TRAVELCENTERS OF AMERICA LLC | ||||
(Exact Name of Registrant as Specified in Its Charter) | ||||
Delaware | 20-5701514 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
24601 Center Ridge Road, Suite 200, Westlake, OH 44145-5639 | ||||
(Address of Principal Executive Offices) | ||||
(440) 808-9100 | ||||
(Registrant's Telephone Number, Including Area Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Name of each exchange on which registered | |
Common Shares | The Nasdaq Stock Market LLC | |
8.25% Senior Notes due 2028 | The Nasdaq Stock Market LLC | |
8.00% Senior Notes due 2029 | The Nasdaq Stock Market LLC | |
8.00% Senior Notes due 2030 | The Nasdaq Stock Market LLC |
Large accelerated filer o | Accelerated filer x | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) | ||
Emerging growth company o |
• | OUR OPERATING RESULTS FOR THE YEAR ENDED DECEMBER 31, 2017, REFLECT INCREASES IN FUEL AND NONFUEL REVENUES AND NONFUEL GROSS MARGIN OVER THE SAME PERIOD LAST YEAR, WHICH MAY IMPLY THAT OUR FUEL AND NONFUEL REVENUES AND NONFUEL GROSS MARGIN ARE IMPROVING AND WILL CONTINUE TO IMPROVE. FUEL PRICES, CUSTOMER DEMAND AND COMPETITIVE CONDITIONS, AMONG OTHER FACTORS, MAY SIGNIFICANTLY IMPACT OUR FUEL AND NONFUEL REVENUES AND THE COSTS OF OUR NONFUEL PRODUCTS MAY INCREASE IN THE FUTURE BECAUSE OF INFLATION OR OTHER REASONS. IF FUEL PRICES OR FUEL OR NONFUEL SALES VOLUMES DECLINE, IF WE ARE NOT ABLE TO PASS INCREASED 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 AND OUR NONFUEL GROSS MARGIN MAY DECLINE; |
• | WE EXPECT THAT LOCATIONS WE ACQUIRE WILL PRODUCE STABILIZED FINANCIAL RESULTS AFTER A PERIOD OF TIME FOLLOWING ACQUISITION. THIS STATEMENT MAY IMPLY THAT STABILIZATION OF OUR ACQUIRED 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 AND OUR ABILITY TO OPERATE THESE LOCATIONS PROFITABLY DEPENDS UPON MANY FACTORS, SOME OF WHICH ARE BEYOND OUR CONTROL. ACCORDINGLY, OUR ACQUIRED 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 EXPECT THAT IN THE FUTURE WE MAY MAKE ACQUISITIONS AND DEVELOP NEW LOCATIONS. THESE STATEMENTS MAY IMPLY THAT ANY FUTURE ACQUISITIONS AND DEVELOPMENT PROJECTS WILL BE COMPLETED AND THAT THESE COMPLETED ACQUISITIONS AND DEVELOPMENT PROJECTS WILL IMPROVE OUR FUTURE PROFITS. THERE ARE MANY FACTORS THAT MAY RESULT IN OUR NOT BEING ABLE TO ACQUIRE, RENOVATE AND DEVELOP ADDITIONAL LOCATIONS THAT YIELD PROFITS, INCLUDING COMPETITION FROM OTHER BUYERS OR DEVELOPERS, OUR INABILITY TO NEGOTIATE ACCEPTABLE PURCHASE TERMS AND THE POSSIBILITY THAT WE MAY NEED TO USE OUR AVAILABLE FUNDS FOR OTHER PURPOSES OR MAY NOT BE ABLE TO OBTAIN CAPITAL FROM OTHER SOURCES. WE MAY DETERMINE TO DELAY OR NOT TO PROCEED WITH RENOVATIONS OR DEVELOPMENT PROJECTS. MOREOVER, 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 NOW EXPECT; |
• | 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. WE ESTIMATE THAT DURING 2018 WE WILL MAKE SUSTAINING CAPITAL INVESTMENTS OF APPROXIMATELY $55.0 MILLION TO OUR EXISTING LOCATIONS, SOME OF WHICH IS EXPECTED TO BE OF THE TYPE OF IMPROVEMENTS WE TYPICALLY REQUEST HOSPITALITY PROPERTIES TRUST, OR HPT, PURCHASE FROM US, AND OUR CAPITAL EXPENDITURES PLAN FOR 2018 |
• | ON SEPTEMBER 11, 2017, THE COURT OF CHANCERY OF THE STATE OF DELAWARE, OR THE COURT, ISSUED A MEMORANDUM OPINION IN OUR LITIGATION AGAINST COMDATA INC., OR COMDATA, WHICH, AMONG OTHER THINGS, ENTITLES US TO AN ORDER REQUIRING COMDATA TO SPECIFICALLY PERFORM UNDER OUR MERCHANT AGREEMENT WITH COMDATA AND AWARDS DAMAGES TO US AND AGAINST COMDATA FOR THE DIFFERENCE BETWEEN THE HIGHER TRANSACTION FEES PAID BY US TO COMDATA SINCE FEBRUARY 1, 2017, AND WHAT WE SHOULD HAVE PAID UNDER THE MERCHANT AGREEMENT. THIS OPINION ALSO FOUND THAT THE MERCHANT AGREEMENT PROVIDES FOR AN AWARD OF REASONABLE ATTORNEYS' FEES AND COSTS TO US. WE AND COMDATA HAVE REACHED AGREEMENT ON THE AMOUNT OF EXCESS TRANSACTION FEES TO BE PAID TO US, AND COMDATA HAS PAID US THAT AMOUNT, BUT WE AND COMDATA HAVE NOT REACHED AN AGREEMENT ON WHEN FINAL JUDGMENT SHOULD ENTER IN THIS LITIGATION OR ON THE AMOUNT OF OUR ATTORNEYS' FEES AND OTHER COSTS THAT COMDATA SHOULD PAY US. THE COURT HAS NOT ISSUED ITS FINAL JUDGMENT AND THE COURT MAY NOT AWARD US SOME OR ALL OF OUR ATTORNEYS' FEES AND COSTS. FURTHERMORE, COMDATA MAY APPEAL THE COURT'S JUDGMENT AND THE COURT'S DECISION MAY BE REVERSED OR AMENDED UPON APPEAL. THE CONTINUATION OF THIS LITIGATION IS DISTRACTING TO OUR MANAGEMENT AND EXPENSIVE, AND THIS DISTRACTION AND EXPENSE MAY CONTINUE; |
• | 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, 2017, BASED ON OUR ELIGIBLE COLLATERAL AT THAT DATE, OUR BORROWING AND LETTER OF CREDIT AVAILABILITY WAS $112.7 MILLION, OF WHICH WE HAD USED $17.8 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 NEED OR WANT TO DO SO; |
• | WE EXPECT TO RECOGNIZE IN OUR FIRST QUARTER 2018 FINANCIAL STATEMENTS APPROXIMATELY $23.3 MILLION RELATED TO THE FEDERAL BIODIESEL TAX CREDIT THAT WAS RETROACTIVELY REINSTATED FOR 2017 IN LEGISLATION PASSED ON FEBRUARY 8, 2018. THIS STATEMENT MAY IMPLY THAT WE WILL RECOGNIZE INCREASED FUEL GROSS MARGIN OR AN INCREASE IN NET INCOME IN OUR FIRST QUARTER 2018 AND THROUGHOUT 2018. HOWEVER, FUEL PRICES, CUSTOMER DEMAND AND COMPETITIVE CONDITIONS, AMONG OTHER FACTORS, MAY SIGNIFICANTLY IMPACT OUR FUEL REVENUE AND THE COSTS OF OUR FUEL. IF FUEL PRICES OR FUEL VOLUMES DECLINE, IF WE ARE NOT ABLE TO PASS INCREASED FUEL COSTS TO OUR CUSTOMERS, OUR FUEL GROSS MARGIN OR OUR NET INCOME MAY DECLINE. IN ADDITION, WE MAY NOT RECOVER THE FULL AMOUNT OF REFUNDS OF 2017 PURCHASE PAYMENTS WE EXPECT FROM OUR SUPPLIERS. FURTHER, TO DATE, THE BIODIESEL TAX CREDIT HAS NOT BEEN REINSTATED FOR 2018 AND IT IS UNKNOWN WHETHER IT WILL BE REINSTATED AND, IF IT IS, WHEN THAT REINSTATEMENT MAY OCCUR AND BE EFFECTIVE; |
• | WE MAY FINANCE OR SELL UNENCUMBERED REAL ESTATE THAT WE OWN. HOWEVER, WE DO NOT KNOW THE EXTENT TO WHICH WE COULD MONETIZE OUR EXISTING UNENCUMBERED REAL ESTATE OR WHAT THE TERMS OF ANY SUCH SALE OR FINANCING WOULD BE; |
• | IMPROVED OPERATING RESULTS, COST SAVINGS AND INCREASING GROSS MARGINS MAY IMPLY THAT WE WILL BE PROFITABLE IN THE FUTURE. IN FACT, SINCE WE BECAME A PUBLICLY OWNED 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; AND |
• | WE EXPECT THAT OUR RESTAURANT RENOVATION, REBRANDING AND COST INITIATIVES WILL IMPROVE THE PROFITABILITY OF THE AFFECTED RESTAURANTS. HOWEVER, THE PROFITABILITY OF THOSE RESTAURANTS MAY NOT IMPROVE AND ANY IMPROVED PROFITABILITY THAT MAY BE REALIZED MAY NOT EXCEED THE COSTS WE INCURRED TO RENOVATE AND REBRAND THOSE RESTAURANTS. |
• | 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, CONVENIENCE STORE 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 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; |
• | ACQUISITIONS OR PROPERTY DEVELOPMENT MAY SUBJECT US TO GREATER RISKS THAN OUR CONTINUING OPERATIONS, INCLUDING THE ASSUMPTION OF UNKNOWN LIABILITIES; |
• | 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. COMPETITION, OR LACK THEREOF, AMONG FUEL CARD COMPANIES MAY RESULT IN FUTURE INCREASES IN OUR TRANSACTION FEE EXPENSES OR WORKING CAPITAL REQUIREMENTS, OR BOTH; |
• | 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; |
• | 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; |
• | 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 |
• | ALTHOUGH WE BELIEVE THAT WE BENEFIT FROM OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING HPT, THE RMR GROUP LLC, AFFILIATES INSURANCE COMPANY AND OTHERS AFFILIATED WITH THEM, ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH RELATED PARTIES MAY PRESENT A CONTRARY APPEARANCE OR RESULT IN LITIGATION AND THE BENEFITS WE BELIEVE WE MAY REALIZE FROM THE RELATIONSHIPS MAY NOT MATERIALIZE. |
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• | over 26 acres of land with parking for approximately 200 tractor trailers and 100 cars; |
• | a full service restaurant and one or more QSRs that we operate as a franchisee under various brands; |
• | a truck repair facility and parts store; |
• | multiple diesel and gasoline fueling points, including DEF at the diesel lanes; and |
• | a travel store, game room, lounge and other amenities for professional truck drivers and motorists. |
• | 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, 2017, we offered branded gasoline at 239 of our 256 locations and unbranded gasoline at six of our travel centers operated by our franchisees. |
• | Diesel Exhaust Fluid. DEF is an additive that is required by most truck engines manufactured after 2010. As of December 31, 2017, we offered DEF from dispensers on the diesel fueling island at 254 of our travel centers. |
• | Full Service Restaurants and QSRs. Most of our travel centers have both full service restaurants and 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 37 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, 2017, approximately 197 of our travel centers included a full service restaurant, approximately 211 of our travel centers offered at least one QSR and there were a total of approximately 442 QSRs in our 256 travel centers. |
• | Truck Service. Most of our travel centers have truck repair and maintenance facilities. Our 244 truck repair and maintenance facilities typically have between two 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. |
• | Travel Stores. Travel stores located at our travel centers typically have a selection of over 4,700 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. In 2015, we began to use Minit Mart branding at the travel stores in our travel centers; as of December 31, 2017, 67 travel centers included Minit Mart signage and branding elements, 20 of which were completed during 2017. |
• | 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, 2017, we offered Reserve-It!® parking at 240 of our travel centers and had deployed a total of approximately 5,135 reserved parking spaces. These reserved parking spaces comprise an average percentage of the total parking spaces per site of approximately 11%. |
• | 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: |
• | specialized business services, including an information center where drivers can send and receive faxes, overnight mail and other communications; |
• | a banking desk where drivers can cash checks and receive funds transfers from fleet operators; |
• | wi-fi internet access; |
• | a laundry area with washers and dryers; |
• | private showers; |
• | free exercise facilities; and |
• | areas designated for truck drivers only, including a theater or big screen television room with a video player and comfortable seating. |
• | approximately six fueling positions; |
• | approximately 3,800 square feet of interior space; |
• | at least one QSR offering; and |
• | various nonfuel offerings such as coffee, groceries, fresh foods and beer/liquor. |
• | Fuel. We sell branded gasoline and unbranded diesel fuel at our convenience stores. As of December 31, 2017, we offered branded gasoline at nearly all of our 233 convenience stores and offered unbranded diesel fuel at 155 of our convenience stores. |
• | Nonfuel Offerings. Our convenience stores generally have a selection of over 3,100 items, including packaged food and snack items, beverages, beer and wine, tobacco products, non-prescription drug and beauty supplies, batteries and automobile accessories. Each convenience store also has a "to go" bar offering fresh brewed coffee, fountain drinks, hot dogs, prepared sandwiches and other prepared foods. As of December 31, 2017, 83 of our convenience stores also offered car washes. |
• | QSRs. Many of our convenience stores have a nationally recognized branded QSR. We operate 27 different brands of QSRs at our convenience stores, including O'Deli's Subs®, Godfather's Pizza®, Subway®, Hot Stuff Pizza® and Hunt Brothers Pizza®. As of December 31, 2017, 130 of our convenience stores offered at least one QSR and there were a total of 227 QSRs in our 233 convenience stores. |
• | RoadSquad® is a roadside truck service program that operates 24 hours per day, seven days per week. As of December 31, 2017, this program included a fleet of approximately 570 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 one Canadian province with a total of approximately 1,570 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 or on certain days of the week. |
• | RoadSquad OnSite® offers truck and trailer mobile maintenance and repair services performed by certified technicians at customer facilities, with a fleet of approximately 135 trucks in service as of December 31, 2017. 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. |
• | TA Commercial Tire Network™ is a commercial tire program that 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. We believe the TA Commercial Tire Network™ is the most comprehensive commercial tire purchasing, monitoring and maintenance program in the United States. |
• | property insurance in an amount equal to the full replacement cost of at risk improvements at our leased properties; |
• | business interruption insurance; |
• | general liability insurance, including bodily injury and property damage, in amounts that are generally maintained by companies operating travel centers; |
• | flood insurance for any property located in whole or in part in a flood plain; |
• | workers' compensation insurance if required by law; and |
• | such additional insurance as may be generally maintained by companies operating travel centers, including certain environmental insurance. |
• | our failure to pay rent or any other amounts when due; |
• | our failure to maintain the insurance required under the lease; |
• | the occurrence of certain events with respect to our insolvency; |
• | the institution of a proceeding for our bankruptcy or dissolution; |
• | our failure to continuously operate any leased properties without HPT's consent; |
• | 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; |
• | 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 |
• | 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. |
• | accelerate the rent; |
• | terminate the lease; and/or |
• | 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. |
Brand Affiliation: | Ownership of Sites By: | |||||||||||||||||
TA | Petro | QSL | Total | TA | Franchisee or Others | |||||||||||||
Alabama | 1 | 1 | — | 2 | 1 | 1 | ||||||||||||
Florida | — | — | 1 | 1 | — | 1 | ||||||||||||
Georgia | 1 | — | — | 1 | 1 | — | ||||||||||||
Illinois | — | 1 | — | 1 | — | 1 | ||||||||||||
Iowa | 1 | — | 1 | 2 | — | 2 | ||||||||||||
Kansas | 1 | 1 | — | 2 | — | 2 | ||||||||||||
Kentucky | — | — | 1 | 1 | — | 1 | ||||||||||||
Louisiana | — | — | 2 | 2 | — | 2 | ||||||||||||
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 | — | 8 | 9 | — | 9 | ||||||||||||
South Carolina | — | — | 1 | 1 | — | 1 | ||||||||||||
Tennessee | 2 | — | 2 | 4 | 1 | 3 | ||||||||||||
Texas | 2 | — | — | 2 | 1 | 1 | ||||||||||||
Virginia | 1 | 2 | 1 | 4 | — | 4 | ||||||||||||
West Virginia | — | — | 1 | 1 | — | 1 | ||||||||||||
Wisconsin | 1 | 1 | 3 | 5 | — | 5 | ||||||||||||
Total | 15 | 13 | 33 | 61 | 4 | 57 |
• | 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 8.6% of our outstanding common shares as of December 31, 2017. |
• | Our Managing Director, Adam D. Portnoy, is a current managing trustee of HPT, and his father, Barry M. Portnoy, is a former managing trustee of HPT, and together owned, directly or indirectly, in aggregate 1.4% of HPT's outstanding common shares as of December 31, 2017. |
• | 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. |
• | Adam D. Portnoy is a managing director and an officer and, as the current sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc. and is an officer of, and owns equity interests in, RMR. The RMR Group Inc. is the managing member of RMR and RMR is a subsidiary of The RMR Group Inc. |
• | 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. |
• | Andrew J. Rebholz, our Chief Executive Officer, 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. Barry M. Portnoy was our other Managing Director and a director and an officer of The RMR Group Inc. and an officer of RMR until his death on February 25, 2018. Thomas M. O'Brien, our former Managing Director and President and Chief Executive Officer who retired effective December 31, 2017, was also an officer of RMR. |
• | 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 Affiliates Insurance Company, an Indiana insurance company, or AIC, 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 license 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 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. |
Brand Affiliation: | Ownership of Sites by: | |||||||||||||||||||||||||||||
TA | Petro | Minit Mart(1) | QSL | Others(2) | Total | TA | HPT | Joint Venture | Others(3) | |||||||||||||||||||||
Alabama | 3 | 3 | — | — | — | 6 | 2 | 4 | — | — | ||||||||||||||||||||
Arizona | 5 | 2 | — | — | — | 7 | — | 7 | — | — | ||||||||||||||||||||
Arkansas | 2 | 2 | — | — | — | 4 | — | 4 | — | — | ||||||||||||||||||||
California | 9 | 4 | 3 | — | 1 | 17 | — | 11 | 6 | — | ||||||||||||||||||||
Colorado | 4 | 1 | 2 | — | — | 7 | 4 | 3 | — | — | ||||||||||||||||||||
Connecticut | 3 | — | — | — | — | 3 | — | 3 | — | — | ||||||||||||||||||||
Florida | 6 | 1 | — | — | — | 7 | — | 7 | — | — | ||||||||||||||||||||
Georgia | 6 | 3 | — | — | — | 9 | 1 | 8 | — | — | ||||||||||||||||||||
Idaho | 1 | — | — | — | — | 1 | — | 1 | — | — | ||||||||||||||||||||
Illinois | 7 | 3 | 42 | — | — | 52 | 36 | 10 | — | 6 | ||||||||||||||||||||
Indiana | 8 | 6 | 1 | — | — | 15 | 4 | 11 | — | — | ||||||||||||||||||||
Iowa | 2 | — | — | — | — | 2 | 1 | 1 | — | — | ||||||||||||||||||||
Kansas | 1 | 1 | 20 | — | — | 22 | 21 | 1 | — | — | ||||||||||||||||||||
Kentucky | 2 | 2 | 68 | — | 1 | 73 | 49 | 3 | — | 21 | ||||||||||||||||||||
Louisiana | 4 | 3 | — | — | — | 7 | — | 7 | — | — | ||||||||||||||||||||
Maryland | 3 | — | — | — | — | 3 | — | 3 | — | — | ||||||||||||||||||||
Michigan | 6 | — | — | — | — | 6 | 1 | 5 | — | — | ||||||||||||||||||||
Minnesota | 1 | — | 18 | — | — | 19 | 17 | 1 | — | 1 | ||||||||||||||||||||
Mississippi | 1 | 1 | — | — | — | 2 | — | 1 | — | 1 | ||||||||||||||||||||
Missouri | 4 | 1 | 39 | — | — | 44 | 39 | 5 | — | — | ||||||||||||||||||||
Montana | 2 | — | — | — | — | 2 | 2 | — | — | — | ||||||||||||||||||||
Nebraska | 2 | 1 | — | — | — | 3 | — | 3 | — | — | ||||||||||||||||||||
Nevada | 3 | 3 | — | — | — | 6 | 1 | 5 | — | — | ||||||||||||||||||||
New Hampshire | 1 | — | — | — | — | 1 | — | 1 | — | — | ||||||||||||||||||||
New Jersey | 3 | 1 | — | — | — | 4 | — | 4 | — | — | ||||||||||||||||||||
New Mexico | 5 | 2 | — | — | — | 7 | — | 6 | — | 1 | ||||||||||||||||||||
New York | 5 | 1 | — | — | — | 6 | — | 6 | — | — | ||||||||||||||||||||
North Carolina | 3 | 1 | — | — | — | 4 | 1 | 3 | — | — | ||||||||||||||||||||
North Dakota | 1 | — | — | — | — | 1 | 1 | — | — | — | ||||||||||||||||||||
Ohio | 9 | 4 | 11 | 7 | — | 31 | 11 | 14 | — | 6 | ||||||||||||||||||||
Oklahoma | 3 | 1 | — | — | — | 4 | — | 4 | — | — | ||||||||||||||||||||
Oregon | 2 | 1 | — | — | — | 3 | — | 3 | — | — | ||||||||||||||||||||
Pennsylvania | 8 | 2 | — | 5 | — | 15 | 4 | 9 | — | 2 | ||||||||||||||||||||
Rhode Island | 1 | — | — | — | — | 1 | 1 | — | — | — | ||||||||||||||||||||
South Carolina | 4 | 2 | — | — | — | 6 | 2 | 4 | — | — | ||||||||||||||||||||
Tennessee | 6 | 2 | 3 | — | — | 11 | 3 | 8 | — | — | ||||||||||||||||||||
Texas | 13 | 8 | — | — | — | 21 | 3 | 18 | — | — | ||||||||||||||||||||
Utah | 2 | — | — | — | — | 2 | — | 2 | — | — | ||||||||||||||||||||
Virginia | 3 | — | — | 1 | — | 4 | — | 3 | — | 1 | ||||||||||||||||||||
Washington | 1 | 1 | — | — | — | 2 | — | 2 | — | — | ||||||||||||||||||||
West Virginia | 2 | — | — | 1 | — | 3 | — | 2 | — | 1 | ||||||||||||||||||||
Wisconsin | 2 | 1 | 26 | — | — | 29 | 25 | 2 | — | 2 | ||||||||||||||||||||
Wyoming | 3 | 1 | — | — | — | 4 | — | 4 | — | — | ||||||||||||||||||||
Ontario, Canada | 1 | — | — | — | — | 1 | 1 | — | — | — | ||||||||||||||||||||
Total | 163 | 65 | 233 | 14 | 2 | 477 | 230 | 199 | 6 | 42 |
(1) | Includes one Minit Mart branded convenience store we own and lease to a dealer. Excludes Minit Mart branded stores located within our travel centers. |
(2) | Includes restaurant brands other than QSL. |
(3) | Includes properties leased from, or managed for, parties other than HPT. |
2017 | High | Low | ||||||
First Quarter | $ | 7.75 | $ | 5.60 | ||||
Second Quarter | 6.38 | 3.55 | ||||||
Third Quarter | 4.63 | 2.95 | ||||||
Fourth Quarter | 5.85 | 3.95 |
2016 | High | Low | ||||||
First Quarter | $ | 9.58 | $ | 6.41 | ||||
Second Quarter | 9.23 | 6.45 | ||||||
Third Quarter | 8.78 | 6.56 | ||||||
Fourth Quarter | 7.60 | 5.65 |
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 | ||||||||||
October 2017 | 29,956 | $ | 4.15 | — | $ | — | ||||||||
November 2017 | — | — | — | — | ||||||||||
December 2017 | 232,809 | 4.35 | — | — | ||||||||||
Total | 262,765 | $ | 4.33 | — | $ | — |
(1) | During 2017, all common share purchases were made to satisfy share award recipients' tax withholding and payment obligations in connection with the vesting of awards of restricted common shares, which were repurchased by us based on their fair market value on the repurchase date. |
(in thousands, except per share and site counts unless indicated otherwise) | Year Ended December 31, | ||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Statements of Operations and Comprehensive Income (Loss) Attributable to Common Shareholders Data: | |||||||||||||||||||
Revenues: | |||||||||||||||||||
Fuel | $ | 4,090,912 | $ | 3,530,149 | $ | 4,055,448 | $ | 6,149,449 | $ | 6,481,252 | |||||||||
Nonfuel | 1,944,181 | 1,903,623 | 1,740,509 | 1,596,575 | 1,420,756 | ||||||||||||||
Rent and royalties from franchisees | 16,500 | 17,352 | 12,424 | 12,382 | 12,687 | ||||||||||||||
Total revenues | 6,051,593 | 5,451,124 | 5,808,381 | 7,758,406 | 7,914,695 | ||||||||||||||
(Loss) income from operations | (45,924 | ) | 22,060 | 78,297 | 113,640 | 21,190 | |||||||||||||
Net income (loss) attributable to common shareholders | 9,262 | (2,018 | ) | 27,719 | 60,969 | 31,623 | |||||||||||||
Net income (loss) per common share attributable to common shareholders: | |||||||||||||||||||
Basic and diluted | $ | 0.23 | $ | (0.05 | ) | $ | 0.72 | $ | 1.62 | $ | 1.06 | ||||||||
Balance Sheet Data (end of period): | |||||||||||||||||||
Total assets | $ | 1,617,854 | $ | 1,659,841 | $ | 1,621,541 | $ | 1,393,007 | $ | 1,234,171 | |||||||||
Sale leaseback financing obligation, noncurrent portion(1) | 22,987 | 21,165 | 20,719 | 82,591 | 83,762 | ||||||||||||||
Deferred rent obligation(2) | 150,000 | 150,000 | 150,000 | 150,000 | 150,000 | ||||||||||||||
Senior Notes | 330,000 | 330,000 | 330,000 | 230,000 | 110,000 | ||||||||||||||
Other Operating Data: | |||||||||||||||||||
Total fuel sold (gallons)(3) | 2,152,179 | 2,205,424 | 2,130,103 | 2,024,790 | 2,034,929 | ||||||||||||||
Number of sites (end of period): | |||||||||||||||||||
Company operated travel centers | 228 | 225 | 223 | 220 | 217 | ||||||||||||||
Company operated convenience stores | 232 | 232 | 203 | 34 | 34 | ||||||||||||||
Company operated standalone restaurants | 16 | 13 | 2 | 1 | — | ||||||||||||||
Franchisee operated travel centers | 4 | 5 | 5 | 5 | 5 | ||||||||||||||
Franchisee owned and operated travel centers | 24 | 25 | 24 | 25 | 25 | ||||||||||||||
Dealer operated convenience store | 1 | 1 | 1 | — | — | ||||||||||||||
Franchisee owned and operated standalone restaurants | 33 | 39 | — | — | — | ||||||||||||||
Total locations | 538 | 540 | 458 | 285 | 281 |
(1) | See Note 7 to the Notes to Consolidated Financial Statements included in Item 15 of this Annual Report for more information about our sale leaseback financing obligation. |
(2) | The deferred rent obligation is due and payable in five installments of $42,915, $29,324, $29,107, $27,421 and $21,233 on June 30, 2024, and December 31, 2026, 2028, 2029 and 2030, respectively, and the obligation does not bear interest unless certain events provided under the applicable agreement occur. Deferred rent is subject to acceleration at HPT's option upon an uncured default by, or a change in control of, us. |
(3) | Includes all fuel we sold, both at our retail locations and on a wholesale basis, including to a joint venture in which we own a noncontrolling interest, but excludes the retail fuel sales at travel centers operated by our franchisees. |
• | We recognized aggregate impairment charges of $9,769 on certain property and equipment and other asset write offs of $6,773, which charges are included in depreciation and amortization expense in our consolidated statements of operations and comprehensive income (loss). |
• | We incurred $9,706 of legal fees during 2017 in connection with our dispute with Comdata, as further described below, which is included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). |
