TravelCenters of America LLC Announces Fourth Quarter and Full Year 2016 Financial Results

WESTLAKE, Ohio--()--TravelCenters of America LLC (Nasdaq: TA) today announced financial results for the three months and year ended December 31, 2016:

       
(in thousands, except per share and per gallon amounts

unless indicated otherwise)

Three Months Ended
December 31,
Year Ended
December 31,
2016     2015 2016     2015
Total revenues $ 1,424,287 $ 1,351,056 $ 5,511,405 $ 5,850,633
(Loss) income before income taxes (10,849 ) (4,227 ) (3,662 ) 44,258
Net (loss) income attributable to common shareholders (6,493 ) (1,608 ) (2,018 ) 27,719
 
Net (loss) income per common share attributable to

common shareholders (basic and diluted)

$ (0.17 ) $ (0.04 ) $ (0.05 ) $ 0.72
 
Supplemental Data:
Fuel sales volume (gallons):
Diesel fuel 400,881 420,606 1,660,976 1,722,209
Gasoline 134,945   123,786   544,448   407,894  
Total fuel sales volume (gallons) 535,826   544,392   2,205,424   2,130,103  
 
Total fuel revenues $ 941,852 $ 896,049 $ 3,530,149 $ 4,055,448
Fuel gross margin 101,050 103,270 404,777 414,494
Fuel gross margin per gallon $ 0.189 $ 0.190 $ 0.184 $ 0.195
 
Total nonfuel revenues $ 478,218 $ 451,975 $ 1,963,904 $ 1,782,761
Nonfuel gross margin 256,353 240,609 1,053,077 962,766
Nonfuel gross margin percentage 53.6 % 53.2 % 53.6 % 54.0 %
 
Adjusted EBITDA(1) $ 24,101 $ 21,154 $ 116,453 $ 149,688
 

(1) A reconciliation of earnings before interest, taxes, depreciation and amortization, and loss on extinguishment of debt, or Adjusted EBITDA, from net (loss) income attributable to common shareholders, the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP, appears in the supplemental data below.

Thomas M. O'Brien, TA's CEO, made the following statement regarding the 2016 fourth quarter results:

"During the 2016 fourth quarter, our business strategies resulted in gains in nonfuel gross margin as well as continued improvement in operating efficiencies as reflected in lower site level operating expenses on a same site basis. We grew site level gross margin in excess of site level operating expenses in total and on a same site basis. Fuel gross margin was negatively impacted by the absence in the 2016 period of an $8.0 million pretax benefit in the 2015 fourth quarter related to biodiesel fuel tax credits; our 2016 performance made up for all but $2.2 million of this amount, however net income attributable to common shareholders declined, largely as a result of increased depreciation expense associated with investments in new locations and existing site improvements that were placed in service during the last year. The combination of our internal and external growth activities outpaced headwinds of increased fuel efficiency for heavy duty truck engines, the impact of competition and a softness in freight volume, resulting in an increase in Adjusted EBITDA of 13.9% in the 2016 fourth quarter versus 2015. Our results also reflect continued improvement in financial contributions from our recently acquired sites, and I remain confident in the prospect of realizing the expected results from these investments."

Fourth Quarter 2016 Business Commentary

Fuel sales volume decreased by 8.6 million gallons, or 1.6%, in the 2016 fourth quarter compared to the 2015 fourth quarter primarily due to a decrease in same site fuel volume. The same site fuel sales volume decrease was attributed to fuel efficiency gains by TA's commercial diesel fuel customers, new sites opened by competition and a relatively soft trucking freight environment. Fuel revenue increased by $45.8 million, or 5.1%, in the 2016 fourth quarter compared to the 2015 fourth quarter due to both newly acquired locations and same site results. Same site fuel revenues increased due to higher market prices for fuel, which was offset by lower volumes. Fuel gross margin decreased slightly by $2.2 million ($0.001 per gallon), to $101.1 million ($0.189 per gallon) primarily as a result of the decline in fuel volume.

Nonfuel revenue increased $26.2 million, or 5.8%, in the 2016 fourth quarter compared to the 2015 fourth quarter: $25.1 million of the increase was due to sites acquired since the beginning of the 2015 fourth quarter, while $1.1 million, or 0.2%, of the increase was attributable to same sites. Nonfuel gross margin increased $15.7 million, or 6.5%, in the 2016 fourth quarter compared to the 2015 fourth quarter primarily due to an $11.7 million increase from newly acquired locations, while $4.0 million of the increase was attributable to growth in same site nonfuel gross margin. Same site nonfuel gross margin in the 2016 fourth quarter was 54.2% of nonfuel revenue, compared to 53.4% in the 2015 fourth quarter, a change largely attributable to the positive impact of TA's purchasing and pricing strategies and TA's marketing initiatives.

