TravelCenters of America LLC Announces Results For The Periods Ended December 31, 2006.WESTLAKE, Ohio Westlake is a city in Cuyahoga County, Ohio, United States. The population was 31,719 at the 2000 census. Geography Westlake is located at (41.454439, -81.928657)GR1. -- TravelCenters of America TravelCenters of America (TA) is the largest truck stop chain[1] in the United States and Ontario, Canada. The majority of customers are RV's and professional truck drivers. The company's headquarter is located in Westlake, Ohio. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (AMEX AMEX See: American Stock Exchange : TA) today announced its pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma financial results for the periods ended December 31, 2006. On January 31, 2007, Hospitality Properties Trust (NYSE NYSE See: New York Stock Exchange : HPT HPT Human Performance Technology HPT Hyperparathyroidism HPT Heartland Poker Tour HPT Home Pregnancy Test HPT High Pressure Turbine HPT Host Print Transform HPT High-Performance Team HPT high-payoff target (US DoD) ) completed its acquisition and restructuring of TravelCenters of America, Inc., our predecessor, and we were spun off from HPT. Also on that date, we entered into a long term lease agreement with HPT for 146 of the travel center sites in our network. Further details on these transactions can be found in our Form S-1 filed with the Securities and Exchange Commission on January 26, 2007. Today, we are a separate public company traded on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. . Because of these January 31, 2007 events, our predecessor's historical financial information may have limited relevance to investors. In addition to the 146 sites we lease from HPT, at January 31, 2007 our network of 163 sites included 13 sites that are owned by our franchisees, three that are owned by third parties other than HPT and one that we own. Our predecessor's historical net income for the year and quarter ended December 31, 2006, was $31.0 million and $5.9 million, respectively, compared to net losses of $2.1 million and $2.5 million for the respective 2005 periods. Principally because the capital structure we employ as a separate public company is materially different than our predecessor's capital structure, the supplemental information which accompanies this release includes pro forma financial data. We have also presented supplemental pro forma financial data, principally to display earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) , and to display adjusted EBITDAR, which is EBITDAR excluding the impact of certain non-cash items and certain items which we consider to be non-recurring. The adjustments applied to the historical data of our predecessor are described in the notes to the accompanying supplemental information. Our pro forma net loss for the year and quarter ended December 31, 2006, was $24.0 million and $6.8 million, respectively, compared to pro forma net loss of $80.2 million and $20.5 million for the respective 2005 periods. Our pro forma EBITDAR for the year and quarter ended December 31, 2006, was $173.6 million and $42.3 million, respectively, compared to $118.8 million and $29.1 million for the respective 2005 periods. Our pro forma adjusted EBITDAR for the year and quarter ended December 31, 2006, was $189.2 million and $42.4 million, respectively, compared to $165.3 million and $38.2 million for the respective 2005 periods. Recent network changes: * We expect to open a brand new travel center in Livingston, CA, later this week, which will bring our network to 164 travel centers. This travel center was developed in our "protolite" design. The total development and construction cost of our new travel center was $14 million. Our Livingston, CA, travel center is located within i mile of Winton Parkway off of State Highway 99 and includes 10.5 acres of land, 105 truck parking spaces, 128 automobile parking spaces, and offers six diesel fuel lanes and six gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by dispensers, a travel store, a 5-bay truck repair facility, a full service restaurant and three quick service restaurants, or QSRs. * In December 2006, our predecessor agreed to franchise the "TravelCenters of America" and "TA" names to the owner of a travel center in Greeneville, TN. We expect the franchise agreement to begin during the second quarter of 2007 when the owner completes certain facility improvements required to meet our brand standards. This travel center will increase the number of franchised sites in our network to 24 and the total network to 165 travel centers. The Greeneville, TN, travel center is located at Exit 36 off of Interstate 81 and includes 14 acres of land, 140 truck parking spaces, 100 automobile parking spaces, and offers eight diesel fuel lanes and four gasoline dispensers, a travel store, a 2-bay truck repair facility and a full service restaurant. * In November 2006, our predecessor purchased an operating travel center in Troy, IL, and converted it to the "TravelCenters of America" brand for an aggregate cost of $5.1 million. Our Troy, IL, travel center is located at Exit 18 off of Interstate 55 and 70 and includes 20 acres of land, 110 truck parking spaces, 60 automobile parking spaces, and offers eight diesel fuel lanes and five gasoline dispensers, a travel store, a 3-bay truck repair facility, and a full service restaurant. * During the quarter ended December 31, 2006, our predecessor completed the construction of nine truck repair shop bays at five of