UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-33274

TravelCenters of America Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland

20-5701514

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)


			24601 Center Ridge Road, Westlake, OH 44145-5639
			(Address and Zip Code of Principal Executive Offices)

			(440) 808-9100
			(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

Shares of Common Stock, $0.001 Par Value Per Share

The Nasdaq Stock Market LLC

8.25% Senior Notes due 2028

TANNI

The Nasdaq Stock Market LLC

8.00% Senior Notes due 2029

TANNL

The Nasdaq Stock Market LLC

8.00% Senior Notes due 2030

TANNZ

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~"large~~“large accelerated filer,~~" "accelerated~~”“accelerated filer,~~" "smaller~~”“smaller reporting company,"” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐						Accelerated filer ☒

Non-accelerated filer ☐						Smaller reporting company ☒☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of the ~~registrant's~~registrant’s shares of common stock outstanding as of ~~October 29, 2021: 14,579,621.~~November 1, 2022: 14,853,593.

Table of Contents

TABLE OF CONTENTS


		Page
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021	1
	Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the Three and Nine Months Ended ~~September~~Sep tember 30, ~~2021~~2022 and ~~2020~~2021	2
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	3
	Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity for the Three and Nine Months Ended September 30, ~~2021~~ 2022 and ~~2020~~2021	4
	Notes to Consolidated Financial Statements	6
Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	1719
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2931
Item 4.	Controls and Procedures	2931
	Warning Concerning Forward-Looking Statements	3032
PART II — OTHER INFORMATION		3335
Item 1A.	Risk Factors	3335
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3335
Item 6.	Exhibits	3436
SIGNATURE		3637

As used herein, the terms ~~"we," "us," "our"~~“we,”“us,”“our” and ~~"TA"~~“TA” include TravelCenters of America Inc. and its consolidated subsidiaries unless otherwise expressly stated or the context otherwise requires.

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

TravelCenters of America Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except par value amount)


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Assets:	Assets:					Assets:
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	621,103	$	483,151	Cash and cash equivalents	$	467,342	$	536,002
Accounts receivable (net of allowance for doubtful accounts of $1,343 and $1,016 as of September 30, 2021 and December 31, 2020, respectively)		149,410		94,429
Accounts receivable (net of allowance for doubtful accounts of $1,193 and $1,003 as of September 30, 2022 and December 31, 2021, respectively)						Accounts receivable (net of allowance for doubtful accounts of $1,193 and $1,003 as of September 30, 2022 and December 31, 2021, respectively)	219,379		111,392
Inventory	Inventory	169,543		172,830		Inventory	242,606		191,843
Other current assets	Other current assets	22,129		35,506		Other current assets	35,623		37,947
Total current assets	Total current assets	962,185		785,916		Total current assets	964,950		877,184

Property and equipment, net	Property and equipment, net	789,403		801,789		Property and equipment, net	982,319		831,427
Operating lease assets	Operating lease assets	1,680,902		1,734,883		Operating lease assets	1,600,551		1,659,526
Goodwill	Goodwill	22,213		22,213		Goodwill	34,832		22,213
Intangible assets, net	Intangible assets, net	11,060		11,529		Intangible assets, net	14,871		10,934
Other noncurrent assets	Other noncurrent assets	110,438		87,530		Other noncurrent assets	85,695		107,217
Total assets	Total assets	$	3,576,201	$	3,443,860	Total assets	$	3,683,218	$	3,508,501

Liabilities and Stockholders' Equity:
Liabilities and Stockholders’ Equity:						Liabilities and Stockholders’ Equity:
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	249,982	$	158,075	Accounts payable	$	284,668	$	206,420
Current operating lease liabilities	Current operating lease liabilities	116,046		111,255		Current operating lease liabilities	116,303		118,005
Other current liabilities	Other current liabilities	207,311		175,867		Other current liabilities	239,486		194,853
Total current liabilities	Total current liabilities	573,339		445,197		Total current liabilities	640,457		519,278

Long term debt, net	Long term debt, net	524,925		525,397		Long term debt, net	524,355		524,781
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	1,685,084		1,763,166		Noncurrent operating lease liabilities	1,579,064		1,655,359
Other noncurrent liabilities	Other noncurrent liabilities	104,602		69,121		Other noncurrent liabilities	114,759		106,230
Total liabilities	Total liabilities	2,887,950		2,802,881		Total liabilities	2,858,635		2,805,648

Stockholders' equity:
Common stock, $0.001 par value, 216,000 shares of common stock authorized as of September 30, 2021 and December 31, 2020, and 14,579 and 14,574 shares of common stock issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		14		14
Stockholders’ equity:						Stockholders’ equity:
Common stock, $0.001 par value, 216,000 shares of common stock authorized as of September 30, 2022 and December 31, 2021, and 14,854 and 14,839 shares of common stock issued and outstanding as of September 30, 2022 and December 31, 2021, respectively						Common stock, $0.001 par value, 216,000 shares of common stock authorized as of September 30, 2022 and December 31, 2021, and 14,854 and 14,839 shares of common stock issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	14		14
Additional paid-in capital	Additional paid-in capital	783,778		781,841		Additional paid-in capital	789,855		785,597
Accumulated other comprehensive loss		(194)		(205)
Accumulated deficit		(95,347)		(141,084)
Total TA stockholders' equity		688,251		640,566
Noncontrolling interest		—		413
Total stockholders' equity		688,251		640,979
Total liabilities and stockholders' equity		$	3,576,201	$	3,443,860
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	15		(198)
Retained earnings (accumulated deficit)						Retained earnings (accumulated deficit)	34,699		(82,560)
Total stockholders’ equity						Total stockholders’ equity	824,583		702,853
Total liabilities and stockholders’ equity						Total liabilities and stockholders’ equity	$	3,683,218	$	3,508,501

The accompanying notes are an integral part of these consolidated financial statements.

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TravelCenters of America Inc.

Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ (Unaudited)

(in thousands, except per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Fuel	Fuel	$	1,424,997	$	791,880	$	3,830,886	$	2,244,219	Fuel	$	2,242,821	$	1,424,997	$	6,570,691	$	3,830,886
Nonfuel	Nonfuel	511,063		474,097		1,460,787		1,304,674		Nonfuel	564,941		511,063		1,605,385		1,460,787
Rent and royalties from franchisees	Rent and royalties from franchisees	3,886		3,947		11,649		10,482		Rent and royalties from franchisees	3,317		3,886		11,123		11,649
Total revenues	Total revenues	1,939,946		1,269,924		5,303,322		3,559,375		Total revenues	2,811,079		1,939,946		8,187,199		5,303,322

Cost of goods sold (excluding depreciation):	Cost of goods sold (excluding depreciation):									Cost of goods sold (excluding depreciation):
Fuel	Fuel	1,318,987		711,757		3,547,154		1,990,241		Fuel	2,110,419		1,318,987		6,168,740		3,547,154
Nonfuel	Nonfuel	206,265		188,114		577,195		512,784		Nonfuel	225,381		206,265		638,749		577,195
Total cost of goods sold	Total cost of goods sold	1,525,252		899,871		4,124,349		2,503,025		Total cost of goods sold	2,335,800		1,525,252		6,807,489		4,124,349

Site level operating expense	Site level operating expense	246,871		221,864		708,097		655,950		Site level operating expense	276,717		246,871		788,864		708,097
Selling, general and administrative expense	Selling, general and administrative expense	39,563		32,967		112,083		108,171		Selling, general and administrative expense	46,497		39,563		134,206		112,083
Real estate rent expense	Real estate rent expense	63,898		65,226		191,378		191,893		Real estate rent expense	64,954		63,898		194,753		191,378
Depreciation and amortization expense	Depreciation and amortization expense	24,276		32,299		72,244		89,113		Depreciation and amortization expense	29,267		24,276		80,260		72,244
Other operating expense (income), net	Other operating expense (income), net	230		—		(642)		—		Other operating expense (income), net	692		230		(1,795)		(642)

Income from operations	Income from operations	39,856		17,697		95,813		11,223		Income from operations	57,152		39,856		183,422		95,813

Interest expense, net	Interest expense, net	11,843		7,375		34,966		22,064		Interest expense, net	9,800		11,843		32,503		34,966
Other (income) expense, net	Other (income) expense, net	(1,034)		233		1,667		1,109		Other (income) expense, net	(1,358)		(1,034)		(3,212)		1,667
Income (loss) before income taxes		29,047		10,089		59,180		(11,950)
(Provision) benefit for income taxes		(6,847)		(1,432)		(13,776)		4,222
Net income (loss)		22,200		8,657		45,404		(7,728)
Less: net income (loss) for noncontrolling interest		—		52		(333)		104
Net income (loss) attributable to common stockholders		$	22,200	$	8,605	$	45,737	$	(7,832)
Income before income taxes										Income before income taxes	48,710		29,047		154,131		59,180
Provision for income taxes										Provision for income taxes	(11,735)		(6,847)		(36,872)		(13,776)
Net income										Net income	36,975		22,200		117,259		45,404
Less: net income for noncontrolling interest										Less: net income for noncontrolling interest	—		—		—		(333)
Net income attributable to common stockholders										Net income attributable to common stockholders	$	36,975	$	22,200	$	117,259	$	45,737

Other comprehensive income (loss), net of taxes:
Foreign currency income (loss), net of taxes of $(36), $27, $(1) and $(33) respectively		$	28	$	—	$	11	$	(18)
Other comprehensive income (loss) attributable to common stockholders		28		—		11		(18)
Other comprehensive income, net of taxes:										Other comprehensive income, net of taxes:
Foreign currency gain, net of taxes of $(77), $(36), $(98) and $(1) respectively										Foreign currency gain, net of taxes of $(77), $(36), $(98) and $(1) respectively	$	173	$	28	$	213	$	11
Other comprehensive income attributable to common stockholders										Other comprehensive income attributable to common stockholders	173		28		213		11

Comprehensive income (loss) attributable to common stockholders		$	22,228	$	8,605	$	45,748	$	(7,850)
Comprehensive income attributable to common stockholders										Comprehensive income attributable to common stockholders	$	37,148	$	22,228	$	117,472	$	45,748

Net income (loss) per share of common stock attributable to common stockholders:
Net income per share of common stock attributable to common stockholders:										Net income per share of common stock attributable to common stockholders:
Basic and diluted	Basic and diluted	$	1.52	$	0.61	$	3.14	$	(0.76)	Basic and diluted	$	2.49	$	1.52	$	7.90	$	3.14

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

TravelCenters of America Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Nine Months Ended
September 30,
2021 2020
Cash flows from operating activities:
Net income (loss) $ 45,404 $ (7,728)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Noncash rent credits, net (17,527) (15,827)
Depreciation and amortization expense 72,244 89,113
Deferred income tax benefit (provision) 13,336 (3,045)
Gain on sale of assets, net (642) —
Changes in operating assets and liabilities:
Accounts receivable (55,345) 59,238
Inventory 3,288 35,684
Other assets 8,700 3,280
Accounts payable and other liabilities 108,369 43,807
Other, net 3,459 9,050
Net cash provided by operating activities 181,286 213,572
Cash flows from investing activities:
Capital expenditures (46,782) (36,795)
Proceeds from other asset sales 8,803 1,270
Investment in equity investee (1,350) —
Other 148 (1,864)
Net cash used in investing activities (39,181) (37,389)
Cash flows from financing activities:
Proceeds from underwritten public equity offering — 79,985
West Greenwich Loan borrowings — 16,600
Payments on West Greenwich Loan (498) —
Payments on Revolving Credit Facility — (7,900)
Payments on Term Loan Facility (1,500) —
Distributions to noncontrolling interest (80) (65)
Acquisition of stock from employees (110) —
Other, net (2,029) (1,589)
Net cash (used in) provided by financing activities (4,217) 87,031
Effect of exchange rate changes on cash 64 22
Net increase in cash and cash equivalents 137,952 263,236
Cash and cash equivalents at the beginning of the period 483,151 17,206
Cash and cash equivalents at the end of the period $ 621,103 $ 280,442
Supplemental disclosure of cash flow information:
Lease modification (operating to finance lease) $ 28,201 $ —
Interest paid, net of capitalized interest 33,069 21,353
Income taxes paid (refunded) 74 (56)


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net income	$	117,259	$	45,404
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash rent credits, net	(17,284)		(17,527)
Depreciation and amortization expense	80,260		72,244
Deferred income taxes	32,568		13,336
Gain on sale of assets, net	(2,622)		(642)
Changes in operating assets and liabilities:
Accounts receivable	(108,413)		(55,345)
Inventory	(44,821)		3,288
Other current assets	4,216		8,700
Accounts payable and other liabilities	123,463		108,369
Other, net	(4,652)		3,459
Net cash provided by operating activities	179,974		181,286

Cash flows from investing activities:
Capital expenditures	(135,602)		(46,782)
Acquisitions of travel centers and other sites, net of cash acquired	(109,506)		—
Proceeds from the sale of assets	722		8,803
Investment in equity investees	(1,000)		(1,350)
Other, net	2,152		148
Net cash used in investing activities	(243,234)		(39,181)

Cash flows from financing activities:
Payments on West Greenwich Loan	(498)		(498)
Payments on Term Loan Facility	(1,500)		(1,500)
Distributions to noncontrolling interest	—		(80)
Acquisition of stock from employees	(63)		(110)
Other, net	(3,471)		(2,029)
Net cash used in financing activities	(5,532)		(4,217)

Effect of exchange rate changes on cash	132		64
Net (decrease) increase in cash and cash equivalents	(68,660)		137,952
Cash and cash equivalents at the beginning of the period	536,002		483,151
Cash and cash equivalents at the end of the period	$	467,342	$	621,103

Supplemental disclosure of cash flow information:
Lease modification (operating to finance lease)	$	—	$	28,201
Interest paid, net of capitalized interest	33,855		33,069
Income taxes paid, net	3,532		74

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

TravelCenters of America Inc.

Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity (Unaudited)

(in thousands)


																		Number of Shares of Common Stock	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total TA Stockholders’ Equity		Noncontrolling Interest		Total Stockholders’ Equity
June 30, 2022																	June 30, 2022	14,856	$	14	$	788,710	$	(158)	$	(2,276)	$	786,290	$	—	$	786,290
Grants under share award plan and stock based compensation, net																	Grants under share award plan and stock based compensation, net	(2)	—		1,145		—		—		1,145		—		1,145
Other comprehensive income, net of taxes																	Other comprehensive income, net of taxes	—	—		—		173		—		173		—		173
Net income																	Net income	—	—		—		—		36,975		36,975		—		36,975
September 30, 2022																	September 30, 2022	14,854	$	14	$	789,855	$	15	$	34,699	$	824,583	$	—	$	824,583
		Number of Shares of Common Stock	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total TA Stockholders' Equity		Noncontrolling Interest		Total Stockholders' Equity
June 30, 2021	June 30, 2021	14,581	$	14	$	783,137	$	(222)	$	(117,547)	$	665,382	$	—	$	665,382	June 30, 2021	14,581	$	14	$	783,137	$	(222)	$	(117,547)	$	665,382	$	—	$	665,382
Grants under share award plan and stock based compensation, net	Grants under share award plan and stock based compensation, net	(2)	—		641		—		—		641		—		641		Grants under share award plan and stock based compensation, net	(2)	—		641		—		—		641		—		641
Other comprehensive loss, net of taxes	Other comprehensive loss, net of taxes	—	—		—		28		—		28		—		28		Other comprehensive loss, net of taxes	—	—		—		28		—		28		—		28
Net income	Net income	—	—		—		—		22,200		22,200		—		22,200		Net income	—	—		—		—		22,200		22,200		—		22,200
September 30, 2021	September 30, 2021	14,579	$	14	$	783,778	$	(194)	$	(95,347)	$	688,251	$	—	$	688,251	September 30, 2021	14,579	$	14	$	783,778	$	(194)	$	(95,347)	$	688,251	$	—	$	688,251

June 30, 2020		8,298	$	8	$	700,619	$	(190)	$	(143,622)	$	556,815	$	1,470	$	558,285
Grants under share award plan and stock based compensation, net		(2)	—		(41)		—		—		(41)		—		(41)
Proceeds from underwritten public equity offering		6,100	6		79,979		—		—		79,985		—		79,985
Net income		—	—		—		—		8,605		8,605		52		8,657
September 30, 2020		14,396	$	14	$	780,557	$	(190)	$	(135,017)	$	645,364	$	1,522	$	646,886

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

TravelCenters of America Inc.

Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity (Unaudited)

(in thousands)


																		Number of Shares of Common Stock	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total TA Stockholders’ Equity		Noncontrolling Interest		Total Stockholders’ Equity
December 31, 2021																	December 31, 2021	14,839	$	14	$	785,597	$	(198)	$	(82,560)	$	702,853	$	—	$	702,853
Grants under share award plan and stock based compensation, net																	Grants under share award plan and stock based compensation, net	15	—		4,258		—		—		4,258		—		4,258
Other comprehensive income, net of taxes																	Other comprehensive income, net of taxes	—	—		—		213		—		213		—		213
Net income																	Net income	—	—		—		—		117,259		117,259		—		117,259
September 30, 2022																	September 30, 2022	14,854	14		789,855		15		34,699		824,583		—		824,583
		Number of Shares of Common Stock	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total TA Stockholders' Equity		Noncontrolling Interest		Total Stockholders' Equity
December 31, 2020	December 31, 2020	14,574	$	14	$	781,841	$	(205)	$	(141,084)	$	640,566	$	413	$	640,979	December 31, 2020	14,574	$	14	$	781,841	$	(205)	$	(141,084)	$	640,566	$	413	$	640,979
Grants under share award plan and stock based compensation, net	Grants under share award plan and stock based compensation, net	5	—		2,537		—		—		2,537		—		2,537		Grants under share award plan and stock based compensation, net	5	—		2,537		—		—		2,537		—		2,537
Distribution to noncontrolling interest	Distribution to noncontrolling interest	—	—		—		—		—		—		(80)		(80)		Distribution to noncontrolling interest	—	—		—		—		—		—		(80)		(80)
Other changes	Other changes	—	—		(600)		—		—		(600)		—		(600)		Other changes	—	—		(600)		—		—		(600)		—		(600)
Other comprehensive loss, net of taxes	Other comprehensive loss, net of taxes	—	—		—		11		—		11		—		11		Other comprehensive loss, net of taxes	—	—		—		11		—		11		—		11
Net income (loss)		—	—		—		—		45,737		45,737		(333)		45,404
Net income																	Net income	—	—		—		—		45,737		45,737		(333)		45,404
September 30, 2021	September 30, 2021	14,579	14		783,778		(194)		(95,347)		688,251		—		688,251		September 30, 2021	14,579	14		783,778		(194)		(95,347)		688,251		—		688,251

December 31, 2019		8,307	$	8	$	698,402	$	(172)	$	(127,185)	$	571,053	$	1,483	$	572,536
Grants under share award plan and stock based compensation, net		(11)	—		2,176		—		—		2,176		—		2,176
Proceeds from underwritten public equity offering		6,100	6		79,979		—		—		79,985		—		79,985
Distribution to noncontrolling interest		—	—		—		—		—		—		(65)		(65)
Other comprehensive loss, net of taxes		—	—		—		(18)		—		(18)		—		(18)
Net (loss) income		—	—		—		—		(7,832)		(7,832)		104		(7,728)
September 30, 2020		14,396	14		780,557		(190)		(135,017)		645,364		1,522		646,886

The accompanying notes are an integral part of these consolidated financial statements.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

1.Business Description and Basis of Presentation

TravelCenters of America Inc. is a Maryland corporation. ~~We operate~~As of September 30, 2022, we operated or ~~franchise 279~~franchised 284 travel centers, standalone truck service facilities and a standalone ~~restaurant.~~restaurants. 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 September 30, ~~2021,~~2022, our business included ~~275~~278 travel centers in 44 states in the United States, ~~and the province of Ontario, Canada,~~ primarily along the U.S. interstate highway system, operated primarily under the ~~"TravelCenters~~“TravelCenters of America,~~" "TA," "TA~~”“TA,”“TA Express,~~" "Petro~~”“Petro Stopping ~~Centers"~~Centers” and ~~"Petro"~~“Petro” brand names. Of these travel centers, we owned ~~51,~~55, we leased 181, we operated 2two for a joint venture ~~in which we owned a noncontrolling interest~~ and 4140 were owned or leased from others by our franchisees. We operated ~~232~~238 of our travel centers and franchisees operated 4340 travel ~~centers, including 2 we leased to franchisees.~~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 ~~travel stores~~ and various customer amenities.

As of September 30, ~~2021,~~2022, our business included 3five standalone truck service facilities operated under the ~~"TA~~“TA Truck ~~Service"~~Service” brand name. Of these standalone truck service facilities, we leased 2three and owned 1.two. Our standalone truck service facilities offer extensive maintenance and emergency repair and roadside services to large trucks.

~~As of September 30, 2021, our business included 1 standalone restaurant that we operated for a joint venture in which we owned a noncontrolling interest.~~

On April 21, 2021, we completed the sale of our Quaker Steak & Lube, or QSL, business for $5,000, excluding costs to sell and certain closing adjustments. See Note 3 of this Quarterly Report on Form 10-Q, or this Quarterly Report, for more information about the sale of our QSL business.

We manage our business as 1one 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. ~~We have a single~~On April 26, 2022, we ceased operations at our only travel center located in a foreign country, Canada, ~~that~~which we dodid not consider material to our operations. On March 2, 2022, we entered into an agreement to sell our Canadian travel center for C$26,000 (subsequently revised to C$23,000, or approximately US$17,000 based on foreign exchange rates as of September 30, 2022), excluding costs to sell and certain closing adjustments. See Note 3 of this Quarterly Report for more information about the potential sale of this travel center.

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, ~~2020,~~2021, 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 ~~COVID-19 pandemic has, and~~current economic conditions ~~occasionally~~have, and may in the ~~past have,~~future, significantly ~~altered~~alter the seasonal aspects of our ~~business, and they may have similar impacts in the future.~~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.

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 September 30, ~~2021,~~2022, was ~~$354,756.~~

$339,468.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

Recently Issued Accounting Pronouncement and Other Accounting Matters

~~In December 2019,~~The following table summarizes recent accounting standard updates, or ASUs, issued by the Financial Accounting Standards Board, ~~issued Accounting Standards Update 2019-12,~~ ~~Income Taxes – Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in~~or FASB, that could have an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. We adopted this standard on January 1, 2021, using the prospective transition method. The implementation of this update did not have a material impact on our consolidated financial statements.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, as a response to the economic uncertainty resulting from the COVID-19 pandemic, which, among other things, included several temporary changes to corporate income tax provisions such as modifications to limitations on deductibility of net operating losses and business interest, provisions relating to the deferral of the employer portion of social security taxes incurred through December 31, 2020, and employee retention tax credit, which is a refundable payroll credit for certain qualified wages and health benefits. As of September 30, 2021, we have deferred $23,340 of employer social security payments, and have included this amount in other current liabilities in our consolidated balance sheets. On December 27, 2020 and March 11, 2021, the CARES Act was modified by the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, respectively, extending the employee retention tax credit through December 31, 2021. During the year ended December 31, 2020, we recognized $3,268 relating to the employee retention tax credit, which is included in accounts receivable in our consolidated balance sheets. We continue to evaluate the total amount of employee retention tax credits for which we may be eligible and the $3,268 outstanding receivable as of September 30, 2021 is still our best estimate. We will continue to evaluate the impact of this legislation on our operations and consolidated financial statements in future periods to the extent additional guidance and regulations are issued.

Standard

Description

Effective Date

Effect on the Consolidated Financial Statements

Recently Adopted Standards

ASU 2021-10 - Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance

This update aims to provide increased transparency by requiring business entities to disclose information about certain types of government assistance they receive in the notes to the financial statements.

January 1, 2022

This update did not have a material impact on our consolidated financial statements. We are pursuing government grants in connection with our efforts to develop and market alternative energy and sustainable resources. We could provide disclosures in the future if we receive material government assistance within the scope of this update.

Recently Issued Standards

ASU 2021-01 - Reference Rate Reform (Topic 848) Scope

This update clarifies that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

January 1, 2023

We are currently assessing whether this update will have a material impact on our consolidated financial statements.

ASU 2020-04 - Reference Rate Reform (Topic 848) Facilitation of the effects of Reference Rate Reform of Financial Reporting

This update provides 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.

January 1, 2023

We are currently assessing whether this update will have a material impact on our consolidated financial statements.

2. Revenues

We recognize revenues based on the consideration specified in the contract with the customer, ~~net of any sales incentives~~less estimates for variable consideration (such as customer loyalty programs and customer rebates), and ~~excluding~~ 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 ~~retail~~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 (loss).~~income. Nonfuel revenues disaggregated by type of good or service for the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, were as follows:
Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Nonfuel revenues:
Store and retail services $ 197,842 $ 179,517 $ 564,054 $ 489,575
Truck service 200,192 189,630 565,520 504,584
Restaurant 79,850 77,665 233,657 233,369
Diesel exhaust fluid 33,179 27,285 97,556 77,146
Total nonfuel revenues $ 511,063 $ 474,097 $ 1,460,787 $ 1,304,674

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Nonfuel revenues:
Store and retail services	$	204,010	$	197,842	$	583,974	$	564,054
Truck service	227,428		200,192		634,022		565,520
Restaurant	87,486		79,850		248,450		233,657
Diesel exhaust fluid	46,017		33,179		138,939		97,556
Total nonfuel revenues	$	564,941	$	511,063	$	1,605,385	$	1,460,787

Contract Liabilities

Our contract liabilities, which are presented in our consolidated balance sheets in other current and other noncurrent liabilities, primarily include deferred revenues related to our customer loyalty programs, gift cards ~~rebates payable to customers~~ and other deferred revenues. The following table shows the changes in our contract liabilities between periods.


		Customer Loyalty Programs		Other		Total			Customer Loyalty Programs		Deferred Franchise Fees and Other		Total
December 31, 2019		$	17,993	$	4,822	$	22,815
December 31, 2021								December 31, 2021	$	26,120	$	6,156	$	32,276
Increases due to unsatisfied performance obligations arising during the period	Increases due to unsatisfied performance obligations arising during the period	115,792		15,791		131,583		Increases due to unsatisfied performance obligations arising during the period	96,201		2,444		98,645
Revenues recognized from satisfied performance obligations during the period	Revenues recognized from satisfied performance obligations during the period	(98,147)		(12,879)		(111,026)		Revenues recognized from satisfied performance obligations during the period	(109,567)		(2,197)		(111,764)
Other	Other	(12,817)		(589)		(13,406)		Other	14,050		(430)		13,620
December 31, 2020		22,821		7,145		29,966
Increases due to unsatisfied performance obligations arising during the period		95,943		9,762		105,705
Revenues recognized from satisfied performance obligations during the period		(89,444)		(8,609)		(98,053)
Other		(2,804)		(1,496)		(4,300)
September 30, 2021		$	26,516	$	6,802	$	33,318
September 30, 2022								September 30, 2022	$	26,804	$	5,973	$	32,777

As of September 30, ~~2021,~~2022, we expect the unsatisfied performance obligations, relating to our customer loyalty programs and other contract liabilities, will generally be satisfied within 12 months.

As of September 30, 2022, the deferred initial and renewal franchise fee revenue expected to be recognized in future periods is approximately $600 for each of the years 2022 through 2026.

3. Acquisition and Disposition Activity

2022 Acquisitions

During the nine months ended September 30, 2022, for aggregate cash consideration of $109,372, inclusive of certain closing costs and other purchase price adjustments, we acquired certain assets of independent travel centers, previously franchised travel centers, and truck service facilities. We also acquired certain assets as a result of the assumed operation of two travel centers which are owned by us, but which we previously leased and franchised to former tenants/franchisees.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

We have included the operating results and preliminary purchase price allocations for each acquisition in our consolidated financial statements beginning as of the date of acquisition. The pro forma impact of these acquisitions, including the respective results of operations from the beginning of the periods presented, are not material to our consolidated financial statements. We continue to obtain information to complete the valuation of certain assets and liabilities, and expect to complete these valuations no later than one year from the date of acquisition. During the third quarter of 2022, we recorded immaterial measurement period adjustments for acquisitions completed in the second quarter of 2022. For all of our acquisitions, we will make adjustments to the fair values of the identifiable assets acquired and liabilities assumed as those valuations are finalized, which may result in adjustments to the recorded amounts in our consolidated financial statements. These adjustments may or may not be material.

Because one of our acquisitions was completed close to the end of the third quarter of 2022, the fair values of the identifiable assets acquired in that acquisition are preliminary estimates based on the information that was available as of the acquisition date. Substantially all of the provisional goodwill in the table below relates to that acquisition and may be allocated to other identifiable assets once valuations are finalized.Any resulting goodwill from that acquisition will be part of the single travel centers reporting unit. The factors that may contribute to the recognition of goodwill for that acquisition primarily include the benefits related to various customer and purchasing synergies, along with the value of an assembled workforce in place at the acquired travel center.

As of September 30, 2022, the following table summarizes the preliminary fair values we recorded for the aggregate assets acquired and liabilities assumed from our acquisitions completed in the nine months ended September 30, 2022. The intangible assets figure represents reacquired franchise rights with a weighted average amortization period of approximately 5.2 years based on the contractual lives of the applicable franchise agreements.


	Preliminary Fair Value
Cash and cash equivalents	$	146
Inventory	6,143
Property and equipment	86,317
Goodwill	12,619
Intangible assets	4,723
Other current and non-current liabilities	(297)
Total assets acquired and liabilities assumed	$	109,651

2022 Disposition Activity

On March 2, 2022, we entered into an agreement to sell our travel center located in the city of Woodstock, Ontario, Canada, or Woodstock, which we stopped operating in April 2022, for C$26,000 (subsequently revised to C$23,000, or approximately US$17,000 based on foreign exchange rates as of September 30, 2022), excluding costs to sell and certain closing adjustments. We classified certain Woodstock assets as held for sale as of March 31, 2022, because the circumstances met the applicable criteria for that treatment as set forth in FASB Accounting Standards Codification 360, Property, Plant, and Equipment. As of September 30, 2022, the held for sale assets and liabilities consisted of inventory of $186, property and equipment, net of $1,651 and other current liabilities of $589. We do not believe that this potential sale represents a strategic shift in our business, and we do not consider the Canadian travel center to be material to our operations. We expect this sale to close by December 31, 2022; however, it is subject to certain conditions. Accordingly, we cannot be certain that we will complete this sale, that this sale will not be delayed or that the terms will not change.

In connection with the closure of the travel center in April 2022, during the nine months ended September 30, 2022, we recognized expenses of $375 for employee termination benefits, which were paid in the second quarter of 2022, and $630 related to environmental remediation. These expenses were included in site level operating expense in our consolidated statements of operations and comprehensive income.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

2021 Disposition Activity

On April 21, 2021, we completed the sale of our QSL business for $5,000 excluding costs to sell and certain closing adjustments. ~~We had classified our QSL business as held for sale as of December 31, 2020.~~ We did not treat the sale of QSL as a discontinued operation, as we concluded that its effect was not material and did not represent a strategic shift in our business. As of the date of sale, our QSL business included 41 standalone restaurants in 11 states in the United States operated primarily under the QSL brand name.

During the nine months ended September 30, 2021, we recognized a $606 loss on the sale of QSL, which was included in other operating (income) expense, net in our consolidated statements of operations and comprehensive income. During the first quarter of 2021, we recorded impairment charges of $650, primarily resulting from the change in fair value of underlying assets sold, which were included in depreciation and amortization expense in our consolidated statements of operations and comprehensive ~~income (loss). During the second quarter of 2021, we recognized a~~ ~~$606~~ ~~loss on the sale of~~ ~~QSL, which was included in other operating expense (income), net,~~ in our consolidated statements of operations and comprehensive income (loss). Impairment charges relating to our QSL net asset disposal group cumulatively totaled $14,365, which includes a $13,715 impairment charge recognized during the year ended December 31, 2020 and were included in depreciation and amortization expense in our consolidated statements of operations and comprehensive income (loss).income.

4. ~~Stockholders'~~Stockholders’ Equity

The following table presents a reconciliation of net income ~~(loss)~~ attributable to common stockholders to net income ~~(loss)~~ available to common stockholders and the related earnings ~~(loss)~~ per share of common stock for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.
Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Net income (loss) attributable to common stockholders $ 22,200 $ 8,605 $ 45,737 $ (7,832)
Less: net (income) loss attributable to
participating securities
497 175 1,048 (273)
Net income (loss) available to common stockholders $ 21,703 $ 8,430 $ 44,689 $ (7,559)
Weighted average shares of common stock(1)
14,254 13,779 14,239 9,890
Basic and diluted net income (loss) per share of common stock attributable to common stockholders $ 1.52 $ 0.61 $ 3.14 $ (0.76)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income attributable to common stockholders	$	36,975	$	22,200	$	117,259	$	45,737
Less: net income attributable to participating securities	1,144		497		3,650		1,048
Net income available to common stockholders	$	35,831	$	21,703	$	113,609	$	44,689

Weighted average shares of common stock(1)	14,396		14,254		14,383		14,239

Basic and diluted net income per share of common stock attributable to common stockholders	$	2.49	$	1.52	$	7.90	$	3.14

(1) Excludes unvested shares of common stock awarded under our share award plans, 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 September 30, 2022 and 2021, was 460 and ~~2020, was~~ 327, ~~and 286,~~ respectively. The weighted average number of unvested shares of common stock outstanding for the nine months ended September 30, 2022 and 2021, was 462 and ~~2020, was~~ 334, ~~and 358,~~ respectively.