Site level operating expenses increased $5.1 million, or 2.2%, in the 2016 fourth quarter compared to the 2015 fourth quarter: a $9.2 million increase due to locations acquired since the beginning of the 2015 fourth quarter, partially offset by a $4.1 million decrease in same site results. On a same site basis, site level operating expenses as a percentage of nonfuel revenues improved from the prior year quarter by 1.1% to 49.8%.

Selling, general and administrative expenses for the 2016 fourth quarter increased $2.9 million, or 8.6%, compared to the 2015 fourth quarter, principally as a result of increased personnel costs, which resulted from increased field management and corporate staffing required to support the growth of TA's business, as well as planned increased spending on marketing and promotional activities.

Real estate rent expense increased $5.4 million, or 8.7%, in the 2016 fourth quarter compared to the 2015 fourth quarter primarily resulting from 2016 and 2015 sale and leaseback transactions with Hospitality Properties Trust, or HPT.

Net loss attributable to common shareholders for the 2016 fourth quarter was $6.5 million ($0.17 per common share) compared to $1.6 million ($0.04 per common share) for the 2015 fourth quarter. The change in net loss attributable to common shareholders was primarily due to increases in depreciation and amortization expenses, and expenses related to financing and managing newly acquired and developed locations (including real estate rent, interest and selling, general and administrative expenses), a decrease in fuel gross margin, and increased competition. These decreases were partially offset by an increase in nonfuel gross margin in excess of site level operating expenses generated by TA's locations.

Adjusted EBITDA for the 2016 fourth quarter increased by $2.9 million, or 13.9%, as compared to the 2015 fourth quarter. Adjusted EBITDA increased as a result of the increase in nonfuel gross margin due to both same sites and newly acquired locations, partially offset by increases in site level operating expenses due to newly acquired locations and a decrease in fuel gross margin.

Travel Centers Segment

Both fuel and nonfuel revenues increased, resulting in an increase in total revenues of $30.6 million, or 2.6%, in the 2016 fourth quarter compared to the 2015 fourth quarter. The increase in total revenues was primarily due to increases in fuel prices on a same site basis, plus the addition of new locations opened during 2016.

Site level gross margin in excess of site level operating expenses increased in the 2016 fourth quarter by $2.7 million, or 2.4%, as compared to the 2015 fourth quarter principally due to an increase in nonfuel gross margin and a decrease in operating expenses on a same site basis, partially offset by a decrease in fuel gross margin.

Convenience Stores Segment

Both fuel and nonfuel revenues increased, resulting in an increase in total revenues of $34.1 million, or 22.8%, in the 2016 fourth quarter compared to the 2015 fourth quarter. The increases in both fuel and nonfuel revenues were due to locations acquired since the beginning of the 2015 fourth quarter (49 locations).

Site level gross margin in excess of site level operating expenses increased in the 2016 fourth quarter by $4.7 million, or 97.0%, as compared to the 2015 fourth quarter due to improvements at same sites and the addition of locations acquired in 2015 and 2016.

Investment and Growth Activities

From the beginning of 2011, when TA began its acquisition program, to December 31, 2016, TA has invested $855.0 million to develop, purchase and improve 318 travel centers, convenience stores and standalone restaurants. For the year ended December 31, 2016, these investments produced site level gross margin in excess of site level operating expenses of $100.0 million, or, on a sequential basis, $8.3 million, or 9.0%, greater than site level gross margin in excess of site level operating expenses for the twelve months ended September 30, 2016.

TA believes that its investments require a period after they are developed or acquired and upgrades are completed to reach their expected stabilized financial results, generally three years for travel centers and one year for convenience stores.

TA acquired or developed 39 travel centers during the 2011 to 2016 period. Of those, 36 are included in the "Travel Centers Segment Same Site Operating Data" for the year ended December 31, 2016 and 2015. As of December 31, 2016, TA has invested $312.1 million (including improvements) in these 36 locations, and they generated $54.3 million of gross margin in excess of site level operating expenses during the year ended December 31, 2016. The remaining three locations were developed by TA for a total investment of $64.9 million; and they generated $3.5 million of gross margin in excess of site level operating expenses during the year ended December 31, 2016; however, TA has operated these locations for less than the full year 2016 (one opened in each of January, March and May).