our travel centers at an aggregate cost of $2 million. Since December 31, 2006, through March 11, 2007, we completed the construction of 16 truck repair shop bays at five of our travel centers. As of March 11, 2007, our network includes over 600 truck repair bays. * During the quarter ended December 31, 2006, our predecessor completed the addition of five QSRs at three of our travel centers. Since December 31, 2006, through March 11, 2007, we added an additional QSR QSR Quick Service Restaurant QSR QoS (Quality of Service) Satisfaction Rate QSR Quality System Regulations QSR Quality Status Report QSR Quality System Review QSR Quarterly Status Report QSR Quality System Requirement at one of our travel centers. As of March 11, 2007, our network includes 213 QSRs branded under 20 different QSR concepts. * During the quarter ended December 31, 2006, our predecessor installed IdleAire[R] equipment in 1,521 truck parking spaces at 24 of our travel centers. Since December 31, 2006, through March 11, 2007, we equipped an additional 516 truck parking spaces with IdleAire[R] at eight of our travel centers. IdleAire[R] is a technology of IdleAire Technology Corporation that provides professional truck drivers with the ability to reduce engine wear and emissions by providing heated or cooled air to control cabin temperatures without the need to run the truck engines while parked at one of our travel centers. As of March 11, 2007, our network includes 3,782 truck parking spaces at 56 travel centers equipped with IdleAire[R]. * During 2006, our predecessor spent $92.0 million for capital projects, including $25.2 million which we consider to be sustaining capital expenditures and $66.8 million which we consider to be revenue enhancing capital expenditures. Included in the completed capital projects in 2006 were the modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, and upgrade of 17 shower and bathroom facilities across our network. [TABLE OMITTED] In connection with our spin off, HPT committed to fund $125 million of capital expenditures at the travel centers we lease from HPT over the next five years without adjustment to our rent. We may also accept funding of additional capital expenditures at these travel centers from HPT in exchange for increased rent. Conference Call: On Monday, March 12, 2007, at 1:00 p.m. Eastern Time, our Company will host a conference call to discuss the financial results for the periods ended December 31, 2006. Following the Company's remarks, there will be a question and answer period. The conference call telephone number is (800) 819-9193. Participants calling from outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada should dial (913) 981-4911. 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 through Sunday, March 18, 2007. To hear the replay, dial (719) 457-0820. The replay pass code is 5825174. A live audio webcast of the conference call will also be available in a listen only mode on the Company's web site at www.tatravelcenters.com. Participants wanting to access the webcast should visit the Company's web site about five minutes before the call. The archived webcast will be available for replay on the Company's web site for about one week after the call. About TravelCenters of America LLC: Our travel centers offer diesel and gasoline fueling services, restaurants, heavy truck repair facilities, stores and other services and facilities. Our nationwide network includes travel centers located in 40 U.S. states A U.S. state is any one of the fifty subnational entities of the United States, although four states use the official title "commonwealth". The separate state governments and the federal government share sovereignty, in that an American is a citizen both of the federal entity and and in Canada. [TABLE OMITTED] Supplemental Information, page 1 of 14
TRAVELCENTERS OF AMERICA LLC
INTRODUCTION TO SUPPLEMENTAL INFORMATION
The adjusted pro forma information provided herein is based on the historical operating results of TravelCenters of America, Inc., our predecessor, for the periods indicated, adjusted for HPT's acquisition of our predecessor and our recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. and spin off from HPT, or the "Transaction". The adjustments applied to the historical operating results of our predecessor are described in the reconciliations to our predecessor's historical financial information beginning on page 6 and the notes thereto beginning on page 11. The adjusted pro forma statement Pro forma statement A financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. of operations assumes that the Transaction occurred at the beginning of the period presented. The adjusted pro forma balance sheet assumes that the Transaction occurred on December 31, 2006. The information provided in this release does not represent our financial condition or results of operations for any future date or period. Actual future results may be materially different from those presented herein. Differences could arise from many factors, including, but not limited to, those related to our operation as a separate publicly owned Publicly owned can refer to:
