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TravelCenters Of America LLC Announces Fourth Quarter And Year End 2011 Results

Stocks in this article: TA

RESULTS THAT DIFFER FROM THOSE STATED OR IMPLIED BY TA’S FORWARD LOOKING STATEMENTS MAY ALSO BE CAUSED BY VARIOUS CHANGES IN TA’S BUSINESS OR MARKET CONDITIONS, AS DESCRIBED MORE FULLY IN TA’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2011, UNDER “WARNING CONCERNING FORWARD LOOKING STATEMENTS,” “RISK FACTORS” AND ELSEWHERE IN THAT ANNUAL REPORT. COPIES OF THAT TA ANNUAL REPORT WILL BE AVAILABLE AT THE WEBSITE OF THE U.S. SECURITIES AND EXCHANGE COMMISSION: WWW.SEC.GOV.

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

 

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 
Three Months Ended December 31,
2011 2010
Revenues:
Fuel $ 1,613,402 $ 1,278,453
Nonfuel 307,409 279,522
Rent and royalties   3,690   3,286
Total revenues 1,924,501 1,561,261
 
Cost of goods sold (excluding depreciation):
Fuel 1,540,004 1,218,324
Nonfuel   132,744   118,408
Total cost of goods sold (excluding depreciation) 1,672,748 1,336,732
 
Operating expenses:
Site level operating 166,923 155,492
Selling, general & administrative 23,428 20,718
Real estate rent 48,459 58,553
Depreciation and amortization   13,067   12,594
Total operating expenses   251,877   247,357
 
Income (loss) from operations (124 ) (22,828 )
 
Income (loss) from equity investees 455 (11 )
Interest income 180 215
Interest expense   (2,317 )   (7,210 )
Loss before income taxes (1,806 ) (29,834 )
Provision for income taxes   669   200
Net loss $ (2,475 ) $ (30,034 )
 
Net loss per share:
Basic and diluted $ (0.09 ) $ (1.71 )
 

These financial statements should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the U.S. Securities and Exchange Commission, including the audited financial statements and notes thereto, which include descriptions of certain revisions to the 2010 data that we determined are not material.

       

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 
Year Ended December 31,
2011       2010
Revenues:
Fuel $ 6,603,329 $ 4,790,659
Nonfuel 1,271,085 1,158,343
Rent and royalties   14,443   13,479
Total revenues 7,888,857 5,962,481
 
Cost of goods sold (excluding depreciation):
Fuel 6,301,947 4,530,943
Nonfuel   548,092   488,687
Total cost of goods sold (excluding depreciation) 6,850,039 5,019,630
 
Operating expenses:
Site level operating 677,958 625,979
Selling, general & administrative 89,196 80,562
Real estate rent 191,798 234,228
Depreciation and amortization   47,466   44,116
Total operating expenses 1,006,418 984,885
 
Income (loss) from operations 32,400 (42,034 )
 
Income from equity investees 1,169 757
Acquisition costs (446 )
Interest income 835 1,127
Interest expense   (9,005 )   (25,653 )
Income (loss) before income taxes 24,953 (65,803 )
Provision for income taxes   1,379   887
Net income (loss) $ 23,574 $ (66,690 )
 
Net income (loss) per share:
Basic and diluted $ 0.98 $ (3.84 )
 

These financial statements should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the U.S. Securities and Exchange Commission, including the audited financial statements and notes thereto, which include descriptions of certain revisions to the 2010 data that we determined are not material.

