TRAVELCENTERS OF AMERICA LLC
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(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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20-5701514
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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24601 Center Ridge Road, Suite 200, Westlake, OH 44145-5639
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(Address of Principal Executive Offices)
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(440) 808-9100
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(Registrant's Telephone Number, Including Area Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Shares
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The Nasdaq Stock Market LLC
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8.25% Senior Notes due 2028
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The Nasdaq Stock Market LLC
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8.00% Senior Notes due 2029
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The Nasdaq Stock Market LLC
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8.00% Senior Notes due 2030
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The Nasdaq Stock Market LLC
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
x
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Emerging growth company
o
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•
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OUR OPERATING RESULTS FOR THE YEAR ENDED
DECEMBER 31, 2018
, REFLECT CERTAIN IMPROVEMENTS, SUCH AS INCREASES IN FUEL AND NONFUEL REVENUES AND FUEL AND NONFUEL GROSS MARGIN OVER THE SAME PERIOD LAST YEAR. THIS MAY IMPLY THAT WE WILL INCREASE OR MAINTAIN THESE IMPROVEMENTS AND THAT WE WILL BE PROFITABLE IN THE FUTURE. HOWEVER, CERTAIN OF THESE IMPROVEMENTS RESULTED FROM UNIQUE ITEMS THAT MAY NOT OCCUR IN THE FUTURE. IN ADDITION, FUEL PRICES, CUSTOMER DEMAND AND COMPETITIVE CONDITIONS, AMONG OTHER FACTORS, MAY SIGNIFICANTLY IMPACT OUR FUEL AND NONFUEL REVENUES AND THE COSTS OF OUR FUEL AND NONFUEL PRODUCTS MAY INCREASE IN THE FUTURE BECAUSE OF INFLATION OR OTHER REASONS. IF FUEL GROSS MARGIN PER GALLON OR FUEL OR NONFUEL SALES VOLUMES DECLINE, IF WE ARE NOT ABLE TO PASS INCREASES IN FUEL OR NONFUEL COSTS TO OUR CUSTOMERS, OR IF OUR NONFUEL SALES MIX CHANGES IN A MANNER THAT NEGATIVELY IMPACTS OUR NONFUEL GROSS MARGIN, OUR FUEL AND NONFUEL REVENUES OR OUR FUEL AND NONFUEL GROSS MARGIN MAY DECLINE. IN FACT, SINCE WE BECAME A PUBLIC COMPANY IN 2007, WE HAVE BEEN ABLE TO PRODUCE ONLY OCCASIONAL PROFITS AND WE HAVE ACCUMULATED SIGNIFICANT LOSSES. WE MAY BE UNABLE TO PRODUCE FUTURE PROFITS AND OUR LOSSES MAY INCREASE;
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WE EXPECT THAT LOCATIONS WE ACQUIRE, DEVELOP OR RENOVATE WILL PRODUCE STABILIZED FINANCIAL RESULTS AFTER A PERIOD OF TIME FOLLOWING ACQUISITION, DEVELOPMENT OR RENOVATION. THIS STATEMENT MAY IMPLY THAT STABILIZATION OF OUR ACQUIRED, DEVELOPED OR RENOVATED SITES WILL OCCUR AS EXPECTED, AND IF SO, WILL GENERATE INCREASED OPERATING INCOME. HOWEVER, MANY OF THE LOCATIONS WE HAVE ACQUIRED OR MAY ACQUIRE IN THE FUTURE PRODUCED OPERATING RESULTS THAT CAUSED THE PRIOR OWNERS TO EXIT THESE BUSINESSES. OUR ABILITY TO OPERATE THESE ACQUIRED, DEVELOPED OR RENOVATED LOCATIONS PROFITABLY DEPENDS UPON MANY FACTORS, SOME OF WHICH ARE BEYOND OUR CONTROL. ACCORDINGLY, THESE LOCATIONS MAY NOT GENERATE INCREASED OPERATING INCOME OR IT MAY TAKE LONGER THAN WE EXPECT TO REALIZE ANY SUCH INCREASES;
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WE HAVE MADE ACQUISITIONS AND DEVELOPED NEW LOCATIONS AND WE MAY MAKE ACQUISITIONS AND DEVELOP NEW LOCATIONS IN THE FUTURE, INCLUDING ADDING SITES THROUGH FRANCHISING. MANAGING AND INTEGRATING ACQUIRED AND DEVELOPED LOCATIONS CAN BE DIFFICULT, TIME CONSUMING AND/OR MORE EXPENSIVE THAN ANTICIPATED AND INVOLVE RISKS OF FINANCIAL LOSSES. WE MAY NOT OPERATE OUR ACQUIRED OR DEVELOPED LOCATIONS AS PROFITABLY AS WE MAY EXPECT. IN ADDITION, ACQUISITIONS OR PROPERTY DEVELOPMENT MAY SUBJECT US TO GREATER RISKS THAN OUR CONTINUING OPERATIONS, INCLUDING THE ASSUMPTION OF UNKNOWN LIABILITIES;
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WE PLAN TO CONTINUE TO INVEST IN EXISTING LOCATIONS AND MAY INVEST IN NEW LOCATIONS. AN IMPLICATION OF THIS STATEMENT MAY BE THAT WE HAVE OR WILL HAVE SUFFICIENT CAPITAL TO MAKE THE INVESTMENTS WE HAVE IDENTIFIED AS WELL AS OTHER INVESTMENTS THAT WE HAVE NOT YET IDENTIFIED. HOWEVER, WE CANNOT BE SURE THAT WE WILL HAVE SUFFICIENT CAPITAL FOR SUCH INVESTMENTS. IN ADDITION, OUR GROWTH STRATEGIES AND BUSINESS REQUIRE REGULAR AND SUBSTANTIAL CAPITAL INVESTMENTS. OUR CAPITAL EXPENDITURES PLAN FOR
2019
CONTEMPLATES AGGREGATE INVESTMENTS OF APPROXIMATELY
$100.7
MILLION. THE AMOUNT AND TIMING OF CAPITAL EXPENDITURES ARE OFTEN DIFFICULT TO PREDICT AND MAY COST MORE THAN ANTICIPATED. UNANTICIPATED PROJECTS THAT WE MAY BE REQUIRED TO UNDERTAKE IN THE FUTURE (AS A RESULT OF GOVERNMENT PROGRAMS OR REGULATION, ADVANCES OR CHANGES MADE BY OUR COMPETITION, DEMANDS OF OUR CUSTOMERS, OR FOR OTHER REASONS) MAY ARISE AND CAUSE US TO SPEND MORE THAN CURRENTLY ANTICIPATED. SOME CAPITAL PROJECTS TAKE MORE TIME TO COMPLETE THAN ANTICIPATED. AS A RESULT OF MARKET CONDITIONS OR OTHER CONSIDERATIONS, WE MAY DEFER CERTAIN CAPITAL PROJECTS AND ANY SUCH DEFERRALS MAY HARM OUR BUSINESS OR REQUIRE US TO MAKE LARGER CAPITAL EXPENDITURES IN THE FUTURE. ALSO, WE MAY BE UNABLE TO ACCESS REASONABLY PRICED CAPITAL TO MAKE SUCH INVESTMENTS IN THE FUTURE;
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STATEMENTS ABOUT THE AGREEMENTS WE ENTERED WITH A PROSPECTIVE FRANCHISEE PURSUANT TO WHICH WE EXPECT TO ADD UP TO
SIX
TA EXPRESS BRANDED TRAVEL CENTERS TO OUR NETWORK. THESE AGREEMENTS ARE SUBJECT TO CONDITIONS AND THESE FRANCHISE ARRANGEMENTS MAY NOT OCCUR OR MAY BE DELAYED, AND THE TERMS OF THE ARRANGEMENTS MAY CHANGE;
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WE BELIEVE THE U.S. GOVERNMENT MAY RETROACTIVELY REINSTATE THE BIODIESEL BLENDERS’ TAX CREDIT FOR 2018. THIS STATEMENT MAY IMPLY THAT THE U.S. GOVERNMENT WILL RETROACTIVELY REINSTATE THE BIODIESEL BLENDERS’ TAX CREDIT, RESULTING IN A TAX CREDIT OF APPROXIMATELY $35.0 MILLION FOR US IN 2019. HOWEVER, THE U.S. GOVERNMENT MAY CHOOSE NOT TO RETROACTIVELY REINSTATE THE BIODIESEL BLENDERS’ TAX CREDIT FOR 2018 IN 2019 OR ANY OTHER TIME. IN ADDITION, THE U.S. GOVERNMENT COULD CHOOSE TO ONLY RETROACTIVELY REINSTATE THIS CREDIT IN PART, WHICH WOULD RESULT IN OUR NOT RECOVERING THE FULL AMOUNT WE PAID TO OUR SUPPLIERS IN CONNECTION WITH BIODIESEL PURCHASES IN 2018. IN ADDITION, THESE STATEMENTS ABOUT THE BIODIESEL TAX CREDIT MAY IMPLY THAT THE U.S. GOVERNMENT WILL EXTEND OR RETROACTIVELY REINSTATE THE BIODIESEL BLENDERS’ TAX CREDIT FOR 2019 AND FUTURE YEARS. HOWEVER, THE U.S. GOVERNMENT MAY CHOOSE NOT TO DO SO;
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WE PLAN TO REDUCE THE LEVEL OF IMPROVEMENT SALES TO HOSPITALITY PROPERTIES TRUST, OR HPT, DURING 2019 IN ORDER TO LIMIT THE RELATED RENT INCREASES. CIRCUMSTANCES AND OUR PLANS MAY CHANGE AND WE MAY NOT REDUCE SUCH SALES AND, AS A RESULT, WE MAY NOT LIMIT THE RELATED RENT INCREASES;
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WE HAVE A CREDIT FACILITY WITH A CURRENT MAXIMUM AVAILABILITY OF $200.0 MILLION, WHICH WE REFER TO AS OUR CREDIT FACILITY. THE AVAILABILITY OF THIS MAXIMUM AMOUNT IS SUBJECT TO LIMITS BASED ON OUR QUALIFIED COLLATERAL, INCLUDING OUR ELIGIBLE CASH, ACCOUNTS RECEIVABLE AND INVENTORY, THAT VARIES IN AMOUNT FROM TIME TO TIME. ACCORDINGLY, OUR BORROWING AND LETTER OF CREDIT AVAILABILITY AT ANY TIME MAY BE LESS THAN $200.0 MILLION. AT
DECEMBER 31, 2018
, BASED ON OUR ELIGIBLE COLLATERAL AT THAT DATE, OUR BORROWING AND LETTER OF CREDIT AVAILABILITY WAS
$100.2
MILLION, OF WHICH WE HAD USED
$14.8
MILLION FOR OUTSTANDING LETTERS OF CREDIT. THE MAXIMUM AMOUNT AVAILABLE UNDER THE CREDIT FACILITY MAY BE INCREASED TO $300.0 MILLION, THE AVAILABILITY OF WHICH IS SUBJECT TO LIMITS BASED ON OUR AVAILABLE COLLATERAL AND LENDER PARTICIPATION. HOWEVER, IF WE DO NOT HAVE SUFFICIENT COLLATERAL OR IF WE ARE UNABLE TO IDENTIFY LENDERS WILLING TO INCREASE THEIR COMMITMENTS OR JOIN OUR CREDIT FACILITY, WE MAY NOT BE ABLE TO INCREASE THE SIZE OF OUR CREDIT FACILITY OR THE AVAILABILITY OF BORROWINGS WHEN WE MAY WANT OR NEED TO DO SO. WE INTEND TO RENEW OR REPLACE THE CREDIT FACILITY PRIOR TO DECEMBER 2019, BUT DO NOT KNOW WHETHER OR AT WHAT MAXIMUM AMOUNT WE WILL BE ABLE TO DO SO; AND
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WE MAY FINANCE OR SELL UNENCUMBERED REAL ESTATE THAT WE OWN. HOWEVER, WE DO NOT KNOW THE EXTENT TO WHICH WE CAN MONETIZE OUR EXISTING UNENCUMBERED REAL ESTATE OR WHAT THE TERMS OF ANY SUCH FINANCING OR SALE WOULD BE.