5. Goodwill

~~The~~Our Goodwill balance as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 was $34,832 and $22,213, respectively, all of which relates to our single travel centers reporting unit. Goodwill is tested for impairment annually as of July 31, or more frequently if circumstances warrant, at the reporting unit level. As of July 31, ~~2021,~~2022, we evaluated our travel centers reporting unit for impairment using a qualitative analysis which included evaluating financial trends, industry and market conditions and assessing the reasonableness of the assumptions used in the most recent quantitative analysis, including comparing actual results to the projections used in the quantitative analysis.

After evaluating and weighing all relevant events and circumstances, we concluded that it is not more likely than not that the fair value of the single travel centers reporting unit was less than its carrying amount.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

The ~~impact~~increase in goodwill of ~~the COVID-19 pandemic on our operations was included in our analyses. However, we are unable~~$12,619 primarily relates to ~~predict the duration and severity of the COVID-19 pandemic and~~provisional goodwill recorded as a result ~~we are unable~~of acquisitions completed in 2022 and relates to ~~determine what the ultimate impact will be on~~ our ~~financial results and financial position. We will continue to closely monitor the impact of the COVID-19 pandemic on the fair value of our~~single travel centers reporting unit.

See Note 3 of this Quarterly Report for more information about these acquisitions.

6. 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 5five leases with Service Properties Trust, or 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 September 30, ~~2021, most of~~2022, 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~~lease were classified as finance leases. ~~As of September 30, 2021, our non-SVC finance lease assets and~~

~~Table of Contents~~

~~TravelCenters of America Inc.~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(dollars and shares in thousands, except per share amounts)~~

~~liabilities were immaterial to our consolidated financial statements.~~ Finance lease assets were included in other noncurrent assets, with the corresponding current and noncurrent finance lease liabilities included in other current liabilities and other noncurrent liabilities, respectively, onin our consolidated balance sheets.

Certain of our operating leases provide for variable lease costs, which primarily include percentage rent and our obligation for the estimated cost of removing underground storage tanks under the SVC Leases.

Our lease costs are included in various balances in our consolidated statements of operations and comprehensive income (loss), as shown in the following table. For the three and nine months ended September 30, 2021 and 2020, our lease costs consisted of the following:
Classification in our Consolidated
Statements of Operations
and Comprehensive Income (Loss) Three Months Ended
September 30,
2021 2020
Operating lease costs: SVC Leases Real estate rent expense $ 58,951 $ 59,500
Operating lease costs: other Real estate rent expense 2,447 4,182
Variable lease costs: SVC Leases Real estate rent expense 2,332 1,372
Variable lease costs: other Real estate rent expense 168 172
Total real estate rent expense 63,898 65,226
Operating lease costs: equipment and other
Site level operating expense and selling,
   general and administrative expense
710 881
Financing lease costs: equipment and other Site level operating expense 53 —
Short-term lease costs
Site level operating expense and selling,
   general and administrative expense
171 390
Amortization of finance lease assets:
   SVC Leases Depreciation and amortization expense 553 —
Amortization of finance lease assets: other Depreciation and amortization expense 553 79
Interest on finance lease liabilities:
   SVC Leases Interest expense, net 305 —
Interest on finance lease liabilities: other Interest expense, net 134 32
Sublease income Nonfuel revenues (502) (542)
Net lease costs $ 65,875 $ 66,066

~~Table of Contents~~Leasing Agreements with SVC

~~TravelCenters of America Inc.~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(dollars and shares in thousands, except per share amounts)~~

Classification in our Consolidated
Statements of Operations
and Comprehensive Income (Loss) Nine Months Ended
September 30,
2021 2020
Operating lease costs: SVC Leases Real estate rent expense $ 177,040 $ 178,499
Operating lease costs: other Real estate rent expense 7,529 9,859
Variable lease costs: SVC Leases Real estate rent expense 6,303 3,073
Variable lease costs: other Real estate rent expense 506 462
Total real estate rent expense 191,378 191,893
Operating lease costs: equipment and other
Site level operating expense and selling,
   general and administrative expense
2,332 2,797
Financing lease costs: equipment and other Site level operating expense 152 —
Short-term lease costs
Site level operating expense and selling,
   general and administrative expense
513 1,340
Amortization of finance lease assets:
   SVC Leases Depreciation and amortization expense 1,290 —
Amortization of finance lease assets: other Depreciation and amortization expense 1,212 79
Interest on finance lease liabilities:
   SVC Leases Interest expense, net 716 —
Interest on finance lease liabilities: other Interest expense, net 323 32
Sublease income Nonfuel revenues (1,505) (1,565)
Net lease costs $ 196,411 $ 194,576

~~Maturities of our operating lease liabilities that had remaining noncancelable lease terms in excess of one year as of September 30, 2021, were as follows:~~
SVC Leases(1)
Other Total
Years ended December 31:
2021 $ 67,350 $ 1,134 $ 68,484
2022 268,980 4,133 273,113
2023 255,407 2,601 258,008
2024 251,234 1,463 252,697
2025 251,221 1,334 252,555
Thereafter 1,789,682 3,483 1,793,165
Total operating lease payments 2,883,874 14,148 2,898,022
Less: present value discount(2)
(1,094,815) (2,077) (1,096,892)
Present value of operating lease liabilities $ 1,789,059 $ 12,071 $ 1,801,130

~~(1)~~ ~~Includes rent for properties we sublease from SVC and pay directly to SVC's landlords.~~

~~(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 September 30, 2021, was approximately 12 years. Our weighted average discount rate for our operating leases as of September 30, 2021, was approximately 9.1%.

~~During the nine months ended September 30, 2021 and 2020, we paid $208,905 and $208,327, respectively, for amounts that had been included in the measurement of our operating lease liabilities.~~

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~~TravelCenters of America Inc.~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(dollars and shares in thousands, except per share amounts)~~

As of September 30, ~~2021~~2022, we leased from SVC a total of 179 properties under five leases. We refer to these five leases collectively as the SVC Leases. The SVC Leases expire between 2029 and ~~December 31, 2020,~~2035, subject to our ~~operating lease assets and liabilities consisted~~right to extend those leases. We have two renewal options of 15 years under each of the ~~following:~~
September 30,
2021 December 31,
2020
Operating lease assets:
SVC Leases $ 1,669,329 $ 1,724,428
Other 11,573 10,455
Total operating lease assets $ 1,680,902 $ 1,734,883
Current operating lease liabilities:
SVC Leases $ 112,030 $ 106,788
Other 4,016 4,467
Total current operating lease liabilities $ 116,046 $ 111,255
Noncurrent operating lease liabilities:
SVC Leases $ 1,677,029 $ 1,756,449
Other 8,055 6,717
Total noncurrent operating lease liabilities $ 1,685,084 $ 1,763,166
SVC Leases.

On March 9, 2021, we and SVC amended 1one of the SVC Leases to reflect the renewal of a third party ground lease at 1one of the 179 travel center properties that we lease from SVC. This ground lease, which was previously accounted for as an operating lease, is now accounted for as a finance lease. As a result of this ground lease modification, ~~the applicable ground lease has balances, as of September 30, 2021, of $27,095~~we recorded $28,201 in other noncurrent assets, ~~$1,487~~$1,158 in other current liabilities and ~~$26,346~~$27,046 in other noncurrent liabilities on our consolidated balance ~~sheets.~~

Maturities of the financing lease liabilities related to the amended ground lease noted above that had remaining noncancelable lease terms in excess of one year as of September 30, 2021, were as follows:

Finance Ground Lease
Years ended December 31:
2021 $ 644
2022 2,591
2023 2,656
2024 2,722
2025 2,790
Thereafter 24,986
Total financing lease payments 36,389
Less: present value discount(1)
(8,556)
Present value of financing lease liabilities $ 27,833

~~(1)~~ ~~The discount rate used to derive the present value of unpaid lease payments is based on the rate implicit~~sheets in the ~~SVC Lease.~~

~~Table~~first quarter of ~~Contents~~

~~TravelCenters of America Inc.~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(dollars and shares in thousands, except per share amounts)~~

~~Leasing Agreements with SVC.~~ As of September 30, 2021, we leased from SVC a total of 179 properties under 5 leases that expire between 2029 and 2035, subject to our right to extend those leases. We refer to these 5 leases collectively as the SVC Leases.2021.

We recognized total real estate rent expense under the SVC Leases of ~~$61,283~~$64,056 and ~~$60,872~~$61,283 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$183,343~~$192,262 and ~~$181,572~~$183,343 for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Included in these rent expense amounts are percentage rent payable of ~~$1,850~~$2,692 and ~~$893~~$1,850 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$4,827~~$8,029 and ~~$1,742~~$4,827 for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, which are based on a percentage of the increases in total nonfuel revenues at each leased property over base year levels, deferred rent of $4,404 and $13,211 for the three and nine month periods, respectively, and adjustments to record minimum annual rent on a straight line basis over the terms of the leases and estimated future payments by us for the cost of removing underground storage tanks on a straight line basis. As of September 30, 2022, the estimated future payments related to these underground storage tanks were $26,898 and are recorded in other noncurrent liabilities on our consolidated balance sheets. The remaining balance of our deferred rent obligations was ~~$26,422~~$8,807 as of September 30, ~~2021.~~2022 and is scheduled to be fully paid by January 31, 2023.

As of September 30, 2022, 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 and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.

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 ~~$502~~$509 and ~~$542~~$502 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$1,505~~$1,413 and ~~$1,565~~$1,505 for the nine months ended September 30, 2022 and 2021, respectively.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and ~~2020, respectively.~~shares in thousands, except per share amounts)

Lease Costs

Our lease costs are included in various balances in our consolidated statements of operations and comprehensive income, as shown in the following tables. For the three and nine months ended September 30, 2022 and 2021, our lease costs consisted of the following:


	Classification in our Consolidated Statements of Operations and Comprehensive Income	Three Months Ended September 30,
		2022		2021
Operating lease costs: SVC Leases	Real estate rent expense	$	60,886	$	58,951
Operating lease costs: other	Real estate rent expense	684		2,447
Variable lease costs: SVC Leases	Real estate rent expense	3,169		2,332
Variable lease costs: other	Real estate rent expense	215		168
Total real estate rent expense		64,954		63,898
Operating lease costs: equipment and other	Site level operating expense and selling, general and administrative expense	324		710
Financing lease costs: equipment and other	Site level operating expense	75		53
Short-term lease costs	Site level operating expense and selling, general and administrative expense	101		171
Amortization of finance lease assets: SVC Leases	Depreciation and amortization expense	553		553
Amortization of finance lease assets: other	Depreciation and amortization expense	922		553
Interest on finance lease liabilities: SVC Leases	Interest expense, net	291		305
Interest on finance lease liabilities: other	Interest expense, net	177		134
Sublease income	Nonfuel revenues	(509)		(502)
Net lease costs		$	66,888	$	65,875

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Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)


	Classification in our Consolidated Statements of Operations and Comprehensive Income	Nine Months Ended September 30,
		2022		2021
Operating lease costs: SVC Leases	Real estate rent expense	$	182,814	$	177,040
Operating lease costs: other	Real estate rent expense	1,865		7,529
Variable lease costs: SVC Leases	Real estate rent expense	9,448		6,303
Variable lease costs: other	Real estate rent expense	626		506
Total real estate rent expense		194,753		191,378
Operating lease costs: equipment and other	Site level operating expense and selling, general and administrative expense	2,259		2,332
Financing lease costs: equipment and other	Site level operating expense	306		152
Short-term lease costs	Site level operating expense and selling, general and administrative expense	313		513
Amortization of finance lease assets: SVC Leases	Depreciation and amortization expense	1,659		1,290
Amortization of finance lease assets: other	Depreciation and amortization expense	2,510		1,212
Interest on finance lease liabilities: SVC Leases	Interest expense, net	883		716
Interest on finance lease liabilities: other	Interest expense, net	514		323
Sublease income	Nonfuel revenues	(1,413)		(1,505)
Net lease costs		$	201,784	$	196,411

Lease Assets and Liabilities

As of September 30, 2022 and December 31, 2021, our operating lease assets and liabilities consisted of the following:


	September 30, 2022		December 31, 2021
Operating lease assets:
SVC Leases	$	1,583,634	$	1,649,142
Other	16,917		10,384
Total operating lease assets	$	1,600,551	$	1,659,526

Current operating lease liabilities:
SVC Leases	$	112,447	$	114,372
Other	3,856		3,633
Total current operating lease liabilities	$	116,303	$	118,005

Noncurrent operating lease liabilities:
SVC Leases	$	1,565,516	$	1,648,112
Other	13,548		7,247
Total noncurrent operating lease liabilities	$	1,579,064	$	1,655,359

During the nine months ended September 30, 2022 and 2021, we paid $212,038 and $208,905, respectively, for amounts that had been included in the measurement of our operating lease liabilities.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

As of September 30, 2022 and December 31, 2021, our finance lease assets and liabilities consisted of the following:


	September 30, 2022		December 31, 2021
Finance lease assets:
SVC Leases	$	24,883	$	26,542
Other	17,109		15,781
Total finance lease assets	$	41,992	$	42,323

Current finance lease liabilities:
SVC Leases	$	1,519	$	1,517
Other	3,628		2,814
Total current finance lease liabilities	$	5,147	$	4,331

Noncurrent finance lease liabilities:
SVC Leases	$	24,924	$	25,974
Other	14,031		13,240
Total noncurrent finance lease liabilities	$	38,955	$	39,214

During the nine months ended September 30, 2022 and 2021, we paid $3,360 and $1,721, respectively, for amounts that had been included in the measurement of our finance lease liabilities.

Lease Maturities and Other Information

The annual and total remaining operating lease payments and present value of operating lease liabilities for our operating leases that had remaining noncancelable lease terms in excess of one year as of September 30, 2022, were as follows:


	SVC Leases		Other		Total
Years ended December 31:
2022	$	67,213	$	1,185	$	68,398
2023	255,469		4,059		259,528
2024	251,295		2,961		254,256
2025	251,283		2,851		254,134
2026	251,278		2,495		253,773
Thereafter	1,538,649		7,249		1,545,898
Total operating lease payments	2,615,187		20,800		2,635,987
Less: present value discount(1)	(937,224)		(3,396)		(940,620)
Present value of operating lease liabilities	$	1,677,963	$	17,404	$	1,695,367

(1) 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 September 30, 2022, was approximately 11 years. Our weighted average discount rate for our operating leases as of September 30, 2022, was approximately 9.1%.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

The annual and total remaining finance lease payments and present value of finance lease liabilities for our finance leases that had remaining noncancelable lease terms in excess of one year as of September 30, 2022, were as follows:


	SVC Lease		Other		Total
Years ended December 31:
2022	$	660	$	1,065	$	1,725
2023	2,656		4,262		6,918
2024	2,722		3,820		6,542
2025	2,790		3,227		6,017
2026	2,860		3,024		5,884
Thereafter	22,126		4,177		26,303
Total finance lease payments	33,814		19,575		53,389
Less: present value discount(1)	(7,371)		(1,916)		(9,287)
Present value of finance lease liabilities	$	26,443	$	17,659	$	44,102

(1) 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 September 30, 2022, was approximately 9 years. Our weighted average discount rate for our finance leases as of September 30, 2022, was approximately 4.3%.

As a Lessor

~~We leased 2~~

During the second and third quarters of 2022, we acquired the operating assets related to two travel centers we previously leased to ~~franchisees as of September 30, 2021 and 2020.~~franchisees. Rent revenues from these operating leases totaled ~~$595~~zero and ~~$584~~$595 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$1,763~~$1,190 and ~~$1,728~~$1,763 for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~Future minimum lease payments due to us~~See Note 3 of this Quarterly Report for ~~the 2 leased sites under~~more information about these ~~operating leases as of September 30, 2021, were $595 for the remainder of 2021 and $1,190 for 2022.~~acquisitions. 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 we own to third parties to operate other retail operations.

7. 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 ~~$3,822~~$4,427 and ~~$3,369~~$3,822 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and $~~10,418~~12,315 and ~~$9,513~~$10,418 for the nine months ended September 30, 2022 and 2021, ~~and 2020, respectively, which included reimbursements for our share of RMR's costs for providing internal audit services.~~respectively. These amounts are included in selling, general and administrative expense in our consolidated statements of operations and comprehensive ~~income (loss).~~income. For more information about our relationship with RMR, see Note 8 of this Quarterly Report and Note 12 of our Annual Report.

