0001378453-18-000068.txt : 20181206 0001378453-18-000068.hdr.sgml : 20181206 20181206105331 ACCESSION NUMBER: 0001378453-18-000068 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20181205 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20181206 DATE AS OF CHANGE: 20181206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELCENTERS OF AMERICA LLC CENTRAL INDEX KEY: 0001378453 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500] IRS NUMBER: 205701514 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33274 FILM NUMBER: 181219479 BUSINESS ADDRESS: STREET 1: 24601 CENTER RIDGE ROAD CITY: WESTLAKE STATE: OH ZIP: 44145 BUSINESS PHONE: 440-808-9100 MAIL ADDRESS: STREET 1: 24601 CENTER RIDGE ROAD CITY: WESTLAKE STATE: OH ZIP: 44145 8-K 1 a20181205form8k.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 5, 2018
TRAVELCENTERS OF AMERICA LLC
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
 
Delaware
 
001-33274
 
20-5701514
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
 
 
 
 
24601 Center Ridge Road,
Westlake, Ohio
 
 
 
 
44145
(Address of principal executive offices)
 
 
 
 
(Zip Code)
 
 
 
 
 
 
 
 
 
440-808-9100
 
 
(Registrant's telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨








Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 5, 2018, TravelCenters of America LLC and its subsidiary, TA Operating LLC, (collectively, the “Company”) completed the previously announced sale of 225 standalone convenience store properties, one standalone restaurant, five parcels of vacant land and certain related assets (the “C-Store Business”) to EG Retail (America), LLC and EG Group Limited (the “Buyer”) for an aggregate sales price of $330.8 million plus the assumption of certain liabilities pursuant to the Asset Purchase Agreement, dated September 1, 2018, between the Company and the Buyer (the "Agreement"). This sales price included $25.8 million of estimated net working capital items. The aggregate sales price received by the Company in this transaction remains subject to confirmation and possible adjustment of the net working capital items pursuant to certain customary post-closing true-up procedures set forth in the Agreement.
The Company incurred approximately $9.4 million of expenses related to the sale of the C-Store Business that consist primarily of advisor fees, marketing costs, employee severance and retention benefits, asset write offs and other transition and closing related costs.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 4, 2018, which is incorporated herein by reference. 

WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS CURRENT REPORT CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. WHENEVER THE COMPANY USES WORDS SUCH AS “BELIEVE,” “EXPECT,” “ANTICIPATE,” “INTEND,” “PLAN,” “ESTIMATE," "WILL," "MAY" AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, THE COMPANY IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON THE COMPANY'S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THE COMPANY'S FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
•
TA RECEIVED AN AGGREGATE SALES PRICE OF $330.8 MILLION IN CONNECTION WITH ITS SALE OF THE C-STORE BUSINESS. THIS SALES PRICE INCLUDED $25.8 MILLION OF ESTIMATED NET WORKING CAPITAL ITEMS, WHICH ARE SUBJECT TO CONFIRMATION AND POSSIBLE ADJUSTMENT PURSUANT TO CERTAIN CUSTOMARY POST-CLOSING TRUE-UP PROCEDURES. AS A RESULT, THE AGGREGATE SALES PRICE MAY ULTIMATELY BE MORE OR LESS THAN $330.8 MILLION; AND
•
TA INCURRED APPROXIMATELY $9.4 MILLION OF EXPENSES RELATED TO THE SALE OF THE C-STORE BUSINESS. THESE EXPENSES ARE ESTIMATES AND ACTUAL EXPENSES MAY BE MORE, OR LESS, THAN THESE ESTIMATES.
THE INFORMATION CONTAINED IN THE COMPANY'S FILINGS WITH THE SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS” IN THE COMPANY'S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM THE FORWARD LOOKING STATEMENTS. THE COMPANY'S FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, THE COMPANY DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENT AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The unaudited pro forma financial information for the Company giving effect to the sale of the C-Store Business contemplated by the Agreement is attached hereto as Exhibit 99.1 and incorporated herein by reference.