             

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 
December 31, December 31,
2011 2010
Assets
Current assets:
Cash and cash equivalents $ 118,255 $ 125,396
Accounts receivable, net 130,672 82,374
Inventories 168,267 139,810
Other current assets   67,056   59,846
Total current assets 484,250 407,426
 
Property and equipment, net 479,943 430,402
Intangible assets, net 21,957 25,749
Other noncurrent assets   30,381   27,515
Total assets $ 1,016,531 $ 891,092
 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 149,051 $ 110,228
Current HPT Leases Liabilities 25,073 24,544
Other current liabilities   113,624   104,283
Total current liabilities 287,748 239,055
 
Noncurrent HPT Leases liabilities 364,369 372,503
Other noncurrent liabilities   45,813   40,018
Total liabilities 697,930 651,576
 
Shareholders’ equity   318,601   239,516
Total liabilities and shareholders’ equity $ 1,016,531 $ 891,092
 

These financial statements should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the U.S. Securities and Exchange Commission, including the audited financial statements and notes thereto, which include descriptions of certain revisions to the 2010 data that we determined are not material.

             

TRAVELCENTERS OF AMERICA LLC

CONSOLIDATED SUPPLEMENTAL DATA

(in thousands)

 

Three Months Ended December 31,

Year Ended December 31,

 
2011     2010 2011     2010
Calculation of EBITDAR: (1)
Net income (loss) $ (2,475 ) $ (30,034 ) $ 23,574 $ (66,690 )
Add: income taxes 669 200 1,379 887
Add: depreciation and amortization 13,067 12,594 47,466 44,116
Deduct: interest income (180 ) (215 ) (835 ) (1,127 )
Add: interest expense (2) 2,317 7,210 9,005 25,653
Add: real estate rent expense (3)   48,459   58,553   191,798   234,228
EBITDAR $ 61,857 $ 48,308 $ 272,387 $ 237,067
 
  (1)     TA calculates EBITDAR as earnings before interest, taxes, depreciation, amortization and rent. TA believes EBITDAR is a useful indication of its operating performance and its ability to pay rent or service debt, make capital expenditures and expand its business. TA believes that EBITDAR is a meaningful disclosure that may help interested persons to better understand its financial performance, including comparing its performance between periods and to the performance of other companies. However, EBITDAR as presented may not be comparable to similarly titled amounts calculated by other companies. This information should not be considered as an alternative to net income, income from continuing operations, operating profit, cash flow from operations or any other operating or liquidity performance measure prescribed by U.S. generally accepted accounting principles, or GAAP.
 
(2) Interest expense included the following.
 
         

Three Months Ended December 31,

Year Ended December 31,

2011     2010 2011     2010
HPT rent classified as interest $ 1,849 $ 2,475 $ 7,390 $ 9,900
Interest on deferred rent obligation

4,200

14,100
Amortization of deferred financing costs 190 72 403 285
Other   278   463   1,212   1,368
$ 2,317 $ 7,210 $ 9,005 $ 25,653
 

This supplemental data should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the U.S. Securities and Exchange Commission, including the audited financial statements and notes thereto, which include descriptions of certain revisions to the 2010 data that we determined are not material.

     
(3) Real estate rent expense recognized under GAAP differs from TA’s obligation to pay cash for rent under its leases. Cash paid for rent was $51,993 and $50,564 during the three month periods ended December 31, 2011 and 2010, respectively, while the total rent amounts expensed during the quarters ended December 31, 2011 and 2010, were $48,459 and $58,553, respectively. During the years ended December 31, 2011 and 2010, cash paid for rent was $206,128 and $197,947, respectively, while the total rent amounts expensed were $191,798 and $234,228, respectively. GAAP requires recognition of minimum lease payments payable during the lease term in equal amounts on a straight line basis over the lease term. In addition, under GAAP, a portion of the rent TA pays to HPT is classified as interest expense and a portion of the rent payments made to HPT is charged against a sale/leaseback financing obligation. Also, under GAAP, TA amortizes as a reduction of rent expense the deferred tenant improvement allowance that HPT paid to TA during the four years from 2007 through 2010. The rent payments to HPT that TA deferred in 2010 were recognized in expense in 2010 under GAAP although they were not paid in cash. Further, during 2010, TA paid interest to HPT monthly in arrears on the deferred rent obligation at a rate of 1% per month. A reconciliation of these amounts is as follows.
 

