(2) Excludes a $10 million charge in the 2013 fourth quarter related to a previously disclosed settlement of litigation.

Business Commentary

TA’s Adjusted EBITDAR for the fourth quarter of 2013 increased by approximately $2.6 million, or 3.9%, to $68.2 million, versus EBITDAR for the 2012 fourth quarter of $65.6 million. The increase in Adjusted EBITDAR is primarily attributable to an increase in fuel gross margin per gallon, which was $0.169 during the 2013 fourth quarter versus $0.157 during the 2012 fourth quarter.

Net income for the fourth quarter of 2013 improved by approximately $14.4 million, to $12.0 million ($0.39 per share), versus a net loss for the 2012 fourth quarter of $2.5 million ($0.08 per share). The increase is primarily due to the $29.9 income tax benefit from the reversal of TA’s valuation allowance on most of its deferred tax assets, partially offset by the $10 million litigation settlement described above and an increase in depreciation and amortization expense attributable to acquisitions and other capital investments TA has made during 2012 and 2013 and the related acquisition and financing costs.

The improvements to travel center properties TA acquires are often substantial and require a long period of time to plan, design, permit and complete, and after completion the acquired sites then require a period of time to produce stabilized financial results and become part of our customers’ networks. TA estimates that the travel centers it has acquired generally will reach financial stabilization in approximately the third year after acquisition, but the actual result can vary widely from this estimate due to many factors. The table below shows the gross revenues in excess of cost of goods sold and site level operating expenses for the properties TA began to operate for its own account since the beginning of 2011, whether by way of acquisition from franchisees or others or takeover of operations upon termination of a franchisee sublease, from the beginning of the period shown (or the dates TA began to operate such sites for its own account, if later).
  Revenues in Excess of Cost of Goods Sold and Site
Level Operating Costs
Three Months Ended   Year Ended
December 31, December 31,
(amounts in thousands) 2013   2012   2013   2012
Properties acquired in 2011 (6 sites) $ 3,171 $ 1,130 $ 9,437   $ 5,260
Properties acquired in 2012 (14 sites) 3,833 555 14,100 643
Properties acquired in 2013 (41 sites)*   1,254  


Total $ 8,258 $ 1,685 $ 26,478 $ 5,903

* Includes 31 convenience stores acquired in December 2013.

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