8. 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 1one 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. ~~Mr. Portnoy is also~~, 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~~SVC’s officers also serve as officers and employees of RMR. Some of our Independent Directors also serve as independent trustees or independent directors of other public companies to which RMR or its

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

~~serve as independent trustees or independent directors of other public companies to which RMR or its~~ subsidiaries provide management services. Mr. Portnoy serves as chair of the ~~boards of trustees or boards of directors~~board and as a managing director or managing trustee of these public companies, including SVC. Other officers of RMR, including certain of our officers, serve as managing trustees, managing directors or officers of certain of these companies.

As of September 30, ~~2021,~~2022, Mr. Portnoy beneficially owned ~~659 shares of our common stock~~ (including indirectly through RMR)~~, representing~~ approximately 4.5% of our outstanding shares of common stock.

Relationship with SVC

We are ~~SVC's~~SVC’s largest tenant and SVC is our principal landlord and second largest stockholder. As of September 30, ~~2021,~~2022, SVC owned ~~1,185 shares of our common stock, representing~~ approximately ~~8.1%~~8.0% of our outstanding shares of common stock. As of September 30, ~~2021,~~2022, we leased from SVC a total of 179 travel center properties under the SVC Leases. See Note 6 of this Quarterly Report for more information about our lease agreements with SVC.

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 7 of this Quarterly Report for more information about our business management agreement with RMR.

~~Retirement and Separation Arrangements~~

In December 2019, we and RMR entered into a retirement agreement with Andrew J. Rebholz. Pursuant to his retirement agreement, Mr. Rebholz continued to serve, through June 30, 2020, as a non-executive employee in order to assist in transitioning his duties and responsibilities to his successor. Under Mr. Rebholz's retirement agreement, consistent with past practice, we paid Mr. Rebholz his current annual base salary of $300 until June 30, 2020, a cash bonus in the amount of $1,000 in December 2019 and an additional cash payment in the amount of $1,000 in June 2020, and we fully accelerated the vesting of any unvested shares of our common stock previously awarded to Mr. Rebholz.

In February 2020, we and RMR entered into a separation agreement with our former Executive Vice President, Chief Financial Officer and Treasurer, William E. Myers. Pursuant to his separation agreement, in 2020, we paid Mr. Myers $300 and fully accelerated the vesting of any unvested shares of our common stock previously awarded to Mr. Myers.

Sale of Property

In May 2021, we sold a property located in Mesquite, Texas to Industrial Logistics Properties Trust, or ILPT, for a sales price of $2,200, excluding selling costs of $15. RMR provides management services to ILPT and Mr. Portnoy serves as the chair of the board of trustees and as a managing trustee of ILPT. The gain on sale of assets of $1,504 was included in other operating ~~expense (income),~~income, net for the nine months ended September 30, 2021.

For more information about these and other such relationships and certain other related person transactions, see our Annual Report.

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~~TravelCenters of America Inc.~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(dollars and shares in thousands, except per share amounts)~~

9. 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. Investigation and remediation of both surface spills and subsurface releases is handled by contracted third party consultants and managed by our environmental department. 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.

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

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 September 30, ~~2021,~~2022, we accrued a current liability of ~~$2,355~~ $2,835, of which $589 related to the potential sale of our travel center located in Canada, and a noncurrent liability of ~~$1,268~~$1,209 for environmental matters as well as a receivable, which is recorded in noncurrent assets in our consolidated ~~balance~~balances sheets, for expected recoveries of certain of these estimated future expenditures of ~~$972,~~$768, resulting in an estimated net amount of ~~$2,651~~$3,276 that we expect to fund in the future. See Note 3 of this Quarterly Report for more information about the potential sale of our travel center in Canada. 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 ~~primary~~ 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 of 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 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.

10. Inventory

Inventory as of September 30, 2022 and December 31, 2021, consisted of the following:


	September 30, 2022		December 31, 2021
Nonfuel products	$	186,781	$	146,313
Fuel products	55,825		45,530
Total inventory	$	242,606	$	191,843

11. Equity Investments

QuikQ, an independent full service fuel payment solutions provider, is a joint venture between us and Love’s Travel Stops & Country Stores, Inc. On April 30, 2021, we reduced our ownership in Epona, LLC, owner of QuikQ LLC, an independent

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

(dollars and shares in thousands, except per share amounts)

~~10. Inventory~~

~~Inventory as of September 30, 2021 and December 31, 2020, consisted of the following:~~
September 30,
2021 December 31,
2020
Nonfuel products $ 131,327 $ 143,440
Fuel products 38,216 29,390
Total inventory $ 169,543 $ 172,830

~~11. Equity Investments~~

~~On April 30, 2021, we reduced our ownership in Epona, LLC, owner of QuikQ LLC, an independent~~ full-service fuel payment solutions provider, from 50% to less than 50%, for which a pre-tax loss of $1,826 was included in other (income) expense, ~~(income),~~ net in our consolidated statements of operations and comprehensive income ~~(loss)~~ during the nine months ended September 30, 2021. ~~This~~The investment will continue to be accounted for under the equity method.

For more information about our investments in equity affiliates, see Note 11 of our Annual Report.

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~~TravelCenters of America Inc.~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(dollars and shares in thousands, except per share amounts)~~

Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, or this Quarterly Report, and with our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, or our Annual Report. Unless indicated otherwise, amounts are in thousands of dollars, gallons and shares of common stock, as applicable, ~~other than percentage amounts.~~unless indicated otherwise.

Company Overview

TravelCenters of America Inc. is a Maryland corporation. As of September 30, ~~2021,~~2022, we operated or franchised ~~275~~284 travel centers, ~~three~~ standalone truck service facilities and ~~one~~ standalone ~~restaurant.~~restaurants. 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.

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. We

Economic Conditions

The United States economy has experienced high inflation during 2022 and there are market expectations that inflation may remain at elevated levels for a sustained period. In addition, global supply chain challenges that arose during the second half of 2021 have continued in 2022. Also, labor availability has continued to be constrained and market labor costs have continued to increase. The U.S. Federal Reserve Board also increased interest rates multiple times throughout 2022 with additional significant rate increases expected. These conditions may give rise to an economic slowdown, and perhaps a ~~single travel center located~~recession, and could further increase our costs and/or impact our revenues. At the same time, these conditions and other factors, as further noted below, have created a volatile market for oil, diesel fuel and gasoline, which resulted in ~~a foreign country, Canada, that we do not consider material to~~ our ~~operations.~~

Werealizing increased fuel margins and ~~our suppliers and customers are experiencing negative impacts from~~fuel revenues during 2022. It is unclear whether the current ~~reduced market labor availability, including truck driver shortage, increased labor costs~~economic conditions and ~~related market pressures which may continue~~government responses to ~~present us with challenges and could negatively impact our business and operations if~~ these conditions, ~~continue.~~

~~COVID-19 Pandemic~~

~~In March 2020,~~including inflation, increasing interest rates, the ~~World Health Organization,~~war between Russia and Ukraine and high fuel prices, will result in an economic slowdown or ~~WHO, declared the outbreak of COVID-19 a pandemic, and,~~recession in response to the outbreak, the U.S. Health and Human Services Secretary and many states and municipalities declared public health emergencies. Various governmental responses attempting to contain and mitigate the spread of the virus have negatively impacted, and continue to negatively impact, the global economy, including the U.S. economy.

~~We believe that our travel centers and the truck drivers that we serve are critical to sustaining a resilient supply chain to support essential services and daily consumption across~~ the United States. Our business has benefited from an increased demand for e-commerce and from being recognized by various governmental authorities as a provider of services essential to businesses, which allowed us to continue operating our travel centers through the COVID-19 pandemic. Further, we also benefited from increased initial demand by businesses and households to stock up on certain products in response to the pandemic, which resulted in increased trucking activity to transport those goods across the United States. However, if there is another economic downturn as a result of the continued impact of the pandemic,If that occurs, demand for the transporting of products across the United States by trucks may decline, possibly ~~significantly. If that occurs,~~significantly, which may significantly adversely impact our business, results of operations and financial ~~position may become~~position.

COVID-19 Pandemic

Many of the restrictions that had been imposed in the United States during the COVID-19 pandemic have since been lifted and commercial activity in the United States generally has increasingly ~~negatively impacted.~~

~~We have taken various actions in response~~returned to pre-pandemic practices and operations. To date, the COVID-19 pandemic ~~to address its operating and financial~~has not had a significant adverse impact ~~and to protect the health and safety of~~on our ~~customers, employees and other persons who visit our travel centers and restaurants. In addition,~~business. However, we ~~are continuing~~continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business. ~~See~~For more information and risks relating to the COVID-19 pandemic on us and our business, see Part I, Item 1A, “Risk Factors”, of our Annual ~~Report for further information regarding these actions and monitoring activities.~~

The U.S. economy has been growing as COVID-19 pandemic conditions have significantly improved in the United States from their low points. Commercial activities in the United States have been returning to pre-pandemic practices and operations and as a result of recent and expected future government spending on pandemic relief, infrastructure and other matters. This recent economic growth may have had some impact on our third quarter of 2021 as diesel fuel sales volume increased 5.8% and total nonfuel revenues increased 7.8%, as compared to the prior year quarter. However, there remains uncertainty as to the ultimate duration and severity of the pandemic on commercial activities, supply chain issues and labor availability, including risks that may arise from variants (such as the Delta variant), mutations or related strains of the virus, the ability to successfully administer vaccinations to a sufficient number of persons or attain immunity to the virus by natural or other means to achieve herd immunity and the impact on the U.S. economy that may result from the inability of other countries to administer vaccinations to their citizens or their citizens’ ability to otherwise achieve immunity to the virus. We face potential risks as a result of proposed regulations announced by the Biden administration in September 2021 concerning mandatory COVID-19 vaccinations or required testing for certain employers with over 100 employees as well as proposed regulations to be announced by other government agencies. Implementation could have an adverse effect on our operations given the uncertainty around how the mandate would be administered, how compliance would be documented, and the degree of employee attrition that may result.Report.

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As a result of these uncertainties, we are unable to determine what the ultimate impact will be on our and our customers', vendors' and other stakeholders' businesses, operations, financial results and financial position. For further information on the impact the pandemic has had on our business and risks relating to the pandemic and its aftermath on us and our business, see Item 1A. "Risk Factors" in our Annual Report.

Executive Summary of Financial Results

During the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, we generated income before income taxes of $48,710 and $29,047, respectively. During the nine months ended September 30, 2022 and ~~$10,089,~~2021, we generated income before income taxes of $154,131 and $59,180, respectively. The ~~$18,958 increase~~changes in income before income taxes ~~was~~of $19,663 for the three months ended September 30, 2022 and 2021 and $94,951 for the nine months ended September 30, 2022 and 2021 were primarily due to ~~the following factors:~~

•site level gross margin in excess of site level operating expense ~~increased $19,634, which~~increasing, primarily ~~resulted~~resulting from incremental diesel fuel margin, ~~due to~~the result of fuel market volatility creating favorable market conditions for our business, and increases in nonfuel revenues primarily due to inflation-driven price increases along with the re-opening and ~~fuel revenues when comparing the three months ended September 30, 2021 and 2020,~~expanded hours of more restaurants, partially offset by ~~increased~~higher labor costs ~~in truck services~~due to wage increases and ~~field employees who returned to work for restaurant re-openings during 2021 and~~higher other operating ~~expenses for the three months ended September 30, 2021; and~~

•depreciation and amortization expense decreased $8,023, which primarily resulted from a $6,610 property and equipment impairment charge recognized with respect to our QSL business during the three months ended September 30, 2020, and a $2,372 write off of certain assets related to truck service programs that were canceled during the three months ended September 30, 2020.expenses.

The above factors for the changes in income before income taxes were partially offset by ~~an increase in~~higher selling, general and administrative expense, ~~of $6,596, which~~ primarily ~~resulted from increases~~due to higher wages and compensation costs, costs related to the ~~impact of filling open positions, expenses related~~transition to ~~consultant fees to assist with identifying and implementing cost reduction and other opportunities, and costs related to increased deployments of~~ cloud-based technology solutions, ~~during the three months ended September 30, 2021 and a $4,468~~an increase in ~~interest expense, net, which primarily resulted from the Term Loan Facility (as defined below) that we entered into~~revenue-based business management fees and higher general corporate expenses, in ~~December 2020.~~

~~During the nine months ended September 30, 2021 and 2020, we generated income and loss before income taxes of $59,180 and $11,950, respectively. The $71,130 change from a loss~~addition to ~~income before income taxes was primarily due to the following factors:~~

•site level gross margin in excess of site level operating expense increased $70,476, which primarily resulted from the incremental margin due to increases in nonfuel and fuel revenues when comparing the nine months ended September 30, 2021 and 2020, partially offset by increased labor costs in truck services and field employees who returned to work for restaurant re-openings during 2021 and other operating expenses for the nine months ended September 30, 2021; and

•higher depreciation and amortization expense ~~decreased $16,869, which~~ primarily resulted from $8,072 of write offs of certain assets related to truck service programs that were canceled during the nine months ended September 30, 2020, a $6,610 property and equipment impairment charge recognized with respect to our QSL business during the nine months ended September 30, 2020, a $3,046 goodwill impairment charge recognized during the nine months ended September 30, 2020 with respect to our QSL business and a $834 write off of intangible assets associated with three franchised standalone restaurants that closed during the nine months ended September 30, 2020, partially offset by a $650 impairment charge related to the QSL sale during the nine months ended September 30, 2021.

~~The above factors were partially offset by an increase in selling, general and administrative expense of $3,912, which primarily resulted~~resulting from the impact of filling open positions, increases in consultant fees to assist with identifying and implementing cost reduction and other opportunities, and costs related to increased deployments of cloud-based technology solutions, partially offset by expenses related to the Reorganization Plan and executive officer retirement and separation agreements recognizedgrowth in the ~~nine months ended September 30, 2020~~amount of our new assets placed in service from capital expenditures and ~~a $12,902 increase in interest expense, net, which primarily resulted from the Term Loan Facility (as defined below) that~~locations we ~~entered into in December 2020.~~

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acquired.

Effects of Fuel Prices and Supply and Demand Factors

Our fuel revenues and ~~income~~fuel gross margin are subject to fluctuations, sometimes material, as a result of market prices and the availability of, and demand for, diesel fuel and gasoline. These factors are subject to the worldwide petroleum products supply chain, which historically has experienced price and supply volatility as a result of, among other things, severe weather, terrorism, political crises, military actions and variations in demand and perceived and/or real impacts on supply that are often the result of changes in the macroeconomic environment. Also, concerted efforts by major oil producing countries and cartels to influence oil supply, such as the recent decision of OPEC+ to reduce oil production by two million barrels per day, as well as other actions by governments regarding trade policies, may impact fuel wholesale and retail prices. Further, there have been reports of reduced investment in oil exploration and production as a result of concerns about decreased demand for oil in response to market and governmental factors, including increased demand for alternative energy sources in response to global climate change. These and other factors, for example the ongoing war between Russia and Ukraine and various countries’ actions in response to that war, are believed to have contributed to recent fears of supply constraint and, as a result, increases in the cost of oil and other fossil energy sources.

Although there are several components that comprise and impact our fuel costs of goods sold, including the cost of fuel, freight and mix, the cost of fuel is the primary ~~driver.~~factor. Over the past several years there have been significant changes in the cost of fuel. ~~During~~Fuel prices decreased 16.0% during the three months ended September 30, 2022 and fuel prices increased 44.3%, during the nine months ended September 30, ~~2021, fuel prices trended upward, increasing 14.0% and 63.6%, respectively,~~2022 as compared to the beginning of the period. During the three months ended September 30, 2020, fuel prices trended downward, ending at a 4.1% lower price than at the beginning of the period. The decrease in fuel prices for the three months ended September 30, 2020, primarily resulted from a 5.7% decrease in September 2020 as a result of the decreased demand and reduced production. During the nine months ended September 30, 2020, fuel prices trended downward, ending at a 45.1% lower price than at the beginning of the period. The decrease in fuel prices for the nine months ended September 30, 2020, primarily resulted from decreased demand during the 2021 period due to the pandemic.those respective periods. The average fuel price during the three and nine months ended September 30, ~~2021,~~2022, was ~~70.8%~~74.4% and ~~50.7%~~96.7% higher than the average fuel price during the three and nine months ended September 30, ~~2020,~~2021, respectively. WeThese increases in fuel prices during the first nine months of 2022 and year over year were primarily due to the recent uncertainty in fuel supply markets, impacted, at least in part, by the war between Russia and Ukraine and the various economic sanctions and other punitive measures the United States and other countries have taken against Russia in response, including with respect to Russian oil exports, and the recently announced decision of OPEC+ to reduce oil production. This uncertainty also contributed to higher-than-normal fuel price volatility in the United States in the first nine months of 2022; however, favorable market conditions for certain purchasing arrangements and the significant index correlation of our fuel purchasing and sales contracts mitigated the potential downside risk of this volatility on our per gallon fuel margin this quarter and enabled us to deliver strong fuel margins for the quarter. In the aggregate, we generally are able to pass changes in our cost for fuel products to our customers, but typically with ~~a delay,~~timing differences associated with on-hand inventory, such that during periods of volatile and rising fuel commodity prices, fuel gross margin per gallon tends to be higher than it otherwise may have been and during periods of static and falling fuel commodity prices, fuel gross margin per gallon tends to be lower than it otherwise may have been. For example, steadily rising fuel prices typically improve short-term fuel margins due to the sell-through of lower cost inventory at current market prices. Increases in the prices we pay for fuel can ~~have negative effects on our sales and profitability and~~ increase our working capital requirements.