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , our capital structure and other factors. Further, we have not given pro forma or adjusted pro forma effect to the following: * The costs which we will incur to operate as a separate public company. * Interest income we may earn on cash which we received from HPT prior to our spin off. Simultaneously with the spin off, HPT contributed cash to us such that our current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. , including cash, net of our current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. totaled $200 million. Our cash balance as of January 31, 2007, was approximately $200 million, a portion of which we have used as collateral for certain letters of credit or is at our site level operating cash accounts. Supplemental Information, page 2 of 14 [TABLE OMITTED] (1) See pages 6 to 9 for a reconciliation of our predecessor's historical results to these pro forma results. (2) Our lease with HPT requires us to pay rent of $153.5 million for the period from February 1, 2007, through January 31, 2008. Our lease with HPT requires us to pay, on average, $170.7 million per annum Per annum Yearly. over the 16 year lease term. Certain of our travel centers leased from HPT did not qualify for operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. treatment but are instead treated as capitalized leases under generally accepted accounting principals, or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . As a result, a portion of the rent expense to HPT is recognized as interest expense in our pro forma statement of operations (see Note D to this supplemental information on page 12 for a further discussion). Under GAAP, we recognize our rent obligations on a pro forma basis as follows: [TABLE OMITTED] Our predecessor recognized rent expense shown below as "Other real estate rent" related to real estate leased from parties other than HPT. [TABLE OMITTED] Supplemental Information, page 3 of 14 [TABLE OMITTED] (1) We calculate EBITDAR as earnings before interest, taxes, depreciation and amortization and rent, and we define Adjusted EBITDAR as EBITDAR excluding the impact of certain non-cash items and certain items which we consider to be non-recurring. We consider EBITDAR and Adjusted EBITDAR to be measures which are useful indications of our operating performance and our ability to pay rent or service debt, fund capital expenditures and expand our business. We believe that EBITDAR and Adjusted EBITDAR are meaningful disclosures that may help shareholders to understand our financial performance, including comparing our performance between periods and to other companies. However, EBITDAR and Adjusted EBITDAR as presented may not be comparable to amounts calculated by other companies. This information should not be considered as an alternative to net income, income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses or any other operating or liquidity performance measure prescribed by accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, , or GAAP. (2) The historical noncash share based compensation expense relates primarily to the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of options of our predecessor's, TravelCenters of America, Inc.'s, shares which were redeemed upon the closing of HPT's acquisition of TravelCenters of America, Inc. (3) This amount primarily relates to costs incurred by our predecessor, TravelCenters of America, Inc., in marketing itself for sale and certain refinancing Refinancing An extension and/or increase in amount of existing debt. transactions which were abandoned during 2006. (4) For the year ended December 31, 2006, the amount shown relates primarily to a gain recognized on a claims settlement. For the periods ended December 31, 2005, these amounts relate primarily to debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. . Supplemental Information, page 4 of 14 [TABLE OMITTED] Supplemental Information, page 5 of 14 [TABLE OMITTED] Supplemental Information, page 6 of 14 [TABLE OMITTED] Supplemental Information, page 7 of 14 [TABLE OMITTED] Supplemental Information, page 8 of 14 [TABLE OMITTED] Supplemental Information, page 9 of 14 [TABLE OMITTED] Supplemental Information, page 10 of 14 [TABLE OMITTED] Supplemental Information, page 11 of 14
TRAVELCENTERS OF AMERICA LLC
FOOTNOTES TO PRO FORMA ADJUSTMENTS
(in thousands, except per share data)
Pro forma Statement of Operations Adjustments A. After our spin off from HPT, we entered into a management and shared services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. agreement with Reit Management and Research LLC, or RMR RMR Resting Metabolic Rate RMR Registered Merit Reporter RMR Reliability Must-Run (electric generation plant's status to maintain grid voltage/reliability) RMR Recurring Monthly Revenue (finance) , pursuant to which we will receive certain management services more fully described in our Form S-1 filed with the Securities and Exchange Commission on January 26, 2007. The adjustment represents the fees payable to RMR and is derived as follows: [TABLE OMITTED] B. Our agreement to lease real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most by HPT requires us to make minimum rent payments that have scheduled increases during the term of the lease as described in our Form S-1 filed with the Securities and Exchange Commission on January 26, 2007. Adjustments have been calculated as follows: [TABLE OMITTED] C. As part of the restructuring we retained a portion of the property, equipment and personal property used in the operations of our travel centers. In addition, we retained certain identifiable intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . This adjustment represents the elimination of historical depreciation and amortization expense recognized by our predecessor and the addition of estimated depreciation and amortization expense related to the property, equipment