TravelCenters of America Inc. | ||||||||||||||
(Exact Name of Registrant as Specified in its Charter) | ||||||||||||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address and Zip Code of Principal Executive Offices) | ||||||||
( | ||||||||
(Registrant’s Telephone Number, Including Area Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered | ||||||||||||
Large accelerated filer ☐ | ||||||||
Non-accelerated filer ☐ | Smaller reporting company | |||||||
Emerging growth company |
Page | ||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
Assets: | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (net of allowance for doubtful accounts of $ as of March 31, 2023 and December 31, 2022, respectively) | |||||||||||
Inventory | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity: | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Current operating lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long term debt, net | |||||||||||
Noncurrent operating lease liabilities | |||||||||||
Other noncurrent liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $ March 31, 2023 and December 31, 2022, and common stock issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues: | |||||||||||
Fuel | $ | $ | |||||||||
Nonfuel | |||||||||||
Rent and royalties from franchisees | |||||||||||
Total revenues | |||||||||||
Costs and expenses: | |||||||||||
Fuel product cost | |||||||||||
Nonfuel product cost | |||||||||||
Site level operating expense | |||||||||||
Selling, general and administrative expense | |||||||||||
Real estate rent expense | |||||||||||
Depreciation and amortization expense | |||||||||||
Other operating expense (income), net | ( | ||||||||||
(Loss) income from operations | ( | ||||||||||
Interest expense, net | |||||||||||
Other income, net | ( | ( | |||||||||
(Loss) income before income taxes | ( | ||||||||||
Benefit (provision) for income taxes | ( | ||||||||||
Net (loss) income attributable to common stockholders | $ | ( | $ | ||||||||
Other comprehensive loss, net of taxes: | |||||||||||
Foreign currency income (loss), net of taxes of $ | $ | $ | ( | ||||||||
Other comprehensive income (loss) attributable to common stockholders | ( | ||||||||||
Comprehensive (loss) income attributable to common stockholders | $ | ( | $ | ||||||||
Net (loss) income per share of common stock attributable to common stockholders: | |||||||||||
Basic and diluted | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred rent payments and noncash rent adjustments | ( | ( | |||||||||
Depreciation and amortization expense | |||||||||||
Gain on sale of assets | ( | ( | |||||||||
Deferred income taxes | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventory | ( | ||||||||||
Other assets | ( | ||||||||||
Accounts payable and other liabilities | ( | ||||||||||
Other, net | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Investment in equity investee | ( | ||||||||||
Other | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Payments on long term debt | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash | |||||||||||
Net (decrease) increase in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at the beginning of the period | |||||||||||
Cash and cash equivalents at the end of the period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid, net of capitalized interest | $ | $ | |||||||||
Income taxes paid, net | ( | ( |
Number of Shares of Common Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
December 31, 2022 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Grants under share award plan and stock based compensation, net | ( | — | — | ||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
March 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Grants under share award plan and stock based compensation, net | ( | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
March 31, 2022 | $ | $ | $ | ( | $ | ( | $ |
Standard | Description | Effective Date | Effect on the Consolidated Financial Statements | |||||||||||
Recently Adopted Standards | ||||||||||||||
ASU 2020-04 - Reference Rate Reform (Topic 848) Facilitation of the effects of Reference Rate Reform of Financial Reporting, as amended by ASU 2021-01 and ASU 2022-06 | These updates provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform; clarifies that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition; and defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. | January 1, 2023 | These updates did not have a material impact on our consolidated financial statements. |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Nonfuel revenues: | |||||||||||
Store and retail services | $ | $ | |||||||||
Truck service | |||||||||||
Restaurant | |||||||||||
Diesel exhaust fluid | |||||||||||
Total nonfuel revenues | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net (loss) income attributable to common stockholders | $ | ( | $ | ||||||||
Less: net (loss) income attributable to participating securities | ( | ||||||||||
Net (loss) income available to common stockholders | $ | ( | $ | ||||||||
Weighted average shares of common stock(1) | |||||||||||
Basic and diluted net (loss) income per share of common stock attributable to common stockholders | $ | ( | $ |
Classification in our Consolidated Statements of Operations and Comprehensive (Loss) Income | Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | ||||||||||||||||
Operating lease costs: SVC Leases | Real estate rent expense | $ | $ | ||||||||||||||
Operating lease costs: other | Real estate rent expense | ||||||||||||||||
Variable lease costs: SVC Leases | Real estate rent expense | ||||||||||||||||
Variable lease costs: other | Real estate rent expense | ||||||||||||||||
Total real estate rent expense | |||||||||||||||||
Operating lease costs: equipment and other | Site level operating expense and selling, general and administrative expense | ||||||||||||||||
Financing lease costs: equipment and other | Site level operating expense | ||||||||||||||||
Short-term lease costs | Site level operating expense and selling, general and administrative expense | ||||||||||||||||
Amortization of finance lease assets: SVC Leases | Depreciation and amortization expense | ||||||||||||||||
Amortization of finance lease assets: other | Depreciation and amortization expense | ||||||||||||||||
Interest on finance lease liabilities: SVC Leases | Interest expense, net | ||||||||||||||||
Interest on finance lease liabilities: other | Interest expense, net | ||||||||||||||||
Sublease income | Nonfuel revenues | ( | ( | ||||||||||||||
Net lease costs | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Operating lease assets: | |||||||||||
SVC Leases | $ | $ | |||||||||
Other | |||||||||||
Total operating lease assets | $ | $ | |||||||||
Current operating lease liabilities: | |||||||||||
SVC Leases | $ | $ | |||||||||
Other | |||||||||||
Total current operating lease liabilities | $ | $ | |||||||||
Noncurrent operating lease liabilities: | |||||||||||
SVC Leases | $ | $ | |||||||||
Other | |||||||||||
Total noncurrent operating lease liabilities | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Finance lease assets: | |||||||||||
SVC Leases | $ | $ | |||||||||
Other | |||||||||||
Total finance lease assets | $ | $ | |||||||||
Current finance lease liabilities: | |||||||||||
SVC Leases | $ | $ | |||||||||
Other | |||||||||||
Total current finance lease liabilities | $ | $ | |||||||||
Noncurrent finance lease liabilities: | |||||||||||
SVC Leases | $ | $ | |||||||||
Other | |||||||||||
Total noncurrent finance lease liabilities | $ | $ |
SVC Leases (1) | Other | Total | |||||||||||||||
Years ended December 31: | |||||||||||||||||
2023 | $ | $ | $ | ||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 | |||||||||||||||||
2027 | |||||||||||||||||
Thereafter | |||||||||||||||||
Total operating lease payments | |||||||||||||||||
Less: present value discount(1) | ( | ( | ( | ||||||||||||||
Present value of operating lease liabilities | $ | $ | $ | ||||||||||||||
