Supply Company and Susser Petroleum Company, LP (Asterisks located within
the exhibit denote information which has been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*
|            | 
|10.28       |  | Master Agreement, dated July 28, 2006, by and between Valero Marketing and Supply Company and Susser Petroleum Company, LP (Asterisks located within the exhibit denote information which has
been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*                                        
|            | 
|10.29       |  | Letter Agreement, dated July 28, 2006 by and between CITGO Petroleum Corporation and Susser Petroleum Company, LP*                                                                                                                                                                                                                          



37



---

##### Table of Contents

|     |  |                                                                                                                                                                                             
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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                                                   

---

|* | Incorporated herein by reference to the identically numbered exhibit to Susser Holdings Corporations Amendment No. 4 to registration statement on Form S-1 (File
No. 333-134033), filed with the Securities and Exchange Commission on October 4, 2006.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Incorporated herein by reference to the identically numbered exhibit to Susser Holdings Corporations Amendment No. 3 to registration statement on Form S-1 (File
No. 333-134033), filed with the Securities and Exchange Commission on August 24, 2006.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*** | Incorporated herein by reference to the identically numbered exhibit to Susser Holdings Corporations registration statement on Form S-1 (File No. 333-134033), filed with
the Securities and Exchange Commission on May 12, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



38



---

##### Table of Contents

SIGNATURES

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



|                        |  |                             |  |                                                                      
|----------------------- |  | --------------------------- |  | ---------------------------------------------------------------------
|                        |  | SUSSER HOLDINGS CORPORATION
|                        |  |                            
|Date: November 15, 2006 |  | By                          |  | /s/ Mary E. Sullivan                                                 
|                        |  |                             |  | Mary E. Sullivan Executive Vice President and Chief
Financial Officer



39



---

##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                             
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                 
|2.1         |  | Form of Agreement and Plan of Merger, among Susser Holdings Corporation, Susser Holdings Merger LLC, and Stripes Holdings LLC**                                                                                                                                                                                                             
|            | 
|2.2         |  | Agreement and Plan of Merger, dated December 21, 2005, by and among Susser Holdings, L.L.C., Stripes Holdings LLC and Stripes Acquisition LLC***                                                                                                                                                                                            
|            | 
|2.3         |  | Form of Agreement and Plan of Merger, among Susser Holdings Corporation and Stripes Investment Corp.**                                                                                                                                                                                                                                      
|            | 
|3.4         |  | Amended and Restated Certificate of Incorporation of Susser Holdings Corporation                                                                                                                                                                                                                                                           
|            | 
|3.5         |  | Amended and Restated Bylaws of Susser Holdings Corporation                                                                                                                                                                                                                                                                                 
|            | 
|4.1         |  | Specimen of Stock Certificate*                                                                                                                                                                                                                                                                                                              
|            | 
|4.2         |  | Registration Rights Agreement*                                                                                                                                                                                                                                                                                                              
|            | 
|4.3         |  | Indenture, dated December 21, 2005, by and among Susser Holdings, L.L.C., Susser Finance Corporation, the guarantors named therein and the Bank of New York, as Trustee, relating to the
issuance of the 105/8% Senior Notes due 2013**                                                                                                     
|            | 
|10.22       |  | Amendment No. 2, dated July 26, 2006, to that certain Credit Agreement, dated December 21, 2005, by and among Susser Holdings, L.L.C., SSP Partners, Bank of America, N.A., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities, LLC and the lenders named therein*                         
|            | 
|10.25       |  | Unbranded Supply Agreement, dated July 28, 2006, by and between Susser Petroleum Company, LP and Valero Marketing and Supply Company (Asterisks located within the exhibit denote information
which has been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*                              
|            | 
|10.26       |  | Branded Distributor Marketing Agreement (Valero Brand), dated July 28, 2006, by and between Valero Marketing and Supply Company and Susser Petroleum Company, LP (Asterisks located within the
exhibit denote information which has been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*  
|            | 
|10.27       |  | Branded Distributor Marketing Agreement (Shamrock Brand), dated July 28, 2006, by and between Valero Marketing and Supply Company and Susser Petroleum Company, LP (Asterisks located within
the exhibit denote information which has been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*
|            | 
|10.28       |  | Master Agreement, dated July 28, 2006, by and between Valero Marketing and Supply Company and Susser Petroleum Company, LP (Asterisks located within the exhibit denote information which has
been deleted pursuant to a confidential treatment filing with the Securities and Exchange Commission)*                                        
|            | 
|10.29       |  | Letter Agreement, dated July 28, 2006 by and between CITGO Petroleum Corporation and Susser Petroleum Company, LP*                                                                                                                                                                                                                          
|            | 
|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.
                                                                                                                                                



40



---

##### Table of Contents

|     |  |                                                                                                                                          
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|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

---

|* | Incorporated herein by reference to the identically numbered exhibit to Susser Holdings Corporations Amendment No. 4 to registration statement on Form S-1 (File
No. 333-134033), filed with the Securities and Exchange Commission on October 4, 2006.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Incorporated herein by reference to the identically numbered exhibit to Susser Holdings Corporations Amendment No. 3 to registration statement on Form S-1 (File
No. 333-134033), filed with the Securities and Exchange Commission on August 24, 2006.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*** | Incorporated herein by reference to the identically numbered exhibit to Susser Holdings Corporations registration statement on Form S-1 (File No. 333-134033), filed with
the Securities and Exchange Commission on May 12, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



41