• | As a result of the decrease in the corporate income tax rate from 35% to 21% as part of the Tax Cuts and Jobs Act enacted in December 2017, we recognized a $6,356 charge to reduce our benefit for income taxes as a result of revaluing our deferred tax assets and liabilities at the new statutory rate. |
• | In connection with the retirements of certain of our senior management during 2017, including our former President and Chief Executive Officer and a former Executive Vice President, we recognized $1,489 related to one time payments and accelerated vesting of common shares previously awarded under our equity compensation plans, which amount is included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). |
• | Our restaurant renovation, rebranding and certain cost control initiatives also resulted in lower revenues in the short term but are expected to improve profitability in the future. |
2017 | Change | 2016 | Change | 2015 | |||||||||||||
Revenues: | |||||||||||||||||
Fuel | $ | 4,090,912 | 15.9 | % | $ | 3,530,149 | (13.0 | )% | $ | 4,055,448 | |||||||
Nonfuel | 1,944,181 | 2.1 | % | 1,903,623 | 9.4 | % | 1,740,509 | ||||||||||
Rent and royalties from franchisees | 16,500 | (4.9 | )% | 17,352 | 39.7 | % | 12,424 | ||||||||||
Total revenues | 6,051,593 | 11.0 | % | 5,451,124 | (6.2 | )% | 5,808,381 | ||||||||||
Gross margin: | |||||||||||||||||
Fuel | 394,179 | (2.6 | )% | 404,777 | (2.3 | )% | 414,494 | ||||||||||
Nonfuel | 1,084,352 | 3.0 | % | 1,053,077 | 9.4 | % | 962,766 | ||||||||||
Rent and royalties from franchisees | 16,500 | (4.9 | )% | 17,352 | 39.7 | % | 12,424 | ||||||||||
Total gross margin | 1,495,031 | 1.3 | % | 1,475,206 | 6.2 | % | 1,389,684 | ||||||||||
Operating expenses: | |||||||||||||||||
Site level operating | 980,749 | 2.2 | % | 959,407 | 8.3 | % | 885,646 | ||||||||||
Selling, general and administrative | 154,663 | 11.2 | % | 139,052 | 14.2 | % | 121,767 | ||||||||||
Real estate rent | 277,127 | 5.7 | % | 262,298 | 13.3 | % | 231,591 | ||||||||||
Depreciation and amortization | 128,416 | 39.0 | % | 92,389 | 27.6 | % | 72,383 | ||||||||||
Total operating expenses | 1,540,955 | 6.0 | % | 1,453,146 | 10.8 | % | 1,311,387 | ||||||||||
(Loss) income from operations | (45,924 | ) | (308.2 | )% | 22,060 | (71.8 | )% | 78,297 | |||||||||
Acquisition costs | 247 | (89.9 | )% | 2,451 | (51.4 | )% | 5,048 | ||||||||||
Interest expense, net | 29,962 | 7.7 | % | 27,815 | 23.4 | % | 22,545 | ||||||||||
Income from equity investees | 1,088 | (76.1 | )% | 4,544 | 12.0 | % | 4,056 | ||||||||||
Loss on extinguishment of debt | — | NM | — | NM | 10,502 | ||||||||||||
(Loss) income before income taxes | (75,045 | ) | NM | (3,662 | ) | (108.3 | )% | 44,258 | |||||||||
Benefit (provision) for income taxes | 84,439 | NM | 1,733 | (110.5 | )% | (16,539 | ) | ||||||||||
Net income (loss) | 9,394 | (587.0 | )% | (1,929 | ) | (107.0 | )% | 27,719 | |||||||||
Less: net income for noncontrolling interests | 132 | 48.3 | % | 89 | NM | — | |||||||||||
Net income (loss) attributable to common shareholders | $ | 9,262 | (559.0 | )% | $ | (2,018 | ) | (107.3 | )% | $ | 27,719 |
Fuel Gallons Sold | Fuel Revenues | ||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||
Travel centers | 1,859,212 | 1,908,924 | (2.6 | )% | $ | 3,533,121 | $ | 3,036,861 | 16.3 | % | |||||||||
Convenience stores | 253,826 | 253,363 | 0.2 | % | 480,917 | 420,747 | 14.3 | % | |||||||||||
Corporate and other | 39,141 | 43,137 | (9.3 | )% | 76,874 | 72,541 | 6.0 | % | |||||||||||
Consolidated totals | 2,152,179 | 2,205,424 | (2.4 | )% | $ | 4,090,912 | $ | 3,530,149 | 15.9 | % |
Fuel Gallons Sold | Fuel Revenues | ||||||||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | ||||||||||||||
Travel centers | 1,908,924 | 1,974,744 | (3.3 | )% | $ | 3,036,861 | $ | 3,763,536 | (19.3 | )% | |||||||||
Convenience stores | 253,363 | 121,604 | 108.4 | % | 420,747 | 224,894 | 87.1 | % | |||||||||||
Corporate and other | 43,137 | 33,755 | 27.8 | % | 72,541 | 67,018 | 8.2 | % | |||||||||||
Consolidated totals | 2,205,424 | 2,130,103 | 3.5 | % | $ | 3,530,149 | $ | 4,055,448 | (13.0 | )% |
2017 | Change | 2016 | Change | 2015 | |||||||||||||
Number of company operated travel center locations at end of period | 228 | 3 | 225 | 2 | 223 | ||||||||||||
Number of franchise operated travel center locations at end of period | 28 | (2 | ) | 30 | 1 | 29 | |||||||||||
Fuel: | |||||||||||||||||
Fuel sales volume (gallons) | 1,859,212 | (2.6) | % | 1,908,924 | (3.3) | % | 1,974,744 | ||||||||||
Fuel revenues | $ | 3,533,121 | 16.3 | % | $ | 3,036,861 | (19.3) | % | $ | 3,763,536 | |||||||
Fuel gross margin | 336,253 | (4.6) | % | 352,361 | (9.3) | % | 388,502 | ||||||||||
Fuel gross margin per gallon | $ | 0.181 | (2.2) | % | $ | 0.185 | (6.1) | % | $ | 0.197 | |||||||
Nonfuel: | |||||||||||||||||
Nonfuel revenues | $ | 1,636,009 | 1.3 | % | $ | 1,615,405 | 1.0 | % | $ | 1,599,088 | |||||||
Nonfuel gross margin | 964,438 | 1.9 | % | 946,308 | 3.3 | % | 915,794 | ||||||||||
Nonfuel gross margin percentage | 59.0 | % | 40 | pts | 58.6 | % | 130 | pts | 57.3 | % | |||||||
Total revenues | $ | 5,181,434 | 11.0 | % | $ | 4,665,894 | (13.2) | % | $ | 5,375,048 | |||||||
Total gross margin | 1,312,995 | 0.1 | % | 1,312,297 | (0.3) | % | 1,316,720 | ||||||||||
Site level operating expenses | 849,162 | 0.7 | % | 843,385 | 1.2 | % | 833,156 | ||||||||||
Site level operating expenses as a percentage of nonfuel revenues | 51.9 | % | (30 | )pts | 52.2 | % | 10 | pts | 52.1 | % | |||||||
Site level gross margin in excess of site level operating expenses | $ | 463,833 | (1.1) | % | $ | 468,912 | (3.0) | % | $ | 483,564 |
2017 | 2016 | Change | 2016 | 2015 | Change | ||||||||||||||||
Number of same site company operated travel center locations | 220 | 220 | — | 217 | 217 | — | |||||||||||||||
Fuel: | |||||||||||||||||||||
Fuel sales volume (gallons) | 1,827,357 | 1,893,690 | (3.5) | % | 1,883,514 | 1,967,655 | (4.3) | % | |||||||||||||
Fuel revenues | $ | 3,472,078 | $ | 3,011,216 | 15.3 | % | $ | 2,994,344 | $ | 3,749,929 | (20.1) | % | |||||||||
Fuel gross margin | 329,399 | 348,554 | (5.5) | % | 346,836 | 386,412 | (10.2) | % | |||||||||||||
Fuel gross margin per gallon | $ | 0.180 | $ | 0.184 | (2.2) | % | $ | 0.184 | $ | 0.196 | (6.1) | % | |||||||||
Nonfuel: | |||||||||||||||||||||
Nonfuel revenues | $ | 1,597,954 | $ | 1,596,816 | 0.1 | % | $ | 1,589,156 | $ | 1,591,676 | (0.2) | % | |||||||||
Nonfuel gross margin | 940,724 | 935,140 | 0.6 | % | 931,315 | 911,677 | 2.2 | % | |||||||||||||
Nonfuel gross margin percentage | 58.9 | % | 58.6 | % | 30 | pts | 58.6 | % | 57.3 | % | 130 | pts | |||||||||
Total gross margin | $ | 1,270,123 | $ | 1,283,694 | (1.1) | % | $ | 1,278,151 | $ | 1,298,089 | (1.5) | % | |||||||||
Site level operating expenses | 826,705 | 833,323 | (0.8) | % | 828,390 | 827,603 | 0.1 | % | |||||||||||||
Site level operating expenses as a percentage of nonfuel revenues | 51.7 | % | 52.2 | % | (50 | )pts | 52.1 | % | 52.0 | % | 10 | pts | |||||||||
Site level gross margin in excess of site level operating expenses | $ | 443,418 | $ | 450,371 | (1.5) | % | $ | 449,761 | $ | 470,486 | (4.4) | % |
Gallons Sold | Fuel Revenues | |||||
Results for 2016 | 1,908,924 | $ | 3,036,861 | |||
Increase due to petroleum products price changes | 586,881 | |||||
Decrease due to same site volume changes | (66,333 | ) | (125,955 | ) | ||
Increase due to locations opened | 16,621 | 35,334 | ||||
Net change from prior year period | (49,712 | ) | 496,260 | |||
Results for 2017 | 1,859,212 | $ | 3,533,121 |
Gallons Sold | Fuel Revenues | |||||
Results for 2015 | 1,974,744 | $ | 3,763,536 | |||
Decrease due to petroleum products price changes | (623,726 | ) | ||||
Decrease due to same site volume changes | (84,141 | ) | (132,108 | ) | ||
Increase due to locations opened | 18,321 | 29,159 | ||||
Net change from prior year period | (65,820 | ) | (726,675 | ) | ||
Results for 2016 | 1,908,924 | $ | 3,036,861 |
2017 | Change | 2016 | Change | 2015 | |||||||||||||
Number of company operated convenience stores locations at end of period | 232 | — | 232 | 29 | 203 | ||||||||||||
Number of dealer operated convenience store locations at end of period | 1 | — | 1 | — | 1 | ||||||||||||
Fuel: | |||||||||||||||||
Fuel sales volume (gallons) | 253,826 | 0.2 | % | 253,363 | 108.4 | % | 121,604 | ||||||||||
Fuel revenues | $ | 480,917 | 14.3 | % | $ | 420,747 | 87.1 | % | $ | 224,894 | |||||||
Fuel gross margin | 57,227 | 10.3 | % | 51,900 | 99.2 | % | 26,060 | ||||||||||
Fuel gross margin per gallon | $ | 0.225 | 9.8 | % | $ | 0.205 | (4.2) | % | $ | 0.214 | |||||||
Nonfuel: | |||||||||||||||||
Nonfuel revenues | $ | 269,854 | 2.4 | % | $ | 263,577 | 87.6 | % | $ | 140,503 | |||||||
Nonfuel gross margin | 94,516 | 5.0 | % | 90,047 | 94.4 | % | 46,314 | ||||||||||
Nonfuel gross margin percentage | 35.0 | % | 80 | pts | 34.2 | % | 120 | pts | 33.0 | % | |||||||
Total revenues | $ | 750,986 | 9.7 | % | $ | 684,630 | 87.4 | % | $ | 365,397 | |||||||
Total gross margin | 151,958 | 6.8 | % | 142,253 | 96.6 | % | 72,374 | ||||||||||
Site level operating expenses | 111,404 | 5.5 | % | 105,593 | 91.6 | % | 55,115 | ||||||||||
Site level operating expenses as a percentage of nonfuel revenues | 41.3 | % | 120 | pts | 40.1 | % | 90 | pts | 39.2 | % | |||||||
Site level gross margin in excess of site level operating expenses | $ | 40,554 | 10.6 | % | $ | 36,660 | 112.4 | % | $ | 17,259 |
2017 | 2016 | Change | 2016 | 2015 | Change | ||||||||||||||||
Number of same site company operated convenience store locations | 200 | 200 | — | 32 | 32 | — | |||||||||||||||
Fuel: | |||||||||||||||||||||
Fuel sales volume (gallons) | 227,102 | 232,534 | (2.3) | % | 41,058 | 41,690 | (1.5) | % | |||||||||||||
Fuel revenues | $ | 430,417 | $ | 385,053 | 11.8 | % | $ | 67,338 | $ | 77,706 | (13.3) | % | |||||||||
Fuel gross margin | 51,421 | 48,187 | 6.7 | % | 9,101 | 8,950 | 1.7 | % | |||||||||||||
Fuel gross margin per gallon | $ | 0.226 | $ | 0.207 | 9.2 | % | $ | 0.222 | $ | 0.215 | 3.3 | % | |||||||||
Nonfuel: | |||||||||||||||||||||
Nonfuel revenues | $ | 238,097 | $ | 239,341 | (0.5) | % | $ | 72,664 | $ | 72,827 | (0.2) | % | |||||||||
Nonfuel gross margin | 84,818 | 83,241 | 1.9 | % | 26,258 | 25,965 | 1.1 | % | |||||||||||||
Nonfuel gross margin percentage | 35.6 | % | 34.8 | % | 80 | pts | 36.1 | % | 35.7 | % | 40 | pts | |||||||||
Total gross margin | $ | 136,239 | $ | 131,428 | 3.7 | % | $ | 35,359 | $ | 34,915 | 1.3 | % | |||||||||
Site level operating expenses | 99,399 | 96,819 | 2.7 | % | 21,996 | 22,440 | (2.0) | % | |||||||||||||
Site level operating expenses as a percentage of nonfuel revenues | 41.7 | % | 40.5 | % | 120 | pts | 30.3 | % | 30.8 | % | (50 | )pts | |||||||||
Site level gross margin in excess of site level operating expenses | $ | 36,840 | $ | 34,609 | 6.4 | % | $ | 13,363 | $ | 12,475 | 7.1 | % |
Gallons Sold | Fuel Revenues | |||||
Results for 2016 | 253,363 | $ | 420,747 | |||
Increase due to petroleum products price changes | 55,345 | |||||
Decrease due to same site volume changes | (5,432 | ) | (9,982 | ) | ||
Increase due to locations opened and closed | 5,895 | 14,807 | ||||
Net change from prior year period | 463 | 60,170 | ||||
Results for 2017 | 253,826 | $ | 480,917 |
Gallons Sold | Fuel Revenues | |||||
Results for 2015 | 121,604 | $ | 224,894 | |||
Decrease due to petroleum products price changes | (9,355 | ) | ||||
Decrease due to same site volume changes | (632 | ) | (979 | ) | ||
Increase due to locations opened and closed | 132,391 | 206,187 | ||||
Net change from prior year period | 131,759 | 195,853 | ||||
Results for 2016 | 253,363 | $ | 420,747 |
• | 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; |
• | decreased demand for our products and services that we may experience as a result of competition; |
• | 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 possible inability of acquired or developed properties to generate the stabilized financial results we expected at the time of acquisition or development; |
• | the risk of an economic slowdown or recession in the U.S. economy; |
• | 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; and |
• | the risk of continued litigation costs. |
• | HPT is our former parent company, our principal landlord and our largest shareholder and RMR provides management services to both us and HPT; |
• | As of December 31, 2017, 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; |
• | RMR employs our Chief Executive Officer; our President and Chief Operating Officer; our Executive Vice President, Chief Financial Officer and Treasurer; our Executive Vice President and General Counsel; and our Managing Director; our Managing Director, as the current sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc., and, as such, beneficially owns direct and indirect interests in RMR; RMR employed our prior Managing Director, Barry M. Portnoy, until his death on February 25, 2018; RMR also employed our prior Managing Director, President and Chief Executive Officer who retired effective December 31, 2017; and |
• | RMR 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. |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | |||||||||||||||
Leases with HPT(1) | $ | 3,629,236 | $ | 291,158 | $ | 578,422 | $ | 571,771 | $ | 2,187,885 | |||||||||
Other operating leases | 51,659 | 9,706 | 14,131 | 8,475 | 19,347 | ||||||||||||||
2028 Senior Notes(2) | 110,000 | — | — | — | 110,000 | ||||||||||||||
2029 Senior Notes(3) | 120,000 | — | — | — | 120,000 | ||||||||||||||
2030 Senior Notes(4) | 100,000 | — | — | — | 100,000 | ||||||||||||||
Interest payments on long term debt | 308,475 | 26,721 | 53,428 | 53,408 | 174,918 | ||||||||||||||
Other long term liabilities(5) | 36,949 | 15,410 | 13,570 | 4,308 | 3,661 | ||||||||||||||
Total contractual obligations | $ | 4,356,319 | $ | 342,995 | $ | 659,551 | $ | 637,962 | $ | 2,715,811 |
(1) | The amounts shown for lease payments to HPT include payments due to HPT for the sites we account for as operating leases and for the sites we account for as a financing under a sale leaseback financing obligation and also include the payments of the deferred rent obligation of $42,915, $29,324, $29,107, $27,421 and $21,233 due in June 2024 and December 2026, 2028, 2029, and 2030, respectively, as well as the amounts payable to HPT at the end of the lease terms for the estimated costs of removing underground storage tanks. Interest is not payable on the deferred rent obligation balance unless we default on certain covenants or certain events occur, such as a change in control of us. |
(2) | Our 2028 Senior Notes require us to pay interest at 8.25% quarterly and the 2028 Senior Notes mature (unless previously redeemed) on January 15, 2028. We may, at our option, at any time on or after January 15, 2016, redeem some or all of the 2028 Senior Notes by paying 100% of the principal amount of the 2028 Senior Notes to be redeemed plus accrued but unpaid interest, if any, to, but not including, the redemption date. |
(3) | Our 2029 Senior Notes require us to pay interest at 8.00% quarterly and the 2029 Senior Notes mature (unless previously redeemed) on December 15, 2029. We may, at our option, at any time on or after December 15, 2017, redeem some or all of the 2029 Senior Notes by paying 100% of the principal amount of the 2029 Senior Notes to be redeemed plus accrued but unpaid interest, if any, to, but not including, the redemption date. |
(4) | Our 2030 Senior Notes require us to pay interest at 8.00% quarterly and the 2030 Senior Notes mature (unless previously redeemed) on October 15, 2030. We may, at our option, at any time on or after October 15, 2018, redeem some or all of the 2030 Senior Notes by paying 100% of the principal amount of the 2030 Senior Notes to be redeemed plus accrued but unpaid interest, if any, to, but not including, the redemption date. |
(5) | The other long term liabilities included in the table above include accrued liabilities related to our partial self insurance programs, including for general liability, workers' compensation, motor vehicle and group health benefits claims, as well as a loan secured by a mortgage on one of our standalone restaurants. |
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, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statements of Cash Flows, and (iv) related notes to these financial statements, tagged as blocks of text (filed herewith) |
/s/ RSM US LLP |
/s/ RSM US LLP |
December 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 36,082 | $ | 61,312 | |||
Accounts receivable (less allowance for doubtful accounts of $809 and $744 as of December 31, 2017 and 2016, respectively) | 125,501 | 107,246 | |||||
Inventory | 209,640 | 204,145 | |||||
Other current assets | 27,295 | 29,358 | |||||
Total current assets | 398,518 | 402,061 | |||||
Property and equipment, net | 1,001,090 | 1,082,022 | |||||
Goodwill | 93,859 | 88,542 | |||||
Other intangible assets, net | 34,383 | 37,738 | |||||
Other noncurrent assets | 90,004 | 49,478 | |||||
Total assets | $ | 1,617,854 | $ | 1,659,841 | |||
Liabilities and Shareholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 155,581 | $ | 157,964 | |||
Current HPT Leases liabilities | 41,389 | 39,720 | |||||
Other current liabilities | 130,140 | 132,648 | |||||
Total current liabilities | 327,110 | 330,332 | |||||
Long term debt, net | 319,634 | 318,739 | |||||
Noncurrent HPT Leases liabilities | 368,782 | 381,854 | |||||
Other noncurrent liabilities | 35,029 | 75,837 | |||||
Total liabilities | 1,050,555 | 1,106,762 | |||||
Shareholders' equity: | |||||||
Common shares, no par value, 41,369 shares authorized at December 31, 2017 and 2016, 39,984 and 39,523 shares issued and outstanding as of December 31, 2017, and 2016, respectively | 690,688 | 686,348 | |||||
Accumulated other comprehensive income | 580 | 11 | |||||
Accumulated deficit | (125,416 | ) | (134,678 | ) | |||
Total TA shareholders' equity | 565,852 | 551,681 | |||||
Noncontrolling interests | 1,447 | 1,398 | |||||
Total shareholders' equity | 567,299 | 553,079 | |||||
Total liabilities and shareholders' equity | $ | 1,617,854 | $ | 1,659,841 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues: | |||||||||||
Fuel | $ | 4,090,912 | $ | 3,530,149 | $ | 4,055,448 | |||||
Nonfuel | 1,944,181 | 1,903,623 | 1,740,509 | ||||||||
Rent and royalties from franchisees | 16,500 | 17,352 | 12,424 | ||||||||
Total revenues | 6,051,593 | 5,451,124 | 5,808,381 | ||||||||
Cost of goods sold (excluding depreciation): | |||||||||||
Fuel | 3,696,733 | 3,125,372 | 3,640,954 | ||||||||
Nonfuel | 859,829 | 850,546 | 777,743 | ||||||||
Total cost of goods sold | 4,556,562 | 3,975,918 | 4,418,697 | ||||||||
Operating expenses: | |||||||||||
Site level operating | 980,749 | 959,407 | 885,646 | ||||||||
Selling, general and administrative | 154,663 | 139,052 | 121,767 | ||||||||
Real estate rent | 277,127 | 262,298 | 231,591 | ||||||||
Depreciation and amortization | 128,416 | 92,389 | 72,383 | ||||||||
Total operating expenses | 1,540,955 | 1,453,146 | 1,311,387 | ||||||||
(Loss) income from operations | (45,924 | ) | 22,060 | 78,297 | |||||||
Acquisition costs | 247 | 2,451 | 5,048 | ||||||||
Interest expense, net | 29,962 | 27,815 | 22,545 | ||||||||
Income from equity investees | 1,088 | 4,544 | 4,056 | ||||||||
Loss on extinguishment of debt | — | — | 10,502 | ||||||||
(Loss) income before income taxes | (75,045 | ) | (3,662 | ) | 44,258 | ||||||
Benefit (provision) for income taxes | 84,439 | 1,733 | (16,539 | ) | |||||||
Net income (loss) | 9,394 | (1,929 | ) | 27,719 | |||||||
Less: net income for noncontrolling interests | 132 | 89 | — | ||||||||
Net income (loss) attributable to common shareholders | $ | 9,262 | $ | (2,018 | ) | $ | 27,719 | ||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency income (loss), net of taxes of $179, $57 and $355, respectively | $ | 108 | $ | 99 | $ | (655 | ) | ||||
Equity interest in investee's unrealized gain (loss) on investments | 461 | 152 | (20 | ) | |||||||
Other comprehensive income (loss) attributable to common shareholders | 569 | 251 | (675 | ) | |||||||
Comprehensive income (loss) attributable to common shareholders | $ | 9,831 | $ | (1,767 | ) | $ | 27,044 | ||||
Net income (loss) per common share attributable to common shareholders: | |||||||||||
Basic and diluted | $ | 0.23 | $ | (0.05 | ) | $ | 0.72 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 9,394 | $ | (1,929 | ) | $ | 27,719 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Noncash rent expense | (14,632 | ) | (13,683 | ) | (15,170 | ) | |||||
Depreciation and amortization expense | 128,416 | 92,389 | 72,383 | ||||||||
Deferred income taxes | (85,432 | ) | (2,167 | ) | 17,318 | ||||||
Loss on extinguishment of debt | — | — | 10,502 | ||||||||
Changes in operating assets and liabilities, net of effects of business acquisitions: | |||||||||||
Accounts receivable | (18,507 | ) | (14,503 | ) | 5,076 | ||||||
Inventory | (4,660 | ) | (19,678 | ) | 6,464 | ||||||
Other assets | 2,096 | 21,575 | (2,870 | ) | |||||||
Accounts payable and other liabilities | 8,123 | 46,405 | 8,072 | ||||||||
Other, net | 10,876 | 2,368 | 7,394 | ||||||||
Net cash provided by operating activities | 35,674 | 110,777 | 136,888 | ||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from asset sales | 109,374 | 193,082 | 378,250 | ||||||||
Capital expenditures | (145,401 | ) | (329,997 | ) | (295,437 | ) | |||||
Acquisitions of businesses, net of cash acquired | (19,858 | ) | (71,935 | ) | (320,290 | ) | |||||
Investment in equity investee | (6,000 | ) | (11,188 | ) | — | ||||||
Net cash used in investing activities | (61,885 | ) | (220,038 | ) | (237,477 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of Senior Notes | — | — | 100,000 | ||||||||
Payment of deferred financing costs | — | — | (4,506 | ) | |||||||
Proceeds from sale leaseback transactions with HPT | 2,860 | 937 | 1,190 | ||||||||
Sale leaseback financing obligation payments | (761 | ) | (578 | ) | (46,347 | ) | |||||
Acquisition of treasury shares from employees | (1,175 | ) | (1,394 | ) | (1,842 | ) | |||||
Distribution to noncontrolling interests | (83 | ) | — | — | |||||||
Net cash provided by (used in) financing activities | 841 | (1,035 | ) | 48,495 | |||||||
Effect of exchange rate changes on cash | 140 | (479 | ) | (94 | ) | ||||||
Net decrease in cash and cash equivalents | (25,230 | ) | (110,775 | ) | (52,188 | ) | |||||
Cash and cash equivalents at the beginning of the year | 61,312 | 172,087 | 224,275 | ||||||||
Cash and cash equivalents at the end of the year | $ | 36,082 | $ | 61,312 | $ | 172,087 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid (including rent classified as interest and net of capitalized interest) | $ | 31,611 | $ | 29,846 | $ | 21,204 | |||||
Income taxes paid, net of refunds | 345 | 243 | 1,984 |
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, 2014 | 38,336 | $ | 679,482 | $ | 435 | $ | (160,379 | ) | $ | (928 | ) | $ | 518,610 | $ | — | $ | 518,610 | |||||||||||||
Grants under share award plan and share based compensation, net | 472 | 2,737 | — | — | (1,842 | ) | 895 | — | 895 | |||||||||||||||||||||
Retirement of treasury shares | — | — | — | — | 2,770 | 2,770 | — | 2,770 | ||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | (675 | ) | — | — | (675 | ) | — | (675 | ) | |||||||||||||||||||
Net income | — | — | — | 27,719 | — | 27,719 | — | 27,719 | ||||||||||||||||||||||
December 31, 2015 | 38,808 | 682,219 | (240 | ) | (132,660 | ) | — | 549,319 | — | 549,319 | ||||||||||||||||||||
Grants under share award plan and share based compensation, net | 715 | 4,129 | — | — | (1,394 | ) | 2,735 | — | 2,735 | |||||||||||||||||||||
QSL acquisition | — | — | — | — | — | — | 1,309 | 1,309 | ||||||||||||||||||||||
Retirement of treasury shares | — | — | — | — | 1,394 | 1,394 | — | 1,394 | ||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | 251 | — | — | 251 | — | 251 | ||||||||||||||||||||||
Net (loss) income | — | — | — | (2,018 | ) | — | (2,018 | ) | 89 | (1,929 | ) | |||||||||||||||||||
December 31, 2016 | 39,523 | 686,348 | 11 | (134,678 | ) | — | 551,681 | 1,398 | 553,079 | |||||||||||||||||||||
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 tax | — | — | 569 | — | — | 569 | — | 569 | ||||||||||||||||||||||
Net income | — | — | — | 9,262 | — | 9,262 | 132 | 9,394 | ||||||||||||||||||||||
December 31, 2017 | 39,984 | $ | 690,688 | $ | 580 | $ | (125,416 | ) | $ | — | $ | 565,852 | $ | 1,447 | $ | 567,299 |
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 |
2. | Acquisitions |
Convenience Stores | Corporate and Other(1) | Total | ||||||||||
Inventory | $ | 3,175 | $ | 465 | $ | 3,640 | ||||||