(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
TRAVELCENTERS OF AMERICA LLC
 
 
 
 
 
Date:
December 6, 2018
 
By:
/s/ William E. Myers
 
 
 
 
William E. Myers
 
 
 
 
Executive Vice President, Chief Financial Officer and Treasurer



 EX-99.1 2 a20181205exhibit991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

TravelCenters of America LLC
Pro Forma Consolidated Financial Statements (Unaudited)


On September 1, 2018, TravelCenters of America LLC and its subsidiary, TA Operating LLC, which we collectively refer to as "TA" or "we", "us" and "our", entered into an Asset Purchase Agreement, or the "Agreement", with EG Retail (America), LLC and EG Group Limited, which we collectively refer to as "Buyer", as disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission on September 4, 2018. Pursuant to the Agreement, upon the terms and subject to the conditions thereto, the Buyer agreed to purchase 225 of our standalone convenience stores, one standalone restaurant, five parcels of vacant land and certain other related assets, including inventories, or the "Convenience Stores Business".
On December 5, 2018, we and Buyer completed the sale of the Convenience Stores Business for an aggregate estimated sale price of approximately $330.8 million. This sales price includes $25.8 million of estimated net working capital items, which are subject to confirmation and possible adjustment pursuant to certain customary post-closing true-up procedures set forth in the Agreement. TA does not expect any such adjustment to be material.
The pro forma financial information included below includes pro forma consolidated statements of operations for the nine months ended September 30, 2018, and the years ended December 31, 2017 and 2016. The adjustments to the pro forma consolidated statements of operations for the nine months ended September 30, 2018, and the years ended December 31, 2017 and 2016, assume that this transaction occurred on January 1, 2016. The pro forma financial statements are based on, and should be read in conjunction with, our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017, which we refer to as our "Annual Report", and our unaudited consolidated financial statements and accompanying notes included in our Quarterly Report on Form 10-Q for the period ended September 30, 2018, which we refer to as our "Quarterly Report".
On September 1, 2018, our Board of Directors committed to a plan to sell the Convenience Stores Business and therefore, the business was presented as a discontinued operation in our Quarterly Report. Because the transaction was largely reflected in the consolidated financial statements in the Quarterly Report, a pro forma consolidated balance sheet as of September 30, 2018, is not included herein. Upon the closing of the sale on December 5, 2018, our cash balance increased by the amount of net proceeds from the sale and the balance of our current assets and current liabilities of discontinued operations was eliminated.
The historical consolidated financial information of TA has been adjusted in the pro forma financial statements to give effect to pro forma events that are (1) directly attributable to the transaction, (2) factually supportable, and (3) expected to have a continuing impact on the results of operations. The pro forma financial statements should be read in conjunction with the accompanying notes. Further, the as reported amounts in the pro forma consolidated statements of operations for the years ended December 31, 2017 and 2016, reflect the adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, effective January 1, 2018.


1


TravelCenters of America LLC
Pro Forma Consolidated Statements of Operations (Unaudited)
Nine Months Ended September 30, 2018
(in thousands, except per share amounts)


 
As Reported
 
Pro Forma
Adjustments
 
Note
 
Pro Forma
Revenues:
 
 
 
 
 
 
 
Fuel
$
3,308,744

 
$
—

 
 
 
$
3,308,744

Nonfuel
1,377,159

 
—

 
 
 
1,377,159

Rent and royalties from franchisees
12,022

 
—

 
 
 
12,022

Total revenues
4,697,925

 
—

 
 
 
4,697,925

 
 
 
 
 
 
 
 
Cost of goods sold (excluding depreciation):
 
 
 
 
 
 
 
Fuel
3,074,621

 
—

 
 
 
3,074,621

Nonfuel
538,606

 
—

 
 
 
538,606

Total cost of goods sold
3,613,227

 
—

 
 
 
3,613,227

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Site level operating
685,217

 
—

 
 
 
685,217

Selling, general and administrative
98,292

 
—

 
 
 
98,292

Real estate rent
212,036

 
—

 
 
 
212,036

Depreciation and amortization
62,076

 
—

 
 
 
62,076

Total operating expenses
1,057,621

 
—

 
 
 
1,057,621

 
 
 
 
 
 
 
 
Income from operations
27,077

 
—

 
 
 
27,077

 
 