TA acquired 228 convenience stores during the 2013 to 2016 period. Of these, 31 are included in the "Convenience Store Segment Same Site Operating Data" for the year ended December 31, 2016 and 2015. As of December 31, 2016, TA has invested $66.5 million (including improvements) in these 31 locations, and they generated $11.6 million of gross margin in excess of site level operating expenses during the year ended December 31, 2016. The remaining 197 locations were acquired by TA in 2015 or 2016 for a total investment of $376.9 million (including improvements), and these convenience stores generated $23.2 million of gross margin in excess of site level operating expenses during the year ended December 31, 2016. The 29 convenience stores TA acquired during 2016 were operated by TA for an average of nine months during 2016 and some of these were fully or partially out of service while being renovated.

TA acquired one standalone restaurant during 2015 and 50 during 2016. As of December 31, 2016, TA has invested $34.7 million (including improvements) in these 51 locations, and they generated $7.3 million of gross margin in excess of site level operating expenses during the year ended December 31, 2016.

TA's growth activities have also contributed to growth in its selling, general and administrative expenses, which were $139.1 million for the year ended December 31, 2016, a $17.3 million, or 14.2% increase over the amount for the year ended December 31, 2015. TA estimates that approximately $10.0 million of this increase can be attributed to the increase in TA's number of sites, including such items as marketing, advertising, regional management personnel and centralized corporate function support costs.

Other Growth Initiatives

TA's business requires TA to deliver a myriad of goods and services to multiple customer types from each of TA's locations. TA's business, in particular the travel center segment, also requires significant capital expenditures to remain competitive.

In addition to the investments in new locations described above, TA made capital expenditures of $253.7 million in its business in 2016, some of which were improvements of the type TA typically sells to HPT for an increase in rent and some of which were not yet complete as of December 31, 2016. TA believes that approximately $79.9 million of this amount can be considered to be investments to maintain its product quality and competitive position, while the remainder, or $173.8 million, can be considered to be investments designed to provide incremental returns to TA. These returns on investments may not exceed the cost of capital invested on a short term basis. TA does expect, however, that on a longer term basis, and especially during periods of economic and industry expansion, these investments may provide attractive returns.

TA is currently undertaking several internal growth initiatives that TA believes have the potential to grow its profitability and that are geared toward a combination of (a) developing and deploying new products and services to be delivered to existing customers and (b) delivering existing and new products and services to new customers.

Conference Call:

On Tuesday, February 28, 2017, at 10:00 a.m. Eastern time, TA will host a conference call to discuss its financial results and other activities for the three months and year ended December 31, 2016. Following management's remarks, there will be a question and answer period.

The conference call telephone number is 877-329-4614. Participants calling from outside the United States and Canada should dial 412-317-5437. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available for about a week after the call. To hear the replay, dial 412-317-0088. The replay pass code is 10099937.

A live audio webcast of the conference call will also be available in a listen only mode on TA's website at www.ta-petro.com. To access the webcast, participants should visit TA's website about five minutes before the call. The archived webcast will be available for replay on TA's website for about one week after the call. The transcription, recording and retransmission in any way of TA's fourth quarter conference call is strictly prohibited without the prior written consent of TA. The Company's website is not incorporated as part of this press release.

About TravelCenters of America LLC:

TA's nationwide business includes travel centers located in 43 U.S. states and in Canada, standalone convenience stores in 11 states and standalone restaurants in 15 states. TA's travel centers operate under the "TravelCenters of America," "TA," "Petro Stopping Centers" and "Petro" brand names and offer diesel and gasoline fueling, restaurants, truck repair services, travel/convenience stores and other services which are designed to provide attractive and efficient travel experiences to professional drivers and other motorists. TA's convenience stores operate principally under the "Minit Mart" brand name and offer gasoline fueling as well as nonfuel products and services such as coffee, groceries, some fresh foods and other convenience items. TA's standalone restaurants operate principally under the "Quaker Steak & Lube" brand name.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. WHENEVER TA USES WORDS SUCH AS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND," "PLAN," "ESTIMATE," "WILL," "MAY" AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, TA IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON TA'S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY TA'S FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. AMONG OTHERS, THE FORWARD LOOKING STATEMENTS WHICH APPEAR IN THIS PRESS RELEASE THAT MAY NOT OCCUR INCLUDE STATEMENTS THAT:

