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TravelCenters Of America LLC Announces First Quarter 2012 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 UNDER “WARNING CONCERNING FORWARD LOOKING STATEMENTS” AND ELSEWHERE IN TA’S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2012. COPIES OF THAT TA ANNUAL REPORT ARE AVAILABLE, AND COPIES OF THAT TA QUARTERLY 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 March 31,
2012     2011
Revenues:
Fuel $ 1,683,193 $ 1,493,286
Nonfuel 308,154 285,378
Rent and royalties   3,522   3,450
Total revenues 1,994,869 1,782,114
 
Cost of goods sold (excluding depreciation):
Fuel 1,614,747 1,432,408
Nonfuel   136,770   120,223
Total cost of goods sold (excluding depreciation) 1,751,517 1,552,631
 
Operating expenses:
Site level operating 170,137 163,578
Selling, general & administrative 23,167 21,202
Real estate rent 49,515 47,310
Depreciation and amortization   11,842   11,622
Total operating expenses   254,661   243,712
 
Loss from operations (11,309 ) (14,229 )
 
Loss from equity investees (200 ) (179 )
Acquisition costs (142 )
Interest income 222 164
Interest expense   (2,512 )   (2,108 )
Loss before income taxes (13,941 ) (16,352 )
Provision for income taxes   244   220
Net loss $ (14,185 ) $ (16,572 )
 
Net loss per share:
Basic and diluted $ (0.49 ) $ (0.92 )
 

These financial statements should be read in conjunction with TA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, to be filed with the Securities and Exchange Commission, including the condensed consolidated financial statements and notes thereto that describe certain revisions to the financial information for the three months ended March 31, 2011 that TA determined are not material.

           

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 
March 31, December 31,
2012 2011
Assets
Current assets:
Cash and cash equivalents $ 94,937 $ 118,255
Accounts receivable, net 167,400 130,672
Inventories 165,018 168,267
Other current assets   65,260   67,056
Total current assets 492,615 484,250
 
Property and equipment, net 488,629 479,943
Intangible assets, net 21,039 21,957
Other noncurrent assets   30,340   30,381
Total assets $ 1,032,623 $ 1,016,531
 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 176,908 $ 149,051
Current HPT Leases Liabilities 25,684 25,073
Other current liabilities   117,056   113,624
Total current liabilities 319,648 287,748
 
Noncurrent HPT Leases liabilities 361,490 364,369
Other noncurrent liabilities   46,413   45,813
Total liabilities 727,551 697,930
 
Shareholders’ equity   305,072   318,601
Total liabilities and shareholders’ equity $ 1,032,623 $ 1,016,531

These financial statements should be read in conjunction with TA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, to be filed with the Securities and Exchange Commission.

     

TRAVELCENTERS OF AMERICA LLC

CONSOLIDATED SUPPLEMENTAL DATA

(in thousands)

 
Three Months Ended March 31,
 
2012     2011
Calculation of EBITDAR: (1)
Net loss $ (14,185 ) $ (16,572 )
Add: income taxes 244 220
Add: depreciation and amortization 11,842 11,622
Deduct: interest income (222 ) (164 )
Add: interest expense (2) 2,512 2,108
Add: real estate rent expense (3)   49,515   47,310
EBITDAR $ 49,706 $ 44,524
  (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 March 31,
2012       2011
HPT rent classified as interest $ 1,810 $ 1,773
Amortization of deferred financing costs 87 70
Other   615   265
$ 2,512 $ 2,108
 
  (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 $53,995 and $50,943 during the three month periods ended March 31, 2012 and 2011, respectively, while the total rent amounts expensed during the quarters ended March 31, 2012 and 2011, were $49,515 and $47,310, 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 applied to amortize a sale/leaseback financing obligation. Also, under GAAP, TA amortizes as a reduction of rent expense the deferred tenant improvement allowance that HPT paid to TA during the four years from 2007 through 2010. A reconciliation of these amounts is as follows.
     
Three Months Ended March 31,
 
2012     2011
 
Cash payments to HPT for rent and interest on deferred rent $ 51,601 $ 48,499
Other cash rental payments   2,394   2,444
Total cash payments under real property leases 53,995 50,943
Adjustments for:
Noncash straight line rent accrual – HPT (538 ) 1,815
Noncash straight line rent accrual – other 109 53
Interest paid on deferred rent obligation (1,450 )
Amortization of sale/leaseback financing obligation (549 ) (586 )
Portion of rent payments classified as interest expense (1,810 ) (1,773 )
Amortization of deferred leasehold improvement allowance   (1,692 )   (1,692 )
Total amount expensed as rent $ 49,515 $ 47,310
 

SUPPLEMENTAL SAME SITE OPERATING DATA

The following table presents operating data for all of the travel centers in operation on March 31, 2012, 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.

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