| Leasing Transactions | Leasing Transactions On January 1, 2019, we adopted ASC 842 using the modified retrospective transition method and elected to not restate prior year comparative periods. We elected to adopt the package of practical expedients; accordingly, we retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. As a result of adopting ASC 842 on January 1, 2019, we recognized operating lease assets of $1,785,866 and operating lease liabilities of $1,996,957 . We also recognized an adjustment to our beginning accumulated deficit, net of taxes, of $86,243 consisting of (i) the previously recognized deferred gain on sale leaseback transactions of $113,712 , (ii) the previously recognized liability for certain failed sale leaseback transactions recognized as financings of $1,591 and (iii) the related tax effect of $29,060 . As a Lessee We have lease agreements covering many of our travel centers and standalone restaurants, warehouse space and various equipment, with the most significant leases being our five leases with HPT, which are further described below. Certain of our leases include renewal options and purchase options. Renewal periods are included in calculating our operating lease assets and liabilities when they are reasonably certain. Leases with an initial term of 12 months or less are not recognized in our consolidated balance sheets. As of March 31, 2019, all of our leases were classified as operating leases. 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 HPT Leases (as defined below). Our lease costs are included in various balances in our consolidated statements of operations and comprehensive loss, as shown in the following table. As of March 31, 2019 , our lease costs consisted of the following: Classification in our Consolidated Statements of Operations and Comprehensive Loss Three Months Ended Operating lease costs - HPT Leases Real estate rent expense $ 62,120 Operating lease costs - other leases Real estate rent expense 2,724 Variable lease costs - HPT Leases Real estate rent expense 1,421 Variable lease costs - other leases Real estate rent expense 148 Total real estate rent expense 66,413 Operating lease costs - equipment and other Site level operating and selling, general and administrative 570 Short-term lease costs Site level operating and selling, general and administrative 813 Sublease income Nonfuel revenues (564 ) Net lease costs $ 67,232 Maturities of our operating lease liabilities that had remaining noncancelable lease terms in excess of one year and the amount of those liabilities as of March 31, 2019 , were as follows: HPT Leases Other Leases Total Years ended December 31: 2019 $ 271,294 $ 5,193 $ 276,487 2020 271,332 4,136 275,468 2021 270,241 3,171 273,412 2022 268,788 2,206 270,994 2023 250,977 1,618 252,595 Thereafter 2,226,845 7,206 2,234,051 Total operating lease payments 3,559,477 23,530 3,583,007 Less: present value discount (1) (1,565,671 ) (4,978 ) (1,570,649 ) Present value of operating lease liabilities $ 1,993,806 $ 18,552 $ 2,012,358 (1) The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the lease, if available, or our incremental borrowing rate. The weighted average remaining lease term as of March 31, 2019 , was 14 years. Our weighted average discount rate as of March 31, 2019 , was 9.4% . During the three months ended March 31, 2019, we paid $67,939 for amounts included in the measurement of our operating lease liabilities. As of March 31, 2019 , our operating lease assets and liabilities consisted of the following: March 31, Operating lease assets: HPT Leases $ 1,810,239 Other operating leases 17,451 Total operating lease assets $ 1,827,690 Operating lease liabilities: HPT Leases $ 89,634 Other operating leases 4,347 Total current operating lease liabilities $ 93,981 HPT Leases $ 1,904,172 Other operating leases 14,205 Total noncurrent operating lease liabilities $ 1,918,377 As previously disclosed in our Annual Report and under the previous lease accounting standard, future minimum lease payments required under leases that had remaining noncancelable lease terms in excess of one year as of December 31, 2018 , were as follows (included herein are the full payments then due under the HPT Leases, including the amount attributed to the lease of those sites that were accounted for as a financing as of December 31, 2018, in our consolidated balance sheet as reflected in the sale leaseback financing obligations): Total Years ended December 31: 2019 $ 302,855 2020 301,220 2021 299,393 2022 296,551 2023 295,534 Thereafter 1,980,078 Total $ 3,475,631 The amounts in the table above are as of December 31, 2018, and do not reflect the $43,148 annual minimum rent reduction resulting from the amendments to the HPT