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CONTINUED IMPROVED FUEL EFFICIENCY OF MOTOR VEHICLE ENGINES AND OTHER FUEL CONSERVATION AND ALTERNATIVE FUEL PRACTICES AND SOURCES EMPLOYED OR USED BY OUR CUSTOMERS AND ALTERNATIVE FUEL TECHNOLOGIES OR OTHER MEANS OF TRANSPORTATION THAT MAY BE DEVELOPED AND WIDELY ADOPTED IN THE FUTURE MAY CONTINUE TO REDUCE THE DEMAND FOR THE FUEL THAT WE SELL AND MAY ADVERSELY AFFECT OUR BUSINESS;
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COMPETITION WITHIN THE TRAVEL CENTER, TRUCK REPAIR AND RESTAURANT INDUSTRIES MAY ADVERSELY IMPACT OUR FINANCIAL RESULTS. OUR BUSINESS REQUIRES SUBSTANTIAL AMOUNTS OF WORKING CAPITAL AND OUR COMPETITORS MAY HAVE GREATER FINANCIAL AND OTHER RESOURCES THAN WE DO;
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FUTURE INCREASES IN FUEL PRICES MAY REDUCE THE DEMAND FOR THE PRODUCTS AND SERVICES THAT WE SELL;
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FUTURE COMMODITY FUEL PRICE INCREASES, FUEL PRICE VOLATILITY OR OTHER FACTORS MAY CAUSE US TO NEED MORE WORKING CAPITAL TO MAINTAIN OUR INVENTORY AND CARRY OUR ACCOUNTS RECEIVABLE THAN WE NOW EXPECT AND THE GENERAL AVAILABILITY OF, DEMAND FOR AND PRICING OF MOTOR FUELS MAY CHANGE IN WAYS WHICH LOWER THE PROFITABILITY ASSOCIATED WITH OUR SELLING MOTOR FUELS;
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OUR SUPPLIERS MAY BE UNWILLING OR UNABLE TO MAINTAIN THE CURRENT CREDIT TERMS FOR OUR PURCHASES. IF WE ARE UNABLE TO PURCHASE GOODS ON REASONABLE CREDIT TERMS, OUR REQUIRED WORKING CAPITAL MAY INCREASE AND WE MAY INCUR MATERIAL LOSSES. ALSO, IN TIMES OF RISING FUEL AND NONFUEL PRICES, OUR SUPPLIERS MAY BE UNWILLING OR UNABLE TO INCREASE THE CREDIT AMOUNTS THEY EXTEND TO US, WHICH MAY INCREASE OUR WORKING CAPITAL REQUIREMENTS. THE AVAILABILITY AND THE TERMS OF ANY CREDIT WE MAY BE ABLE TO OBTAIN ARE UNCERTAIN;
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MOST OF OUR TRUCKING COMPANY CUSTOMERS TRANSACT BUSINESS WITH US BY USE OF FUEL CARDS ISSUED BY THIRD PARTY FUEL CARD COMPANIES. FUEL CARD COMPANIES FACILITATE PAYMENTS TO US AND CHARGE US FEES FOR THESE SERVICES. THE FUEL CARD INDUSTRY HAS ONLY A FEW SIGNIFICANT PARTICIPANTS. WE BELIEVE ALMOST ALL TRUCKING COMPANIES USE ONLY A SINGLE FUEL CARD PROVIDER AND HAVE BECOME INCREASINGLY DEPENDENT UPON SERVICES PROVIDED BY THEIR RESPECTIVE FUEL CARD PROVIDER TO MANAGE THEIR FLEETS. CONTINUED LACK OF COMPETITION AMONG FUEL CARD COMPANIES MAY RESULT IN FUTURE INCREASES IN OUR TRANSACTION FEE EXPENSES OR WORKING CAPITAL REQUIREMENTS, OR BOTH;
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FUEL SUPPLY DISRUPTIONS MAY OCCUR, WHICH MAY LIMIT OUR ABILITY TO PURCHASE FUEL FOR RESALE;
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IF TRUCKING COMPANIES ARE UNABLE TO SATISFY MARKET DEMANDS FOR TRANSPORTING GOODS OR IF THE USE OF OTHER MEANS OF TRANSPORTING GOODS INCREASES, THE TRUCKING INDUSTRY MAY EXPERIENCE REDUCED BUSINESS, WHICH WOULD NEGATIVELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND LIQUIDITY;
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COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, INCLUDING THOSE RELATED TO TAX, EMPLOYMENT AND ENVIRONMENTAL MATTERS, ACCOUNTING RULES AND FINANCIAL REPORTING STANDARDS, PAYMENT CARD INDUSTRY REQUIREMENTS AND SIMILAR MATTERS MAY INCREASE OUR OPERATING COSTS AND REDUCE OR ELIMINATE OUR PROFITS;
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WE ARE ROUTINELY INVOLVED IN LITIGATION. DISCOVERY DURING LITIGATION AND COURT DECISIONS OFTEN HAVE UNANTICIPATED RESULTS. LITIGATION IS USUALLY EXPENSIVE AND CAN BE DISTRACTING TO MANAGEMENT. WE CANNOT BE SURE OF THE OUTCOME OF ANY OF THE LITIGATION MATTERS IN WHICH WE ARE OR MAY BECOME INVOLVED;
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ACTS OF TERRORISM, GEOPOLITICAL RISKS, WARS, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL MAY ADVERSELY AFFECT OUR FINANCIAL RESULTS; AND
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ALTHOUGH WE BELIEVE THAT WE BENEFIT FROM OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING HPT, THE RMR GROUP LLC, OR RMR, AFFILIATES INSURANCE COMPANY, OR AIC, AND OTHERS AFFILIATED WITH THEM, ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH RELATED PARTIES MAY PRESENT A CONTRARY PERCEPTION OR RESULT IN LITIGATION AND THE BENEFITS WE BELIEVE WE MAY REALIZE FROM THE RELATIONSHIPS MAY NOT MATERIALIZE.
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the
20
purchased travel centers were removed from the applicable leases and our annual minimum rent was reduced by
$43.1 million
;
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the term of each of the leases was extended by
three years
;
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the amount of deferred rent obligation to be paid to HPT was reduced from
$150.0 million
to
$70.5 million
and we agreed to pay that amount in
16
equal quarterly installments beginning
April 1, 2019
; and
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commencing with the year ended
December 31, 2020
, we will be obligated to pay to HPT an additional amount of percentage rent equal to one-half percent (
0.5%
) of the excess of the annual nonfuel revenues at leased sites over the nonfuel revenues for each respective site for the year ending
December 31, 2019
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over
25
acres of land with parking for approximately
200
tractor trailers and
100
cars;
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a full service restaurant and
one
or more QSRs that we operate as a franchisee under various brands;
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a truck repair facility and parts store;
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multiple diesel and gasoline fueling points, including DEF at the diesel lanes; and
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a travel store, game room, lounge and other amenities for professional truck drivers and motorists.
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approximately
eight
acres of land with parking for approximately
40
tractor trailers and
40
cars;
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one
or more QSRs that we operate as a franchisee under various brands;
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multiple diesel and gasoline fueling points; and
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a travel store and other amenities for professional truck drivers and motorists.
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Fuel.
We sell unbranded diesel fuel at separate truck fueling lanes and we sell gasoline and diesel fuel at motorist fuel islands. As of
December 31, 2018
, we offered branded gasoline at
244
of our
258
locations and unbranded gasoline at
six
of our travel centers operated by our franchisees.
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Diesel Exhaust Fluid.
DEF is an additive that is required by most truck engines manufactured after 2010. As of
December 31, 2018
, we offered DEF from dispensers on the diesel fueling island at
253
of our travel centers.
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Full Service Restaurants and QSRs.
Most of our TA and Petro branded travel centers have both full service restaurants and QSRs, and our TA Express branded travel centers have
one
or more QSRs that offer customers a wide variety of nationally recognized branded food choices. The substantial majority of our full service restaurants within travel centers are operated under our Iron Skillet® and Country Pride® brands and offer menu table service and buffets. At certain travel centers we have converted the full service restaurant to a franchised brand, such as Fuddruckers®, Black Bear Diner® and Bob Evans®. We also operate approximately
39
different brands of QSRs, including Popeye's Chicken & Biscuits®, Subway®, Taco Bell®, Burger King®, Pizza Hut®, Dunkin' Donuts®, Starbuck's Coffee® and Arby's®. As of
December 31, 2018
, approximately
194
of our travel centers included a full service restaurant, approximately
177
of our travel centers offered at least
one
QSR and there were a total of approximately
463
QSRs in our
258
travel centers.
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Truck Service.
Most of our travel centers have truck repair and maintenance facilities. Our
244
truck repair and maintenance facilities typically have between
three
and
eight
service bays and are staffed by service technicians employed by us or our franchisees. These shops generally operate 24 hours per day, 365 days per year and offer extensive maintenance and emergency repair and road services, ranging from basic services such as oil changes, wheel alignments and tire repair to specialty services such as diagnostics and repair of air conditioning, brakes and electrical systems and diesel filter cleaning. Our repair and maintenance services are generally covered by our warranty. Most of our truck repair and maintenance facilities provide some warranty work on Daimler Trucks North America, or Daimler, brand trucks through our participation in the Freightliner ServicePoint® and Western Star ServicePoint® programs, as described under the heading "Operations - Daimler Agreement" below. In addition to work we perform at our facilities, we also provide roadside emergency truck repair, call center and off site truck repair and maintenance services, as described under the heading "TA Truck Service" below.
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Travel Stores.