and intangible assets retained by us at allocated valuations. The depreciation and amortization expense is based on the estimated useful lives of the assets. [TABLE OMITTED] Supplemental Information, page 12 of 14 D. Our spin off from HPT required us to evaluate our lease with HPT as a sale leaseback transaction under Statement of Financial Accounting Standards No. 98, or SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 98, which addresses sale leaseback transactions involving real estate. Under SFAS 98, we determined that several of the travel centers owned by our predecessor that we now lease from HPT did not qualify for operating lease treatment because more than a minor portion of those travel centers are subleased to third parties. We carry such travel centers at an amount equal to HPT's recorded initial carrying amount, equal to their fair value, and have an equal amount of liability, representing our obligation to make future rent payments to HPT, which future payments will be recognized as interest expense in our statement of operations See Income statement. . See Note B. E. All of our predecessor's debt was extinguished ex·tin·guish tr.v. ex·tin·guished, ex·tin·guish·ing, ex·tin·guish·es 1. To put out (a fire, for example); quench. 2. To put an end to (hopes, for example); destroy. See Synonyms at abolish. 3. at the time of HPT's acquisition of our predecessor. This adjustment represents the elimination of historical interest expense and other financial costs. F. This adjustment represents the elimination of our predecessor's historical tax provision. As a result of the HPT acquisition and our spin off from HPT, our predecessor's tax attributes, such as net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. carried forward, if any, will not be available to benefit us in the future. Our predecessor's blended federal and state income tax rate was approximately 37.5%. G. This adjustment represents the elimination of our predecessor's shares outstanding and the addition of our 8,809 total common shares outstanding subsequent to the spin off. Pro Forma Balance Sheet Adjustments H. This column represents the historical balance sheet of our predecessor, TravelCenters of America, Inc., and our balance sheet combined. We were formed as a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of HPT in October 2006 and capitalized with one dollar of cash; we had no other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. and no liabilities as of December 31, 2006. I. Represents the cash that would have been contributed to us by HPT as part of our restructuring if the transaction had closed on December 31, 2006. Under the terms of the transaction agreement with HPT, HPT contributed cash to us so that the sum of our cash and other net working capital on the distribution date was $200,000. Our cash balance as of January 31, 2007, was approximately $200,000, a portion of which was used as collateral for certain letters of credit or is at our site level operating cash accounts. We do not expect that the difference between the cash amount reflected in the pro forma financial statements Pro forma financial statements A firm's financial statements as adjusted to reflect a projected or planned transaction. "What-if" analysis. and the actual amount of our cash on the distribution date to have a material impact on our expected operations. J. As required under GAAP, the acquisition of TravelCenters of America, Inc., will be treated as a business combination. Those generally accepted principles require that we record the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the acquired assets and liabilities at their fair market values: [TABLE OMITTED] Cash consideration per the merger agreement is equal to $1,925,000 less indebtedness on the merger date and adjusted for working capital, as defined, in excess of, or less than, $100,000 on the acquisition date. Supplemental Information, page 13 of 14 [TABLE OMITTED] Adjustments have been calculated as follows: [TABLE OMITTED] K. This adjustment represents the elimination of our predecessor's historical carrying amount of deferred tax assets and liabilities. As of the date of the spin off, both our tax bases and book bases in our assets and liabilities were redetermined with reference to fair market values, and we do not have basis differences that give rise to deferred tax assets or liabilities. L. This adjustment represents the elimination of our predecessor's historical carrying amount of property, plant and equipment retained by HPT as part of the restructuring. The adjustment was calculated as follows: [TABLE OMITTED] Supplemental Information, page 14 of 14 M. This adjustment represents the elimination of the debt, accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. and related unamortized deferred financing costs of our predecessor. In connection with HPT's acquisition of TravelCenters of America, Inc., all of the debt and accrued interest of our predecessor was extinguished. N. This adjustment represents the elimination of historical net shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of our predecessor, net of the effects of the pro forma adjustments described above. O. This adjustment represents the elimination of our predecessor's historical carrying amount of goodwill and recognition of goodwill for the excess of the purchase price over the fair value of assets and liabilities acquired in connection with HPT's acquisition of our predecessor. |
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