SVC Leases (1) | Other | Total | |||||||||||||||
Years ended December 31: | |||||||||||||||||
2023 | $ | $ | $ | ||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 | |||||||||||||||||
2027 | |||||||||||||||||
Thereafter | |||||||||||||||||
Total finance lease payments | |||||||||||||||||
Less: present value discount(1) | ( | ( | ( | ||||||||||||||
Present value of finance lease liabilities | $ | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Nonfuel products | $ | $ | |||||||||
Fuel products | |||||||||||
Total inventory | $ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Fuel | $ | 1,720,057 | $ | 1,806,114 | $ | (86,057) | (4.8) | % | |||||||||||||||
Nonfuel | 515,674 | 487,082 | 28,592 | 5.9 | % | ||||||||||||||||||
Rent and royalties from franchisees | 3,287 | 3,877 | (590) | (15.2) | % | ||||||||||||||||||
Total revenues | 2,239,018 | 2,297,073 | (58,055) | (2.5) | % | ||||||||||||||||||
Gross margin: | |||||||||||||||||||||||
Fuel | 95,255 | 112,919 | (17,664) | (15.6) | % | ||||||||||||||||||
Nonfuel | 324,078 | 295,297 | 28,781 | 9.7 | % | ||||||||||||||||||
Rent and royalties from franchisees | 3,287 | 3,877 | (590) | (15.2) | % | ||||||||||||||||||
Total gross margin | 422,620 | 412,093 | 10,527 | 2.6 | % | ||||||||||||||||||
Site level operating expense | 278,917 | 252,044 | 26,873 | 10.7 | % | ||||||||||||||||||
Selling, general and administrative expense | 51,559 | 41,309 | 10,250 | 24.8 | % | ||||||||||||||||||
Real estate rent expense | 64,701 | 64,646 | 55 | 0.1 | % | ||||||||||||||||||
Depreciation and amortization expense | 27,099 | 24,231 | 2,868 | 11.8 | % | ||||||||||||||||||
Other operating (expense) income, net | 698 | (2,182) | 2,880 | 132.0 | % | ||||||||||||||||||
(Loss) Income from operations | (354) | 32,045 | (32,399) | (101.1) | % | ||||||||||||||||||
Interest expense, net | 9,611 | 11,530 | (1,919) | (16.6) | % | ||||||||||||||||||
Other income, net | (906) | (638) | (268) | (42.0) | % | ||||||||||||||||||
(Loss) Income before income taxes | (9,059) | 21,153 | (30,212) | (142.8) | % | ||||||||||||||||||
Benefit (provision) for income taxes | 2,761 | (4,849) | 7,610 | 156.9 | % | ||||||||||||||||||
Net (loss) income attributable to common stockholders | $ | (6,298) | $ | 16,304 | $ | (22,602) | (138.6) | % |
Gallons Sold | Fuel Revenues | ||||||||||
Results for the three months ended March 31, 2022 | 555,261 | $ | 1,806,114 | ||||||||
Decrease due to petroleum products price changes | (49,381) | ||||||||||
Decrease due to volume changes | (13,096) | (41,979) | |||||||||
Increase in wholesale fuel sales volume | 2,095 | 5,303 | |||||||||
Net change from prior year period | (11,001) | (86,057) | |||||||||
Results for the three months ended March 31, 2023 | 544,260 | $ | 1,720,057 |
Three Months Ended March 31, | |||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ Change | ||||||||||||||
Cash and cash equivalents at the beginning of the period | $ | 416,012 | $ | 536,002 | $ | (119,990) | |||||||||||
Net cash provided by (used in): | |||||||||||||||||
Operating activities | 8,821 | 59,119 | (50,298) | ||||||||||||||
Investing activities | (36,861) | (49,220) | 12,359 | ||||||||||||||
Financing activities | (2,069) | (1,784) | (285) | ||||||||||||||
Effect of exchange rate changes on cash | — | 36 | (36) | ||||||||||||||
Cash and cash equivalents at the end of the period | $ | 385,903 | $ | 544,153 | $ | (158,250) |
Calendar Month | Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
January 2023 | 813 | $ | 43.64 | — | $ | — | ||||||||||||||||||||
February 2023 | 441 | 41.05 | — | — | ||||||||||||||||||||||
March 2023 | 949 | 84.87 | — | — | ||||||||||||||||||||||
Total | 2,203 | $ | 60.88 | — | $ | — |
† | ||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document (filed herewith) | |||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith) | |||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) | |||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document (filed herewith) | |||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith) | |||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
TravelCenters of America Inc. | |||||||||||||||||||||||
By: | /s/ Peter J. Crage | ||||||||||||||||||||||
Date: | April 27, 2023 | Name: | Peter J. Crage | ||||||||||||||||||||
Title: | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) |
Date: April 27, 2023 | /s/ Jonathan M. Pertchik | ||||
Jonathan M. Pertchik | |||||
Chief Executive Officer |
Date: April 27, 2023 | /s/ Peter J. Crage | ||||
Peter J. Crage | |||||
Executive Vice President, Chief Financial Officer and Treasurer |
Date: April 27, 2023 | /s/ Jonathan M. Pertchik | ||||
Jonathan M. Pertchik Chief Executive Officer | |||||
/s/ Peter J. Crage | |||||
Peter J. Crage Executive Vice President, Chief Financial Officer and Treasurer |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,585 | $ 1,361 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 216,000,000 | 216,000,000 |
Common stock, shares issued (in shares) | 15,100,000 | 15,105,000 |
Common stock, shares outstanding (in shares) | 15,100,000 | 15,105,000 |
Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Income Statement [Abstract] | ||
Foreign currency income (loss), taxes | $ 1 | $ 19 |
Business Description and Basis of Presentation |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Description and Basis of Presentation | Business Description and Basis of Presentation TravelCenters of America Inc. is a Maryland corporation. As of March 31, 2023, we operated or franchised 286 travel centers, three standalone truck service facilities and one standalone restaurant. Our customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists and casual diners. We also collect rents, royalties and other fees from our tenants and franchisees. As of March 31, 2023, our business included 286 travel centers in 44 states in the United States, primarily along the U.S. interstate highway system, operated primarily under the “TravelCenters of America,” “TA,” “TA Express,” “Petro Stopping Centers” and “Petro” brand names. Of these travel centers, we owned 56, we leased 181, we operated two for a joint venture and 47 were owned or leased from others by our franchisees. We operated 239 of our travel centers and franchisees operated 47 travel centers. Our travel centers offer a broad range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services such as truck repair and maintenance services, diesel exhaust fluid, full service restaurants, quick service restaurants and various customer amenities. As of March 31, 2023, our business included three standalone truck service facilities that we operate under the “TA Truck Service” brand name. Of these standalone truck service facilities, we leased two and owned one. Our standalone truck service facilities offer extensive maintenance and emergency repair and roadside services to large trucks. We manage our business as one segment. We make specific disclosures concerning fuel and nonfuel products and services because they facilitate our discussion of trends and operational initiatives within our business and industry. The accompanying interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, applicable for interim financial statements. The disclosures presented do not include all the information necessary for complete financial statements in accordance with GAAP. These unaudited interim financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or our Annual Report. In the opinion of our management, the accompanying unaudited interim consolidated financial statements include all adjustments, including normal recurring adjustments, considered necessary for a fair presentation. All intercompany transactions and balances have been eliminated. While our revenues are modestly seasonal, the quarterly variations in our operating results may reflect greater seasonal differences because our rent expense and certain other costs do not vary seasonally. The current economic conditions