Business Description and Basis of Presentation | Business Description and Basis of Presentation TravelCenters of America LLC, which we refer to as the Company or we, us and our, is a Delaware limited liability company. As of September 30, 2018 , we operated and franchised 302 travel centers and standalone 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, 2018 , our business included 259 travel centers in 43 states in the United States, primarily along the U.S. interstate highway system, and the province of Ontario, Canada, operated primarily under the "TravelCenters of America," "TA," "TA Express," "Petro Stopping Centers" and "Petro" brand names. Of our 259 travel centers at September 30, 2018 , we owned 32 , we leased 201 , we operated two for a joint venture in which we own a noncontrolling interest and 24 were owned or leased from others by our franchisees. We operated 233 of our travel centers and franchisees operated 26 travel centers, including two we leased to franchisees. 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, full service restaurants, quick service restaurants and various customer amenities. As of September 30, 2018 , our business included 43 standalone restaurants in 13 states in the United States operated primarily under the "Quaker Steak & Lube", or QSL, brand name. Of our 43 standalone restaurants at September 30, 2018 , we operated 15 restaurants ( six we owned, eight we leased and one we operated for a joint venture in which we own a noncontrolling interest) and 28 were owned or leased from others and operated by our franchisees. We manage our business as one reportable segment. Our locations use similar processes to sell similar products and services. We make specific disclosures concerning fuel and nonfuel products and services because it facilitates our discussion of trends and operational initiatives within our business and industry. We have a single travel center located in a foreign country, Canada, that we do not consider material to our operations. During the third quarter of 2018, we entered into an agreement to sell our convenience stores business. We expect to complete this sale in the fourth quarter of 2018. As a result of this agreement, the results of the convenience stores business are reported as held for sale and presented as discontinued operations for all periods presented in the consolidated statements of operations and comprehensive (loss) income. Additionally, the assets and liabilities of the convenience stores business have been presented as discontinued operations in our consolidated balance sheets. The sale of our convenience stores business eliminated the requirement to report information of our convenience stores segment. See Note 4 for more information about our discontinued operations. The accompanying consolidated financial statements are unaudited. These unaudited interim 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, 2017 , or our Annual Report. In the opinion of our management, the accompanying 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. 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. Reclassifications. Certain prior year amounts have been reclassified to be consistent with the current year presentation within our consolidated financial statements. 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 1 input), the aggregate fair value of our Senior Notes on September 30, 2018 , was $326,188 . Goodwill Impairment Goodwill is tested for impairment annually as of July 31, or more frequently if the circumstances warrant, at the reporting unit level. During the second quarter of 2018, prior to classifying our convenience stores business as held for sale and as a discontinued operation, we determined that the decline in site level gross margin in excess of site level operating expenses for our convenience stores business for the three and six months ended June 30, 2018, as compared to the three and six months ended June 30, 2017, in conjunction with the fact that the operating results for the convenience stores business, since acquisition, failed to meet our forecasted results was an indicator of impairment of the goodwill in our convenience stores business. Accordingly, we performed an impairment assessment of the goodwill in the convenience stores business as of May 31, 2018, using the same quantitative analysis approach that we historically followed for our goodwill impairment assessments. Based on this assessment, during the second quarter of 2018, we recorded an impairment charge of $51,500 , which is presented in loss from discontinued operations, net of taxes in our consolidated statements of operations and comprehensive (loss) income. As a result of our convenience stores business being classified as held for sale and presented as a discontinued operation, we recognized a goodwill impairment charge of $17,942 in the convenience stores reporting unit as of September 1, 2018. See Note 4 for more information about our discontinued operations. As of July 31, 2018, we evaluated our travel centers and QSL reporting units for impairment using a qualitative analysis which included evaluating financial trends and 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. Based on our analyses, we concluded that as of July 31, 2018, our goodwill in those reporting units was not impaired. Change in Accounting Principles In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers , or ASU 2014-09, which established a comprehensive revenue recognition standard under GAAP for almost all industries. We adopted ASU 2014-09 on January 1, 2018, using the full retrospective method, which required that we restate our consolidated financial statements for prior year comparative periods. Although the majority of our revenue is initiated at the point of sale and was unaffected by this ASU, the implementation of this ASU affected the accounting for our loyalty programs, initial and renewal franchise fees and advertising fees received from franchisees. See Note 2 for more information about our revenues. Loyalty programs. Prior to the adoption of ASU 2014-09, we recognized the estimated cost of loyalty awards as a discount against the nonfuel revenues from which the rewards were redeemed. Loyalty awards now are recognized against the revenue that generates the loyalty award, primarily fuel revenues. The adoption of the new standard resulted in a $19,814 and $46,282 reclassification between fuel revenue and nonfuel revenue for the three and nine months ended September 30, 2017 , respectively. Initial and renewal franchise fees. Prior to the adoption of ASU 2014-09, we recognized initial franchise fees as revenue at the time the franchisee opened for business, which is when we had fulfilled our initial obligations under the related