10-Q

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 March 30, 2008

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  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of “large accelerated filer”, “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

COMMON STOCK, $0.01 PAR VALUE	17,025,338 SHARES
(Class)	(Outstanding at May 8, 2008)

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	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	33
Item 4. Controls and Procedures	33
PART II –OTHER INFORMATION
Item 1. Legal Proceedings	34
Item 1A. Risk Factors	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3. Defaults Upon Senior Securities	34
Item 4. Submission of Matters to a Vote of Security Holders	34
Item 5. Other Information	34
Item 6. Exhibits	34

i

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Susser Holdings Corporation

Consolidated Balance Sheets

	December 30, 2007		March 30, 2008
	audited		unaudited
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	7,831	$	13,813
Accounts receivable, net of allowance for doubtful accounts of $1,360 at December 30, 2007 and $1,421 at March 30, 2008		69,368		72,077
Inventories, net		69,577		71,756
Assets held for sale		903		903
Other current assets		8,209		8,131
Total current assets		155,888		166,680
Property and equipment, net		410,745		413,096
Other assets:
Goodwill		248,809		248,809
Intangible assets, net		25,497		24,414
Other noncurrent assets		12,753		12,691
Total other assets		287,059		285,914
Total assets	$	853,692	$	865,690
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	127,756	$	128,306
Accrued expenses and other current liabilities		39,406		39,255
Current maturities of long-term debt		3,937		5,250
Deferred purchase price – TCFS acquisition, current		10,000		10,000
Total current liabilities		181,099		182,811
Long-term debt		374,754		373,327
Revolving line of credit		34,640		45,430
Deferred gain, long-term portion		31,511		35,486
Deferred tax liability, long-term portion		27,145		24,909
Other noncurrent liabilities		20,068		21,761
Total long-term liabilities		488,118		500,913
Minority interests in consolidated subsidiaries		684		695
Commitments and contingencies
Shareholders’ equity:
Common stock, $.01 par value; 125,000,000 shares authorized; 17,006,662 issued and 16,995,338 outstanding as of December 30, 2007; 17,036,662 issued and 17,025,338 outstanding as of March 30, 2008		170		170
Additional paid-in capital		172,765		173,605
Retained earnings		10,856		7,496
Total shareholders’ equity		183,791		181,271
Total liabilities and shareholders’ equity	$	853,692	$	865,690

See accompanying notes.

1

Susser Holdings Corporation

Consolidated Statements of Operations

Unaudited

	Three Months Ended
	April 1, 2007			March 30, 2008
	(dollars in thousands, except per share amounts)
Revenues:
Merchandise sales	$	93,365		$	168,771
Motor fuel sales		429,115			822,392
Other income		6,170			9,543
Total revenues		528,650			1,000,706
Cost of sales:
Merchandise		63,405			112,103
Motor fuel		412,726			796,640
Other		124			440
Total cost of sales		476,255			909,183
Gross profit		52,395			91,523
Operating expenses:
Personnel		18,254			30,297
General and administrative		6,225			9,063
Other operating		14,690			27,946
Rent		6,014			8,411
Royalties		66			—
Loss on disposal of assets and impairment charge		15			98
Depreciation, amortization, and accretion		6,351			10,736
Total operating expenses		51,615			86,551
Income from operations		780			4,972
Other income (expense):
Interest expense, net		(3,010	)		(9,862	)
Other miscellaneous		105			158
Total other income (expense)		(2,905	)		(9,704	)
Minority interest in income of consolidated subsidiaries		(16	)		(12	)
Loss before income taxes		(2,141	)		(4,744	)
Income tax (expense) benefit		(260	)		1,384
Net loss	$	(2,401	)	$	(3,360	)
Net loss per share:
Basic	$	(0.14	)	$	(0.20	)
Diluted	$	(0.14	)	$	(0.20	)
Weighted average shares outstanding:
Basic		16,705,404			16,880,404
Diluted		16,705,404			16,880,404

See accompanying notes.

2

Susser Holdings Corporation

Consolidated Statements of Cash Flows

Unaudited

	Three Months Ended
	April 1, 2007			March 30, 2008
	(in thousands)
Cash flows from operating activities
Net loss	$	(2,401	)	$	(3,360	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization, and accretion		6,351			10,736
Loss on disposal of property and impairment charge		15			98
Non-cash stock-based compensation		675			845
Minority interest		16			12
Deferred income tax		—			(2,185	)
Amortization of debt premium		—			(114	)
Changes in operating assets and liabilities:
Receivables		(8,604	)		(2,709	)
Inventories		(1,660	)		(2,179	)
Assets held for sale and other current assets		(1,820	)		30
Intangible assets, net		151			460
Other noncurrent assets		(185	)		1,833
Accounts payable		11,313			549
Accrued liabilities		786			(154	)
Other noncurrent liabilities		(60	)		(412	)
Net cash provided by operating activities		4,577			3,450
Cash flows from investing activities
Purchases of property and equipment		(17,546	)		(15,243	)
Proceeds from disposal of property and equipment		2			6
Proceeds from sale/leaseback transactions		—			6,949
Net cash used in investing activities		(17,544	)		(8,288	)
Cash flows from financing activities
Change in notes receivable		47			30
Revolving line of credit, net		—			10,790
Net cash provided by financing activities		47			10,820
Net increase (decrease) in cash		(12,920	)		5,982
Cash and cash equivalents at beginning of year		32,938			7,831
Cash and cash equivalents at end of period	$	20,018		$	13,813

See accompanying notes.

3

Susser Holdings Corporation

Notes to Consolidated Financial Statements

Unaudited

1. Organization and Principles of Consolidation

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

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

• Stripes LLC (“Stripes”), a Texas Limited Liability Company, operates convenience stores located primarily in Texas and Southern Oklahoma. On November 13, 2007, Stripes completed the acquisition of TCFS Holdings, Inc., the parent company of the Town & Country Food Stores chain of convenience stores.

• Susser Petroleum Company LLC (“SPC”), a Texas Limited Liability Company, distributes motor fuels in Texas, New Mexico and Oklahoma. SPC is a wholly owned subsidiary of Stripes.

The Company also offers environmental, maintenance and construction management services to the petroleum industry (including its own sites) through its subsidiary, Applied Petroleum Technologies, Ltd. (“APT”), a Texas limited partnership. Two wholly owned subsidiaries, Susser Holdings, L.L.C. and Susser Finance Corporation, are the issuers of the $270 million of senior notes outstanding at March 30, 2008, but do not conduct any operations. (See Note 8) A subsidiary, C&G Investments, LLC, owns a 50% interest in Cash & Go, Ltd. and Cash & Go Management, LLC. Cash & Go, Ltd. currently operates 39 units, located primarily inside Stripes’ retail stores, which provide short-term loans and check cashing services. The Company accounts for this investment under the equity method, and reflects its share of net earnings in other miscellaneous income and its investment in other noncurrent assets.

All significant intercompany accounts and transactions have been eliminated in consolidation. Transactions and balances of other subsidiaries are not material to the consolidated financial statements. The Company’s fiscal year is 52 or 53 weeks and ends on the Sunday closest to December 31. All references to fiscal 2007 refer to the 52-week period ended December 30, 2007. All references to the first quarter of 2007 and 2008 refer to the 13-week periods ended April 1, 2007 and March 30, 2008, respectively. Stripes follows the same accounting calendar as the Company. SPC and APT use calendar month accounting periods, and end their fiscal year on December 31.

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The interim consolidated financial statements have been prepared from the accounting records of the Company and its subsidiaries, and all amounts at March 30, 2008 and for the three months ended April 1, 2007 and March 30, 2008 are unaudited. Pursuant to Regulation S-X, certain information and note disclosures normally included in annual financial statements have been condensed or omitted. The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented, and which are of a normal, recurring nature.

Our results of operations for the three months ended April 1, 2007 and March 30, 2008 are not necessarily indicative of results to be expected for the full fiscal year. Our business is seasonal and we generally experience higher levels of revenues during the summer months than during the winter months.

The interim consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2007.

4

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Certain prior year balances have been reclassified for comparative purposes. Amortization of loan costs have been reclassified from amortization expense to interest expense for prior periods presented.

2. New Accounting Pronouncements

SFAS No. 157

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. In February 2008, FASB issued FASB Staff Position (“FSP”) FAS 157-2, “Effective Date of FASB Statement No. 157”, which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed in the financial statements on a nonrecurring basis to fiscal years beginning after November 15, 2008. The adoption of SFAS 157 and FSP FAS 157-2 did not have a material effect on our financial position or results of operations. (See further discussion in Note 8.)

SFAS No. 159

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This Statement allows entities to voluntarily choose, at specified election dates, to measure many financial assets and liabilities at fair value. The adoption of this Statement as of the beginning of our 2008 fiscal year did not have a material impact on our financial statements.

SFAS 141R

In December 2007, the FASB issued SFAS No. 141R, Business Combinations. SFAS No. 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statement to evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. Accordingly, any business combinations the we engage in will be recorded and disclosed following existing GAAP until December 28, 2008. The Company expects SFAS No. 141R will have an impact on its consolidated financial statements when effective, but the nature and magnitude of the specific effects will depend upon the nature, terms and size of the acquisitions it consummates after the effective date. We are currently evaluating the potential impact of this standard on our future consolidated financial statements.

SFAS 160

In December 2007 the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB 51. SFAS No. 160 changes the accounting and reporting for minority interests. Minority interests will be recharacterized as noncontrolling interests and will be reported as a component of equity separate from the parent’s equity, and purchases or sales of equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement and upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years, except for the presentation and disclosure requirements, which will apply retrospectively. We are currently evaluating the potential impact that the adoption of this statement will have on our future consolidated financial statements.

SFAS 161

In March 2008, FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures concerning

5

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

(1) the manner in which an entity uses derivatives (and the reasons it uses them), (2) the manner in which derivatives and related hedged items are accounted for under SFAS No. 133 and interpretations thereof, and (3) the effects that derivatives and related hedged items have on an entity’s financial position, financial performance, and cash flows. The standard is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We are currently evaluating the potential impact that the adoption of this statement will have on our future consolidated financial statements.

3. Acquisition of TCFS Holdings, Inc.

On November 13, 2007, the Company and TCFS Acquisition Corporation, a Texas corporation and a wholly-owned indirect subsidiary of the Company, acquired 100% of the issued and outstanding capital stock of TCFS Holdings, Inc., a Texas corporation and the parent of the Town & Country Food Stores chain of convenience stores (“TCFS”). Total merger consideration (after adjustments) was approximately $355.6 million, which included the repayment or defeasance of approximately $114.9 million of net debt of TCFS and its subsidiaries and the posting of two $10 million letters of credit that will be held in escrow and will be eligible to be drawn upon on each of the first and second anniversaries of closing, respectively, in either case, net of any settled or pending indemnity claims. The Company is accounting for the TCFS Holdings, Inc. acquisition as a business combination.

The cash needed to fund the merger consideration and pay related fees and expenses of approximately $16.7 million plus a $6.2 million tax benefit payment was provided for by (1) $153.8 million in proceeds, including a premium of $3.8 million, from a $150 million aggregate principal amount of 10-5/8% Senior Notes due 2013 issued by Susser Holdings, L.L.C., (2) a $105 million senior secured term loan facility of Susser Holdings, L.L.C., (3) $51.2 million net proceeds from a concurrent sale/leaseback transaction, (4) $11.3 million from the senior secured revolving credit facility of Susser Holdings, L.L.C. and (5) $42.2 million in cash on hand. We refer to the acquisition of TCFS and related financing transactions as the “TCFS Acquisition.”