have, and may in the future, significantly alter the seasonal aspects of our business. For this and other reasons, our operating results for interim periods are not necessarily indicative of the results that may be expected for a full year. The Proposed Merger On February 15, 2023, we entered into an Agreement and Plan of Merger, the Merger Agreement, with BP Products North America Inc., or BP, and Bluestar RTM Inc., or Merger Subsidiary, pursuant to which Merger Subsidiary will merge with and into TA, or the Merger, with TA surviving the Merger. As a result of the Merger, at the effective time of the Merger, or the Effective Time, each share of our common stock outstanding immediately prior to the Effective Time (other than shares of our common stock (i) owned by BP or Merger Subsidiary immediately prior to the Effective Time, or (ii) held by any subsidiary of ours or BP (other than Merger Subsidiary) immediately prior to the Effective Time), will be converted into the right to receive $86.00 in cash, without interest, or the Merger Consideration. Immediately prior to the Effective Time, each then-outstanding share of our common stock granted subject to vesting or other lapse restrictions under any TA stock plan that is outstanding immediately prior to the Effective Time will vest in full and become free of such restrictions and will be converted into the right to receive the Merger Consideration under the same terms and conditions as apply to the receipt of the Merger Consideration by holders of our common stock generally. The closing of the Merger is subject to the satisfaction or waiver of certain conditions, including, among other things, (i) receipt by us of approval from our stockholders, or the Company Stockholder Approval, (ii) that there is no temporary restraining order, preliminary or permanent injunction or other judgment issued by any court of competent jurisdiction in effect enjoining or otherwise prohibiting the consummation of the Merger, (iii) the expiration or termination of any applicable waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, which expired on April 10, 2023, and all other approvals under antitrust laws, (iv) the accuracy of the representations and warranties contained in the Merger Agreement (subject to specified materiality qualifiers), (v) compliance with the covenants and obligations under the Merger Agreement in all material respects; (vi) the absence of a material adverse effect with respect to TA; and (vii) the execution, release and delivery of the Consent and Amendment Agreement, dated as of February 15, 2023, by and among us, our subsidiary TA Operating LLC, BP, Service Properties Trust, or SVC, and certain of SVC’s subsidiaries, or the SVC Consent Agreement, and all agreements entered into pursuant thereto. We have made customary representations and warranties in the Merger Agreement and have agreed to customary covenants regarding the operation of our business prior to the Effective Time. The Merger Agreement also includes a covenant requiring us not to solicit any acquisition proposal, and, subject to certain exceptions, not to enter into or participate or engage in any discussions or negotiations with, related to an acquisition proposal or enter into any letter of intent, acquisition agreement or other similar agreement relating to an acquisition proposal. Further, our board of directors will not withhold, withdraw, amend or modify, or publicly propose to do any of the foregoing, its recommendation in a manner adverse to BP, adopt, approve or recommend to our stockholders an acquisition proposal, fail to reaffirm its recommendation within 10 business days following BP’s written request, fail to recommend against acceptance of a tender or exchange offer for shares of our common stock within 10 business days after the commencement thereof, nor fail to include its recommendation in the proxy statement related to the Merger. Notwithstanding these restrictions, at any time prior to obtaining the Company Stockholder Approval, if we have received a written, bona fide, unsolicited acquisition proposal from any third party (or a group of third parties) that our board of directors determines in good faith, after consultation with its financial advisor and outside legal counsel, constitutes or could reasonably be expected to lead to a superior proposal, and the failure to take the following actions would reasonably be expected to be inconsistent with its duties under applicable law, then we, directly or indirectly through certain specified representatives may, subject to certain conditions, engage in discussions with such third party and furnish to such third party non-public information relating to us pursuant to an acceptable confidentiality agreement. Further, at any time prior to obtaining the Company Stockholder Approval, in respect to a superior proposal we receive after the date of the Merger Agreement on an unsolicited basis, if our board of directors determines in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such action would be reasonably expected to be inconsistent with its duties under applicable law, our board of directors may, subject to compliance with certain conditions, (i) make an Adverse Recommendation Change (as defined in the Merger Agreement) or (ii) cause us to terminate the Merger Agreement in compliance with the terms of the Merger Agreement in order to enter into a binding written definitive agreement providing for such superior proposal. The Merger Agreement contains certain termination rights for us and BP. Upon termination of the Merger Agreement in accordance with its terms, under certain specified circumstances, we will be required to pay BP a termination fee in an amount equal to $51,900, including if the Merger Agreement is terminated due to our acceptance of an unsolicited superior proposal or due to our board of directors changing its recommendation to our stockholders to vote to approve the Merger Agreement. The Merger Agreement further provides that BP will be required to pay us a termination fee in an amount equal to $90,900 in the event the Merger Agreement is terminated under certain specified circumstances and receipt of antitrust approval has not been obtained by such time. Subject to certain exceptions and limitations, either party may terminate the Merger Agreement if the Merger is not consummated by November 15, 2023, subject to (x) an automatic 90-day extension and (y) an additional 90-day extension under certain circumstances. In connection with entering into the Merger Agreement, we agreed with BP and SVC to amend and restate our subsidiary’s leases with certain of SVC’s subsidiaries, and corresponding guaranty agreements, in each case effective at the Effective Time, conditioned on the occurrence of the closing of the Merger. SVC has consented to the entry by TA into the Merger Agreement and the consummation of the transactions contemplated thereby and any resulting change in control or assignment of TA resulting from either or both of the Merger and such transactions. In addition, SVC has agreed to vote its shares in favor of the sale. Subject to the satisfaction of the remaining conditions to the closing of the Merger, we expect the closing of the transactions contemplated by the Merger Agreement to occur by May 15, 2023. Fair Value Measurement Senior Notes We collectively refer to our $110,000 of 8.25% Senior Notes due 2028, our $120,000 of 8.00% Senior Notes due 2029 and our $100,000 of 8.00% Senior Notes due 2030 as our Senior Notes, which are our senior unsecured obligations. We estimate that, based on their trading prices (a Level 2 input), the aggregate fair value of our Senior Notes on March 31, 2023, was $333,996. Recently Issued Accounting Pronouncement and Other Accounting Matters The following table summarizes recent accounting standard updates, or ASUs, issued by the Financial Accounting Standards Board, or FASB, that could have an impact on our consolidated financial statements.