Three Months Ended December 31,

Year Ended December 31,

 
2011 2010 2011 2010
 
Cash payments to HPT for rent and interest on deferred rent $ 49,586 $ 48,099 $ 196,364 $ 188,162
Other cash rental payments   2,407   2,465   9,764   9,785
Total cash payments under real property leases 51,993 50,564 206,128 197,947
Adjustments for:
Noncash straight line rent accrual – HPT 378 1,555 3,021 6,986
Noncash straight line rent accrual – other 139 58 304 242
Rent expensed but not paid pursuant to deferral agreement 15,000 60,000
Interest paid on deferred rent obligation (4,050 ) (1,450 ) (12,650 )
Amortization of sale/leaseback financing obligation (510 ) (407 ) (2,046 ) (1,628 )
Portion of rent payments classified as interest expense (1,849 ) (2,475 ) (7,390 ) (9,900 )
Amortization of deferred leasehold improvement allowance   (1,692 )   (1,692 )   (6,769 )   (6,769 )
Total amount expensed as rent $ 48,459 $ 58,553 $ 191,798 $ 234,228
 

This supplemental data should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the U.S. Securities and Exchange Commission, including the audited financial statements and notes thereto, which include descriptions of certain revisions to the 2010 data that we determined are not material.

SUPPLEMENTAL SAME SITE OPERATING DATA

The following table presents operating data for all of the travel centers in operation on December 31, 2011, that were operated by TA for the entire period presented. This data excludes revenues and expenses that were not generated by TA, such as rents and royalties from franchises, and corporate level selling, general and administrative expenses.

         

TRAVELCENTERS OF AMERICA LLC

SAME SITE OPERATING DATA (1)

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

 
Three Months Ended December 31, Year Ended December 31,
2011     2010      

Change Fav/(Unfav)

2011     2010      

Change Fav/(Unfav)

Number of company operated travel centers (2) 184 184   184 184
 
Total fuel sales volume (gallons) 474,490 487,024 -2.6 % 1,951,359 1,951,480 0.0 %
 
Total fuel revenues $ 1,495,144 $ 1,230,180 21.5 % $ 6,182,799 $ 4,600,897 34.4 %
Total fuel gross margin $ 70,595 $ 59,901 17.9 % $ 293,049 $ 258,342 13.4 %
 
Total nonfuel revenues $ 299,590 $ 278,664 7.5 % $ 1,249,354 $ 1,153,044 8.4 %
Total nonfuel gross margin $ 170,175 $ 160,579 6.0 % $ 711,155 $ 666,410 6.7 %
Nonfuel gross margin percentage 56.8 % 57.6 % -80 b.p. 56.9 % 57.8 % -90 b.p.
 
Total gross margin $ 240,770 $ 220,480 9.2 % $ 1,004,204 $ 924,752 8.6 %
Site level operating expenses (3) $ 160,335 $ 154,125 4.0 % $ 659,812 $ 620,929 6.3 %
Site level operating expenses as a percentage of nonfuel revenues 53.5 % 55.3 % 180 b.p. 52.8 % 53.9 % 110 b.p.
Net site level gross margin in excess of site level operating expense $ 80,435 $ 66,355 21.2 % $ 344,392 $ 303,823 13.4 %
 
(1)     Includes operating data of company operated travel centers only, excluding data of two travel centers TA operates that are owned by a joint venture and the travel centers operated by TA’s franchisees. Two company operated sites were excluded from this same site comparison because they were temporarily closed during parts of the period as a result of flooding.
 
(2) Includes travel centers that were operated by TA during the entirety of each of the comparable periods presented.
 
(3) Excludes real estate rent expense.
 

This supplemental data should be read in conjunction with TA’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the U.S. Securities and Exchange Commission, including the audited financial statements and notes thereto, which include descriptions of certain revisions to the 2010 data that we determined are not material.



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