The balance sheets presented as of December 30, 2007 and March 30, 2008 reflect the preliminary allocation of purchase price based on available information and certain assumptions management believes to be reasonable. These values are subject to change until certain valuations have been finalized and management completes its fair value assessments. Goodwill recognized for this transaction was approximately $204.0 million. Of this amount, approximately $23.1 million is deductible for tax purposes. In addition, $0.8 million of restructuring charges have been accrued. No expenditures were charged against this accrual during the first quarter of 2008. The entire amount of goodwill was assigned to the Retail segment. All acquired goodwill has an indefinite life. We expect to finalize these estimates prior to November 12, 2008, one year from the date the acquisition took place, and any updates will be reflected in our 2008 financial statements. We will be evaluating potential additional adjustments related to other intangible assets as well as other assets and liabilities in place at the time of the acquisition.

6

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

4. Accounts Receivable

Accounts receivable consisted of the following:

	December 30, 2007			March 30, 2008
	(in thousands)
Accounts receivable, trade	$	52,383		$	58,875
Receivable from state reimbursement funds		2,505			2,336
Vendor receivables for rebates, branding, and others		6,438			6,333
ATM fund receivables		3,138			3,387
Notes receivable, short term		475			442
Other receivables		5,789			2,125
Allowance for uncollectible accounts, trade		(1,024	)		(1,085	)
Allowance for uncollectible accounts, environmental		(336	)		(336	)
Accounts receivables, net	$	69,368		$	72,077

5. Inventories

Inventories consisted of the following:

	December 30, 2007			March 30, 2008
	(in thousands)
Merchandise	$	37,961		$	38,018
Fuel		28,773			30,533
Lottery		1,257			1,247
Maintenance spare parts and equipment		2,113			2,494
Less allowance for inventory shortage and obsolescence		(527	)		(536	)
Total	$	69,577		$	71,756

6. Property, Plant, and Equipment

Property, plant, and equipment consisted of the following:

	December 30, 2007		March 30, 2008
	(in thousands)
Land	$	127,532	$	125,986
Buildings and leasehold improvements		182,494		186,089
Equipment		130,476		135,640
Construction in progress		14,260		19,043
		454,762		466,758
Less accumulated depreciation		44,017		53,662
Total	$	410,745	$	413,096

7

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

7. Goodwill and Other Intangible Assets

Goodwill is not being amortized, but is tested annually for impairment, and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. No changes to goodwill were recorded during the first quarter of 2008.

The Company has finite-lived intangible assets recorded that are amortized in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. These assets consist of supply agreements, favorable leasehold arrangements, loan origination costs and a trade name, all of which are amortized over the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Supply agreements are being amortized over a weighted average period of approximately nine years. Favorable leasehold arrangements are being amortized over a weighted average period of approximately eight years. The Laredo Taco Company trade name is being amortized over fifteen years. The following table presents the gross carrying amount and accumulated amortization for each major class of finite-lived intangible assets at December 30, 2007 and March 30, 2008:

	December 30, 2007						March 30, 2008
	Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
	(in thousands)
Supply agreements	$	4,880	$	1,506	$	3,374	$	5,041	$	1,688	$	3,353
Favorable lease arrangements, net		4,616		1,636		2,980		4,616		1,868		2,748
Loan origination costs		17,058		1,615		15,443		17,061		2,372		14,689
Trade name		4,246		566		3,680		4,246		637		3,609
Other		200		180		20		200		185		15
Total	$	31,000	$	5,503	$	25,497	$	31,164	$	6,750	$	24,414

8. Long-Term Debt

Long-term debt consisted of the following:

	December 30, 2007		March 30, 2008
	(in thousands)
10 5/8% senior unsecured notes due 2013	$	270,000	$	270,000
Term loan facility, bearing interest at LIBOR plus applicable margin (7.53% at December 30, 2007 and 5.62% at March 30, 2008), principal due in quarterly installments through November 13, 2012		105,000		105,000
Revolving credit agreement, bearing interest at Prime or LIBOR plus applicable margin (7.75% at December 30, 2007 and 5.75% at March 30, 2008)		34,640		45,430
Unamortized bond premium		3,691		3,577
Total long-term debt		413,331		424,007
Less: Current maturities		3,937		5,250
Long-term debt, net of current maturities	$	409,394	$	418,757

8

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Senior Unsecured Notes

In December 2005, the Company, through its subsidiaries Susser Holdings, L.L.C. and Susser Finance Corporation, issued $170.0 million 10 ⁵/8% senior unsecured notes (the “Senior Notes”). The Senior Notes pay interest semiannually in arrears on June 15 and December 15 of each year, commencing on June 15, 2006, until they mature on December 15, 2013. 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. The Senior Notes are effectively subordinated to existing and future secured debt, including the new revolving credit facility, to the extent of the value of the assets securing such debt.

The Senior Notes contain covenants that, among other things and subject to various exceptions, restrict the Company’s ability and any restricted subsidiary’s ability to incur additional debt, make restricted payments (including paying dividends on, redeeming or repurchasing capital stock), dispose of assets, and other restrictions. The Senior Notes also contain certain financial covenants which must be complied with.

On November 24, 2006, the Company redeemed $50.0 million of the Senior Notes with proceeds from the IPO, as allowed by the indenture. The related $5.3 million prepayment penalty and $1.8 million of unamortized loan costs were charged to interest expense. On November 13, 2007, in connection with the TCFS Acquisition, the Company issued an additional $150.0 million Senior Notes under and governed by the same indenture as the original Senior Notes. The additional Senior Notes were sold at 102.5% of par, resulting in a premium received of $3.8 million which is being amortized as a credit to interest expense over the remaining life of the Senior Notes.

On or after December 15, 2009, the Company may redeem some or all of the $270.0 million remaining Senior Notes at any time at the following redemption prices (expressed as percentages of principal amount) plus accrued and unpaid interest and liquidated damages, if any: in 2009, at 105.313%; in 2010, at 102.656%; and in 2011 and thereafter, at 100.000%.

Credit Facilities

On November 13, 2007, in connection with the TCFS Acquisition, Susser Holdings, L.L.C. entered into a new credit agreement with Bank of America, N.A., as Term Administrative Agent, Bank of America, N.A., as Revolving Administrative Agent; Swing Line Lender and L/C Issuer, each of Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., Wachovia Bank, National Association and BMO Capital Markets, as Co-Syndication Agents; Banc of America Securities LLC, Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., Wachovia Capital Markets, LLC, and BMO Capital Markets, as Joint Lead Arrangers and Joint Book Managers; and other lenders party thereto, providing for a five-year revolving credit facility in an aggregate principal amount of up to $90.0 million, and a five-year term loan facility in the aggregate principal amount of $105.0 million (the “term loan”). On May 6, 2008, we, Susser Holdings, L.L.C. and the financial institutions party to the credit agreement entered in to Amendment No. 1 to the credit agreement (“Amendment No. 1”), which increased the aggregate commitments under the revolving credit facility to $120 million (we refer to the revolving credit facility, as amended by Amendment No. 1, as the “revolver”). The Company and each of its existing and future direct and indirect subsidiaries (other than (i) any subsidiary that is a “controlled foreign corporation” under the Internal Revenue Code or a subsidiary that is held directly or indirectly by a “controlled foreign corporation” and (ii) Susser Company, Ltd.) are, and will be, guarantors under each of the facilities.

Availability under the revolver is subject to a borrowing base equal to the lesser of (x) (a) 85% of eligible accounts receivable plus (b) 55% of eligible inventory plus (c) 60% of the fair market value of certain designated eligible real property which shall not exceed 35% of the aggregate borrowing base amount, minus (d) such reserves as the administrative agent of the revolver may establish in its reasonable credit judgment acting in good faith (including, without limitation, reserves for exposure under swap contracts and obligations relating to treasury management products)) and (y) 85% of gross accounts receivable plus 60% of gross inventory. Up to $60 million of the revolver may be used for the issuance of standby and commercial letters of credit and a portion of the revolver is available for swing line loans. As of March 30, 2008, we had $45.4 million outstanding under the revolving credit facility, and $28.6 million in standby letters of credit. As of May 6, 2008, we had sufficient borrowing base to support the use of approximately $105 million of the $120 million revolver, as amended, and had $14.4 million in outstanding borrowings and $28.8 million in standby letters of credit, leaving approximately $62 million available on the revolver.

9

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

The term loan facility is secured by a first priority security interest in certain real property and related assets owned on the closing date of the TCFS Acquisition by TCFS and its subsidiaries (the “Term Loan Collateral”) and is subject to quarterly amortization of principal, in equal quarterly installments (except in year 5) in the following annual amounts: 5% in year 1; 7.5% in year 2; 10% in year 3; 10% in year 4; 2.5% in each of the first three quarters of year 5 and the balance on the maturity date.

The interest rates for both the revolver and term loan facility are calculated, at the Company’s option, at either a base rate or a LIBOR rate plus, in each case, a margin. With respect to LIBOR rate loans, interest will be payable at the end of each selected interest period, but no less frequently than quarterly. With respect to base rate loans, interest will be payable quarterly in arrears. We pay a commitment fee on the unused portion of the Revolver, currently 0.5% per annum, and is subject to adjustment based on a leverage grid.

The following amounts are required to be applied to prepay the revolver and the term loan facility (subject to certain reinvestment rights and exceptions):

• all net cash proceeds from any non-ordinary course sales of our property and assets and those of our subsidiaries;

• all net cash proceeds from certain extraordinary receipts;

• all net cash proceeds from the issuance or incurrence after the closing date of additional debt by us or any of our subsidiaries other than debt permitted under the loan documentation;

• 50% of all net cash proceeds from any issuance of equity interest by, or equity contribution to us (subject to leverage-based stepdowns); and

• 50% of our and our subsidiaries’ excess cash flow (subject to leverage-based stepdowns).

The term loan facility and the revolver may be prepaid at any time in whole or in part without premium or penalty, other than breakage costs if applicable, and require the maintenance of a maximum senior secured leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with the required leverage and fixed charge coverage ratios as of March 30, 2008.

The term loan facility and the revolver contain customary representations and warranties as well as certain covenants that impose certain affirmative obligations upon and restrict our ability and that of our subsidiaries to, among other things: incur liens; incur additional indebtedness, guarantees or other contingent obligations; engage in mergers and consolidations; make sales, transfers and other dispositions of property and assets; make loans, acquisitions, joint ventures and other investments; declare dividends; redeem and repurchase shares of equity holders; create new subsidiaries; become a general partner in any partnership; prepay, redeem or repurchase debt; make capital expenditures; grant negative pledges; change the nature of business; amend organizational documents and other material agreements; change accounting policies or reporting practices; and create a passive holding company.

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

10

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Fair Value Measurements

SFAS No. 157 defines and establishes a framework for measuring fair value and expands related disclosures. This Statement does not require any new fair value measurements. We use fair value measurements to measure, among other items, purchased assets and investments, leases and derivative contracts. We also use them to assess impairment of properties, plants and equipment, intangible assets and goodwill. The Statement does not apply to share-based payment transactions and inventory pricing. SFAS No. 157 is effective for the Company’s financial assets and financial liabilities beginning in 2008. In February 2008, FASB Staff Position 157-2, “Effective Date of Statement 157,” deferred the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The nonfinancial assets and nonfinancial liabilities held by the Company include asset retirement obligations, assets held for sale, goodwill, and trade names.

Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, use of unobservable prices or inputs are used to estimate the current fair value, often using an internal valuation model. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the item being valued.

SFAS No. 157 prioritizes the inputs used in measuring fair value into the following hierarchy:

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

From time to time, the Company enters into interest rate swaps to either reduce the impact of changes in interest rates on its floating rate long-term debt or to take advantage of favorable variable interest rates compared to its fixed rate long-term debt. The Company determined that these futures contracts are defined as Level 2 in the fair value hierarchy. There were no interest rate swaps outstanding at December 30, 2007, or March 30, 2008.

The Company also periodically enters into derivatives, such as futures and options, to manage its fuel price risk. Fuel hedging positions have not been material to our operations. These positions have been designated as fair value hedges. The fair value of our derivative contracts are measured using Level 2 inputs, and are determined by either market prices on an active market for similar assets or by prices quoted by a broker or other market-corroborated prices. This price does not differ materially from the amount that would be paid to transfer the liability to a new obligor due to the short term nature of these contracts. At December 30, 2007, the Company held fuel futures contracts with a fair value of ($72,000). At March 30, 2008, the Company held fuel futures contracts with a fair value of ($436,000).

9. Commitments and Contingencies

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 or motor fuel volume. The Company is typically responsible for payment of real estate taxes, maintenance expenses and insurance.

11

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

The components of net rent expense are as follows:

	Three Months Ended
	April 1, 2007			March 30, 2008
	(in thousands)
Cash Rent:
Store base rent	$	5,904		$	8,317
Equipment rent		89			195
Contingent rent		28			30
Total cash rent	$	6,021		$	8,542
Non-cash rent:
Straight-line rent		368			318
Amortization of deferred gain		(375	)		(449	)
Net rent expense	$	6,014		$	8,411

Letters of Credit

We were contingently liable for $28.6 million related to irrevocable letters of credit required by various insurers and suppliers at March 30, 2008. Included in this amount are two $10 million letters of credit held in escrow related to the TCFS Acquisition that will be eligible to be drawn upon on each of the first and second anniversaries of closing, respectively, in either case, net of any settled or pending indemnity claims.

Environmental Remediation

We are subject to various federal, state and local environmental laws and make financial expenditures in order to comply with regulations governing underground storage tanks adopted by federal, state and local regulatory agencies. In particular, at the federal level, the Resource Conservation and Recovery Act of 1976, as amended, requires the U.S. Environmental Protection Agency (“EPA”) to establish a comprehensive regulatory program for the detection, prevention and cleanup of leaking underground storage tanks (e.g. overfills, spills and underground storage tank releases).

Federal and state regulations require us to provide and maintain evidence that we are taking financial responsibility for corrective action and compensating third parties in the event of a release from our underground storage tank systems. In order to comply with these requirements, we have historically obtained private insurance for Texas, New Mexico and Oklahoma. These policies provide protection from Third Party liability claims and in Texas provides for remediation. Additionally, we rely on state trust funds that cover certain claims.

We are currently involved in the remediation of gasoline store sites where releases of regulated substances have been detected. We accrue for anticipated future costs and the related probable state reimbursement amounts for its remediation activities. Accordingly, we have recorded estimated undiscounted liabilities for these sites totaling $2.5 million and $2.7 million, of which $1.8 million and $1.8 million are classified as accrued expenses and other current liabilities as of December 30, 2007 and March 30, 2008, respectively, with the balance included in other noncurrent liabilities. As of March 30, 2008, approximately $1.7 million of the total environmental reserve is for the investigation and remediation of contamination at 24 sites that qualify for reimbursement under state funds. The remaining $1.0 million represents our estimate of deductibles under insurance policies that we anticipate being required to pay with respect to 32 additional sites. There are also 34 sites that we own and/or operate with known contamination, which are being investigated and remediated by third parties (primarily former site owners) pursuant to contractual indemnification agreements imposing responsibility on the former owners for pre-existing contamination. We maintain no reserves for these sites. Susser acquired 17 additional LPST (leaking petroleum storage tank) cases as part of the TCFS Acquisition. Four of these sites are located in New Mexico while the remaining 13 are located in Texas. Ongoing corrective actions at all of these Town & Country locations are contracted to independent environmental consultants on a consignment basis (contractor is reimbursed directly by the state). Susser Holdings does not maintain a reserve for these locations.

12

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Under state reimbursement programs, we are eligible to receive reimbursement for certain future remediation costs, as well as the remediation costs previously paid. Accordingly, we have recorded a net receivable of $2.9 million and $2.8 million for the estimated probable state reimbursements, of which $2.2 million and $2.1 million are included in current receivables as of December 30, 2007 and March 30, 2008, respectively. The remaining $0.7 million and $0.7 million are included in other assets as of December 30, 2007 and March 30, 2008, respectively. Reimbursement from the Texas Petroleum Storage Tank Remediation fund will depend upon the continued maintenance and solvency of the state fund through its scheduled expiration on August 31, 2011.

Self-Insurance

We are partially self-insured for our general liability and employee health insurance. We maintain insurance coverage at levels that are customary and consistent with industry standards for companies of similar size. We are a nonsubscriber under Texas Workers’ Compensation Act and maintain an ERISA-based employee injury plan, which is partially self insured. As of March 30, 2008, 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 $3.6 million as of March 30, 2008, 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

We receive refiner rebates and other incentive payments from a number of its fuel suppliers. A portion of the refiner rebates may be passed on to our wholesale branded dealers under the same terms as required by our fuel suppliers. Many of the agreements require repayment of all or a portion of the amount received if we (or our branded dealers) elect to discontinue selling the specified brand of fuel at certain locations. As of March 30, 2008, the estimated amount of fuel rebates that would have to be repaid upon de-branding at these locations was $10.0 million. Of this amount, approximately $5.5 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. No liability is recorded for the amount of dealer obligations which would become payable upon debranding. We have $4.2 million recorded on the balance sheet as of March 30, 2008, of which $0.3 million is included in accrued expenses and other current liabilities and $3.9 million is included in other noncurrent liabilities.

10. Interest Expense and Interest Income

The components of net interest expense are as follows:

	Three Months Ended
	April 1, 2007			March 30, 2008
	(in thousands)
Interest expense	$	3,279		$	9,149
Capitalized interest		(107	)		(17	)
Amortization of loan costs & issuance premium		151			759
Cash interest income		(313	)		(29	)
Interest expense, net	$	3,010		$	9,862

11. Income Tax

In connection with the closing of the reorganization and initial public offering on October 24, 2006, we converted from a limited liability company to a “C” corporation and established beginning balances in our deferred tax

13

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

assets and liabilities in accordance with SFAS No. 109. Accordingly, we recorded a cumulative net deferred tax asset of less than $0.1 million on that date, which was net of a valuation allowance of $9.7 million. We considered our historical taxable income and our estimates of future taxable income in making a determination of a reasonable valuation allowance. During the year ended December 30, 2007, we generated pre-tax book income as well as taxable income which resulted in the utilization of all net operating loss carryforwards. In addition, as a result of the acquisition of TCFS, we recorded an additional $39.4 million of deferred tax liability. Therefore, in evaluating the need for valuation allowance at December 30, 2007, we determined that it is more likely than not that the full deferred tax assets will be realized and therefore released the entire previously established valuation allowance as of December 30, 2007.

Included in our provision for income tax is a tax imposed by the state of Texas of 0.5% of gross margin in Texas (“margin tax”). The margin tax accrued for the three months ended April 1, 2007 and March 30, 2008 was $0.3 million and $0.4 million, respectively.

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the quarters ended April 1, 2007 and March 30, 2008 is as follows:

	Three Months Ended April 1, 2007					Three Months Ended March 30, 2008
	(in thousands)			Tax rate %		(in thousands)			Tax rate %
Tax at statutory federal rate	$	(749	)	35.0	%	$	(1,660	)	35.0	%
State and local tax, net of federal benefit		169		(7.9	)%		266		(5.6	)%
Decrease in valuation allowance		827		(38.6	)%		—		—
Other		13		(0.6	)%		10		(0.2	)%
Tax expense (benefit) per financial statement	$	260		(12.1	)%	$	(1,384	)	29.2	%

The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the adoption, the Company recognized no adjustment to income tax accounts that existed as of December 31, 2006. It is the Company’s policy to recognize interest and penalties related to uncertain tax positions in general and administrative expense. The Company became a taxpayer at October 24, 2006 with the conversion to a “C” corporation, and the statute of limitations remains open on all years since then. The Company files income tax returns in the U.S. federal jurisdiction, Texas, Oklahoma and New Mexico. The Company is subject to examinations in all jurisdictions for all returns filed since October 24, 2006.

No adjustments have been recorded to the balance of unrecognized tax benefits and therefore no balance exists at March 30, 2008 as all tax positions are considered highly certain. There are no positions the Company reasonably anticipates will significantly increase or decrease within 12 months of the reporting date.

12. Shareholders’ Equity

On October 24, 2006, Susser Holdings Corporation completed an IPO of 7,475,000 shares of its common stock at a price of $16.50 per share for an aggregate offering price of $123.3 million. The Company received $112.8 million in net proceeds from the IPO after payment of fees, expenses and underwriting discounts of approximately $10.5 million. In connection with the Susser corporate formation transactions, units of Stripes Holdings LLC were converted into equivalent shares of Susser Holdings Corporation common stock. All outstanding options to purchase units of Stripes Holdings LLC were also converted into options to purchase shares of Susser common stock on an equivalent basis and exercise price.

A total of 125,000,000 shares of common stock have been authorized, $0.01 par value, of which 17,006,662 were issued and 16,995,338 were outstanding as of December 30, 2007, and 17,036,662 were issued and 17,025,338 were outstanding as of March 30, 2008, respectively. Included in these amounts are 114,934 and 144,934 shares, respectively, which represent restricted shares and are not yet vested and have no voting rights. Treasury shares consist of 11,324 shares issued as restricted shares which were forfeited prior to vesting. A total of 25,000,000 preferred shares have also been authorized, par value $0.01 per share, although none have been issued.

14

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

The Company has also granted options under the Susser Holdings Corporation 2006 Equity Incentive Plan. At March 30, 2008, 1,685,393 options were outstanding, none of which were exercisable. (see Note 13)

13. Share-Based Compensation

The Company has granted options and restricted stock subject to vesting requirements under its 2006 Equity Incentive Plan. Vesting of each grant is generally over five years, with 33.3% of such units vesting on the third, fourth, and fifth anniversary of grant date. None of the units are currently exercisable. Following is a summary of options and restricted stock which have been granted under the Company’s plan:

	Stock Options
	Number Options Outstanding		Weighted Average Exercise Price
Balances at December 31, 2006	1,228,291		$	16.07
Granted	482,743			22.57
Forfeited or expired	(160,817	)		15.98
Balances at December 30, 2007	1,550,217			18.11
Granted	225,480			24.22
Forfeited or expired	(90,304	)		17.93
Balances at March 30, 2008	1,685,393		$	18.94
	Unvested Stock
	Number of Units		Grant-Date Average Fair Value Per Unit
Nonvested at December 31, 2006	118,758		$	14.83
Granted	7,500			17.92
Forfeited	(11,324	)		14.83
Nonvested at December 30, 2007	114,934			15.03
Granted	30,000			24.22
Nonvested at March 30, 2008	144,934		$	16.94

During the first quarter of 2008, we granted 225,480 options to purchase our common stock at a purchase price equal to the fair market value of the related common stock on the date the options were granted. These options had an aggregate fair value of $2.3 million, which will be amortized to expense over the options’ requisite service periods. During the first quarter of 2008 we granted 30,000 shares of restricted stock with an aggregate fair value of $0.7 million which will be amortized to expense over the requisite service period.