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Revenues |
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Revenues | Revenues We recognize revenues based on the consideration specified in the contract with the customer, less estimates for variable consideration (such as customer loyalty programs and customer rebates) and amounts collected on behalf of third parties (such as sales and excise taxes). The majority of our revenues are generated at the point of sale in our travel center locations. Revenues consist of fuel revenues, nonfuel revenues and rents and royalties from franchisees. Disaggregation of Revenues We disaggregate our revenues based on the type of good or service provided to the customer, or by fuel revenues and nonfuel revenues, in our consolidated statements of operations and comprehensive income. Nonfuel revenues disaggregated by type of good or service for the three months ended March 31, 2023 and 2022, were as follows:
Contract Liabilities As of December 31, 2022, our contract liability balances (for customer loyalty programs, deferred franchise fees and gift cards) totaled $32,132, of which $27,807 was recognized as revenue during three months ended March 31, 2023. As of March 31, 2023, our contract liabilities totaled $31,889 and are presented in our consolidated balance sheets in other current and other noncurrent liabilities. As of March 31, 2023, we expect that the unsatisfied performance obligations relating to our customer loyalty programs and other contract liabilities of $25,124, will generally be satisfied within 12 months. As of March 31, 2023, the deferred initial and renewal franchise fee revenue expected to be recognized in future periods is approximately $750 for each of the years 2023 through 2027.
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Stockholders' Equity |
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Stockholders' Equity | Stockholders’ Equity The following table presents a reconciliation of net income attributable to common stockholders to net (loss) income available to common stockholders and the related (loss) earnings per share of common stock for the three months ended March 31, 2023 and 2022.
(1) Excludes unvested shares of common stock awarded under our share award plan, in which shares of common stock are considered participating securities because they participate equally in earnings and losses with all of our other shares of common stock. The weighted average number of unvested shares of common stock outstanding for the three months ended March 31, 2023 and 2022, was 554 and 466, respectively.
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Leasing Transactions |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing Transactions | Leasing Transactions As a Lessee We have lease agreements covering many of our properties, as well as various equipment, with the most significant leases being our five leases with SVC, which are further described below. Certain of our leases include renewal options, and certain leases include escalation clauses and purchase options. Renewal periods are included in calculating our operating lease assets and liabilities when they are reasonably certain. Leases with an initial term of 12 months or less are not recognized in our consolidated balance sheets. As of March 31, 2023, our SVC Leases (as defined below), the leases covering our other properties and most of our equipment leases were classified as operating leases and certain of our other equipment leases and one ground lease pursuant to one SVC Lease were classified as finance leases. Finance lease assets were included in , with the corresponding current and noncurrent finance lease liabilities included in and , respectively, in our consolidated balance sheets. Leasing Agreements with SVC As of March 31, 2023, we leased from SVC a total of 177 properties under five leases. We refer to these five leases collectively as the SVC Leases. The SVC Leases expire between 2029 and 2035, subject to our right to extend those leases. We have two renewal options of 15 years under each of the SVC Leases. We recognized total real estate rent expense under the SVC Leases of $63,601 and $63,907 for the three months ended March 31, 2023 and 2022, respectively. Included in these rent expense amounts are percentage rent payable of $2,385 and $2,499 respectively, which are based on a percentage of the increases in total nonfuel revenues at each leased property over base year levels, net adjustments to record minimum annual rent on a straight line basis over the terms of the leases, the estimated future payments by us for the cost of removing underground storage tanks on a straight line basis and the benefit of other lease incentives. As of March 31, 2023, the present value of the estimated future payments related to these underground storage tanks were $27,775 and are recorded in other noncurrent liabilities on our consolidated balance sheets. As of December 31, 2022, the remaining balance of our deferred rent obligations was $4,404 and we paid that amount in January 2023. As of March 31, 2023, our aggregate annual minimum rent payable to SVC under the SVC Leases was $243,914. Pursuant to the SVC Leases, we may request that SVC purchase qualifying capital improvements we make at the leased travel centers in return for increased annual minimum rent. We did not sell to SVC any improvements we made to properties leased from SVC for the three months ended March 31, 2023 and 2022. As permitted by the SVC Leases, we sublease a portion of certain travel centers to third parties to operate other retail operations. These subleases are classified as operating leases. We recognized sublease rental income of $576 and $423 for the three months ended March 31, 2023 and 2022, respectively. Lease Costs Our lease costs are included in various balances in our consolidated statements of operations and comprehensive (loss) income, as shown in the following table. For the three months ended March 31, 2023 and 2022, our lease costs consisted of the following:
Lease Assets and Liabilities As of March 31, 2023 and December 31, 2022, our operating lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:
As of March 31, 2023 and December 31, 2022, our finance lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:
Lease Maturities and Other Information Maturities of our operating lease liabilities that had remaining noncancelable lease terms in excess of one year as of March 31, 2023, were as follows:
(1) Includes rent for properties we sublease from SVC. (2) The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the SVC Leases and our incremental borrowing rate for all other leases. The weighted average remaining lease term for our operating leases as of March 31, 2023, was approximately 10 years. Our weighted average discount rate for our operating leases as of March 31, 2023, was approximately 9.1%. During the three months ended March 31, 2023 and 2022, we paid real estate rent payments of $70,693 and $70,371, respectively, for amounts that had been included in the measurement of our operating lease liabilities. Maturities of our finance lease liabilities that had remaining noncancelable lease terms in excess of one year as of March 31, 2023, were as follows:
(1) Includes rent for properties we sublease from SVC. (2) The discount rate used to derive the present value of unpaid lease payments is based on our incremental borrowing rate. The weighted average remaining lease term for our finance leases as of March 31, 2023, was approximately 8 years. Our weighted average discount rate for our finance leases as of March 31, 2023, was approximately 4.3%. During the three months ended March 31, 2023 and 2022, we paid $1,818 and $1,035, respectively, for amounts that had been included in the measurement of our finance lease liabilities. In connection with entering into the Merger Agreement, we and our wholly-owned subsidiary, TA Operating LLC, or together the TCA Parties, entered into the SVC Consent Agreement with SVC pursuant to which, among other things, SVC consented to our entering into the Merger Agreement and the consummation of the Merger and agreed to enter into amended and restated lease and guarantee agreements with the applicable TCA Parties, which would be entered into at the effective time of the Merger. For more information about the Merger and the SVC Consent Agreement, see Notes 1 and 6 of this Quarterly Report. As a Lessor During 2022, we acquired the operating assets related to two travel centers we previously leased to franchisees. Rent revenues from these operating leases totaled $595 for the three months ended March 31, 2022. See above for information regarding certain travel centers that we lease from SVC in which we sublease a portion of the travel centers to third parties to operate other retail operations. We also lease portions of owned properties to third parties to operate other retail operations.