agreement. Initial and renewal franchise fees now are recognized as revenue over the term of the related franchise agreement, which is the period the customer benefits from use of the franchise rights. The adoption of the new standard resulted in an increase in our accumulated deficit of $1,082 , an increase in other current liabilities of $188 and an increase in other noncurrent liabilities of $894 as of December 31, 2017 , as well as a decrease of $77 and an increase of $9 in rent and royalties from franchisees revenue for the three and nine months ended September 30, 2017 , respectively. Advertising fees. Prior to the adoption of ASU 2014-09, we recognized advertising fees collected from franchisees as a reduction of the related advertising expenses incurred. We now recognize these advertising fees as revenue. The adoption of the new standard for these advertising fees resulted in an increase in each of selling, general and administrative expenses and rent and royalties from franchisees revenue of $418 and $1,331 for the three and nine months ended September 30, 2017 , respectively. Income taxes. As a result of the adjustments described above, a deferred tax asset was recognized, increasing other noncurrent assets and decreasing our accumulated deficit each by $278 as of December 31, 2017 , and increasing our benefit for income taxes by $30 for the three months ended September 30, 2017 , and decreasing our benefit for income taxes by $3 for the nine months ended September 30, 2017 . The following table presents the effect of the adoption of the new standard on our consolidated balance sheet as of December 31, 2017 . As Reported Discontinued Operations (1) Adoption of ASU 2014-09 As Adjusted Assets: Other noncurrent assets $ 90,004 $ (327 ) $ 278 $ 89,955 Liabilities and Shareholders' Equity: Other current liabilities $ 130,140 $ (2,311 ) $ 188 $ 128,017 Other noncurrent liabilities 35,029 (8,547 ) 894 27,376 Accumulated deficit (125,416 ) — (804 ) (126,220 ) (1) See Note 4 for more information about our discontinued operations. The following table presents the effect of the adoption of the new standard on our consolidated statement of operations and comprehensive income for the three months ended September 30, 2017 . As Reported Discontinued Operations (1) Adoption of ASU 2014-09 As Adjusted Revenues: Fuel $ 1,055,593 $ (127,323 ) $ (19,814 ) $ 908,456 Nonfuel 516,555 (71,137 ) 19,814 465,232 Rent and royalties from franchisees 4,248 (54 ) 341 4,535 Total revenues 1,576,396 (198,514 ) 341 1,378,223 Selling, general and administrative expenses 36,587 (2,657 ) 418 34,348 Income before income taxes and discontinued operations 6,086 1,323 (77 ) 7,332 Benefit for income taxes 56,268 (357 ) 30 55,941 Income from continuing operations 62,354 966 (47 ) 63,273 (1) See Note 4 for more information about our discontinued operations. The following table presents the effect of the adoption of the new standard on our consolidated statement of operations and comprehensive income for the nine months ended September 30, 2017 . As Reported Discontinued Operations (1) Adoption of ASU 2014-09 As Adjusted Revenues: Fuel $ 2,981,154 $ (352,173 ) $ (46,282 ) $ 2,582,699 Nonfuel 1,473,023 (199,997 ) 46,282 1,319,308 Rent and royalties from franchisees 12,651 (162 ) 1,340 13,829 Total revenues 4,466,828 (552,332 ) 1,340 3,915,836 Selling, general and administrative expenses 115,276 (7,611 ) 1,331 108,996 Loss before income taxes and discontinued operations (47,976 ) 5,351 9 (42,616 ) Benefit for income taxes 77,963 (1,523 ) (3 ) 76,437 Income from continuing operations 29,987 3,828 6 33,821 (1) See Note 4 for more information about our discontinued operations. The following table presents the effect of the adoption of the new standard on our consolidated statement of cash flows for the nine months ended September 30, 2017 . As Reported Discontinued Operations (1) Adoption of ASU 2014-09 As Adjusted Cash flows from operating activities: Net income $ 29,987 $ — $ 6 $ 29,993 Deferred income taxes (79,191 ) — 3 (79,188 ) Accounts receivable (33,439 ) — 70 (33,369 ) Accounts payable and other liabilities 46,232 (2,609 ) (79 ) 43,544 Net cash provided by operating activities 46,427 — — 46,427 (1) See Note 4 for more information about our discontinued operations. We recognized a net increase in our accumulated deficit at January 1, 2016, of $305 as a result of adopting ASU 2014-09. In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other , which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The new standard is required for annual or interim impairment tests beginning after December 15, 2019, and requires prospective application. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017, and we adopted this standard during the second quarter of 2018. Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases , or ASU 2016-02, which established a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification determines whether the lease expense is recognized based on the effective interest method or on a straight line basis over the term of the lease. A lessee is also required to recognize a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein. To address implementation of ASU 2016-02 and evaluate its impact on our consolidated financial statements, we have developed a project plan and formed a team to evaluate our leases, lease classifications and related internal controls. While we are still finalizing our evaluation, including implementing a new lease accounting software we have elected the prospective transition method for adoption, which does not require us to restate prior year comparative periods, and will apply the package of practical expedients that will retain the lease classification and initial direct costs for any leases that existed prior to adoption. We believe the adoption of this update will have a material impact on our consolidated balance sheets due to the recognition of the lease rights and obligations as assets and liabilities, primarily as they relate to our leases with Hospitality Properties Trust, or HPT. See Note 7 for more information about our lease agreements and transactions with HPT. Although we continue to evaluate the impact this standard will have on our consolidated financial statements, we do not expect amounts within our statements of operations and comprehensive (loss) income will change materially. In June 2018, the FASB issued Accounting Standards Update 2018-07, Compensation - Stock Compensation , which aligns the accounting for share based payments to non-employees with the accounting for share based payments to employees. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. The implementation of this update is not expected to cause a material change to our consolidated financial statements. |