We adopted SFAS No. 123(R) at the beginning of fiscal 2006 when we were still a private company. Because we used the minimum value method for pro forma disclosures under SFAS No. 123, we are applying SFAS No. 123(R) prospectively to newly issued stock options. Stock options granted during 2005 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. We recognized non-cash stock compensation expense of $0.7 million and $0.8 million during the three months ended April 1, 2007 and March 30, 2008, respectively, which is included in general and administrative expense.

15

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Had compensation cost for the options granted during 2005 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 profits and losses for the periods presented would have been affected as follows:

	Three Months Ended
	April 1, 2007			March 30, 2008
	(in thousands)
Net loss, as reported	$	(2,401	)	$	(3,360	)
Deduct:
Compensation expense on options determined under fair value based method for all awards, net of tax		(23	)		(20	)
Pro forma net loss	$	(2,424	)	$	(3,380	)

14. Segment Reporting

The Company operates its business in two primary segments. The retail segment, Stripes, operates retail convenience stores in Texas, New Mexico and Oklahoma that sell merchandise, prepared food and motor fuel, and also offer a variety of services including car washes, lottery, ATM, money orders, check cashing, and pay phones. The wholesale segment, SPC , purchases fuel from a number of refiners and supplies it to the Company’s retail stores, to independently-owned dealer stations under long-term supply agreements and to other 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.

Segment Financial Data for the Three Months Ended April 1, 2007

(dollars and gallons in thousands)

	Retail Segment		Wholesale Segment		Intercompany Eliminations			All Other			Totals
Revenue:
Merchandise	$	93,365	$	—	$	—		$	—		$	93,365
Fuel		224,685		378,546		(174,116	)		—			429,115
Other		5,058		956		(15	)		171			6,170
Total revenue		323,108		379,502		(174,131	)		171			528,650
Gross profit:
Merchandise		29,960		—		—			—			29,960
Fuel		12,106		4,283		—			—			16,389
Other		5,057		956		(15	)		48			6,046
Total gross profit		47,123		5,239		(15	)		48			52,395
Selling, general, and administrative		40,784		1,977		(15	)		2,503			45,249
Depreciation, amortization, and accretion		5,376		902		—			73			6,351
Other operating expenses (income)		15		—		—			—			15
Operating income (loss)	$	948	$	2,360	$	—		$	(2,528	)	$	780
Gallons		101,793		212,346		(100,761	)		—			213,378
Total assets	$	323,547	$	84,200	$	—		$	24,928		$	432,675
Goodwill	$	31,442	$	13,320	$	—		$	—		$	44,762
Capital expenditures	$	15,834	$	1,500	$	—		$	212		$	17,546

16

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

Segment Financial Data for the Three Months Ended March 30, 2008

(dollars and gallons in thousands)

	Retail Segment		Wholesale Segment		Intercompany Eliminations			All Other			Totals
Revenue:
Merchandise	$	168,771	$	—	$	—		$	—		$	168,771
Fuel		519,797		597,859		(295,264	)		—			822,392
Other		7,655		3,828		(2,043	)		103			9,543
Total revenue		696,223		601,687		(297,307	)		103			1,000,706
Gross profit:
Merchandise		56,668		—		—			—			56,668
Fuel		20,183		5,569		—			—			25,752
Other		7,655		1,406		(15	)		57			9,103
Total gross profit		84,506		6,975		(15	)		57			91,523
Selling, general, and administrative		70,555		2,686		(15	)		2,491			75,717
Depreciation, amortization, and accretion		9,319		1,292		—			125			10,736
Other operating expenses (income)		95		—		—			3			98
Operating income (loss)	$	4,537	$	2,997	$	—		$	(2,562	)	$	4,972
Gallons		169,313		230,722		(116,612	)		—			283,423
Total assets	$	743,829	$	106,949	$	(275	)	$	15,187		$	865,690
Goodwill	$	235,489	$	13,320	$	—		$	—		$	248,809
Capital expenditures	$	14,046	$	1,114	$	—		$	83		$	15,243

17

Susser Holdings Corporation

Notes to Consolidated Financial Statements (continued)

Unaudited

15. Earnings Per Share

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

Per unit information is based on the weighted average number of common shares outstanding during each period for the basic computation and, if dilutive, the weighted average number of potential common shares resulting from the assumed conversion of outstanding stock options for the diluted computation. Units not included in the denominator for basic EPS, but evaluated for inclusion in the denominator for diluted EPS, included options and restricted stock granted under the 2006 Equity Incentive Plan. (see Note 13)

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
	April 1, 2007			March 30, 2008
	(dollars in thousands)
Net loss available to common shareholders	$	(2,401	)	$	(3,360	)
Denominator for basic earnings per share – weighted average number of common shares outstanding during the period		16,705,404			16,880,404
Incremental common shares attributable to exercise of outstanding dilutive options and restricted shares		—			—
Denominator for diluted earnings per common share		16,705,404			16,880,404
Net loss per share
Per common share – basic	$	(0.14	)	$	(0.20	)
Per common share – diluted	$	(0.14	)	$	(0.20	)
Options and non-vested restricted shares not included in diluted net income available to common shareholders because the effect would be anti-dilutive		1,349,549			1,772,224

16. Subsequent Event

On May 6, 2008, we, Susser Holdings, L.L.C. and the financial institutions party to the credit agreement entered in to Amendment No. 1, which increased the aggregate commitments under the revolver from $90 million to $120 million. Additional information is contained in Note 8.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes to consolidated financial statements included elsewhere in this report. Additional discussion and analysis related to our company is contained in our Annual Report on Form 10-K, including the audited consolidated financial statements for the fiscal year ended December 30, 2007. Our fiscal year contains either 52 or 53 weeks and ends on the Sunday closest to December 31. All references to the first quarter of 2007 and 2008 refer to the 13-week periods ended April 1, 2007 and March 30, 2008, respectively. EBITDA and Adjusted EBITDA are non-GAAP financial measures of performance and liquidity that have limitations and should not be considered as a substitute for net income or cash provided by (used in) operating activities – please see footnote 2 under “Key Operating Metrics” below for a discussion of our use of EBITDA and Adjusted EBITDA in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a reconciliation to net income and cash provided by (used in) operating activities for the periods presented.

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, 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, other non-traditional retailers located in our markets, and other wholesale fuel distributors;

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

• Seasonal trends in the industries in which we operate;

• The successful integration and anticipated future financial performance and trends of Town & Country;

• Currently unknown liabilities in connection with the acquisition of Town & Country;

• Volatility in crude oil and wholesale petroleum costs;

• Wholesale cost increases of tobacco products, or future legislation or campaigns to discourage smoking;

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

• Intense competition and fragmentation in the wholesale motor fuel distribution industry;

• The operation of our stores in close proximity to stores of our dealers;

• Devaluation of the Mexican peso or imposition of restrictions on access of Mexican citizens to the United States;

• Unfavorable weather conditions;

• Dependence on one principal supplier for merchandise, two principal suppliers for motor fuel and one principal provider for third-party transportation of the majority of our motor fuel;

• Inability to identify, acquire and integrate new stores;

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

• Dangers inherent in storing and transporting motor fuel;

• Our ability to insure our motor fuel operations;

• Dependence on senior management and the ability to attract qualified employees;

• 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 Annual Report on Form 10-K for the year ended December 30, 2007. The list of factors that could affect future performance and the accuracy of forward-looking statements is illustrative, but by no

19

means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in this report are based on, and include, our estimates as of the date hereof. We anticipate that subsequent events and market developments will cause our estimates to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new information becomes available in the future.

Overview

We are the largest non-refining operator of convenience stores in Texas 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. We acquired 168 retail stores from Town & Country on November 13, 2007, as further described in Note 3 of the accompanying Notes to Consolidated Financial Statements. As of March 30, 2008, our retail segment operated 507 convenience stores in Texas, New Mexico and Oklahoma, offering merchandise, foodservice, motor fuel and other services. During the three months ended March 30, 2008, we purchased approximately 283 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 loss and Adjusted EBITDA for the first quarter 2008 were $1,000.7 million, $(3.4)million and $16.6 million, respectively, compared to $528.6 million, $(2.4) million and $7.8 million, respectively, for the first quarter 2007. 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.

During the first quarter of 2008, we opened three new large-format convenience stores, and opened one additional store in early May. We currently have another three stores under construction and one store under contract to purchase. An estimated 12 to 18 new retail stores are planned for all of 2008, and substantially all of these stores are expected to include a Laredo Taco Company or Country Cookin’ restaurant. In our wholesale operations, we added two new dealer sites and discontinued six during the first quarter, for a total of 383 dealer sites in operation at the end of the first quarter. We expect to add 25 to 35 new dealer sites for all of 2008.

First quarter 2008 results were favorably impacted by a strong regional economic climate, better weather than the prior year, improved purchasing arrangements, enhanced stability and functionality in our IT and communication network and time in position for the retail division managers and area managers. The rapid rise in the cost of motor fuel combined with the explosion on February 18^th at ALON USA’s Big Spring Refinery, has created a challenging environment for motor fuel volume and profitability. The Company’s leading market share and strong relationships with numerous suppliers has helped mitigate these pressures. The record high fuel prices have contributed to a rise in credit card fees and create an incentive for some consumers along the Texas/Mexico border to shift some fuel purchases to Mexico. Crossing the border remains relatively fast and straightforward for U.S. citizens willing to make the effort to buy lower priced fuel south of the border.

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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
	April 1, 2007		March 30, 2008
Revenues:
Merchandise sales	17.7	%	16.9	%
Motor fuel sales	81.2		82.2
Service and other revenue	1.1		0.9
Total revenues	100.0		100.0
Cost of sales	90.1		90.8
Gross profit:
Merchandise	5.7		5.7
Motor fuel	3.1		2.6
Service and other gross profit	1.1		0.9
Total gross profit	9.9		9.2
Selling, general and administrative expenses	8.6		7.6
Depreciation, amortization and accretion	1.2		1.1
Other operating expenses	0.0		0.0
Income from operations	0.1		0.5
Interest and other	0.5		0.9
Net income (loss) before tax	(0.4	)	(0.4	)
Income tax	(0.1	)	0.1
Net income (loss)	(0.5	)%	(0.3	)%

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Pro Forma Results of Operations

The following table presents the quarterly and annual 2007 results of operations, on a pro forma basis for Susser Holdings Corporation as if the acquisition of Town & Country had occurred on January 1, 2007. We are presenting this unaudited information to provide a basis for comparison against our actual 2008 results, due the significant impact of the TCFS Acquisition on our operating results.