  • TA'S CEO, MR. O'BRIEN, STATES IN THIS PRESS RELEASE THAT TA'S INTERNAL AND EXTERNAL GROWTH ACTIVITIES HAD A FAVORABLE EFFECT ON TA'S RESULTS AND HIS CONFIDENCE IN THE PROSPECT OF TA REALIZING THE EXPECTED RESULTS FROM TA'S INVESTMENTS IN ITS ACQUISITION, IMPROVEMENT AND DEVELOPMENT OF NEW SITES AND OTHER GROWTH INITIATIVES. THESE STATEMENTS MAY IMPLY THAT TA'S GROWTH STRATEGIES WILL GENERATE INCREASED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS. HOWEVER, MANY OF THE LOCATIONS TA HAS ACQUIRED OR MAY ACQUIRE PRODUCED OPERATING RESULTS THAT CAUSED THE PRIOR OWNERS TO EXIT THE BUSINESSES AND TA'S ABILITY TO OPERATE THESE LOCATIONS PROFITABLY DEPENDS UPON MANY FACTORS, SOME OF WHICH ARE BEYOND TA'S CONTROL. FURTHER, TA'S BUSINESS INITIATIVES MAY FAIL, OR NOT CONTRIBUTE SUFFICIENTLY TO TA'S RESULTS TO OVERCOME INCREASING DIESEL ENGINE EFFICIENCY, CHANGES IN THE ECONOMY, THE EFFECTS OF COMPETITION OR OTHER FACTORS. ACCORDINGLY, TA MAY NOT GENERATE INCREASED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS OR IT MAY TAKE LONGER THAN TA EXPECTS FOR ITS NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO INCREASE.
  • THIS PRESS RELEASE NOTES THAT TA IS CURRENTLY UNDERTAKING SEVERAL INTERNAL GROWTH INITIATIVES THAT TA BELIEVES HAVE THE POTENTIAL TO GROW ITS PROFITABILITY AND THAT ARE GEARED TOWARD INCREASING PRODUCTS AND SERVICES IT SELLS TO ITS EXISTING AND PROSPECTIVE CUSTOMERS. TA MAY NOT REALIZE THE BENEFITS IT EXPECTS FROM THESE INITIATIVES AND COSTS IT INCURS IN DESIGNING, IMPLEMENTING AND EXECUTING THESE INITIATIVES MAY EXCEED ANY BENEFITS IT MAY REALIZE FROM THEM.

THE INFORMATION CONTAINED IN TA'S PERIODIC REPORTS, INCLUDING TA'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2016, WHICH HAS BEEN OR WILL BE FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, OR SEC, UNDER THE CAPTION "RISK FACTORS," OR ELSEWHERE IN THOSE REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM TA'S FORWARD LOOKING STATEMENTS. TA'S FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, TA DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENT AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

   

TRAVELCENTERS OF AMERICA LLC

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share amounts)

 
Three Months Ended
December 31,
2016     2015
Revenues:
Fuel $ 941,852 $ 896,049
Nonfuel 478,218 451,975
Rent and royalties from franchisees 4,217   3,032  
Total revenues 1,424,287   1,351,056  
 
Cost of goods sold (excluding depreciation):
Fuel 840,802 792,779
Nonfuel 221,865   211,366  
Total cost of goods sold 1,062,667   1,004,145  
 
Operating expenses:
Site level operating 233,653 228,513
Selling, general and administrative 37,265 34,329
Real estate rent 67,460 62,063
Depreciation and amortization 27,844   19,297  
Total operating expenses 366,222   344,202  
 
(Loss) income from operations (4,602 ) 2,709
 
Acquisition costs 165 1,752
Interest expense, net 7,054 6,084
Income from equity investees 972   900  
Loss before income taxes (10,849 ) (4,227 )
Benefit for income taxes (4,304 ) (2,619 )
Net loss (6,545 ) (1,608 )
Less net loss for noncontrolling interests (52 )  
Net loss attributable to common shareholders $ (6,493 ) $ (1,608 )
 
Net loss per common share attributable to common shareholders:
Basic and diluted $ (0.17 ) $ (0.04 )
 

These financial statements should be read in conjunction with TA's Annual Report on Form 10-K for the year ended December 31, 2016, to be filed with the U.S. Securities and Exchange Commission.

   

TRAVELCENTERS OF AMERICA LLC

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share amounts)

 
Year Ended
December 31,
2016     2015
Revenues:
Fuel $ 3,530,149 $ 4,055,448
Nonfuel 1,963,904 1,782,761
Rent and royalties from franchisees 17,352   12,424
Total revenues 5,511,405   5,850,633
 
Cost of goods sold (excluding depreciation):
Fuel 3,125,372 3,640,954
Nonfuel 910,827   819,995
Total cost of goods sold 4,036,199   4,460,949
 
Operating expenses:
Site level operating 959,407 885,646
Selling, general and administrative 139,052 121,767
Real estate rent 262,298 231,591
Depreciation and amortization 92,389   72,383
Total operating expenses 1,453,146   1,311,387
 
