Securities registered pursuant to Section 12(b) of the Act:
|
||||
|
|
|
|
|
Title of each class
|
|
Trading Symbols
|
|
Name of each exchange on which registered
|
Common Shares
|
|
TA
|
|
The Nasdaq Stock Market LLC
|
8.25% Senior Notes due 2028
|
|
TANNI
|
|
The Nasdaq Stock Market LLC
|
8.00% Senior Notes due 2029
|
|
TANNL
|
|
The Nasdaq Stock Market LLC
|
8.00% Senior Notes due 2030
|
|
TANNZ
|
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
x
|
|
|
|
Emerging growth company
o
|
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Assets:
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
25,785
|
|
|
$
|
314,387
|
|
Accounts receivable (net of allowance for doubtful accounts of $756 and $959 as of
June 30, 2019 and December 31, 2018, respectively)
|
147,620
|
|
|
97,449
|
|
||
Inventory
|
199,715
|
|
|
196,721
|
|
||
Other current assets
|
27,437
|
|
|
35,119
|
|
||
Total current assets
|
400,557
|
|
|
643,676
|
|
||
|
|
|
|
||||
Property and equipment, net
|
880,142
|
|
|
628,537
|
|
||
Operating lease assets
|
1,817,701
|
|
|
—
|
|
||
Goodwill
|
25,259
|
|
|
25,259
|
|
||
Intangible assets, net
|
21,683
|
|
|
22,887
|
|
||
Other noncurrent assets
|
99,988
|
|
|
121,749
|
|
||
Total assets
|
$
|
3,245,330
|
|
|
$
|
1,442,108
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity:
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
194,895
|
|
|
$
|
120,914
|
|
Current operating lease liabilities
|
97,298
|
|
|
—
|
|
||
Current HPT Leases liabilities
|
—
|
|
|
42,109
|
|
||
Other current liabilities
|
153,717
|
|
|
125,668
|
|
||
Total current liabilities
|
445,910
|
|
|
288,691
|
|
||
|
|
|
|
||||
Long term debt, net
|
320,971
|
|
|
320,528
|
|
||
Noncurrent operating lease liabilities
|
1,898,832
|
|
|
—
|
|
||
Noncurrent HPT Leases liabilities
|
—
|
|
|
353,756
|
|
||
Other noncurrent liabilities
|
52,853
|
|
|
28,741
|
|
||
Total liabilities
|
2,718,566
|
|
|
991,716
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
|
|
||
Common shares, no par value, 8,674 shares authorized as of June 30, 2019 and
December 31, 2018, and 8,087 and 8,080 shares issued and outstanding as of June
30, 2019 and December 31, 2018, respectively
|
696,886
|
|
|
695,315
|
|
||
Accumulated other comprehensive income
|
538
|
|
|
355
|
|
||
Accumulated deficit
|
(172,099
|
)
|
|
(246,773
|
)
|
||
Total TA shareholders' equity
|
525,325
|
|
|
448,897
|
|
||
Noncontrolling interest
|
1,439
|
|
|
1,495
|
|
||
Total shareholders' equity
|
526,764
|
|
|
450,392
|
|
||
Total liabilities and shareholders' equity
|
$
|
3,245,330
|
|
|
$
|
1,442,108
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Fuel
|
$
|
1,117,671
|
|
|
$
|
1,149,486
|
|
|
$
|
2,100,812
|
|
|
$
|
2,135,831
|
|
Nonfuel
|
476,082
|
|
|
471,442
|
|
|
916,956
|
|
|
895,317
|
|
||||
Rent and royalties from franchisees
|
3,611
|
|
|
4,049
|
|
|
6,888
|
|
|
8,159
|
|
||||
Total revenues
|
1,597,364
|
|
|
1,624,977
|
|
|
3,024,656
|
|
|
3,039,307
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold (excluding depreciation):
|
|
|
|
|
|
|
|
|
|
||||||
Fuel
|
1,040,849
|
|
|
1,075,108
|
|
|
1,949,243
|
|
|
1,978,556
|
|
||||
Nonfuel
|
187,498
|
|
|
184,244
|
|
|
355,766
|
|
|
345,655
|
|
||||
Total cost of goods sold
|
1,228,347
|
|
|
1,259,352
|
|
|
2,305,009
|
|
|
2,324,211
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Site level operating expense
|
234,645
|
|
|
228,861
|
|
|
467,365
|
|
|
451,873
|
|
||||
Selling, general and administrative expense
|
39,562
|
|
|
27,480
|
|
|
76,672
|
|
|
63,974
|
|
||||
Real estate rent expense
|
63,770
|
|
|
70,684
|
|
|
130,183
|
|
|
140,920
|
|
||||
Depreciation and amortization expense
|
23,213
|
|
|
21,123
|
|
|
47,972
|
|
|
41,669
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
7,827
|
|
|
17,477
|
|
|
(2,545
|
)
|
|
16,660
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
7,164
|
|
|
6,865
|
|
|
14,214
|
|
|
14,445
|
|
||||
Other (income) expense, net
|
(144
|
)
|
|
903
|
|
|
430
|
|
|
2,196
|
|
||||
Income (loss) before income taxes and
discontinued operations
|
807
|
|
|
9,709
|
|
|
(17,189
|
)
|
|
19
|
|
||||
Benefit (provision) for income taxes
|
402
|
|
|
(1,071
|
)
|
|
5,669
|
|
|
2,592
|
|
||||
Income (loss) from continuing operations
|
1,209
|
|
|
8,638
|
|
|
(11,520
|
)
|
|
2,611
|
|
||||
Loss from discontinued operations,
net of taxes
|
—
|
|
|
(42,562
|
)
|
|
—
|
|
|
(46,613
|
)
|
||||
Net income (loss)
|
1,209
|
|
|
(33,924
|
)
|
|
(11,520
|
)
|
|
(44,002
|
)
|
||||