Property and equipment | 36,289 | 12,825 | 49,114 | |||||||||
Goodwill | 6,919 | 1,890 | 8,809 | |||||||||
Other intangible assets | 370 | 14,020 | 14,390 | |||||||||
Other assets | 18 | 1,130 | 1,148 | |||||||||
Other liabilities | (1,618 | ) | (3,548 | ) | (5,166 | ) | ||||||
Total aggregate purchase price | $ | 45,153 | $ | 26,782 | $ | 71,935 |
(1) | Includes standalone restaurants. See Note 15 for more segment information. |
3. | Property and Equipment |
December 31, | |||||||
2017 | 2016 | ||||||
Land and improvements | $ | 315,696 | $ | 303,422 | |||
Buildings and improvements | 376,404 | 341,803 | |||||
Machinery, equipment and furniture | 505,803 | 425,527 | |||||
Leasehold improvements | 242,943 | 224,713 | |||||
Construction in progress | 65,450 | 198,600 | |||||
1,506,296 | 1,494,065 | ||||||
Less: accumulated depreciation and amortization | 505,206 | 412,043 | |||||
Property and equipment, net | $ | 1,001,090 | $ | 1,082,022 |
December 31, | |||||||
2017 | 2016 | ||||||
Land and improvements | $ | 14,565 | $ | 14,055 | |||
Buildings and improvements | 9,848 | 7,498 | |||||
Machinery, equipment and furniture | 3,239 | 3,239 | |||||
Leasehold improvements | 114,686 | 114,987 | |||||
142,338 | 139,779 | ||||||
Less: accumulated depreciation and amortization | 89,129 | 80,533 | |||||
Property and equipment, net | $ | 53,209 | $ | 59,246 |
4. | Goodwill and Intangible Assets |
December 31, 2017 | |||||||||||
Cost | Accumulated Amortization | Net | |||||||||
Amortizable intangible assets: | |||||||||||
Agreements with franchisees | $ | 22,945 | $ | (11,221 | ) | $ | 11,724 | ||||
Leasehold interests | 6,867 | (2,777 | ) | 4,090 | |||||||
Agreements with franchisors | 2,836 | (1,893 | ) | 943 | |||||||
Other | 5,190 | (3,681 | ) | 1,509 | |||||||
Total amortizable intangible assets | 37,838 | (19,572 | ) | 18,266 | |||||||
Carrying value of trademarks (indefinite lives) | 16,117 | — | 16,117 | ||||||||
Total intangible assets | 53,955 | (19,572 | ) | 34,383 | |||||||
Goodwill | 93,859 | — | 93,859 | ||||||||
Goodwill and other intangible assets, net | $ | 147,814 | $ | (19,572 | ) | $ | 128,242 |
December 31, 2016 | |||||||||||
Cost | Accumulated Amortization | Net | |||||||||
Amortizable intangible assets: | |||||||||||
Agreements with franchisees | $ | 24,593 | $ | (10,473 | ) | $ | 14,120 | ||||
Leasehold interests | 6,867 | (2,510 | ) | 4,357 | |||||||
Agreements with franchisors | 2,836 | (1,490 | ) | 1,346 | |||||||
Other | 5,276 | (3,478 | ) | 1,798 | |||||||
Total amortizable intangible assets | 39,572 | (17,951 | ) | 21,621 | |||||||
Carrying value of trademarks (indefinite lives) | 16,117 | — | 16,117 | ||||||||
Total intangible assets | 55,689 | (17,951 | ) | 37,738 | |||||||
Goodwill | 88,542 | — | 88,542 | ||||||||
Goodwill and other intangible assets, net | $ | 144,231 | $ | (17,951 | ) | $ | 126,280 |
Total | |||
2018 | $ | 2,172 | |
2019 | 2,054 | ||
2020 | 1,873 | ||
2021 | 1,653 | ||
2022 | 1,413 |
December 31, | |||||||
2017 | 2016 | ||||||
Travel center segment | $ | 21,613 | $ | 17,252 | |||
Convenience store segment | 69,200 | 69,400 | |||||
QSL business | 3,046 | 1,890 | |||||
Total goodwill | $ | 93,859 | $ | 88,542 |
5. | Other Current Liabilities |
December 31, | |||||||
2017 | 2016 | ||||||
Taxes payable, other than income taxes | $ | 48,976 | $ | 47,875 | |||
Accrued wages and benefits | 20,674 | 19,146 | |||||
Self insurance program accruals, current portion | 15,301 | 14,732 | |||||
Loyalty program accruals | 15,165 | 13,686 | |||||
Accrued capital expenditures | 5,695 | 12,135 | |||||
Other | 24,329 | 25,074 | |||||
Total other current liabilities | $ | 130,140 | $ | 132,648 |
6. | Long Term Debt |
December 31, | |||||||
2017 | 2016 | ||||||
2028 Senior Notes | $ | 110,000 | $ | 110,000 | |||
2029 Senior Notes | 120,000 | 120,000 | |||||
2030 Senior Notes | 100,000 | 100,000 | |||||
Other long term debt | 1,189 | 1,292 | |||||
Deferred financing costs | (11,555 | ) | (12,553 | ) | |||
Total long term debt, net | $ | 319,634 | $ | 318,739 |
7. | Leasing Transactions |
Total | |||
2018 | $ | 300,864 | |
2019 | 297,407 | ||
2020 | 295,146 | ||
2021 | 292,177 | ||
2022 | 288,069 | ||
Thereafter | 2,207,232 | ||
Total | $ | 3,680,895 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Minimum rent | $ | 278,806 | $ | 263,212 | $ | 233,211 | |||||
Sublease rent | 7,035 | 7,463 | 8,422 | ||||||||
Contingent rent(1) | 2,195 | 1,304 | (1,266 | ) | |||||||
Total rent expense | $ | 288,036 | $ | 271,979 | $ | 240,367 |
(1) | Since 2007, we had accrued contingent rent associated with one site leased from HPT. In June 2015, we became no longer liable for this contingent rent, and the related accrual was reversed during the year ended December 31, 2015. |
Number of Properties | Initial Term End Date(1) | Minimum Annual Rent as of December 31, 2017 | Deferred Rent(2) | ||||||||
TA Lease 1 | 40 | December 31, 2029 | $ | 52,763 | $ | 27,421 | |||||
TA Lease 2 | 40 | December 31, 2028 | 53,681 | 29,107 | |||||||
TA Lease 3 | 39 | December 31, 2026 | 54,006 | 29,324 | |||||||
TA Lease 4 | 40 | December 31, 2030 | 52,290 | 21,233 | |||||||
Petro Lease | 40 | June 30, 2032 | 69,527 | 42,915 | |||||||
Total | 199 | $ | 282,267 | $ | 150,000 |
(1) | We have two renewal options of 15 years each under each of our 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 by us, which remained outstanding as of December 31, 2017. This deferred rent obligation was allocated among the HPT Leases and is due at the end of the respective initial term end dates for the TA Leases noted above. Deferred rent for the Petro Lease is due and payable on June 30, 2024. Deferred rent is subject to acceleration at HPT's option upon an uncured default by, or a change in control of, us. |
Annual Minimum Rent | Rent for Ground Leases Subleased from HPT | ||||||
2018 | $ | 282,267 | $ | 8,891 | |||
2019 | 282,267 | 7,066 | |||||
2020 | 282,267 | 6,822 | |||||
2021 | 282,267 | 5,240 | |||||
2022 | 282,267 | 1,997 | |||||
2023 | 282,267 | 1,009 | |||||
2024(1) | 325,182 | 775 | |||||
2025 | 282,267 | 303 | |||||
2026(2) | 319,212 | 78 | |||||
2027 | 228,261 | 78 | |||||
2028(3) | 266,317 | 78 | |||||
2029(4) | 210,755 | 78 | |||||
2030(5) | 152,826 | 78 | |||||
2031 | 69,527 | 78 | |||||
2032(6) | 48,638 | 78 |
(1) | Includes previously deferred rent payments of $42,915 due on June 30, 2024. |
(2) | Includes previously deferred rent payments of $29,324 and estimated cost of removing underground storage tanks on the leased properties of $7,621 due on December 31, 2026. |
(3) | Includes previously deferred rent payments of $29,107 and estimated cost of removing underground storage tanks on the leased properties of $8,949 due on December 31, 2028. |
(4) | Includes previously deferred rent payments of $27,421 and estimated cost of removing underground storage tanks on the leased properties of $8,753 due on December 31, 2029. |
(5) | Includes previously deferred rent payments of $21,233 and estimated cost of removing underground storage tanks on the leased properties of $9,776 due on December 31, 2030. |
(6) | Includes estimated cost of removing underground storage tanks on the leased properties of $13,874 due on June 30, 2032. |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash payments for rent under the HPT Leases | $ | 280,897 | $ | 265,482 | $ | 241,962 | |||||
Change in accrued estimated percentage rent | 356 | 430 | (1,275 | ) | |||||||
Adjustments to recognize expense on a straight line basis | (383 | ) | (216 | ) | (4,910 | ) | |||||
Less: sale leaseback financing obligation amortization | (658 | ) | (477 | ) | (974 | ) | |||||
Less: portion of rent payments recognized as interest expense | (1,681 | ) | (1,729 | ) | (3,445 | ) | |||||
Less: deferred tenant improvements allowance amortization | (3,770 | ) | (3,769 | ) | (5,019 | ) | |||||
Amortization of deferred gain on sale leaseback transactions | (10,133 | ) | (9,755 | ) | (5,180 | ) | |||||
Rent expense related to HPT Leases | 264,628 | 249,966 | 221,159 | ||||||||
Rent paid to others(1) | 12,813 | 12,447 | 10,583 | ||||||||
Adjustments to recognize expense on a straight line basis for other leases | (314 | ) | (115 | ) | (151 | ) | |||||
Total real estate rent expense | $ | 277,127 | $ | 262,298 | $ | 231,591 |
(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, 2017 | December 31, 2016 | ||||||
Current HPT Leases liabilities: | |||||||
Accrued rent | $ | 24,170 | $ | 22,868 | |||
Sale leaseback financing obligation(1) | 863 | 484 | |||||
Straight line rent accrual(2) | 2,458 | 2,458 | |||||
Deferred gain(3) | 10,128 | 10,140 | |||||
Deferred tenant improvements allowance(4) | 3,770 | 3,770 | |||||
Total current HPT Leases liabilities | $ | 41,389 | $ | 39,720 | |||
Noncurrent HPT Leases liabilities: | |||||||
Deferred rent obligation | $ | 150,000 | $ | 150,000 | |||
Sale leaseback financing obligation(1) | 22,987 | 21,165 | |||||
Straight line rent accrual(2) | 46,937 | 47,771 | |||||
Deferred gain(3) | 111,041 | 121,331 | |||||
Deferred tenant improvements allowance(4) | 37,817 | 41,587 | |||||
Total noncurrent HPT Leases liabilities | $ | 368,782 | $ | 381,854 |
(1) | Sale Leaseback Financing Obligation. Prior to the Transaction Agreement, 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 June 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 connection with the Transaction Agreement were accounted for as new leases and two of the remaining four properties reflected as financings under the Prior TA Lease then qualified for operating lease treatment, the remaining net assets and financing obligation 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 of 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 minimum annual rents due under our then existing TA lease. While the TA Leases we entered into with HPT in connection with the Transaction Agreement contain no stated rent payment increases, we continue to 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 pursuant to the Transaction Agreement and the amended Transaction Agreement. 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. |
8. | Shareholders' Equity |
Number of Shares | Weighted Average Grant Date Fair Value Per Share | |||||
Unvested shares balance as of December 31, 2016 | 2,098 | $ | 7.50 | |||
Granted | 751 | 4.70 | ||||
Vested | (818 | ) | 6.93 | |||
Forfeited/canceled | (18 | ) | 7.93 | |||
Unvested shares balance as of December 31, 2017 | 2,013 | 6.68 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income (loss) attributable to common shareholders, as reported | $ | 9,262 | $ | (2,018 | ) | $ | 27,719 | ||||
Less: net income (loss) attributable to participating securities | 481 | (100 | ) | 1,386 | |||||||
Net income (loss) available to common shareholders | $ | 8,781 | $ | (1,918 | ) | $ | 26,333 | ||||
Weighted average common shares(1) | 37,524 | 36,976 | 36,485 | ||||||||
Basic and diluted net income (loss) per common share | $ | 0.23 | $ | (0.05 | ) | $ | 0.72 |
(1) | Excludes the 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 2,057 for the year ended December 31, 2017 and 1,920 for the years ended December 31, 2016 and 2015. |
9. | Income Taxes |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
U.S. federal statutory rate applied to income (loss) before income taxes | $ | 25,958 | $ | 1,074 | $ | (15,661 | ) | ||||
Uncertain tax position resolution | 58,602 | — | — | ||||||||
Benefit of tax credits | 2,902 | 2,849 | 2,574 | ||||||||
State income taxes, net of federal benefit | 2,221 | 1,621 | (1,695 | ) | |||||||
Provision to return adjustments | 443 | (910 | ) | 199 | |||||||
Nondeductible executive compensation | — | (841 | ) | (1,499 | ) | ||||||
Other nondeductible expenses | (322 | ) | (331 | ) | (271 | ) | |||||
Tax rate change | (6,356 | ) | — | — | |||||||
Other, net | 991 | (1,729 | ) | (186 | ) | ||||||
Total tax benefit (provision) | $ | 84,439 | $ | 1,733 | $ | (16,539 | ) |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current tax benefit (provision) | |||||||||||
Federal | $ | 32,883 | $ | 2,101 | $ | (6,513 | ) | ||||
State | (5,575 | ) | 3,974 | (2,659 | ) | ||||||
Total current tax benefit (provision) | 27,308 | 6,075 | (9,172 | ) | |||||||
Deferred tax benefit (provision): | |||||||||||
Federal | 48,139 | (2,861 | ) | (7,438 | ) | ||||||
State | 8,992 | (1,481 | ) | 71 | |||||||
Total deferred tax benefit (provision) | 57,131 | (4,342 | ) | (7,367 | ) | ||||||
Total tax benefit (provision) | $ | 84,439 | $ | 1,733 | $ | (16,539 | ) |
December 31, | |||||||
2017 | 2016 | ||||||
Deferred tax assets: | |||||||
Straight line rent accrual | $ | 13,542 | $ | 19,846 | |||
Reserves | 16,566 | 24,575 | |||||
Deferred gains | 32,949 | 55,110 | |||||
Asset retirement obligations | 2,765 | 3,827 | |||||
Tax credit carryforwards | 27,414 | 10,331 | |||||
Tax loss carryforwards | 61,961 | 29,782 | |||||
Deferred tenant improvements allowance | 11,228 | 18,596 | |||||
Other | 6,083 | 10,699 | |||||
Total deferred tax assets before valuation allowance | 172,508 | 172,766 | |||||
Valuation allowance | (1,027 | ) | (600 | ) | |||
Total deferred tax assets | 171,481 | 172,166 | |||||
Deferred tax liabilities: | |||||||
Property and equipment | (120,297 | ) | (176,117 | ) | |||
Goodwill and other intangible assets | (5,632 | ) | (7,865 | ) | |||
Other | (1,466 | ) | (1,050 | ) | |||
Total deferred tax liabilities | (127,395 | ) | (185,032 | ) | |||
Net deferred tax assets (liabilities) | $ | 44,086 | $ | (12,866 | ) |
December 31, | |||||||
2017 | 2016 | ||||||
Net deferred tax amounts are included in: | |||||||
Other noncurrent assets | $ | 44,086 | $ | — | |||
Other noncurrent liabilities | — | (12,866 | ) |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Balance at beginning of period | $ | 59,742 | $ | 59,742 | $ | 59,557 | |||||
Changes to current year tax positions | (1,140 | ) | — | — | |||||||
Interest | — | — | 185 | ||||||||
Lapse in statute of limitations | (58,602 | ) | — | — | |||||||
Balance at end of period | $ | — | $ | 59,742 | $ | 59,742 |
10. | Equity Investments |
PTP | Other(1) | Total | |||||||||
Investment balance: | |||||||||||
As of December 31, 2017 | $ | 20,807 | $ | 21,695 | $ | 42,502 | |||||
As of December 31, 2016 | 21,657 | 24,097 | 45,754 | ||||||||
Income (loss) from equity investments: | |||||||||||
Year ended December 31, 2017 | $ | 3,951 | $ | (2,863 | ) | $ | 1,088 | ||||
Year ended December 31, 2016 | 4,614 | (70 | ) | 4,544 | |||||||
Year ended December 31, 2015 | 4,036 | 20 | 4,056 |
(1) | Includes other equity investments, including our investment in Affiliates Insurance Company, or AIC. See Note 12 for more information about our investment in AIC. |
December 31, | |||||||
2017 | 2016 | ||||||
Total current assets | $ | 10,759 | $ | 12,605 | |||
Total noncurrent assets | 56,676 | 56,047 | |||||
Total current liabilities | 2,262 | 1,909 | |||||
Total noncurrent liabilities | 15,468 | 15,456 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Total revenues | $ | 119,463 | $ | 114,331 | $ | 115,313 | |||||
Cost of goods sold (excluding depreciation) | 85,729 | 80,664 | 84,820 | ||||||||
Operating income | 10,896 | 12,784 | 11,083 | ||||||||
Net income and comprehensive income | 10,418 | 12,077 | 10,629 |
11. | Business and Property Management Agreements with RMR |
12. | Related Party Transactions |
13. | Contingencies |
14. | Inventory |
December 31, 2017 | December 31, 2016 | ||||||
Nonfuel products | $ | 169,140 | $ | 167,813 | |||
Fuel products | 40,500 | 36,332 | |||||
Total inventory | $ | 209,640 | $ | 204,145 |
15. | Segment Information |
Year Ended December 31, 2017 | |||||||||||||||
Travel Centers | Convenience Stores | Corporate and Other | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Fuel | $ | 3,533,121 | $ | 480,917 | $ | 76,874 | $ | 4,090,912 | |||||||
Nonfuel | 1,636,009 | 269,854 | 38,318 | 1,944,181 | |||||||||||
Rent and royalties from franchisees | 12,304 | 215 | 3,981 | 16,500 | |||||||||||
Total revenues | 5,181,434 | 750,986 | 119,173 | 6,051,593 | |||||||||||
Site level gross margin in excess of site level operating expenses | $ | 463,833 | $ | 40,554 | $ | 9,895 | $ | 514,282 | |||||||
Corporate operating expenses: | |||||||||||||||
Selling, general and administrative | $ | 154,663 | $ | 154,663 | |||||||||||
Real estate rent | 277,127 | 277,127 | |||||||||||||
Depreciation and amortization | 128,416 | 128,416 | |||||||||||||
Loss from operations | (45,924 | ) | |||||||||||||
Acquisition costs | 247 | 247 | |||||||||||||
Interest expense, net | 29,962 | 29,962 | |||||||||||||
Income from equity investees | 1,088 | 1,088 | |||||||||||||
Loss before income taxes | (75,045 | ) | |||||||||||||
Benefit for income taxes | 84,439 | 84,439 | |||||||||||||
Net income | 9,394 | ||||||||||||||
Less: net income for noncontrolling interests | 132 | ||||||||||||||
Net income attributable to common shareholders | $ | 9,262 | |||||||||||||
Capital expenditures for property and equipment | $ | 94,174 | $ | 22,979 | $ | 28,248 | $ | 145,401 | |||||||
Acquisitions of businesses, net of cash acquired | 13,748 | — | 6,110 | 19,858 | |||||||||||
Total assets | 708,295 | 491,866 | 417,693 | 1,617,854 |
Year Ended December 31, 2016 | |||||||||||||||
Travel Centers | Convenience Stores | Corporate and Other | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Fuel | $ | 3,036,861 | $ | 420,747 | $ | 72,541 | $ | 3,530,149 | |||||||
Nonfuel | 1,615,405 | 263,577 | 24,641 | 1,903,623 | |||||||||||
Rent and royalties from franchisees | 13,628 | 306 | 3,418 | 17,352 | |||||||||||
Total revenues | 4,665,894 | 684,630 | 100,600 | 5,451,124 | |||||||||||
Site level gross margin in excess of site level operating expenses | $ | 468,912 | $ | 36,660 | $ | 10,227 | $ | 515,799 | |||||||
Corporate operating expenses: | |||||||||||||||
Selling, general and administrative | $ | 139,052 | $ | 139,052 | |||||||||||
Real estate rent | 262,298 | 262,298 | |||||||||||||
Depreciation and amortization | 92,389 | 92,389 | |||||||||||||
Income from operations | 22,060 | ||||||||||||||
Acquisition costs | 2,451 | 2,451 | |||||||||||||
Interest expense, net | 27,815 | 27,815 | |||||||||||||
Income from equity investees | 4,544 | 4,544 | |||||||||||||
Loss before income taxes | (3,662 | ) | |||||||||||||
Benefit for income taxes | 1,733 | 1,733 | |||||||||||||
Net loss | (1,929 | ) | |||||||||||||
Less: net income for noncontrolling interests | 89 | ||||||||||||||
Net loss attributable to common shareholders | $ | (2,018 | ) | ||||||||||||
Capital expenditures for property and equipment | $ | 200,513 | $ | 58,197 | $ | 71,287 | $ | 329,997 | |||||||
Acquisitions of businesses, net of cash acquired | — | 45,153 | 26,782 | 71,935 | |||||||||||
Total assets | 754,372 | 516,343 | 389,126 | 1,659,841 |
Year Ended December 31, 2015 | |||||||||||||||
Travel Centers | Convenience Stores | Corporate and Other | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Fuel | $ | 3,763,536 | $ | 224,894 | $ | 67,018 | $ | 4,055,448 | |||||||
Nonfuel | 1,599,088 | 140,503 | 918 | 1,740,509 | |||||||||||
Rent and royalties from franchisees | 12,424 | — | — | 12,424 | |||||||||||
Total revenues | 5,375,048 | 365,397 | 67,936 | 5,808,381 | |||||||||||
Site level gross margin in excess of site level operating expenses | $ | 483,564 | $ | 17,259 | $ | 3,215 | $ | 504,038 | |||||||
Corporate operating expenses: | |||||||||||||||
Selling, general and administrative | $ | 121,767 | $ | 121,767 | |||||||||||
Real estate rent | 231,591 | 231,591 | |||||||||||||
Depreciation and amortization | 72,383 | 72,383 | |||||||||||||
Income from operations | 78,297 | ||||||||||||||
Acquisition costs | 5,048 | 5,048 | |||||||||||||
Interest expense, net | 22,545 | 22,545 | |||||||||||||
Income from equity investees | 4,056 | 4,056 | |||||||||||||
Loss on extinguishment of debt | 10,502 | 10,502 | |||||||||||||
Income before income taxes | 44,258 | ||||||||||||||
Provision for income taxes | (16,539 | ) | (16,539 | ) | |||||||||||
Net income | 27,719 | ||||||||||||||
Less: net income for noncontrolling interests | — | ||||||||||||||
Net income attributable to common shareholders | $ | 27,719 | |||||||||||||
Capital expenditures for property and equipment | $ | 210,385 | $ | 14,191 | $ | 70,861 | $ | 295,437 | |||||||
Acquisitions of businesses, net of cash acquired | 9,338 | 310,952 | — | 320,290 | |||||||||||
Total assets | 720,149 | 431,014 | 470,378 | 1,621,541 |
16. | Selected Quarterly Financial Data (unaudited) |
Year Ended December 31, 2017 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total revenues | $ | 1,390,766 | $ | 1,498,668 | $ | 1,575,677 | $ | 1,584,765 | |||||||
Total gross margin | 345,056 | 390,246 | 394,173 | 365,556 | |||||||||||
(Loss) income from operations | (41,470 | ) | 1,630 | 13,112 | (19,161 | ) | |||||||||
Benefit for income taxes | 19,315 | 2,380 | 56,268 | 6,476 | |||||||||||
Net (loss) income attributable to common shareholders | (29,424 | ) | (3,013 | ) | 62,324 | (20,625 | ) | ||||||||
Net (loss) income per common share attributable to common shareholders: | |||||||||||||||
Basic and diluted | $ | (0.74 | ) | $ | (0.08 | ) | $ | 1.58 | $ | (0.52 | ) | ||||
Comprehensive (loss) income attributable to common shareholders | $ | (29,276 | ) | $ | (2,902 | ) | $ | 62,529 | $ | (20,520 | ) |
Year Ended December 31, 2016 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total revenues | $ | 1,149,822 | $ | 1,430,008 | $ | 1,462,646 | $ | 1,408,648 | |||||||
Total gross margin | 340,292 | 378,498 | 394,796 | 361,620 | |||||||||||
(Loss) income from operations | (8,778 | ) | 12,311 | 23,129 | (4,602 | ) | |||||||||
Benefit (provision) for income taxes | 5,677 | (1,985 | ) | (6,263 | ) | 4,304 | |||||||||
Net (loss) income attributable to common shareholders | (9,944 | ) | 3,521 | 10,898 | (6,493 | ) | |||||||||
Net (loss) income per common share attributable to common shareholders: | |||||||||||||||
Basic and diluted | $ | (0.26 | ) | $ | 0.09 | $ | 0.28 | $ | (0.17 | ) | |||||
Comprehensive (loss) income attributable to common shareholders | $ | (9,698 | ) | $ | 3,581 | $ | 10,932 | $ | (6,582 | ) |
TRAVELCENTERS OF AMERICA LLC | |||||||
Date: | February 28, 2018 | 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 | Chief Executive Officer (Principal Executive Officer) | February 28, 2018 | ||
Andrew J. Rebholz | ||||
/s/ Barry A. Richards | President and Chief Operating Officer (Principal Executive Officer) | February 28, 2018 | ||
Barry A. Richards | ||||
/s/ William E. Myers | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | February 28, 2018 | ||
William E. Myers | ||||
/s/ Adam D. Portnoy | Managing Director | February 28, 2018 | ||
Adam D. Portnoy | ||||
/s/ Barbara D. Gilmore | Independent Director | February 28, 2018 | ||
Barbara D. Gilmore | ||||
/s/ Lisa Harris Jones | Independent Director | February 28, 2018 | ||
Lisa Harris Jones | ||||
/s/ Joseph L. Morea | Independent Director | February 28, 2018 | ||
Joseph L. Morea |
Years Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(in thousands, except ratio amounts) | |||||||||||||||||||
(Loss) income before income taxes, income from equity investees and noncontrolling interests | $ | (76,133 | ) | $ | (8,206 | ) | $ | 40,202 | $ | 95,768 | $ | 2,331 | |||||||
Distributions received from equity investees | 4,800 | 3,000 | 4,800 | — | — | ||||||||||||||
Fixed charges | 123,381 | 118,248 | 106,344 | 93,101 | 90,880 | ||||||||||||||
Amortization of capitalized interest | 136 | 90 | 30 | 41 | 31 | ||||||||||||||
Capitalized interest | (510 | ) | (2,377 | ) | (1,797 | ) | (755 | ) | (1,033 | ) | |||||||||
Total earnings | $ | 51,674 | $ | 110,755 | $ | 149,579 | $ | 188,155 | $ | 92,209 | |||||||||
Interest expense(1) | $ | 30,495 | $ | 28,438 | $ | 24,425 | $ | 17,241 | $ | 17,650 | |||||||||
Estimated interest within real estate rent expense(2) | 92,376 | 87,433 | 80,122 | 75,105 | 72,197 | ||||||||||||||
Capitalized interest | 510 | 2,377 | 1,797 | 755 | 1,033 | ||||||||||||||
Total fixed charges | $ | 123,381 | $ | 118,248 | $ | 106,344 | $ | 93,101 | $ | 90,880 | |||||||||
Ratio of earnings to fixed charges | 0.42 | 0.94 | 1.41 | 2.02 | 1.01 | ||||||||||||||
Deficiency of earnings available to cover fixed charges | $ | (71,707 | ) | $ | (7,493 | ) | $ N/A | $ N/A | $ N/A |
(1) | Includes interest expense and amortization of premiums and discounts related to indebtedness. |
(2) | Estimated interest within real estate rent expense includes one third of real estate rent expense, which approximates the interest component of our operating leases. |
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 | |
307300 Nova Scotia Company | Nova Scotia, 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 | |
QSL of Austintown Realty LLC | Ohio | |
QSL of Austintown Ohio LLC | Ohio |