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Leasing Transactions | Leasing Transactions As a Lessee We have lease agreements covering many of our properties, as well as various equipment, with the most significant leases being our five leases with SVC, which are further described below. Certain of our leases include renewal options, and certain leases include escalation clauses and purchase options. Renewal periods are included in calculating our operating lease assets and liabilities when they are reasonably certain. Leases with an initial term of 12 months or less are not recognized in our consolidated balance sheets. As of March 31, 2023, our SVC Leases (as defined below), the leases covering our other properties and most of our equipment leases were classified as operating leases and certain of our other equipment leases and one ground lease pursuant to one SVC Lease were classified as finance leases. Finance lease assets were included in , with the corresponding current and noncurrent finance lease liabilities included in and , respectively, in our consolidated balance sheets. Leasing Agreements with SVC As of March 31, 2023, we leased from SVC a total of 177 properties under five leases. We refer to these five leases collectively as the SVC Leases. The SVC Leases expire between 2029 and 2035, subject to our right to extend those leases. We have two renewal options of 15 years under each of the SVC Leases. We recognized total real estate rent expense under the SVC Leases of $63,601 and $63,907 for the three months ended March 31, 2023 and 2022, respectively. Included in these rent expense amounts are percentage rent payable of $2,385 and $2,499 respectively, which are based on a percentage of the increases in total nonfuel revenues at each leased property over base year levels, net adjustments to record minimum annual rent on a straight line basis over the terms of the leases, the estimated future payments by us for the cost of removing underground storage tanks on a straight line basis and the benefit of other lease incentives. As of March 31, 2023, the present value of the estimated future payments related to these underground storage tanks were $27,775 and are recorded in other noncurrent liabilities on our consolidated balance sheets. As of December 31, 2022, the remaining balance of our deferred rent obligations was $4,404 and we paid that amount in January 2023. As of March 31, 2023, our aggregate annual minimum rent payable to SVC under the SVC Leases was $243,914. Pursuant to the SVC Leases, we may request that SVC purchase qualifying capital improvements we make at the leased travel centers in return for increased annual minimum rent. We did not sell to SVC any improvements we made to properties leased from SVC for the three months ended March 31, 2023 and 2022. As permitted by the SVC Leases, we sublease a portion of certain travel centers to third parties to operate other retail operations. These subleases are classified as operating leases. We recognized sublease rental income of $576 and $423 for the three months ended March 31, 2023 and 2022, respectively. Lease Costs Our lease costs are included in various balances in our consolidated statements of operations and comprehensive (loss) income, as shown in the following table. For the three months ended March 31, 2023 and 2022, our lease costs consisted of the following:
Lease Assets and Liabilities As of March 31, 2023 and December 31, 2022, our operating lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:
As of March 31, 2023 and December 31, 2022, our finance lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:
Lease Maturities and Other Information Maturities of our operating lease liabilities that had remaining noncancelable lease terms in excess of one year as of March 31, 2023, were as follows:
(1) Includes rent for properties we sublease from SVC. (2) The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the SVC Leases and our incremental borrowing rate for all other leases. The weighted average remaining lease term for our operating leases as of March 31, 2023, was approximately 10 years. Our weighted average discount rate for our operating leases as of March 31, 2023, was approximately 9.1%. During the three months ended March 31, 2023 and 2022, we paid real estate rent payments of $70,693 and $70,371, respectively, for amounts that had been included in the measurement of our operating lease liabilities. Maturities of our finance lease liabilities that had remaining noncancelable lease terms in excess of one year as of March 31, 2023, were as follows:
(1) Includes rent for properties we sublease from SVC. (2) The discount rate used to derive the present value of unpaid lease payments is based on our incremental borrowing rate. The weighted average remaining lease term for our finance leases as of March 31, 2023, was approximately 8 years. Our weighted average discount rate for our finance leases as of March 31, 2023, was approximately 4.3%. During the three months ended March 31, 2023 and 2022, we paid $1,818 and $1,035, respectively, for amounts that had been included in the measurement of our finance lease liabilities. In connection with entering into the Merger Agreement, we and our wholly-owned subsidiary, TA Operating LLC, or together the TCA Parties, entered into the SVC Consent Agreement with SVC pursuant to which, among other things, SVC consented to our entering into the Merger Agreement and the consummation of the Merger and agreed to enter into amended and restated lease and guarantee agreements with the applicable TCA Parties, which would be entered into at the effective time of the Merger. For more information about the Merger and the SVC Consent Agreement, see Notes 1 and 6 of this Quarterly Report. As a Lessor During 2022, we acquired the operating assets related to two travel centers we previously leased to franchisees. Rent revenues from these operating leases totaled $595 for the three months ended March 31, 2022. See above for information regarding certain travel centers that we lease from SVC in which we sublease a portion of the travel centers to third parties to operate other retail operations. We also lease portions of owned properties to third parties to operate other retail operations.