	Three Months Ended (1)												Twelve Months Ended
	April 1, 2007			July 1, 2007			September 30, 2007			December 30, 2007			December 30, 2007
	(in thousands, except share data)
Revenues:
Merchandise sales	$	148,368		$	166,705		$	171,450		$	166,509		$	653,032
Motor fuel sales		560,903			752,274			738,036			765,027			2,816,240
Other income		9,017			8,758			8,740			8,671			35,186
Total revenues		718,288			927,737			918,226			940,207			3,504,458
Cost of sales:
Merchandise (2)		99,987			112,406			114,637			114,262			441,292
Motor fuel (2)		534,971			714,783			698,298			731,240			2,679,292
Other		579			771			593			518			2,461
Total cost of sales		635,537			827,960			813,528			846,020			3,123,045
Gross profit		82,751			99,777			104,698			94,187			381,413
Operating expenses:
Personnel		27,069			28,692			29,230			29,253			114,244
General and administrative		8,134			7,963			9,286			11,058			36,441
Other operating		23,483			26,814			27,708			24,428			102,433
Rent (3)		7,417			7,524			7,549			8,355			30,845
Royalties		66			—			—			—			66
(Gain) loss on disposal of assets and impairment charge		16			(221	)		271			116			182
Depreciation, amortization, and accretion (4)		9,661			10,383			11,446			9,481			40,971
Total operating expenses		75,846			81,155			85,490			82,691			325,182
Income from operations		6,905			18,622			19,208			11,496			56,231
Other income (expense):
Interest expense, net (5)		(10,267	)		(10,197	)		(10,196	)		(11,257	)		(41,917	)
Other miscellaneous		105			91			123			116			435
Total other income (expense)		(10,162	)		(10,106	)		(10,073	)		(11,141	)		(41,482	)
Minority interest in income (loss) of consolidated subsidiaries		(16	)		(18	)		—			(10	)		(44	)
Income (loss) before income taxes		(3,273	)		8,498			9,135			345			14,705
Income tax expense (benefit) (6)		767			(3,355	)		(3,603	)		(417	)		(6,608	)
Net income (loss)	$	(2,506	)	$	5,143		$	5,532		$	(72	)	$	8,097
Net income (loss) per share:
Basic	$	(0.15	)	$	0.31		$	0.33		$	0.00		$	0.48
Diluted	$	(0.15	)	$	0.31		$	0.33		$	0.00		$	0.48
Weighted average shares outstanding:
Basic		16,705,404			16,705,404			16,705,404			16,822,071			16,734,571
Diluted		16,705,404			16,766,204			16,776,347			17,017,075			16,817,417

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	Three Months Ended (1)								Twelve Months Ended
	April 1, 2007		July 1, 2007		September 30, 2007		December 30, 2007		December 30, 2007
Merchandise Gross Profit, net	32.6	%	32.6	%	33.1	%	31.4	%	32.4	%
Gallons:
Retail	156,467		163,803		169,498		167,447		657,215
Wholesale	113,027		120,152		120,249		116,850		470,278
Motor fuel margin (cents per gallon):
Retail	13.67	¢	18.83	¢	18.90	¢	16.27	¢	16.97	¢
Wholesale	4.02	¢	5.53	¢	6.40	¢	5.60	¢	5.41	¢

(1) Town & Country’s historical monthly results have been aggregated to correspond to our fiscal quarters, which differ from Town & Country’s historical fiscal quarters, to more accurately reflect the combined quarterly seasonal trends on a pro forma basis. Therefore, this presentation varies slightly from the Pro Forma Condensed Consolidated Statements of Operations included in Note 4 of our Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 30, 2007, as that presentation was based on Town & Country’s audited financial statements for the fiscal year ended November 3, 2007, as adjusted. Certain pro forma adjustments related to the TCFS Acquisition have been made, as further described in the following notes, which are consistent with our pro forma presentation in our referenced Note 4.

(2) Cost of sales has been adjusted to eliminate the impact of the use of the LIFO inventory method by Town & Country.

(3) Includes additional rent expense to reflect the $51.2 million sale/leaseback of Town & Country assets completed concurrent with the TCFS Acquisition.

(4) Reflects the effects on depreciation from the valuation of Town & Country assets to fair market value and the sale/leaseback transaction.

(5) Reflects the net increase in interest expense resulting from the issuance of the $105 million term loan and $150 million senior notes, along with amortization of issuance costs, and eliminates interest expense related to Town & Country debt which was paid off or defeased.

(6) Income tax expense was calculated at a 36% effective rate on pre-tax income, plus the Texas margin tax at 0.5% of gross margin. This calculation of pro forma income tax eliminates the effects of our release of a tax valuation allowance during 2007, of which the final $6.6 million was released in fourth quarter 2007. The TCFS Acquisition changed our tax position, and therefore this pro forma presentation will be more comparable to our 2008 income tax expense.

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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
	April 1, 2007						March 30, 2008 Actual
	Actual			Pro Forma
	(in thousands)
Revenue:
Merchandise sales	$	93,365		$	148,368		$	168,771
Motor fuel—retail		224,685			353,381			519,797
Motor fuel—wholesale		204,430			207,522			302,595
Other		6,170			9,017			9,543
Total revenue	$	528,650		$	718,288		$	1,000,706
Gross profit:
Merchandise	$	29,960		$	48,381		$	56,668
Motor fuel—retail		12,106			21,386			20,183
Motor fuel—wholesale		4,283			4,546			5,569
Other		6,046			8,438			9,103
Total gross profit	$	52,395		$	82,751		$	91,523
Adjusted EBITDA (2):
Retail	$	6,339					$	13,951
Wholesale		3,262						4,289
Other		(1,796	)					(1,601	)
Total Adjusted EBITDA	$	7,805		$	17,241		$	16,639
Retail merchandise margin		32.1	%		32.6	%		33.6	%
Merchandise same store sales growth		4.9	%					8.2	%
Pro forma merchandise same store sales growth								8.4	%
Average per retail store:
Merchandise sales	$	288.5		$	303.0		$	334.0
Motor fuel gallons		317.4			325.5			340.4
Motor fuel gallons sold:
Retail		101,793			156,467			169,313
Wholesale		111,585			113,027			114,110
Average retail price of motor fuel	$	2.21		$	2.26		$	3.07
Motor fuel gross profit cents per gallon:
Retail		11.89	¢		13.67	¢		11.92	¢
Wholesale		3.84	¢		4.02	¢		4.88	¢

(1) We are providing both actual results for the three months ended April 1, 2007, and pro forma results as if the TCFS Acquisition had occurred at the beginning of our 2007 fiscal year. Refer to the preceding “Pro Forma Results of Operations” for additional description of the pro forma financial results.

(2) We define EBITDA as net income before net interest expense, 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 non-recurring transaction expenses and the gain or loss on disposal of assets and impairment charges. In addition, those expenses that we have excluded from our presentation of Adjusted EBITDA are also excluded in measuring our covenants under our revolving credit facility and the indenture governing our senior notes.

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

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

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

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

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

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

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

• they do not reflect changes in, or cash requirements for, working capital;

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

• they do not reflect payments made or future requirements for income taxes;

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

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

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

	Three Months Ended
	April 1, 2007						March 30, 2008 Actual
	Actual			Pro Forma
Net loss	$	(2,401	)	$	(2,506	)	$	(3,360	)
Depreciation, amortization, and accretion		6,351			9,661			10,736
Interest expense, net		3,010			10,267			9,862
Income tax expense (benefit)		260			(767	)		(1,384	)
EBITDA	$	7,220		$	16,655		$	15,854
Non-cash stock based compensation		675			675			845
Loss on disposal of assets		15			16			98
Other miscellaneous		(105	)		(105	)		(158	)
Adjusted EBITDA	$	7,805		$	17,241		$	16,639

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

	Three Months Ended
	April 1, 2007			March 30, 2008
	(in thousands)
Net cash provided by operating activities	$	4,577		$	3,450
Changes in operating assets & liabilities		79			2,582
Gain on disposal of assets		(15	)		(98	)
Non-cash stock based compensation expense		(675	)		(845	)
Minority interest		(16	)		(12	)
Deferred income tax		—			2,185
Amortization of debt premium		—			114
Income taxes		260			(1,384	)
Interest expense, net		3,010			9,862
EBITDA	$	7,220		$	15,854
Non-cash stock based compensation		675			845
Loss on disposal of assets		15			98
Other miscellaneous		(105	)		(158	)
Adjusted EBITDA	$	7,805		$	16,639

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

	Retail Segment Three Months Ended				Wholesale Segment Three Months Ended				All Other Three Months Ended						Total Three Months Ended
	April 1, 2007		March 30, 2008		April 1, 2007		March 30, 2008		April 1, 2007			March 30, 2008			April 1, 2007			March 30, 2008
	(in thousands)
Operating income (loss)	$	948	$	4,537	$	2,360	$	2,997	$	(2,528	)	$	(2,562	)	$	780		$	4,972
Depreciation, amortization, and accretion		5,376		9,319		902		1,292		73			125			6,351			10,736
Other miscellaneous		—		—		—		—		105			158			105			158
Minority interest		—		—		—		—		(16	)		(12	)		(16	)		(12	)
EBITDA		6,324		13,856		3,262		4,289		(2,366	)		(2,291	)		7,220			15,854
Non-cash stock based compensation		—		—		—		—		675			845			675			845
Management fee		—		—		—		—		—			—			—			—
Loss on disposal of assets and impairment charge		15		95		—		—		—			3			15			98
Other operating expenses		—		—		—		—		(105	)		(158	)		(105	)		(158	)
Adjusted EBITDA	$	6,339	$	13,951	$	3,262	$	4,289	$	(1,796	)	$	(1,601	)	$	7,805		$	16,639

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First Quarter 2008 Compared to First Quarter 2007

The following discussion of results for first quarter 2008 compared to first quarter 2007 compares the 13-week period of operations ended March 30, 2008 to the 13-week period of operations ended April 1, 2007. Results for 2008 include the Town & Country results, which we acquired on November 13, 2007, and increased our retail store count by approximately 50%. We also constructed or acquired another 18 stores during fiscal 2007 and three new stores during the first quarter 2008 which contributed to the increases over the prior period. We are providing selected comparative results on an unaudited pro forma basis, as if the TCFS Acquisition had occurred at the beginning of our 2007 fiscal year, in order to provide additional information about the underlying business trends.

Total Revenue. Total revenue for first quarter 2008 was $1,000.7 million, an increase of $472.1 million, or 89.3%, over 2007. The increase in total revenue was driven by an 80.8% increase in merchandise sales, a 131.3% increase in retail fuel revenue and a 48.0% increase in wholesale fuel revenue, as further discussed below. Total revenue increased by $282.4 or 39.3%, on a pro forma basis.

Total Gross Profit. Total gross profit for first quarter 2008 was $91.5 million, an increase of $39.1 million, or 74.7%, over 2007 and a pro forma increase of $8.8 million, or 10.6%. Contributing to the increase were the impact of the other new stores constructed or acquired during 2007 and 2008 ($3.7 million excluding Town & Country) and other reasons as further described below.

Merchandise Sales and Gross Profit. Merchandise sales were $168.8 million for first quarter 2008, a $75.4 million, or 80.8%, increase over 2007, and a $20.4 million, or 13.8% increase on a pro forma basis. Our performance was due to a 8.2% merchandise same store sales increase, accounting for $7.6 million of the increase, with the balance due to new stores built or acquired in 2007 and 2008. Key categories contributing to the same store sales increase were packaged drinks ($1.8 million), cigarettes ($1.4 million), beer ($1.3 million) and food service ($1.1 million). Food service includes sales from restaurant operations, hot dogs, fountain beverages, coffee and other prepared foods. As we do not include a store in our same store sales base until its thirteenth month of operations, the Town & Country stores are not a part of our reported same store sales increase. However, on a pro forma basis, had Town & Country been part of our operations for all of 2007, we would have reported a same store sales increase of 8.4%.