Less: net income for noncontrolling interest
|
31
|
|
|
54
|
|
|
49
|
|
|
88
|
|
||||
Net income (loss) attributable to
common shareholders
|
$
|
1,178
|
|
|
$
|
(33,978
|
)
|
|
$
|
(11,569
|
)
|
|
$
|
(44,090
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss),
net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency gain (loss), net of taxes of
$26, $(28), $51 and $(64), respectively
|
$
|
15
|
|
|
$
|
(41
|
)
|
|
$
|
46
|
|
|
$
|
(103
|
)
|
Equity interest in investee's unrealized gains
(losses) on investments
|
71
|
|
|
10
|
|
|
137
|
|
|
(83
|
)
|
||||
Other comprehensive income (loss)
attributable to common shareholders
|
86
|
|
|
(31
|
)
|
|
183
|
|
|
(186
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss) attributable to
common shareholders
|
$
|
1,264
|
|
|
$
|
(34,009
|
)
|
|
$
|
(11,386
|
)
|
|
$
|
(44,276
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share
attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted from continuing operations
|
$
|
0.15
|
|
|
$
|
1.07
|
|
|
$
|
(1.43
|
)
|
|
$
|
0.32
|
|
Basic and diluted from discontinued
operations
|
—
|
|
|
(5.32
|
)
|
|
—
|
|
|
(5.83
|
)
|
||||
Basic and diluted
|
0.15
|
|
|
(4.25
|
)
|
|
(1.43
|
)
|
|
(5.51
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(11,520
|
)
|
|
$
|
(44,002
|
)
|
Less: loss from discontinued operations, net of taxes
|
—
|
|
|
(46,613
|
)
|
||
(Loss) income from continuing operations
|
(11,520
|
)
|
|
2,611
|
|
||
Adjustments to reconcile (loss) income from continuing operations to net cash
provided by operating activities of continuing operations:
|
|
|
|
|
|
||
Noncash rent adjustments
|
(8,487
|
)
|
|
(7,232
|
)
|
||
Depreciation and amortization expense
|
47,972
|
|
|
41,669
|
|
||
Deferred income tax benefit
|
(5,134
|
)
|
|
(2,977
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(49,968
|
)
|
|
(37,266
|
)
|
||
Inventory
|
(2,975
|
)
|
|
(5,029
|
)
|
||
Other assets
|
7,468
|
|
|
767
|
|
||
Accounts payable and other liabilities
|
80,282
|
|
|
73,117
|
|
||
Other, net
|
1,275
|
|
|
10,656
|
|
||
Net cash provided by operating activities of continuing operations
|
58,913
|
|
|
76,316
|
|
||
Net cash provided by operating activities of discontinued operations
|
—
|
|
|
5,717
|
|
||
Net cash provided by operating activities
|
58,913
|
|
|
82,033
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisitions of travel centers from HPT
|
(309,637
|
)
|
|
—
|
|
||
Capital expenditures
|
(37,189
|
)
|
|
(62,423
|
)
|
||
Proceeds from asset sales to HPT
|
—
|
|
|
28,345
|
|
||
Proceeds from asset sales
|
890
|
|
|
—
|
|
||
Other
|
(1,500
|
)
|
|
141
|
|
||
Net cash used in investing activities of continuing operations
|
(347,436
|
)
|
|
(33,937
|
)
|
||
Net cash used in investing activities of discontinued operations
|
—
|
|
|
(5,725
|
)
|
||
Net cash used in investing activities
|
(347,436
|
)
|
|
(39,662
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from sale leaseback transactions with HPT
|
—
|
|
|
491
|
|
||
Distributions to noncontrolling interest
|
(105
|
)
|
|
(101
|
)
|
||
Sale leaseback financing obligation payments
|
—
|
|
|
(479
|
)
|
||
Other
|
(55
|
)
|
|
(52
|
)
|
||
Net cash used in financing activities
|
(160
|
)
|
|
(141
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
81
|
|
|
(123
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(288,602
|
)
|
|
42,107
|
|
||
Cash and cash equivalents at the beginning of the period
|
314,387
|
|
|
36,082
|
|
||
Cash and cash equivalents at the end of the period
|
25,785
|
|
|
78,189
|
|
||
Less: cash of discontinued operations at the end of the period
|
—
|
|
|
548
|
|
||
Cash and cash equivalents of continuing operations at the end of the period
|
$
|
25,785
|
|
|
$
|
77,641
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Interest paid (including rent classified as interest and net of capitalized interest)
|
$
|
13,783
|
|
|
$
|
14,617
|
|
Income taxes paid, net of refunds
|
106
|
|
|
91
|
|
|
Number
of
Common
Shares
|
|
Common
Shares
|
|
Accumulated
Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Treasury
Shares
|
|
Total TA
Shareholders'
Equity
|
|
Noncontrolling
Interest
|
|
Total
Shareholders'
Equity
|
|||||||||||||||
March 31, 2019
|
8,080
|
|
|
$
|
696,017
|
|
|
$
|
452
|
|
|
$
|
(173,277
|
)
|
|
$
|
—
|
|
|
$
|
523,192
|
|
|
$
|
1,484
|
|
|
$
|
524,676
|
|
Grants under share
award plan and
share based
compensation, net
|
7
|
|
|
869
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
867
|
|
|
—
|
|