• | Registration Statement (Form S-3 No. 333-181182) 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. 333-176161) pertaining to the Amended and Restated TravelCenters of America LLC 2007 Equity Compensation Plan, |
• | Registration Statement (Form S-3 No. 333-206711) and related Prospectus of TravelCenters of America LLC, and |
• | Registration Statement (Form S-8 No. 333-211458) pertaining to the 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 28, 2018 | /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 28, 2018 | /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 28, 2018 | /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 |
Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2017 |
Feb. 27, 2018 |
Jun. 30, 2017 |
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Document and Entity Information | |||
Entity Registrant Name | TRAVELCENTERS OF AMERICA LLC | ||
Entity Central Index Key | 0001378453 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 133.1 | ||
Entity Common Stock, Shares Outstanding | 39,983,742 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 809 | $ 744 |
Common shares, shares authorized | 41,369 | 41,369 |
Common shares, shares issued | 39,984 | 39,523 |
Common shares, shares outstanding | 39,984 | 39,523 |
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Income Statement [Abstract] | |||
Foreign currency income (loss), taxes | $ 179 | $ 57 | $ (355) |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||
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Dec. 31, 2017 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies General Information and Basis of Presentation TravelCenters of America LLC, which we refer to as the Company or we, us and our, is a Delaware limited liability company. As of December 31, 2017, we operated and franchised 538 travel centers, standalone convenience stores and standalone restaurants. Our customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists and casual diners. We also collect rents, royalties and other fees from our tenants and franchisees. We manage our business on the basis of two separately reportable segments, travel centers and convenience stores. See Note 15 for more information about our reportable segments. We have a single travel center located in a foreign country, Canada, that we do not consider material to our operations. As of December 31, 2017, our business included 256 travel centers in 43 states in the United States, primarily along the U.S. interstate highway system, and the province of Ontario, Canada. Our travel centers included 178 locations operated under the "TravelCenters of America" and "TA" brand names and 78 locations operated under the "Petro Stopping Centers" and "Petro" brand names. Of our 256 travel centers at December 31, 2017, we owned 30, we leased 200, we operated two for a joint venture in which we own a noncontrolling interest and 24 were owned or leased from others by our franchisees. We operated 228 of our travel centers and franchisees operated 28 travel centers, including four we leased to franchisees. Our travel centers offer a broad range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services such as truck repair and maintenance services, full service restaurants, quick service restaurants, or QSRs, and various customer amenities. We report this portion of our business as our travel center segment. As of December 31, 2017, our business included 233 convenience stores in 11 states in the United States. We operate our convenience stores under the "Minit Mart" brand name. Of these 233 convenience stores at December 31, 2017, we owned 198, we leased 32 and we operated three for a joint venture in which we own a noncontrolling interest. Our convenience stores offer gasoline as well as a variety of nonfuel products and services, including coffee, groceries, some fresh foods, and, in many stores, a QSR and/or car wash. We report this portion of our business as our convenience store segment. As of December 31, 2017, our business included 49 standalone restaurants in 13 states in the United States operated primarily under the "Quaker Steak & Lube", or QSL, brand name. Of our 49 standalone restaurants at December 31, 2017, we owned six, we leased nine, we operated one for a joint venture in which we own a noncontrolling interest and 33 were owned or leased from others by our franchisees. We report this portion of our business within corporate and other in our segment information. Our consolidated financial statements include the accounts of TravelCenters of America LLC and its subsidiaries. All intercompany transactions and balances have been eliminated. We use the equity method of accounting for investments in entities when we have the ability to significantly influence, but not control, the investee's operating and financial policies, typically when we own 20% to 50% of the investee's voting stock. See Note 10 for more information about our equity investments. The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant Accounting Policies Revenue Recognition. We recognize revenue and the related costs at the time of final sale to consumers at our company operated locations for retail fuel and nonfuel sales. We record the estimated cost of loyalty program redemptions by customers of our loyalty program points as a discount against gross revenue in determining net revenue presented in our consolidated statements of operations and comprehensive income (loss). For those travel centers that we lease to a franchisee, we recognize rent revenue. These leases generally specify rent increases each year based on inflation rates for the respective periods or capital improvements we make at the travel center. Because the rent increases related to these factors are contingent upon future events, we recognize the related rent revenue after such events have occurred. We collect and recognize franchise royalty revenues monthly. We determine royalty revenues generally as a percentage of the franchisees' revenues. We recognize initial franchise fee revenues when the franchisee opens for business under our brand name, which is when we have fulfilled our initial obligations under the related agreements. Accounts Receivable and Allowance for Doubtful Accounts. We record trade accounts receivable at the invoiced amount and those amounts do not bear interest. The recorded allowance for doubtful accounts is our best estimate of the amount of probable losses in our existing accounts receivable. We base the allowance on historical payment patterns, aging of accounts receivable, periodic review of customers' financial condition and actual write off history. We charge off account balances against the allowance when we believe it is probable the receivable will not be collected. Inventory. We state our inventory at the lower of cost or market value. We determine cost principally on the weighted average cost method. We maintain reserves for the estimated amounts of obsolete and excess inventory. These estimates are based on unit sales histories and on hand inventory quantities, known market trends for inventory items and assumptions regarding factors such as future inventory needs, our ability and the related cost to return items to our suppliers and our ability to sell inventory at a discount when necessary. Property and Equipment. We record property and equipment as a result of business combinations based on their fair values as of the date of the acquisition. We record all other property and equipment at cost. We depreciate our property and equipment on a straight line basis generally over the following estimated useful lives of the assets:
We depreciate leasehold improvements over the shorter of the lives shown above or the remaining term of the underlying lease. Amortization expense related to assets recorded in connection with the sale leaseback financing obligation pertaining to certain travel centers we lease from Hospitality Properties Trust, or HPT, is included in depreciation and amortization expense over the shorter of the estimated useful lives of the assets or the lease term. See Notes 7 and 12 for more information about our relationship and transactions with HPT. Goodwill and Other Intangible Assets. In a business combination we are required to record assets and liabilities acquired, including those intangible assets that arise from contractual or other legal rights or are otherwise capable of being separated or divided from the acquired entity, based on the fair values of the acquired assets and liabilities. Any excess of acquisition cost over the fair value of the acquired net assets is recognized as goodwill. We amortize the recorded costs of intangible assets with finite lives on a straight line basis over their estimated lives, principally the terms of the related contractual agreements. See Note 4 for more information about our goodwill and other intangible assets. Impairment. We review definite lived assets for indicators of impairment during each reporting period. We recognize impairment charges when (i) the carrying value of a long lived asset or asset group to be held and used in the business is not recoverable and exceeds its fair value and (ii) when the carrying value of a long lived asset or asset group to be disposed of exceeds the estimated fair value of the asset less the estimated cost to sell the asset. Our estimates of fair value are based on our estimates of likely market participant assumptions, including projected operating results, real estate rent expense and the discount rate used to measure the present value of projected future cash flows. We use a number of assumptions and methods in preparing valuations underlying impairment tests, and in some instances we may obtain third party appraisals. We recognize impairment charges in the period during which the circumstances surrounding an asset or asset group to be held and used have changed such that the carrying value is no longer recoverable, or during which a commitment to a plan to dispose of the asset or asset group is made. We perform our impairment analysis for substantially all of our property and equipment at the individual site level because that is the lowest level of asset and liability groupings for which the cash flows are largely independent of the cash flows of other assets and liabilities. During 2017, our estimates and assumptions resulted in total impairment charges of $9,769 related to certain convenience store locations. We assess intangible assets with definite lives for impairment annually or whenever events or changes in circumstances warrant a revision to the remaining period of amortization. Definite lived intangible assets include our agreements with franchisees, leasehold interests, our agreements with franchisors and other intangible assets. For 2017, definite lived intangible assets were assessed using a qualitative analysis that was performed by assessing certain trends and factors, including actual sales, collection of royalties from franchisees and any changes in the manner in which the assets were used that could impact the value of the asset. During 2017, we did not record any impairment charges related to our definite lived intangible assets. We evaluate goodwill and indefinite lived intangible assets for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable using either a quantitative or qualitative analysis. We subject goodwill and indefinite lived intangible assets to further evaluation and recognize impairment charges when events and circumstances indicate the carrying value of the goodwill or indefinite lived intangible asset exceeds the fair market value of the asset. For 2017, indefinite lived intangible assets were assessed using a qualitative analysis that was performed by assessing certain trends and factors, including projected growth rates and actual sales and operating profit margins, discount rates, industry data and other relevant qualitative factors. These trends and factors were compared to, and based on, the assumptions used in the most recent quantitative assessment. During 2017, we did not record any impairment charges related to our indefinite lived intangible assets. We evaluate goodwill for impairment as of July 31, or more frequently if the circumstances warrant, at the reporting unit level. We have three reporting units, which include our two reportable segments, travel centers and convenience stores, and our QSL business. With respect to goodwill, if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of impairment to be recognized, if any. Goodwill impairment testing for the travel center and convenience store reporting units for 2017 was performed using a quantitative analysis under which the fair value of our reportable segments was estimated using both an income approach and a market approach. The income approach considered discounted forecasted cash flows that were based on our long term operating plan. A terminal value was used to estimate the cash flows beyond the period covered by the operating plan. If the business climate deteriorates, our actual results may not be consistent with these assumptions and estimates. The discount rate is an estimate of the overall after tax market rate of return we believe may be required by equity and debt holders of a business enterprise. The market approach considered the estimated fair values of possible comparable publicly traded companies. For each comparable publicly traded company, value indicators, or pricing multiples, were considered to estimate the value of our business enterprise. These analyses require the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows, including revenue growth rates and operating cash flow margins, of the respective reporting unit. The fair value estimates are sensitive and actual rates and results may differ materially. Applying different assumptions could lead to different results. We utilized a qualitative approach to perform impairment testing for the QSL business, which included evaluating financial trends and industry and market conditions. The fair value of our travel center reporting unit substantially exceeded its carrying value and the fair value of our convenience store reporting unit exceeded its carrying amount by 2.6%. Based on our analyses, we concluded that as of July 31, 2017, our goodwill was not impaired. Share Based Employee Compensation. We have historically granted awards of our common shares under our share award plans. Share awards issued to our Directors vest immediately. Share awards made to others vest in five to ten equal annual installments beginning on the date of grant. Compensation expense related to share awards is determined based on the market value of our shares on either the date of grant for employees or the vesting date for nonemployees, as appropriate, with the aggregate value of the shares awarded amortized to expense over the related vesting period. We include share based compensation expense in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). Environmental Remediation. We record remediation charges and penalties when the obligation to remediate is probable and the amount of associated costs are reasonably determinable. We include remediation expenses within site level operating expenses in our consolidated statements of operations and comprehensive income (loss). Generally, the timing of remediation expense recognition coincides with completion of a feasibility study or the commitment to a formal plan of action. Accrued liabilities related to environmental matters are recorded on an undiscounted basis because of the uncertainty associated with the timing of the related future payments. In our consolidated balance sheets, the accrual for environmental matters is included in other noncurrent liabilities, with the amount estimated to be expended within the subsequent 12 months included in other current liabilities. We recognize a receivable for estimated future environmental costs that we may be reimbursed for within other noncurrent assets in our consolidated balance sheets. Self Insurance Accruals. For insurance programs for which we pay deductibles and for which we are partially self insured up to certain stop loss amounts, we establish accruals for both estimated losses on known claims and claims incurred but not reported, based on claims histories and using actuarial methods. In our consolidated balance sheets, the accrual for self insurance costs is included in other noncurrent liabilities, with the amount estimated to be expended within the subsequent 12 months included in other current liabilities. Asset Retirement Obligations. We recognize the future costs for our obligations related to the removal of our underground storage tanks and certain improvements we own at leased properties over the estimated useful lives of each asset requiring removal. We record a liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long lived asset at the time such an asset is installed. We base the estimated liability on our historical experiences in removing these assets, their estimated useful lives, external estimates as to the cost to remove the assets in the future and regulatory or contractual requirements. The liability is a discounted liability using a credit adjusted risk free rate. Our asset retirement obligations at December 31, 2017 and 2016, were $10,240 and $9,335, respectively, and are presented in other noncurrent liabilities in our consolidated balance sheets. Leasing Transactions. Leasing transactions are a material part of our business. We have five leases with HPT. See Note 7 for more information about our leases with HPT and our accounting for them. We recognize rent under operating leases without scheduled rent increases as expense over the lease term as it becomes payable. Certain operating leases specify scheduled rent increases over the lease term or other lease payments that are not scheduled evenly throughout the lease term. We recognize the effects of those scheduled rent increases in rent expense over the lease term on an average, or straight line, basis. The rent payments resulting from our sales to HPT of improvements to the properties we lease from HPT are contingent rent. Other than at the travel centers where our leases are accounted for as sale leaseback financing obligations, we recognize the expense related to this contingent rent evenly throughout the remaining lease term beginning on the dates of the related sales to HPT. Income Taxes. We establish deferred income tax assets and liabilities to reflect the future tax consequences of differences between the tax bases and financial statement bases of assets and liabilities. We reduce the measurement of deferred tax assets, if necessary, by a valuation allowance when it is more likely than not that the deferred tax asset will not be realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. We evaluate and adjust these tax positions based on changing facts and circumstances. For tax positions meeting the more likely than not threshold, the amount we recognize in the financial statements is the largest benefit that we estimate has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. We classify interest and penalties related to uncertain tax positions, if any, in our financial statements as a component of income tax expense. See Note 9 for more information about our income taxes. Reclassifications. Certain prior year amounts have been reclassified to be consistent with the current year presentation within our consolidated financial statements, primarily the reclassification of certain lottery adjustments from nonfuel cost of goods sold to nonfuel revenues in our consolidated statements of operations and comprehensive income (loss). This reclassification is not considered material and has no impact on (loss) income from operations. In addition, we reclassified lottery tickets from inventory to other current assets in our consolidated balance sheets. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, which establishes a comprehensive revenue recognition standard under GAAP for almost all industries. This new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein. To address implementation of ASU 2014-09 and evaluate its impact on our consolidated financial statements, we developed a project plan in which we utilized a bottom up approach to evaluate our revenue streams and related internal controls. We have selected the full retrospective transition method for adoption, which requires that we restate our consolidated financial statements for prior year comparative periods. Although the majority of our revenue is initiated at the point of sale, the implementation of this standard will impact the accounting for our loyalty programs, initial franchise fees and advertising contributions received from franchisees. Under ASU 2014-09, loyalty awards will be recognized as a separate performance obligation against the revenue that earned the loyalty award, which will result in a reclassification of $65,623 and $56,477 between fuel and nonfuel revenue in our consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2017 and 2016, respectively, which will significantly affect our reported amounts for fuel gross margin per gallon (decrease) and nonfuel gross margin percentage (increase). However, the accounting for our loyalty program will not have a material impact on our (loss) income from operations or net income (loss) attributable to common shareholders or our consolidated balance sheets. The adjustments to reflect adoption of ASU 2014-09 with respect to our initial franchise fees and advertising contributions for the years ended December 31, 2017 and 2016, are not material to our consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases, which establishes a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability on the consolidated balance sheets for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. We are in the process of evaluating the effects the adoption of this update may have on our consolidated financial statements. We believe the adoption of this update will have a material impact on our consolidated balance sheets due to the recognition of the lease rights and obligations as assets and liabilities. While the adoption of this standard will have no effect on the cash we pay under our lease agreements, we expect amounts within our consolidated statements of operations and comprehensive income (loss) will change materially. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows, which simplifies elements of cash flow classification and reduces diversity in practice across all industries. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein, and requires retrospective application. Early adoption is permitted. The implementation of this update is not expected to cause any material changes to our consolidated statements of cash flows. In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations, which clarifies the definition of a business. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein, and requires prospective application. Early adoption is permitted. The implementation of this update is not expected to cause any material changes to our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The new standard will apply for annual or interim impairment tests beginning after December 15, 2019, and requires prospective application. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. |
Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions 2017 Acquisitions. During the year ended December 31, 2017, we acquired six standalone restaurants from one of our franchisees and a travel center from another of our franchisees for an aggregate purchase price of $19,858, and we accounted for these transactions as business combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their respective fair values as of the date of acquisition. We have included the results of these acquired businesses in our consolidated financial statements from the dates of acquisition. The pro forma impact of these acquisitions, including the respective results of operations from the beginning of the periods presented, are not material to our consolidated financial statements. 2016 Acquisitions. During the year ended December 31, 2016, we acquired 29 convenience stores for a total of $45,153 and 11 standalone restaurants and franchise agreements for an additional 39 standalone restaurants for a total of $26,782, and we accounted for these acquisitions as business combinations. The following table summarizes the amounts we recorded for the assets acquired and liabilities assumed in the business combinations in 2016 described above, along with resulting goodwill. We expect that amortization of all of the goodwill resulting from these acquisitions will be deductible for tax purposes.