Leases entered into in January 2019, as further described below. Leasing Agreements with HPT As of March 31, 2019 , we leased from HPT a total of 179 properties under five leases, four of which we refer to as the TA Leases and one of which we refer to as the Petro Lease, and which we refer to collectively as the HPT Leases. On January 16, 2019 , we entered the Transaction Agreements, pursuant to which in January 2019: • We purchased from HPT 20 travel center properties, which we previously leased from HPT, for a total purchase price of $309,637 , including $1,437 of transaction related costs. • Our annual minimum rent due to HPT was reduced by $43,148 . • The term of each HPT Lease was extended by three years. • Commencing on April 1, 2019 , we will pay to HPT 16 quarterly installments of approximately $4,404 each (an aggregate of $70,458 ) to fully satisfy and discharge our $150,000 deferred rent obligation to HPT that otherwise would have become due in five installments between 2024 and 2030. • Commencing with the year ending December 31, 2020 , we will be obligated to pay to HPT an additional amount of percentage rent equal to one-half percent ( 0.5% ) of the excess of our annual nonfuel revenues at leased sites over the nonfuel revenues for each respective site for the year ending December 31, 2019 . • Certain of the 179 travel center properties that we continue to lease from HPT were reallocated among the HPT Leases. As a result of the Transaction Agreements, our operating lease assets and liabilities each increased by $23,673 . In addition, the purchase of the 20 travel center properties resulted in the derecognition of certain lease assets and liabilities. See Note 3 for more information about these acquisitions. In addition to the payment of annual minimum rent, the TA Leases provide for payment to HPT of percentage rent, based on increases in total nonfuel revenues at a property over base year levels ( 3.0% of nonfuel revenues above 2015 nonfuel revenues and, beginning with the year ending December 31, 2020 , an additional 0.5% of nonfuel revenues above 2019 nonfuel revenues) and the Petro Lease provides for payment to HPT of percentage rent based on increases in total nonfuel revenues at a property over base year levels at such property ( 3.0% of nonfuel revenues above 2012 nonfuel revenues and, beginning with the year ending December 31, 2020 , an additional 0.5% of nonfuel revenues above 2019 nonfuel revenues). The percentage rent amounts due for the three months ended March 31, 2019 and 2018, were $1,069 and $810 , respectively. We recognized total rent expense under the HPT Leases of $63,541 and $67,638 for the three months ended March 31, 2019 and 2018 , respectively. During the three months ended March 31, 2019 , we did not sell to HPT any improvements we made to properties leased from HPT. During the three months ended March 31, 2018 , we sold to HPT $13,137 of improvements we made to properties leased from HPT; as a result, pursuant to the terms of the HPT Leases, our annual minimum rent payable to HPT increased by $1,117 . At March 31, 2019 , our property and equipment balance included $17,727 of improvements of the type that we typically request that HPT purchase for an increase in annual minimum rent; however, we may elect not to sell some of those improvements and HPT is not obligated to purchase these improvements. Pursuant to a rent deferral agreement with HPT, deferred rent shall be accelerated and interest shall begin to accrue thereon at 1% per month on the deferred rent amounts if certain events occur, including: our default under the HPT Leases; a change of control of us, as defined in the deferral agreement; or our declaration or payment of a dividend or other distribution in respect of our common shares. The HPT Leases allow us to sublease a portion of the leased properties to a third party. We sublease a portion of certain travel centers to third parties to operate other retail operations, which are classified as operating leases. During the three months ended March 31, 2019 and 2018 , we recognized sublease rental income of $564 and $580 , respectively. The following table summarizes the various amounts related to the HPT Leases that were included in our consolidated balance sheet as of December 31, 2018. December 31, Current HPT Leases liabilities: Accrued rent $ 24,721 Sale leaseback financing obligations (1) 1,032 Straight line rent accrual (2) 2,458 Deferred gain (3) 10,128 Deferred tenant improvements allowance (4) 3,770 Total current HPT Leases liabilities $ 42,109 Noncurrent HPT Leases liabilities: Deferred rent obligation (5) $ 150,000 Sale leaseback financing obligations (1) 22,365 Straight line rent accrual (2) 46,431 Deferred gain (3) 