|
867
|
|
|||||||
Retirement of
treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||||
Distributions to
noncontrolling
interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
(76
|
)
|
|||||||
Other comprehensive
income, net of
taxes
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,178
|
|
|
—
|
|
|
1,178
|
|
|
31
|
|
|
1,209
|
|
|||||||
June 30, 2019
|
8,087
|
|
|
$
|
696,886
|
|
|
$
|
538
|
|
|
$
|
(172,099
|
)
|
|
$
|
—
|
|
|
$
|
525,325
|
|
|
$
|
1,439
|
|
|
$
|
526,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
March 31, 2018
|
8,000
|
|
|
$
|
692,706
|
|
|
$
|
425
|
|
|
$
|
(136,332
|
)
|
|
$
|
—
|
|
|
$
|
556,799
|
|
|
$
|
1,481
|
|
|
$
|
558,280
|
|
Grants under share
award plan and
share based
compensation, net
|
(46
|
)
|
|
2,143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,143
|
|
|
—
|
|
|
2,143
|
|
|||||||
Distributions to
noncontrolling
interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
(101
|
)
|
|||||||
Other comprehensive
loss, net of taxes
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,978
|
)
|
|
—
|
|
|
(33,978
|
)
|
|
54
|
|
|
(33,924
|
)
|
|||||||
June 30, 2018
|
7,954
|
|
|
$
|
694,849
|
|
|
$
|
394
|
|
|
$
|
(170,310
|
)
|
|
$
|
—
|
|
|
$
|
524,933
|
|
|
$
|
1,434
|
|
|
$
|
526,367
|
|
|
Number of
Common Shares |
|
Common
Shares |
|
Accumulated
Other Comprehensive Income |
|
Accumulated
Deficit |
|
Treasury
Shares |
|
Total TA
Shareholders' Equity |
|
Noncontrolling
Interest |
|
Total
Shareholders' Equity |
|||||||||||||||
December 31, 2018
|
8,080
|
|
|
$
|
695,315
|
|
|
$
|
355
|
|
|
$
|
(246,773
|
)
|
|
$
|
—
|
|
|
$
|
448,897
|
|
|
$
|
1,495
|
|
|
$
|
450,392
|
|
Grants under share
award plan and
share based
compensation, net
|
7
|
|
|
1,571
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
1,569
|
|
|
—
|
|
|
1,569
|
|
|||||||
Retirement of
treasury shares |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||||
Distributions to
noncontrolling
interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|
(105
|
)
|
|||||||
Other comprehensive
income, net of
taxes
|
—
|
|
|
—
|
|
|
183
|
|
|
—
|
|
|
—
|
|
|
183
|
|
|
—
|
|
|
183
|
|
|||||||
Cumulative effect
of adoption of
ASC 842, net of
taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
86,243
|
|
|
—
|
|
|
86,243
|
|
|
—
|
|
|
86,243
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,569
|
)
|
|
—
|
|
|
(11,569
|
)
|
|
49
|
|
|
(11,520
|
)
|
|||||||
June 30, 2019
|
8,087
|
|
|
$
|
696,886
|
|
|
$
|
538
|
|
|
$
|
(172,099
|
)
|
|
$
|
—
|
|
|
$
|
525,325
|
|
|
$
|
1,439
|
|
|
$
|
526,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
December 31, 2017
|
7,997
|
|
|
$
|
690,688
|
|
|
$
|
580
|
|
|
$
|
(126,220
|
)
|
|
$
|
—
|
|
|
$
|
565,048
|
|
|
$
|
1,447
|
|
|
$
|
566,495
|
|
Grants under share
award plan and
share based
compensation, net
|
(43
|
)
|
|
4,161
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,161
|
|
|
—
|
|
|
4,161
|
|
|||||||
Distributions to
noncontrolling
interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
(101
|
)
|
|||||||
Other comprehensive
loss, net of taxes
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
—
|
|
|
(186
|
)
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,090
|
)
|
|
—
|
|
|
(44,090
|
)
|
|
88
|
|
|
(44,002
|
)
|
|||||||
June 30, 2018
|
7,954
|
|
|
$
|
694,849
|
|
|
$
|
394
|
|
|
$
|
(170,310
|
)
|
|
$
|
—
|
|
|
$
|
524,933
|
|
|
$
|
1,434
|
|
|
$
|
526,367
|
|
1.
|
Business Description and Basis of Presentation
|
2.
|
Revenues
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Nonfuel revenues:
|
|
|
|
|
|
|
|
||||||||
Store and retail services
|
$
|
193,895
|
|
|
$
|
187,935
|
|
|
$
|
374,320
|
|
|
$
|
358,325
|
|
Truck service
|
173,431
|
|
|
176,115
|
|
|
334,626
|
|
|
332,635
|
|
||||
Restaurant
|
108,756
|
|
|
107,392
|
|
|
208,010
|
|
|
204,357
|
|
||||
Total nonfuel revenues
|
$
|
476,082
|
|
|
$
|
471,442
|
|
|
$
|
916,956
|
|
|
$
|
895,317
|
|
|
Customer
Loyalty
Programs
|
|
Other
|
|
Total
|
||||||
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
|
|
|||
Revenues 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
|
|
|||
Increases due to unsatisfied performance obligations
arising during the period
|
48,904
|
|
|
6,479
|
|
|
55,383
|
|
|||
Revenues recognized from satisfying performance
obligations during the period
|
(42,840
|
)
|
|
(5,311
|
)
|
|
(48,151
|
)
|
|||
Other
|
(4,718
|
)
|
|
(621
|
)
|
|
(5,339
|
)
|
|||
June 30, 2019
|
$
|
16,836
|
|
|
$
|
4,017
|
|
|
$
|
20,853
|
|
3.