 
 
 
 
 
 
Interest expense, net
21,963

 
—

 
 
 
21,963

Other expense, net
1,627

 
—

 
 
 
1,627

Income before income taxes and
   discontinued operations
3,487

 
—

 
 
 
3,487

Benefit for income taxes
713

 
—

 
 
 
713

Income from continuing operations
4,200

 
—

 
 
 
4,200

Loss from discontinued operations, net of taxes
(118,682
)
 
118,682

 
2 (a)
 
—

Net (loss) income
(114,482
)
 
118,682

 
 
 
4,200

Less: net income for noncontrolling interests
122

 
—

 
 
 
122

Net (loss) income attributable to common shareholders
$
(114,604
)
 
$
118,682

 
 
 
$
4,078

 
 
 
 
 
 
 
 
Net (loss) income per common share attributable to
common shareholders
 
 
 
 
 
 
 
Basic and diluted from continuing operations
$
0.10

 
$
—

 
 
 
$
0.10

Basic and diluted from discontinued operations
(2.97
)
 
2.97

 
 
 
—

Basic and diluted
(2.87
)
 
2.97

 
 
 
0.10



2


TravelCenters of America LLC
Pro Forma Consolidated Statements of Operations (Unaudited)
Year Ended December 31, 2017
(in thousands, except per share amounts)


 
As Reported(1)
 
Pro Forma
Adjustments
 
Note
 
Pro Forma
Revenues:
 
 
 
 
 
 
 
Fuel
$
4,025,289

 
$
(474,514
)
 
2 (b)
 
$
3,550,775

Nonfuel
2,009,804

 
(261,703
)
 
2 (b)
 
1,748,101

Rent and royalties from franchisees
18,236

 
(215
)
 
2 (b)
 
18,021

Total revenues
6,053,329

 
(736,432
)
 
 
 
5,316,897

 
 
 
 
 
 
 
 
Cost of goods sold (excluding depreciation):
 
 
 
 
 
 
 
Fuel
3,696,733

 
(420,122
)
 
2 (b)
 
3,276,611

Nonfuel
859,829

 
(171,227
)
 
2 (b)
 
688,602

Total cost of goods sold
4,556,562

 
(591,349
)
 
 
 
3,965,213

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Site level operating
980,749

 
(108,082
)
 
2 (b)
 
872,667

Selling, general and administrative
156,347

 
(10,332
)
 
2 (c)
 
146,015

Real estate rent
277,127

 
(2,277
)
 
2 (b)
 
274,850

Depreciation and amortization
128,416

 
(39,037
)
 
2 (b)
 
89,379

Total operating expenses
1,542,639

 
(159,728
)
 
 
 
1,382,911

 
 
 
 
 
 
 
 
Loss from operations
(45,872
)
 
14,645

 
 
 
(31,227
)
 
 
 
 
 
 
 
 
Interest expense, net
30,016

 
—

 
 
 
30,016

Other (income), net
(895
)
 
—

 
 
 
(895
)
Loss before income taxes
(74,993
)
 
14,645

 
 
 
(60,348
)
Benefit for income taxes
84,276

 
(5,638
)
 
2 (d)
 
78,638

Net income
9,283

 
9,007

 
 
 
18,290

Less: net income for noncontrolling interests
132

 
—

 
 
 
132

Net income attributable to common shareholders
$
9,151

 
$
9,007

 
 
 
$
18,158

 
 
 
 
 
 
 
 
Net income per common share attributable
to common shareholders
 
 
 
 
 
 
 
Basic and diluted
$
0.23

 
$
0.23

 
 
 
$
0.46

(1) 
As of January 1, 2018, ASU 2014-09 was adopted using the full retrospective method, which required us to restate our consolidated financial statements for the year ended December 31, 2017.



