TA’s net loss of $2.5 million for the fourth quarter of 2011 reflected an improvement of $27.6 million as compared to the net loss in the 2010 fourth quarter. This improvement was primarily from increases in fuel and nonfuel sales and gross margin levels, and from a reduction in rent and interest expenses as a result of the January 2011 lease amendment with Hospitality Properties Trust, or HPT. TA’s results also reflected improvement in EBITDAR, which increased by 28.0%, or $13.5 million, in the 2011 fourth quarter over the 2010 fourth quarter. TA’s fuel sales volume and fuel gross margin increased by 1.2% and 22.1%, respectively, in the 2011 fourth quarter as compared to the 2010 fourth quarter. During the fourth quarter of 2011, TA experienced a 2.6% decrease in same site fuel sales volume, compared with the fourth quarter of 2010. TA believes this decrease is a result of pricing strategies and the impact of capital projects in 2011 to replace fuel dispensers and install diesel exhaust fluid dispensers, which required TA to take certain diesel dispensers out of service during the period. Nonfuel sales and gross margin for the 2011 fourth quarter increased 10.0% and 8.4% over the 2010 fourth quarter, respectively. The improved results in the fourth quarter of 2011 compared to 2010 resulted, in large part, from the travel centers opened during the second quarter of 2011, increased fuel margin per gallon and increased nonfuel customer spending in TA’s travel centers.
The trucking industry is the primary customer for TA’s goods and services. Freight and trucking demand in the U.S. generally reflects the level of commercial activity in the U.S. economy. The slow but continual improvement of the U.S. economy generally, and the improving financial condition and increased activity of the trucking industry in the U.S. specifically, impacted TA’s financial results during the 2011 fourth quarter. While the U.S. economy has been slowly growing over the past several quarters and trucking activity measures reflect continued growth in that industry, the strength and sustainability of any economic recovery remains uncertain. If the U.S. economy worsens, TA’s financial results may not improve and may decline, resulting in TA experiencing losses from operations.