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Due to the volatility of our fuel costs and our methods of pricing fuel to our customers, we believe that fuel revenues are not a reliable metric for analyzing our results of operations from period to period. As a result solely of changes in fuel prices, our fuel revenues may materially increase or decrease, in both absolute amounts and on a percentage basis, without a comparable change in fuel sales volume or in fuel gross margin, as evidenced by the three and nine months ended September 30, ~~2021.~~2022. We therefore consider fuel sales volume and fuel gross margin to be better measures of our performance.

WeWhile we experienced slightly higher diesel sales volumes combined with significantly lower gasoline sales volumes during the three and nine months ended September 30, 2022, as compared to the three and nine months ended September 30, 2021, primarily due to higher fuel prices and inflationary and competitive pressures, we believe that demand for fuel by trucking companies and motorists for a constant level of miles driven will remain relatively unchanged in the near-term, subject to a possible economic recession or substantial economic downturn, but could continue to decline over time because of changes in consumer behavior due to COVID-19 and inflation, technological innovations that improve fuel efficiency of motor vehicle engines, other fuel conservation practices and alternative fuels and technologies. ~~Although we believe these factors, combined with competitive pressures, impact~~For the ~~level~~first half of 2022, our fuel sales ~~volume we realize, fuel sales volume~~volumes increased ~~during the three and nine months ended September 30, 2021, as compared~~primarily due to ~~the three and nine months ended September 30, 2020. These increases primarily resulted from~~ improved market conditions within the freight industry, traffic increases associated with the ongoing COVID-19 pandemic recovery and the success of our marketing ~~initiatives.~~initiatives; however, these factors were less significant in the third quarter of 2022 as our fuel sales volume was down slightly as compared to a strong recovery in the prior year quarter.

In addition, we believe that to some degree higher fuel prices and inflationary pressures resulted in less disposable income for our customers to purchase our nonfuel products and services. While nonfuel revenues and nonfuel margin increased 10.5% and 11.4%, respectively, during the three months ended September 30, 2022, as compared to the three months ended September 30, 2021, higher fuel prices and inflationary pressures in the third quarter of 2022 tempered certain nonfuel transaction volumes.

Other Factors Affecting Comparability

~~COVID-19 Pandemic~~

~~See our discussion regarding the COVID-19 pandemic and its impact on us and our business above.~~

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Growth ~~and Cost Control~~ Strategies

~~During the 2020 second quarter, we commenced a strategic transformation~~We continue to prioritize and ~~turnaround plan, or our Transformation Plan, consisting of numerous~~focus on key initiatives across our organization ~~for~~with the purpose of ~~expanding our travel center~~ network ~~improving~~growth through high return capital investments, bottom-line growth through process improvement and ~~enhancing operational efficiencies~~cost discipline, continued introduction of efficient technology and ~~profitability, strengthening our financial position~~systems, and defining the future of on-highway mobility through a commitment to energy alternatives, all in support of our core mission to return every traveler to the road better than they came. ~~Among these initiatives was~~

Acquiring high quality existing travel centers is a ~~corporate restructuring that resulted in immediate selling, general~~key aspect of our strategic network growth plan. We completed the acquisitions of certain assets of five travel centers and administrative expense savings and the hiring of many new members of management. We also created a centralized procurement group to drive economies of scale in pricing and increased leverage in vendor negotiations, which is leading to substantial purchasing savings and a streamlined operation. Other key initiatives are focused in areas of liquidity, expanding our franchise base, increasing diesel fuel and gasoline gross margin and fuel sales volume, increasing market share in thetwo truck service ~~business, improving merchandising~~facilities during the first nine months of 2022. Our active acquisition pipeline may enable us to add independent and ~~increasing gross margin~~franchised sites along active corridors to strengthen the geographic coverage of our network. See Note 3 in ~~store and retail services, improving operating effectiveness in~~Item 1. of this Quarterly Report for more information about these acquisitions.

Our growth strategy also includes adding franchised travel centers to our ~~food service offerings and improving information technology systems, while focusing on opportunities to control and rationalize costs.~~

network. Since the beginning of ~~2019,~~2020, we have entered into franchise agreements ~~for 52~~covering approximately 56 travel centers to be operated under our travel center brand ~~names; four~~names. Five of these franchised travel centers began operations during ~~2019, 10~~2020, two began operations during ~~2020~~2021 and ~~four~~one began operations during the ~~nine months ended September 30, 2021.~~second quarter of 2022. We expect the remaining 3448 to all open by the ~~third~~fourth quarter of ~~2023.~~2024.

~~As a result of nationwide labor and supply chain challenges, our~~Our capital expenditures ~~plan has been impacted and it is currently~~for 2022 are expected to be in the range of ~~$80,000~~$175,000 to ~~$100,000 in 2021. We do not believe that this delay will have a material impact on the underlying operating business. The 2021 capital expenditures include~~$200,000 and includes projects to ~~enhance~~improve the guest experience through significant upgrades atour travel centers, the expansion of restaurants and food offerings and improvements to ~~improve~~ our technology systems infrastructure. Approximately ~~half~~55% of our expected capital expenditures ~~in 2021~~for 2022 are focused on growth initiatives that we expect will meet or exceed our 15% to 20% cash on cash return hurdle.

~~Importantly, we~~We are committed to embracing environmentally friendly energy sources ~~of energy~~ through our eTA division, which seeks to deliver sustainable and alternative energy to the marketplace ~~and focus on~~by working with the public sector, private companies and customers and guests to facilitate ~~a possible industry transformation. This business division extends our commitment to providing the widest range of commercially prudent and practicable nonfuel offerings across our sites.~~this initiative. Recent accomplishments include ~~continued expansion~~expanding of our biodiesel and renewable diesel blending capabilities, increasing the availability of diesel exhaust fluid, or DEF, at ~~the pump~~all diesel pumps nationwide and ~~placement of~~installing electric vehicle charging stations. We are also exploring ultra-high power truck charging and hydrogen fuel dispensing in parallel with traditional fossil fuels to provide energy alternatives as the transportation sector transitions to a lighter carbon footprint. We believe our large, well-located sites ~~and our focus as a pure supplier may provide~~will allow us ~~with the opportunity~~ to make both fossil and, eventually, non-fossil fuels available ~~and to potentially balance or adjust~~throughout our ~~product and service offerings as we may determine and subject to availability.~~nationwide network of sites.

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Seasonality

Our sales volumes are generally lower in the first and fourth quarters than the second and third quarters of each year. In the first quarter, the movement of freight by professional truck drivers as well as motorist travel are usually at their lowest levels of the calendar year. In the fourth quarter, freight movement is typically lower due to the holiday season. While our revenues are modestly seasonal, quarterly variations in our operating results may reflect greater seasonal differences as our rent expense and certain other costs do not vary seasonally. ~~The COVID-19 pandemic has, and economic conditions occasionally in the past have, significantly altered the seasonal aspects of our business, and they may have similar impacts in the future.~~

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Results of Operations

All of our company operated locations are same site locations with the exception of ~~one standalone~~the recently acquired travel centers and truck service ~~facility.~~facilities and the travel center located in Canada that we stopped operating during the second quarter of 2022. As a result, same site operating results are not presented as part of this discussion and analysis as they would not provide materially different information from our consolidated results. See Note 3 in Item 1. of this Quarterly Report for more information about acquisition and disposition activity.

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Consolidated Financial Results

The following table presents changes in our operating results for the three and nine months ended September 30, ~~2021,~~2022, as compared to the three and nine months ended September 30, ~~2020.~~2021.


		Three Months Ended September 30,									Three Months Ended September 30,
		2021		2020		$ Change		% Change			2022		2021		$ Change		% Change
Revenues:	Revenues:									Revenues:
Fuel	Fuel	$	1,424,997	$	791,880	$	633,117	80.0	%	Fuel	$	2,242,821	$	1,424,997	$	817,824	57.4	%
Nonfuel	Nonfuel	511,063		474,097		36,966		7.8	%	Nonfuel	564,941		511,063		53,878		10.5	%
Rent and royalties from franchisees	Rent and royalties from franchisees	3,886		3,947		(61)		(1.5)	%	Rent and royalties from franchisees	3,317		3,886		(569)		(14.6)	%
Total revenues	Total revenues	1,939,946		1,269,924		670,022		52.8	%	Total revenues	2,811,079		1,939,946		871,133		44.9	%

Gross margin:	Gross margin:									Gross margin:
Fuel	Fuel	106,010		80,123		25,887		32.3	%	Fuel	132,402		106,010		26,392		24.9	%
Nonfuel	Nonfuel	304,798		285,983		18,815		6.6	%	Nonfuel	339,560		304,798		34,762		11.4	%
Rent and royalties from franchisees	Rent and royalties from franchisees	3,886		3,947		(61)		(1.5)	%	Rent and royalties from franchisees	3,317		3,886		(569)		(14.6)	%
Total gross margin	Total gross margin	414,694		370,053		44,641		12.1	%	Total gross margin	475,279		414,694		60,585		14.6	%

Site level operating expense	Site level operating expense	246,871		221,864		25,007		11.3	%	Site level operating expense	276,717		246,871		29,846		12.1	%
Selling, general and administrative expense	Selling, general and administrative expense	39,563		32,967		6,596		20.0	%	Selling, general and administrative expense	46,497		39,563		6,934		17.5	%
Real estate rent expense	Real estate rent expense	63,898		65,226		(1,328)		(2.0)	%	Real estate rent expense	64,954		63,898		1,056		1.7	%
Depreciation and amortization expense	Depreciation and amortization expense	24,276		32,299		(8,023)		(24.8)	%	Depreciation and amortization expense	29,267		24,276		4,991		20.6	%
Other operating expense, net	Other operating expense, net	230		—		230		—	%	Other operating expense, net	692		230		462		200.9	%

Income from operations	Income from operations	39,856		17,697		22,159		125.2	%	Income from operations	57,152		39,856		17,296		43.4	%

Interest expense, net	Interest expense, net	11,843		7,375		4,468		60.6	%	Interest expense, net	9,800		11,843		(2,043)		(17.3)	%
Other (income) expense, net		(1,034)		233		(1,267)		(543.8)	%
Other income, net										Other income, net	(1,358)		(1,034)		(324)		(31.3)	%
Income before income taxes	Income before income taxes	29,047		10,089		18,958		187.9	%	Income before income taxes	48,710		29,047		19,663		67.7	%
Provision for income taxes	Provision for income taxes	(6,847)		(1,432)		(5,415)		(378.1)	%	Provision for income taxes	(11,735)		(6,847)		(4,888)		(71.4)	%
Net income	Net income	22,200		8,657		13,543		156.4	%	Net income	36,975		22,200		14,775		66.6	%
Less: net income for noncontrolling interest		—		52		(52)		(100.0)	%
Less: net loss for noncontrolling interest										Less: net loss for noncontrolling interest	—		—		—		—	%
Net income attributable to common stockholders	Net income attributable to common stockholders	$	22,200	$	8,605	$	13,595	158.0	%	Net income attributable to common stockholders	$	36,975	$	22,200	$	14,775	66.6	%

2023

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		Nine Months Ended September 30,									Nine Months Ended September 30,
		2021		2020		$ Change		% Change			2022		2021		$ Change		% Change
Revenues:	Revenues:									Revenues:
Fuel	Fuel	$	3,830,886	$	2,244,219	$	1,586,667	70.7	%	Fuel	$	6,570,691	$	3,830,886	$	2,739,805	71.5	%
Nonfuel	Nonfuel	1,460,787		1,304,674		156,113		12.0	%	Nonfuel	1,605,385		1,460,787		144,598		9.9	%
Rent and royalties from franchisees	Rent and royalties from franchisees	11,649		10,482		1,167		11.1	%	Rent and royalties from franchisees	11,123		11,649		(526)		(4.5)	%
Total revenues	Total revenues	5,303,322		3,559,375		1,743,947		49.0	%	Total revenues	8,187,199		5,303,322		2,883,877		54.4	%

Gross margin:	Gross margin:									Gross margin:
Fuel	Fuel	283,732		253,978		29,754		11.7	%	Fuel	401,951		283,732		118,219		41.7	%
Nonfuel	Nonfuel	883,592		791,890		91,702		11.6	%	Nonfuel	966,636		883,592		83,044		9.4	%
Rent and royalties from franchisees	Rent and royalties from franchisees	11,649		10,482		1,167		11.1	%	Rent and royalties from franchisees	11,123		11,649		(526)		(4.5)	%
Total gross margin	Total gross margin	1,178,973		1,056,350		122,623		11.6	%	Total gross margin	1,379,710		1,178,973		200,737		17.0	%

Site level operating expense	Site level operating expense	708,097		655,950		52,147		7.9	%	Site level operating expense	788,864		708,097		80,767		11.4	%
Selling, general and administrative expense	Selling, general and administrative expense	112,083		108,171		3,912		3.6	%	Selling, general and administrative expense	134,206		112,083		22,123		19.7	%
Real estate rent expense	Real estate rent expense	191,378		191,893		(515)		(0.3)	%	Real estate rent expense	194,753		191,378		3,375		1.8	%
Depreciation and amortization expense	Depreciation and amortization expense	72,244		89,113		(16,869)		(18.9)	%	Depreciation and amortization expense	80,260		72,244		8,016		11.1	%
Other operating income, net	Other operating income, net	(642)		—		(642)		—	%	Other operating income, net	(1,795)		(642)		(1,153)		(179.6)	%

Income from operations	Income from operations	95,813		11,223		84,590		753.7	%	Income from operations	183,422		95,813		87,609		91.4	%

Interest expense, net	Interest expense, net	34,966		22,064		12,902		58.5	%	Interest expense, net	32,503		34,966		(2,463)		(7.0)	%
Other expense, net		1,667		1,109		558		50.3	%
Income (loss) before income taxes		59,180		(11,950)		71,130		595.2	%
(Provision) benefit for income taxes		(13,776)		4,222		(17,998)		(426.3)	%
Net income (loss)		45,404		(7,728)		53,132		687.5	%
Less: net (loss) income for noncontrolling interest		(333)		104		(437)		(420.2)	%
Net income (loss) attributable to common stockholders		$	45,737	$	(7,832)	$	53,569	684.0	%
Other (income) expense, net										Other (income) expense, net	(3,212)		1,667		(4,879)		(292.7)	%
Income before income taxes										Income before income taxes	154,131		59,180		94,951		160.4	%
Provision for income taxes										Provision for income taxes	(36,872)		(13,776)		(23,096)		(167.7)	%
Net income										Net income	117,259		45,404		71,855		158.3	%
Less: net loss for noncontrolling interest										Less: net loss for noncontrolling interest	—		(333)		333		100.0	%
Net income attributable to common stockholders										Net income attributable to common stockholders	$	117,259	$	45,737	$	71,522	156.4	%

Three Months Ended September 30, ~~2021,~~2022, as Compared to Three Months Ended September 30, ~~2020~~2021

Fuel Revenues. Fuel revenues for the three months ended September 30, ~~2021,~~2022, increased by ~~$633,117,~~$817,824, or ~~80.0%~~57.4%, as compared to the three months ended September 30, ~~2020,~~2021, primarily as a result of an increase in ~~fuel sales volume in addition to an increase in~~ market prices for ~~fuel.~~fuel, partially offset by a decrease in fuel sales volume. The table below presents the factors causing the changes in total fuel sales volume and revenues between periods. See ~~"Effects~~“Effects of Fuel Prices and Supply and Demand ~~Factors"~~Factors” for more information regarding the impact market prices for fuel has on our financial results.