Travel stores located at our travel centers typically have a selection of over
5,000
items, including packaged food and snack items, beverages, non-prescription drug and beauty supplies, batteries, automobile accessories, and music and video products. Each travel store also has a "to go" bar offering fresh brewed coffee, hot dogs, prepared sandwiches and other prepared foods. The travel stores in our travel centers also sell items specifically designed for the truck driver's "on the road" lifestyle, including laundry supplies, clothing, truck accessories and a variety of electronics.
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Parking.
Our travel centers offer the Reserve-It!® parking program, which allows drivers to reserve for a fee a parking space in advance of arriving at a travel center. As of
December 31, 2018
, we offered Reserve-It!® parking at
241
of our travel centers and had deployed a total of approximately
5,824
reserved parking spaces. These reserved parking spaces comprise an average percentage of the total parking spaces per site of approximately
12%
.
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Additional Driver Services.
We believe that trucking fleets can improve the retention and recruitment of truck drivers by directing them to visit large, high quality, full service travel centers with plentiful overnight parking. We offer commercial trucker and other customer loyalty programs, the principal program being the UltraOne® Club, that are similar to the frequent shopper programs offered by other retailers. Drivers receive points for diesel fuel purchases and for spending on selected nonfuel products and services. These points may be redeemed for discounts on nonfuel products and services at our travel centers. In addition, we publish a magazine called RoadKing® which includes articles and advertising of interest to professional truck drivers. Some of our travel centers offer casino gaming. We strive to provide a consistently high level of service and amenities to professional truck drivers at all of our travel centers, making our travel centers an attractive choice for trucking fleets. Most of our travel centers provide truck drivers the amenities listed below:
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specialized business services, including an information center where drivers can send and receive faxes, overnight mail and other communications;
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a banking desk where drivers can cash checks and receive funds transfers from fleet operators;
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wi-fi internet access;
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a laundry area with washers and dryers;
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private showers;
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free exercise facilities; and
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areas designated for truck drivers only, including a theater or big screen television room with a video player and comfortable seating.
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RoadSquad® is a roadside truck service program that operates 24 hours per day, seven days per week. As of
December 31, 2018
, this program included a fleet of approximately
573
heavy duty professionally maintained emergency vehicles equipped with GPS technology at our travel center and other sites and third party roadside service providers in
50
U.S. states and
10
Canadian provinces with a total of approximately
1,643
locations. We centrally dispatch our service trucks and third party service providers from our call center to assist customers with comprehensive repair services when they are unable to bring their trucks to our travel centers due to a break down. We also provide outsourced call center services to trucking fleets and other truck owners in place of their internal call centers, which customers may use on a full-time basis or for only a portion of a day, on certain days of the week or for certain designated periods. As of December 31, 2018, we provided outsourced call center services to 100 customers, including 72 on a full time basis.
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RoadSquad OnSite® offers truck and trailer mobile maintenance and repair services performed by certified technicians at customer facilities, with a fleet of approximately
198
trucks in service as of
December 31, 2018
. RoadSquad OnSite® is designed to be a "bay on wheels" fully stocked with standard and specialty parts and state of the art technology that offers various services such as pre-trip truck inspections, U.S. Department of Transportation required inspections, tire repair and replacement, marker light operation checks, brake inspections, truck refurbishings and complete lubrication services.
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TA Commercial Tire Network™ is a commercial tire program we began in late 2016 through which we sell a variety of branded tires at our truck repair and maintenance facilities, on customers' lots, distribution centers, through direct sales and under tire manufacturers' national fleet account programs. The TA Commercial Tire Network™ includes a tire retread facility that is part of the Goodyear Authorized Retread Network, providing a full line of Goodyear commercial tire retread products to fleets, local industries and tire dealers within a 150 mile radius of its location in Bowling Green, Ohio. Many of our truck service facilities have access to the retread tires produced at this plant. We believe the TA Commercial Tire Network™ is the most comprehensive commercial tire purchasing, monitoring and maintenance program in the United States.
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property insurance in an amount equal to the full replacement cost of at risk improvements at our leased properties;
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business interruption insurance;
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general liability insurance, including bodily injury and property damage, in amounts that are generally maintained by companies operating travel centers;
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flood insurance for any property located in whole or in part in a flood plain;
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workers' compensation insurance if required by law; and
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such additional insurance as may be generally maintained by companies operating travel centers, including certain environmental insurance.
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our failure to pay rent or any other amounts when due;
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our failure to maintain the insurance required under the lease;
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the occurrence of certain events with respect to our insolvency;
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the institution of a proceeding for our bankruptcy or dissolution;
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our failure to continuously operate any leased properties without HPT's consent;
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the acquisition by any person or group of beneficial ownership of
9.8%
or more of our voting shares or the power to direct the management and policies of us or any of our subsidiary tenants or guarantors; the sale of a material part of the assets of us or any such tenant or guarantor; or the cessation of certain continuing directors constituting a majority of the board of directors of us or any such tenant or guarantor; in each case without the consent of HPT;
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our default under any indebtedness of
$10.0 million
or more for the TA Leases, or
$20.0 million
or more for the Petro Lease, that gives the holder the right to accelerate the maturity of the indebtedness; and
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our failure to perform certain other covenants or agreements of the lease and the continuance thereof for a specified period of time after written notice.
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accelerate the rent;
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terminate the lease; and/or
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make any payment or perform any act required to be performed by us under the lease and receive from us, on demand, an amount equal to the amount so expended by HPT plus interest.
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Brand Affiliation:
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Ownership of Sites By:
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TA
(1)
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Petro
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QSL
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Total
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TA
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Franchisee
or Others
(1)
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Alabama
|
1
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|
1
|
|
|
—
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|
|
2
|
|
|
|
1
|
|
|
1
|
|
Florida
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
Illinois
|
—
|
|
|
1
|
|
|
—
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|
|
1
|
|
|
|
—
|
|
|
1
|
|
Iowa
|
1
|
|
|
—
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|
|
1
|
|
|
2
|
|
|
|
—
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|
|
2
|
|
Kansas
|
1
|
|
|
1
|
|
|
—
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|
|
2
|
|
|
|
—
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|
|
2
|
|
Kentucky
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
—
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|
|
1
|
|
Louisiana
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
—
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|
|
1
|
|
Minnesota
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
|
—
|
|
|
2
|
|
Missouri
|
2
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|
|
—
|
|
|
4
|
|
New Jersey
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
|
—
|
|
|
3
|
|
North Carolina
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
North Dakota
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
Ohio
|
1
|
|
|
1
|
|
|
9
|
|
|
11
|
|
|
|
—
|
|
|
11
|
|
Oregon
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
Pennsylvania
|
1
|
|
|
—
|
|
|
7
|
|
|
8
|
|
|
|
—
|
|
|
8
|
|
South Carolina
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
Tennessee
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
|
—
|
|
|
2
|
|
Texas
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
1
|
|
|
—
|
|
Virginia
|
1
|
|
|
2
|
|
|
1
|
|
|
4
|
|
|
|
—
|
|
|
4
|
|
West Virginia
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
Wisconsin
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
|
—
|
|
|
2
|
|
Total
|
12
|
|
|
13
|
|
|
27
|
|
|
52
|
|
|
|
2
|
|
|
50
|
|
(1)
|
Since December 31, 2018, through the date of this Annual Report, we entered into a franchise agreement for one additional travel center in North Dakota and an agreement for up to
five
additional travel centers.
|
•
|
findings of suitability by the relevant gaming authorities with respect to, or licensure of, certain of our and our licensed subsidiaries' directors, officers and key employees and certain individuals having a material relationship with us or our licensed subsidiaries;
|
•
|
findings of suitability by the relevant gaming authorities with respect to certain of our security holders and restrictions on ownership of certain of our securities;
|
•
|
prior approval in certain circumstances by the relevant gaming authorities of offerings of our securities;
|
•
|
prior approval by the relevant gaming authorities of changes in control of us; and
|
•
|
specified reporting requirements.
|
•
|
We lease a large majority of our travel centers from HPT and our business is substantially dependent upon our relationship with HPT.
|
•
|
HPT is our largest shareholder, owning
3.4 million
, or approximately
8.5%
of our outstanding common shares as of
December 31, 2018
.
|
•
|
RMR provides us with business management services pursuant to a business management agreement and we pay RMR fees for those services based on a percentage of our fuel gross margin and nonfuel revenues. RMR also provides business and property management services to HPT.
|
•
|
One of our Managing Directors, Adam D. Portnoy, is a managing trustee of HPT, owned 1.5% of HPT's outstanding common shares as of December 31, 2018, is a managing director and an officer and, as the sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc. and is a managing director and the president and chief executive officer of The RMR Group Inc. and is an officer and employee of RMR. The RMR Group Inc. is the managing member of RMR and RMR is the majority operating subsidiary of The RMR Group Inc.
|
•
|
As of December 31, 2018, RMR owned
1.5 million
, or approximately
3.7%
, of our common shares.
|
•
|
Our other Managing Director and Chief Executive Officer, Andrew J. Rebholz, is an Executive Vice President of RMR.
|
•
|
Barry A. Richards, our President and Chief Operating Officer, William E. Myers, our Executive Vice President, Chief Financial Officer and Treasurer, and Mark R. Young, our Executive Vice President and General Counsel, are also officers of RMR.
|
•
|
Adam D. Portnoy and all of our Independent Directors are members of the boards of trustees or boards of directors of other public companies to which RMR or its subsidiaries provide management services.
|
•
|
In the event of conflicts between us and RMR, any affiliate of RMR or any publicly owned entity with which RMR has a relationship, including HPT, our business management agreement allows RMR to act on its own behalf and on behalf of HPT or such other entity rather than on our behalf.
|
•
|
We, HPT and five other companies to which RMR provides management services currently own AIC, an Indiana insurance company, which arranges and insures or reinsures in part a combined property insurance program for us and its six other shareholders and are parties to a shareholders agreement regarding AIC.
|
•
|
the division of our Directors into three classes, with the term of one class expiring each year;
|
•
|
the authority of our Board of Directors, and not our shareholders, to adopt, amend or repeal our bylaws and to fill vacancies on the Board of Directors;
|
•
|
limitations on the ability of shareholders to cause a special meeting of shareholders to be held and a prohibition on shareholders acting by written consent unless the consent is a unanimous consent of all our shareholders entitled to vote on the matter;
|
•
|
required qualifications for an individual to serve as a Director and a requirement that certain of our Directors be "Managing Directors" and other Directors be "Independent Directors," as defined in the governing documents;
|
•
|
the power of our Board of Directors, without shareholders' approval, to authorize and issue additional shares of any class or type on terms that it determines;
|
•
|
limitations on the ability of our shareholders to propose nominees for election as Directors and propose other business to be considered at a meeting of shareholders;
|
•
|
a requirement that an individual Director may only be removed for cause and then only by unanimous vote of the other Directors; and a 75% shareholders' vote and cause requirements for removal of our entire Board of Directors;
|
•
|
a 75% shareholders' vote requirement for shareholder nominations and other proposals that are not approved by our Board of Directors;
|
•
|
our election to be governed by Section 203 of the Delaware General Corporation Law, which would prohibit us from engaging in a business combination with an interested shareholder, generally a person that together with its affiliates owns or within the last three years has owned 15% of our voting shares, for a period of three years after the date of the transaction in which the person became an interested shareholder, unless the business combination is approved in a prescribed manner;
|
•
|
requirements that shareholders comply with regulatory requirements (including Illinois, Louisiana, Montana and Nevada gaming and Indiana insurance licensing requirements) affecting us which could effectively limit share ownership of us, including in some cases, to 5% of our outstanding shares; and
|
•
|
requirements that any person nominated to be a Director comply with any clearance and pre-clearance requirements of state gaming or insurance licensing laws applicable to our business.