100,913 Deferred tenant improvements allowance (4) 34,047 Total noncurrent HPT Leases liabilities $ 353,756 (1) Sale Leaseback Financing Obligations. As of December 31, 2018, the assets related to two travel centers we leased from HPT were reflected in our consolidated balance sheet, as was the related financing obligation. This accounting was required primarily because, at the time of the inception of the prior leases with HPT, more than a minor portion of these two travel centers was subleased to third parties. Upon adoption of ASC 842 on January 1, 2019, these failed sale leasebacks were reclassified as operating leases, which resulted in a gain that was recognized in our beginning accumulated deficit. See above for more information about the impact of adopting ASC 842. (2) Straight Line Rent Accrual. As of December 31, 2018, the straight line rent accrual included the accrued rent expense from 2007 to 2012 for stated increases in our annual minimum rent due under our then existing TA lease. The TA Leases we entered into with HPT in connection with the 2015 transaction agreement contain no stated rent payment increases. Prior to the adoption of ASC 842, we amortized this accrual on a straight line basis over the current terms of the TA Leases as a reduction of real estate rent expense. The straight line rent accrual also included our obligation for the estimated cost of removing underground storage tanks at properties leased from HPT at the end of the related lease; we recognized these obligations on a straight line basis over the term of the related leases as additional real estate rent expense. As of January 1, 2019, the straight line rent accrual was reclassified as a reduction to our operating lease assets and the obligation for the estimated cost of removal of underground storage tanks was reclassified to other noncurrent liabilities. (3) Deferred Gain. The deferred gain primarily includes $145,462 of gains from the sales of travel centers and certain other assets to HPT during 2015 and 2016. Prior to the adoption of ASC 842, we amortized the deferred gains on a straight line basis over the terms of the related leases as a reduction of real estate rent expense. Upon adoption of ASC 842 on January 1, 2019, we recognized the unamortized deferred gain of $85,053 , net of taxes, in our beginning accumulated deficit. See above for more information about the impact of adopting ASC 842. (4) Deferred Tenant Improvements Allowance. HPT funded certain capital projects at the properties we lease under the HPT Leases without an increase in rent payable by us. In connection with HPT's initial capital commitment, we recognized a liability for rent deemed to be related to this capital commitment as a deferred tenant improvements allowance. Prior to the adoption of ASC 842, we amortized the deferred tenant improvements allowance on a straight line basis over the terms of the HPT Leases as a reduction of real estate rent expense. Upon the adoption of ASC 842 on January 1, 2019, the unamortized balance of the deferred tenant improvements allowance was reclassified as a reduction to our operating lease assets. (5) Deferred Rent Obligation . Pursuant to a rent deferral agreement with HPT, we previously deferred as of December 31, 2010, a total of $150,000 of rent payable to HPT, which remained outstanding as of December 31, 2018, and had been due in five installments between 2024 and 2030. Upon the adoption of ASC 842 on January 1, 2019, these future lease payments were included in our calculation of our operating lease assets and liabilities and the deferred rent obligation was reclassified as a reduction to our operating lease assets. In January 2019, as described above and pursuant to the terms of the Transaction Agreements, our deferred rent obligation was reduced to $70,458 , payable in 16 equal quarterly installments commencing on April 1, 2019, and our operating lease assets and liabilities were remeasured using these revised payment amounts. As a Lessor As of March 31, 2019 , we leased two travel centers to franchisees. These two lease agreements expire in June 2022. These leases include rent escalations that are contingent on future events, namely inflation or our investing in capital improvements at these travel centers. As of March 31, 2018, we leased four travel centers to franchisees. Two of these lease agreements expired in 2018. Rent revenue from these operating leases totaled $551 and $997 for the three months ended March 31, 2019 and 2018 , respectively. Future minimum lease payments due to us for the two leased sites under these operating leases as of March 31, 2019 , was $1,688 for the remainder of 2019 , $2,250 for each of the years 2020 and 2021 and $1,125 for 2022 . |