|
Acquisitions
|
4.
|
Discontinued Operations
|
|
Three Months
Ended June 30, 2018 |
|
Six Months
Ended June 30, 2018 |
||||
Revenues
|
$
|
216,101
|
|
|
$
|
386,844
|
|
Cost of goods sold (excluding depreciation)
|
177,611
|
|
|
317,315
|
|
||
Site level operating expense
|
27,423
|
|
|
53,971
|
|
||
Selling, general and administrative expense
|
2,872
|
|
|
4,799
|
|
||
Real estate rent expense
|
573
|
|
|
1,149
|
|
||
Depreciation and amortization expense
|
8,795
|
|
|
15,797
|
|
||
Impairment of goodwill
|
51,500
|
|
|
51,500
|
|
||
Loss from discontinued operations before income taxes
|
(52,673
|
)
|
|
(57,687
|
)
|
||
Benefit for income taxes
|
10,111
|
|
|
11,074
|
|
||
Loss from discontinued operations, net of taxes
|
$
|
(42,562
|
)
|
|
$
|
(46,613
|
)
|
5.
|
Earnings Per Share from Continuing Operations
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income (loss) from continuing operations
|
$
|
1,209
|
|
|
$
|
8,638
|
|
|
$
|
(11,520
|
)
|
|
$
|
2,611
|
|
Less: net income for noncontrolling interest
|
31
|
|
|
54
|
|
|
49
|
|
|
88
|
|
||||
Income (loss) from continuing operations
attributable to common shareholders
|
1,178
|
|
|
8,584
|
|
|
(11,569
|
)
|
|
2,523
|
|
||||
Less: income (loss) from continuing
operations attributable to
participating securities
|
46
|
|
|
427
|
|
|
(450
|
)
|
|
126
|
|
||||
Income (loss) from continuing operations
available to common shareholders
|
$
|
1,132
|
|
|
$
|
8,157
|
|
|
$
|
(11,119
|
)
|
|
$
|
2,397
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares
(1)
|
7,770
|
|
|
7,605
|
|
|
7,767
|
|
|
7,601
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic and diluted income (loss) per common
share from continuing operations attributable
to common shareholders
|
$
|
0.15
|
|
|
$
|
1.07
|
|
|
$
|
(1.43
|
)
|
|
$
|
0.32
|
|
(1)
|
Reflects the retrospective adjustment related to the reverse stock split completed on August 1, 2019, and 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 for the
three months ended
June 30, 2019
and
2018
, was
313
and
398
, respectively. The weighted average number of unvested shares outstanding for the
six months ended
June 30, 2019
and
2018
, was
314
and
400
, respectively.
|
6.
|
Leasing Transactions
|
|
Classification in our Consolidated
Statements of Operations
and Comprehensive Income (Loss)
|
|
Three Months
Ended
June 30, 2019 |
|
Six Months
Ended
June 30, 2019 |
||||
Operating lease costs: HPT Leases
|
Real estate rent expense
|
|
$
|
59,424
|
|
|
$
|
121,544
|
|
Operating lease costs: other
|
Real estate rent expense
|
|
2,752
|
|
|
5,476
|
|
||
Variable lease costs: HPT Leases
|
Real estate rent expense
|
|
1,465
|
|
|
2,886
|
|
||
Variable lease costs: other
|
Real estate rent expense
|
|
129
|
|
|
277
|
|
||
Total real estate rent expense
|
|
|
63,770
|
|
|
130,183
|
|
||
Operating lease costs: equipment
and other
|
Site level operating expense and selling, general
and administrative expense
|
|
647
|
|
|
1,217
|
|
||
Short-term lease costs
|
Site level operating expense and selling, general
and administrative expense
|
|
732
|
|
|
1,545
|
|
||
Sublease income
|
Nonfuel revenues
|
|
(591
|
)
|
|
(1,155
|
)
|
||
Net lease costs
|
|
|
$
|
64,558
|
|
|
$
|
131,790
|
|
|
HPT Leases
(1)
|
|
Other
|
|
Total
|
||||||
Years ended December 31:
|
|
|
|
|
|
||||||
2019
|
$
|
135,712
|
|
|
$
|
3,493
|
|
|
$
|
139,205
|
|
2020
|
271,331
|
|
|
6,073
|
|
|
277,404
|
|
|||
2021
|
270,794
|
|
|
4,952
|
|
|
275,746
|
|
|||
2022
|
268,931
|
|
|
3,922
|
|
|
272,853
|
|
|||
2023
|
255,338
|
|
|
2,697
|
|
|
258,035
|
|
|||
Thereafter
|
2,289,605
|
|
|
7,890
|
|
|
2,297,495
|
|
|||
Total operating lease payments
|
3,491,711
|
|
|
29,027
|
|
|
3,520,738
|
|
|||
Less: present value discount
(2)
|
(1,519,135
|
)
|
|
(5,473
|
)
|
|
(1,524,608
|
)
|
|||
Present value of operating lease liabilities
|
$
|
1,972,576
|
|
|
$
|
23,554
|
|
|
$
|
1,996,130
|
|
(1)
|
Includes rent for properties we sublease from HPT and pay directly to HPT's landlords.
|
(2)
|
The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the leases, if available, or our incremental borrowing rate.
|
|
HPT Leases
|
|
Other
|
|
Total
|
||||||
Operating lease assets
|
$
|
1,795,375
|
|
|
$
|
22,326
|
|
|
$
|
1,817,701
|
|
Current operating lease liabilities
|
91,638
|
|
|
5,660
|
|
|
97,298
|
|
|||
Noncurrent operating lease liabilities
|
1,880,938
|
|
|
17,894
|
|
|
1,898,832
|
|
•
|
In January 2019, we purchased from HPT
20
travel center properties, which we previously leased from HPT, for a total purchase price of
$309,637
, including
$1,437
of transaction related costs.