|
•
|
shareholders whose ownership of our securities exceeds certain thresholds may be required to report their holdings to and to be licensed, found suitable or approved by the relevant state gaming authorities;
|
•
|
persons seeking to acquire control over us or over the operation of our gaming licenses are subject to prior investigation by and approval from the relevant gaming authorities;
|
•
|
persons who wish to serve as one of our Directors or officers may be required to be approved, found suitable and in some cases licensed, by the relevant state gaming authorities; and
|
•
|
the relevant state gaming authorities may limit our involvement with or ownership of securities by persons they determine to be unsuitable.
|
•
|
the liquidity of the market for our common shares;
|
•
|
our historic policy to not pay cash dividends;
|
•
|
changes in our operating results;
|
•
|
issuances of additional common shares and sales of our common shares by holders of large blocks of our common shares, such as HPT, RMR or our Directors or officers;
|
•
|
a lack of analyst coverage, changes in analysts' expectations and unfavorable research reports; and
|
•
|
general economic and industry trends and conditions.
|
•
|
the Senior Notes are unsecured and effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness;
|
•
|
an active trading market for the Senior Notes may not be maintained or be liquid;
|
•
|
we depend upon our subsidiaries for cash flow to service our debt, and the Senior Notes are structurally subordinated to the payment of the indebtedness, lease and other liabilities and any preferred equity of our subsidiaries;
|
•
|
the Senior Notes are not rated;
|
•
|
redemption may adversely affect noteholders' return on the Senior Notes; and
|
•
|
an increase in market interest rates and other factors could result in a decrease in the value of the Senior Notes.
|
(1)
|
Includes
four
TA Express branded locations.
|
(2)
|
Includes restaurant brands other than QSL and
one
Goodyear authorized retread facility we own in Ohio.
|
(3)
|
Includes
20
properties we acquired from HPT in January 2019 that we leased from HPT as of December 31, 2018. These
20
properties are located in
15
states.
|
(4)
|
Includes properties leased from, or managed for, parties other than HPT.
|
Calendar Month
|
|
Number of Shares
Purchased
(1)
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Approximate
Dollar Value of Shares
That May Yet Be
Purchased Under the
Plans or Programs
|
||||||
December 2018
|
|
171,314
|
|
|
$
|
4.51
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
171,314
|
|
|
$
|
4.51
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
During
2018
, all common share purchases were made to satisfy share award recipients' tax withholding and payment obligations in connection with the vesting of awards of common shares, which were repurchased by us based on their fair market value on the repurchase dates.
|
•
|
a
$50,737
increase in site level gross margin in excess of site level operating expenses, which included a
$23,251
benefit from the federal biodiesel tax credit that was retroactively reinstated for 2017 and recognized in February 2018; and
|
•
|
a
$9,632
reduction in selling, general and administrative expenses, primarily attributable to reimbursed litigation costs collected in 2018.
|
|
Year Ended December 31,
|
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
Revenues:
|
|
|
|
|
|
|||||
Fuel
|
$
|
4,395,731
|
|
|
$
|
3,557,537
|
|
|
23.6
|
%
|
Nonfuel
|
1,819,563
|
|
|
1,741,339
|
|
|
4.5
|
%
|
||
Rent and royalties from franchisees
|
16,143
|
|
|
18,021
|
|
|
(10.4
|
)%
|
||
Total revenues
|
6,231,437
|
|
|
5,316,897
|
|
|
17.2
|
%
|
||
|
|
|
|
|
|
|||||
Gross margin:
|
|
|
|
|
|
|||||
Fuel
|
320,027
|
|
|
280,926
|
|
|
13.9
|
%
|
||
Nonfuel
|
1,108,314
|
|
|
1,052,737
|
|
|
5.3
|
%
|
||
Rent and royalties from franchisees
|
16,143
|
|
|
18,021
|
|
|
(10.4
|
)%
|
||
Total gross margin
|
1,444,484
|
|
|
1,351,684
|
|
|
6.9
|
%
|
||
|
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|||||
Site level operating
|
914,730
|
|
|
872,667
|
|
|
4.8
|
%
|
||
Selling, general and administrative
|
136,383
|
|
|
146,015
|
|
|
(6.6
|
)%
|
||
Real estate rent
|
283,476
|
|
|
274,850
|
|
|
3.1
|
%
|
||
Depreciation and amortization
|
83,179
|
|
|
89,379
|
|
|
(6.9
|
)%
|
||
Total operating expenses
|
1,417,768
|
|
|
1,382,911
|
|
|
2.5
|
%
|
||
|
|
|
|
|
|
|||||
Income (loss) from operations
|
26,716
|
|
|
(31,227
|
)
|
|
185.6
|
%
|
||
|
|
|
|
|
|
|||||
Interest expense, net
|
29,003
|
|
|
30,016
|
|
|
(3.4
|
)%
|
||
Other expense (income), net
|
2,060
|
|
|
(895
|
)
|
|
330.2
|
%
|
||
Loss before income taxes and discontinued operations
|
(4,347
|
)
|
|
(60,348
|
)
|
|
92.8
|
%
|
||
Benefit for income taxes
|
1,574
|
|
|
80,250
|
|
|
(98.0
|
)%
|
||
(Loss) income from continuing operations
|
(2,773
|
)
|
|
19,902
|
|
|
(113.9
|
)%
|
||
Loss from discontinued operations, net of taxes
|
(117,631
|
)
|
|
(10,619
|
)
|
|
NM
|
|
||
Net (loss) income
|
(120,404
|
)
|
|
9,283
|
|
|
NM
|
|
||
Less: net income for noncontrolling interests
|
149
|
|
|
132
|
|
|
12.9
|
%
|
||
Net (loss) income attributable to common shareholders
|
$
|
(120,553
|
)
|
|
$
|
9,151
|
|
|
NM
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
Number of same site company operated locations
|
235
|
|
|
235
|
|
|
—
|
|
||
|
|
|
|
|
|
|||||
Diesel sales volume (gallons)
|
1,569,582
|
|
|
1,573,325
|
|
|
(0.2)
|
%
|
||
Gasoline sales volume (gallons)
|
280,143
|
|
|
285,172
|
|
|
(1.8)
|
%
|
||
Total fuel sales volume (gallons)
|
1,849,725
|
|
|
1,858,497
|
|
|
(0.5)
|
%
|
||
|
|
|
|
|
|
|||||
Fuel revenues
|
$
|
4,259,100
|
|
|
$
|
3,474,219
|
|
|
22.6
|
%
|
Fuel gross margin
|
313,879
|
|
|
278,671
|
|
|
12.6
|
%
|
||
Fuel gross margin per gallon
|
$
|
0.170
|
|
|
$
|
0.150
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|||||
Nonfuel revenues
|
$
|
1,777,799
|
|
|
$
|
1,716,655
|
|
|
3.6
|
%
|
Nonfuel gross margin
|
1,082,255
|
|
|
1,036,231
|
|
|
4.4
|
%
|
||
Nonfuel gross margin percentage
|
60.9
|
%
|
|
60.4
|
%
|
|
50
|
pts
|
||
|
|
|
|
|
|
|||||
Total gross margin
|
$
|
1,396,134
|
|
|
$
|
1,314,902
|
|
|
6.2
|
%
|
Site level operating expenses
|
887,840
|
|
|
855,730
|
|
|
3.8
|
%
|
||
Site level operating expenses as a percentage of nonfuel revenues
|
49.9
|
%
|
|
49.8
|
%
|
|
10
|
pts
|
||
Site level gross margin in excess of site level operating expenses
|
$
|
508,294
|
|
|
$
|
459,172
|
|
|
10.7
|
%
|
|
Gallons Sold
|
|
Fuel Revenues
|
|||
Results for the year ended December 31, 2017
|
1,900,465
|
|
|
$
|
3,557,537
|
|
Increase due to petroleum products price changes
|
|
|
819,200
|
|
||
Decrease due to same site volume changes
|
(8,772
|
)
|
|
(19,946
|
)
|
|
Increase due to locations opened
|
16,757
|
|
|
40,808
|
|
|
Decrease due to locations closed
|
(1,948
|
)
|
|
(3,607
|
)
|
|
Increase in wholesale fuel sales volume
|
883
|
|
|
1,739
|
|
|
Net change from prior year period
|
6,920
|
|
|
838,194
|
|
|
Results for the year ended December 31, 2018
|
1,907,385
|
|
|
$
|
4,395,731
|
|
•
|
cash balance;
|
•
|
operating cash flow;
|
•
|
our revolving Credit Facility with a current maximum availability of
$200,000
subject to limits based on our qualified collateral;
|
•
|
sales to HPT of improvements we make to the sites we lease from HPT;
|
•
|
potential issuances of new debt and equity securities; and
|
•
|
potential financing or selling of unencumbered real estate that we own.
|
•
|
continuing decreased demand for our fuel products resulting from regulatory and market efforts for improved engine fuel efficiency, fuel conservation and alternative fuels and technologies;
|
•
|
decreased demand for our products and services that we may experience as a result of competition or otherwise;
|
•
|
the fixed nature of a significant portion of our expenses, which may restrict our ability to realize a sufficient reduction in our expenses to offset a reduction in our revenues;
|
•
|
the costs and funding that may be required to execute our growth initiatives;
|
•
|
the possible inability of acquired or developed properties to generate the stabilized financial results we expected at the time of acquisition or development;
|
•
|
increasing labor cost inflation;
|
•
|
increasing market interest rates that may increase our cost of capital;
|
•
|
the risk of an economic slowdown or recession in the U.S. economy; and
|
•
|
the negative impacts on our gross margins and working capital requirements if there were a return to the higher level of prices for petroleum products we experienced in prior years or due to increases in the cost of our fuel or nonfuel products resulting from inflation generally.