| Leasing Transactions | Leasing Transactions On January 1, 2019, we adopted ASC 842 using the modified retrospective transition method and elected to not restate prior year comparative periods. We elected to adopt the package of practical expedients; accordingly, we retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. As a result of adopting ASC 842 on January 1, 2019, we recognized operating lease assets of $1,785,866 and operating lease liabilities of $1,996,957 . We also recognized an adjustment to our beginning accumulated deficit, net of taxes, of $86,243 consisting of (i) the previously recognized deferred gain on sale leaseback transactions of $113,712 , (ii) the previously recognized liability for certain failed sale leaseback transactions recognized as financings of $1,591 and (iii) the related tax effect of $29,060 . As a Lessee We have lease agreements covering many of our travel centers and standalone restaurants, warehouse space and various equipment, with the most significant leases being our five leases with HPT, which are further described below. Certain of our leases include renewal options and purchase options. Renewal periods are included in calculating our operating lease assets and liabilities when they are reasonably certain. Leases with an initial term of 12 months or less are not recognized in our consolidated balance sheets. As of March 31, 2019, all of our leases were classified as operating leases. 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 HPT Leases (as defined below). Our lease costs are included in various balances in our consolidated statements of operations and comprehensive loss, as shown in the following table. As of March 31, 2019 , our lease costs consisted of the following: Classification in our Consolidated Statements of Operations and Comprehensive Loss Three Months Ended Operating lease costs - HPT Leases Real estate rent expense $ 62,120 Operating lease costs - other leases Real estate rent expense 2,724 Variable lease costs - HPT Leases Real estate rent expense 1,421 Variable lease costs - other leases Real estate rent expense 148 Total real estate rent expense 66,413 Operating lease costs - equipment and other Site level operating and selling, general and administrative 570 Short-term lease costs Site level operating and selling, general and administrative 813 Sublease income Nonfuel revenues (564 ) Net lease costs $ 67,232 Maturities of our operating lease liabilities that had remaining noncancelable lease terms in excess of one year and the amount of those liabilities as of March 31, 2019 , were as follows: HPT Leases Other Leases Total Years ended December 31: 2019 $ 271,294 $ 5,193 $ 276,487 2020 271,332 4,136 275,468 2021 270,241 3,171 273,412 2022 268,788 2,206 270,994 2023 250,977 1,618 252,595 Thereafter 2,226,845 7,206 2,234,051 Total operating lease payments 3,559,477 23,530 3,583,007 Less: present value discount (1) (1,565,671 ) (4,978 ) (1,570,649 ) Present value of operating lease liabilities $ 1,993,806 $ 18,552 $ 2,012,358 (1) The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the lease, if available, or our incremental borrowing rate. The weighted average remaining lease term as of March 31, 2019 , was 14 years. Our weighted average discount rate as of March 31, 2019 , was 9.4% . During the three months ended March 31, 2019, we paid $67,939 for amounts included in the measurement of our operating lease liabilities. As of March 31, 2019 , our operating lease assets and liabilities consisted of the following: March 31, Operating lease assets: HPT Leases $ 1,810,239 Other operating leases 17,451 Total operating lease assets $ 1,827,690 Operating lease liabilities: HPT Leases $ 89,634 Other operating leases 4,347 Total current operating lease liabilities $ 93,981 HPT Leases $ 1,904,172 Other operating leases 14,205 Total noncurrent operating lease liabilities $ 1,918,377 As previously disclosed in our Annual Report and under the previous lease accounting standard, future minimum lease payments required under leases that had remaining noncancelable lease terms in excess of one year as of December 31, 2018 , were as follows (included herein are the full payments then due under the HPT Leases, including the amount attributed to the lease of those sites that were accounted for as a financing as of December 31, 2018, in our consolidated balance sheet as reflected in the sale leaseback financing obligations): Total Years ended December 31: 2019 $ 302,855 2020 301,220 2021 299,393 2022 296,551 2023 295,534 Thereafter 1,980,078 Total $ 3,475,631 The amounts in the table above are as of December 31, 2018, and do not reflect the $43,148 annual minimum rent reduction resulting from the amendments to the HPT