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) |
10.1 | Development Property Agreement, dated May 3, 2017, among HPT TA Properties LLC and TA Operating LLC (filed herewith) |
10.2 | Seventh Amendment to Amended and Restated Lease Agreement No. 4, dated May 3, 2017, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC (filed herewith) |
10.3 | Transaction Agreement, dated June 1, 2015, by and among Hospitality Properties Trust, HPT TA Properties Trust, HPT TA Properties LLC, HPT PSC Properties Trust, HPT PSC Properties LLC, TravelCenters of America LLC, TravelCenters of America Holding Company LLC, TA Leasing LLC, and TA Operating LLC (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated June 1, 2015) |
10.4 | First Amendment to Transaction Agreement, dated June 22, 2016, by and among Hospitality Properties Trust, HPT TA Properties Trust, HPT TA Properties LLC, HPT PSC Properties Trust, HPT PSC Properties LLC, TravelCenters of America LLC, TravelCenters of America Holding Company LLC and TA Operating LLC (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated June 22, 2016) |
99.1 | Pro Forma Financial Statements (filed herewith) |
TRAVELCENTERS OF AMERICA LLC | ||||
Date: | May 4, 2017 | By: | /s/ ANDREW J. REBHOLZ | |
Andrew J. Rebholz | ||||
Executive Vice President, Chief Financial Officer and Treasurer |
1. | Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and income tax regulations thereunder); |
2. | Transferor is not a disregarded entity as defined in Treasury Regulation Section 1.1445-2(b)(2)(iii); |
3. | TA Operating LLC, which has legal title to one or more transferred U.S. real property interests under local law, is disregarded as an entity separate from Transferor for U.S. federal income tax purposes; |
4. | Transferor’s U.S. employer identification number is 20-5701514; and |
5. | Transferor’s office address is 24601 Center Ridge Road, Westlake, OH 44145. |
Exhibit | TA Site No. | Property Address |
A-1 | 224 | 1806 Highway 371 W, Prescott, AR 71857. |
A-2 | 41 | 46155 Dillon Road, Coachella, CA 92236. |
A-3 | 346 | 28991 West Gonzaga Rd., Santa Nella, CA 95322. |
A-4 | 148 | 5101 Quebec Street, Commerce City (Denver East), CO 80022. |
A-5 | 22 | 327 Ruby Road, Willington, CT 06279. |
A-6 | 53 | 556 St. Rt. 44, Wildwood, FL 34785. |
A-7 | 45 | P.O. Box 592, Madison, GA 30650. |
A-8 | 367 | 5915 Monee Rd., Monee, IL 60449. |
A-9 | 43 | 4510 Broadway, Mt. Vernon, IL 62864. |
A-10 | 257 | 10346 S. State Rd. 39, Clayton, IN 46118. |
A-11 | 220 | 1600 West US Hwy 20, Porter, IN 46304. |
A-12 | 252 | 2775 US Hwy 75, Lebo (Beto Junction), KS 66856. |
A-13 | 28 | 145 Richwood Road, Walton, KY 41094. |
A-14 | 180 | 1682 Gause Blvd., Slidell, LA 70458. |
A-15 | 19 | 1400 Elkton Road, Elkton, MD 21921. |
A-16 | 175 | 3265 N. Service Road East, Foristell, MO 63348. |
A-17 | 193 | 8033 W. Holling Rd., Alda (Grand Island), NE 68810. |
A-18 | 6 | 2 Simpson Road, Columbia, NJ 07832. |
A-19 | 81 | 2501 University Blvd. NE, Albuquerque, NM 87107. |
A-20 | 207 | 753 Upper Court St., Binghamton, NY 13904. |
A-21 | 194 | 8420 Alleghany Rd., Corfu (Pembroke), NY 14036. |
A-22 | 221 | 153 Wiggins Road, Candler, NC 28715. |
A-23 | 701 | 715 US 250 East, Ashland, OH 44805. |
A-24 | 139 | 12403 US Rt. 35 NW, Jeffersonville, OH 43128. |
A-25 | 95 | 4450 Portage St. NW, North Canton, OH 44720. |
A-26 | 152 | P.O. Box 171, Sayre, OK 73662. |
A-27 | 67 | 5644 SR 8, Harrisville (Barkeyville), PA 16038. |
A-28 | 68 | 5600 Nittany Valley Drive, Lamar, PA 16848. |
A-29 | 179 | 3014 Paxville Highway, Manning, SC 29102. |
A-30 | 245 | 155 Hwy. 138, Denmark (Jackson), TN 38391. |
A-31 | 34 | 111 N. First Street, Nashville, TN 37213. |
A-32 | 150 | 7751 Bonnie View Road, Dallas (South), TX 75241. |
A-33 | 153 | 1010 Beltway Parkway, Laredo, TX 78045. |
A-34 | 232 | 4817 I-35 North, New Braunfels, TX 78130. |
A-35 | 32 | RR1, Valley Grove, WV 26060. |
A-36 | 188 | P.O. Box 400, Ft. Bridger, WY 82933. |
A-37 | 242 | 15874 Eleven Mile Road, Battle Creek, MI 49014. |
A-38 | 246 | 3747 Express Drive, Holbrook, AZ 86025. |