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Business Management Agreement with RMR |
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Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Business Management Agreement with RMR | Business Management Agreement with RMR The RMR Group LLC, or RMR, provides us certain services that we require to operate our business, and which relate to various aspects of our business. RMR provides these services pursuant to a business management agreement. Pursuant to the business management agreement, we incurred aggregate fees and certain cost reimbursements payable to RMR of $3,544 and $3,639 for the three months ended March 31, 2023 and 2022, respectively. These amounts are included in selling, general and administrative expense in our consolidated statements of operations and comprehensive (loss) income. For more information about our relationship with RMR, see Note 6 of this Quarterly Report and our Annual Report.Related Party Transactions We have relationships and historical and continuing transactions with SVC, RMR and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have directors, trustees or officers who are also our Directors or officers. RMR is a majority owned subsidiary of The RMR Group Inc. The Chair of our Board of Directors and one of our Managing Directors, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of The RMR Group Inc., the chair of the board of directors, a managing director, and the president and chief executive officer of The RMR Group Inc. and an officer and employee of RMR. Jonathan M. Pertchik, our other Managing Director and Chief Executive Officer, also serves as an officer and employee of RMR. Certain of our other officers and SVC’s officers also serve as officers and employees of RMR. Some of our Independent Directors also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the board and as a managing trustee of these public companies, including SVC. Other officers of RMR, including certain of our officers, serve as managing trustees or officers of certain of these companies. As of March 31, 2023, Mr. Portnoy beneficially owned 662 shares of our common stock (including indirectly through RMR), representing approximately 4.4% of our outstanding shares of common stock. Relationship with SVC We are SVC’s largest tenant and SVC is our principal landlord and a significant stockholder of ours. As of March 31, 2023, SVC owned 1,185 shares of our common stock, representing approximately 7.8% of our outstanding shares of common stock. As of March 31, 2023, we leased from SVC a total of 177 travel center properties under the SVC Leases. See Note 4 of this Quarterly Report for more information about our lease agreements with SVC. In connection with our entering into the Merger Agreement, SVC entered into the SVC Consent Agreement. SVC also entered into a voting agreement with BP pursuant to which SVC agreed to vote all of its shares of our common stock in favor of our sale to BP and against any alternative acquisition proposal. See Notes 1 and 4 of this Quarterly Report for more information about our sale to BP and the Consent Agreement. Our Manager, RMR RMR provides certain services we require to operate our business. We have a business management agreement with RMR to provide management services to us, which relates to various aspects of our business generally. See Note 5 of this Quarterly Report for more information about our business management agreement with RMR. In connection with the Merger Agreement, on February 15, 2023, RMR entered into a voting agreement with BP pursuant to which RMR agreed to vote all of its shares of our common stock in favor of our sale to BP and against any alternative acquisition proposal. For more information about these and other such relationships and certain other related person transactions, see our Annual Report.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Business Management Agreement with RMR The RMR Group LLC, or RMR, provides us certain services that we require to operate our business, and which relate to various aspects of our business. RMR provides these services pursuant to a business management agreement. Pursuant to the business management agreement, we incurred aggregate fees and certain cost reimbursements payable to RMR of $3,544 and $3,639 for the three months ended March 31, 2023 and 2022, respectively. These amounts are included in selling, general and administrative expense in our consolidated statements of operations and comprehensive (loss) income. For more information about our relationship with RMR, see Note 6 of this Quarterly Report and our Annual Report.Related Party Transactions We have relationships and historical and continuing transactions with SVC, RMR and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have directors, trustees or officers who are also our Directors or officers. RMR is a majority owned subsidiary of The RMR Group Inc. The Chair of our Board of Directors and one of our Managing Directors, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of The RMR Group Inc., the chair of the board of directors, a managing director, and the president and chief executive officer of The RMR Group Inc. and an officer and employee of RMR. Jonathan M. Pertchik, our other Managing Director and Chief Executive Officer, also serves as an officer and employee of RMR. Certain of our other officers and SVC’s officers also serve as officers and employees of RMR. Some of our Independent Directors also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the board and as a managing trustee of these public companies, including SVC. Other officers of RMR, including certain of our officers, serve as managing trustees or officers of certain of these companies. As of March 31, 2023, Mr. Portnoy beneficially owned 662 shares of our common stock (including indirectly through RMR), representing approximately 4.4% of our outstanding shares of common stock. Relationship with SVC We are SVC’s largest tenant and SVC is our principal landlord and a significant stockholder of ours. As of March 31, 2023, SVC owned 1,185 shares of our common stock, representing approximately 7.8% of our outstanding shares of common stock. As of March 31, 2023, we leased from SVC a total of 177 travel center properties under the SVC Leases. See Note 4 of this Quarterly Report for more information about our lease agreements with SVC. In connection with our entering into the Merger Agreement, SVC entered into the SVC Consent Agreement. SVC also entered into a voting agreement with BP pursuant to which SVC agreed to vote all of its shares of our common stock in favor of our sale to BP and against any alternative acquisition proposal. See Notes 1 and 4 of this Quarterly Report for more information about our sale to BP and the Consent Agreement. Our Manager, RMR RMR provides certain services we require to operate our business. We have a business management agreement with RMR to provide management services to us, which relates to various aspects of our business generally. See Note 5 of this Quarterly Report for more information about our business management agreement with RMR. In connection with the Merger Agreement, on February 15, 2023, RMR entered into a voting agreement with BP pursuant to which RMR agreed to vote all of its shares of our common stock in favor of our sale to BP and against any alternative acquisition proposal. For more information about these and other such relationships and certain other related person transactions, see our Annual Report.
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Contingencies |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Environmental Contingencies Extensive environmental laws regulate our operations and properties. These laws may require us to investigate and clean up hazardous substances, including petroleum or natural gas products, released at our owned and leased properties. Governmental entities or third parties may hold us liable for property damage and personal injuries, and for investigation, remediation and monitoring costs incurred in connection with any contamination and regulatory compliance at our locations. We use both underground storage tanks and above ground storage tanks to store petroleum products, natural gas and other hazardous substances at our locations. We must comply with environmental laws regarding tank construction, integrity testing, leak detection and monitoring, overfill and spill control, release reporting and financial assurance for corrective action in the event of a release. At some locations we must also comply with environmental laws relative to vapor recovery or discharges to water. Under the terms of the SVC Leases, we generally have agreed to indemnify SVC for any environmental liabilities related to properties that we lease from SVC and we are required to pay all environmental related expenses incurred in the operation of the leased properties. We have entered into certain other arrangements in which we have agreed to indemnify third parties for environmental liabilities and expenses resulting from our operations. From time to time we have received, and in the future likely will receive, notices of alleged violations of environmental laws or otherwise have become or will become aware of the need to undertake corrective actions to comply with environmental laws at our locations. Investigatory and remedial actions were, and regularly are, undertaken with respect to releases of hazardous substances at our locations. In some cases we have received, and may receive in the future, contributions to partially offset our environmental costs from insurers, from state funds established for environmental clean up associated with the sale of petroleum products or from indemnitors who agreed to fund certain environmental related costs at locations purchased from those indemnitors. To the extent we incur material amounts for environmental matters for which we do not receive or expect to receive insurance or other third party reimbursement and for which we have not previously recorded a liability, our operating results may be materially adversely affected. In addition, to the extent we fail to comply with environmental laws and regulations, or we become subject to costs and requirements not similarly experienced by our competitors, our competitive position may be harmed. As of March 31, 2023, we had a current liability of $2,572 and a noncurrent liability of $1,068 for environmental matters as well as a receivable, which is recorded in noncurrent assets in our consolidated balance sheets, for expected recoveries of certain of these estimated future expenditures of $578. We cannot precisely know the ultimate costs we may incur in connection with currently known environmental related violations, corrective actions, investigation and remediation; however, we do not expect the costs for such matters to be material, individually or in the aggregate, to our financial position or results of operations. We currently have insurance of up to $20,000 per incident and up to $20,000 in the aggregate for certain environmental liabilities, subject, in each case, to certain limitations and deductibles. Our current insurance policy expires in June 2024 and we can provide no assurance that we will be able to maintain similar environmental insurance coverage in the future on acceptable terms. We cannot predict the ultimate effect changing circumstances and changing environmental laws may have on us in the future or the ultimate outcome of matters currently pending. We cannot be certain that contamination presently unknown to us does not exist at our sites, or that a material liability will not be imposed on us in the future. If we discover additional environmental issues, or if government agencies impose additional environmental requirements, increased environmental compliance or remediation expenditures may be required, which could have a material adverse effect on us. Legal Proceedings We are routinely involved in various legal and administrative proceedings incidental to the ordinary course of business, including commercial disputes, employment related claims, wage and hour claims, premises liability claims and tax audits among others. We and our directors are also involved in litigation related to the Merger and certain of our disclosures about the Merger. We do not expect that any litigation or administrative proceedings in which we are presently involved, or of which we are aware, will have a material adverse effect on our business, financial condition, results of operations or cash flows.