Leases entered into in January 2019, as further described below. Leasing Agreements with HPT As of March 31, 2019 , we leased from HPT a total of 179 properties under five leases, four of which we refer to as the TA Leases and one of which we refer to as the Petro Lease, and which we refer to collectively as the HPT Leases. On January 16, 2019 , we entered the Transaction Agreements, pursuant to which in January 2019: • We purchased from HPT 20 travel center properties, which we previously leased from HPT, for a total purchase price of $309,637 , including $1,437 of transaction related costs. • Our annual minimum rent due to HPT was reduced by $43,148 . • The term of each HPT Lease was extended by three years. • Commencing on April 1, 2019 , we will pay to HPT 16 quarterly installments of approximately $4,404 each (an aggregate of $70,458 ) to fully satisfy and discharge our $150,000 deferred rent obligation to HPT that otherwise would have become due in five installments between 2024 and 2030. • Commencing with the year ending December 31, 2020 , we will be obligated to pay to HPT an additional amount of percentage rent equal to one-half percent ( 0.5% ) of the excess of our annual nonfuel revenues at leased sites over the nonfuel revenues for each respective site for the year ending December 31, 2019 . • Certain of the 179 travel center properties that we continue to lease from HPT were reallocated among the HPT Leases. As a result of the Transaction Agreements, our operating lease assets and liabilities each increased by $23,673 . In addition, the purchase of the 20 travel center properties resulted in the derecognition of certain lease assets and liabilities. See Note 3 for more information about these acquisitions. In addition to the payment of annual minimum rent, the TA Leases provide for payment to HPT of percentage rent, based on increases in total nonfuel revenues at a property over base year levels ( 3.0% of nonfuel revenues above 2015 nonfuel revenues and, beginning with the year ending December 31, 2020 , an additional 0.5% of nonfuel revenues above 2019 nonfuel revenues) and the Petro Lease provides for payment to HPT of percentage rent based on increases in total nonfuel revenues at a property over base year levels at such property ( 3.0% of nonfuel revenues above 2012 nonfuel revenues and, beginning with the year ending December 31, 2020 , an additional 0.5% of nonfuel revenues above 2019 nonfuel revenues). The percentage rent amounts due for the three months ended March 31, 2019 and 2018, were $1,069 and $810 , respectively. We recognized total rent expense under the HPT Leases of $63,541 and $67,638 for the three months ended March 31, 2019 and 2018 , respectively. During the three months ended March 31, 2019 , we did not sell to HPT any improvements we made to properties leased from HPT. During the three months ended March 31, 2018 , we sold to HPT $13,137 of improvements we made to properties leased from HPT; as a result, pursuant to the terms of the HPT Leases, our annual minimum rent payable to HPT increased by $1,117 . At March 31, 2019 , our property and equipment balance included $17,727 of improvements of the type that we typically request that HPT purchase for an increase in annual minimum rent; however, we may elect not to sell some of those improvements and HPT is not obligated to purchase these improvements. Pursuant to a rent deferral agreement with HPT, deferred rent shall be accelerated and interest shall begin to accrue thereon at 1% per month on the deferred rent amounts if certain events occur, including: our default under the HPT Leases; a change of control of us, as defined in the deferral agreement; or our declaration or payment of a dividend or other distribution in respect of our common shares. The HPT Leases allow us to sublease a portion of the leased properties to a third party. We sublease a portion of certain travel centers to third parties to operate other retail operations, which are classified as operating leases. During the three months ended March 31, 2019 and 2018 , we recognized sublease rental income of $564 and $580 , respectively. The following table summarizes the various amounts related to the HPT Leases that were included in our consolidated balance sheet as of December 31, 2018. December 31, Current HPT Leases liabilities: Accrued rent $ 24,721 Sale leaseback financing obligations (1) 1,032 Straight line rent accrual (2) 2,458 Deferred gain (3) 10,128 Deferred tenant improvements allowance (4) 3,770 Total current HPT Leases liabilities $ 42,109 Noncurrent HPT Leases liabilities: Deferred rent obligation (5) $ 150,000 Sale leaseback financing obligations (1) 22,365 Straight line rent accrual (2) 46,431 Deferred gain (3) 