		Gallons Sold	Fuel Revenues			Gallons Sold	Fuel Revenues
Results for the three months ended September 30, 2020		555,102	$	791,880
Results for the three months ended September 30, 2021					Results for the three months ended September 30, 2021	585,848	$	1,424,997
Increase due to petroleum products price changes	Increase due to petroleum products price changes		562,189		Increase due to petroleum products price changes		830,094
Increase due to volume changes		27,214	65,204
Increase in wholesale fuel sales volume		3,532	5,724
Decrease due to volume changes					Decrease due to volume changes	(3,688)	(12,026)
Increase (decrease) in wholesale fuel sales volume					Increase (decrease) in wholesale fuel sales volume	479	(244)
Net change from prior year period	Net change from prior year period	30,746	633,117		Net change from prior year period	(3,209)	817,824
Results for the three months ended September 30, 2021		585,848	$	1,424,997
Results for the three months ended September 30, 2022					Results for the three months ended September 30, 2022	582,639	2,242,821

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Nonfuel Revenues. Nonfuel revenues for the three months ended September 30, ~~2021,~~2022 increased by ~~$36,966,~~$53,878, or ~~7.8%~~10.5%, as compared to the three months ended September 30, ~~2020,~~2021, primarily as a result of increases in ~~our store~~DEF due to the growth of newer trucks on the road that require DEF, and ~~retail~~truck services ~~truck~~and full service restaurants, due to inflation-driven pricing increases along with the reopening and ~~diesel exhaust fluid revenues.~~expanded hours at our full service restaurants. These increases were primarily due to the impact the COVID-19 pandemic had on nonfuel revenues for the three months ended September 30, 2020, including the additional sales from certain travel center restaurants that have now re-opened or are operating with expanded hours as compared to the pandemic conditions experienced in the prior year, and the progress of our Transformation Plan.partially offset by lower overall transaction volumes.

Rent and Royalties from Franchisees. Rent and royalties from franchisees for the three months ended September 30, ~~2021,~~2022 decreased by ~~$61,~~$569, or ~~1.5%~~14.6%, as compared to the three months ended September 30, ~~2020,~~2021, primarily as a result of the ~~sale~~elimination of rent and royalties due to acquisitions of franchised ~~standalone restaurants in the sale of our QSL business in April 2021,~~travel centers, partially offset by higher nonfuel revenues at franchised travel ~~centers that began operations after September 30, 2020.~~centers.

Fuel Gross Margin. Fuel gross margin for the three months ended September 30, ~~2021,~~2022 increased by ~~$25,887,~~$26,392, or ~~32.3%~~24.9%, as compared to the three months ended September 30, ~~2020,~~2021, primarily as a result of ~~an increase~~more favorable market conditions discussed above, partially offset by a decrease in fuel sales volume ~~and a more favorable purchasing environment~~ during the three months ended September 30, ~~2021.~~2022.

Nonfuel Gross Margin. Nonfuel gross margin for the three months ended September 30, ~~2021,~~2022 increased by ~~$18,815,~~$34,762, or ~~6.6%~~11.4%, as compared to the three months ended September 30, ~~2020,~~2021, due to the increase in total nonfuel revenues. Nonfuel gross margin percentage for the three months ended September 30, ~~2021, decreased 70~~2022, increased 50 basis points to 60.1% from 59.6% ~~from 60.3% compared to~~for the three months ended September 30, ~~2020,~~2021, primarily due to a change in the mix of products and services, ~~sold and certain pricing and marketing initiatives.~~partially offset by higher product costs.

Site Level Operating Expense. Site level operating expense for the three months ended September 30, ~~2021,~~2022 increased by ~~$25,007,~~$29,846, or ~~11.3%~~12.1%, as compared to the three months ended September 30, ~~2020,~~2021, primarily due to ~~increased~~higher labor costs ~~in truck services~~as a result of inflationary wage increases and ~~field employees who returned to work during 2021 to support our restaurant re-openings as compared to furloughs~~the reopening and ~~lower staffing levels in 2020 in response to the COVID-19 pandemic~~expanded hours at certain full service restaurants and increased other operating expenses ~~for~~during the three months ended September 30, ~~2021.~~2022. Site level operating expense as a percentage of nonfuel revenues increased ~~150~~70 basis points to 49.0% for the three months ended September 30, 2022, from 48.3% for the three months ended September 30, 2021, ~~from 46.8% for the three months ended September 30, 2020,~~ primarily due to ~~higher labor costs for~~ the ~~three months ended September 30, 2021 as we restaffed in response to improved business conditions and re-opening of certain full service restaurants.~~

above factors.

Selling, General and Administrative Expense. Selling, general and administrative expense for the three months ended September 30, ~~2021,~~2022 increased by ~~$6,596,~~$6,934, or ~~20.0%~~17.5%, as compared to the three months ended September 30, ~~2020,~~2021, primarily ~~as a result of increases~~due to higher wages and compensation costs, costs related to the ~~impact of filling open positions, expenses related~~transition to ~~consultant fees to assist with identifying and implementing cost reduction and other opportunities, and costs related to increased deployments of~~ cloud-based technology solutions, ~~during the three months ended September 30, 2021.~~an increase in revenue-based business management fees and higher general corporate expenses.

Real Estate Rent Expense. Real estate rent expense for the three months ended September 30, ~~2021, decreased~~2022 increased by ~~$1,328,~~$1,056, or ~~2.0%~~1.7%, as compared to the three months ended September 30, ~~2020,~~2021, primarily as a result of an increase in percentage rent payable as a ~~$1,262 impairment charge recognized to operating lease assets with respect to~~result of the increase in total nonfuel revenues at our ~~QSL business~~applicable travel centers during the three months ended September 30, ~~2020.~~2022.

Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended September 30, ~~2021, decreased~~2022 increased by ~~$8,023,~~$4,991, or ~~24.8%~~20.6%, as compared to the three months ended September 30, ~~2020,~~ 2021, primarily as a result of ~~a $6,610 property~~the growth in the amount of our new assets placed in service from capital expenditures and equipment impairment charge recognized with respect to our QSL business during the three months ended September 30, 2020, and a $2,372 write off of certain assets related to truck service programs that were canceled during the three months ended September 30, 2020.locations we acquired.

Interest Expense, Net.Interest expense, net for the three months ended September 30, ~~2021, increased~~2022, decreased by ~~$4,468,~~$2,043, or ~~60.6%~~17.3%, as compared to the three months ended September 30, ~~2020,~~2021, primarily as a result of ~~the Term Loan Facility (as defined below) that we entered into in December 2020.~~higher interest income earned on investments due to higher interest rates.

~~(Provision)Benefit~~Provision for Income Taxes. Provision for income taxes was $11,735 and $6,847 for the three months ended September 30, 2022 and 2021 ~~increased to $6,847 compared to $1,432~~, respectively. The effective income tax rates were 24.1% and 23.4% for the three months ended September 30, ~~2020.~~2022 and 2021, respectively. The ~~increase in the~~effective income tax ~~provision is primarily due to higher pretax income recognized in~~rates for the three months ended September 30, 2022 and 2021, ~~as compared~~were higher than the U.S. federal income tax rate of 21.0% primarily due to the ~~three months ended September 30, 2020.~~impact of state income taxes and additional tax expense related to compensation, partially offset by federal tax credits.

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Nine Months Ended September 30, ~~2021,~~2022, as Compared to Nine Months Ended September 30, ~~2020~~2021

Fuel Revenues. Fuel revenues for the nine months ended September 30, ~~2021,~~2022, increased by ~~$1,586,667,~~$2,739,805, or ~~70.7%~~71.5%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of an increase in ~~fuel sales volume in addition to an increase in~~ market prices for ~~fuel.~~fuel, partially offset by a decrease in an overall fuel sales volume. The table below presents the factors causing the changes in total fuel sales volume and revenues between periods. See ~~"Effects~~“Effects of Fuel Prices and Supply and Demand ~~Factors"~~Factors” for more information regarding the impact market prices for fuel has on our financial results.


		Gallons Sold	Fuel Revenues			Gallons Sold	Fuel Revenues
Results for the nine months ended September 30, 2020		1,520,104	$	2,244,219
Results for the nine months ended September 30, 2021					Results for the nine months ended September 30, 2021	1,713,351	$	3,830,886
Increase due to petroleum products price changes	Increase due to petroleum products price changes		1,163,614		Increase due to petroleum products price changes		2,745,169
Increase due to volume changes		184,259	408,131
Decrease due to volume changes					Decrease due to volume changes	(4,535)	(13,313)
Increase in wholesale fuel sales volume	Increase in wholesale fuel sales volume	8,988	14,922		Increase in wholesale fuel sales volume	3,429	7,949
Net change from prior year period	Net change from prior year period	193,247	1,586,667		Net change from prior year period	(1,106)	2,739,805
Results for the nine months ended September 30, 2021		1,713,351	$	3,830,886
Results for the nine months ended September 30, 2022					Results for the nine months ended September 30, 2022	1,712,245	6,570,691

Nonfuel Revenues. Nonfuel revenues for the nine months ended September 30, ~~2021,~~2022, increased by ~~$156,113,~~$144,598, or ~~12.0%~~9.9%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of increases in ~~our store~~DEF due to the growth of newer trucks on the road that require DEF, and ~~retail~~truck services ~~truck~~and full service restaurants, due to inflation-driven pricing increases along with the reopening and ~~diesel exhaust fluid revenues.~~expanded hours at our full service restaurants. These increases were primarily due to the impact the COVID-19 pandemic had on nonfuel revenues for the nine months ended September 30, 2020, including the additional sales from certain travel center restaurants that have now re-opened or are operating with expanded hours as compared to the pandemic conditions experienced in the prior year, and the progress of our Transformation Plan.partially offset by lower overall transaction volumes.

Rent and Royalties from Franchisees. Rent and royalties from franchisees for the nine months ended September 30, ~~2021, increased~~2022 decreased by ~~$1,167,~~$526, or ~~11.1%~~4.5%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of the elimination of rent and royalties due to acquisitions of franchised travel centers ~~that began operations since~~and the ~~beginning~~elimination of ~~2020, partially offset by the sale of~~royalties from franchised QSL standalone restaurants ~~from~~following the sale of our QSL business in April ~~2021.~~2021, partially offset by higher nonfuel revenues at franchised travel centers.

Fuel Gross Margin. Fuel gross margin for the nine months ended September 30, ~~2021,~~2022 increased by ~~$29,754,~~$118,219, or ~~11.7%~~41.7%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of ~~an increase~~more favorable market conditions, as discussed above, partially offset by a decrease in fuel sales volume ~~and a more favorable purchasing environment~~ during the ~~nine~~three months ended September 30, ~~2021.~~2022.

Nonfuel Gross Margin. Nonfuel gross margin for the nine months ended September 30, ~~2021,~~2022 increased by ~~$91,702,~~$83,044, or ~~11.6%~~9.4%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of the increase in total nonfuel revenues. Nonfuel gross margin percentage for the nine months ended September 30, ~~2021, remained essentially flat at~~2022, declined 30 basis points to 60.2% from 60.5% ~~as compared to~~for the nine months ended September 30, ~~2020.~~2021, primarily due to a change in the mix of products and services, partially offset by higher product costs.

Site Level Operating Expense. Site level operating expense for the nine months ended September 30, ~~2021,~~2022 increased by ~~$52,147,~~$80,767, or ~~7.9%~~11.4%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily due to ~~increased~~higher labor costs ~~in truck services~~as a result of inflationary wage increases and ~~field employees who returned to work during 2021 to support our restaurant re-openings as compared to furloughs~~the reopening and ~~lower staffing levels in 2020 in response to the COVID-19 pandemic~~expanded hours at certain full service restaurants and increased other operating expenses ~~for the nine months ended September 30, 2021. This increase was partially offset by $3,769 of bonuses paid to support those who continued to work at our locations during the COVID-19 pandemic~~ during the nine months ended September 30, ~~2020.~~2022. Site level operating expense as a percentage of nonfuel revenues ~~decreased 180~~increased 60 basis points to 49.1% for the nine months ended September 30, 2022, from 48.5% for the nine months ended September 30, 2021, ~~from 50.3% for the nine months ended September 30, 2020,~~ primarily due to the ~~increase in nonfuel revenues and management of cost reintroduction as business conditions improved and we re-opened certain full service restaurants.~~above factors.

Selling, General and Administrative Expense. Selling, general and administrative expense for the nine months ended September 30, ~~2021,~~2022 increased by ~~$3,912,~~$22,123, or ~~3.6%~~19.7%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily ~~as a result of the impact of filling open positions, increases in consultant fees~~due to ~~assist with identifying~~higher wages and ~~implementing cost reduction and other opportunities, and~~compensation costs, costs related to ~~increased deployments of~~the transition to cloud-based technology solutions, ~~partially offset by expenses related to the Reorganization Plan~~an increase in revenue-based management fees and ~~executive officer retirement and separation agreements recognized in the nine months ended September 30, 2020.~~higher general corporate expenses.

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Real Estate Rent Expense. Real estate rent expense for the nine months ended September 30, ~~2021, decreased~~2022 increased by ~~$515,~~$3,375, or ~~0.3%~~1.8%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of ~~a $1,262 impairment charge recognized to operating lease assets with respect to our QSL business during the nine months ended September 30, 2020, partially offset by~~ an increase in percentage rent ~~due to SVC~~payable as a result of the increase in total nonfuel revenues at our applicable travel centers during the nine months ended September 30, ~~2021.~~2022.

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Depreciation and Amortization Expense. Depreciation and amortization expense for the nine months ended September 30, ~~2021, decreased~~2022 increased by ~~$16,869,~~$8,016, or ~~18.9%~~11.1%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of ~~$8,072~~the growth in the amount of ~~write offs of certain~~our new assets ~~related to truck~~placed in service ~~programs that were canceled during the nine months ended September 30, 2020, a $6,610 property~~from capital expenditures and equipment impairment charge recognized with respect to our QSL business during the nine months ended September 30, 2020, a $3,046 goodwill impairment charge recognized during the nine months ended September 30, 2020, with respect to our QSL business and a $834 write off of intangible assets associated with three franchised standalone restaurants that closed during the nine months ended September 30, 2020,locations we acquired, partially offset by a $650 impairment charge related to the QSL sale during the nine months ended September 30, 2021.

Interest Expense, Net. Interest expense, net for the nine months ended September 30, ~~2021, increased~~2022 decreased by ~~$12,902,~~$2,463, or ~~58.5%~~7.0%, as compared to the nine months ended September 30, ~~2020,~~2021, primarily as a result of ~~the Term Loan Facility (as defined below) that we entered into in December 2020.~~higher interest income earned on investments due to higher interest rates.

~~(Provision) Benefit~~Provision for Income Taxes. Provision for income taxes was $36,872 and $13,776 for the nine months ended September 30, 2022 and 2021, ~~increased to $13,776 as compared to an~~respectively. The effective income tax ~~benefit of $4,222~~rates were 23.7% and 23.0% for the nine months ended September 30, ~~2020.~~2022 and 2021, respectively. The ~~increase in the~~effective income tax ~~provision is primarily due to pretax income recognized in~~rates for the nine months ended September 30, 2022 and 2021 ~~as compared~~were higher than the U.S. federal income tax rate of 21.0% primarily due to ~~a pretax loss in~~ the ~~nine months ended September 30, 2020.~~impact of state income taxes and additional tax expense related to compensation, partially offset by federal tax credits.

Liquidity and Capital Resources

Our principal liquidity requirements are to meet our operating and financing costs and to fund our capital expenditures, acquisitions and working capital requirements. Our principal sources of liquidity to meet these requirements are our:

•cash balance;

•operating cash flow;

•our Credit Facility (as defined below) with a current maximum availability of $200,000 subject to limits based on our qualified collateral;

•potential sales to SVC of improvements we make to the sites we lease from SVC;

•potential issuances of new debt and equity securities; and

•potential financing or selling of unencumbered real estate that we own.