2015 Acquisitions. During the year ended December 31, 2015, we acquired three travel centers for a total of $9,338 and 169 convenience stores for a total of $310,952, and we accounted for these transactions as business combinations. |
Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, net, at cost, as of December 31, 2017 and 2016, consisted of the following:
Total depreciation expense for the years ended December 31, 2017, 2016 and 2015, was $124,419, $88,892 and $70,042, respectively, which included impairment charges of $9,769 for the year ended December 31, 2017, related to certain convenience store locations. The following table shows the amounts of property and equipment owned by HPT but recognized in our consolidated balance sheets and included within the balances shown in the table above, as a result of the required accounting for the assets funded by HPT under the deferred tenant improvements allowance and for the assets that did not qualify for sale leaseback accounting. See Note 7 for more information about our leases with HPT.
At December 31, 2017, our property and equipment balance included $16,408 of improvements of the type that we typically request that HPT purchase for an increase in minimum annual rent; however, HPT is not obligated to purchase these improvements. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and other intangible assets, net, as of December 31, 2017 and 2016, consisted of the following:
Total amortization expense for amortizable intangible assets for the years ended December 31, 2017, 2016 and 2015, was $3,057, $2,570 and $1,703, respectively. We amortize our amortizable intangible assets over a weighted average period of 12 years. The aggregate amortization expense for our amortizable intangible assets as of December 31, 2017, for each of the next five years is:
Goodwill. During the years ended December 31, 2017 and 2016, we recognized $5,517 and $8,809, respectively, of goodwill in connection with our business combinations. Our goodwill balance included $77,738 that is deductible for tax purposes. Goodwill by reporting unit was as follows:
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Other Current Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Current Liabilities Other current liabilities, as of December 31, 2017 and 2016, consisted of the following:
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Long Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Term Debt | Long Term Debt Long term debt, net, as of December 31, 2017 and 2016, consisted of the following:
Senior Notes In October 2015 we issued in an underwritten public offering $100,000 aggregate principal amount of our 8.00% Senior Notes due on October 15, 2030, or the 2030 Senior Notes. Our net proceeds from this issuance were $95,494 after underwriters' discount and commission and other costs of the offering. The 2030 Senior Notes require us to pay interest at 8.00% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, beginning on January 15, 2016, and the 2030 Senior Notes will mature (unless previously redeemed) on October 15, 2030, and no principal payments are required prior to that date. We may, at our option, at any time on or after October 15, 2018, redeem some or all of the 2030 Senior Notes by paying 100% of the principal amount of the 2030 Senior Notes to be redeemed plus accrued but unpaid interest, if any, to, but not including, the redemption date. Our 8.00% Senior Notes due on December 15, 2029, or the 2029 Senior Notes, were issued in December 2014. The 2029 Senior Notes require us to pay interest at 8.00% per annum, payable quarterly in arrears on February 28, May 31, August 31 and November 30 of each year. The 2029 Senior Notes will mature (unless previously redeemed) on December 15, 2029, and no principal payments are required prior to that date. We may, at our option, at any time on or after December 15, 2017, redeem some or all of the 2029 Senior Notes by paying 100% of the principal amount of the 2029 Senior Notes to be redeemed plus accrued but unpaid interest, if any, to, but not including, the redemption date. Our 8.25% Senior Notes due on January 15, 2028, or the 2028 Senior Notes, were issued in January 2013. The 2028 Senior Notes require us to pay interest at 8.25% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The 2028 Senior Notes will mature (unless previously redeemed) on January 15, 2028 and no principal payments are required prior to that date. We may, at our option, at any time on or after January 15, 2016, redeem some or all of the 2028 Senior Notes by paying 100% of the principal amount of the 2028 Senior Notes to be redeemed plus accrued but unpaid interest, if any, to, but not including, the redemption date. We refer to the 2028 Senior Notes, 2029 Senior Notes and 2030 Senior Notes collectively as our Senior Notes, which are our senior unsecured obligations. The indenture governing our Senior Notes does not limit the amount of indebtedness we may incur. We may issue additional debt from time to time. Our Senior Notes have been presented on our consolidated balance sheets as long term debt, net of deferred financing costs. We estimate that the fair values of our 2028 Senior Notes, 2029 Senior Notes, and 2030 Senior Notes were $111,100, $120,960 and $99,960, respectively, based on their respective closing prices on The Nasdaq Stock Market LLC (a Level 1 input) on December 31, 2017. Revolving Credit Facility Our revolving credit facility, or the Credit Facility, matures on December 19, 2019. Under the Credit Facility, a maximum of $200,000 may be drawn, repaid and redrawn until maturity in December 2019. The availability of this maximum amount is subject to limits based on qualified collateral. Subject to available collateral and lender participation, the maximum amount may be increased to $300,000. The Credit Facility may be used for general business purposes and provides for the issuance of letters of credit. Generally, no principal payments are due until maturity. We are required to pay interest on borrowings under the Credit Facility at a rate based on, at our option, LIBOR or a base rate, plus a premium (which premium is subject to adjustment based upon facility availability, utilization and other matters). Pursuant to the Credit Facility, we pay a monthly unused line fee which is subject to adjustment according to the average daily principal amount of unused commitment under the Credit Facility. As of December 31, 2017, our letter of credit fees were an annual rate of 1.50% of our outstanding standby letters of credit and our unused line fee rate was an annual rate of 0.25% of the maximum balance minus our utilization and letters of credit. The Credit Facility requires us to maintain certain levels of collateral, limits our ability to incur debt and liens, restricts us from making certain investments and paying dividends and other distributions, requires us to maintain a minimum fixed charge ratio under certain circumstances and contains other customary covenants and conditions. The Credit Facility provides for the acceleration of principal and interest payments upon an event of default including, but not limited to, failure to pay interest or other amounts due, a change in control of us, as defined in the Credit Facility, and our default under certain contracts, including our leases with HPT, and our business management agreement with The RMR Group LLC, or RMR. Our Credit Facility is secured by substantially all of our cash, accounts receivable, inventory, equipment and intangible assets. The amount available to us is determined by reference to a borrowing base calculation based on eligible collateral. At December 31, 2017, based on our qualified collateral, a total of $112,669 was available to us for loans and letters of credit under the Credit Facility. At December 31, 2017, there were no borrowings outstanding under the Credit Facility but we had outstanding $17,795 of letters of credit issued under that facility, securing certain trade payables, insurance, fuel tax and other obligations. These letters of credit reduce the amount available for borrowing under the Credit Facility. Deferred Financing Costs The unamortized balance of our deferred financing costs were $11,555 and $12,553 for our Senior Notes and $440 and $664 for our Credit Facility at December 31, 2017 and 2016, respectively, net of accumulated amortization of $3,425 and $2,428, and $680 and $456, respectively. The deferred financing costs for our Senior Notes are presented as a reduction of long term debt and the deferred financing costs for our Credit Facility are presented in other noncurrent assets in our consolidated balance sheets. We estimate we will recognize future amortization of deferred financing costs of $1,221 in 2018, $1,214 in 2019, $1,000 in 2020, and $997 in each of the years 2021 and 2022. We recognized interest expense from the amortization of deferred financing costs of $1,221, $1,225 and $995 for the years ended December 31, 2017, 2016 and 2015, respectively. |
Leasing Transactions |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing Transactions | Leasing Transactions As a lessee. We have entered into lease agreements covering many of our retail locations, office and warehouse space, and various equipment and vehicles, with the most significant leases being our five leases with HPT that are further described below. Certain leases include renewal options, and certain leases include escalation clauses and purchase options. Future minimum lease payments required under leases that had remaining noncancelable lease terms in excess of one year as of December 31, 2017, were as follows (included herein are the full payments due under the HPT Leases, including the amount attributed to the lease of those sites that are accounted for as a financing in our consolidated balance sheets as reflected in the sale leaseback financing obligation):
The expenses related to our operating leases are included in site level operating expenses; selling, general and administrative expenses; and real estate rent expense in the operating expenses section of our consolidated statements of operations and comprehensive income (loss). Rent expense under our operating leases consisted of the following:
HPT Leases. As of December 31, 2017, we leased from HPT a total of 199 properties under five leases, four of which we refer to as our TA Leases and one of which we refer to as the Petro Lease, and which we refer to collectively as the HPT Leases. The number of properties leased, the terms, the minimum annual rent and deferred rent balances owed by us under our HPT Leases as of December 31, 2017, were as follows:
The HPT Leases are "triple net" leases that require us to pay all costs incurred in the operation of the leased properties, including costs related to personnel, utilities, inventory acquisition and provision of services to customers, insurance, real estate and personal property taxes, environmental related expenses, underground storage tank removal costs and ground lease payments at those properties at which HPT leases the property and subleases it to us. We also are required generally to indemnify HPT for certain environmental matters and for liabilities that arise during the terms of the leases from ownership or operation of the leased properties and, at lease expiration, we are required to pay an amount equal to an estimate of the cost of removing underground storage tanks on the leased properties. The HPT Leases require us to maintain the leased properties, including structural and non-structural components. We recognized rent expense of $264,628, $249,966 and $221,159, for the years ended December 31, 2017, 2016 and 2015, respectively, under our HPT Leases. In addition to the payment of minimum annual rent, the TA Leases provide for payment to HPT of percentage rent, beginning in 2016, based on increases in total nonfuel revenues over base year levels (3% of nonfuel revenues above 2015 nonfuel revenues) and the Petro Lease provides for payment to HPT of percentage rent based on increases in total nonfuel revenues over base year levels (3% of nonfuel revenues above 2012 nonfuel revenues). HPT waived $372 and $1,121 of percentage rent under our Petro Lease for the years ended December 31, 2016 and 2015, respectively, pursuant to a prior agreement. As of June 30, 2016, HPT had cumulatively waived all of the $2,500 of percentage rent it previously agreed to waive. The total amount of percentage rent (which is net of any waived amounts) that we incurred during the years ended December 31, 2017, 2016 and 2015, was $2,195, $1,304 and $1,999, respectively. Under our HPT Leases, we may request that HPT purchase approved amounts of renovations, improvements and equipment at the leased properties in return for increases in our minimum annual rent according to the following formula: the minimum annual rent will be increased by an amount equal to the amount paid by HPT multiplied by the greater of (i) 8.5% or (ii) a benchmark U.S. Treasury interest rate plus 3.5%. During the years ended December 31, 2017, 2016 and 2015, we sold to HPT $84,632, $109,926 and $99,896, respectively, of improvements we previously made to properties leased from HPT, and, as a result, our minimum annual rent payable to HPT increased by $7,194, $9,344 and $8,491, respectively. At December 31, 2017, our property and equipment balance included $16,408 of improvements of the type that we typically request that HPT purchase for an increase in minimum annual rent; however, HPT is not obligated to purchase these improvements. On September 25, 2017, HPT purchased land and improvements that previously were leased by HPT from a third party and subleased to us. Effective as of that date, our rent due to that third party pursuant to the terms of our sublease with HPT ceased. Also on that date, we and HPT amended our lease to reflect our direct lease from HPT of that land and those improvements and to increase our minimum annual rent due to HPT by $731, which was 8.5% of HPT's investment. On September 14, 2016, HPT purchased a vacant land parcel located adjacent to a property we lease from HPT for $325; and we and HPT amended our TA Lease 4 to add this parcel and our minimum annual rent under our TA Lease 4 increased by $28. On October 30, 2015, HPT purchased land and improvements that previously were leased by HPT from a third party and subleased to us. Effective as of that date, our rent due to that third party pursuant to the terms of our sublease with HPT ceased. Also on that date, we and HPT amended our lease to reflect our direct lease from HPT of that land and those improvements and to increase our minimum annual rent due to HPT by $1,275, which was 8.5% of HPT's investment. On June 1, 2015, we entered into a transaction agreement, or the Transaction Agreement, with HPT pursuant to which, among other things, we agreed to sell to, and lease back from, HPT 14 travel centers we owned and certain assets we owned at 11 properties we lease from HPT for an aggregate of $279,383. As of December 31, 2015, we had completed the sale to, and lease back from, HPT of the 14 travel centers we owned and certain assets we owned at 11 properties and our minimum annual rent increased by $24,027. These sales generated an aggregate gain of $133,668, which was deferred and is being amortized as a reduction of our real estate rent expense over the terms of the TA Leases. On June 9, 2015, pursuant to the Transaction Agreement, we purchased from HPT, for $45,042, five travel centers that we previously leased from HPT and subleased to franchisees. The lease of these properties had been accounted for as a financing, with the related assets recognized in our consolidated balance sheets. The purchase prices paid for the properties exceeded the unamortized balance of the sale leaseback financing obligation, resulting in our recognition of a loss on extinguishment of debt of $10,502. Our minimum annual rent payment decreased by $3,874 as a result of the completion of our purchase of these properties. Also pursuant to the Transaction Agreement, we agreed to sell to, and lease back from, HPT five travel centers upon the completion of their development for a purchase price equal to their development costs. On March 31, 2016, we sold one of these development properties to HPT for $19,683. On June 22, 2016, we and HPT amended the Transaction Agreement to, among other things, replace one development property with two alternative travel centers owned by us. Pursuant to the Transaction Agreement, as amended, on June 22, 2016, we sold the two alternative travel centers to HPT for an aggregate of $23,876. The sale of these two properties generated a gain of $11,794 that was deferred and is being amortized on a straight line basis over the terms of the related leases as a reduction of real estate rent expense. On June 30, 2016, we sold one of these development properties to HPT for $22,297. On September 30, 2016, we sold one of these development properties to HPT for $16,557. On May 3, 2017, we sold the remaining development property to HPT for $27,602. On August 13, 2013, the travel center located in Roanoke, VA that we leased from HPT was taken by eminent domain proceedings brought by the Virginia Department of Transportation, or VDOT, in connection with planned highway construction. In January 2014, HPT received proceeds from VDOT of $6,178, which is a substantial portion of VDOT's estimate of the value of the property, and as a result the minimum annual rent payable by us to HPT under the then applicable lease was reduced by $525 effective January 6, 2014. HPT challenged VDOT's estimate of the property's value and during 2017 engaged in mediation. Following the mediation, VDOT agreed to pay, and HPT agreed to accept, the sum of $7,209 as full payment for VDOT's acquisition of the travel center. In 2017, VDOT subsequently made payment to HPT of $1,031, representing the agreed settlement less amounts previously paid to HPT (exclusive of interest). After deducting from this payment our and HPT's share of third party costs and expenses incurred in connection with the challenge of VDOT's initial valuation of the property, we and HPT will allocate and apply the remaining amount of $1,031 as set forth in the lease. The following table sets forth the amounts of annual minimum lease payments required under the HPT Leases as of December 31, 2017, in each of the years shown.
The following table summarizes the various amounts related to the HPT Leases and leases with other lessors that are reflected in real estate rent expense in our consolidated statements of operations and comprehensive income (loss).
The following table summarizes the various amounts related to the HPT Leases that are included in our consolidated balance sheets.
As a lessor. As of December 31, 2017, we leased to franchisees four travel centers. Two of the four franchisees exercised their final renewal term options and renewed their lease agreements during 2017, and the current terms of these two lease agreements expire in June 2022. The remaining two franchisees did not exercise their final renewal term options and therefore, the related lease agreements expired during 2017. One of these franchisees has filed, and the other has indicated an intent to file, requests for a preliminary injunction preventing their eviction from the lease premises until such time as a court can determine whether we breached the terms of the leases by proposing increases in rent during the final renewal terms or whether they have breached their agreements. As this matter proceeds through the courts, these two franchisees currently are operating under certain terms of the expired lease agreements. These leases include rent escalations that are contingent on future events, namely inflation or our investing in capital improvements at these travel centers. Rent revenue from these operating leases totaled $4,208, $4,439 and $4,458 for the years ended December 31, 2017, 2016 and 2015, respectively. Future minimum lease payments due to us for the two leased sites under these operating leases as of December 31, 2017, were $1,927 for each of the years 2018, 2019, 2020 and 2021, and $963 for 2022. |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders' Equity Share Award Plans. On May 19, 2016, our shareholders approved the TravelCenters of America LLC 2016 Equity Compensation Plan, or the 2016 Plan, under which 2,300 shares were authorized for issuance under the terms of the 2016 Plan. The 2016 Plan replaced the Amended and Restated TravelCenters of America LLC 2007 Equity Compensation Plan, or the 2007 Plan. No additional awards will be made under the 2007 Plan and the shares previously registered for offer and sale under the 2007 Plan but not yet issued were deregistered, although shares awarded under the 2007 Plan that had not yet vested have continued, and will continue, to vest in accordance with, and subject to, the terms of the related awards. We refer to the 2007 Plan and 2016 Plan collectively as the Share Award Plans. We awarded a total of 751, 926 and 671 common shares under the Share Award Plans during the years ended December 31, 2017, 2016 and 2015, respectively, with aggregate market values of $3,528, $6,120 and $6,607, respectively, based on the closing prices of our common shares on the principal exchange on which they were traded on the dates of the awards. During the years ended December 31, 2017, 2016 and 2015, we recognized total share based compensation expense of $5,515, $5,523 and $5,507, respectively. During the years ended December 31, 2017, 2016 and 2015, the vesting date fair value of common shares that vested was $3,781, $5,040 and $7,621, respectively. The weighted average grant date fair value of common shares awarded during the years ended December 31, 2017, 2016 and 2015, was $4.70, $6.61 and $9.84, per share, respectively. Common shares issued to Directors vested immediately and the related compensation expense was recognized on the grant date. Common shares issued to others vest in five to ten equal annual installments beginning on the date of grant. The related compensation expense was determined based on the market value of our common shares on either the date of grant for employees or the vesting date for nonemployees, as appropriate, with the aggregate value of the awarded common shares expensed over the related vesting period. As of December 31, 2017, 633 common shares remained available for issuance under the 2016 Plan. As of December 31, 2017, there was a total of $10,664 of share based compensation related to unvested common shares that will be expensed over a weighted average remaining service period of three years. The following table sets forth the number and weighted average grant date fair value of unvested common shares and common shares awarded under the Share Award Plans for the year ended December 31, 2017.