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Inventory |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | InventoryInventory as of March 31, 2023 and December 31, 2022 consisted of the following:
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Business Description and Basis of Presentation (Policies) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | We manage our business as one segment. We make specific disclosures concerning fuel and nonfuel products and services because they facilitate our discussion of trends and operational initiatives within our business and industry. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, applicable for interim financial statements. The disclosures presented do not include all the information necessary for complete financial statements in accordance with GAAP. These unaudited interim financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or our Annual Report. In the opinion of our management, the accompanying unaudited interim consolidated financial statements include all adjustments, including normal recurring adjustments, considered necessary for a fair presentation. All intercompany transactions and balances have been eliminated. While our revenues are modestly seasonal, the quarterly variations in our operating results may reflect greater seasonal differences because our rent expense and certain other costs do not vary seasonally. The current economic conditions have, and may in the future, significantly alter the seasonal aspects of our business. For this and other reasons, our operating results for interim periods are not necessarily indicative of the results that may be expected for a full year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recently Issued Accounting Pronouncement and Other Accounting Matters | Recently Issued Accounting Pronouncement and Other Accounting Matters The following table summarizes recent accounting standard updates, or ASUs, issued by the Financial Accounting Standards Board, or FASB, that could have an impact on our consolidated financial statements.
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Leasing Transactions | Certain of our leases include renewal options, and certain leases include escalation clauses and purchase options. Renewal periods are included in calculating our operating lease assets and liabilities when they are reasonably certain. Leases with an initial term of 12 months or less are not recognized in our consolidated balance sheets. |
Business Description and Basis of Presentation (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recent Accounting Standard Updates | The following table summarizes recent accounting standard updates, or ASUs, issued by the Financial Accounting Standards Board, or FASB, that could have an impact on our consolidated financial statements.
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Revenues (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonfuel Revenues Disaggregated by Type of Good or Service | Nonfuel revenues disaggregated by type of good or service for the three months ended March 31, 2023 and 2022, were as follows:
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Stockholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Net (Loss) Income Attributable to Common Stockholders to Net (Loss) Income Available to Common Stockholders | The following table presents a reconciliation of net income attributable to common stockholders to net (loss) income available to common stockholders and the related (loss) earnings per share of common stock for the three months ended March 31, 2023 and 2022.
(1) Excludes unvested shares of common stock awarded under our share award plan, in which shares of common stock are considered participating securities because they participate equally in earnings and losses with all of our other shares of common stock. The weighted average number of unvested shares of common stock outstanding for the three months ended March 31, 2023 and 2022, was 554 and 466, respectively.
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Leasing Transactions (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Costs as a Lessee | For the three months ended March 31, 2023 and 2022, our lease costs consisted of the following:
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Schedule of Operating Lease Assets and Liabilities | As of March 31, 2023 and December 31, 2022, our operating lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:
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Schedule of Finance Lease Assets and Liabilities | As of March 31, 2023 and December 31, 2022, our finance lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:
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Schedule of Maturities of Operating Lease Liabilities | Maturities of our operating lease liabilities that had remaining noncancelable lease terms in excess of one year as of March 31, 2023, were as follows:
(1) Includes rent for properties we sublease from SVC. (2) The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the SVC Leases and our incremental borrowing rate for all other leases.
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Schedule of Maturities of Finance Lease Liabilities | Maturities of our finance lease liabilities that had remaining noncancelable lease terms in excess of one year as of March 31, 2023, were as follows:
(1) Includes rent for properties we sublease from SVC. (2) The discount rate used to derive the present value of unpaid lease payments is based on our incremental borrowing rate.