We believe that the primary risks we currently face with respect to our operating cash flow are:

•~~the~~ inflationary pressures;

•recessionary pressures;

•increasing labor costs;

•labor availability;

•adverse impacts from supply chain challenges;

•potential ~~intensifying of the~~ negative impacts from the continuing change in market practices that arose during the COVID-19 pandemic, including if the United States experiences a prolonged and significant decline in economic activity that reduces demand for our products and ~~services;~~services, as a result;

•~~continuing~~ decreased demand for our fuel products resulting from regulatory and market efforts for improved engine fuel efficiency, fuel conservation and alternative fuels and technologies;

•decreased demand for our products and services that we may experience as a result of competition or otherwise;

•the fixed nature of a significant portion of our expenses, which may restrict our ability to realize a sufficient reduction in our expenses to offset a reduction in our revenues;

•the costs and funding that may be required to execute our growth initiatives;

•the possible inability of acquired or developed properties to generate the stabilized financial results we expected at the time of acquisition or development;

•~~increasing labor costs;~~

•~~labor availability;~~

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•increased cost of fleet card fees;

•increased costs for nonfuel products that we may not be able to pass through to our customers;

•increases in our cost of capital due to increasing market interest ~~rates;~~

•~~adverse impacts from the current supply chain challenges;~~rates and interest rate spreads;

•increased costs we may need to incur to operate our business in response to the COVID-19 pandemic, including enhancing sanitation and other preventative measures, and ~~the potential implementation of a vaccine mandate~~sick pay; and ~~testing; and~~

•the negative impacts on our gross margins and working capital requirements due to the higher level of prices for petroleum products or due to increases in the cost of our fuel or nonfuel products resulting from inflation generally.

Our business requires substantial amounts of working capital, including cash liquidity, and our working capital requirements can be especially large because of the volatility of fuel prices. Selectively acquiring additional properties and businesses and developing new sites requires us to expend substantial capital for any such properties, businesses or developments. In addition, our properties are high traffic sites with many customers and large trucks entering and exiting our properties daily, requiring us to expend capital to maintain, repair and improve our properties. Although we had a cash balance of ~~$621,103~~$467,342 at September 30, ~~2021,~~2022, and net cash provided by operating activities of ~~$181,286~~$179,974 for the nine months ended September 30, ~~2021,~~2022, we cannot be sure that we will maintain sufficient amounts of cash, that we will generate future profits or positive cash flows or that we will be able to obtain additional financing, if and when it becomes necessary or desirable to pursue business opportunities. We believe we have sufficient financial resources to fund operations and required capital expenditures for greater than 12 months.

Our Investment and Financing Liquidity and Resources

Revolving Credit Facility

~~On December 14, 2020, we~~We and certain of our subsidiaries ~~entered into~~are parties to an ~~amendment to our~~ Amended and Restated Loan and Security Agreement, or the Credit Facility, with a group of commercial banks that matures on July 19, 2024. Under the Credit Facility, a maximum of $200,000 may be drawn, repaid and redrawn until maturity. The availability of this maximum amount is subject to limits based on qualified collateral. Subject to available collateral and lender participation, the maximum amount of this Credit Facility may be increased to $300,000. The Credit Facility may be used for general business purposes and allows for the issuance of letters of credit. Generally, no principal payments are due until maturity. Under the terms of the Credit Facility, interest is payable on outstanding borrowings at a rate based on, at our option, LIBOR or a base rate, plus a premium (which premium is subject to adjustment based upon facility availability, utilization and other matters). At September 30, ~~2021,~~2022, based on our qualified collateral, a total of ~~$108,212~~$193,369 was available to us for loans and letters of credit under the Credit Facility. At September 30, ~~2021,~~2022, there were no borrowings outstanding under the Credit Facility ~~but we had outstanding $14,128~~and $13,928 of letters of credit issued under that facility, which reduced the amount available for borrowing under the Credit Facility, leaving ~~$94,084~~$179,441 available for our use as of that date. At September 30, ~~2021,~~2022, we were in compliance with all covenants of the Credit Facility. As of ~~October 29, 2021,~~November 1, 2022, there were no borrowings outstanding under the Credit Facility and approximately ~~$94,084~~$179,441 available under the Credit Facility for our use as of that date.

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Term Loan Facility

~~On December 14, 2020, we entered into~~We have a $200,000 Term Loan Facility, or the Term Loan Facility, which is secured by a pledge of all the equity interests of substantially all of our wholly owned subsidiaries, a pledge, subject to the prior interest of the lenders under our Credit Facility, of substantially all of our other assets and the assets of such wholly owned subsidiaries and mortgages on certain of our fee owned real properties. We ~~have been using~~used the ~~$190,062 in~~ net proceeds of $190,062 from our Term Loan Facility for general business purposes, including the funding of deferred capital expenditures, updates to key information technology infrastructure and growth initiatives consistent with our Transformation Plan. Interest on amounts outstanding under the Term Loan Facility are calculated at LIBOR, with a LIBOR floor of 100 basis points, plus 600 basis points, and the Term Loan Facility matures on December 14, 2027. Our Term Loan Facility requires ~~monthly~~periodic interest payments based on the interest period selected and quarterly principal payments of $500, or 1.0% of the original principal amount annually. In addition, beginning with the year ended December 31, 2021 and for each twelve month calendar year period thereafter (each considered an “Excess Cash Flow Period”, as defined), we are required to calculate Excess Cash Flow, as defined, and prepay an amount equal to Excess Cash Flow less other specified adjustments. The prepayment, as calculated, is due 95 days after the end of the respective Excess Cash Flow Period. There was no required prepayment due for the Excess Cash Flow Period ended December 31, 2021. Remaining principal amounts outstanding under the Term Loan Facility may be prepaid, without penalty, beginning on December 14, 2022.

~~Underwritten Public Equity Offering~~

~~On July 6, 2020,~~ At September 30, 2022, we ~~received net proceeds~~were in compliance with all covenants of ~~$79,980, after $296 of offering costs and $5,124 of underwriting discounts and commissions, from~~ the sale and issuance of 6,100 shares of common stock in an underwritten public equity offering. We have been using the net proceeds from this offering to fund deferred maintenance and other capital expenditures necessary to enhance property conditions and implement growth initiatives, for working capital and for general corporate purposes.Term Loan Facility.

West Greenwich Loan

~~On February 7, 2020, we entered into~~We have a ~~10 year~~ term loan for $16,600 with The Washington Trust Company, or the West Greenwich Loan. The West Greenwich Loan matures on February 7, 2030 and is secured by a mortgage encumbering our travel center located in West Greenwich, Rhode Island. The annual interest rate is fixed at 3.85% ~~for five years~~through February 7, 2025, and resets thereafter, based on the five year Federal Home Loan Bank rate plus 198 basis ~~points, and will reset thereafter.~~points. The West Greenwich Loan requires us to make principal and interest payments monthly. The proceeds from the West Greenwich Loan were used for general business purposes. We may, at our option with 60 days prior written notice, repay the loan in full prior to ~~the end of the 10 year term~~maturity plus, if repaid prior to February 7, 2023, a nominal penalty.

IHOP Secured Advance Note

~~On October 28, 2019, we entered into~~We are party to a multi-unit franchise agreement with IHOP Franchisor LLC, or IHOP, inpursuant to which we agreed to rebrand and convert ~~up to 94~~certain of our full service restaurants to IHOP restaurants over ~~the next five years,~~a period through October 2024, or the IHOP Agreement. ~~Concurrent with entering into the IHOP Agreement, we entered into~~We are also a party to a Secured Advance Note with IHOP, or the IHOP Note, pursuant to which we can borrow up to $10,000 in connection with the costs to convert our full service restaurants to IHOP restaurants. As of September 30, ~~2021,~~2022, there were no loans outstanding under the IHOP Note.

Sources and Uses of Cash

The following is a summary of our sources and uses of cash for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, as reflected in our consolidated statements of cash flows:


		Nine Months Ended September 30,							Nine Months Ended September 30,
(in thousands)	(in thousands)	2021		2020		$ Change		(in thousands)	2022		2021		$ Change
Cash and cash equivalents at the beginning of the period	Cash and cash equivalents at the beginning of the period	$	483,151	$	17,206	$	465,945	Cash and cash equivalents at the beginning of the period	$	536,002	$	483,151	$	52,851
Net cash provided by (used in):	Net cash provided by (used in):							Net cash provided by (used in):
Operating activities	Operating activities	181,286		213,572		(32,286)		Operating activities	179,974		181,286		(1,312)
Investing activities	Investing activities	(39,181)		(37,389)		(1,792)		Investing activities	(243,234)		(39,181)		(204,053)
Financing activities	Financing activities	(4,217)		87,031		(91,248)		Financing activities	(5,532)		(4,217)		(1,315)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	64		22		42		Effect of exchange rate changes on cash	132		64		68
Cash and cash equivalents at the end of the period	Cash and cash equivalents at the end of the period	$	621,103	$	280,442	$	340,661	Cash and cash equivalents at the end of the period	$	467,342	$	621,103	$	(153,761)

Cash Flows from Operating Activities. During the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, we had net cash inflows from operating activities of ~~$181,286~~$179,974 and ~~$213,572,~~$181,286, respectively. The ~~$32,286~~$1,312 change was primarily due to a ~~decrease~~$71,855 increase in ~~cash generated from~~earnings, offset by the effect of changes in working capital ~~primarily~~from higher accounts receivable and inventory during the nine months ended September 30, 2022, as ~~a result of lower receivable collections due~~compared to the ~~collection of the~~nine months ended September 30, 2021.

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~~biodiesel credit in 2020, partially offset by higher earnings in 2021 during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020.~~

Cash Flows from Investing Activities. During the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, we had net cash outflows from investing activities of ~~$39,181~~$243,234 and ~~$37,389,~~$39,181, respectively. The ~~$1,792~~$204,053 change primarily resulted from an increase in capital expenditures ~~partially offset by proceeds from the sale of assets~~and acquisition activity during the nine months ended September 30, ~~2021,~~2022, as compared to the nine months ended September 30, ~~2020.~~2021.

Cash Flows from Financing Activities. During the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, we had net cash outflows ~~and inflows~~ from financing activities of ~~$4,217~~$5,532 and ~~$87,031,~~$4,217, respectively. The ~~$91,248~~$1,315 change primarily resulted from ~~$79,985 proceeds received from the underwritten public equity offering and $16,600 proceeds received under the West Greenwich Loan~~an increase in finance lease principal payments during the nine months ended September 30, ~~2020, partially offset by repayments of $1,500 on our Term Loan Facility and repayments of~~ ~~$498~~ ~~on the West Greenwich Loan during~~2022, as compared to the nine months ended September 30, ~~2021 and a $7,900 repayment of our borrowings under our Credit Facility during the nine months ended September 30, 2020.~~2021.

Related Party Transactions

We have relationships and historical and continuing transactions with SVC, ~~The RMR Group LLC, or~~ RMR and others related to them. For further information about these and other such relationships and related party transactions, see Notes 6, 7 and 8 to the Consolidated Financial Statements included in Item 1. of this Quarterly Report, our Annual Report, our definitive Proxy Statement for our ~~2021~~2022 Annual Meeting of Stockholders and our other filings with the Securities and Exchange Commission. In addition, see Item 1A. ~~"Risk Factors"~~“Risk Factors” in our Annual Report for a description of risks that may arise as a result of these and other related party transactions and relationships. We may engage in additional transactions with related parties, including businesses to which RMR or its subsidiaries provide management services.

Environmental and Climate Change Matters

~~Legislation~~Governmental actions, including legislation, regulations, treaties and ~~regulation regarding climate change, including~~commitments, such as those seeking to reduce greenhouse gas emissions, and ~~other environmental matters and~~ market ~~reaction~~actions in response to ~~any such legislation or regulation or to~~concerns about climate change, ~~concerns,~~ may decrease the demand for our major product, diesel fuel, ~~products,~~and may require us to ~~expend~~make significant ~~amounts and may otherwise negatively impact our business. For instance, federal~~capital or other expenditures related to alternative energy distribution or other changing fuel conservation practices. Federal and state ~~governmental requirements addressing~~governments require manufacturers to limit emissions from trucks and other motor vehicles, such as the U.S. ~~Environment~~Environmental Protection ~~Agency's,~~Agency, or ~~EPA's,~~EPA’s, gasoline and diesel sulfur control requirements that limit the concentration of sulfur in motor ~~fuel, as well as new~~fuel. Further, legislative and regulatory initiatives requiring increased truck fuel efficiency ~~standards for medium~~have accelerated in the United States and ~~heavy duty commercial trucks,~~these mandates have ~~caused us~~and may continue to add certain services and provide certain products to our customers at a cost to us that we may be unable to pass through to our customers. Also, various private initiatives and government regulations to promote fuel efficiency and control air pollutant emissions from the trucking industry may raise the cost of trucking as compared to other types of freight transport, as a result ~~decreasing the~~in decreased demand for ~~our fuel products and negatively impacting our business.~~diesel fuel.

For example, in August ~~2016~~2021 the EPA and the National Highway Traffic Safety Administration ~~established final regulations~~proposed new rules intended to phase in more stringent ~~greenhouse gas emission and~~ fuel efficiency standards for ~~medium~~passenger cars and ~~heavy~~light duty trucks. Under the Trump Administration, the EPA and the U.S. Department of Transportation rolled back various rules relating to greenhouse gas emissions and fuel efficiency standards for trucks and other motor vehicles, including portions of the rule discussed above. President Biden has signed executive orders requiring federal agencies to review certain actions taken by the Trump Administration with respect to fuel efficiency standards and the U.S. Congress is considering legislation that would dedicate significant resources to environmental initiatives, but it is difficult to predict what, if any, changes to existing rules will occur under the Biden Administration or as a result of federal legislative action or due to related legal challenges and, if changes occur, what impact those changes would have on our industry, us or our business. In addition, the California Air Resources Board, ~~or CARB,~~and other similar state government agencies routinely ~~considers~~consider rulemaking activity the purpose of which is to ~~make heavy duty truck fleets operating in the state more~~improve fuel efficient and less polluting. The Trump Administration challenged CARB's ability to take such actions, and legal challenges remain to the enforceability of CARB's rulemaking. Because of the size of the California market and economy, fleet rules adopted by CARB frequently have influence throughout the United States. We may not be able to completely offset the loss of business we may suffer as a result of increasing engine efficiency and ~~other~~limit pollution from vehicles. Moreover, market concerns regarding climate change may result in decreased demand for fossil fuels and increased adoption of higher efficiency fuel ~~conservation~~technologies and ~~pollution reduction efforts under federal~~alternative energy sources. Regulations that limit, or ~~state rules~~market demands to reduce carbon emissions, may cause our costs at our locations to significantly increase, make some of our locations obsolete or disadvantaged, or require us to make material investments in our properties. In pace with customer demand for alternative energy sources, we have installed electric charging capacity at certain of our travel centers and expect to install them at additional travel centers over time. We are also evaluating hydrogen dispensing as ~~a result~~another alternative fuel offering at certain of ~~other existing or future regulation or changes in customer demand.~~our travel centers, have expanded DEF availability and installed additional biodiesel blending infrastructure. We are also evaluating the use of hydrogen fuel cell and natural gas generators for both emergency power and base electric load support.

~~Many observers believe severe weather activities in different parts of the country over the last few years are evidence of global~~Severe weather-related events due to climate ~~change. Such severe weather~~change may have an adverse effect on individual properties we own, lease or operate, or

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the volume of business at our locations. We mitigate these risks by owning, leasing and operating a geographically diversified portfolio of properties, by procuring insurance coverage we believe adequately protects us from material damages and losses and by attempting to monitor and be prepared for such events. However, we cannot be certain that our mitigation efforts will be sufficient or that future ~~storms, rising sea levels~~weather-related events or other climate changes that may occur ~~due to future climate change or otherwise could~~will not have ~~a material~~an adverse effect on our business.

For further information about these and other environmental and climate change matters, and the related risks that may arise, see the disclosure under the heading ~~"Environmental Contingencies"~~“Environmental Contingencies” in Note 9 to the Consolidated Financial Statements included in Item 1. of this Quarterly Report, which disclosure is incorporated herein by reference.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Not applicable.~~Our Credit Facility is secured by substantially all of our cash, accounts receivable, inventory, equipment and intangible assets. As of September 30, 2022, no loans were outstanding under this Credit Facility. We borrow under this Credit Facility in U.S. dollars and those borrowings require us to pay interest at floating interest rates, which are based on LIBOR or a base rate, plus a premium. Interest on amounts outstanding under our Term Loan Facility are also calculated based on LIBOR plus a premium. Accordingly, we are vulnerable to changes in U.S. dollar based short term interest rates. A change in interest rates generally would not affect the fair value of any outstanding floating rate debt but could affect our operating results. For example, if the $200,000 stated maximum amount was drawn under our Credit Facility and interest rates decreased or increased by 100 basis points per annum, our interest expense would decrease or increase by $2,000 per year. If interest rates were to change gradually over time, the impact would occur over time.