|
•
|
As a result of our purchases of the
20
travel center properties, 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 paid to HPT the first of
16
quarterly installments of approximately
$4,404
each (an aggregate of
$70,458
) 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
.
|
•
|
Certain of the
179
travel center properties that we continue to lease from HPT were reallocated among the HPT Leases.
|
|
December 31,
2018 |
||
Current HPT Leases liabilities:
|
|
|
|
Accrued rent
|
$
|
24,721
|
|
Sale leaseback financing obligations
(1)
|
1,032
|
|
|
Straight line rent accrual
(2)
|
2,458
|
|
|
Deferred gain
(3)
|
10,128
|
|
|
Deferred tenant improvements allowance
(4)
|
3,770
|
|
|
Total current HPT Leases liabilities
|
$
|
42,109
|
|
|
|
||
Noncurrent HPT Leases liabilities:
|
|
|
|
Deferred rent obligation
(5)
|
$
|
150,000
|
|
Sale leaseback financing obligations
(1)
|
22,365
|
|
|
Straight line rent accrual
(2)
|
46,431
|
|
|
Deferred gain
(3)
|
100,913
|
|
|
Deferred tenant improvements allowance
(4)
|
34,047
|
|
|
Total noncurrent HPT Leases liabilities
|
$
|
353,756
|
|
(1)
|
Sale Leaseback Financing Obligations.
As of December 31, 2018, the assets related to
two
travel centers we leased from HPT were reflected in our consolidated balance sheet, as were the related financing obligations. 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
two
travel centers was subleased to third parties. Upon adoption of ASC 842 on January 1, 2019, these failed sale leasebacks were reclassified as operating leases, which resulted in a gain that was recognized in our beginning accumulated deficit. See above for more information about the impact of adopting ASC 842.
|
(2)
|
Straight Line Rent Accrual.
As of December 31, 2018, the straight line rent accrual included the accrued rent expense from 2007 to 2012 for stated increases in our annual minimum rent due under our then existing TA Lease. The TA Leases we entered into in connection with a transaction agreement we entered into with HPT in 2015 contain no stated rent payment increases. Prior to the adoption of ASC 842, we amortized this accrual on a straight line basis over the current terms of the TA Leases as a reduction of real estate rent expense. The straight line rent accrual also included our obligation for the estimated cost of removing underground storage tanks at properties leased from HPT at the end of the related lease; we recognized these obligations on a straight line basis over the term of the related leases as additional real estate rent expense. As of January 1, 2019, the straight line rent accrual was reclassified as a reduction to our operating lease assets and the obligation for the estimated cost of removal of underground storage tanks was reclassified to other noncurrent liabilities.
|
(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. Prior to the adoption of ASC 842, we amortized the deferred gains on a straight line basis over the terms of the related leases as a reduction of real estate rent expense. Upon adoption of ASC 842 on January 1, 2019, we recognized the unamortized deferred gain of
$85,053
, net of taxes, in our beginning accumulated deficit. See above for more information about the impact of adopting ASC 842.
|
(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. Prior to the adoption of ASC 842, we amortized 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. Upon the adoption of ASC 842 on January 1, 2019, the unamortized balance of the deferred tenant improvements allowance was reclassified as a reduction to our operating lease assets.
|
(5)
|
Deferred Rent Obligation
. 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. Upon the adoption of ASC 842 on January 1, 2019, these future lease payments were included in our calculation of our operating lease assets and liabilities and the deferred rent obligation was reclassified as a reduction to our operating lease assets. In January 2019, as described above and pursuant to the terms of the Transaction Agreements, our deferred rent obligation was reduced to
$70,458
, payable in
16
equal quarterly installments commencing on April 1, 2019, and our operating lease assets and liabilities were remeasured using these revised payment amounts.
|
7.
|
Revolving Credit Facility
|
8.
|
Business Management Agreement with RMR
|
9.
|
Related Party Transactions
|
10.
|
Contingencies
|
11.
|
Inventory
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Nonfuel products
|
$
|
166,719
|
|
|
$
|
163,302
|
|
Fuel products
|
32,996
|
|
|
33,419
|
|
||
Total inventory
|
$
|
199,715
|
|
|
$
|
196,721
|
|
•
|
selling, general and administrative expense
increase
d
$12,082
, which was primarily due to
$10,082
of reimbursed litigation costs collected from Comdata Inc., or Comdata, during April 2018;
|
•
|
site level gross margin in excess of site level operating expense declined
$2,392
, which primarily resulted from higher maintenance costs and the hiring and training of additional truck service personnel to support the planned increase in sales in that department; and
|
•
|
depreciation and amortization expense
increase
d
$2,090
, primarily as a result of the
20
travel centers acquired from Hospitality Properties Trust, or HPT, in January 2019.
|
•
|
selling, general and administrative expense
increase
d
$12,698
, which was primarily due to
$10,082
of reimbursed litigation costs collected from Comdata during April 2018;
|
•
|
site level gross margin in excess of site level operating expense declined
$10,941
, which primarily resulted from the
$23,251
benefit from the federal biodiesel blenders' tax credit that was retroactively reinstated for 2017 and recognized in February 2018 that has not yet been reinstated for 2018; and
|
•
|
depreciation and amortization expense
increase
d
$6,303
, primarily as a result of the
20
travel centers acquired from HPT in January 2019.