|
•
|
HPT is our former parent company, our principal landlord and our largest shareholder, owning as of
December 31, 2018
,
3,420
, or approximately
8.5%
, of our outstanding common shares, and RMR provides management services to both us and HPT;
|
•
|
RMR, which is controlled by Adam. D. Portnoy, one of our Managing Directors, assists us with various aspects of our business pursuant to a business management agreement and until July 31, 2017, provided building management services at our headquarters office building pursuant to a property management agreement;
|
•
|
RMR employs our Chief Executive Officer, who is also one of our Managing Directors; our President and Chief Operating Officer; our Executive Vice President, Chief Financial Officer and Treasurer; our Executive Vice President and General Counsel; and our other Managing Director;
|
•
|
As of
December 31, 2018
, RMR owned
1,493
, or approximately
3.7%
, of our common shares; and
|
•
|
As of
December 31, 2018
, we, HPT and five other companies to which RMR provides management services each owned
14.3%
of AIC, which arranges and insures or reinsures in part a combined property insurance program for us and its six other shareholders.
|
TravelCenters of America LLC Audited Financial Statements
|
Page
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|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.1
|
|
The following materials from TravelCenters of America LLC's Annual Report on Form 10-K for the year ended December 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive
(Loss)
Income
, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders' Equity and (v) related notes to these financial statements, tagged as blocks of text (filed herewith)
|
/s/ RSM US LLP
|
|
|
/s/ RSM US LLP
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
314,387
|
|
|
$
|
35,526
|
|
Accounts receivable (less allowance for doubtful accounts of $959 and $809 as of
December 31, 2018 and 2017, respectively)
|
97,449
|
|
|
125,501
|
|
||
Inventory
|
196,721
|
|
|
187,237
|
|
||
Other current assets
|
35,119
|
|
|
27,015
|
|
||
Current assets of discontinued operations
|
—
|
|
|
23,239
|
|
||
Total current assets
|
643,676
|
|
|
398,518
|
|
||
|
|
|
|
||||
Property and equipment, net
|
628,537
|
|
|
613,196
|
|
||
Goodwill
|
25,259
|
|
|
25,259
|
|
||
Intangible assets, net
|
22,887
|
|
|
25,194
|
|
||
Other noncurrent assets
|
121,749
|
|
|
89,955
|
|
||
Noncurrent assets of discontinued operations
|
—
|
|
|
466,010
|
|
||
Total assets
|
$
|
1,442,108
|
|
|
$
|
1,618,132
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity:
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
120,914
|
|
|
$
|
155,581
|
|
Current HPT Leases liabilities
|
42,109
|
|
|
41,389
|
|
||
Other current liabilities
|
125,668
|
|
|
128,017
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
2,311
|
|
||
Total current liabilities
|
288,691
|
|
|
327,298
|
|
||
|
|
|
|
||||
Long term debt, net
|
320,528
|
|
|
319,634
|
|
||
Noncurrent HPT Leases liabilities
|
353,756
|
|
|
368,782
|
|
||
Other noncurrent liabilities
|
28,741
|
|
|
27,376
|
|
||
Noncurrent liabilities of discontinued operations
|
—
|
|
|
8,547
|
|
||
Total liabilities
|
991,716
|
|
|
1,051,637
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
|
|
||
Common shares, no par value, 43,369 and 41,369 shares authorized as of
December 31, 2018 and 2017, respectively, 40,402 and 39,984 shares issued
and outstanding as of December 31, 2018 and 2017, respectively
|
695,315
|
|
|
690,688
|
|
||
Accumulated other comprehensive income
|
355
|
|
|
580
|
|
||
Accumulated deficit
|
(246,773
|
)
|
|
(126,220
|
)
|
||
Total TA shareholders' equity
|
448,897
|
|
|
565,048
|
|
||
Noncontrolling interests
|
1,495
|
|
|
1,447
|
|
||
Total shareholders' equity
|
450,392
|
|
|
566,495
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,442,108
|
|
|
$
|
1,618,132
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
|
|
||
Fuel
|
$
|
4,395,731
|
|
|
$
|
3,557,537
|
|
Nonfuel
|
1,819,563
|
|
|
1,741,339
|
|
||
Rent and royalties from franchisees
|
16,143
|
|
|
18,021
|
|
||
Total revenues
|
6,231,437
|
|
|
5,316,897
|
|
||
|
|
|
|
||||
Cost of goods sold (excluding depreciation):
|
|
|
|
||||
Fuel
|
4,075,704
|
|
|
3,276,611
|
|
||
Nonfuel
|
711,249
|
|
|
688,602
|
|
||
Total cost of goods sold
|
4,786,953
|
|
|
3,965,213
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
||
Site level operating
|
914,730
|
|
|
872,667
|
|
||
Selling, general and administrative
|
136,383
|
|
|
146,015
|
|
||
Real estate rent
|
283,476
|
|
|
274,850
|
|
||
Depreciation and amortization
|
83,179
|
|
|
89,379
|
|
||
Total operating expenses
|
1,417,768
|
|
|
1,382,911
|
|
||
|
|
|
|
||||
Income (loss) from operations
|
26,716
|
|
|
(31,227
|
)
|
||
|
|
|
|
||||
Interest expense, net
|
29,003
|
|
|
30,016
|
|
||
Other expense (income), net
|
2,060
|
|
|
(895
|
)
|
||
Loss before income taxes and discontinued operations
|
(4,347
|
)
|
|
(60,348
|
)
|
||
Benefit for income taxes
|
1,574
|
|
|
80,250
|
|
||
(Loss) income from continuing operations
|
(2,773
|
)
|
|
19,902
|
|
||
Loss from discontinued operations, net of taxes
|
(117,631
|
)
|
|
(10,619
|
)
|
||
Net (loss) income
|
(120,404
|
)
|
|
9,283
|
|
||
Less: net income for noncontrolling interests
|
149
|
|
|
132
|
|
||
Net (loss) income attributable to common shareholders
|
$
|
(120,553
|
)
|
|
$
|
9,151
|
|
|
|
|
|
||||
Other comprehensive (loss) income, net of taxes:
|
|
|
|
|
|
||
Foreign currency (loss) income, net of taxes of $(104) and $179, respectively
|
$
|
(156
|
)
|
|
$
|
108
|
|
Equity interest in investee's unrealized (loss) gain on investments
|
(69
|
)
|
|
461
|
|
||
Other comprehensive (loss) income attributable to common shareholders
|
(225
|
)
|
|
569
|
|
||
|
|
|
|
||||
Comprehensive (loss) income attributable to common shareholders
|
$
|
(120,778
|
)
|
|
$
|
9,720
|
|
|
|
|
|
||||
Net (loss) income per common share attributable to common shareholders:
|
|
|
|
|
|
||
Basic and diluted from continuing operations
|
$
|
(0.07
|
)
|
|
$
|
0.50
|
|
Basic and diluted from discontinued operations
|
(2.95
|
)
|
|
(0.27
|
)
|
||
Basic and diluted
|
(3.02
|
)
|
|
0.23
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net (loss) income
|
$
|
(120,404
|
)
|
|
$
|
9,283
|
|
Less: loss from discontinued operations, net of taxes
|
(117,631
|
)
|
|
(10,619
|
)
|
||
(Loss) income
from continuing operations
|
(2,773
|
)
|
|
19,902
|
|
||
Adjustments to reconcile (loss) income from continuing operations to net cash
provided by operating activities of continuing operations:
|
|
|
|
|
|
||
Noncash rent expense
|
(14,799
|
)
|
|
(14,632
|
)
|
||
Depreciation and amortization expense
|
83,179
|
|
|
89,379
|
|
||
Deferred income taxes
|
403
|
|
|
(81,243
|
)
|
||
Changes in operating assets and liabilities, net of effects of business acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
27,340
|
|
|
(18,437
|
)
|
||
Inventory
|
(9,102
|
)
|
|
(3,646
|
)
|
||
Other assets
|
1,384
|
|
|
1,795
|
|
||
Accounts payable and other liabilities
|
(31,932
|
)
|
|
3,876
|
|
||
Other, net
|
19,558
|
|
|
17,319
|
|
||
Net cash provided by operating activities of continuing operations
|
73,258
|
|
|
14,313
|
|
||
Net cash provided by operating activities of discontinued operations
|
8,348
|
|
|
21,361
|
|
||
Net cash provided by operating activities
|
81,606
|
|
|
35,674
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Proceeds from sale of convenience stores business, net of transaction costs
and cash sold
|
310,496
|
|
|
—
|
|
||
Proceeds from asset sales to HPT
|
55,829
|
|
|
109,374
|
|
||
Capital expenditures
|
(144,781
|
)
|
|
(124,055
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
(10,482
|
)
|
|
(19,858
|
)
|
||
Investment in equity investee
|
(2,859
|
)
|
|
(6,000
|
)
|
||
Net cash provided by (used in) investing activities of continuing operations
|
208,203
|
|
|
(40,539
|
)
|
||
Net cash used in investing activities of discontinued operations
|
(8,904
|
)
|
|
(21,346
|
)
|
||
Net cash provided by (used in) investing activities
|
199,299
|
|
|
(61,885
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from sale leaseback transactions with HPT
|
517
|
|
|
2,860
|
|
||
Sale leaseback financing obligation payments
|
(1,074
|
)
|
|
(761
|
)
|
||
Acquisition of treasury shares from employees
|
(1,744
|
)
|
|
(1,175
|
)
|
||
Distribution to noncontrolling interests
|
(101
|
)
|
|
(83
|
)
|
||
Net cash (used in) provided by financing activities
|
(2,402
|
)
|
|
841
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(198
|
)
|
|
140
|
|
||
Net increase (decrease) in cash and cash equivalents
|
278,305
|
|
|
(25,230
|
)
|
||
Cash and cash equivalents at the beginning of the year
|
36,082
|
|
|
61,312
|
|
||
Cash and cash equivalents at the end of the year
|
314,387
|
|
|
36,082
|
|
||
Less: cash of discontinued operations at the end of the year
|
—
|
|
|
556
|
|
||
Cash and cash equivalents of continuing operations at the end of the year
|
$
|
314,387
|
|
|
$
|
35,526
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Interest paid (including rent classified as interest and net of capitalized interest)
|
$
|
29,250
|
|
|
$
|
31,611
|
|
Income taxes (refunded) paid
|
(228
|
)
|
|
345
|
|
|
Number of
Common
Shares
|
|
Common
Shares
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Treasury
Shares
|
|
Total TA
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total
Shareholders'
Equity
|
|||||||||||||||
December 31, 2016
|
39,523
|
|
|
$
|
686,348
|
|
|
$
|
11
|
|
|
$
|
(135,371
|
)
|
|
$
|
—
|
|
|
$
|
550,988
|
|
|
$
|
1,398
|
|
|
$
|
552,386
|
|
Grants under share
award plan and
share based
compensation, net
|
461
|
|
|
4,340
|
|
|
—
|
|
|
—
|
|
|
(1,175
|
)
|
|
3,165
|
|
|
—
|
|
|
3,165
|
|
|||||||
Retirement of
treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,175
|
|
|
1,175
|
|
|
—
|
|
|
1,175
|
|
|||||||
Distribution to
noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
(83
|
)
|
|||||||
Other comprehensive
income, net of
taxes
|
—
|
|
|
—
|
|
|
569
|
|
|
—
|
|
|
—
|
|
|
569
|
|
|
—
|
|
|
569
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
9,151
|
|
|
—
|
|
|
9,151
|
|
|
132
|
|
|
9,283
|
|
|||||||
December 31, 2017
|
39,984
|
|
|
690,688
|
|
|
580
|
|
|
(126,220
|
)
|
|
—
|
|
|
565,048
|
|
|
1,447
|
|
|
566,495
|
|
|||||||
Grants under share
award plan and
share based
compensation, net
|
418
|
|
|
4,627
|
|
|
—
|
|
|
—
|
|
|
(1,744
|
)
|
|
2,883
|
|
|
—
|
|
|
2,883
|
|
|||||||
Retirement of
treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,744
|
|
|
1,744
|
|
|
—
|
|
|
1,744
|
|
|||||||
Distribution to
noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
(101
|
)
|
|||||||
Other comprehensive
loss, net of taxes
|
—
|
|
|
—
|
|
|
(225
|
)
|
|
—
|
|
|
—
|
|
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(120,553
|
)
|
|
—
|
|
|
(120,553
|
)
|
|
149
|
|
|
(120,404
|
)
|
|||||||
December 31, 2018
|
40,402
|
|
|
$
|
695,315
|
|
|
$
|
355
|
|
|
$
|
(246,773
|
)
|
|
$
|
—
|
|
|
$
|
448,897
|
|
|
$
|
1,495
|
|
|
$
|
450,392
|
|
1.
