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8-K - 8-K - TravelCenters of America Inc. /MD/a13-1361_58k.htm

Exhibit 99.1

 

GRAPHIC

 

FOR IMMEDIATE RELEASE

 

 

Contacts:

 

Timothy A. Bonang, Vice President of Investor Relations, or

 

Carlynn Finn, Senior Manager of Investor Relations

 

(617) 796-8251

 

www.tatravelcenters.com

 

TravelCenters of America LLC Announces Fourth Quarter and Year End 2012 Results

 

Westlake, OH (March 18, 2013):  TravelCenters of America LLC (NYSE MKT: TA) today announced financial results for the fourth quarter and year ended December 31, 2012.

 

At December 31, 2012, TA’s business included 243 sites, 171 of which were operated under the “TravelCenters of America” or “TA” brand names and 72 of which were operated under the “Petro” brand name.  TA’s results were:

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

1,925,195

 

$

1,924,501

 

$

7,995,724

 

$

7,888,857

 

Net income (loss)

 

$

(2,459

)

$

(2,475

)

$

32,198

 

$

23,574

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.08

)

$

(0.09

)

$

1.12

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data:

 

 

 

 

 

 

 

 

 

Total fuel sales volume (gallons)

 

486,963

 

513,023

 

2,039,960

 

2,087,416

 

Total fuel revenues

 

$

1,597,287

 

$

1,613,402

 

$

6,636,297

 

$

6,603,329

 

Fuel gross margin

 

$

76,484

 

$

73,398

 

$

326,047

 

$

301,382

 

 

 

 

 

 

 

 

 

 

 

Total nonfuel sales

 

$

324,456

 

$

307,409

 

$

1,344,755

 

$

1,271,085

 

Nonfuel gross margin

 

$

180,183

 

$

174,665

 

$

745,281

 

$

722,993

 

Nonfuel gross margin percentage

 

55.5

%

56.8

%

55.4

%

56.9

%

 

 

 

 

 

 

 

 

 

 

EBITDAR(1)

 

$

65,598

 

$

61,857

 

$

293,023

 

$

272,387

 

 


(1)        A reconciliation that shows the calculation of earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, from net income (loss) determined in accordance with generally accepted accounting principles, or GAAP, appears in the supplemental data below.

 

Business Commentary

 

TA’s net loss of $2.5 million for the fourth quarter of 2012 was essentially unchanged from its net loss for the fourth quarter of 2011.  TA’s results for the fourth quarter of 2012 included improvement in fuel gross margin, nonfuel revenues, nonfuel gross margin and EBITDAR, the latter of which increased by $3.7 million, or 6.0%, over the 2011 fourth quarter to $65.6 million, despite a decline in fuel sales volume.  Nonfuel revenues for the 2012 fourth quarter increased $17.0 million, or 5.5%, over the 2011 fourth quarter.  Despite a 5.1% decline in gallons sold, fuel gross margin increased $3.1 million, or 4.2%, nonfuel gross margin increased $5.5 million, or 3.2%, and total gross margin increased $8.4 million, or 3.3%, each in the 2012 fourth quarter as compared to the 2011 fourth quarter.  Approximately 27% of the 5.1% decline in fuel gallons sold was attributable to TA’s ceasing to supply fuel on a wholesale basis to certain of its franchisees during 2012.  In addition, during the 2012 fourth quarter TA replaced 234 diesel dispensers, or about 12% of its total, adversely affecting diesel

 



 

fueling capacity at its travel centers.  The improvements in nonfuel revenues and gross margin in the fourth quarter of 2012 resulted, in large part, from the travel centers acquired during 2011 and 2012, increased fuel gross margin per gallon and increased customer spending for nonfuel products and services in TA’s travel centers.

 

Investment Activity

 

During the year ended December 31, 2012, TA made capital investments of $166.8 million for improvements to its existing travel center business and $21.9 million to improve travel centers TA acquired during 2011 and 2012.  During 2012, TA purchased ten travel centers and acquired the businesses of four franchisees for an aggregate of $52.3 million.  During 2012, TA entered agreements to acquire four additional travel centers for a total of $20.3 million; two of these acquisitions were completed during January and February 2013 and TA expects to complete the other two purchases during the first half of 2013.  However, the pending acquisitions are subject to conditions and, accordingly, they may be delayed, their terms may be changed or they may not be completed.