|
|
Three Months Ended
June 30, |
|
|
|
Six Months Ended
June 30, |
|
|
||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fuel
|
$
|
1,117,671
|
|
|
$
|
1,149,486
|
|
|
(2.8
|
)%
|
|
$
|
2,100,812
|
|
|
$
|
2,135,831
|
|
|
(1.6
|
)%
|
Nonfuel
|
476,082
|
|
|
471,442
|
|
|
1.0
|
%
|
|
916,956
|
|
|
895,317
|
|
|
2.4
|
%
|
||||
Rent and royalties from franchisees
|
3,611
|
|
|
4,049
|
|
|
(10.8
|
)%
|
|
6,888
|
|
|
8,159
|
|
|
(15.6
|
)%
|
||||
Total revenues
|
1,597,364
|
|
|
1,624,977
|
|
|
(1.7
|
)%
|
|
3,024,656
|
|
|
3,039,307
|
|
|
(0.5
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fuel
(1)
|
76,822
|
|
|
74,378
|
|
|
3.3
|
%
|
|
151,569
|
|
|
157,275
|
|
|
(3.6
|
)%
|
||||
Nonfuel
|
288,584
|
|
|
287,198
|
|
|
0.5
|
%
|
|
561,190
|
|
|
549,662
|
|
|
2.1
|
%
|
||||
Rent and royalties from franchisees
|
3,611
|
|
|
4,049
|
|
|
(10.8
|
)%
|
|
6,888
|
|
|
8,159
|
|
|
(15.6
|
)%
|
||||
Total gross margin
(1)
|
369,017
|
|
|
365,625
|
|
|
0.9
|
%
|
|
719,647
|
|
|
715,096
|
|
|
0.6
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Site level operating expense
|
234,645
|
|
|
228,861
|
|
|
2.5
|
%
|
|
467,365
|
|
|
451,873
|
|
|
3.4
|
%
|
||||
Selling, general and administrative expense
|
39,562
|
|
|
27,480
|
|
|
44.0
|
%
|
|
76,672
|
|
|
63,974
|
|
|
19.8
|
%
|
||||
Real estate rent expense
|
63,770
|
|
|
70,684
|
|
|
(9.8
|
)%
|
|
130,183
|
|
|
140,920
|
|
|
(7.6
|
)%
|
||||
Depreciation and amortization expense
|
23,213
|
|
|
21,123
|
|
|
9.9
|
%
|
|
47,972
|
|
|
41,669
|
|
|
15.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from operations
|
7,827
|
|
|
17,477
|
|
|
(55.2
|
)%
|
|
(2,545
|
)
|
|
16,660
|
|
|
(115.3
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
7,164
|
|
|
6,865
|
|
|
4.4
|
%
|
|
14,214
|
|
|
14,445
|
|
|
(1.6
|
)%
|
||||
Other (income) expense, net
|
(144
|
)
|
|
903
|
|
|
(115.9
|
)%
|
|
430
|
|
|
2,196
|
|
|
(80.4
|
)%
|
||||
Income (loss) before income taxes
and discontinued operations
|
807
|
|
|
9,709
|
|
|
(91.7
|
)%
|
|
(17,189
|
)
|
|
19
|
|
|
NM
|
|
||||
Benefit (provision) for income taxes
|
402
|
|
|
(1,071
|
)
|
|
137.5
|
%
|
|
5,669
|
|
|
2,592
|
|
|
118.7
|
%
|
||||
Income (loss) from continuing operations
|
1,209
|
|
|
8,638
|
|
|
(86.0
|
)%
|
|
(11,520
|
)
|
|
2,611
|
|
|
(541.2
|
)%
|
||||
Loss from discontinued operations,
net of taxes
|
—
|
|
|
(42,562
|
)
|
|
NM
|
|
|
—
|
|
|
(46,613
|
)
|
|
NM
|
|
||||
Net income (loss)
|
1,209
|
|
|
(33,924
|
)
|
|
103.6
|
%
|
|
(11,520
|
)
|
|
(44,002
|
)
|
|
73.8
|
%
|
||||
Less: net income for
noncontrolling interests
|
31
|
|
|
54
|
|
|
(42.6
|
)%
|
|
49
|
|
|
88
|
|
|
(44.3
|
)%
|
||||
Net income (loss) attributable to
common shareholders
|
$
|
1,178
|
|
|
$
|
(33,978
|
)
|
|
103.5
|
%
|
|
$
|
(11,569
|
)
|
|
$
|
(44,090
|
)
|
|
73.8
|
%
|
(1)
|
The amount for the
six months ended
June 30, 2019
, includes
$2,840
of a one time benefit due to the reversal of loyalty award accruals recognized in connection with introducing a revised customer loyalty program, and the amount for the
six months ended
June 30, 2018
, includes the
$23,251
benefit from the federal biodiesel blenders' tax credit that the U.S. government retroactively reinstated for 2017 in February 2018. The U.S. government has not yet reinstated the federal biodiesel blenders' tax credit for 2018 or 2019.