Income from operations 22,060 78,297
 
Acquisition costs 2,451 5,048
Interest expense, net 27,815 22,545
Income from equity investees 4,544 4,056
Loss on extinguishment of debt   10,502
(Loss) income before income taxes (3,662 ) 44,258
(Benefit) provision for income taxes (1,733 ) 16,539
Net (loss) income (1,929 ) 27,719
Less net income for noncontrolling interests 89  
Net (loss) income attributable to common shareholders $ (2,018 ) $ 27,719
 
Net (loss) income per common share attributable to common shareholders:
Basic and diluted $ (0.05 ) $ 0.72
 

These financial statements should be read in conjunction with TA's Annual Report on Form 10-K for the year ended December 31, 2016, to be filed with the U.S. Securities and Exchange Commission.

       

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 
December 31,
2016
December 31,
2015
Assets
Current assets:
Cash and cash equivalents $ 61,312 $ 172,087
Accounts receivable, net 107,246 91,580
Inventory 207,829 183,492
Other current assets 25,674   48,181
Total current assets 402,061 495,340
 
Property and equipment, net 1,082,022 989,606
Goodwill 88,542 79,768
Other intangible assets, net 37,738 26,209
Other noncurrent assets 49,478   30,618
Total assets $ 1,659,841   $ 1,621,541
 
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 157,964 $ 125,079
Current HPT Leases liabilities 39,720 37,030
Other current liabilities 132,648   133,513
Total current liabilities 330,332 295,622
 
Long term debt, net 318,739 316,447
Noncurrent HPT Leases liabilities 381,854 385,498
Other noncurrent liabilities 75,837   74,655
Total liabilities 1,106,762 1,072,222
 
Shareholders' equity (39,523 and 38,808 common shares outstanding at

December 31, 2016 and December 31, 2015, respectively)

553,079   549,319
Total liabilities and shareholders' equity $ 1,659,841   $ 1,621,541
 

These financial statements should be read in conjunction with TA's Annual Report on Form 10-K for the year ended December 31, 2016, to be filed with the U.S. Securities and Exchange Commission.

TRAVELCENTERS OF AMERICA LLC
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands)

Non-GAAP financial measures are financial measures that are not determined in accordance with GAAP. TA believes the non-GAAP financial measures presented in the table below are meaningful supplemental disclosures because they may help investors gain a better understanding of changes in TA's operating results and its ability to pay rent or service debt, make capital expenditures and expand its business. These non-GAAP financial measures also may help investors to make comparisons between TA and other companies on both a GAAP and a non-GAAP basis. TA calculates Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization and loss on extinguishment of debt, as shown below. TA believes that Adjusted EBITDA is a meaningful disclosure that may help investors to better understand its financial performance, including by allowing investors to compare TA's performance between periods and to the performance of other companies. Adjusted EBITDA is used by management to evaluate TA's financial performance and compare TA's performance over time and to the performance of its competitors. This information should not be considered as an alternative to net income or income from operations, as an indicator of TA's operating performance or as a measure of TA's liquidity. Also, Adjusted EBITDA as presented may not be comparable to similarly titled amounts calculated by other companies.

TA believes that net (loss) income attributable to common shareholders is the most comparable financial measure, determined according to GAAP, to TA's presentation of Adjusted EBITDA. The following table presents the reconciliation of this non-GAAP financial measure to net (loss) income attributable to common shareholders for the three months and year ended December 31, 2016 and 2015.

       
Three Months Ended
December 31,
Year Ended
December 31,
2016     2015 2016     2015
Calculation of Adjusted EBITDA:
Net (loss) income attributable to common shareholders $ (6,493 ) $ (1,608 ) $ (2,018 ) $ 27,719
Add: (benefit) provision for income taxes (4,304 ) (2,619 ) (1,733 ) 16,539
Add: depreciation and amortization 27,844 19,297 92,389 72,383
Add: interest expense, net 7,054 6,084 27,815 22,545
Add: loss on extinguishment of debt       10,502
Adjusted EBITDA $ 24,101   $ 21,154   $ 116,453   $ 149,688
 

TRAVELCENTERS OF AMERICA LLC
SUPPLEMENTAL SAME SITE OPERATING DATA
(in thousands, except for number of locations, percentage amounts and fuel gross margin per gallon)

CONSOLIDATED SAME SITE OPERATING DATA

The following table presents consolidated operating data for the periods noted for all of the locations in operation on December 31, 2016, that were operated by TA continuously since the beginning of the earliest period presented, with the exception of five locations TA operates that are owned by an unconsolidated joint venture in which TA owns a noncontrolling interest. This data excludes revenues and expenses that were not generated at locations TA operates, such as rents and royalties from franchisees and corporate level selling, general and administrative expenses. TA does not exclude locations from the same site comparisons as a result of capital improvements to the site or changes in the services offered.