 

Capital Activity

 

During 2012, TA sold to Hospitality Properties Trust, or HPT, $76.8 million of improvements to sites leased from HPT.  On January 15, 2013, TA sold $110 million of 8.25% Senior Notes due 2028 in a public offering for net proceeds of approximately $105.2 million after underwriters discount and commission and other offering expenses.

 

Thomas M. O’Brien, TA’s CEO, made the following statement regarding the fourth quarter and full year 2012 results of operations and recent activities.

 

“TA furthered its operating and financial flexibility during 2012.  At the same time TA was able to increase EBITDAR and net income per share over the prior year by 8% and 14%, respectively.  These results were achieved through a combination of a number of factors, including higher fuel margins per gallon and in total, the acquisition of travel centers and businesses, execution of internal growth projects, our ability to take advantage of an opportunity in the capital markets and, above all, the operating excellence demonstrated by over 17,000 employees.”

 

Supplemental Data

 

In addition to the historical financial results prepared in accordance with GAAP, TA furnishes supplemental data that it believes may help investors better understand TA’s business.  Included in this supplemental data is same site operating data that includes operating data for the travel centers that were operated by TA continuously since the beginning of the earliest applicable periods presented.  A presentation of EBITDAR, and a reconciliation that shows the calculation of EBITDAR from net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, also appears in the supplemental data.

 

Conference Call:

 

Later today, at 10:00 a.m. Eastern Time, TA will host a conference call to discuss its financial results and other activities for the three months and year ended December 31, 2012.  Following management’s remarks, there will be a question and answer period.

 

The conference call telephone number is (800) 553-0288.  Participants calling from outside the United States and Canada should dial (612) 332-0530.  No pass code is necessary to access the call from either number.  Participants should dial in about 15 minutes prior to the scheduled start of the call.  A replay of the conference call will be available for about a week after the call.  To hear the replay, dial (320) 365-3844.  The replay pass code is 286314.

 

A live audio webcast of the conference call will also be available in a listen only mode on our web site at www.tatravelcenters.com.  To access the webcast, participants should visit our web site about five minutes before the call.  The archived webcast will be available for replay on our web site for about one week after the call.

 

The transcription, recording and retransmission in any way of TA’s fourth quarter and year end conference call is strictly prohibited without the prior written consent of TA.

 

About TravelCenters of America LLC:

 

TA’s travel centers operate under the “TravelCenters of America”, “TA”, “Petro Stopping Centers” and “Petro” brand names and offer diesel and gasoline fueling, restaurants, truck repair facilities, stores and other services.  TA’s nationwide business includes travel centers located in 41 U.S. states and in Canada.

 

2



 

WARNING CONCERNING FORWARD LOOKING STATEMENTS

 

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS.  ALSO, WHENEVER TA USES WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, TA IS MAKING FORWARD LOOKING STATEMENTS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON TA’S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.  ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.  AMONG OTHERS, THE FORWARD LOOKING STATEMENTS WHICH APPEAR IN THIS PRESS RELEASE THAT MAY NOT OCCUR INCLUDE:

 

·                  THIS PRESS RELEASE STATES THAT THE IMPROVEMENT IN TA’S NONFUEL REVENUES AND GROSS MARGIN RESULTED IN LARGE PART FROM THE TRAVEL CENTERS ACQUIRED OR OPENED DURING 2011 AND 2012, INCREASED FUEL MARGIN PER GALLON AND INCREASED CUSTOMER SPENDING FOR NONFUEL PRODUCTS AND SERVICES IN TA’S TRAVEL CENTERS.  AN IMPLICATION OF THESE STATEMENTS MAY BE THAT TA WILL BE ABLE TO OPERATE PROFITABLY IN THE FUTURE. IN FACT, THERE ARE MANY FACTORS WHICH WILL IMPACT TA’ S FUTURE OPERATIONS THAT MAY CAUSE TA TO OPERATE UNPROFITABLY IN ANNUAL AND/OR QUARTERLY PERIODS IN ADDITION TO THOSE STATED ITEMS, INCLUDING SOME FACTORS WHICH ARE BEYOND TA’S CONTROL SUCH AS SEASONALITY, THE CONDITION OF THE U.S. ECONOMY GENERALLY, THE FUTURE DEMAND FOR TA’S GOODS AND SERVICES AND COMPETITION IN TA’S BUSINESS;

 