We are exposed to risks arising from market price changes for diesel and gasoline fuel. These risks have historically resulted from changes in supply and demand for fuel and from market speculation about future changes. Some supply changes may arise from local conditions, such as a malfunction in a particular pipeline or at a particular terminal. However, in the recent past most of the supply risks have arisen from national or international conditions, such as weather-related shutdowns of oil drilling or refining capacities, political instability in oil producing regions of the world, war or other hostilities, or terrorism. Concerted efforts by major oil producing countries and cartels to limit oil supply, such as the recent decision of OPEC+ to reduce oil production by two million barrels per day, may also impact prices. Because petroleum products are regularly traded in commodity markets, material changes in demand for and the price of fuel worldwide and financial speculation in these commodities markets may have a material effect upon the prices we have to pay for fuel and may also impact our customers’ demand for fuel and other products we sell. Almost all of these risks are beyond our control. Nevertheless, we attempt to mitigate our exposure to fuel commodity price market risks in three ways. First, whenever possible, we attempt to maintain supply contracts for diesel fuel with several different suppliers for our locations; if there is a local supply disruption, our contract supplier(s) work to fulfill their contractual commitments. When this type of situation happens, we may also work with other suppliers to procure additional supply either locally or from surrounding markets to avoid outages at our locations. Second, we maintain modest fuel inventory of only a few days of fuel sales. Modest inventory may mitigate the risk that we are required by competitive or contract conditions to sell fuel for less than its cost in the event of rapid price declines; however, the modest level of fuel inventory could exacerbate our fuel supply risks. Third, we sell a majority of our diesel fuel at prices determined by reference to a benchmark which is reflective of the market costs for fuel; by selling on such terms we may be able to substantially maintain our margin per gallon despite changes in the price we pay for fuel. Based on the composition of our fuel inventory as of September 30, 2022, and our fuel sales volume for the three months ended, September 30, 2022, each one cent change in the price of fuel would change our inventory value by $163 and our fuel revenues by $5,826.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at September 30, ~~2021.~~2022.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, ~~2021,~~2022, there were no changes to our internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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Warning Concerning Forward-Looking Statements

This Quarterly Report contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever we use words such as ~~"believe," "expect," "anticipate," "intend," "plan," "estimate," "will," "may"~~“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may” and negatives and derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our 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 our forward-looking ~~statements.~~statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. Among others, the forward-looking statements that appear in this Quarterly Report that may not occurinclude statements that:

•Our ~~expectations about our~~fuel purchasing and inventory management practices may allow us to mitigate the ~~trucking industry's ability to operate through the COVID-19 pandemic;~~

•~~The duration and severity~~impact of ~~any adverse economic impact that might result from the COVID-19 pandemic on us and our customers, suppliers and other stakeholders;~~fuel price volatility;

•Our operating results for the three and nine months ended September 30, ~~2021,~~2022, reflect certain improvements as compared to the three and nine months ended September 30, ~~2020.~~2021. This may imply that we will increase or maintain these improvements and that we will be as profitable in the future. However, ~~certain~~there are no guarantees that we will be able to sustain this level of ~~these improvements resulted from unique items that may not occur~~performance or growth in the future. In addition, customer demand, ~~and~~inflationary or recessionary pressures, geopolitical risks, competitive conditions, fuel market dynamics, war and other hostilities, and government regulation, among other factors, may significantly impact our fuel and nonfuel revenues and the costs of our fuel and nonfuel products may increase in the future because of inflation or other reasons. If fuel gross margin per gallon, or fuel or nonfuel sales volume, decline, if we are not able to pass increases in fuel or nonfuel costs to our customers or if our nonfuel sales mix changes in a manner that negatively impacts our nonfuel gross margin, our nonfuel revenues or our fuel and nonfuel gross margin may decline. In fact, since we became a public company in 2007, we have been able to produce only occasional profits and we have accumulated significant losses. We may be unable to produce future profits and our losses may increase;decline;

•We are executing ~~our Transformation Plan, which includes numerous~~ initiatives that we believe have and will improve and enhance our growth, profitability and operational efficiencies and profitability, increase diesel fuel and gasoline gross margin and fuel sales volume, increase market share in the truck service industry, improve merchandising and gross margin in store and retail services, improve operating effectiveness in our full service restaurants and expand our franchise base.efficiency. However, we may not be able to grow or recognize the improvements to our operating results that we ~~anticipate.~~anticipate and we may not realize the returns we target on our related investments. In addition, the costs incurred to complete the initiatives may be greater than we anticipate;

•We are generally able to pass changes in certain of our costs to our customers, but with some timing differences. We may however, be unable to pass cost increases to our customers due to competitive or other market conditions or otherwise;

•We have incurred costs to support our anticipated business growth. This statement may imply that these costs will result in increased revenues and us receiving the expected return on our investments in growing our business. However, these costs may exceed any increased revenue we may receive from this growth or the returns on these investments may be less than expected;

•Our belief that our sites are ~~large and~~ well-located may prove otherwise and, if so, we may not realize the benefits we expect based on the characteristics of our sites;

•We may make acquisitions and develop new locations in the future including adding sites through franchising. Managing and integrating acquired, developed or franchised locations can be difficult, time consuming and/or more expensive than anticipated and involve risks of financial ~~losses.~~loss. We may not operate our acquired or developed locations as profitably as we may expect. In addition, acquisitions or property development may subject us to greater risks than our continuing operations, including the assumption of unknown liabilities;

•Our belief that, as of the date of this Quarterly Report, we had sufficient financial resources to fund operations for ~~the~~ at least 12 months. However, our business is subject to risks, including risks beyond our control. If economic conditions decline for an extended period or if we fail to operate our business and compete successfully, our business, results of operations and financial condition may be materially adversely impacted, which may result in our not having sufficient financial resources to fund operations for the foreseeable future;

•We expect to expand our network by entering into new franchise ~~agreements.~~agreements and the anticipated number of new franchised locations. However, we may not succeed in entering these agreements and the commencement and stabilization of any new franchises may not occur or may be delayed or the franchise may not open, and these franchises may not be successful or generate the royalties for us that we expect;

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•~~We have a~~Our efforts to continually monitor our fuel purchasing, pricing, supply and inventory management and taking actions we believe appropriate that are intended to improve fuel margins may not be successful due to our failure to succeed in our efforts or due to market, supplier or other reasons;

•Our Credit Facility ~~with~~has a current maximum availability of $200.0 million. The availability of this maximum amount is subject to limits based on our qualified collateral, including our eligible cash, accounts receivable, inventory, equipment and intangible assets that varies in amount from time to time. Accordingly, our borrowing and letter of credit availability at any time may be less than $200.0 million. At September 30, ~~2021,~~2022, based on our eligible collateral at that date, our borrowing and letter of credit availability was ~~$108.2~~$193.4 million, of which we had used ~~$14.1~~$13.9 million for outstanding letters of credit. The maximum amount available under the Credit Facility may be increased to $300.0 million, the availability of which is subject to limits based on our available collateral and lender participation. However, if we do not have sufficient collateral or if we are unable to identify lenders willing to increase their commitments or join our Credit Facility, we may not be able to increase the size of our Credit Facility or the availability of borrowings when we may want or need to do so; ~~and~~

•We may not spend the ~~$80.0~~$175.0 million to ~~$100.0~~$200.0 million of capital expenditures in ~~2021~~2022 that we currently expect to spend, we may spend more or less than these amounts, we may spend these amounts in a different manner, these expenditures may not provide the benefits we expect and we may not ~~reach~~realize our expected cash on cash return ~~hurdle.~~hurdle;

•The sale of our travel center located in Canada is subject to conditions; as a result, that sale may not occur, may be delayed or the terms may change.

•Our commitment to embracing environmentally friendly energy sources through our eTA division may not be successful, may not result in the benefits we expect and may not be sufficient to offset declines we may experience in our business if the market moves from fossil fuels to non-fossil fuels; and

•The duration and severity of the COVID-19 pandemic and its impact on the economy, us and our customers, suppliers and other stakeholders;

These and other unexpected results may be caused by various factors, some of which are beyond our control, including:

•Continued improved fuel efficiency of motor vehicle engines and other fuel conservation and alternative fuel practices and sources employed or used by our customers and alternative fuel technologies, alternative forms of energy or other means of transportation that may be developed and widely adopted in the future may continue to reduce the demand for the fuel that we sell and may adversely affect our business;

•Competition within the travel center, truck repair and restaurant industries may adversely impact our financial results. Our business requires substantial amounts of working capital and our competitors may have greater financial and other resources than we do;

•Future increases in fuel prices may reduce the demand for the products and services that we sell;

•Future commodity fuel price increases, fuel price volatility or other factors may cause us to need more working capital to maintain our inventory and carry our accounts receivable at higher balances than we now expect and the general availability of, demand for and pricing of motor fuels may change in ways which lower the profitability associated with our selling motor fuels;

•Our suppliers may be unwilling or unable to maintain the current credit terms for our purchases. If we are unable to purchase goods on reasonable credit terms, our required working capital may increase and we may incur material losses. Also, in times of rising fuel and nonfuel prices, our suppliers may be unwilling or unable to increase the credit amounts they extend to us, which may increase our working capital requirements. The availability and the terms of any credit we may be able to obtain are uncertain;

•The potential impacts of a recessionary environment may adversely affect our business, results of operations and liquidity;

•Most of our trucking company customers transact business with us by use of fuel cards issued by third party fuel card companies. Fuel card companies facilitate payments to us and charge us fees for these services. The fuel card industry has only two significant participants. We believe ~~almost all~~most large trucking companies use only a single fuel card provider and have become increasingly dependent upon services provided by their respective fuel card provider to manage their

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fleets. Continued lack of competition among fuel card companies may result in future increases in our transaction fee expenses or working capital requirements, or both;

•Our labor costs may continue to increase in response to business and market demands and conditions, business opportunities or pursuant to legal requirements;

•The costs we have incurred and expect to incur to support our planned and expected growth of our business may exceed any increased revenue we may receive from this growth or result in our returns on these investments being less than we expect and target;

•Fuel supply disruptions may occur, which may limit our ability to purchase fuel for resale;

•We and our suppliers and customers are experiencing negative impacts from the current reduced market labor availability, including truck driver shortage, and related market pressures which may continue to present us with challenges and could negatively impact our business and operations if these conditions continue;

•Continued supply chain challenges may limit our growth, reduce our scale and scope of operations, increase our operating costs, continue to expand the time to complete our capital projects, and adversely impact our results of operations and financial condition;

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•If trucking companies are unable to satisfy market demands for transporting goods or if the use of other means of transporting goods increases, the trucking industry may experience reduced business, which would negatively affect our business, results of operations and liquidity;

•Trucking companies have incurred, and may incur additional, increased labor costs to retain and hire truck drivers, which may reduce the amount these companies are willing to pay for our ~~services;~~services or products;

•Adverse weather events, natural disasters and ~~global~~ climate change may adversely impact our travel centers and other properties, operations and financial condition;

•Compliance with, and changes to, federal, state and local laws and regulations, including those related to tax, employment and environmental matters, accounting rules and financial reporting standards, payment card industry requirements, competition and similar matters may increase our operating costs and reduce or eliminate our profits;

•We are routinely involved in litigation. Discovery during litigation and court decisions often have unanticipated results. Litigation is usually expensive and can be distracting to management. We cannot be sure of the outcome of any of the litigation matters in which we are or may become involved;

•Acts of terrorism, geopolitical risks, political crises, wars or other military actions, such as the current war between Russia and Ukraine, public health crises, such as the ongoing COVID-19 pandemic, or other man made or natural disasters beyond our control may adversely affect our financial results; and

•Although we believe that we benefit from our relationships with our related parties, including SVC, RMR and others affiliated with them, actual and potential conflicts of interest with related parties may present a contrary perception or result in litigation, and the benefits we believe we may realize from the relationships may not materialize.

Results that differ from those stated or implied by our forward-looking statements may also be caused by various changes in our business or market conditions as described more fully in our Annual Report, including under ~~"Warning~~“Warning Concerning Forward-Looking ~~Statements"~~Statements” and Part I, Item 1A. ~~"Risk~~“Risk Factors,"” and elsewhere in this Quarterly Report.

You should not place undue reliance upon forward-looking statements. Except as required by law, we undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise.

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Part II. Other Information

Item 1A. Risk Factors

There have been no material changes during the period covered by this Quarterly Report on Form 10-Q to the risk factors previously disclosed under the ~~"Risk Factors"~~“Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

~~The following table provides information about our~~There were no purchases of our equity securities during the ~~three months~~quarter ended September 30, ~~2021.~~
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
July 2021 772 $ 29.24 — $ —
August 2021 — — — —
September 2021 — — — —
Total 772 $ 29.24 — —
2022.

Calendar
Month

Number of

Purchased

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

July 2022

—

August 2022

—

September 2022

—

Total

—

~~(1)~~ During the three months ended September 30, 2021, all common stock purchases were made to satisfy share award recipients' tax withholding and payment obligations in connection with the vesting of awards of shares of common stock, which were repurchased by us based on their fair market value on the repurchase date.

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Item 6. Exhibits

3.1

Plan of Conversion (Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed July 30, 2019)

3.2

Articles of Conversion of TravelCenters of America LLC (Incorporated by reference to Exhibit 99.3 to our Current Report on Form 8-K filed July 30, 2019)

3.3

Articles of Incorporation of TravelCenters of America Inc. (Incorporated by reference to Exhibit 99.4 to our Current Report on Form 8-K filed July 30, 2019)

3.4

Articles of Amendment to the Articles of Incorporation of TravelCenters of America Inc. (Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed June 26, 2020)

3.5

Amended and Restated Bylaws of TravelCenters of America Inc. (Incorporated by reference to Exhibit 99.5 to our Current Report on Form 8-K filed July 30, 2019)

4.1

Form of Stock Certificate (Incorporated by reference to Exhibit 4.3 to our Post Effective Amendment to our Registration Statement on Form S-3 filed August 1, 2019)

4.2

Indenture by and between TravelCenters of America LLC and U.S. Bank National Association, as trustee, dated as of January 15, 2013 (Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed January 15, 2013)

4.3

First Supplemental Indenture by and between TravelCenters of America LLC and U.S. Bank National Association, as trustee, dated as of January 15, 2013 (Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed January 15, 2013)

4.4

Second Supplemental Indenture by and between TravelCenters of America LLC and U.S. Bank National Association, as trustee, dated as of December 16, 2014 (Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form 8-A (File No. 001-33274) filed December 16, 2014)

4.5

Third Supplemental Indenture by and between TravelCenters of America LLC and U.S. Bank National Association, as trustee, dated as of October 5, 2015 (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form 8-A (File No. 001-33274) filed October 5, 2015)

4.6

Fourth Supplemental Indenture by and between TravelCenters of America Inc. (as successor by statutory conversion to TravelCenters of America LLC) and U.S. Bank National Association, as trustee, dated as of August 1, 2019 (Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed August 1, 2019)

4.7

Form of 8.25% Senior Notes due 2028 (included in Exhibit 4.3 above)

4.8

Form of 8.00% Senior Notes due 2029 (included in Exhibit 4.4 above)

4.9

Form of 8.00% Senior Notes due 2030 (included in Exhibit 4.5 above)

~~10.1~~

*WEX Merchant Acceptance Agreement, dated as of November 5, 2016, by and between WEX Inc. and TA Operating LLC (filed herewith)

~~10.2~~

*Amendment # 1 to the WEX Merchant Acceptance Agreement, executed as of January 6, 2017, by and between WEX Inc. and TA Operating LLC (filed herewith)

31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith)

31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith)

32.1

Section 1350 Certification of Chief Executive Officer and Chief Financial Officer (furnished herewith)

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)

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104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Portions of this exhibit (indicated by asterisks) have been omitted in accordance with the rules of the Securities and Exchange Commission.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TravelCenters of America Inc.

By:

/s/ Peter J. Crage

Date:

November 2, ~~2021~~2022

Name:

Peter J. Crage

Title:

Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)

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	SVC Leases(1)		Other		Total
Years ended December 31:
2021	$	67,350	$	1,134	$	68,484
2022	268,980		4,133		273,113
2023	255,407		2,601		258,008
2024	251,234		1,463		252,697
2025	251,221		1,334		252,555
Thereafter	1,789,682		3,483		1,793,165
Total operating lease payments	2,883,874		14,148		2,898,022
Less: present value discount(2)	(1,094,815)		(2,077)		(1,096,892)
Present value of operating lease liabilities	$	1,789,059	$	12,071	$	1,801,130


	Finance Ground Lease
Years ended December 31:
2021	$	644
2022	2,591
2023	2,656
2024	2,722
2025	2,790
Thereafter	24,986
Total financing lease payments	36,389
Less: present value discount(1)	(8,556)
Present value of financing lease liabilities	$	27,833


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
July 2021	772	$	29.24	—	$	—
August 2021	—	—		—	—
September 2021	—	—		—	—
Total	772	$	29.24	—	—