|
|
Three Months Ended
June 30, |
|
|
|
Six Months Ended
June 30, |
|
|
||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||
Number of same site company
operated locations
|
241
|
|
|
241
|
|
|
—
|
|
|
241
|
|
|
241
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diesel sales volume (gallons)
|
417,930
|
|
|
402,612
|
|
|
3.8
|
%
|
|
818,178
|
|
|
790,506
|
|
|
3.5
|
%
|
||||
Gasoline sales volume (gallons)
|
71,221
|
|
|
74,653
|
|
|
(4.6)
|
%
|
|
131,059
|
|
|
137,840
|
|
|
(4.9)
|
%
|
||||
Total fuel sales volume (gallons)
|
489,151
|
|
|
477,265
|
|
|
2.5
|
%
|
|
949,237
|
|
|
928,346
|
|
|
2.3
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fuel revenues
|
$
|
1,082,594
|
|
|
$
|
1,127,213
|
|
|
(4.0)
|
%
|
|
$
|
2,035,211
|
|
|
$
|
2,097,030
|
|
|
(2.9)
|
%
|
Fuel gross margin
(1)
|
76,289
|
|
|
73,598
|
|
|
3.7
|
%
|
|
150,442
|
|
|
155,754
|
|
|
(3.4)
|
%
|
||||
Fuel gross margin per gallon
|
$
|
0.156
|
|
|
$
|
0.154
|
|
|
1.3
|
%
|
|
$
|
0.158
|
|
|
$
|
0.168
|
|
|
(6.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonfuel revenues
|
$
|
470,663
|
|
|
$
|
469,367
|
|
|
0.3
|
%
|
|
$
|
904,890
|
|
|
$
|
892,085
|
|
|
1.4
|
%
|
Nonfuel gross margin
|
285,272
|
|
|
285,764
|
|
|
(0.2)
|
%
|
|
553,597
|
|
|
547,283
|
|
|
1.2
|
%
|
||||
Nonfuel gross margin percentage
|
60.6
|
%
|
|
60.9
|
%
|
|
(30
|
)pts
|
|
61.2
|
%
|
|
61.3
|
%
|
|
(10
|
)pts
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total gross margin
(1)
|
$
|
361,561
|
|
|
$
|
359,362
|
|
|
0.6
|
%
|
|
$
|
704,039
|
|
|
$
|
703,037
|
|
|
0.1
|
%
|
Site level operating expense
|
230,520
|
|
|
226,961
|
|
|
1.6
|
%
|
|
459,141
|
|
|
448,871
|
|
|
2.3
|
%
|
||||
Site level operating expense as a
percentage of nonfuel revenues
|
49.0
|
%
|
|
48.4
|
%
|
|
60
|
pts
|
|
50.7
|
%
|
|
50.3
|
%
|
|
40
|
pts
|
||||
Site level gross margin in excess of
site level operating expense
(1)
|
$
|
131,041
|
|
|
$
|
132,401
|
|
|
(1.0)
|
%
|
|
$
|
244,898
|
|
|
$
|
254,166
|
|
|
(3.6)
|
%
|
(1)
|
The amount for the
six months ended
June 30, 2019
, includes
$2,812
of a one time benefit due to the reversal of loyalty award accruals recognized in connection with introducing a revised customer loyalty program, and the amount for the
six months ended
June 30, 2018
, includes the
$23,234
benefit from the federal biodiesel blenders' tax credit that the U.S. government retroactively reinstated for 2017 in February 2018. The U.S. government has not yet reinstated the federal biodiesel blenders' tax credit for 2018 or 2019.
|
|
Gallons Sold
|
|
Fuel Revenues
|
|||
Results for the three months ended June 30, 2018
|
486,447
|
|
|
$
|
1,149,486
|
|
Decrease due to petroleum products price changes
|
|
|
(65,536
|
)
|
||
Increase due to same site volume changes
|
11,886
|
|
|
25,624
|
|
|
Increase due to locations opened
|
4,301
|
|
|
8,764
|
|
|
Decrease due to locations closed
|
(32
|
)
|
|
(74
|
)
|
|
Decrease in wholesale fuel sales volume
|
(256
|
)
|
|
(593
|
)
|
|
Net change from prior year period
|
15,899
|
|
|
(31,815
|
)
|
|
Results for the three months ended June 30, 2019
|
502,346
|
|
|
$
|
1,117,671
|
|
|
Gallons Sold
|
|
Fuel Revenues
|
|||
Results for the six months ended June 30, 2018
|
944,693
|
|
|
$
|
2,135,831
|
|
Decrease due to petroleum products price changes
|
|
|
(97,305
|
)
|
||
Increase due to same site volume changes
|
20,891
|
|
|
44,855
|
|
|
Increase due to locations opened
|
9,392
|
|
|
19,029
|
|
|
Decrease due to locations closed
|
(373
|
)
|
|
(778
|
)
|
|
Decrease in wholesale fuel sales volume
|
(355
|
)
|
|
(820
|
)
|
|
Net change from prior year period
|
29,555
|
|
|
(35,019
|
)
|
|
Results for the six months ended June 30, 2019
|
974,248
|
|
|
$
|
2,100,812
|
|
•
|
cash balance;
|
•
|
operating cash flow;
|
•
|
our revolving credit facility, or our 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.