·                  THIS PRESS RELEASE STATES THAT TA HAS ACQUIRED TRAVEL CENTER LOCATIONS DURING 2011 AND 2012, REFERENCES SEVERAL TRAVEL CENTER AND BUSINESS PURCHASES THAT TA HAS COMPLETED OR AGREED TO COMPLETE DURING 2012 AND TO DATE IN 2013, AND STATES THAT TA EXPECTS PURCHASES TO CLOSE DURING THE FIRST HALF OF 2013.  THE IMPLICATIONS OF THESE STATEMENTS MAY BE THAT TA WILL BE ABLE TO COMPLETE THE REFERENCED PURCHASES AND TA WILL BE ABLE TO OPERATE ITS PURCHASED LOCATIONS PROFITABLY.  MANY OF THE TRAVEL CENTERS TA HAS ACQUIRED PRODUCED OPERATING RESULTS WHICH MAY HAVE CAUSED THE PRIOR OWNERS TO EXIT THESE BUSINESSES AND TA’S ABILITY TO OPERATE THESE LOCATIONS PROFITABLY DEPENDS UPON MANY FACTORS, INCLUDING TA’S ABILITY TO INTEGRATE NEW OPERATIONS INTO ITS EXISTING OPERATIONS AND SOME FACTORS WHICH ARE BEYOND TA’S CONTROL SUCH AS THE LEVEL OF DEMAND FOR TA’S GOODS AND SERVICES ARISING FROM THE U.S. ECONOMY GENERALLY.  TA MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE NEW TRAVEL CENTER OPERATIONS OR OPERATE SUCH LOCATIONS PROFITABLY IN THE FUTURE.  ALSO, TA MAY NOT SUCCEED IN COMPLETING THE PURCHASES TO WHICH TA HAS AGREED; AND

 

·                  THIS PRESS RELEASE STATES THAT DURING 2012 TA MADE CAPITAL INVESTMENTS OF $188.7 MILLION FOR IMPROVEMENTS TO EXISTING AND ACQUIRED TRAVEL CENTERS, AND SOLD TO HPT, $76.8 MILLION OF IMPROVEMENTS TO TRAVEL CENTERS LEASED FROM HPT.  TA’S REGULAR OPERATIONS REQUIRE LARGE AMOUNTS OF CAPITAL INVESTMENT TO MAINTAIN THE COMPETITIVENESS OF TA’S LOCATIONS AND HPT IS NOT OBLIGATED TO PURCHASE IMPROVEMENTS TO LEASED TRAVEL CENTERS FROM TA. THERE CAN BE NO ASSURANCE THAT TA WILL HAVE SUFFICIENT WORKING CAPITAL OR CASH LIQUIDITY TO FUND FUTURE CAPITAL INVESTMENTS.

 

THESE AND OTHER UNEXPECTED RESULTS MAY BE CAUSED BY VARIOUS FACTORS, SOME OF WHICH ARE BEYOND TA’S CONTROL, INCLUDING:

 

·                  THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON TA, ITS CUSTOMERS AND ITS FRANCHISEES;

 

·                  COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX RATES AND SIMILAR MATTERS;

 

·                  COMPETITION WITHIN THE TRAVEL CENTER INDUSTRY;

 

·                  FUTURE FUEL PRICE INCREASES, FUEL PRICE VOLATILITY, COMPETITION OR OTHER FACTORS MAY CAUSE TA TO NEED MORE WORKING CAPITAL TO MAINTAIN ITS INVENTORIES AND CARRY ITS ACCOUNTS RECEIVABLE THAN TA NOW EXPECTS;

 

·                  ACQUISITIONS MAY SUBJECT TA TO ADDITIONAL OR GREATER RISKS THAN TA’S CONTINUING OPERATIONS, INCLUDING THE ASSUMPTION OF UNKNOWN LIABILITIES;

 

·                  MOST OF TA’S TRUCKING CUSTOMERS TRANSACT BUSINESS WITH TA BY USE OF FUEL CARDS, WHICH ARE ISSUED BY THIRD PARTY FUEL CARD COMPANIES.  THE FUEL CARD INDUSTRY HAS ONLY A FEW SIGNIFICANT PARTICIPANTS.  FUEL CARD COMPANIES FACILITATE PAYMENTS TO TA, AND CHARGE TA FEES FOR THESE

 

3



 