|
Summary of Significant Accounting Policies
|
Buildings and site improvements
|
15 to 40 years
|
Machinery and equipment
|
3 to 15 years
|
Furniture and fixtures
|
5 to 10 years
|
|
As Reported
|
|
Discontinued
Operations
(1)
|
|
Adoption of
ASU 2014-09
|
|
As Adjusted
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other noncurrent assets
|
$
|
90,004
|
|
|
$
|
(327
|
)
|
|
$
|
278
|
|
|
$
|
89,955
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and Shareholders' Equity:
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
$
|
130,140
|
|
|
$
|
(2,311
|
)
|
|
$
|
188
|
|
|
$
|
128,017
|
|
Other noncurrent liabilities
|
35,029
|
|
|
(8,547
|
)
|
|
894
|
|
|
27,376
|
|
||||
Accumulated deficit
|
(125,416
|
)
|
|
—
|
|
|
(804
|
)
|
|
(126,220
|
)
|
(1)
|
See Note 4 for more information about our discontinued operations.
|
|
As Reported
|
|
Discontinued
Operations
(1)
|
|
Adoption of
ASU 2014-09
|
|
As Adjusted
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Fuel
|
$
|
4,090,912
|
|
|
$
|
(474,514
|
)
|
|
$
|
(58,861
|
)
|
|
$
|
3,557,537
|
|
Nonfuel
|
1,944,181
|
|
|
(261,703
|
)
|
|
58,861
|
|
|
1,741,339
|
|
||||
Rent and royalties from franchisees
|
16,500
|
|
|
(215
|
)
|
|
1,736
|
|
|
18,021
|
|
||||
Total revenues
|
6,051,593
|
|
|
(736,432
|
)
|
|
1,736
|
|
|
5,316,897
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
154,663
|
|
|
(10,332
|
)
|
|
1,684
|
|
|
146,015
|
|
||||
Loss before income taxes and discontinued
operations
|
(75,045
|
)
|
|
14,645
|
|
|
52
|
|
|
(60,348
|
)
|
||||
Benefit for income taxes
|
84,439
|
|
|
(4,026
|
)
|
|
(163
|
)
|
|
80,250
|
|
||||
Income from continuing operations
|
9,394
|
|
|
10,619
|
|
|
(111
|
)
|
|
19,902
|
|
(1)
|
See Note 4 for more information about our discontinued operations.
|
|
As Reported
|
|
Discontinued
Operations
(1)
|
|
Adoption of
ASU 2014-09
|
|
As Adjusted
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
9,394
|
|
|
$
|
—
|
|
|
$
|
(111
|
)
|
|
$
|
9,283
|
|
Deferred income taxes
|
(85,432
|
)
|
|
4,026
|
|
|
163
|
|
|
(81,243
|
)
|
||||
Accounts receivable
|
(18,507
|
)
|
|
—
|
|
|
70
|
|
|
(18,437
|
)
|
||||
Accounts payable and other liabilities
|
8,123
|
|
|
(4,125
|
)
|
|
(122
|
)
|
|
3,876
|
|
||||
Net cash provided by operating activities
|
35,674
|
|
|
—
|
|
|
—
|
|
|
35,674
|
|
(1)
|
See Note 4 for more information about our discontinued operations.
|
2.
|
Revenue
|
•
|
Customer Loyalty Programs.
We offer travel center trucking customers and casual restaurant diners the option to participate in our loyalty programs. Our loyalty programs provide customers with the right to earn loyalty awards on qualifying purchases that can be used for discounts on future purchases of goods or services. We apply a relative standalone selling price approach to our outstanding loyalty awards whereby a portion of each sale attributable to the loyalty awards earned is deferred and will be recognized as revenue in the category in which the loyalty awards are redeemed upon the redemption or expiration of the loyalty awards. Significant judgment is required to determine the standalone selling price for loyalty awards. Assumptions used in determining the standalone selling price include the historic redemption rate and the use of a weighted average selling price for fuel to calculate the revenue attributable to the loyalty awards.
|
•
|
Customer Discounts and Rebates.
We enter into agreements with certain customers in which we agree to provide discounts on fuel and/or truck service purchases, some of which are structured as rebates payable to the customer after the end of the period. We recognize the cost of discounts against, and in the same period as, the revenue that generated the discounts earned.
|
•
|
Gift Cards.
We sell branded gift cards. Sales proceeds are recognized as a contract liability; the liability is reduced and revenue is recognized when the gift card subsequently is redeemed for goods or services. Unredeemed gift card balances are recognized as revenue when the possibility of redemption becomes remote.
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Nonfuel revenues:
|
|
|
|
||||
Truck service
|
$
|
672,169
|
|
|
$
|
642,961
|
|
Store and retail services
|
730,658
|
|
|
682,101
|
|
||
Restaurants
|
416,736
|
|
|
416,277
|
|
||
Total nonfuel revenues
|
$
|
1,819,563
|
|
|
$
|
1,741,339
|
|
|
Loyalty
Programs
|
|
Other Contract
Liabilities
|
|
Total
|
||||||
December 31, 2016
|
$
|
13,686
|
|
|
$
|
4,921
|
|
|
$
|
18,607
|
|
Increases due to unsatisfied performance obligations
arising during the period
|
72,424
|
|
|
11,335
|
|
|
83,759
|
|
|||
Revenue recognized from satisfying performance
obligations during the period
|
(65,854
|
)
|
|
(10,007
|
)
|
|
(75,861
|
)
|
|||
Other
|
(5,091
|
)
|
|
(1,568
|
)
|
|
(6,659
|
)
|
|||
December 31, 2017
|
15,165
|
|
|
4,681
|
|
|
19,846
|
|
|||
Increases due to unsatisfied performance obligations
arising during the period
|
81,517
|
|
|
10,083
|
|
|
91,600
|
|
|||
Revenue recognized from satisfying performance
obligations during the period
|
(74,548
|
)
|
|
(10,064
|
)
|
|
(84,612
|
)
|
|||
Other
|
(6,644
|
)
|
|
(1,230
|
)
|
|
(7,874
|
)
|
|||
December 31, 2018
|
$
|
15,490
|
|
|
$
|
3,470
|
|
|
$
|
18,960
|
|
3.
|
Acquisitions
|
4.
|
Discontinued Operations
|
|
December 31,
2017 |
||
Assets:
|
|
||
Cash
|
$
|
556
|
|
Inventory
|
22,403
|
|
|
Other current assets
|
280
|
|
|
Property and equipment, net
|
387,894
|
|
|
Goodwill
|
68,600
|
|
|
Other intangible assets, net
|
9,189
|
|
|
Other noncurrent assets
|
327
|
|
|
Total assets of discontinued operations
|
$
|
489,249
|
|
|
|
||
Liabilities:
|
|
||
Other current liabilities
|
$
|
2,311
|
|
Other noncurrent liabilities
|
8,547
|
|
|
Total liabilities of discontinued operations
|
$
|
10,858
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues
|
$
|
742,160
|
|
|
$
|
736,432
|
|
Cost of goods sold (excluding depreciation)
|
610,524
|
|
|
591,349
|
|
||
Site level operating expenses
|
103,037
|
|
|
108,082
|
|
||
Selling, general and administrative expenses
|
9,443
|
|
|
10,332
|
|
||
Real estate rent expense
|
2,206
|
|
|
2,277
|
|
||
Depreciation and amortization expense
|
20,418
|
|
|
39,037
|
|
||
Impairment of goodwill
|
69,340
|
|
|
—
|
|
||
Loss from discontinued operations before income taxes
|
(72,808
|
)
|
|
(14,645
|
)
|
||
Benefit for income taxes
|
14,789
|
|
|
4,026
|
|
||
Loss from discontinued operations, net of taxes
|
(58,019
|
)
|
|
(10,619
|
)
|
||
Loss on disposal
|
(79,623
|
)
|
|
—
|
|
||
Benefit for income taxes
|
20,011
|
|
|
—
|
|
||
Loss from discontinued operations
|
$
|
(117,631
|
)
|
|
$
|
(10,619
|
)
|
5.
|
Property and Equipment
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land and improvements
|
$
|
177,322
|
|
|
$
|
164,019
|
|
Buildings and improvements
|
197,866
|
|
|
178,722
|
|
||
Machinery, equipment and furniture
|
459,892
|
|
|
421,721
|
|
||
Leasehold improvements
|
242,469
|
|
|
233,857
|
|
||
Construction in progress
|
65,855
|
|
|
58,841
|
|
||
Property and equipment, at cost
|
1,143,404
|
|
|
1,057,160
|
|
||
Less: accumulated depreciation and amortization
|
514,867
|
|
|
443,964
|
|
||
Property and equipment, net
|
$
|
628,537
|
|
|
$
|
613,196
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land and improvements
|
$
|
14,945
|
|
|
$
|
14,565
|
|
Buildings and improvements
|
9,943
|
|
|
9,848
|
|
||
Machinery, equipment and furniture
|
3,282
|
|
|
3,239
|
|
||
Leasehold improvements
|
114,195
|
|
|
114,686
|
|
||
Property and equipment, at cost
|
142,365
|
|
|
142,338
|
|
||
Less: accumulated depreciation and amortization
|
96,266
|
|
|
89,129
|
|
||
Property and equipment, net
|
$
|
46,099
|
|
|
$
|
53,209
|
|
6.