Treasury Shares. Certain recipients of share awards may elect to have us withhold the number of their vesting common shares with a fair market value sufficient to fund the required tax withholding obligations with respect to their share awards. For the years ended December 31, 2017, 2016 and 2015, we acquired through this share withholding process 272, 209 and 197 common shares, respectively, with an aggregate value of $1,175, $1,394 and $1,842, respectively. During the years ended December 31, 2017, 2016 and 2015, we retired 272, 209 and 287 treasury shares, no par value, respectively, with a carrying value of $1,175, $1,394 and $2,770, respectively, that reduced common shares outstanding. Net Income (Loss) Per Common Share Attributable to Common Shareholders We calculate basic earnings per common share by dividing net income (loss) available to common shareholders for the period by the weighted average number of common shares outstanding during the period. The net income (loss) attributable to participating securities is deducted from our total net income (loss) attributable to common shareholders to determine the net income (loss) available to common shareholders. We calculate diluted earnings per common share by adjusting weighted average outstanding shares, assuming conversion of all potentially dilutive share securities, using the treasury stock method; but we had no dilutive share securities outstanding as of December 31, 2017, nor at any time during the three year period then ended. Unvested shares issued under our Share Award Plans are deemed participating securities because they participate equally in earnings and losses with all of our other common shares. The following table presents a reconciliation of net income (loss) attributable to common shareholders to net income (loss) available to common shareholders and the related earnings per share.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes We had a tax benefit of $84,439 and $1,733 for the years ended December 31, 2017 and 2016, respectively, and a tax provision of $16,539 for the year ended December 31, 2015. Effective Tax Rate Reconciliation
In December 2017, the U.S. government enacted the Tax Cuts and Jobs Act, or the Tax Act, which, among other things, decreased the corporate statutory tax rate from 35% to 21%. We applied the effect of the Tax Act in 2017, the period in which the Tax Act was enacted. Passage of the Tax Act, among other things, required us to revalue our deferred tax assets and liabilities at the new statutory rate, which resulted in a decrease in our tax benefit of $6,356 for the year ended December 31, 2017. We will monitor future interpretations of the Tax Act as they develop and accordingly, our estimates may change. Components of the Income Tax Benefit (Provision)
Components of Deferred Tax Assets and Liabilities
As of December 31, 2017, we had a valuation allowance of $1,027 related to federal capital loss and foreign credit carryforwards, state net operating losses and deferred tax assets in foreign jurisdictions due to the uncertainty of their realization. At December 31, 2017, we had carryforwards for federal net operating losses, state net operating losses and federal tax credits of $245,598, $173,082 and $27,414, respectively. Although not anticipated, $58,473 of the federal net operating losses is scheduled to expire in 2031 if unused. We anticipate $19 of the state net operating losses will expire in 2018, and the remainder to be utilized prior to expiration beginning in 2021. Federal tax credit carryforwards of $498 may expire between 2019 and 2025 if unused, with the remainder expected to be utilized prior to their expiration beginning in 2031. The following table presents the classification in our consolidated balance sheets of the deferred tax assets and liabilities presented in the table above.
Uncertain Tax Positions
Because of uncertainties concerning our value as of the date of an ownership change for federal income tax purposes that we experienced as a result of certain trading in our common shares during 2007, and as to the measurement of the net unrecognized built-in loss and allocation of the net unrecognized built-in loss, if any, to our various assets as of the date of the ownership change, we previously had not recognized certain of our tax attributes. In September 2017, as a result of a number of factors including the passage of time and the results of audits of certain of our U.S. federal income tax returns, the uncertainty related to the filing positions giving rise to these tax attributes was resolved and, accordingly, we recognized deferred tax assets related to those tax attributes and reversed a related accrued tax liability. The benefit for income taxes in our consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2017, includes $58,602 recognized in connection with the resolution of the previous uncertain tax positions. Our U.S. federal income tax returns are subject to tax examinations for the years ended December 31, 2014 through 2017. Our state and Canadian income tax returns are generally subject to examination for the tax years ended December 31, 2013 through 2017. To the extent we have tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted by the taxing authorities to the extent the carryforwards are utilized in a subsequent year. |
Equity Investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Investments | Equity Investments As of December 31, 2017, our investment in equity affiliates, which are presented in our consolidated balance sheets in other noncurrent assets, and our proportional share of our investees' net income (loss) recognized in our consolidated statements of operations and comprehensive income (loss) were as follows:
Petro Travel Plaza Holdings LLC Petro Travel Plaza Holdings LLC, or PTP, is a joint venture between us and Tejon Development Corporation that owns two travel centers, three convenience stores and one standalone restaurant in California. We own a 40% interest in PTP and we receive a management fee from PTP to operate these locations. This investment is accounted for under the equity method. We recognized management fee income of $1,540, $1,055 and $838 for the years ended December 31, 2017, 2016 and 2015, respectively. In addition, we supply PTP with its fuel at our cost. During the years ended December 31, 2017, 2016 and 2015, we sold to PTP $59,943, $55,004 and $60,875 of fuel, respectively. The following tables set forth summarized financial information of PTP and does not represent the amounts we have included in our consolidated financial statements in connection with our investment in PTP.
Fair Value It is not practicable to estimate the fair value of our equity investments because of the lack of quoted market prices and the inability to estimate current fair value without incurring excessive costs. However, management believes that the carrying amounts of our equity investments at December 31, 2017, were not impaired given these companies' overall financial conditions and earnings trends. |
Business and Property Management Agreements with RMR |
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Related Party Transaction [Line Items] | |
Business and Property Management Agreements with RMR | Related Party Transactions Relationship with HPT We were a 100% owned subsidiary of HPT until HPT distributed our common shares to its shareholders in 2007. We are HPT's largest tenant and HPT is our principal landlord and largest shareholder and as of December 31, 2017, owned 3,420 of our common shares, or approximately 8.6% of our outstanding common shares. Our Managing Director, Adam D. Portnoy, serves, and our former Managing Director, Barry M. Portnoy, served, as a managing trustee of HPT. Ethan S. Bornstein, Adam D. Portnoy's brother-in-law, is an executive officer of HPT. Thomas M. O'Brien, who served as one of our Managing Directors and our President and Chief Executive Officer until December 31, 2017, was a former executive officer of HPT. RMR provides management services to both us and HPT. Spin-Off Transaction Agreement. In connection with our spin-off from HPT in 2007, we entered a transaction agreement with HPT and RMR, pursuant to which we granted HPT a right of first refusal to purchase, lease, mortgage or otherwise finance any interest we own in a travel center before we sell, lease, mortgage or otherwise finance that travel center to or with another party, and we granted HPT and any other company to which RMR provides management services a right of first refusal to acquire or finance any real estate of the types in which HPT or such other companies invest before we do. We also agreed that for so long as we are a tenant of HPT we will not permit: the acquisition by any person or group of beneficial ownership of 9.8% or more of the voting shares or the power to direct the management and policies of us or any of our subsidiary tenants or guarantors under the HPT Leases; the sale of a material part of our assets or of any such tenant or guarantor; or the cessation of certain of our Directors to continue to constitute a majority of our Board of Directors or any such tenant or guarantor. Also, we agreed not to take any action that might reasonably be expected to have a material adverse impact on HPT's ability to qualify as a real estate investment trust and to indemnify HPT for any liabilities it may incur relating to our assets and business. Lease Arrangements. As of December 31, 2017, we leased from HPT a total of 199 properties under the HPT Leases. We have also engaged in other transactions with HPT, including in connection with the Transaction Agreement that we entered into with HPT on June 1, 2015. See Note 7 for more information about our relationship, agreements and transactions with HPT. Our Manager, RMR RMR provides certain services we require to operate our business. We have a business management agreement with RMR to provide management services to us, which relates to various aspects of our business generally. Until July 31, 2017, we also had a property management agreement with RMR, which related to building management services for our headquarters building. See Note 11 for more information about our current and former management agreements with RMR. We have relationships and historical and continuing transactions with RMR, The RMR Group Inc. and others related to them. RMR is a majority owned subsidiary of The RMR Group Inc. Our Managing Director, Adam D. Portnoy, is a managing director and an officer and, as the current sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc. and an officer of RMR. Adam D. Portnoy, as the current sole trustee of ABP Trust, beneficially owns all the class A membership units of RMR. Barry M. Portnoy was our other Managing Director and a director and an officer of The RMR Group Inc. and an officer of RMR until his death on February 25, 2018. Andrew J. Rebholz, our Chief Executive Officer, 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 officers and employees of RMR. Thomas M. O'Brien, who served as one of our Managing Directors and our President and Chief Executive Officer until December 31, 2017, was also an officer and an employee of RMR until December 31, 2017. RMR provides management services to HPT and HPT's executive officers are officers and employees of RMR. Our Independent Directors also serve as independent directors or independent trustees of other companies to which RMR or its subsidiaries provide management services. Adam D. Portnoy serves as a managing director or managing trustee of almost all of the public companies to which RMR or its subsidiaries provide management services. In addition, officers of RMR and The RMR Group Inc. serve as our officers and officers of other companies to which RMR or its subsidiaries provide management services. See Note 11 for more information about our relationship with RMR. Share Awards to RMR Employees. Under our Share Award Plans, we grant share awards to certain employees of RMR who are not also Directors, officers or employees of ours. We awarded a total of 67, 63 and 62 shares with an aggregate value of $319, $416 and $575 to such persons during the years ended December 31, 2017, 2016 and 2015, respectively, based upon the closing price of our common shares on the applicable stock exchange on which such shares were listed on the dates of the grants. One fifth of those shares vested on the applicable grant dates and one fifth vests on each of the next four anniversaries of the grant dates. These share awards to such RMR employees are in addition to both the fees we pay to RMR and our share awards to our Directors, officers and employees. During these periods, we purchased some of our common shares from certain of our and RMR's officers and employees in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We made these purchases at the closing price for our common shares on the applicable stock exchange on which such shares are listed on the date of purchase. See Note 8 for more information about share withholding. CEO Retirement. On November 29, 2017, we and RMR entered into a retirement agreement with Thomas M. O'Brien. Pursuant to his retirement agreement, Thomas M. O'Brien continued to serve as our President and Chief Executive Officer and as one of our Managing Directors until December 31, 2017, and he will remain our employee through June 30, 2018, in order to continue to assist in transitioning his duties and responsibilities to his successor. Under Thomas M. O'Brien's retirement agreement, (i) consistent with past practice, we will continue to pay Thomas M. O'Brien his current annual base salary of $300 until June 30, 2018, and we paid a cash bonus in respect of 2017 in the amount of $2,060 in December 2017 and (ii) in lieu of any share grants for his 2017 service, we paid an additional cash payment in the amount of $475 to Thomas M. O'Brien in December 2017. Subject to the satisfaction of certain conditions, after his retirement from the Company on June 30, 2018, we will make an additional cash payment to Thomas M. O'Brien in the amount of $1,505 and fully accelerate the vesting of any then unvested common shares of the Company previously awarded to Thomas M. O'Brien. The retirement agreement does not entitle Thomas M. O'Brien to any additional share awards from us. Pursuant to his retirement agreement, Thomas M. O'Brien granted to us or our nominee a right of first refusal in the event he determines to sell any of his shares of the Company, pursuant to which we may elect during a specified period to purchase those shares at the average closing price per share for the ten trading days preceding the date of his written notice to us of his intent to sell. In the event that we decline to exercise our purchase right, RMR may elect to purchase such shares at the price offered to us. Thomas M. O'Brien also agreed that, as long as he owns shares in the Company, he will vote those shares at shareholders' meetings in favor of nominees for director and proposals recommended by our Board of Directors. Thomas M. O'Brien's retirement agreement contains other terms and conditions, including cooperation, confidentiality, non-solicitation, non-competition and other covenants, and a waiver and release. Thomas M. O'Brien's retirement agreement also contains certain terms relating to RMR and other companies to which RMR or its subsidiaries provide management services. Relationship with AIC We, HPT and five other companies to which RMR provides management services each currently own 14.3% of AIC, an Indiana insurance company and are parties to a shareholders agreement regarding AIC. Although we own less than 20% of AIC, we use the equity method to account for this investment because we believe that we have significant influence over AIC because all of our Directors are also directors of AIC. All of our Directors and all of the trustees and directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. Pursuant to this agreement, AIC pays to RMR a service fee equal to 3.0% of the total annual net earned premiums payable under then active policies issued or underwritten by AIC or by a vendor or an agent of AIC on its behalf or in furtherance of AIC's business. We and the other shareholders of AIC participate in a combined property insurance program arranged and insured or reinsured in part by AIC. We paid aggregate annual premiums, including taxes and fees, of $1,721, $2,281 and $2,283, respectively, in connection with this insurance program for the policy years ending June 30, 2018, 2017 and 2016, respectively. Our aggregate annual premiums for the current policy year may be adjusted from time to time as we acquire or dispose of properties that are included in this insurance program. As of December 31, 2017, we have invested $6,054 in AIC since its formation in 2008. Our investment in AIC had a carrying value of $8,185 and $7,116 as of December 31, 2017 and 2016, respectively. These amounts are included in other noncurrent assets in our consolidated balance sheets. We recognized income of $608, $137 and $20, related to our investment in AIC for the years ended December 31, 2017, 2016 and 2015, respectively. Our other comprehensive income (loss) includes our proportional share of unrealized gains (losses) on securities held for sale, which are owned by AIC, of $461, $152 and $(20) for the years ended December 31, 2017, 2016 and 2015, respectively. Directors' and Officers' Liability Insurance We, The RMR Group Inc., RMR and certain companies to which RMR or its subsidiaries provide management services, including HPT, participate in a combined directors' and officers' liability insurance policy. The current combined policy expires in September 2018. We paid aggregate premiums of $156, $91 and $225 in the years ended December 31, 2017, 2016 and 2015, respectively, for these policies. |
Affiliated entity | RMR | |
Related Party Transaction [Line Items] | |
Business and Property Management Agreements with RMR | Business and Property Management Agreements with RMR We have a business management agreement with RMR to provide management services to us, which relates to various aspects of our business generally, including but not limited to, services related to compliance with various laws and rules applicable to our status as a publicly owned company, advice and supervision with respect to our travel centers, site selection for properties on which new travel centers may be developed, identification of, and purchase negotiation for, travel center and convenience store properties and companies, accounting and financial reporting, capital markets and financing activities, investor relations and general oversight of our daily business activities, including legal matters, human resources, insurance programs, management information systems and the like. Until July 31, 2017, we also had a property management agreement under which RMR provided building management services to us for our headquarters building. See Note 12 for further information regarding our relationship, agreements and transactions with RMR. Business Management Agreement. Under our business management agreement, we pay RMR an annual business management fee equal to 0.6% of the sum of our fuel gross margin (which is our fuel revenues less our fuel cost of goods sold) plus our total nonfuel revenues. The fee is payable monthly based on the prior month's gross margin and revenues. This fee totaled $14,030, $14,212 and $13,179 for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts are included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). The current term of our business management agreement with RMR ends on December 31, 2018, and automatically renews for successive one year terms unless we or RMR gives notice of non-renewal before the end of an applicable term. RMR may terminate the business management agreement upon 120 days' written notice, and we have the right to terminate the business management agreement upon 60 days' written notice, subject to approval by a majority vote of our Independent Directors. If we terminate or do not renew the business management agreement other than for cause, as defined, we are obligated to pay RMR a termination fee equal to 2.875 times the annual base management fee and the annual internal audit services expense, which amounts are based on averages during the 24 consecutive calendar months prior to the date of notice of termination or nonrenewal. We are also generally responsible for all of our expenses and certain expenses incurred by RMR on our behalf. RMR also provides internal audit services to us in return for our share of the total internal audit costs incurred by RMR for us and other publicly owned companies to which RMR or its subsidiaries provide management services, which amounts are subject to approval by our Compensation Committee. Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves our portion of RMR's internal audit costs. The amounts recognized as expense for internal audit costs were $276, $235 and $257 for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts are included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss) and are in addition to the business management fees paid to RMR. Pursuant to our business management agreement, RMR may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of services to us. As part of this arrangement, we may enter agreements with RMR and other companies to which RMR provides management services for the purpose of obtaining more favorable terms from such vendors and suppliers. In addition, RMR has agreed to provide certain transition services to us for 120 days following termination by us or notice of termination by RMR. Property Management Agreement. Until July 31, 2017, we also had a property management agreement with RMR under which RMR provided building management services to us for our headquarters building. We paid RMR aggregate fees and expenses of $78, $153 and $145 for property management services at our headquarters building for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts are included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). |
Related Party Transactions |
12 Months Ended |
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Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Relationship with HPT We were a 100% owned subsidiary of HPT until HPT distributed our common shares to its shareholders in 2007. We are HPT's largest tenant and HPT is our principal landlord and largest shareholder and as of December 31, 2017, owned 3,420 of our common shares, or approximately 8.6% of our outstanding common shares. Our Managing Director, Adam D. Portnoy, serves, and our former Managing Director, Barry M. Portnoy, served, as a managing trustee of HPT. Ethan S. Bornstein, Adam D. Portnoy's brother-in-law, is an executive officer of HPT. Thomas M. O'Brien, who served as one of our Managing Directors and our President and Chief Executive Officer until December 31, 2017, was a former executive officer of HPT. RMR provides management services to both us and HPT. Spin-Off Transaction Agreement. In connection with our spin-off from HPT in 2007, we entered a transaction agreement with HPT and RMR, pursuant to which we granted HPT a right of first refusal to purchase, lease, mortgage or otherwise finance any interest we own in a travel center before we sell, lease, mortgage or otherwise finance that travel center to or with another party, and we granted HPT and any other company to which RMR provides management services a right of first refusal to acquire or finance any real estate of the types in which HPT or such other companies invest before we do. We also agreed that for so long as we are a tenant of HPT we will not permit: the acquisition by any person or group of beneficial ownership of 9.8% or more of the voting shares or the power to direct the management and policies of us or any of our subsidiary tenants or guarantors under the HPT Leases; the sale of a material part of our assets or of any such tenant or guarantor; or the cessation of certain of our Directors to continue to constitute a majority of our Board of Directors or any such tenant or guarantor. Also, we agreed not to take any action that might reasonably be expected to have a material adverse impact on HPT's ability to qualify as a real estate investment trust and to indemnify HPT for any liabilities it may incur relating to our assets and business. Lease Arrangements. As of December 31, 2017, we leased from HPT a total of 199 properties under the HPT Leases. We have also engaged in other transactions with HPT, including in connection with the Transaction Agreement that we entered into with HPT on June 1, 2015. See Note 7 for more information about our relationship, agreements and transactions with HPT. Our Manager, RMR RMR provides certain services we require to operate our business. We have a business management agreement with RMR to provide management services to us, which relates to various aspects of our business generally. Until July 31, 2017, we also had a property management agreement with RMR, which related to building management services for our headquarters building. See Note 11 for more information about our current and former management agreements with RMR. We have relationships and historical and continuing transactions with RMR, The RMR Group Inc. and others related to them. RMR is a majority owned subsidiary of The RMR Group Inc. Our Managing Director, Adam D. Portnoy, is a managing director and an officer and, as the current sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc. and an officer of RMR. Adam D. Portnoy, as the current sole trustee of ABP Trust, beneficially owns all the class A membership units of RMR. Barry M. Portnoy was our other Managing Director and a director and an officer of The RMR Group Inc. and an officer of RMR until his death on February 25, 2018. Andrew J. Rebholz, our Chief Executive Officer, 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 officers and employees of RMR. Thomas M. O'Brien, who served as one of our Managing Directors and our President and Chief Executive Officer until December 31, 2017, was also an officer and an employee of RMR until December 31, 2017. RMR provides management services to HPT and HPT's executive officers are officers and employees of RMR. Our Independent Directors also serve as independent directors or independent trustees of other companies to which RMR or its subsidiaries provide management services. Adam D. Portnoy serves as a managing director or managing trustee of almost all of the public companies to which RMR or its subsidiaries provide management services. In addition, officers of RMR and The RMR Group Inc. serve as our officers and officers of other companies to which RMR or its subsidiaries provide management services. See Note 11 for more information about our relationship with RMR. Share Awards to RMR Employees. Under our Share Award Plans, we grant share awards to certain employees of RMR who are not also Directors, officers or employees of ours. We awarded a total of 67, 63 and 62 shares with an aggregate value of $319, $416 and $575 to such persons during the years ended December 31, 2017, 2016 and 2015, respectively, based upon the closing price of our common shares on the applicable stock exchange on which such shares were listed on the dates of the grants. One fifth of those shares vested on the applicable grant dates and one fifth vests on each of the next four anniversaries of the grant dates. These share awards to such RMR employees are in addition to both the fees we pay to RMR and our share awards to our Directors, officers and employees. During these periods, we purchased some of our common shares from certain of our and RMR's officers and employees in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We made these purchases at the closing price for our common shares on the applicable stock exchange on which such shares are listed on the date of purchase. See Note 8 for more information about share withholding. CEO Retirement. On November 29, 2017, we and RMR entered into a retirement agreement with Thomas M. O'Brien. Pursuant to his retirement agreement, Thomas M. O'Brien continued to serve as our President and Chief Executive Officer and as one of our Managing Directors until December 31, 2017, and he will remain our employee through June 30, 2018, in order to continue to assist in transitioning his duties and responsibilities to his successor. Under Thomas M. O'Brien's retirement agreement, (i) consistent with past practice, we will continue to pay Thomas M. O'Brien his current annual base salary of $300 until June 30, 2018, and we paid a cash bonus in respect of 2017 in the amount of $2,060 in December 2017 and (ii) in lieu of any share grants for his 2017 service, we paid an additional cash payment in the amount of $475 to Thomas M. O'Brien in December 2017. Subject to the satisfaction of certain conditions, after his retirement from the Company on June 30, 2018, we will make an additional cash payment to Thomas M. O'Brien in the amount of $1,505 and fully accelerate the vesting of any then unvested common shares of the Company previously awarded to Thomas M. O'Brien. The retirement agreement does not entitle Thomas M. O'Brien to any additional share awards from us. Pursuant to his retirement agreement, Thomas M. O'Brien granted to us or our nominee a right of first refusal in the event he determines to sell any of his shares of the Company, pursuant to which we may elect during a specified period to purchase those shares at the average closing price per share for the ten trading days preceding the date of his written notice to us of his intent to sell. In the event that we decline to exercise our purchase right, RMR may elect to purchase such shares at the price offered to us. Thomas M. O'Brien also agreed that, as long as he owns shares in the Company, he will vote those shares at shareholders' meetings in favor of nominees for director and proposals recommended by our Board of Directors. Thomas M. O'Brien's retirement agreement contains other terms and conditions, including cooperation, confidentiality, non-solicitation, non-competition and other covenants, and a waiver and release. Thomas M. O'Brien's retirement agreement also contains certain terms relating to RMR and other companies to which RMR or its subsidiaries provide management services. Relationship with AIC We, HPT and five other companies to which RMR provides management services each currently own 14.3% of AIC, an Indiana insurance company and are parties to a shareholders agreement regarding AIC. Although we own less than 20% of AIC, we use the equity method to account for this investment because we believe that we have significant influence over AIC because all of our Directors are also directors of AIC. All of our Directors and all of the trustees and directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. Pursuant to this agreement, AIC pays to RMR a service fee equal to 3.0% of the total annual net earned premiums payable under then active policies issued or underwritten by AIC or by a vendor or an agent of AIC on its behalf or in furtherance of AIC's business. We and the other shareholders of AIC participate in a combined property insurance program arranged and insured or reinsured in part by AIC. We paid aggregate annual premiums, including taxes and fees, of $1,721, $2,281 and $2,283, respectively, in connection with this insurance program for the policy years ending June 30, 2018, 2017 and 2016, respectively. Our aggregate annual premiums for the current policy year may be adjusted from time to time as we acquire or dispose of properties that are included in this insurance program. As of December 31, 2017, we have invested $6,054 in AIC since its formation in 2008. Our investment in AIC had a carrying value of $8,185 and $7,116 as of December 31, 2017 and 2016, respectively. These amounts are included in other noncurrent assets in our consolidated balance sheets. We recognized income of $608, $137 and $20, related to our investment in AIC for the years ended December 31, 2017, 2016 and 2015, respectively. Our other comprehensive income (loss) includes our proportional share of unrealized gains (losses) on securities held for sale, which are owned by AIC, of $461, $152 and $(20) for the years ended December 31, 2017, 2016 and 2015, respectively. Directors' and Officers' Liability Insurance We, The RMR Group Inc., RMR and certain companies to which RMR or its subsidiaries provide management services, including HPT, participate in a combined directors' and officers' liability insurance policy. The current combined policy expires in September 2018. We paid aggregate premiums of $156, $91 and $225 in the years ended December 31, 2017, 2016 and 2015, respectively, for these policies. |
Contingencies |
12 Months Ended |