SERVICES.  COMPETITION, OR LACK THEREOF, AMONG THE FUEL CARD COMPANIES MAY RESULT IN FUTURE INCREASES IN TA’S TRANSACTION FEE EXPENSES OR WORKING CAPITAL REQUIREMENTS, OR BOTH;

 

·                  IN THE PAST, INCREASES IN FUEL PRICES HAVE REDUCED THE DEMAND FOR THE PRODUCTS AND SERVICES THAT TA SELLS BECAUSE HIGH FUEL PRICES MAY HAVE ENCOURAGED FUEL CONSERVATION, DIRECTED FREIGHT BUSINESS AWAY FROM TRUCKING OR OTHERWISE ADVERSELY AFFECTED THE BUSINESS OF TA’S CUSTOMERS.  FUTURE INCREASES IN FUEL PRICES MAY HAVE SIMILAR AND OTHER ADVERSE EFFECTS ON TA’S BUSINESS AND SOME OF THESE PAST CONSEQUENCES MAY CONTINUE, WHICH MAY ADVERSELY AFFECT TA’S BUSINESS EVEN IF FUEL PRICES DO NOT INCREASE;

 

·                  TA’S SUPPLIERS MAY BE UNWILLING OR UNABLE TO MAINTAIN TA’S CURRENT TERMS FOR PURCHASES ON CREDIT.  IF TA IS UNABLE TO PURCHASE GOODS ON REASONABLE CREDIT TERMS, TA’S REQUIRED WORKING CAPITAL MAY INCREASE AND TA MAY INCUR MATERIAL LOSSES.  IN TIMES OF RISING FUEL AND NONFUEL PRICES, TA’S SUPPLIERS MAY BE UNWILLING OR UNABLE TO INCREASE THE CREDIT AMOUNTS THEY EXTEND TO TA, WHICH MAY REQUIRE TA TO INCREASE ITS WORKING CAPITAL INVESTMENT.  ALSO, IN LIGHT OF TA’S HISTORICAL OPERATING LOSSES, THE AVAILABILITY AND THE TERMS OF ANY CREDIT TA MAY BE ABLE TO OBTAIN ARE UNCERTAIN;

 

·                  TA IS ROUTINELY INVOLVED IN LITIGATION AND OTHER LEGAL MATTERS INCIDENTAL TO THE ORDINARY COURSE OF ITS BUSINESS.  DISCOVERY AND COURT DECISIONS DURING LITIGATION OFTEN HAVE UNANTICIPATED RESULTS.  LITIGATION IS EXPENSIVE AND DISTRACTING TO MANAGEMENT.  TA CAN PROVIDE NO ASSURANCE AS TO THE OUTCOME OF ANY OF THE LITIGATION MATTERS IN WHICH IT IS OR MAY BECOME INVOLVED;

 

·                  ACTS OF TERRORISM, GEOPOLITICAL RISKS, WARS, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND TA’S CONTROL MAY ADVERSELY AFFECT TA’S OPERATING RESULTS;

 

·                  ALTHOUGH TA BELIEVES THAT IT BENEFITS FROM ITS CONTINUING RELATIONSHIPS WITH HPT, REIT MANAGEMENT & RESEARCH LLC, OR RMR, AFFILIATES INSURANCE COMPANY, OR AIC, AND THEIR AFFILIATED AND RELATED PERSONS AND ENTITIES, ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH TA’S MANAGING DIRECTORS, HPT, RMR, AIC AND AFFILIATED AND RELATED PERSONS AND ENTITIES MAY PRESENT A CONTRARY PERCEPTION OR RESULT IN LITIGATION;

 

·                  AS A RESULT OF CERTAIN TRADING IN TA’S SHARES DURING 2007, TA EXPERIENCED AN OWNERSHIP CHANGE AS DEFINED BY SECTION 382 OF THE INTERNAL REVENUE CODE, OR THE CODE.  CONSEQUENTLY, TA IS UNABLE TO USE ITS NET OPERATING LOSS GENERATED IN 2007 TO OFFSET ANY FUTURE TAXABLE INCOME.  IF TA EXPERIENCES ADDITIONAL OWNERSHIP CHANGES, AS DEFINED IN THE CODE, ITS NET OPERATING LOSSES GENERATED AFTER 2007 COULD ALSO BE SUBJECT TO USAGE LIMITATIONS; AND

 

·                  TA’S LIMITED LIABILITY COMPANY AGREEMENT AND BYLAWS AND CERTAIN OF TA’S OTHER AGREEMENTS INCLUDE VARIOUS PROVISIONS WHICH MAY DETER A CHANGE OF CONTROL OF TA AND, AS A RESULT, TA’S SHAREHOLDERS MAY BE UNABLE TO REALIZE A TAKE OVER PREMIUM FOR THEIR SHARES.