A-39 | 333 | 160 State Highway 77, Hillsboro, TX 76645. |
A-40 | 238 | 2150-2240 Beltline Boulevard, Columbia, SC 29209. |
TA Site No. | Property Address |
346 | 28991 West Gonzaga Rd., Santa Nella, CA 95322. |
367 | 5915 Monee Rd., Monee, IL 60449. |
238 | 2150-2240 Beltline Boulevard, Columbia, SC 29202. |
• | On June 9, 2015, the Prior TA Lease was expanded and subdivided into four new leases, which we refer to collectively as the New TA Leases. The initial terms for the New TA Leases end on December 31, 2026, 2028, 2029 and 2030. Each of the New TA Leases grants us two renewal options of 15 years each. |
• | On June 9, 2015, HPT purchased from us, for $183.4 million, 10 travel centers we owned and certain assets we owned at eight properties we leased from HPT under the Prior TA Lease. HPT leased back these properties to us under the New TA Leases. Our annual rent increased by $15.8 million as a result of the sale and leaseback of properties completed on June 9, 2015. |
• | On June 9, 2015, we purchased from HPT, for $45.0 million, five travel centers that we previously leased from HPT under the Prior TA Lease. Our annual rent decreased by $3.9 million as a result of our completion of the purchase of these properties. |
• | On June 16, 2015, HPT purchased from us, for $24.4 million, one travel center we owned and certain assets we owned at another travel center that we lease from HPT under one of the New TA Leases and HPT leased back the travel center and assets to us under two of the New TA Leases. Our annual rent increased by $2.1 million as a result of the sale and leaseback of the travel center and assets completed on June 16, 2015. |
• | On June 23, 2015, HPT purchased from us, for $20.1 million, one travel center we owned and certain assets we owned at another travel center that we lease from HPT under one of the New TA Leases and HPT leased back the travel center and assets to us under two of the New TA Leases. Our annual rent increased by $1.7 million as a result of the sale and leaseback of the travel center and assets completed on June 23, 2015. |
• | On September 23, 2015, HPT purchased from us, for $51.5 million, two travel centers we owned and certain assets we owned at another travel center that we lease from HPT under one of the New TA Leases and HPT leased back the two travel centers and assets to us under three of the New TA Leases. Our annual rent increased by $4.4 million as a result of the sale and leaseback of the travel center and assets completed on September 23, 2015. |
• | On March 31, 2016, HPT purchased from us, for $19.7 million, one travel center we developed and owned and HPT leased back the travel center to us under one of the New TA Leases. Our annual rent increased by $1.7 million as a result of the sale and leaseback of the travel center completed on March 31, 2016. |
• | On June 22, 2016, pursuant to the Amendment, HPT purchased from us, for $23.9 million, two travel centers we owned and HPT leased back these two travel centers to us under two of the New TA Leases. Our annual rent increased by $2.0 million as a result of the sale and leaseback of the travel centers completed on June 22, 2016. |
• | On June 30, 2016, HPT purchased from us, for $22.3 million, one travel center we developed and owned, and HPT leased back the travel center to us under one of the New TA Leases. Our annual rent increased by $1.9 million as a result of the sale and leaseback of the travel center completed on June 30, 2016. |
• | On September 30, 2016, HPT purchased from us, for $16.6 million, one travel center we developed and owned, and HPT leased back the travel center to us under one of the New TA Leases. Our annual rent increased by $1.4 million as a result of the sale and leaseback of the travel center completed on September 30, 2016. |
• | On May 3, 2017, HPT purchased from us, for $27.6 million, one travel center we developed and owned, and HPT leased back the travel center to us under one of the New TA Leases. Our annual rent increased by $2.3 million as a result of the sale and leaseback of the travel center completed on May 3, 2017. |