3


TravelCenters of America LLC
Pro Forma Consolidated Statements of Operations (Unaudited)
Year Ended December 31, 2016
(in thousands, except per share amounts)


 
As Reported(1)
 
Pro Forma
Adjustments
 
Note
 
Pro Forma
Revenues:
 
 
 
 
 
 
 
Fuel
$
3,473,672

 
$
(418,947
)
 
2 (b)
 
$
3,054,725

Nonfuel
1,960,100

 
(255,927
)
 
2 (b)
 
1,704,173

Rent and royalties from franchisees
18,033

 
(306
)
 
2 (b)
 
17,727

Total revenues
5,451,805

 
(675,180
)
 
 
 
4,776,625

 
 
 
 
 
 
 
 
Cost of goods sold (excluding depreciation):
 
 
 
 
 
 
 
Fuel
3,125,372

 
(369,615
)
 
2 (b)
 
2,755,757

Nonfuel
850,546

 
(169,522
)
 
2 (b)
 
681,024

Total cost of goods sold
3,975,918

 
(539,137
)
 
 
 
3,436,781

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Site level operating
959,407

 
(101,942
)
 
2 (b)
 
857,465

Selling, general and administrative
140,563

 
(8,902
)
 
2 (c)
 
131,661

Real estate rent
262,298

 
(2,260
)
 
2 (b)
 
260,038

Depreciation and amortization
92,389

 
(23,524
)
 
2 (b)
 
68,865

Total operating expenses
1,454,657

 
(136,628
)
 
 
 
1,318,029

 
 
 
 
 
 
 
 
Income from operations
21,230

 
585

 
 
 
21,815

 
 
 
 
 
 
 
 
Interest expense, net
27,835

 
—

 
 
 
27,835

Other (income), net
(2,113
)
 
—

 
 
 
(2,113
)
Loss before income taxes
(4,492
)
 
585

 
 
 
(3,907
)
Benefit for income taxes
2,056

 
(225
)
 
2 (d)
 
1,831

Net loss
(2,436
)
 
360

 
 
 
(2,076
)
Less: net income for noncontrolling interests
89

 
—

 
 
 
89

Net loss attributable to common shareholders
$
(2,525
)
 
$
360

 
 
 
$
(2,165
)
 
 
 
 
 
 
 
 
Net loss per common share attributable
to common shareholders
 
 
 
 
 
 
 
Basic and diluted
$
(0.06
)
 
$
0.01

 
 
 
$
(0.05
)
(1) 
As of January 1, 2018, ASU 2014-09 was adopted using the full retrospective method, which required us to restate our consolidated financial statements for the year ended December 31, 2016.



4



TravelCenters of America LLC
Notes to Consolidated Pro Forma Financial Statements (Unaudited)
(in thousands)



1.
Basis of Presentation
The consolidated pro forma financial statements were derived from historical financial statements in accordance with U.S. generally accepted accounting principles and should be read in conjunction with our Annual Report and Quarterly Report. The consolidated pro forma financial statements are presented for informational purposes only and are not necessarily indicative of what our results of operations actually would have been had the transaction been completed as of the date indicated. In addition, the consolidated pro forma financial statements do not purport to project our future operating results.

2.
Pro Forma Adjustments
The consolidated pro forma financial statements were prepared based on our historical consolidated financial statements.
The historical consolidated financial information of TA has been adjusted in the pro forma consolidated financial statements to give effect to events that are (1) directly attributable to the transaction, (2) factually supportable, and (3) expected to have a continuing impact on the results of operations.
Pro Forma Statements of Operations Adjustments
(a)     Loss from discontinued operations, net of taxes
This adjustment eliminated the reported amount of loss from discontinued operations, net of taxes, which includes the results of operations from the Convenience Stores Business as well as the selling, general and administrative expenses, loss on disposal and impairment charges related thereto.
(b)     Results of operations
These adjustments represent the elimination of the revenues and expenses directly generated from the operations of the Convenience Stores Business for the respective periods.
(c)    Selling, general and administrative expenses
The adjustments to selling, general and administrative expenses include the expenses identifiable as directly relating to the Convenience Stores Business, including the RMR business management fee applicable to the fuel gross margin and nonfuel revenues of the Convenience Stores Business and the personnel costs and other expenses TA anticipates it will no longer incur as a result of the corporate level positions to be eliminated as a consequence of the sale.
(d)    Benefit for income taxes
The benefit for income taxes has been affected at a blended statutory federal and state income tax rate of 38.5% for each of the years ended December 31, 2017 and 2016.


5