 

TA ACCUMULATED A SIGNIFICANT DEFICIT DURING THE YEARS 2007 THROUGH 2010.  ALTHOUGH TA GENERATED NET INCOME FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2012, AND TA’S PLANS ARE INTENDED TO GENERATE NET INCOME IN FUTURE PERIODS, THERE CAN BE NO ASSURANCE THAT THESE PLANS WILL SUCCEED.

 

RESULTS THAT DIFFER FROM THOSE STATED OR IMPLIED BY TA’S FORWARD LOOKING STATEMENTS MAY ALSO BE CAUSED BY VARIOUS CHANGES IN TA’S BUSINESS OR MARKET CONDITIONS, AS DESCRIBED MORE FULLY IN TA’S PERIODIC REPORTS, INCLUDING TA’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2012, TO BE FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, UNDER “WARNING CONCERNING FORWARD LOOKING STATEMENTS,” AND “RISK FACTORS” AND ELSEWHERE IN THAT ANNUAL REPORT.  COPIES OF THAT TA ANNUAL REPORT WILL BE AVAILABLE AT THE WEBSITE OF THE U.S. SECURITIES AND EXCHANGE COMMISSION: WWW.SEC.GOV.

 

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.  EXCEPT AS REQUIRED BY LAW, TA UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

 

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TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 

 

 

Three Months Ended December 31,

 

 

 

2012

 

2011

 

Revenues:

 

 

 

 

 

Fuel

 

$

1,597,287

 

$

1,613,402

 

Nonfuel

 

324,456

 

307,409

 

Rent and royalties

 

3,452

 

3,690

 

Total revenues

 

1,925,195

 

1,924,501

 

 

 

 

 

 

 

Cost of goods sold (excluding depreciation):

 

 

 

 

 

Fuel

 

1,520,803

 

1,540,004

 

Nonfuel

 

144,273

 

132,744

 

Total cost of goods sold (excluding depreciation)

 

1,665,076

 

1,672,748

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Site level operating

 

172,560

 

166,923

 

Selling, general & administrative

 

22,437

 

23,428

 

Real estate rent

 

50,897

 

48,459

 

Depreciation and amortization

 

14,396

 

13,067

 

Total operating expenses

 

260,290

 

251,877

 

 

 

 

 

 

 

Income (loss) from operations

 

(171

)

(124

)

 

 

 

 

 

 

Income (loss) from equity investees

 

614

 

455

 

Acquisition costs

 

(138

)

 

Interest income

 

391

 

180

 

Interest expense

 

(2,726

)

(2,317

)

Loss before income taxes

 

(2,030

)

(1,806

)

Provision for income taxes

 

429

 

669

 

Net loss

 

$

(2,459

)

$

(2,475

)

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

Basic and diluted

 

$

(0.08

)

$

(0.09

)

 

These financial statements should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2012, to be filed with the U.S. Securities and Exchange Commission.

 

5



 

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 

 

 

Year Ended December 31,

 

 

 

2012

 

2011

 

Revenues:

 

 

 

 

 

Fuel

 

$

6,636,297

 

$

6,603,329

 

Nonfuel

 

1,344,755

 

1,271,085

 

Rent and royalties

 

14,672

 

14,443

 

Total revenues

 

7,995,724

 

7,888,857

 

 

 

 

 

 

 

Cost of goods sold (excluding depreciation):

 

 

 

 

 

Fuel

 

6,310,250

 

6,301,947

 

Nonfuel

 

599,474

 

548,092

 

Total cost of goods sold (excluding depreciation)

 

6,909,724

 

6,850,039

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Site level operating

 

698,522

 

677,958

 

Selling, general & administrative

 

95,547

 

89,196

 

Real estate rent

 

198,927

 

191,798

 

Depreciation and amortization

 

51,534

 

47,466

 

Total operating expenses

 

1,044,530

 

1,006,418

 

 

 

 

 

 

 

Income (loss) from operations

 

41,470

 

32,400

 

 

 

 

 

 

 

Income from equity investees

 

1,877

 

1,169

 

Acquisition costs

 

(785

)

(446

)

Interest income

 

1,485

 

835

 

Interest expense

 

(10,358

)

(9,005

)

Income (loss) before income taxes

 

33,689

 

24,953

 

Provision for income taxes

 

1,491

 

1,379

 

Net income (loss)

 

$

32,198

 

$

23,574

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

Basic and diluted

 

$

1.12

 

$

0.98

 

 

These financial statements should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2012, to be filed with the U.S. Securities and Exchange Commission.