Merchandise gross profit was $56.7 million for the first quarter of 2008, a $26.7 million, or 89.1%, increase over 2007, which was driven by the increase in merchandise sales and an increase in gross profit margin from 32.1% to 33.6%. On a pro forma basis, merchandise margin increased by $8.3 million, or 17.1%, and the gross profit margin increased by approximately 100 basis points. Our reported merchandise margins do not include other income from services such as ATM’s, lottery, prepaid phone cards and car washes.

Retail Motor Fuel Sales, Gallons and Gross Profit. Retail sales of motor fuel for 2008 were $519.8 million, an increase of 131.3% from 2007, driven by a 66.3% increase in retail gallons sold and a 39.1% increase in the average retail price of motor fuel. On a pro forma basis, retail motor fuel sales increased $166.4 million, or 47.1%, due to an 8.2% increase in gallons sold and a 35.9% increase in the average retail price of fuel. We sold an average of 0.3 million gallons per retail store, a 7.2% increase over 2007 and a 4.6% increase on a pro forma basis. Retail motor fuel gross profit increased by 66.7% over 2007 due to the additional gallons sold, as retail fuel margins were even with the prior period on a reported basis, and decreased 1.75 cents per gallons on a pro forma basis.

Wholesale Motor Fuel Sales, Gallons and Gross Profit. Wholesale motor fuel revenues to third parties for the first quarter of 2008 were $302.6 million, a 48.0% increase over 2007. The increase was driven by a 2.3% increase in gallons sold and an 44.7% increase in the wholesale selling price per gallon. Wholesale motor fuel gross profit of $5.6 million increased 30.0% from 2007 due to the increase in gallons and a 27.1% increase in the gross profit per gallon to 4.9 cents per gallon.

Other Revenue and Gross Profit. Other revenue of $9.5 million for first quarter 2008 increased by 54.7% over 2007. Gross profit associated with other revenue was $9.1 million, an increase of 50.6% over 2007. The retail segment had other revenue of $7.7 million in 2008 compared to $5.1 million in 2007. Retail segment other gross profit was also $7.7 million and $5.1 million in 2008 and 2007, respectively, as we record these service revenues on a net basis. The increase over last year was primarily due to the acquisition of Town & Country, and partially driven by an increase in income from ATM and car wash income. Other revenues and related gross profit for the wholesale segment in 2008 was $1.8 million and $1.4 million, respectively, compared to $1.0 million revenue and $1.0 million gross profit for the prior period. The increase in revenue and gross profit is primarily attributable to the acquisition of Town and Country.

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Personnel Expense. The largest component of our operating expense is retail store personnel expense. For the first quarter 2008, personnel expense was $30.3 million, an increase of $12.0 million, or 66.0%, over 2007. The increase in personnel expense was primarily attributable to the Town & Country acquisition and our new store openings, which have restaurants requiring incremental labor.

General and Administrative Expenses. For first quarter 2008, general and administrative expenses increased by $2.8 million, or 45.6%, from 2007. On a pro forma basis, general and administrative expenses increased by $0.9 million, or 11.4%. The increase was primarily due to additional compensation expense for additional personnel in the marketing and information technology departments and a $0.2 million increase in non-cash stock based compensation expense. We expect to achieve synergies in G&A costs from the Town & Country integration beginning in the second half of 2008, with an estimated annual savings of approximately $2 million fully implemented beginning in 2009.

Other Operating Expenses. Other operating expenses increased by $13.3 million or 90.2% over 2007. On a pro forma basis, this category increased $4.5 million or 19.0%. The increase was primarily due to the retail stores constructed and acquired during 2007 and 2008. In addition, the higher energy costs we experienced during the quarter resulted in a $1.8 million increase in pro forma credit card expense.

Rent Expense. Rent expense for first quarter 2008 of $8.4 million was $2.4 million or 39.9% higher than 2007 due primarily to rent expense on additional leased stores, including the 13 Town & Country stores sold and leased back concurrent with the TCFS Acquisition.

Depreciation, Amortization and Accretion. Depreciation, amortization and accretion expense for first quarter 2008 of $10.7 million was up $4.4 million or 69.0% from 2007 primarily due to the addition of the Town & Country assets, which have been recorded at estimated fair value.

Income from Operations. Income from operations for first quarter 2008 was $5.0 million, compared to $0.8 million for 2007. The increase is attributed to the TCFS Acquisition and increases in gross profit, partially offset by the increases in operating expenses, as described above.

Interest Expense, Net. Net interest expense for first quarter 2008 was $9.9 million, an increase of $6.9 million from 2007 primarily due to the issuance of $150 million in additional senior notes and the $105 million term loan in November 2007 related to the TCFS Acquisition.

Income Tax. We became a taxable entity on October 24, 2006. Additionally, effective January 1, 2007, the state of Texas implemented a tax based on gross margin to replace the previous franchise tax system. The Texas margin tax has been determined to be an income tax for financial statement presentation. The income tax benefit accrued for first quarter 2008 was $1.4 million, which consisted of $0.4 million of expense attributable to the Texas margin tax and $1.8 million of income tax benefit related to federal and state income tax. Tax expense for the first quarter of 2007 consisted only of the Texas margin tax of $0.3 million. See Note 11 of the accompanying Notes to Consolidated Financial Statements for further discussion of our income tax provision.

Net Income. We recorded net loss for the first quarter 2008 of $3.4 million, compared to net loss of $2.4 million for 2007. The decrease is primarily due to the same factors impacting operating income, as described above, and the increase in interest expense.

Adjusted EBITDA. Adjusted EBITDA for first quarter 2008 was $16.6 million, an increase of $8.8 million, or 113.2%, compared to 2007. The increase is primarily due to the Town and Country acquisition. On a pro forma basis, Adjusted EBITDA decreased $0.6 million which is primarily attributable to decreased fuel gross profit and higher credit card expenses, partly offset by higher merchandise gross profit. Retail segment Adjusted EBITDA of $14.0 million increased by $7.6 million, or 120.1% compared to 2007, primarily due the Town and Country acquisition and higher merchandise gross profits, but offset by the lower fuel margins. Wholesale segment Adjusted EBITDA of $4.3 million increased by $1.0 million, or 31.5%, from 2007. Other segment Adjusted EBITDA reflects net expenses of $1.6 million for the quarter, compared to $1.8 million for the same period in 2007.

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Liquidity and Capital Resources

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

Cash flows from operations were $3.5 million and $4.6 million for the first three months of 2008 and 2007, respectively. The change in our cash provided from operating activities for the respective periods was primarily attributable to changes in working capital. Our daily capital requirements fluctuate within each month, primarily in response to the timing of motor fuel tax, sales tax and rent payments. We had $13.8 million of cash and cash equivalents on hand at March 30, 2008 compared to $20.0 million at April 1, 2007, and $7.8 million at December 30, 2007.

Capital Expenditures. Capital expenditures, before any sale/leasebacks and asset dispositions, were $15.2 million and $17.5 million during the first quarter of 2008 and 2007, respectively. During first quarter 2008, we completed a $6.9 million sale leaseback transaction of five existing retail stores. We also completed additional sale leasebacks of one new retail store in April 2008 for net proceeds of $2.9 million, and six new retail stores in May 2008 for net proceeds of $16.7 million. We opened three new retail stores during the first quarter 2008, bringing our store count to 507 as of March 30, 2008. We opened one additional store in early May, and currently have another three stores under construction and one store under contract to purchase. We expect to open a total of 12 to 18 new retail stores during 2008. During fiscal 2008, we plan to invest approximately $25 to $40 million (net of approximately $50 to $55 million of lease financing) in new retail stores, new dealer projects and maintenance and upgrade of our existing facilities. We plan to finance our capital spending plan with cash flow from operations, cash balances, borrowings under the revolving credit facility and additional lease financing.

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

	Fiscal Year Ended December 30, 2007		Three Months Ended March 30, 2008
Retail stores:
Number at beginning of period	325		504
New stores	17		3
Acquired stores	169		—
Closed stores	(7	)	—
Number at end of period	504		507
Wholesale dealer locations:
Number at beginning of period	367		387
New locations	30		2
Closed locations	(10	)	(6	)
Number at end of period	387		383

Cash Flows from Financing Activities. At March 30, 2008, our outstanding debt was $420.4 million, including $5.3 million current maturities but excluding $3.6 million unamortized issuance premium. On November 13, 2007, we financed the acquisition of TCFS with the issuance of an additional $150 million 10 5/8% senior unsecured notes, a $105 million term loan facility, an $11.3 million draw on our revolving credit facility, a $51.2 million sale/leaseback transaction, and cash on the balance sheet. The notes, term loan and revolving credit facility are further discussed in “Credit Facilities” and “Senior Notes” below, and in our Notes to Consolidated Financial Statements.

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Credit Facilities. On November 13, 2007, as part of the TCFS Acquisition, we, as parent guarantor, and our indirect wholly-owned subsidiary Susser Holdings, L.L.C., as borrower entered into a new credit agreement with Bank of America, N.A., as Term Administrative Agent, Bank of America, N.A., as Revolving Administrative Agent, Swing Line Lender, and L/C Issuer, each of Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., Wachovia Bank, National Association, and BMO Capital Markets, as Co-Syndication Agents, Banc of America Securities LLC, Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., Wachovia Capital Markets, LLC, and BMO Capital Markets, as Joint Lead Arrangers and Joint Book Managers, and other lenders party thereto, providing for a five year revolving credit facility in an aggregate principal amount of up to $90 million, and a five year term loan facility in the aggregate principal amount of $105 million (the “term loan”). On May 6, 2008, we, Susser Holdings, L.L.C. and the financial institutions party to the credit agreement entered into Amendment No. 1 to the credit agreement (“Amendment No. 1”), which increased the aggregate commitments under the revolving credit facility to $120 million (we refer to the revolving credit facility, as amended by Amendment No. 1, as the “revolver”). We and each of our existing and future direct and indirect subsidiaries (other than (i) any subsidiary that is a “controlled foreign corporation” under the Internal Revenue Code or a subsidiary that is held directly or indirectly by a “controlled foreign corporation” and (ii) Susser Company, Ltd.) are, and will be, guarantors under each of the facilities.

The term loan was funded in full at the closing of the credit agreement and net term loan proceeds were used to finance part of the merger consideration and related fees and expenses paid in connection with the TCFS Acquisition as well as to refinance, in part, certain existing indebtedness.

Availability under the revolver is subject to a borrowing base equal to the lesser of (x) (a) 85% of eligible accounts receivable plus (b) 55% of eligible inventory plus (c) 60% of the fair market value of certain designated eligible real property which shall not exceed 35% of the aggregate borrowing base amount, minus (d) such reserves as the administrative agent of the revolving credit facility may establish in its reasonable credit judgment acting in good faith (including, without limitation, reserves for exposure under swap contracts and obligations relating to treasury management products)) and (y) 85% of gross accounts receivable plus 60% of gross inventory. Borrowings under the revolver may be made to fund ongoing working capital and other general corporate purposes. Up to $60 million of the revolver may be used for the issuance of standby and commercial letters of credit and a portion of the revolver is available for swing line loans.

The interest rates for both the revolver and term loan facility are calculated, at the borrower’s option, at either a base rate or a LIBOR rate plus, in each case, a margin. With respect to LIBOR rate loans, interest will be payable at the end of each selected interest period, but no less frequently than quarterly. With respect to base rate loans, interest will be payable quarterly in arrears.