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Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Environmental Contingencies Extensive environmental laws regulate our operations and properties. These laws may require us to investigate and clean up hazardous substances, including petroleum or natural gas products, released at our owned and leased properties. Governmental entities or third parties may hold us liable for property damage and personal injuries, and for investigation, remediation and monitoring costs incurred in connection with any contamination and regulatory compliance at our locations. We use both underground storage tanks and above ground storage tanks to store petroleum products, natural gas and other hazardous substances at our locations. We must comply with environmental laws regarding tank construction, integrity testing, leak detection and monitoring, overfill and spill control, release reporting and financial assurance for corrective action in the event of a release. At some locations we must also comply with environmental laws relative to vapor recovery or discharges to water. Under the terms of the HPT Leases, we generally have agreed to indemnify HPT for any environmental liabilities related to properties that we lease from HPT and we are required to pay all environmental related expenses incurred in the operation of the leased properties. Under an agreement with Equilon Enterprises LLC doing business as Shell Oil Products U.S., or Shell, we have agreed to indemnify Shell and its affiliates from certain environmental liabilities incurred with respect to our travel centers where Shell has installed natural gas fueling lanes. From time to time we have received, and in the future likely will receive, notices of alleged violations of environmental laws or otherwise have become or will become aware of the need to undertake corrective actions to comply with environmental laws at our locations. Investigatory and remedial actions were, and regularly are, undertaken with respect to releases of hazardous substances at our locations. In some cases we have received, and may receive in the future, contributions to partially offset our environmental costs from insurers, from state funds established for environmental clean up associated with the sale of petroleum products or from indemnitors who agreed to fund certain environmental related costs at locations purchased from those indemnitors. To the extent we incur material amounts for environmental matters for which we do not receive or expect to receive insurance or other third party reimbursement and for which we have not previously recorded a liability, our operating results may be materially adversely affected. In addition, to the extent we fail to comply with environmental laws and regulations, or we become subject to costs and requirements not similarly experienced by our competitors, our competitive position may be harmed. At December 31, 2017, we had an accrued liability of $2,751 for environmental matters as well as a receivable for expected recoveries of certain of these estimated future expenditures of $687, resulting in an estimated net amount of $2,064 that we expect to fund in the future. We cannot precisely know the ultimate costs we may incur in connection with currently known environmental related violations, corrective actions, investigation and remediation; however, we do not expect the costs for such matters to be material, individually or in the aggregate, to our financial position or results of operations. In February 2014, we reached an agreement with the California State Water Resources Control Board, or the State Water Board, to settle certain claims the State Water Board had filed against us in California Superior Court, or the Superior Court, in 2010 relating to alleged violations of underground storage tank laws and regulations for a cash payment of $1,800; suspended penalties of $1,000 that would become payable by us in the future if, prior to March 2019, we fail to comply with specified underground storage tank laws and regulations; and our agreement to invest, prior to March 2018, up to $2,000 of verified costs to develop and implement a comprehensive compliance program for the underground storage tank systems at all of our California facilities that is above and beyond minimum requirements of California law (which costs have since been incurred and were verified as of February 2017). The settlement, which was approved by the Superior Court on February 20, 2014, also included injunctive relief provisions requiring that we comply with certain California environmental laws and regulations applicable to underground storage tank systems. In October 2015, the State Water Board issued a notice of alleged suspended penalty conduct claiming that we were liable for the full amount of the $1,000 in suspended penalties as a result of five alleged violations of underground storage tank regulations and requesting further information concerning the alleged violations. In November 2015, we filed our response to the State Water Board's notice and we subsequently met with the State Water Board to attempt to respond to these matters without a court hearing. On November 11, 2017, we reached an agreement with the State Water Board by agreeing to pay $500 of suspended penalties. Although it is possible that, if we fail to comply with certain underground storage tank laws and regulations prior to March 2019, we may become liable for the remaining $500 of suspended penalties, based on current information, we do not believe this is reasonably likely to occur and, accordingly, we reversed $500 of our previously recognized liability in the fourth quarter 2017. We currently have insurance of up to $10,000 per incident and up to $25,000 in the aggregate for certain environmental liabilities, subject, in each case, to certain limitations and deductibles which expires in June 2018. However, we can provide no assurance that we will be able to maintain similar environmental insurance coverage in the future on acceptable terms. We cannot predict the ultimate effect changing circumstances and changing environmental laws may have on us in the future or the ultimate outcome of matters currently pending. We cannot be certain that contamination presently unknown to us does not exist at our sites, or that material liability will not be imposed on us in the future. If we discover additional environmental issues, or if government agencies impose additional environmental requirements, increased environmental compliance or remediation expenditures may be required, which could have a material adverse effect on us. Legal Proceedings We are routinely involved in various legal and administrative proceedings, including tax audits, incidental to the ordinary course of our business. Except as set forth below, we do not expect that any litigation or administrative proceedings in which we are presently involved or are aware of will have a material adverse effect on our business, financial condition, results of operations or cash flows. On November 30, 2016, we filed a complaint, or the Complaint, captioned TA Operating LLC v. Comdata, Inc., et al. C.A. No. 12954-CB (Del. Ch.), in the Court of Chancery of the State of Delaware, or the Court, against Comdata Inc., or Comdata, and its parent company with respect to a notice of termination we received from Comdata on November 3, 2016. Based upon Comdata's assertion that we had breached an agreement under which we agreed to install radio frequency identification, or RFID, technology at our travel centers, or the RFID Agreement, the notice purported to terminate a different agreement between us and Comdata under which we agreed to accept Comdata issued fuel cards through January 2, 2022, for certain purchases by our customers in exchange for fees payable by us to Comdata, or the Merchant Agreement. In the Complaint, we sought, among other things, (a) a declaration that we are not in default under the Merchant Agreement; (b) a judgment that Comdata has breached its contractual duties to us; (c) a judgment that Comdata breached its implied covenant of good faith and fair dealing to us; (d) a judgment that Comdata has and is willfully and knowingly engaged in unfair, abusive and deceptive business practices in the course of its business dealings with us in violation of Tennessee law; (e) an order for specific performance by Comdata of its obligations to us under the Merchant Agreement; (f) injunctive relief; and (g) damages, including attorneys' fees and costs, and further relief as the Court deems appropriate. At a hearing held on December 14, 2016, the Court denied our request for preliminary injunctive relief subject to Comdata's agreement to continue providing services under the Merchant Agreement pending a final ruling from the Court. On December 21, 2016, Comdata filed a counterclaim alleging that we defaulted under the RFID Agreement and that this alleged default allows Comdata to terminate both the RFID Agreement and the Merchant Agreement. In addition, from February 1, 2017, until mid-September 2017, Comdata unilaterally withheld increased fees from the transaction settlement payments due to us. During the year ended December 31, 2017, the difference between the withheld fees and the fees payable under the Merchant Agreement totaled $6,903. After a trial in April 2017, and post-trial briefing and argument, on September 11, 2017, the Court issued its post-trial Memorandum Opinion. The Court found that we are entitled to, among other things, an order requiring Comdata to specifically perform under the Merchant Agreement, and awarded damages to us and against Comdata for the difference between the higher transaction fees we paid to Comdata since February 1, 2017, and what we would have paid during this period under the fee structure in the Merchant Agreement, plus pre- and post- judgment interest. The Court also found that the Merchant Agreement provides for an award of reasonable attorneys' fees and costs to the prevailing party in a lawsuit enforcing any rights under the Merchant Agreement. The Court directed us and Comdata to submit a form of final judgment with an accounting of our damages and a proposed schedule for resolution of the fees and costs within ten days of the date of the Memorandum Opinion. We and Comdata reached agreement on the amount of excess fees to be paid to us by Comdata and on the calculation of pre-judgment interest, but did not reach agreement on when final judgment should enter and on the amounts of, or schedule for resolving an award of, attorney's fees and costs. Consequently, we and Comdata each filed our own proposed forms of final judgment. On October 17, 2017, the Court entered an order outlining a schedule for resolving issues related to attorney's fees and costs. In September 2017, we recognized a receivable, with an offsetting reduction of transaction fees expense, of $6,903 for the amount of excess transaction fees we subsequently recovered from Comdata in November 2017. The transaction fee expense which we paid net of the amount we recovered from Comdata is included in site level operating expenses in our consolidated statements of operations and comprehensive income (loss). During the year ended December 31, 2017, we recognized litigation expenses related to this matter of $9,706, which are included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). Although the Court's September 11, 2017, Memorandum Opinion found that the prevailing party in litigation to enforce the Merchant Agreement is entitled to recover its reasonable attorneys' fees and costs plus pre- and post- judgment interest, we have not recognized any amounts of receivable or expense reduction for these attorneys' fees and costs, as the Court has not determined the amount of fees and costs that we are entitled to recover. Our attorneys' fees and costs related to this matter totaled $10,518 through December 31, 2017. |
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Inventory | Inventory Inventory at December 31, 2017 and 2016, consisted of the following:
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. Our separately reportable segments are travel centers and convenience stores. We measure our reportable segments' profitability based on site level gross margin in excess of site level operating expenses. Travel Centers We operate and franchise travel centers under the "TA brand" and the "Petro brand", primarily along the U.S. interstate highway system. Our travel center customers include trucking fleets and their drivers, independent truck drivers and highway and local motorists. Our travel centers offer customers diesel fuel and gasoline as well as nonfuel products and services such as truck repair and maintenance services, full service restaurants, QSRs and various customer amenities. Convenience Stores We operate convenience stores with retail gasoline stations, under the "Minit Mart brand", that generally serve motorists and are not located at a travel center. These convenience stores typically offer customers gasoline as well as a variety of nonfuel products and services, including coffee, groceries, some fresh foods, and, in many stores, a QSR and/or car wash. Corporate and Other We include unallocated corporate expenses and the operations of our standalone restaurants and distribution centers, which are not material to our operations, in corporate and other. For purposes of segment performance measurement, we do not allocate to either our travel center or convenience store segments income and expenses that are of a non-operating or of a corporate nature such as selling, general and administrative expenses, transaction costs associated with the acquisition of certain businesses, interest, income from equity investees and income taxes. Identifiable assets of the business segments exclude general corporate assets, which primarily consist of certain cash, accounts receivable, certain property and equipment, deferred income taxes and certain other assets. Other than cash that resides at the travel centers or convenience stores, cash and accounts receivable are managed within our treasury and finance function at corporate. Additional Information The accounting policies of the business segments are the same as the policies described in Note 1. Intersegment sales and transfers are accounted for at the same prices as if the sales and transfers were made to third parties and are eliminated in consolidation. Segment Information
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Selected Quarterly Financial Data (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2017 and 2016:
During the fourth quarter of 2017, we recognized a $6,356 charge to the benefit for income taxes in order to revalue our deferred tax assets and liabilities at the new statutory rate of 21%, a decrease from 35%, as part of the Tax Cuts and Jobs Act enacted in December 2017. We also recognized a $5,389 impairment charge relating to certain property and equipment and a $1,546 write off of certain assets. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||
Segment Reporting | We manage our business on the basis of two separately reportable segments, travel centers and convenience stores. See Note 15 for more information about our reportable segments. We have a single travel center located in a foreign country, Canada, that we do not consider material to our operations. |
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Consolidation | Our consolidated financial statements include the accounts of TravelCenters of America LLC and its subsidiaries. All intercompany transactions and balances have been eliminated. We use the equity method of accounting for investments in entities when we have the ability to significantly influence, but not control, the investee's operating and financial policies, typically when we own 20% to 50% of the investee's voting stock. |
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Basis of Presentation | The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Revenue Recognition | Revenue Recognition. We recognize revenue and the related costs at the time of final sale to consumers at our company operated locations for retail fuel and nonfuel sales. We record the estimated cost of loyalty program redemptions by customers of our loyalty program points as a discount against gross revenue in determining net revenue presented in our consolidated statements of operations and comprehensive income (loss). For those travel centers that we lease to a franchisee, we recognize rent revenue. These leases generally specify rent increases each year based on inflation rates for the respective periods or capital improvements we make at the travel center. Because the rent increases related to these factors are contingent upon future events, we recognize the related rent revenue after such events have occurred. We collect and recognize franchise royalty revenues monthly. We determine royalty revenues generally as a percentage of the franchisees' revenues. We recognize initial franchise fee revenues when the franchisee opens for business under our brand name, which is when we have fulfilled our initial obligations under the related agreements. |
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Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts. We record trade accounts receivable at the invoiced amount and those amounts do not bear interest. The recorded allowance for doubtful accounts is our best estimate of the amount of probable losses in our existing accounts receivable. We base the allowance on historical payment patterns, aging of accounts receivable, periodic review of customers' financial condition and actual write off history. We charge off account balances against the allowance when we believe it is probable the receivable will not be collected. |
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Inventory | Inventory. We state our inventory at the lower of cost or market value. We determine cost principally on the weighted average cost method. We maintain reserves for the estimated amounts of obsolete and excess inventory. These estimates are based on unit sales histories and on hand inventory quantities, known market trends for inventory items and assumptions regarding factors such as future inventory needs, our ability and the related cost to return items to our suppliers and our ability to sell inventory at a discount when necessary. |
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Property and Equipment | Property and Equipment. We record property and equipment as a result of business combinations based on their fair values as of the date of the acquisition. We record all other property and equipment at cost. We depreciate our property and equipment on a straight line basis generally over the following estimated useful lives of the assets:
We depreciate leasehold improvements over the shorter of the lives shown above or the remaining term of the underlying lease. Amortization expense related to assets recorded in connection with the sale leaseback financing obligation pertaining to certain travel centers we lease from Hospitality Properties Trust, or HPT, is included in depreciation and amortization expense over the shorter of the estimated useful lives of the assets or the lease term. |
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. In a business combination we are required to record assets and liabilities acquired, including those intangible assets that arise from contractual or other legal rights or are otherwise capable of being separated or divided from the acquired entity, based on the fair values of the acquired assets and liabilities. Any excess of acquisition cost over the fair value of the acquired net assets is recognized as goodwill. We amortize the recorded costs of intangible assets with finite lives on a straight line basis over their estimated lives, principally the terms of the related contractual agreements. |
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Impairment | Impairment. We review definite lived assets for indicators of impairment during each reporting period. We recognize impairment charges when (i) the carrying value of a long lived asset or asset group to be held and used in the business is not recoverable and exceeds its fair value and (ii) when the carrying value of a long lived asset or asset group to be disposed of exceeds the estimated fair value of the asset less the estimated cost to sell the asset. Our estimates of fair value are based on our estimates of likely market participant assumptions, including projected operating results, real estate rent expense and the discount rate used to measure the present value of projected future cash flows. We use a number of assumptions and methods in preparing valuations underlying impairment tests, and in some instances we may obtain third party appraisals. We recognize impairment charges in the period during which the circumstances surrounding an asset or asset group to be held and used have changed such that the carrying value is no longer recoverable, or during which a commitment to a plan to dispose of the asset or asset group is made. We perform our impairment analysis for substantially all of our property and equipment at the individual site level because that is the lowest level of asset and liability groupings for which the cash flows are largely independent of the cash flows of other assets and liabilities. During 2017, our estimates and assumptions resulted in total impairment charges of $9,769 related to certain convenience store locations. We assess intangible assets with definite lives for impairment annually or whenever events or changes in circumstances warrant a revision to the remaining period of amortization. Definite lived intangible assets include our agreements with franchisees, leasehold interests, our agreements with franchisors and other intangible assets. For 2017, definite lived intangible assets were assessed using a qualitative analysis that was performed by assessing certain trends and factors, including actual sales, collection of royalties from franchisees and any changes in the manner in which the assets were used that could impact the value of the asset. During 2017, we did not record any impairment charges related to our definite lived intangible assets. We evaluate goodwill and indefinite lived intangible assets for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable using either a quantitative or qualitative analysis. We subject goodwill and indefinite lived intangible assets to further evaluation and recognize impairment charges when events and circumstances indicate the carrying value of the goodwill or indefinite lived intangible asset exceeds the fair market value of the asset. For 2017, indefinite lived intangible assets were assessed using a qualitative analysis that was performed by assessing certain trends and factors, including projected growth rates and actual sales and operating profit margins, discount rates, industry data and other relevant qualitative factors. These trends and factors were compared to, and based on, the assumptions used in the most recent quantitative assessment. During 2017, we did not record any impairment charges related to our indefinite lived intangible assets. We evaluate goodwill for impairment as of July 31, or more frequently if the circumstances warrant, at the reporting unit level. We have three reporting units, which include our two reportable segments, travel centers and convenience stores, and our QSL business. With respect to goodwill, if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of impairment to be recognized, if any. |
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Share Based Employee Compensation | Share Based Employee Compensation. We have historically granted awards of our common shares under our share award plans. Share awards issued to our Directors vest immediately. Share awards made to others vest in five to ten equal annual installments beginning on the date of grant. Compensation expense related to share awards is determined based on the market value of our shares on either the date of grant for employees or the vesting date for nonemployees, as appropriate, with the aggregate value of the shares awarded amortized to expense over the related vesting period. We include share based compensation expense in selling, general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). |
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Environmental Remediation | Environmental Remediation. We record remediation charges and penalties when the obligation to remediate is probable and the amount of associated costs are reasonably determinable. We include remediation expenses within site level operating expenses in our consolidated statements of operations and comprehensive income (loss). Generally, the timing of remediation expense recognition coincides with completion of a feasibility study or the commitment to a formal plan of action. Accrued liabilities related to environmental matters are recorded on an undiscounted basis because of the uncertainty associated with the timing of the related future payments. In our consolidated balance sheets, the accrual for environmental matters is included in other noncurrent liabilities, with the amount estimated to be expended within the subsequent 12 months included in other current liabilities. We recognize a receivable for estimated future environmental costs that we may be reimbursed for within other noncurrent assets in our consolidated balance sheets. |
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Self Insurance Accruals | Self Insurance Accruals. For insurance programs for which we pay deductibles and for which we are partially self insured up to certain stop loss amounts, we establish accruals for both estimated losses on known claims and claims incurred but not reported, based on claims histories and using actuarial methods. In our consolidated balance sheets, the accrual for self insurance costs is included in other noncurrent liabilities, with the amount estimated to be expended within the subsequent 12 months included in other current liabilities. |
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Asset Retirement Obligations | Asset Retirement Obligations. We recognize the future costs for our obligations related to the removal of our underground storage tanks and certain improvements we own at leased properties over the estimated useful lives of each asset requiring removal. We record a liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long lived asset at the time such an asset is installed. We base the estimated liability on our historical experiences in removing these assets, their estimated useful lives, external estimates as to the cost to remove the assets in the future and regulatory or contractual requirements. The liability is a discounted liability using a credit adjusted risk free rate. |
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Leasing Transactions | We recognize rent under operating leases without scheduled rent increases as expense over the lease term as it becomes payable. Certain operating leases specify scheduled rent increases over the lease term or other lease payments that are not scheduled evenly throughout the lease term. We recognize the effects of those scheduled rent increases in rent expense over the lease term on an average, or straight line, basis. The rent payments resulting from our sales to HPT of improvements to the properties we lease from HPT are contingent rent. Other than at the travel centers where our leases are accounted for as sale leaseback financing obligations, we recognize the expense related to this contingent rent evenly throughout the remaining lease term beginning on the dates of the related sales to HPT. |
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Income Taxes | Income Taxes. We establish deferred income tax assets and liabilities to reflect the future tax consequences of differences between the tax bases and financial statement bases of assets and liabilities. We reduce the measurement of deferred tax assets, if necessary, by a valuation allowance when it is more likely than not that the deferred tax asset will not be realized. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. We evaluate and adjust these tax positions based on changing facts and circumstances. For tax positions meeting the more likely than not threshold, the amount we recognize in the financial statements is the largest benefit that we estimate has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. We classify interest and penalties related to uncertain tax positions, if any, in our financial statements as a component of income tax expense. |
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Reclassifications | Reclassifications. Certain prior year amounts have been reclassified to be consistent with the current year presentation within our consolidated financial statements, primarily the reclassification of certain lottery adjustments from nonfuel cost of goods sold to nonfuel revenues in our consolidated statements of operations and comprehensive income (loss). This reclassification is not considered material and has no impact on (loss) income from operations. In addition, we reclassified lottery tickets from inventory to other current assets in our consolidated balance sheets. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, which establishes a comprehensive revenue recognition standard under GAAP for almost all industries. This new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein. To address implementation of ASU 2014-09 and evaluate its impact on our consolidated financial statements, we developed a project plan in which we utilized a bottom up approach to evaluate our revenue streams and related internal controls. We have selected the full retrospective transition method for adoption, which requires that we restate our consolidated financial statements for prior year comparative periods. Although the majority of our revenue is initiated at the point of sale, the implementation of this standard will impact the accounting for our loyalty programs, initial franchise fees and advertising contributions received from franchisees. Under ASU 2014-09, loyalty awards will be recognized as a separate performance obligation against the revenue that earned the loyalty award, which will result in a reclassification of $65,623 and $56,477 between fuel and nonfuel revenue in our consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2017 and 2016, respectively, which will significantly affect our reported amounts for fuel gross margin per gallon (decrease) and nonfuel gross margin percentage (increase). However, the accounting for our loyalty program will not have a material impact on our (loss) income from operations or net income (loss) attributable to common shareholders or our consolidated balance sheets. The adjustments to reflect adoption of ASU 2014-09 with respect to our initial franchise fees and advertising contributions for the years ended December 31, 2017 and 2016, are not material to our consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases, which establishes a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability on the consolidated balance sheets for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. We are in the process of evaluating the effects the adoption of this update may have on our consolidated financial statements. We believe the adoption of this update will have a material impact on our consolidated balance sheets due to the recognition of the lease rights and obligations as assets and liabilities. While the adoption of this standard will have no effect on the cash we pay under our lease agreements, we expect amounts within our consolidated statements of operations and comprehensive income (loss) will change materially. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows, which simplifies elements of cash flow classification and reduces diversity in practice across all industries. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein, and requires retrospective application. Early adoption is permitted. The implementation of this update is not expected to cause any material changes to our consolidated statements of cash flows. In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations, which clarifies the definition of a business. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein, and requires prospective application. Early adoption is permitted. The implementation of this update is not expected to cause any material changes to our consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The new standard will apply for annual or interim impairment tests beginning after December 15, 2019, and requires prospective application. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated useful lives of property and equipment | We depreciate our property and equipment on a straight line basis generally over the following estimated useful lives of the assets:
Property and equipment, net, at cost, as of December 31, 2017 and 2016, consisted of the following:
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the amounts assigned, based on their fair values, to the assets acquired and liabilities assumed in the business combinations | The following table summarizes the amounts we recorded for the assets acquired and liabilities assumed in the business combinations in 2016 described above, along with resulting goodwill. We expect that amortization of all of the goodwill resulting from these acquisitions will be deductible for tax purposes.