               
Three Months Ended
December 31,
Year Ended
December 31,
2016     2015 Change 2016     2015 Change
Number of same site company

operated locations

401 401 249 249
 
Diesel sales volume (gallons) 391,259 415,681 (5.9 ) % 1,608,676 1,695,051 (5.1 ) %
Gasoline sales volume (gallons) 118,394   115,014   2.9 % 315,896   314,294   0.5 %
Total fuel sales volume (gallons) 509,653   530,695   (4.0 ) % 1,924,572   2,009,345   (4.2 ) %
 
Fuel revenues $ 895,923 $ 872,995 2.6 % $ 3,061,682 $ 3,827,635 (20.0 ) %
Fuel gross margin 97,657 102,659 (4.9 ) % 355,937 395,362 (10.0 ) %
Fuel gross margin per gallon $ 0.192 $ 0.193 (0.5 ) % $ 0.185 $ 0.197 (6.1 ) %
 
Nonfuel revenues $ 448,324 $ 447,270 0.2 % $ 1,697,635 $ 1,698,640 (0.1 ) %
Nonfuel gross margin 242,876 238,831 1.7 % 957,573 937,642 2.1 %
Nonfuel gross margin percentage 54.2 % 53.4 % 80 pts 56.4 % 55.2 % 120 pts
 
Total gross margin $ 340,533 $ 341,490 (0.3 ) % $ 1,313,510 $ 1,333,004 (1.5 ) %
Site level operating expenses 223,403 227,455 (1.8 ) % 850,386 850,043 %
Site level operating expenses as a

percentage of nonfuel revenues

49.8 % 50.9 % (110 )pts 50.1 % 50.0 % 10 pts
Site level gross margin in excess of

site level operating expenses

$ 117,130 $ 114,035 2.7 % $ 463,124 $ 482,961 (4.1 ) %
 

TRAVELCENTERS OF AMERICA LLC
SUPPLEMENTAL SAME SITE OPERATING DATA
(in thousands, except for number of locations, percentage amounts and fuel gross margin per gallon)

TRAVEL CENTERS SEGMENT SAME SITE OPERATING DATA

The following table presents operating data for the periods noted for all of the travel centers in operation on December 31, 2016, that were operated by TA continuously since the beginning of the earliest period presented, with the exception of two travel centers TA operates that are owned by an unconsolidated joint venture in which TA owns a noncontrolling interest. This data also excludes revenues and expenses that were not generated at travel centers TA operates, such as rents and royalties from franchisees and corporate level selling, general and administrative expenses. TA does not exclude locations from the same site comparisons as a result of capital improvements to the site or changes in the services offered.

               
Three Months Ended
December 31,
Year Ended
December 31,
Travel Centers 2016     2015 Change 2016     2015 Change
Number of same site company

operated travel center locations

220 220 217 217
 
Diesel sales volume (gallons) 387,226 412,177 (6.1 ) % 1,605,279 1,691,991 (5.1 ) %
Gasoline sales volume (gallons) 69,674   66,467   4.8 % 278,235   275,664   0.9 %
Total fuel sales volume (gallons) 456,900   478,644   (4.5 ) % 1,883,514   1,967,655   (4.3 ) %
 
Fuel revenues $ 804,678 $ 786,036 2.4 % $ 2,994,344 $ 3,749,929 (20.1 ) %
Fuel gross margin 86,735 91,644 (5.4 ) % 346,836 386,412 (10.2 ) %
Fuel gross margin per gallon $ 0.190 $ 0.191 (0.5 ) % $ 0.184 $ 0.196 (6.1 ) %
 
Nonfuel revenues $ 390,381 $ 391,241 (0.2 ) % $ 1,617,598 $ 1,618,983 (0.1 ) %
Nonfuel gross margin 224,772 222,890 0.8 % 931,315 911,677 2.2 %
Nonfuel gross margin percentage 57.6 % 57.0 % 60 pts 57.6 % 56.3 % 130 pts
 
Total gross margin $ 311,507 $ 314,534 (1.0 ) % $ 1,278,151 $ 1,298,089 (1.5 ) %
Site level operating expenses 202,121 205,370 (1.6 ) % 828,390 827,603 0.1 %
Site level operating expenses as a

percentage of nonfuel revenues

51.8 % 52.5 % (70 )pts 51.2 % 51.1 % 10 pts
Site level gross margin in excess of

site level operating expenses

$ 109,386 $ 109,164 0.2 % $ 449,761 $ 470,486 (4.4 ) %
 

TRAVELCENTERS OF AMERICA LLC
SUPPLEMENTAL SAME SITE OPERATING DATA
(in thousands, except for number of locations, percentage amounts and fuel gross margin per gallon)