As reported | Transaction adjustments | Note | Pro forma | ||||||||||
Assets | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 61,312 | $ | 27,602 | 2 (a) | $ | 88,914 | ||||||
Accounts receivable (less allowance for doubtful accounts of $744) | 107,246 | — | 107,246 | ||||||||||
Inventory | 207,829 | — | 207,829 | ||||||||||
Other current assets | 25,674 | — | 25,674 | ||||||||||
Total current assets | 402,061 | 27,602 | 429,663 | ||||||||||
Property and equipment, net | 1,082,022 | (27,602 | ) | 2 (b) | 1,054,420 | ||||||||
Goodwill | 88,542 | — | 88,542 | ||||||||||
Other intangible assets, net | 37,738 | — | 37,738 | ||||||||||
Other noncurrent assets | 49,478 | — | 49,478 | ||||||||||
Total assets | $ | 1,659,841 | $ | — | $ | 1,659,841 | |||||||
Liabilities and Shareholders' Equity | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 157,964 | $ | — | $ | 157,964 | |||||||
Current HPT Leases liabilities | 39,720 | — | 39,720 | ||||||||||
Other current liabilities | 132,648 | — | 132,648 | ||||||||||
Total current liabilities | 330,332 | — | 330,332 | ||||||||||
Long term debt, net | 318,739 | — | 318,739 | ||||||||||
Noncurrent HPT Leases liabilities | 381,854 | — | 381,854 | ||||||||||
Other noncurrent liabilities | 75,837 | — | 75,837 | ||||||||||
Total liabilities | 1,106,762 | — | 1,106,762 | ||||||||||
Total shareholders' equity | 553,079 | — | 553,079 | ||||||||||
Total liabilities and shareholders' equity | $ | 1,659,841 | $ | — | $ | 1,659,841 |
As reported | Transaction adjustments | Note | Pro forma | ||||||||||
Revenues: | |||||||||||||
Fuel | $ | 3,530,149 | $ | — | $ | 3,530,149 | |||||||
Nonfuel | 1,963,904 | — | 1,963,904 | ||||||||||
Rent and royalties from franchisees | 17,352 | — | 17,352 | ||||||||||
Total revenues | 5,511,405 | — | 5,511,405 | ||||||||||
Cost of goods sold (excluding depreciation): | |||||||||||||
Fuel | 3,125,372 | — | 3,125,372 | ||||||||||
Nonfuel | 910,827 | — | 910,827 | ||||||||||
Total cost of goods sold | 4,036,199 | — | 4,036,199 | ||||||||||
Operating expenses: | |||||||||||||
Site level operating | 959,407 | — | 959,407 | ||||||||||
Selling, general and administrative | 139,052 | — | 139,052 | ||||||||||
Real estate rent | 262,298 | 5,245 | 2 (c) | 267,543 | |||||||||
Depreciation and amortization | 92,389 | (638 | ) | 2 (d) | 91,751 | ||||||||
Total operating expenses | 1,453,146 | 4,607 | 1,457,753 | ||||||||||
Income from operations | 22,060 | (4,607 | ) | 17,453 | |||||||||
Acquisition costs | 2,451 | — | 2,451 | ||||||||||
Interest expense, net | 27,815 | — | 27,815 | ||||||||||
Income from equity investees | 4,544 | — | 4,544 | ||||||||||
Loss before income taxes | (3,662 | ) | (4,607 | ) | (8,269 | ) | |||||||
Benefit for income taxes | (1,733 | ) | (1,792 | ) | 2 (e) | (3,525 | ) | ||||||
Net loss | (1,929 | ) | (2,815 | ) | (4,744 | ) | |||||||
Less net income for noncontrolling interests | 89 | — | 89 | ||||||||||
Net loss attributable to common shareholders | $ | (2,018 | ) | $ | (2,815 | ) | $ | (4,833 | ) | ||||
Net loss per common share attributable to common shareholders: | |||||||||||||
Basic and diluted | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.13 | ) |
Year Ended December 31, 2016 | |||
Increase in base rent due to sale and lease back transactions | $ | 5,735 | |
Less: Amortization of deferred gain | (490 | ) | |
Net adjustment to real estate rent expense | $ | 5,245 | |
On March 31, 2016, June 22, 2016, June 30, 2016, and September 31, 2016, we completed certain of the transactions contemplated by the Transaction Agreement, as described above. Our historical results for the year ended December 31, 2016, include the rent increase related to those completed transactions from those respective dates. |
Proceeds from the sales of four development properties and two travel centers to HPT | $ | 110,015 | |
Rent increase rate | 8.5 | % | |
Increase in annual base rent from 2016 and 2017 transactions | $ | 9,351 |