|
Goodwill and Intangible Assets
|
|
December 31, 2018
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|||
Agreements with franchisees
|
$
|
21,645
|
|
|
$
|
(12,308
|
)
|
|
$
|
9,337
|
|
Leasehold interests
|
2,754
|
|
|
(2,183
|
)
|
|
571
|
|
|||
Other
|
3,913
|
|
|
(3,251
|
)
|
|
662
|
|
|||
Total amortizable intangible assets
|
28,312
|
|
|
(17,742
|
)
|
|
10,570
|
|
|||
Carrying value of trademarks (indefinite lives)
|
12,317
|
|
|
—
|
|
|
12,317
|
|
|||
Intangible assets, net
|
$
|
40,629
|
|
|
$
|
(17,742
|
)
|
|
$
|
22,887
|
|
|
December 31, 2017
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|||
Agreements with franchisees
|
$
|
22,945
|
|
|
$
|
(11,221
|
)
|
|
$
|
11,724
|
|
Leasehold interests
|
2,754
|
|
|
(2,149
|
)
|
|
605
|
|
|||
Other
|
3,748
|
|
|
(3,200
|
)
|
|
548
|
|
|||
Total amortizable intangible assets
|
29,447
|
|
|
(16,570
|
)
|
|
12,877
|
|
|||
Carrying value of trademarks (indefinite lives)
|
12,317
|
|
|
—
|
|
|
12,317
|
|
|||
Intangible assets, net
|
$
|
41,764
|
|
|
$
|
(16,570
|
)
|
|
$
|
25,194
|
|
|
Total
|
||
2019
|
$
|
1,252
|
|
2020
|
1,237
|
|
|
2021
|
1,087
|
|
|
2022
|
981
|
|
|
2023
|
883
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Travel centers business
|
$
|
22,213
|
|
|
$
|
22,213
|
|
QSL business
|
3,046
|
|
|
3,046
|
|
||
Total goodwill
|
$
|
25,259
|
|
|
$
|
25,259
|
|
7.
|
Other Current Liabilities
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Taxes payable, other than income taxes
|
$
|
42,985
|
|
|
$
|
46,872
|
|
Accrued wages and benefits
|
19,830
|
|
|
20,674
|
|
||
Loyalty program accruals
|
15,490
|
|
|
15,165
|
|
||
Self insurance program accruals, current portion
|
14,623
|
|
|
15,301
|
|
||
Accrued capital expenditures
|
7,742
|
|
|
5,695
|
|
||
Other
|
24,998
|
|
|
24,310
|
|
||
Total other current liabilities
|
$
|
125,668
|
|
|
$
|
128,017
|
|
8.
|
Long Term Debt
|
|
Interest Rate
|
|
Maturity Date
|
|
December 31,
|
||||||
|
|
|
2018
|
|
2017
|
||||||
2028 Senior Notes
|
8.25%
|
|
January 15, 2028
|
|
$
|
110,000
|
|
|
$
|
110,000
|
|
2029 Senior Notes
|
8.00%
|
|
December 15, 2029
|
|
120,000
|
|
|
120,000
|
|
||
2030 Senior Notes
|
8.00%
|
|
October 15, 2030
|
|
100,000
|
|
|
100,000
|
|
||
Other long term debt
|
4.01%
|
|
March 31, 2027
|
|
1,086
|
|
|
1,189
|
|
||
Deferred financing costs
|
|
|
|
|
(10,558
|
)
|
|
(11,555
|
)
|
||
Total long term debt, net
|
|
|
|
|
$
|
320,528
|
|
|
$
|
319,634
|
|
9.
|
Leasing Transactions
|
|
Total
|
||
2019
|
$
|
302,855
|
|
2020
|
301,220
|
|
|
2021
|
299,393
|
|
|
2022
|
296,551
|
|
|
2023
|
295,534
|
|
|
Thereafter
|
1,980,078
|
|
|
Total
|
$
|
3,475,631
|
|
•
|
we purchased
20
travel center properties from HPT, which we previously leased from HPT, for a total purchase price of approximately
$308,200
;
|
•
|
our annual minimum rent due to HPT was reduced by
$43,148
;
|
•
|
the term of each HPT Lease was extended by
three
years;
|
•
|
commencing on
April 1, 2019
, we will pay to HPT an aggregate of
$70,458
, in
16
quarterly installments of approximately
$4,404
each, to fully satisfy and discharge our
$150,000
deferred rent obligation to HPT that otherwise would have become due in
five
installments between 2024 and 2030;
|
•
|
commencing with the year ending
December 31, 2020
, we will be obligated to pay to HPT an additional amount of percentage rent equal to one-half percent (
0.5%
) of the excess of our annual nonfuel revenues at leased sites over the nonfuel revenues for each respective site for the year ending
December 31, 2019
; and
|
•
|
certain of the
179
travel center properties that we continue to lease from HPT were reallocated among the HPT Leases.
|
|
Number
of Properties
|
|
Initial Term
End Date
(1)
|
|
Annual Minimum Rent as of
January 31, 2019
|
|
Deferred Rent
(2)
|
||||
TA Lease 1
|
36
|
|
December 31, 2032
|
|
$
|
49,019
|
|
|
$
|
14,175
|
|
TA Lease 2
|
36
|
|
December 31, 2031
|
|
44,663
|
|
|
12,847
|
|
||
TA Lease 3
|
35
|
|
December 31, 2029
|
|
42,404
|
|
|
12,603
|
|
||
TA Lease 4
|
37
|
|
December 31, 2033
|
|
46,206
|
|
|
12,961
|
|
||
Petro Lease
|
35
|
|
June 30, 2035
|
|
61,617
|
|
|
17,872
|
|
||
Total
|
179
|
|
|
|
$
|
243,909
|
|
|
$
|
70,458
|
|
(1)
|
We have
two
renewal options of
15
years each under each of the HPT Leases.
|
(2)
|
Pursuant to a rent deferral agreement with HPT, we previously deferred as of December 31, 2010, a total of
$150,000
of rent payable to HPT, which remained outstanding as of
December 31, 2018
, and had been due in
five
installments between 2024 and 2030. Pursuant to the Transaction Agreements, we agreed to make
16
quarterly installments of
$4,404
each commencing
April 1, 2019
, or
$70,458
in aggregate, to repay and fully satisfy and discharge the
$150,000
in deferred rent we owed HPT. Under the rent deferral agreement, deferred rent shall be accelerated and interest shall begin to accrue thereon at
1%
per month on the deferred rent amounts if certain events occur, including: a default under the HPT Leases; a change of control of us, as defined in the deferral agreement; or our declaration or payment of a dividend or other distribution in respect of our common shares.
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash payments for rent under the HPT Leases
|
$
|
289,793
|
|
|
$
|
280,894
|
|
Change in accrued estimated percentage rent
|
93
|
|
|
356
|
|
||
Adjustments to recognize expense on a straight line basis
|
(327
|
)
|
|
(383
|
)
|
||
Less: sale leaseback financing obligation amortization
|
(974
|
)
|
|
(658
|
)
|
||
Less: portion of rent payments recognized as interest expense
|
(1,675
|
)
|
|
(1,681
|
)
|
||
Less: deferred tenant improvements allowance amortization
|
(3,770
|
)
|
|
(3,770
|
)
|
||
Amortization of deferred gain on sale leaseback transactions
|
(10,128
|
)
|
|
(10,133
|
)
|
||
Rent expense related to the HPT Leases
|
273,012
|
|
|
264,625
|
|
||
Rent paid to others
(1)
|
10,412
|
|
|
10,643
|
|
||
Adjustments to recognize expense on a straight line basis for other leases
|
52
|
|
|
(418
|
)
|
||
Total real estate rent expense
|
$
|
283,476
|
|
|
$
|
274,850
|
|
(1)
|
Includes rent paid directly to HPT's landlords under leases for properties we sublease from HPT, as well as rent related to properties we lease from landlords other than HPT.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Current HPT Leases liabilities:
|
|
|
|
|
|
||
Accrued rent
|
$
|
24,721
|
|
|
$
|
24,170
|
|
Sale leaseback financing obligations
(1)
|
1,032
|
|
|
863
|
|
||
Straight line rent accrual
(2)
|
2,458
|
|
|
2,458
|
|
||
Deferred gain
(3)
|
10,128
|
|
|
10,128
|
|
||
Deferred tenant improvements allowance
(4)
|
3,770
|
|
|
3,770
|
|
||
Total current HPT Leases liabilities
|
$
|
42,109
|
|
|
$
|
41,389
|
|
|
|
|
|
||||
Noncurrent HPT Leases liabilities:
|
|
|
|
|
|
||
Deferred rent obligation
(5)
|
$
|
150,000
|
|
|
$
|
150,000
|
|
Sale leaseback financing obligations
(1)
|
22,365
|
|
|
22,987
|
|
||
Straight line rent accrual
(2)
|
46,431
|
|
|
46,937
|
|
||
Deferred gain
(3)
|
100,913
|
|
|
111,041
|
|
||
Deferred tenant improvements allowance
(4)
|
34,047
|
|
|
37,817
|
|
||
Total noncurrent HPT Leases liabilities
|
$
|
353,756
|
|
|
$
|
368,782
|
|
(1)
|
Sale Leaseback Financing Obligations.
Prior to 2015, the assets related to
nine
travel centers we leased from HPT were reflected in our consolidated balance sheets, as was the related financing obligation. This accounting was required primarily because, at the time of the inception of the prior leases with HPT, more than a minor portion of these
nine
travel centers was subleased to third parties. As part of the 2015 transaction agreement, we purchased
five
of these
nine
travel centers from HPT. That purchase was accounted for as an extinguishment of the related financing obligation and resulted in a loss on extinguishment of debt of
$10,502
because the price we paid to HPT to purchase the
five
properties was
$10,502
in excess of the then remaining related financing obligation. Also, because the TA Leases we entered into with HPT in 2015 were accounted for as new leases and
two
of the remaining
four
properties reflected as financings under the prior TA Leases then qualified for operating lease treatment, the remaining net assets and financing obligations related to these
two
properties were eliminated, resulting in a gain of
$1,033
, which was deferred and will be recognized over the terms of the applicable TA Leases as a reduction to real estate rent expense.
|
(2)
|
Straight Line Rent Accrual.
Straight line rent accrual includes the accrued rent expense from 2007 to 2012 for stated increases in our annual minimum rents due under our then existing TA lease. The TA Leases we entered into with HPT in connection with the 2015 transaction agreement contain no stated rent payment increases. We amortize this accrual on a straight line basis over the current terms of the TA Leases as a reduction to real estate rent expense. The straight line rent accrual also includes our obligation for the estimated cost of removal of underground storage tanks at properties leased from HPT at the end of the related lease; we recognize these obligations on a straight line basis over the term of the related leases as additional real estate rent expense.
|
(3)
|
Deferred Gain.