CONVENIENCE STORES SEGMENT SAME SITE OPERATING DATA

The following table presents operating data for the periods noted for all of the convenience stores in operation on December 31, 2016, that were operated by TA continuously since the beginning of the earliest period presented, with the exception of three convenience stores TA operates that are owned by an unconsolidated joint venture in which TA owns a noncontrolling interest. This data also excludes revenues and expenses that were not generated at convenience stores TA operates, such as revenues from a dealer operated convenience store and corporate level selling, general and administrative expenses. TA does not exclude locations from the same site comparisons as a result of capital improvements to the site or changes in the services offered.

               
Three Months Ended
December 31,
Year Ended
December 31,
Convenience Stores 2016     2015 Change 2016     2015 Change
Number of same site company

operated convenience store

locations

181 181 32 32
 
Fuel sales volume (gallons) 52,753 52,051 1.3 % 41,058 41,690 (1.5 ) %
Fuel revenues $ 91,245 $ 86,959 4.9 % $ 67,338 $ 77,706 (13.3 ) %
Fuel gross margin 10,922 11,015 (0.8 ) % 9,101 8,950 1.7 %
Fuel gross margin per gallon $ 0.207 $ 0.212 (2.4 ) % $ 0.222 $ 0.215 3.3 %
 
Nonfuel revenues $ 57,943 $ 56,029 3.4 % $ 80,037 $ 79,657 0.5 %
Nonfuel gross margin 18,104 15,941 13.6 % 26,258 25,965 1.1 %
Nonfuel gross margin percentage 31.2 % 28.5 % 270 pts 32.8 % 32.6 % 20 pts
 
Total gross margin $ 29,026 $ 26,956 7.7 % $ 35,359 $ 34,915 1.3 %
Site level operating expenses 21,282 22,085 (3.6 ) % 21,996 22,440 (2.0 ) %
Site level operating expenses as a

percentage of nonfuel revenues

36.7 % 39.4 % (270 )pts 27.5 % 28.2 % (70 )pts
Site level gross margin in excess of

site level operating expenses

$ 7,744 $ 4,871 59.0 % $ 13,363 $ 12,475 7.1 %
 

TRAVELCENTERS OF AMERICA LLC
BUSINESS SEGMENT INFORMATION (UNAUDITED)
(in thousands)

The following tables present business segment information for travel centers and convenience stores, or TA's reportable segments, for the three months ended and year ended December 31, 2016 and 2015.

   
Three Months Ended December 31, 2016
Travel
Centers
    Convenience
Stores
    Corporate
and Other
    Consolidated
Revenues:
Fuel $ 813,899 $ 109,548 $ 18,405 $ 941,852
Nonfuel 395,878 74,290 8,050 478,218
Rent and royalties from franchisees 3,072   57   1,088   4,217  
Total revenues 1,212,849   183,895   27,543   1,424,287  
 
Site level gross margin in excess of

site level operating expenses

$ 115,267   $ 9,472   $ 3,228   $ 127,967  
 
Corporate operating expenses:
Selling, general and administrative $ 37,265 $ 37,265
Real estate rent 67,460 67,460
Depreciation and amortization 27,844   27,844  
Loss from operations (4,602 )
 
Acquisition costs 165 165
Interest expense, net 7,054 7,054
Income from equity investees 972   972  
Loss before income taxes (10,849 )
Benefit for income taxes (4,304 ) (4,304 )
Net loss (6,545 )
Less net loss for noncontrolling interests (52 )
Net loss attributable to common shareholders $ (6,493 )
 

Supplemental data:

Gross margin                                            
Fuel $ 87,915 $ 12,995 $ 140 $ 101,050
Nonfuel 228,601 22,326 5,426 256,353
Rent and royalties from franchisees 3,072   57   1,088   4,217
Total gross margin $ 319,588   $ 35,378   $ 6,654   $ 361,620
 
Site level operating expenses $ 204,321   $ 25,906   $ 3,426   $ 233,653
   

TRAVELCENTERS OF AMERICA LLC

BUSINESS SEGMENT INFORMATION (UNAUDITED)

(in thousands)

 
Three Months Ended December 31, 2015
Travel
Centers
    Convenience
Stores
    Corporate
and Other
    Consolidated
Revenues
Fuel $ 787,008 $ 90,293 $ 18,748 $ 896,049
Nonfuel 392,179 59,519 277 451,975
Rent and royalties from franchisees 3,032       3,032  
Total revenues 1,182,219   149,812   19,025   1,351,056  
 