100,913 Deferred tenant improvements allowance (4) 34,047 Total noncurrent HPT Leases liabilities $ 353,756 (1) Sale Leaseback Financing Obligations. As of December 31, 2018, the assets related to two travel centers we leased from HPT were reflected in our consolidated balance sheet, as was the related financing obligation. This accounting was required primarily because, at the time of the inception of the prior leases with HPT, more than a minor portion of these two travel centers was subleased to third parties. Upon adoption of ASC 842 on January 1, 2019, these failed sale leasebacks were reclassified as operating leases, which resulted in a gain that was recognized in our beginning accumulated deficit. See above for more information about the impact of adopting ASC 842. (2) Straight Line Rent Accrual. As of December 31, 2018, the straight line rent accrual included the accrued rent expense from 2007 to 2012 for stated increases in our annual minimum rent due under our then existing TA lease. The TA Leases we entered into with HPT in connection with the 2015 transaction agreement contain no stated rent payment increases. Prior to the adoption of ASC 842, we amortized this accrual on a straight line basis over the current terms of the TA Leases as a reduction of real estate rent expense. The straight line rent accrual also included our obligation for the estimated cost of removing underground storage tanks at properties leased from HPT at the end of the related lease; we recognized these obligations on a straight line basis over the term of the related leases as additional real estate rent expense. As of January 1, 2019, the straight line rent accrual was reclassified as a reduction to our operating lease assets and the obligation for the estimated cost of removal of underground storage tanks was reclassified to other noncurrent liabilities. (3) Deferred Gain. The deferred gain primarily includes $145,462 of gains from the sales of travel centers and certain other assets to HPT during 2015 and 2016. Prior to the adoption of ASC 842, we amortized the deferred gains on a straight line basis over the terms of the related leases as a reduction of real estate rent expense. Upon adoption of ASC 842 on January 1, 2019, we recognized the unamortized deferred gain of $85,053 , net of taxes, in our beginning accumulated deficit. See above for more information about the impact of adopting ASC 842. (4) Deferred Tenant Improvements Allowance. HPT funded certain capital projects at the properties we lease under the HPT Leases without an increase in rent payable by us. In connection with HPT's initial capital commitment, we recognized a liability for rent deemed to be related to this capital commitment as a deferred tenant improvements allowance. Prior to the adoption of ASC 842, we amortized the deferred tenant improvements allowance on a straight line basis over the terms of the HPT Leases as a reduction of real estate rent expense. Upon the adoption of ASC 842 on January 1, 2019, the unamortized balance of the deferred tenant improvements allowance was reclassified as a reduction to our operating lease assets. (5) Deferred Rent Obligation . Pursuant to a rent deferral agreement with HPT, we previously deferred as of December 31, 2010, a total of $150,000 of rent payable to HPT, which remained outstanding as of December 31, 2018, and had been due in five installments between 2024 and 2030. Upon the adoption of ASC 842 on January 1, 2019, these future lease payments were included in our calculation of our operating lease assets and liabilities and the deferred rent obligation was reclassified as a reduction to our operating lease assets. In January 2019, as described above and pursuant to the terms of the Transaction Agreements, our deferred rent obligation was reduced to $70,458 , payable in 16 equal quarterly installments commencing on April 1, 2019, and our operating lease assets and liabilities were remeasured using these revised payment amounts. As a Lessor As of March 31, 2019 , we leased two travel centers to franchisees. These two lease agreements expire in June 2022. These leases include rent escalations that are contingent on future events, namely inflation or our investing in capital improvements at these travel centers. As of March 31, 2018, we leased four travel centers to franchisees. Two of these lease agreements expired in 2018. Rent revenue from these operating leases totaled $551 and $997 for the three months ended March 31, 2019 and 2018 , respectively. Future minimum lease payments due to us for the two leased sites under these operating leases as of March 31, 2019 , was $1,688 for the remainder of 2019 , $2,250 for each of the years 2020 and 2021 and $1,125 for 2022 . |