 

6



 

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2012

 

2011

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents (1)

 

$

35,189

 

$

118,255

 

Accounts receivable, net

 

106,273

 

130,672

 

Inventories

 

191,006

 

168,267

 

Other current assets

 

61,020

 

67,056

 

Total current assets

 

393,488

 

484,250

 

 

 

 

 

 

 

Property and equipment, net

 

576,512

 

479,943

 

Goodwill and intangible assets, net

 

20,041

 

21,957

 

Other noncurrent assets

 

28,240

 

30,381

 

Total assets

 

$

1,018,281

 

$

1,016,531

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

143,605

 

$

149,051

 

Current HPT Leases Liabilities

 

28,354

 

26,891

 

Other current liabilities

 

111,168

 

113,624

 

Total current liabilities

 

283,127

 

289,566

 

 

 

 

 

 

 

Noncurrent HPT Leases liabilities

 

351,135

 

373,451

 

Other noncurrent liabilities

 

30,585

 

34,913

 

Total liabilities

 

664,847

 

697,930

 

 

 

 

 

 

 

Shareholders’ equity

 

353,434

 

318,601

 

Total liabilities and shareholders’ equity

 

$

1,018,281

 

$

1,016,531

 

 

These financial statements should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2012, to be filed with the U.S. Securities and Exchange Commission.

 


(1)                   On January 15, 2013, TA sold $110,000 of 8.25% Senior Notes for net proceeds of approximately $105,200 after underwriters’ discounts and commission and other offering expenses.

 

7



 

TRAVELCENTERS OF AMERICA LLC

CONSOLIDATED SUPPLEMENTAL DATA

(in thousands)

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

Calculation of EBITDAR:(1)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(2,459

)

$

(2,475

)

$

32,198

 

$

23,574

 

Add: income taxes

 

429

 

669

 

1,491

 

1,379

 

Add: depreciation and amortization

 

14,396

 

13,067

 

51,534

 

47,466

 

Deduct: interest income

 

(391

)

(180

)

(1,485

)

(835

)

Add: interest expense(2)

 

2,726

 

2,317

 

10,358

 

9,005

 

Add: real estate rent expense(3)

 

50,897

 

48,459

 

198,927

 

191,798

 

EBITDAR

 

$

65,598

 

$

61,857

 

$

293,023

 

$

272,387

 

 


(1)       TA calculates EBITDAR as earnings before interest, taxes, depreciation, amortization and rent.  TA believes EBITDAR is a useful indication of its operating performance and its ability to pay rent or service debt, make capital expenditures and expand its business.  TA believes that EBITDAR is a meaningful disclosure that may help interested persons to better understand its financial performance, including comparing its performance between periods and to the performance of other companies.  However, EBITDAR as presented may not be comparable to similarly titled amounts calculated by other companies.  This information should not be considered as an alternative to net income, income from continuing operations, operating profit, cash flow from operations or any other operating or liquidity performance measure prescribed by U.S. generally accepted accounting principles, or GAAP.

 

(2)       Interest expense included the following:

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

HPT rent classified as interest

 

$

1,894

 

$

1,849

 

$

7,330

 

$

7,390

 

Amortization of deferred financing costs

 

89

 

190

 

352

 

403

 

Other

 

743

 

278

 

2,676

 

1,212

 

 

 

$

2,726

 

$

2,317

 

$

10,358

 

$

9,005

 

 

8



 

(3)       Real estate rent expense recognized under GAAP differs from TA’s obligation to pay cash for rent under its leases.  Cash paid under real property lease agreements was $55,217 and $51,993 during the three month periods ended December 31, 2012 and 2011, respectively, while the total rent amounts expensed during the quarters ended December 31, 2012 and 2011, were $50,897 and $48,459, respectively.  Cash paid under lease agreements was $217,568 and $206,128, during the years ended December 31, 2012 and 2011, respectively, while the total rent amounts expensed were $198,927 and $191,798, respectively.  GAAP requires recognition of minimum lease payments payable during the lease term in equal amounts on a straight line basis over the lease term.  In addition, under GAAP, a portion of the rent TA pays to HPT is classified as interest expense and a portion of the rent payments to HPT is applied to amortize a sale/leaseback financing obligation.  Also, under GAAP, TA amortizes as a reduction of rent expense the deferred tenant improvement allowance that HPT paid to TA during the four years from 2007 through 2010 and the deferred gain realized on the sale of assets that are leased back.  A reconciliation of these amounts is as follows.