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of property and equipment, net, at cost | We depreciate our property and equipment on a straight line basis generally over the following estimated useful lives of the assets:
Property and equipment, net, at cost, as of December 31, 2017 and 2016, consisted of the following:
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Principal landlord and largest shareholder | HPT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of property and equipment, net, at cost | The following table shows the amounts of property and equipment owned by HPT but recognized in our consolidated balance sheets and included within the balances shown in the table above, as a result of the required accounting for the assets funded by HPT under the deferred tenant improvements allowance and for the assets that did not qualify for sale leaseback accounting. See Note 7 for more information about our leases with HPT.
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of goodwill and other intangible assets, net | Goodwill and other intangible assets, net, as of December 31, 2017 and 2016, consisted of the following:
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Schedule of estimate the aggregate amortization expense for amortizable intangible assets to be as follows for each of the next five years | The aggregate amortization expense for our amortizable intangible assets as of December 31, 2017, for each of the next five years is:
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Schedule of goodwill by segment | Goodwill by reporting unit was as follows:
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Other Current Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other current liabilities | Other current liabilities, as of December 31, 2017 and 2016, consisted of the following:
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Long Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long term debt | Long term debt, net, as of December 31, 2017 and 2016, consisted of the following:
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Leasing Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments required under entity's leases and HPT Leases | Future minimum lease payments required under leases that had remaining noncancelable lease terms in excess of one year as of December 31, 2017, were as follows (included herein are the full payments due under the HPT Leases, including the amount attributed to the lease of those sites that are accounted for as a financing in our consolidated balance sheets as reflected in the sale leaseback financing obligation):
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Schedule of rent expense under the entity's operating leases and HPT Leases | Rent expense under our operating leases consisted of the following:
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Principal landlord and largest shareholder | HPT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments required under entity's leases and HPT Leases | The following table sets forth the amounts of annual minimum lease payments required under the HPT Leases as of December 31, 2017, in each of the years shown.
The number of properties leased, the terms, the minimum annual rent and deferred rent balances owed by us under our HPT Leases as of December 31, 2017, were as follows:
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Schedule of rent expense under the entity's operating leases and HPT Leases | The following table summarizes the various amounts related to the HPT Leases and leases with other lessors that are reflected in real estate rent expense in our consolidated statements of operations and comprehensive income (loss).
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Summary of various amounts related to the HPT Leases included in the consolidated balance sheets | The following table summarizes the various amounts related to the HPT Leases that are included in our consolidated balance sheets.
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of number and weighted average grant date fair value of unvested common shares and common shares issued under the Share Award Plans | The following table sets forth the number and weighted average grant date fair value of unvested common shares and common shares awarded under the Share Award Plans for the year ended December 31, 2017.
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Reconciliation from net income (loss) attributable to common shareholders to net income (loss) available to common shareholders | The following table presents a reconciliation of net income (loss) attributable to common shareholders to net income (loss) available to common shareholders and the related earnings per share.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of principal reasons for the difference between income tax (benefit) provision and the income tax (benefit) provision at the U.S. Federal statutory income tax rate | Effective Tax Rate Reconciliation
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Schedule of benefit (provision) for income taxes | Components of the Income Tax Benefit (Provision)
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Schedule of significant components of deferred tax assets and liabilities | The following table presents the classification in our consolidated balance sheets of the deferred tax assets and liabilities presented in the table above.
Components of Deferred Tax Assets and Liabilities
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Summary of activity related to uncertain tax positions | Uncertain Tax Positions
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Equity Investments - Equity Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized financial information | The following tables set forth summarized financial information of PTP and does not represent the amounts we have included in our consolidated financial statements in connection with our investment in PTP.
As of December 31, 2017, our investment in equity affiliates, which are presented in our consolidated balance sheets in other noncurrent assets, and our proportional share of our investees' net income (loss) recognized in our consolidated statements of operations and comprehensive income (loss) were as follows:
|
Inventory (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventory at December 31, 2017 and 2016, consisted of the following:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information | Segment Information
|
Selected Quarterly Financial Data (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of unaudited quarterly results of operations | The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2017 and 2016:
|
Summary of Significant Accounting Policies - Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Buildings and site improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Buildings and site improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Summary of Significant Accounting Policies - Impairment (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
reporting_unit
segment
|
Jul. 31, 2017 |
|
Accounting Policies [Abstract] | |||
Impairment charges related to certain convenience stores | $ | $ 5,389 | $ 9,769 | |
Goodwill [Line Items] | |||
Number of reporting units | reporting_unit | 3 | ||
Number of reportable segments | segment | 2 | ||
Convenience stores | |||
Goodwill [Line Items] | |||
Reporting units percentage of fair value in excess of carrying value | 2.60% |
Summary of Significant Accounting Policies - Share Based Employee Compensation (Details) - Restricted shares |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period of shares issued to other than directors | 5 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period of shares issued to other than directors | 10 years |
Summary of Significant Accounting Policies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounting Policies [Abstract] | ||
Asset retirement obligation | $ 10,240 | $ 9,335 |
Summary of Significant Accounting Policies - Leasing Transactions (Details) |
Dec. 31, 2017
lease
|
---|---|
Principal landlord and largest shareholder | HPT | |
Real Estate Properties [Line Items] | |
Number of leases with HPT | 5 |
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
ASU 2014-09 | ||
Lottery awards reclassification between fuel and nonfuel revenue | $ 65,623 | $ 56,477 |
Acquisitions - Assets Acquired and Liabilities Assumed (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Inventory | $ 3,640 |
Property and equipment | 49,114 |
Goodwill | 8,809 |
Other intangible assets | 14,390 |
Other assets | 1,148 |
Other liabilities | (5,166) |
Total aggregate purchase price | 71,935 |
Restaurants | |
Business Acquisition [Line Items] | |
Inventory | 465 |
Property and equipment | 12,825 |
Goodwill | 1,890 |
Other intangible assets | 14,020 |
Other assets | 1,130 |
Other liabilities | (3,548) |
Total aggregate purchase price | 26,782 |
Convenience stores | |
Business Acquisition [Line Items] | |
Inventory | 3,175 |
Property and equipment | 36,289 |
Goodwill | 6,919 |
Other intangible assets | 370 |
Other assets | 18 |
Other liabilities | (1,618) |
Total aggregate purchase price | $ 45,153 |
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Total | |
2018 | $ 2,172 |
2019 | 2,054 |
2020 | 1,873 |
2021 | 1,653 |
2022 | $ 1,413 |
Goodwill and Intangible Assets - Goodwill by Segment (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill [Line Items] | ||
Total goodwill | $ 93,859 | $ 88,542 |
QSL business | ||
Goodwill [Line Items] | ||
Total goodwill | 3,046 | 1,890 |
Travel center segment | ||
Goodwill [Line Items] | ||
Total goodwill | 21,613 | 17,252 |
Convenience store segment | ||
Goodwill [Line Items] | ||
Total goodwill | $ 69,200 | $ 69,400 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense for amortizable intangible assets | $ 3,057 | $ 2,570 | $ 1,703 |
Weighted average period of amortizable intangible assets | 12 years | ||
Goodwill acquired during period | $ 5,517 | $ 8,809 | |
Goodwill deductible for tax purposes | $ 77,738 |
Other Current Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Taxes payable, other than income taxes | $ 48,976 | $ 47,875 |
Accrued wages and benefits | 20,674 | 19,146 |
Self insurance program accruals, current portion | 15,301 | 14,732 |
Loyalty program accruals | 15,165 | 13,686 |
Accrued capital expenditures | 5,695 | 12,135 |
Other | 24,329 | 25,074 |
Total other current liabilities | $ 130,140 | $ 132,648 |
Long Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Total long term debt, net | $ 319,634 | $ 318,739 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Deferred financing costs | (11,555) | (12,553) |
Other long term debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 1,189 | 1,292 |
2028 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 110,000 | 110,000 |
2029 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 120,000 | 120,000 |
2030 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 100,000 | $ 100,000 |
Long Term Debt - Senior Notes (Details) - Senior Notes - USD ($) |
1 Months Ended | |||
---|---|---|---|---|
Oct. 31, 2015 |
Dec. 31, 2014 |
Jan. 31, 2013 |
Dec. 31, 2017 |
|
2030 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount issued | $ 100,000,000 | |||
Interest rate (as a percent) | 8.00% | |||
Net proceeds from issuance | $ 95,494,000 | |||
Redemption price of debt instrument (as a percent) | 100.00% | |||
Fair value of debt instrument | $ 99,960,000 | |||
2029 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 8.00% | |||
Redemption price of debt instrument (as a percent) | 100.00% | |||
Fair value of debt instrument | 120,960,000 | |||
2028 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 8.25% | |||
Redemption price of debt instrument (as a percent) | 100.00% | |||
Fair value of debt instrument | $ 111,100,000 |
Long Term Debt - Revolving Credit Facility (Details) - Credit Facility |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 200,000,000 |
Increase in maximum borrowing capacity subject to available collateral and lender participation | $ 300,000,000 |
Fee on outstanding commitments (as a percent) | 1.50% |
Fee on unused commitments (as a percent) | 0.25% |
Amount available for borrowings and letters of credit | $ 112,669,000 |
Borrowings outstanding | 0 |
Outstanding amount of letters of credit | $ 17,795,000 |
Long Term Debt - Deferred Financing Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Instrument [Line Items] | |||
Future amortization of deferred financing fees in 2018 | $ 1,221 | ||
Future amortization of deferred financing fees in 2019 | 1,214 | ||
Future amortization of deferred financing fees in 2020 | 1,000 | ||
Future amortization of deferred financing fees in 2021 | 997 | ||
Future amortization of deferred financing fees in 2022 | 997 | ||
Interest expense from the amortization of deferred financing fees | 1,221 | $ 1,225 | $ 995 |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Deferred financing costs | 11,555 | 12,553 | |
Accumulated amortization | 3,425 | 2,428 | |
Credit Facility | |||
Debt Instrument [Line Items] | |||
Deferred financing costs | 440 | 664 | |
Accumulated amortization | $ 680 | $ 456 |
Leasing Transactions - As a Lessee (Details) |
Dec. 31, 2017
lease
|
---|---|
Principal landlord and largest shareholder | HPT | |
Related Party Transaction [Line Items] | |
Number of leases with HPT | 5 |
Leasing Transactions - Rent Expense Under Operating Leases (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Jun. 30, 2015
lease
|
|
Leases [Abstract] | ||||
Minimum rent | $ 278,806 | $ 263,212 | $ 233,211 | |
Sublease rent | 7,035 | 7,463 | 8,422 | |
Contingent rent | 2,195 | 1,304 | (1,266) | |
Total rent expense | 288,036 | $ 271,979 | $ 240,367 | |
Principal landlord and largest shareholder | HPT | ||||
Leases [Abstract] | ||||
Minimum rent | $ 282,267 | |||
Operating Leased Assets [Line Items] | ||||
Number of leases with contingent rent | lease | 1 |
Leasing Transactions - Future Minimum Lease Payments (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Leases [Abstract] | |
2018 | $ 300,864 |
2019 | 297,407 |
2020 | 295,146 |
2021 | 292,177 |
2022 | 288,069 |
Thereafter | 2,207,232 |
Total | $ 3,680,895 |
Leasing Transactions - As a Lessor (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017
USD ($)
franchisee
travel_center
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Operating Leased Assets [Line Items] | |||
Rent revenue from operating leases | $ 4,208 | $ 4,439 | $ 4,458 |
Future minimum lease payments due in 2018 | 1,927 | ||
Future minimum lease payments due in 2019 | 1,927 | ||
Future minimum lease payments due in 2020 | 1,927 | ||
Future minimum lease payments due in 2021 | 1,927 | ||
Future minimum lease payments due in 2022 | $ 963 | ||
Travel centers | Franchise units | |||
Operating Leased Assets [Line Items] | |||
Number of sites subject to lease | franchisee | 4 | ||
Number of franchisees that renewed in 2017 | franchisee | 2 | ||
Number of franchisees that did not renewed in 2017 | travel_center | 2 | ||
Number of franchisees who filed preliminary injunction request | franchisee | 1 | ||
Number of franchisees who have intent to file preliminary injunction request | franchisee | 1 |
Shareholders' Equity - Unvested Common Shares (Details) - Share award plans - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Number of Shares | |||
Unvested shares balance at the beginning of the period | 2,098 | ||
Granted (in shares) | 751 | 926 | 671 |
Vested (in shares) | (818) | ||
Forfeited/canceled (in shares) | (18) | ||
Unvested shares balance at the end of the period | 2,013 | 2,098 | |
Weighted Average Grant Date Fair Value Per Share | |||
Unvested shares balance at the beginning of the period (in usd per share) | $ 7.50 | ||
Granted (in usd per share) | 4.70 | $ 6.61 | $ 9.84 |
Vested (in usd per share) | 6.93 | ||
Forfeited/canceled (in usd per share) | 7.93 | ||
Unvested shares balance at the end of the period (in usd per share) | $ 6.68 | $ 7.50 |
Shareholders' Equity - Treasury Shares (Details) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Stockholders' Equity Note [Abstract] | |||
Aggregate number of shares repurchased | 272 | 209 | 197 |
Aggregate value of shares repurchased | $ 1,175 | $ 1,394 | $ 1,842 |
Number of treasury shares retired | 272 | 209 | 287 |
Carrying value of treasury shares retired | $ 1,175 | $ 1,394 | $ 2,770 |
Shareholders' Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Stockholders' Equity Note [Abstract] | |||||||||||
Dilutive share securities oustanding | $ 0 | $ 0 | $ 0 | ||||||||
Net income (loss) attributable to common shareholders, as reported | $ (20,625,000) | $ 62,324,000 | $ (3,013,000) | $ (29,424,000) | $ (6,493,000) | $ 10,898,000 | $ 3,521,000 | $ (9,944,000) | 9,262,000 | (2,018,000) | 27,719,000 |
Less: net income (loss) attributable to participating securities | 481,000 | (100,000) | 1,386,000 | ||||||||
Net income (loss) available to common shareholders | $ 8,781,000 | $ (1,918,000) | $ 26,333,000 | ||||||||
Weighted average common shares | 37,524 | 36,976 | 36,485 | ||||||||
Basic and diluted net income (loss) per common share | $ (0.52) | $ 1.58 | $ (0.08) | $ (0.74) | $ (0.17) | $ 0.28 | $ 0.09 | $ (0.26) | $ 0.23 | $ (0.05) | $ 0.72 |
Weighted average number of unvested shares outstanding (in shares) | 2,057 | 1,920 | 1,920 |
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||||||||||
U.S. federal statutory rate applied to income (loss) before income taxes | $ 25,958 | $ 1,074 | $ (15,661) | ||||||||
Uncertain tax position resolution | 58,602 | 0 | 0 | ||||||||
Benefit of tax credits | 2,902 | 2,849 | 2,574 | ||||||||
State income taxes, net of federal benefit | 2,221 | 1,621 | (1,695) | ||||||||
Provision to return adjustments | 443 | (910) | 199 | ||||||||
Nondeductible executive compensation | 0 | (841) | (1,499) | ||||||||
Other nondeductible expenses | (322) | (331) | (271) | ||||||||
Tax rate change | (6,356) | 0 | 0 | ||||||||
Other, net | 991 | (1,729) | (186) | ||||||||
Total tax benefit (provision) | $ 6,476 | $ 56,268 | $ 2,380 | $ 19,315 | $ 4,304 | $ (6,263) | $ (1,985) | $ 5,677 | $ 84,439 | $ 1,733 | $ (16,539) |
Income Taxes - Components of Income Tax Benefit (Provision) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current tax benefit (provision) | |||||||||||
Federal | $ 32,883 | $ 2,101 | $ (6,513) | ||||||||
State | (5,575) | 3,974 | (2,659) | ||||||||
Total current tax benefit (provision) | 27,308 | 6,075 | (9,172) | ||||||||
Deferred tax benefit (provision): | |||||||||||
Federal | 48,139 | (2,861) | (7,438) | ||||||||
State | 8,992 | (1,481) | 71 | ||||||||
Total deferred tax benefit (provision) | 57,131 | (4,342) | (7,367) | ||||||||
Total tax benefit (provision) | $ 6,476 | $ 56,268 | $ 2,380 | $ 19,315 | $ 4,304 | $ (6,263) | $ (1,985) | $ 5,677 | $ 84,439 | $ 1,733 | $ (16,539) |
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Deferred tax assets: | ||
Straight line rent accrual | $ 13,542 | $ 19,846 |
Reserves | 16,566 | 24,575 |
Deferred gains | 32,949 | 55,110 |
Asset retirement obligations | 2,765 | 3,827 |
Tax credit carryforwards | 27,414 | 10,331 |
Tax loss carryforwards | 61,961 | 29,782 |
Deferred tenant improvements allowance | 11,228 | 18,596 |
Other | 6,083 | 10,699 |
Total deferred tax assets before valuation allowance | 172,508 | 172,766 |
Valuation allowance | (1,027) | (600) |
Total deferred tax assets | 171,481 | 172,166 |
Deferred tax liabilities: | ||
Property and equipment | (120,297) | (176,117) |
Goodwill and other intangible assets | (5,632) | (7,865) |
Other | (1,466) | (1,050) |
Total deferred tax liabilities | (127,395) | (185,032) |
Net deferred tax assets | $ 44,086 | |
Net deferred tax (liabilities) | $ (12,866) |
Income Taxes - Classification of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Net deferred tax amounts are included in: | ||
Other noncurrent assets | $ 44,086 | $ 0 |
Other noncurrent liabilities | $ 0 | $ (12,866) |
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Activity related to unrecognized tax benefits | |||
Balance at beginning of period | $ 59,742 | $ 59,742 | $ 59,557 |
Changes to current year tax positions | (1,140) | 0 | 0 |
Interest | 0 | 0 | 185 |
Lapse in statute of limitations | (58,602) | 0 | 0 |
Balance at end of period | $ 0 | $ 59,742 | $ 59,742 |
Equity Investments - Equity Investments (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Schedule of Equity Method Investments [Line Items] | |||
Investment balance | $ 42,502 | $ 45,754 | |
Income (loss) from equity investments | 1,088 | 4,544 | $ 4,056 |
PTP | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment balance | 20,807 | 21,657 | |
Income (loss) from equity investments | 3,951 | 4,614 | 4,036 |
Other | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment balance | 21,695 | 24,097 | |
Income (loss) from equity investments | $ (2,863) | $ (70) | $ 20 |
Equity Investments - PTP summarized financial information (Details) - PTP - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Schedule of Equity Method Investments [Line Items] | |||
Total current assets | $ 10,759 | $ 12,605 | |
Total noncurrent assets | 56,676 | 56,047 | |
Total current liabilities | 2,262 | 1,909 | |
Total noncurrent liabilities | 15,468 | 15,456 | |
Total revenues | 119,463 | 114,331 | $ 115,313 |
Cost of goods sold (excluding depreciation) | 85,729 | 80,664 | 84,820 |
Operating income | 10,896 | 12,784 | 11,083 |
Net income and comprehensive income | $ 10,418 | $ 12,077 | $ 10,629 |
Related Party Transactions - Relationship with HPT (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017
property
shares
|
Dec. 31, 2016
shares
|
|
Related Party Transaction [Line Items] | ||
Common shares, shares outstanding | 39,984,000 | 39,523,000 |
Principal landlord and largest shareholder | HPT | ||
Related Party Transaction [Line Items] | ||
Common shares, shares outstanding | 3,420,000 | |
Percentage of outstanding common shares owned | 8.60% | |
Number of properties | property | 199 | |
Affiliated entity | RMR | Maximum | ||
Related Party Transaction [Line Items] | ||
Percentage of any class of equity shares that can be acquired | 9.80% |
Related Party Transactions - Directors' and Officers' Liability Insurance (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Affiliated entity | RMR | Directors and officers liability insurance | |||
Related Party Transaction [Line Items] | |||
Aggregate premiums paid | $ 156 | $ 91 | $ 225 |
Contingencies - Environmental Contingencies (Details) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Nov. 11, 2017
USD ($)
|
Oct. 31, 2015
violation
|
Feb. 28, 2014
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Litigation by California State Water Resources Control Board | |||||
Commitments and contingencies | |||||
Settlement amount | $ 1,800,000 | ||||
Suspended penalties | 1,000,000 | ||||
Maximum verified costs | $ 2,000,000 | ||||
Number of alleged violations | violation | 5 | ||||
Agreed upon settlement of suspended penalties | $ 500,000 | ||||
Remaining amount of suspended penalties liability that was reversed | $ 500,000 | ||||
Environmental matters | |||||
Commitments and contingencies | |||||
Total recorded liabilities | 2,751,000 | $ 2,751,000 | |||
Expected recoveries of future expenditures | 687,000 | ||||
Loss contingency liability | 2,064,000 | 2,064,000 | |||
Loss contingency insurance limit for liabilities per incident | $ 10,000,000 | 10,000,000 | |||
Loss contingency insurance limit for liabilities | $ 25,000,000 |
Contingencies - Legal Proceedings (Details) - Litigation with FleetCor and Comdata - USD ($) $ in Thousands |
12 Months Ended | 13 Months Ended |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2017 |
|
Site level operating expenses | ||
Other Commitments [Line Items] | ||
Total transaction fees withheld | $ 6,903 | |
Selling, general and administrative expenses | ||
Other Commitments [Line Items] | ||
Litigation expenses | $ 9,706 | $ 10,518 |
Inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory [Line Items] | ||
Total inventory | $ 209,640 | $ 204,145 |
Nonfuel products | ||
Inventory [Line Items] | ||
Total inventory | 169,140 | 167,813 |
Fuel products | ||
Inventory [Line Items] | ||
Total inventory | $ 40,500 | $ 36,332 |
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Decrease in tax benefit due to Tax Cuts and Jobs Act | $ 6,356 | $ 6,356 | |||||||||
Selected Quarterly Financial Data (unaudited) | |||||||||||
Total revenues | 1,584,765 | $ 1,575,677 | $ 1,498,668 | $ 1,390,766 | $ 1,408,648 | $ 1,462,646 | $ 1,430,008 | $ 1,149,822 | 6,051,593 | $ 5,451,124 | $ 5,808,381 |
Total gross margin | 365,556 | 394,173 | 390,246 | 345,056 | 361,620 | 394,796 | 378,498 | 340,292 | |||
(Loss) income from operations | (19,161) | 13,112 | 1,630 | (41,470) | (4,602) | 23,129 | 12,311 | (8,778) | (45,924) | 22,060 | 78,297 |
Benefit (provision) for income taxes | 6,476 | 56,268 | 2,380 | 19,315 | 4,304 | (6,263) | (1,985) | 5,677 | 84,439 | 1,733 | (16,539) |
Net (loss) income attributable to common shareholders | $ (20,625) | $ 62,324 | $ (3,013) | $ (29,424) | $ (6,493) | $ 10,898 | $ 3,521 | $ (9,944) | $ 9,262 | $ (2,018) | $ 27,719 |
Net (loss) income per common share attributable to common shareholders: | |||||||||||
Basic and diluted (in usd per share) | $ (0.52) | $ 1.58 | $ (0.08) | $ (0.74) | $ (0.17) | $ 0.28 | $ 0.09 | $ (0.26) | $ 0.23 | $ (0.05) | $ 0.72 |
Comprehensive (loss) income attributable to common shareholders | $ (20,520) | $ 62,529 | $ (2,902) | $ (29,276) | $ (6,582) | $ 10,932 | $ 3,581 | $ (9,698) | $ 9,831 | $ (1,767) | $ 27,044 |
Decrease in tax benefit due to Tax Cuts and Jobs Act | 6,356 | $ 0 | $ 0 | ||||||||
Impairment charges related to certain convenience stores | 5,389 | $ 9,769 | |||||||||
Write off of certain assets | $ 1,546 |
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