As of March 30, 2008, we had $45.4 million outstanding on the revolver and $28.6 million in standby letters of credit, which include two $10.0 million letters of credit held in escrow related to the TCFS Acquisition that will be eligible to be drawn upon on each of the first and second anniversaries of closing, respectively, net of any settled or pending indemnity claims. As of May 6, 2008, we had sufficient borrowing base to support the use of approximately $105 million of the $120 million revolver, as amended, and had $14.4million in outstanding borrowings and $28.8 million in standby letters of credit, leaving approximately $62 million available on the revolver. Additional description of the credit facilities is included in our accompanying Notes to Consolidated Financial Statements and in our Annual Report of Form 10-K for the year ended December 30, 2007.

Senior Notes. On December 21, 2005, Susser Holdings, L.L.C. and a subsidiary, Susser Finance Corporation (which we refer to, collectively, as the “issuers”), sold $170 million of 10 ⁵/8% senior unsecured notes due, 2013 (referred to as the “original notes”). Proceeds from the sale of the original notes were used to fund the 2005 recapitalization, repay existing indebtedness and pay related fees and expenses. We incurred approximately $7.6 million in costs associated with the original notes, which were deferred and are being amortized over the life of the existing notes. A portion of the proceeds from the IPO were used to redeem $50 million of the original notes, plus accrued interest and premium thereon on November 24, 2006.

On November 13, 2007, as part of the TCFS Acquisition, the issuers issued and sold an additional $150 million in aggregate principal amount of 10 5/8% senior notes, due 2013 (which we refer to, alone, as the “additional notes” and

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together with the original notes, as the “senior notes”). The additional notes were issued under, and are governed by the terms of, the indenture, dated as of December 21, 2005, governing the original notes (referred to as the “indenture”). Under the indenture, the original notes and the additional notes are subject to the same interest payment, ranking, redemption and change of control provisions, covenants and transfer restrictions and pay interest semiannually in arrears on June 15 and December 15 of each year. The senior notes mature on December 15, 2013 and are guaranteed by us and each existing and future domestic subsidiary of the issuers with the exception of one non-wholly-owned subsidiary. We incurred approximately $7.0 million in costs associated with the additional notes, which were deferred and are being amortized to interest expense over the remaining life of the senior notes. We are also amortizing a $3.8 million issuance premium as a credit to interest expense over the remaining life of the senior notes.

Pursuant to a registration rights agreement that the issuers entered into at the time that the issuers issued the additional notes, the issuers agreed to file a registration statement with the SEC within 180 days, and to use reasonable best efforts to cause it to become effective as soon as possible after filing—but in any event no later than 90 days after the date of the initial filing with the SEC, with respect to an offer to exchange each of the additional notes for a new issue of debt securities registered under the Securities Act, with terms identical to those of the additional notes (except for provisions relating to transfer restrictions and payment of additional interest). The issuers filed a registration statement on Form S-4 with the SEC on April 29, 2008 in respect of such additional notes. Additional description of the senior notes is included in our accompanying Notes to Consolidated Financial Statements and in our Annual Report on Form 10-K for the year ended December 30, 2007.

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

Properties. We completed a sale/leaseback of five properties in January 2008. 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
	December 30, 2007	March 30, 2008
Operating sites – fee owned:
Retail	250	247
Wholesale	44	44
Total fee owned	294	291
Operating sites – leased:
Retail	254	260
Wholesale	10	10
Total leased	264	270
Office locations – fee owned	8	7
Properties currently being developed	3	5
Properties held for future development	21	21
Surplus properties for sale	47	48

We own the headquarters facility of our retail segment, which consists of approximately 27,000 square feet of

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office space located in Corpus Christi, and the Town & Country office in San Angelo. We also own the headquarters of our wholesale segment, which consists of approximately 43,000 square feet in Houston, and the headquarters of APT, which consists of approximately 25,000 square feet of office and warehouse space in Corpus Christi. We have entered into a lease agreement for an approximately 83,000 square foot building that we are remodeling to consolidate our four Corpus Christi facilities into one location and to alleviate current overcrowding and facilitate the consolidation of certain Town & Country back office functions from San Angelo to Corpus Christi. The annual lease expense is approximately $144,000, net of taxes, insurance and maintenance. We plan to move during the summer of 2008, and to sell or lease the existing office locations.

Quarterly Results of Operations and Seasonality

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

	2006												2007												2008 First QTR
	First QTR			Second QTR			Third QTR			Fourth QTR			First QTR			Second QTR			Third QTR			Fourth QTR (a)
	(dollars and gallons in thousands)
Merchandise sales	$	85,799		$	94,713		$	96,141		$	88,690		$	93,365		$	105,925		$	108,227		$	136,701		$	168,771
Motor fuel sales:
Retail		228,295			271,024			253,300			200,385			224,685			297,751			291,413			397,902			519,797
Wholesale		203,281			277,453			250,184			192,719			204,430			282,829			268,252			279,958			302,595
Other income		5,936			5,968			5,479			5,792			6,170			6,290			6,130			7,334			9,543
Total revenue		523,311			649,158			605,104			487,586			528,650			692,795			674,022			821,895			1,000,706
Merchandise gross profit		28,130			31,417			30,978			28,567			29,960			34,043			35,921			44,642			56,668
Motor fuel gross profit:
Retail	$	9,487		$	15,520		$	20,225		$	8,686		$	12,106		$	18,352		$	17,247		$	19,629		$	20,183
Wholesale		5,242			6,988			7,780			5,004			4,283			6,337			7,420			6,411			5,569
Other gross profit		5,815			5,756			5,341			5,842			6,046			5,831			5,885			7,030			9,103
Total gross profit		48,674			59,681			64,324			48,099			52,395			64,563			66,473			77,712			91,523
Income from operations		836			8,742			1,215			(616	)		780			9,412			7,944			8,122			4,972
Income before tax		(3,947	)		3,760			7,360			(10,871	)		(2,141	)		6,394			4,964			1,282			(4,744	)
Income tax expense		—			—			—			(48	)		(260	)		(120	)		(123	)		6,256			1,384
Net income	$	(3,947	)	$	3,760		$	7,360		$	(10,919	)	$	(2,401	)	$	6,274		$	4,841		$	7,538		$	(3,360	)
Merchandise gross profit percentage		32.8	%		33.2	%		32.2	%		32.2	%		32.1	%		32.1	%		33.2	%		32.7	%		33.6	%
Fuel gallons:
Retail		103,210			101,109			96,249			94,770			101,793			106,624			108,874			139,236			169,313
Wholesale		109,810			117,863			112,944			110,355			111,585			118,682			118,767			116,152			114,110
Motor fuel margin (cents per gallon):
Retail (b)		9.19	¢		15.35	¢		21.01	¢		9.16	¢		11.89	¢		17.21	¢		15.84	¢		14.10	¢		11.92	¢
Wholesale		4.77	¢		5.93	¢		6.89	¢		4.54	¢		3.84	¢		5.34	¢		6.25	¢		5.52	¢		4.88	¢

(a) Includes 48 days of Town & Country Operations.

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

Summary of Significant Accounting Policies

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported

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amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Critical accounting policies are those we believe are both most important to the portrayal of our financial condition and results, and require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions. Our significant accounting policies are described in our Annual Report on Form 10-K for the year ended December 30, 2007. As discussed in Note 2 to our Consolidated Financial Statements included elsewhere in this report, certain new financial accounting pronouncements have been issued which either have already been reflected in the accompanying consolidated financial statements, or will become effective for our financial statements at various dates in the future.

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. Our revolving credit facility bears interest at variable rates. At March 30, 2008, we had $45.4 million outstanding on the credit facility. Our $105 million term loan facility also bears interest at variable rates. The annualized effect of a one percentage point change in floating interest rates on our variable rate debt obligations at March 30, 2008 would be to change interest expense by approximately $1.5 million.

From time to time, we enter into interest rate swaps to either reduce the impact of changes in interest rates on our floating rate long-term debt or to take advantage of favorable variable interest rates compared to our fixed rate long-term debt. We had no interest rate swaps outstanding at December 30, 2007 or March 30, 2008.

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, management evaluates our financial position on an ongoing basis.

We at times manage fuel risk by purchasing fuel futures. At March 30, 2008, the Company held fuel futures contracts with a fair value of ($436,000).

Item 4. Controls and Procedures

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

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

You should carefully consider the risks described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 30, 2007, as well as the section within this report entitled “Forward-Looking Statements” under Part I. Financial Information—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, before making any investment decision with respect to our securities. The risks and uncertainties described in our annual report and below are not the only ones facing us. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, could negatively impact our results of operations or financial condition in the future. If any of such risks actually occur, our business, financial condition or results of operations could be materially adversely affected.

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

None.

Item 3. Defaults Upon Senior Securities

None.

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

None

Item 5. Other Information

The description of Amendment No. 1 to our credit agreement set forth under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities”, which would have otherwise been disclosed in a current report on Form 8-K under the heading “1.01 – Entry into a Material Definitive Agreement,” is incorporated under this Item 5 and qualified in its entirety by the terms of Amendment No. 1 itself, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

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
4.1	Fourth Supplemental Indenture, dated as of December 20, 2007, by and among Susser Holdings, L.L.C., Susser Finance Corporation, each of the Guarantors party thereto, GoPetro Transport LLC and the Bank of New York. *
10.1	Amendment No. 1, dated as of May 6, 2008, to Credit Agreement dated November 13, 2007, among Susser Holdings Corporation, Susser Holdings, L.L.C., Bank of America, N.A., Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., Wachovia Bank, National Association, BMO Capital Markets, Banc of America Securities LLC, Wachovia Capital Markets, LLC, and the other lenders party thereto. †

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31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. †
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. †
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act. †
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act. †

† Filed herewith.

* Incorporated by reference to Exhibit 4.8 to the Registrant’s registration statement on Form S-4 filed April 29, 2008.

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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: May 9, 2008
	By	/s/ Mary E. Sullivan
		Mary E. Sullivan
		Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
4.1	Fourth Supplemental Indenture, dated as of December 20, 2007, by and among Susser Holdings, L.L.C., Susser Finance Corporation, each of the Guarantors party thereto, GoPetro Transport LLC and the Bank of New York. *
10.1	Amendment No. 1, dated as of May 6, 2008, to Credit Agreement dated November 13, 2007, among Susser Holdings Corporation, Susser Holdings, L.L.C., Bank of America, N.A., Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., Wachovia Bank, National Association, BMO Capital Markets, Banc of America Securities LLC, Wachovia Capital Markets, LLC, and the other lenders party thereto. †
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. †
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. †
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.†
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.†

† Filed herewith.

* Incorporated by reference to Exhibit 4.8 to the Registrant’s registration statement on Form S-4 filed April 29, 2008.

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EX-10.1

Exhibit 10.1

[Execution Version]

AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 dated as of May 6, 2008 (this “Amendment”) to the Credit Agreement (as defined herein), is entered into by Susser Holdings, L.L.C., a Delaware limited liability company (the “Borrower”), Susser Holdings Corporation, a Delaware corporation, as Parent Guarantor (the “Parent Guarantor”), other guarantors parties hereto, the lenders parties hereto (collectively, the “Lenders”), Bank of America, N.A., as Administrative Agent for the Term Lenders (in such capacity, the “Term Administrative Agent”), Administrative Agent for the Revolving Credit Lenders (in such capacity, the “Revolving Administrative Agent”, and together with the Term Administrative Agent, the “Administrative Agents”), Swing Line Lender and L/C Issuer.

INTRODUCTION

Reference is made to the Credit Agreement dated as of November 13, 2007 (as modified from time to time, the “Credit Agreement”), among the Borrower, the Administrative Agents, and the lenders thereto. The Borrower has requested, and the Lenders and the Administrative Agents have agreed, to make certain amendments to the Credit Agreement as set forth herein.