The deferred gain primarily includes
$145,462
of gains from the sales of travel centers and certain other assets to HPT during 2015 and 2016. We amortize the deferred gains on a straight line basis over the terms of the related leases as a reduction of real estate rent expense.
|
(4)
|
Deferred Tenant Improvements Allowance.
HPT funded certain capital projects at the properties we lease under the HPT Leases without an increase in rent payable by us. In connection with HPT's initial capital commitment, we recognized a liability for rent deemed to be related to this capital commitment as a deferred tenant improvements allowance. We amortize the deferred tenant improvements allowance on a straight line basis over the terms of the HPT Leases as a reduction of real estate rent expense.
|
(5)
|
Deferred Rent Obligation
. In January 2019, this amount was reduced to
$70,458
pursuant to the terms of the Transaction Agreements.
|
10.
|
Shareholders' Equity
|
|
Number
of Shares
|
|
Weighted Average
Grant Date Fair Value Per Share
|
|||
Unvested shares balance as of December 31, 2017
|
2,013
|
|
|
$
|
6.68
|
|
Granted
|
876
|
|
|
4.41
|
|
|
Vested
|
(1,298
|
)
|
|
6.61
|
|
|
Forfeited/canceled
|
(9
|
)
|
|
5.71
|
|
|
Unvested shares balance as of December 31, 2018
|
1,582
|
|
|
5.49
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
(Loss) income from continuing operations
|
$
|
(2,773
|
)
|
|
$
|
19,902
|
|
Less: net income for noncontrolling interests
|
149
|
|
|
132
|
|
||
(Loss) income from continuing operations attributable to common shareholders
|
(2,922
|
)
|
|
19,770
|
|
||
Less: (loss) income from continuing operations attributable to participating securities
|
(125
|
)
|
|
1,028
|
|
||
(Loss) income from continuing operations available to common shareholders
|
$
|
(2,797
|
)
|
|
$
|
18,742
|
|
|
|
|
|
||||
Weighted average common shares
(1)
|
38,244
|
|
|
37,524
|
|
||
|
|
|
|
||||
Basic and diluted (loss) income per common share from continuing operations
attributable to common shareholders
|
$
|
(0.07
|
)
|
|
$
|
0.50
|
|
(1)
|
Excludes unvested shares awarded under our Share Award Plans, which shares are considered participating securities because they participate equally in earnings and losses with all of our other common shares. The weighted average number of unvested shares outstanding was
1,705
and
2,057
for the years ended
December 31, 2018
and
2017
, respectively.
|
11.
|
Income Taxes
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
U.S. federal statutory rate applied to loss before income taxes and
discontinued operations
|
$
|
994
|
|
|
$
|
20,815
|
|
Benefit of tax credits
|
3,977
|
|
|
2,688
|
|
||
Provision to return adjustments
|
560
|
|
|
443
|
|
||
Nondeductible executive compensation
|
(210
|
)
|
|
—
|
|
||
Other nondeductible expenses
|
(430
|
)
|
|
(318
|
)
|
||
State income taxes, net of federal benefit
|
(2,957
|
)
|
|
1,648
|
|
||
Uncertain tax position resolution
|
—
|
|
|
58,602
|
|
||
Tax rate change
|
—
|
|
|
(4,619
|
)
|
||
Other, net
|
(360
|
)
|
|
991
|
|
||
Total tax benefit
|
$
|
1,574
|
|
|
$
|
80,250
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Current tax benefit:
|
|
|
|
|
|
||
Federal
|
$
|
1,737
|
|
|
$
|
32,883
|
|
State
|
240
|
|
|
(5,575
|
)
|
||
Total current tax benefit
|
1,977
|
|
|
27,308
|
|
||
Deferred tax benefit:
|
|
|
|
|
|
||
Federal
|
3,581
|
|
|
44,831
|
|
||
State
|
(3,984
|
)
|
|
8,111
|
|
||
Total deferred tax benefit
|
(403
|
)
|
|
52,942
|
|
||
Total tax benefit
|
$
|
1,574
|
|
|
$
|
80,250
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
Tax loss carryforwards
|
$
|
76,250
|
|
|
$
|
61,961
|
|
Deferred gains
|
33,882
|
|
|
32,949
|
|
||
Tax credit carryforwards
|
31,377
|
|
|
27,414
|
|
||
Reserves
|
16,186
|
|
|
16,844
|
|
||
Straight line rent accrual
|
12,516
|
|
|
13,542
|
|
||
Deferred tenant improvements allowance
|
9,531
|
|
|
11,228
|
|
||
Asset retirement obligations
|
625
|
|
|
2,765
|
|
||
Other
|
488
|
|
|
6,083
|
|
||
Total deferred tax assets before valuation allowance
|
180,855
|
|
|
172,786
|
|
||
Valuation allowance
|
(1,310
|
)
|
|
(1,027
|
)
|
||
Total deferred tax assets
|
179,545
|
|
|
171,759
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
||
Property and equipment
|
(97,306
|
)
|
|
(120,297
|
)
|
||
Goodwill and intangible assets
|
(3,374
|
)
|
|
(5,632
|
)
|
||
Other
|
—
|
|
|
(1,466
|
)
|
||
Total deferred tax liabilities
|
(100,680
|
)
|
|
(127,395
|
)
|
||
|
|
|
|
||||
Net deferred tax assets
|
$
|
78,865
|
|
|
$
|
44,364
|
|
|
Year Ended December 31, 2017
|
||||||
|
Recognized
|
|
Unrecognized
|
||||
Balance at beginning of period
|
$
|
28,301
|
|
|
$
|
31,441
|
|
Changes to current year tax positions
|
—
|
|
|
(1,140
|
)
|
||
Lapse in statute of limitations
|
(28,301
|
)
|
|
(30,301
|
)
|
||
Balance at end of period
|
$
|
—
|
|
|
$
|
—
|
|
12.
|
Equity Investments
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
(1)
|
||||
Total revenues
|
$
|
125,136
|
|
|
$
|
113,679
|
|
Cost of goods sold (excluding depreciation)
|
87,189
|
|
|
72,364
|
|
||
Operating income
|
2,862
|
|
|
10,402
|
|
||
Net income
|
1,482
|
|
|
7,808
|
|
(1)
|
Total revenues and cost of goods sold (excluding depreciation) for the year ended 2017 have been adjusted for the adoption of ASU 2014-09. Motor fuel taxes are no longer included in fuel revenues or fuel cost of goods sold, resulting in a decrease from the originally reported amounts in each of fuel revenues and fuel cost of goods sold of
$13,956
for the year ended December 31, 2017.
|
13.
|
Business Management Agreement with RMR
|
14.
|
Related Party Transactions
|
15.
|
Contingencies
|
16.
|
Inventory
|
|
|
|
|
TRAVELCENTERS OF AMERICA LLC
|
|||
|
|
|
|
|
|
|
|
|
Date:
|
February 26, 2019
|
|
By:
|
|
/s/ William E. Myers
|
|
|
|
|
|
|
|
Name:
|
William E. Myers
|
|
|
|
|
|
|
Title:
|
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer and Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Andrew J. Rebholz
|
|
Managing Director and Chief Executive Officer
(Principal Executive Officer)
|
|
February 26, 2019
|
Andrew J. Rebholz
|
|
|
||
|
|
|
|
|
/s/ William E. Myers
|
|
Executive Vice President, Chief Financial Officer
and Treasurer (Principal Financial Officer and
Principal Accounting Officer)
|
|
February 26, 2019
|
William E. Myers
|
|
|
||
|
|
|
|
|
/s/ Adam D. Portnoy
|
|
Managing Director
|
|
February 26, 2019
|
Adam D. Portnoy
|
|
|
||
|
|
|
|
|
/s/ Barbara D. Gilmore
|
|
Independent Director
|
|
February 26, 2019
|
Barbara D. Gilmore
|
|
|
||
|
|
|
|
|
/s/ Lisa Harris Jones
|
|
Independent Director
|
|
February 26, 2019
|
Lisa Harris Jones
|
|
|
||
|
|
|
|
|
/s/ Joseph L. Morea
|
|
Independent Director
|
|
February 26, 2019
|
Joseph L. Morea
|
|
|
Name of Subsidiary
|
|
Jurisdiction of Organization
|
TravelCenters of America Holding Company LLC
|
|
Delaware
|
TA Operating LLC
|
|
Delaware
|
TA Franchise Systems LLC
|
|
Delaware
|
Petro Franchise Systems LLC
|
|
Delaware
|
TA Operating Nevada LLC
|
|
Nevada
|
TA Operating Montana LLC
|
|
Delaware
|
TravelCentres Canada Corporation
|
|
Ontario, Canada
|
TravelCentres Canada, Inc.
|
|
Ontario, Canada
|
TravelCentres Canada Limited Partnership
|
|
Ontario, Canada
|
QSL Operating LLC
|
|
Maryland
|
QSL Franchise Systems LLC
|
|
Maryland
|
QSL RE LLC
|
|
Maryland
|
TA HQ LLC
|
|
Maryland
|
TA Ventures LLC
|
|
Maryland
|
QSL of Austintown Realty LLC
|
|
Ohio
|
QSL of Austintown Ohio LLC
|
|
Ohio
|
•
|
Registration Statement (Form S-3 No. 333-223310) and related Prospectus of TravelCenters of America LLC,
|
•
|
Registration Statement (Form S-8 No. 333-154735) pertaining to the TravelCenters of America LLC 2007 Equity Compensation Plan,
|
•
|
Registration Statement (Form S-8 No. 333-160933) pertaining to the Amended and Restated TravelCenters of America LLC 2007 Equity Compensation Plan,
|
•
|
Registration Statement (Form S-8 No. 333-211458) pertaining to the TravelCenters of America LLC 2016 Equity Compensation Plan, and
|
•
|
Registration Statement (Form S-8 No. 333-225149) pertaining to the Amended and Restated TravelCenters of America LLC 2016 Equity Compensation Plan.
|
/s/ RSM US LLP
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of TravelCenters of America LLC;
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 principles;
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) 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(s) 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 registrant's board of directors (or persons performing the equivalent functions):
|
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: February 26, 2019
|
/s/ Andrew J. Rebholz
|
|
Andrew J. Rebholz
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of TravelCenters of America LLC;
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 principles;
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) 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(s) 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 registrant's board of directors (or persons performing the equivalent functions):
|
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: February 26, 2019
|
/s/ William E. Myers
|
|
William E. Myers
|
|
Executive Vice President, Chief Financial
Officer and Treasurer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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: February 26, 2019
|
/s/ Andrew J. Rebholz
|
|
Andrew J. Rebholz
Chief Executive Officer
|
|
|
|
/s/ William E. Myers
|
|
William E. Myers
Executive Vice President, Chief Financial Officer and Treasurer
|