Site level gross margin in excess of

site level operating expenses

$ 112,555   $ 4,809   $ 1,034   $ 118,398  
 
Corporate operating expenses
Selling, general and administrative $ 34,329 $ 34,329
Real estate rent 62,063 62,063
Depreciation and amortization 19,297   19,297  
Income from operations 2,709
 
Acquisition costs 1,752 1,752
Interest expense, net 6,084 6,084
Income from equity investees 900   900  
Loss before income taxes (4,227 )
Benefit for income taxes (2,619 ) (2,619 )
Net loss (1,608 )
Less net income for noncontrolling interests  
Net loss attributable to common shareholders $ (1,608 )
 

Supplemental data:

Gross margin                                            
Fuel $ 91,790 $ 11,439 $ 41 $ 103,270
Nonfuel 223,582 16,817 210 240,609
Rent and royalties from franchisees 3,032       3,032
Total gross margin $ 318,404   $ 28,256   $ 251   $ 346,911
 
Site level operating expenses $ 205,849   $ 23,447   $ (783 ) $ 228,513
   

TRAVELCENTERS OF AMERICA LLC

BUSINESS SEGMENT INFORMATION (UNAUDITED)

(in thousands)

 
Year Ended December 31, 2016

Travel
Centers

   

Convenience
Stores

   

Corporate
and Other

    Consolidated
Revenues
Fuel $ 3,036,861 $ 420,747 $ 72,541 $ 3,530,149
Nonfuel 1,644,411 294,852 24,641 1,963,904
Rent and royalties from franchisees 13,628   306   3,418   17,352  
Total revenues 4,694,900   715,905   100,600   5,511,405  
 
Site level gross margin in excess of

site level operating expenses

$ 468,912   $ 36,660   $ 10,227   $ 515,799  
 
Corporate operating expenses
Selling, general and administrative $ 139,052 $ 139,052
Real estate rent 262,298 262,298
Depreciation and amortization 92,389   92,389  
Income from operations 22,060
 
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 )
Benefit for income taxes (1,733 ) (1,733 )
Net loss (1,929 )
Less net income for noncontrolling interests 89  
Net loss attributable to common shareholders $ (2,018 )
 

Supplemental data:

Gross margin                                        
Fuel $ 352,361 $ 51,900 $ 516 $ 404,777
Nonfuel 946,308 90,047 16,722 1,053,077
Rent and royalties from franchisees 13,628   306   3,418   17,352
Total gross margin $ 1,312,297   $ 142,253   $ 20,656   $ 1,475,206
 
Site level operating expenses $ 843,385   $ 105,593   $ 10,429   $ 959,407
 
   

TRAVELCENTERS OF AMERICA LLC

BUSINESS SEGMENT INFORMATION (UNAUDITED)

(in thousands)

 
Year Ended December 31, 2015

Travel
Centers

   

Convenience
Stores

   

Corporate
and Other

    Consolidated
Revenues
Fuel $ 3,763,536 $ 224,894 $ 67,018 $ 4,055,448
Nonfuel 1,626,646 155,197 918 1,782,761
Rent and royalties from franchisees 12,424       12,424
Total revenues 5,402,606   380,091   67,936   5,850,633
 
Site level gross margin in excess of

site level operating expenses

$ 483,564   $ 17,259   $ 3,215   $ 504,038
 
Corporate operating expenses
Selling, general and administrative $ 121,767 $ 121,767
Real estate rent 231,591 231,591
Depreciation and amortization 72,383  

72,383

Income from operations 78,297
 
Acquisition costs 5,048 5,048
Interest expense, net 22,545 22,545
Income from equity investees 4,056 4,056
Loss on extinguishment of debt 10,502   10,502
Income before income taxes 44,258
Provision for income taxes 16,539   16,539
Net income 27,719
Less net income for noncontrolling interests
Net income attributable to common shareholders $ 27,719

Supplemental data:

Gross margin                                      
Fuel $ 388,502 $ 26,060 $ (68 ) $ 414,494
Nonfuel 915,794 46,314 658 962,766
Rent and royalties from franchisees 12,424       12,424
Total gross margin $ 1,316,720   $ 72,374   $ 590   $ 1,389,684
 
Site level operating expenses $ 833,156   $ 55,115   $ (2,625 ) $ 885,646

Contacts

TravelCenters of America LLC
Katie Strohacker, 617-796-8251
Senior Director of Investor Relations
www.ta-petro.com

Contacts

TravelCenters of America LLC
Katie Strohacker, 617-796-8251
Senior Director of Investor Relations
www.ta-petro.com