THEREFORE, in connection with the foregoing and for other good and valuable consideration, the Borrower, the Lenders, and the Administrative Agents hereby agree as follows:

Section 1. Definitions; References. Unless otherwise defined in this Amendment, each term used in this Amendment that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.

Section 2. Amendments to Credit Agreement.

(a) Section 1.1 of the Credit Agreement is hereby amended by replacing Section (f) of the definition of “Eligible Accounts” in its entirety with the following:

(f) accounts receivable generated from any credit card transaction involving credit cards issued or processed by a Person that is a fuel supplier to the Borrower or any Subsidiary or that is an Affiliate of any such Person;

(b) Section 1.1 of the Credit Agreement is hereby amended by replacing the definition of “Revolving Credit Commitment” in its entirety with the following:

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligations to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.1(b), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.1 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable,

as such amount may be adjusted from time to time in accordance with this Agreement, or as set forth in any Revolving Commitment Increase Agreement signed by such Revolving Credit Lender. As of May 6, 2008, the aggregate Revolving Credit Commitments equal $120,000,000.

(c) The Credit Agreement is hereby amended by adding Section 2.22 as follows:

2.22 Increase in Revolving Credit Facility. (a) Request for Increase. Provided there exists no Default, upon notice to the Revolving Administrative Agent (which shall promptly notify the Revolving Credit Lenders), the Borrower may, prior to November 13, 2011, on a one-time basis, request an increase in the Revolving Credit Facility by an amount not exceeding $10,000,000; provided that any such request for an increase shall be in a minimum amount of $5,000,000. At the time of sending such notice, the Borrower (in consultation with the Revolving Administrative Agent) shall specify the time period within which each Revolving Credit Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Credit Lenders).

(b) Lender Elections to Increase. Each Revolving Credit Lender shall notify the Revolving Administrative Agent within such time period whether or not it agrees to increase its Revolving Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its ratable portion (based on such Revolving Lender’s Applicable Percentage in respect of the Revolving Credit Facility) of such requested increase. Any Revolving Credit Lender not responding within such time period shall be deemed to have declined to increase its Revolving Credit Commitment.

(c) Notification by Revolving Administrative Agent; Additional Revolving Credit Lenders. The Revolving Administrative Agent shall notify the Borrower and each Revolving Credit Lender of the Revolving Credit Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase, and subject to the approval of the Revolving Administrative Agent (which approval shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Revolving Credit Lenders pursuant to a joinder agreement in form and substance satisfactory to the Revolving Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Revolving Loans are increased in accordance with this Section, the Revolving Administrative Agent and the Borrower shall determine the effective date (the “Revolving Increase Effective Date”) and the final allocation of such increase. The Revolving Administrative Agent shall promptly notify the Borrower and the Revolving Credit Lenders of the final allocation of such increase and the Revolving Increase Effective Date. Any amendment implementing an increase under this Section 2.22 may be signed by the Revolving Administrative Agent, on behalf of the Lenders and the Term Administrative Agent.

-2-

(e) Conditions to Effectiveness of Increase. As conditions precedent to such increase, the Borrower shall deliver to the Revolving Administrative Agent (i) a certificate of the Borrower dated as of the Revolving Increase Effective Date signed by a Responsible Officer of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article IV and the other Credit Documents are true and correct in all material respects on and as of the Revolving Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.22, the representations and warranties contained in subsections (a) and (b) of Section 4.7 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 5.2, and (B) no Default exists and (ii) modification/downdate endorsements to the title insurance policies applicable to the Revolving Mortgages in form and substance reasonably satisfactory to the Revolving Administrative Agent. The Borrower shall prepay any Revolving Credit Loans outstanding on the Revolving Credit Increase Effective Date (and pay any additional amounts required pursuant to Section 2.18) to the extent necessary to keep the outstanding Revolving Credit Loans ratable with any revised Applicable Revolving Credit Percentages arising from any nonratable increase in the Revolving Credit Commitments under this Section.

(f) Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 8.3 to the contrary.

(d) Exhibit A of the Credit Agreement is hereby amended by replacing such exhibit in its entirety with Exhibit A attached hereto.

Section 3. Representations and Warranties. The Borrower and the Parent Guarantor each represent and warrant that (a) the execution, delivery, and performance by each Credit Party of this Amendment and the consummation of the transactions contemplated thereby (i) do not contravene the organizational documents of such Credit Party, (ii) have been duly authorized by all necessary partnership, limited liability company or corporate action of each Credit Party, and (iii) are within each Credit Party’s partnership, limited liability company or corporate powers, (b) the Liens under the Security Documents are valid and subsisting; (c) this Amendment constitutes the legal, valid and binding obligation of each Credit Party, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws at the time in effect affecting the rights of creditors generally and subject to the availability of equitable remedies; and (d) the representations and warranties contained in each Credit Document are true and correct in all material respects, no Event of Default exists under the Credit Documents, and there has occurred no event which with notice or lapse of time would become an Event of Default under the Credit Documents.

Section 4. Effect on Credit Documents. Except as amended herein, the Credit Agreement and all other Credit Documents remain in full force and effect as originally executed. Nothing herein shall act as a waiver of any of the Administrative Agents’ or any Lender’s rights under the Credit Documents as amended, including the waiver of any default or event of default,

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however denominated. The Borrower acknowledges and agrees that this Amendment shall in no manner impair or affect the validity or enforceability of the Credit Agreement. This Amendment is a Credit Document for the purposes of the provisions of the other Credit Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Amendment may be a default or event of default under the other Credit Documents.

Section 5. Effectiveness. This Amendment shall become effective and the Credit Agreement shall be amended as provided for herein upon the execution and delivery of this Amendment by each of the parties hereto, together with any other documents or items listed on Annex I hereto or otherwise reasonably requested by the Agent to document the agreements and intent of this Amendment and the other Credit Documents, each in form and with substance satisfactory to the Administrative Agents.

Section 6. Reaffirmation of Guaranties. By its signature hereto, each Guarantor represents and warrants that it has no defense to the enforcement of its respective Revolving Guaranty or Term Guaranty, and that according to its terms each Revolving Guaranty and Term Guaranty will continue in full force and effect to guaranty the Borrower’s Revolving Obligations or Term Obligations, as applicable, under the Credit Agreement and the other amounts described in such Revolving Guaranty or Term Guaranty following the execution of this Amendment.

Section 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Section 8. Miscellaneous. The miscellaneous provisions set forth in Article VIII of the Credit Agreement apply to this Amendment. This Amendment may be signed in any number of counterparts, each of which shall be an original, and may be executed and delivered by telecopier.

[Signature pages follow.]

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THIS WRITTEN AMENDMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

EXECUTED as of the first date above written.

BORROWER:
SUSSER HOLDINGS, L.L.C., a Delaware limited liability company
By:	/s/ E.V. Bonner, Jr.
Name:	E.V. Bonner, Jr.
Title:	Executive Vice President
PARENT GUARANTOR:
SUSSER HOLDINGS CORPORATION, a Delaware corporation
By:	/s/ E.V. Bonner, Jr.
Name:	E.V. Bonner, Jr.
Title:	Executive Vice President
GUARANTORS:
APPLIED PETROLEUM TECHNOLOGIES LTD.
By:	APT Management Company, LLC, its general partner
By:	/s/ E.V. Bonner, Jr.
	E.V. Bonner, Jr.
	Executive Vice President

Signature Page to Amendment No. 1 to Credit Agreement

APT MANAGEMENT COMPANY, LLC
C&G INVESTMENTS, LLC
CORPUS CHRISTI REIMCO, LLC
GOPETRO TRANSPORT LLC
STRIPES LLC
STRIPES ACQUISITION LLC
STRIPES HOLDINGS LLC
STRIPES NO. 1009 LLC
SUSSER FINANCE CORPORATION
SUSSER FINANCIAL SERVICES LLC
SUSSER PETROLEUM COMPANY LLC
T&C WHOLESALE INC.
TCFS HOLDINGS, INC.
TOWN & COUNTRY FOOD STORES, INC.
By:	/s/ E.V. Bonner, Jr.
	E.V. Bonner, Jr.
	Executive Vice President
SSP BEVCO I LLC
SSP BEVCO II LLC
SSP BEVERAGE, LLC
TND BEVERAGE, LLC
By:	/s/ E.V. Bonner, Jr.
	E.V. Bonner, Jr.
	Manager
SUSSER HOLDINGS CORPORATION
By:	/s/ E.V. Bonner, Jr.
	E.V. Bonner, Jr.
	Executive Vice President
STRIPES HOLDINGS LLC
By:	/s/ E.V. Bonner, Jr.
	E.V. Bonner, Jr.
	Executive Vice President

Signature Page to Amendment No. 1 to Credit Agreement

REVOLVING ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Revolving Administrative Agent
By:	/s/ Suzanne M. Paul
Name:	Suzanne M. Paul
Title:	Vice President
TERM ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Term Administrative Agent
By:	/s/ Suzanne M. Paul
Name:	Suzanne M. Paul
Title:	Vice President

Signature Page to Amendment No. 1 to Credit Agreement

LENDERS:
BANK OF AMERICA, N.A.
By:	/s/ Gary L. Mingle
Name:	Gary L. Mingle
Title:	Senior Vice President

Signature Page to Amendment No. 1 to Credit Agreement

WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/ Bruce Roland
Name:	Bruce Roland
Title:	Senior Vice President

Signature Page to Amendment No. 1 to Credit Agreement

BMO CAPITAL MARKETS FINANCING, INC.
By:	/s/ C. Scott Place
Name:	C. Scott Place
Title:	Director

Signature Page to Amendment No. 1 to Credit Agreement

WELLS FARGO BANK, N.A.
By:	/s/ Stephen A. Leon
Name:	Stephen A. Leon
Title:	Managing Director

Signature Page to Amendment No. 1 to Credit Agreement

TEXAS STATE BANK
By:	/s/ Frank Hastings
Name:	Frank Hastings
Title:	Senior Vice President

Signature Page to Amendment No. 1 to Credit Agreement

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:	/s/ Brian E. Lemons
Name:	Brian E. Lemons
Title:	Vice President

Signature Page to Amendment No. 1 to Credit Agreement

REGIONS BANK, AN ALABAMA BANKING CORPORATION
By:	/s/ Robin Ingari
Name:	Robin Ingari
Title:	Senior Vice President

Signature Page to Amendment No. 1 to Credit Agreement

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Sam L. Susser, certify that:

1) I have reviewed this report on Form 10-Q of Susser Holdings Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting practices;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the board of directors of the registrant:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2008	SUSSER HOLDINGS CORPORATION
	By	/s/ Sam L. Susser
		Sam L. Susser
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Mary E. Sullivan, certify that:

1) I have reviewed this report on Form 10-Q of Susser Holdings Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting practices;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the board of directors of the registrant:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2008	SUSSER HOLDINGS CORPORATION
	By	/s/ Mary E. Sullivan
		Mary E. Sullivan
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Susser Holdings Corporation (the “Company”) for the three months ended March 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sam L. Susser, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2008	SUSSER HOLDINGS CORPORATION
	By	/s/ Sam L. Susser
		Sam L. Susser
		President and Chief Executive Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Susser Holdings Corporation (the “Company”) for the three months ended March 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mary E. Sullivan, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2008	SUSSER HOLDINGS CORPORATION
	By	/s/ Mary E. Sullivan
		Mary E. Sullivan
		Executive Vice President and Chief Financial Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.