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Inventory (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory as of March 31, 2023 and December 31, 2022 consisted of the following:
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Business Description and Basis of Presentation - Senior Notes (Details) - Senior Notes |
Mar. 31, 2023
USD ($)
|
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Level 1 input | |
Debt Instrument [Line Items] | |
Fair value of long term debt | $ 333,996,000 |
8.25% Senior Notes due 2028 | |
Debt Instrument [Line Items] | |
Aggregate principal amount issued | $ 110,000,000 |
Interest rate (as a percent) | 8.25% |
8.00% Senior Notes due 2029 | |
Debt Instrument [Line Items] | |
Aggregate principal amount issued | $ 120,000,000 |
Interest rate (as a percent) | 8.00% |
8.00% Senior Notes due 2030 | |
Debt Instrument [Line Items] | |
Aggregate principal amount issued | $ 100,000,000 |
Interest rate (as a percent) | 8.00% |
Revenues - Disaggregation of Nonfuel Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Disaggregation of Revenue [Line Items] | ||
Total nonfuel revenues | $ 2,239,018 | $ 2,297,073 |
Store and retail services | ||
Disaggregation of Revenue [Line Items] | ||
Total nonfuel revenues | 179,437 | 179,540 |
Truck service | ||
Disaggregation of Revenue [Line Items] | ||
Total nonfuel revenues | 207,441 | 188,384 |
Restaurant | ||
Disaggregation of Revenue [Line Items] | ||
Total nonfuel revenues | 82,880 | 74,338 |
Diesel exhaust fluid | ||
Disaggregation of Revenue [Line Items] | ||
Total nonfuel revenues | 45,916 | 44,820 |
Nonfuel | ||
Disaggregation of Revenue [Line Items] | ||
Total nonfuel revenues | $ 515,674 | $ 487,082 |
Leasing Transactions - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Lessee, Lease, Description [Line Items] | ||
Operating lease assets | $ 1,557,689 | $ 1,576,538 |
Current operating lease liabilities | 111,781 | 113,940 |
Noncurrent operating lease liabilities | 1,528,025 | 1,551,027 |
SVC Leases | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | 1,531,944 | 1,560,616 |
Current operating lease liabilities | 107,984 | 110,521 |
Noncurrent operating lease liabilities | 1,505,574 | 1,538,031 |
Other | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | 25,745 | 15,922 |
Current operating lease liabilities | 3,797 | 3,419 |
Noncurrent operating lease liabilities | $ 22,451 | $ 12,996 |
Leasing Transactions - Schedule of Finance Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Lessee, Lease, Description [Line Items] | ||
Finance lease assets | $ 39,290 | $ 40,535 |
Current financing lease liabilities | 5,342 | 5,242 |
Noncurrent financing lease liabilities | 36,433 | 38,451 |
SVC Leases | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease assets | 23,777 | 24,330 |
Current financing lease liabilities | 1,586 | 1,552 |
Noncurrent financing lease liabilities | 24,106 | 24,517 |
Other | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease assets | 15,513 | 16,205 |
Current financing lease liabilities | 3,756 | 3,690 |
Noncurrent financing lease liabilities | $ 12,327 | $ 13,934 |
Leasing Transactions - Schedule of Maturities of Operating Leases Liabilities (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
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Lessee, Lease, Description [Line Items] | |
2023 | $ 191,587 |
2024 | 255,310 |
2025 | 255,223 |
2026 | 254,706 |
2027 | 253,856 |
Thereafter | 1,297,077 |
Total operating lease payments | 2,507,759 |
Less: present value discount | (867,948) |
Present value of operating lease liabilities | 1,639,811 |
SVC Leases | |
Lessee, Lease, Description [Line Items] | |
2023 | 187,645 |
2024 | 250,388 |
2025 | 250,375 |
2026 | 250,371 |
2027 | 250,392 |
Thereafter | 1,285,536 |
Total operating lease payments | 2,474,707 |
Less: present value discount | (861,149) |
Present value of operating lease liabilities | 1,613,558 |
Other | |
Lessee, Lease, Description [Line Items] | |
2023 | 3,942 |
2024 | 4,922 |
2025 | 4,848 |
2026 | 4,335 |
2027 | 3,464 |
Thereafter | 11,541 |
Total operating lease payments | 33,052 |
Less: present value discount | (6,799) |
Present value of operating lease liabilities | $ 26,253 |
Leasing Transactions - Schedule of Maturities of Financing Lease Liabilities (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
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Lessee, Lease, Description [Line Items] | |
2023 | $ 5,293 |
2024 | 6,676 |
2025 | 6,139 |
2026 | 5,842 |
2027 | 5,617 |
Thereafter | 20,610 |
Total finance lease payments | 50,177 |
Less: present value discount | (8,402) |
Present value of finance lease liabilities | 41,775 |
SVC Leases | |
Lessee, Lease, Description [Line Items] | |
2023 | 1,996 |
2024 | 2,722 |
2025 | 2,790 |
2026 | 2,860 |
2027 | 2,932 |
Thereafter | 19,194 |
Total finance lease payments | 32,494 |
Less: present value discount | (6,802) |
Present value of finance lease liabilities | 25,692 |
Other | |
Lessee, Lease, Description [Line Items] | |
2023 | 3,297 |
2024 | 3,954 |
2025 | 3,349 |
2026 | 2,982 |
2027 | 2,685 |
Thereafter | 1,416 |
Total finance lease payments | 17,683 |
Less: present value discount | (1,600) |
Present value of finance lease liabilities | $ 16,083 |
Leasing Transactions - As a Lessor (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
travel_center
|
|
Lessor, Lease, Description [Line Items] | ||
Rent revenue | $ | $ 595 | |
Franchised units | Travel centers | ||
Lessor, Lease, Description [Line Items] | ||
Number of sites leased | travel_center | 2 |
Business Management Agreement with RMR (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
RMR Group LLC | Affiliated entity | Selling, general and administrative expense | Business management agreement | ||
Related Party Transaction [Line Items] | ||
Business management fees and internal audit costs | $ 3,544 | $ 3,639 |
Related Party Transactions - Narrative (Details) shares in Thousands |
Mar. 31, 2023
director
shares
|
Dec. 31, 2022
shares
|
Mar. 09, 2021
property
|
---|---|---|---|
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 15,100 | 15,105 | |
RMR Group LLC | Affiliated entity | |||
Related Party Transaction [Line Items] | |||
Number of TA Managing Directors who are also the sole trustee, an officer and the controlling shareholder of ABP Trust as well as RMR's managing director, president and CEO | director | 1 | ||
Common stock, shares outstanding (in shares) | 662 | ||
Percentage of outstanding shares of common stock owned | 4.40% | ||
SVC | Principal Landlord and One of Largest Stockholders | SVC Leases | |||
Related Party Transaction [Line Items] | |||
Number of sites leased | property | 177 |
Related Party Transactions - Relationship with SVC (Details) - shares shares in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Related Party Transaction [Line Items] | ||
Number of shares of common stock outstanding owned (in shares) | 15,100 | 15,105 |
SVC | Principal landlord and second largest stockholder | ||
Related Party Transaction [Line Items] | ||
Number of shares of common stock outstanding owned (in shares) | 1,185 | |
Percentage of outstanding shares of common stock owned | 7.80% |
Contingencies (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Loss Contingencies [Line Items] | |
Current liability accrued for environmental matters | $ 2,572,000 |
Noncurrent liability accrued for environmental matters | 1,068,000 |
Expected recoveries of future expenditures | 578,000 |
Environmental issue | |
Loss Contingencies [Line Items] | |
Environmental liability insurance maximum coverage per incident | 20,000,000 |
Environmental liability insurance annual coverage limit | $ 20,000,000 |
Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory [Line Items] | ||
Total inventory | $ 252,455 | $ 272,074 |
Nonfuel products | ||
Inventory [Line Items] | ||
Total inventory | 205,569 | 212,811 |
Fuel products | ||
Inventory [Line Items] | ||
Total inventory | $ 46,886 | $ 59,263 |
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