|
•
|
Our operating results for the
three and six
months ended
June 30, 2019
, reflect certain improvements such as increases in nonfuel revenues 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, customer demand and competitive conditions, among other factors, may significantly impact our nonfuel revenues and the costs of our nonfuel products may increase in the future because of inflation or other reasons. If nonfuel sales volume declines, if we are not able to pass increases in nonfuel costs to our customers or if our nonfuel sales mix changes in a manner that negatively impacts our nonfuel gross margin, our nonfuel revenues or our 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;
|
•
|
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;
|
•
|
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, developed or franchised 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;
|
•
|
We believe the U.S. government may retroactively reinstate the federal biodiesel blenders' tax credit for 2018 and 2019 before the end of 2019 and that we may recognize a reduction in our fuel cost of goods sold for the refund from this credit of approximately
$35.0 million
relating to 2018 and
$17.0 million
relating to the first
six
months of 2019, respectively, in the period in which the U.S. government enacts the tax credit reinstatement. However, the U.S. government may not retroactively reinstate this tax credit at the level we expect or at all and we may not realize the reductions in our fuel cost of goods sold that we expect. In addition, these statements about the federal biodiesel blenders' tax credit may imply that the U.S. government will extend or retroactively reinstate the federal biodiesel blenders’ tax credit for future years. However, the U.S. government may choose not to do so;
|
•
|
Statements about the franchise agreements we entered with franchisees pursuant to which we expect to add TA branded travel centers to our network, as well as, the pipeline of site acquisition opportunities being pursued. These franchise agreements are subject to conditions and these franchise arrangements may not occur or may be delayed, and the terms of the arrangements may change. In addition, acquisition opportunities may not occur or may subject us to greater risks than anticipated. These opportunities may not result in the increased EBITDA and cash flows as expected;
|
•
|
We expect to realize increased sales from our truck service programs and have incurred costs to hire and train additional truck service personnel to support that planned increase in sales. Our truck services are subject to significant and increasing competition. We may not realize the increased sales from our truck services that we expect and any increased sales we may realize may not exceed the increased costs we incur;
|
•
|
We have a Credit Facility with a current maximum availability of
$200.0 million
. 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
June 30, 2019
, based on our eligible collateral at that date, our borrowing and letter of credit availability was
$142.1 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; and
|
•
|
We may seek to 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.
|
•
|
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;
|
•
|
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;
|
•
|
Future increases in fuel prices may reduce the demand for the products and services that we sell;
|
•
|
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 at higher balances 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;
|
•
|
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;
|
•
|
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;
|
•
|
Our labor costs may continue to increase in response to business and market demands and conditions, business opportunities or pursuant to legal requirements;
|
•
|
Fuel supply disruptions may occur, which may limit our ability to purchase fuel for resale;
|
•
|
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;
|
•
|
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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•
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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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•
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Acts of terrorism, geopolitical risks, wars, outbreaks of so called pandemics or other man made or natural disasters beyond our control may adversely affect our financial results; and
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•
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Although we believe that we benefit from our relationships with our related parties, including HPT, RMR 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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•
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the division of our Board of Directors into three classes, with the term of one class expiring at each annual meeting of stockholders;
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•
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the authority of our Board of Directors, and not our stockholders, to adopt, amend or repeal our bylaws and to fill vacancies on the Board of Directors;
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•
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limitations on the ability of stockholders to cause a special meeting of stockholders to be held and a prohibition on stockholders acting by written consent unless the consent is a unanimous consent of all our stockholders entitled to vote on the matter;
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•
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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;
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•
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the power of our Board of Directors, without stockholders’ approval, to authorize and issue additional shares of stock of any class or type on terms that it determines;
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•
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limitations on the ability of our stockholders to propose nominees for election as Directors and propose other business to be considered at a meeting of stockholders;
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•
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a requirement that an individual Director may be removed only for cause (as defined in our Articles) and then only by the affirmative vote of stockholders entitled to cast 75% of the votes entitled to be cast in the election of directors;
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•
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a requirement that any matter that is not approved by our Board of Directors receive the affirmative vote of stockholders entitled to cast 75% of the votes entitled to be cast on the matter;
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•
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our elections being subject to Section 3-601
et seq.
of the Maryland General Corporation Law, which generally prohibits us from engaging in a business combination with an interested stockholder (as defined in the statute);
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•
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requirements that stockholders comply with regulatory requirements (including Illinois, Louisiana, Montana and Nevada gaming and Indiana insurance licensing requirements) affecting us which could effectively limit stock ownership of us, including in some cases, to 5% of our outstanding shares of common stock; and
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•
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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.
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•
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the liquidity of the market for our capital stock;
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•
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our historic policy to not pay cash dividends;
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•
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changes in our operating results;
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•
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issuances of additional shares of capital stock and sales of our capital stock by holders of large blocks of our capital stock, such as HPT, RMR or our Directors or officers;
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•
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a lack of analyst coverage, changes in analysts’ expectations and unfavorable research reports; and
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•
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general economic and industry trends and conditions.
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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
|
||||||
April 2019
|
|
75
|
|
|
$
|
20.90
|
|
|
—
|
|
|
$
|
—
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|
June 2019
|
|
500
|
|
|
18.10
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
575
|
|
|
$
|
18.47
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
During the quarter ended
June 30, 2019
, 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.
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|
TRAVELCENTERS OF AMERICA INC.
|
||
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By:
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/s/ William E. Myers
|
|
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Date:
|
August 5, 2019
|
|
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Name:
|
William E. Myers
|
|
|
|
|
|
|
Title:
|
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer and Principal Accounting Officer)
|
Annual Retainer for Independent Directors:
|
|
$75,000
|
|
|
|
Share Grants for all Directors:
|
|
10,000 annually to be granted on the day of the first board meeting following the Annual Meeting of Shareholders (or, for Directors who are first elected or appointed at other times, on the day of the first board meeting attended)
|
|
|
|
Lead Independent Director
|
|
$17,500 per year
|
|
|
|
Chair of the Audit Committee:
|
|
$22,500 per year
|
|
|
|
Chair of the Nominating and Governance Committee:
|
|
$12,500 per year
|
|
|
|
Chair of the Compensation Committee:
|
|
$12,500 per year
|
|
|
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Board Liaison to the Gaming Compliance Committee
|
|
$12,500 per year
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of TravelCenters of America Inc.;
|
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: August 5, 2019
|
/s/ Andrew J. Rebholz
|
|
Andrew J. Rebholz
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of TravelCenters of America Inc.;
|
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: August 5, 2019
|
/s/ William E. Myers
|
|
William E. Myers
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
Date: August 5, 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
|