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Cash payments to HPT for rent (a)

 

$

52,604

 

$

49,586

 

$

207,653

 

$

196,364

 

Other cash rental payments

 

2,613

 

2,407

 

9,915

 

9,764

 

Total cash payments under real property leases

 

55,217

 

51,993

 

217,568

 

206,128

 

Adjustments for:

 

 

 

 

 

 

 

 

 

Accrued estimated percentage rent not yet paid (overpaid)

 

(11

)

 

(11

)

 

Noncash straight line rent accrual — HPT

 

(358

)

378

 

(2,664

)

3,021

 

Noncash straight line rent accrual — other

 

134

 

139

 

325

 

304

 

Interest paid on deferred rent obligation

 

 

 

 

(1,450

)

Amortization of sale/leaseback financing obligation

 

(449

)

(510

)

(2,089

)

(2,046

)

Portion of rent payments classified as interest expense

 

(1,894

)

(1,849

)

(7,330

)

(7,390

)

Amortization of deferred tenant improvements allowance

 

(1,692

)

(1,692

)

(6,769

)

(6,769

)

Amortization of deferred gain on sale/leaseback transactions

 

(50

)

 

(103

)

 

Total amount expensed as rent

 

$

50,897

 

$

48,459

 

$

198,927

 

$

191,798

 

 


(a)     Includes the last payment of interest made on TA’s deferred rent obligation in January 2011.

 

9



 

SUPPLEMENTAL SAME SITE OPERATING DATA

 

The following table presents operating data for all of the travel centers in operation on December 31, 2012, that were operated by TA continuously since the beginning of the earliest applicable periods presented.  This data excludes revenues and expenses that were not generated at travel centers TA operates, such as rents and royalties from franchises, and corporate level selling, general and administrative expenses.

 

TRAVELCENTERS OF AMERICA LLC

SAME SITE OPERATING DATA(1)

(in thousands, except for number of travel centers and percentage amounts)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2012

 

2011

 

Change
Fav/(Unfav)

 

2012

 

2011

 

Change
Fav/(Unfav)

 

Number of company operated travel centers

 

192

 

192

 

 

184

 

184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fuel sales volume (gallons)

 

458,715

 

486,302

 

(5.7

)%

1,868,867

 

1,951,359

 

(4.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fuel revenues

 

$

1,506,578

 

$

1,532,249

 

(1.7

)%

$

6,089,938

 

$

6,182,799

 

(1.5

)%

Total fuel gross margin

 

$

74,150

 

$

72,576

 

2.2

%

$

311,404

 

$

292,987

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonfuel revenues

 

$

313,614

 

$

307,137

 

2.1

%

$

1,288,936

 

$

1,249,467

 

3.2

%

Total nonfuel gross margin

 

$

174,133

 

$

174,402

 

(0.2

)%

$

714,918

 

$

710,807

 

0.6

%

Nonfuel gross margin percentage

 

55.5

%

56.8

%

(130

)b.p.

55.5

%

56.9

%

(140

)b.p.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total gross margin

 

$

248,283

 

$

246,978

 

0.5

%

$

1,026,322

 

$

1,003,794

 

2.2

%

Site level operating expenses

 

$

166,296

 

$

165,023

 

(0.8

)%

$

660,663

 

$

658,559

 

(0.3

)%

Site level operating expenses as a percentage of nonfuel revenues

 

53.0

%

53.7

%

70

b.p.

51.3

%

52.7

%

140

b.p.

Site level gross margin in excess of site level operating expense

 

$

81,987

 

$

81,955

 

0.0

%

$

365,659

 

$

345,235

 

5.9

%

 


(1)          Excludes two travel centers TA operates that are owned by a joint venture and travel centers operated by TA’s franchisees.

 

(End)

 

10