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~~March 3031, ~~2022~~2023

☐ 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 accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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 shares of common stock outstanding as of ~~November~~April 120, ~~2022~~2023: 1415,~~853~~099,~~593~~648.

Table of Contents

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	1
	Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	1
	Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	2
	Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three Months Ended March 31, 2023 and 2022	2
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	3
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	3
	Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022	4
	Notes to Consolidated Financial Statements	65
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1915
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3124
Item 4.	Controls and Procedures	3125
	Warning Concerning Forward-Looking Statements	3226
PART II — OTHER INFORMATION		3529
Item 1A.	Risk Factors	3529
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3529
Item 6.	Exhibits	3630
SIGNATURE		3732

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

Table of Contents

~~Part~~PART I. ~~Financial~~FINANCIAL ~~Information~~INFORMATION

Item 1. Financial Statements

TravelCenters of America Inc.

Consolidated Balance Sheets (Unaudited)

(dollars in thousands, except par value amount)

	September 30,2022		December 31,2021
	March 31,2023		December 31,2022
Assets:
Current assets:
Cash and cash equivalents	$	~~467~~385,~~342~~903	$	~~536~~416,~~002~~012
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
Accounts receivable (net of allowance for doubtful accounts of $1,585 and $1,361 as of March 31, 2023 and December 31, 2022, respectively)	194,470		206,622
Inventory	~~242~~252,~~606~~455		~~191~~272,~~843~~074
Other current assets	3549,~~623~~579		3747,~~947~~192
Total current assets	~~964~~882,~~950~~407		~~877~~941,~~184~~900
Property and equipment, net	~~982~~1,~~319~~004,560		~~831~~999,~~427~~404
Operating lease assets	1,~~600~~557,~~551~~689		1,~~659~~576,~~526~~538
Goodwill	3437,~~832~~110		2237,~~213~~110
Intangible assets, net	14,~~871~~202		1014,~~934~~485
Other noncurrent assets	8581,~~695~~218		~~107~~83,~~217~~470
Total assets	$	3,~~683~~577,~~218~~186	$	3,~~508~~652,~~501~~907
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	~~284~~245,~~668~~013	$	~~206~~253,~~420~~571
Current operating lease liabilities	~~116~~111,~~303~~781		~~118~~113,~~005~~940
Other current liabilities	~~239~~184,~~486~~303		~~194~~216,~~853~~138
Total current liabilities	~~640~~541,~~457~~097		~~519~~583,~~278~~649
Long term debt, net	524,~~355~~051		524,~~781~~206
Noncurrent operating lease liabilities	1,~~579~~528,~~064~~025		1,~~655~~551,~~359~~027
Other noncurrent liabilities	~~114~~115,~~759~~522		~~106~~120,~~230~~819
Total liabilities	2,~~858~~708,~~635~~695		2,~~805~~779,~~648~~701
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	14		14
Common stock, $0.001 par value, 216,000 shares of common stock authorized as of March 31, 2023 and December 31, 2022, and 15,100 and 15,105 shares of common stock issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	16		14
Additional paid-in capital	~~789~~793,~~855~~281		~~785~~791,~~597~~711
Accumulated other comprehensive income (loss)	15		(198)
Accumulated other comprehensive loss	(8)		(19)
Retained earnings (accumulated deficit)	34,699		(82,560)
Retained earnings	75,202		81,500
Total stockholders’ equity	~~824~~868,~~583~~491		~~702~~873,~~853~~206
Total liabilities and stockholders’ equity	$	3,~~683~~577,~~218~~186	$	3,~~508~~652,~~501~~907

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 (Loss) Income (Unaudited)

(dollars in thousands, except per share amounts)

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		2022		2021
	2023		2022
Revenues:
Fuel	$	21,~~242~~720,~~821~~057	$	1,~~424~~806,~~997~~114	$	~~6,570,691~~	$	~~3,830,886~~
Nonfuel	~~564~~515,~~941~~674		~~511~~487,~~063~~082		~~1,605,385~~		~~1,460,787~~
Rent and royalties from franchisees	3,~~317~~287		3,~~886~~877		~~11,123~~		~~11,649~~
Total revenues	2,~~811~~239,~~079~~018		12,~~939~~297,~~946~~073		~~8,187,199~~		~~5,303,322~~
Cost of goods sold (excluding depreciation):
Costs and expenses:
Fuel	2,110,419		1,318,987		6,168,740		3,547,154
Fuel product cost	1,624,802		1,693,195
Nonfuel	225,381		206,265		638,749		577,195
Nonfuel product cost	191,596		191,785
Total cost of goods sold	2,335,800		1,525,252		6,807,489		4,124,349
Site level operating expense	278,917		252,044
Site level operating expense	276,717		246,871		788,864		708,097
Selling, general and administrative expense	51,559		41,309
Selling, general and administrative expense	46,497		39,563		134,206		112,083
Real estate rent expense	64,701		64,646
Real estate rent expense	64,954		63,898		194,753		191,378
Depreciation and amortization expense	27,099		24,231
Depreciation and amortization expense	29,267		24,276		80,260		72,244
Other operating expense (income), net	698		(2,182)
Other operating expense (income), net	692		230		(1,795)		(642)
(Loss) income from operations	(354)		32,045
Income from operations	57,152		39,856		183,422		95,813
Interest expense, net	9,611		11,530
Interest expense, net	9,800		11,843		32,503		34,966
Other income, net	(906)		(638)
Other (income) expense, net	(1,358)		(1,034)		(3,212)		1,667
(Loss) income before income taxes	(9,059)		21,153
Income before income taxes	48,710		29,047		154,131		59,180
Benefit (provision) for income taxes	2,761		(4,849)
Provision for income taxes	(11,735)		(6,847)		(36,872)		(13,776)
Net (loss) income attributable to common stockholders	$	(6,298)	$	16,304
Net income	36,975		22,200		117,259		45,404
Other comprehensive loss, net of taxes:
Less: net income for noncontrolling interest	—		—		—		(333)
Foreign currency income (loss), net of taxes of $1 and $19, respectively	$	11	$	(26)
Net income attributable to common stockholders	$	36,975	$	22,200	$	117,259	$	45,737
Other comprehensive income (loss) attributable to common stockholders	11		(26)
Other comprehensive income, net of taxes:
Comprehensive (loss) income attributable to common stockholders	$	(6,287)	$	16,278
Foreign currency gain, net of taxes of $(77), $(36), $(98) and $(1) respectively	$	173	$	28	$	213	$	11
Net (loss) income per share of common stock attributable to common stockholders:
Other comprehensive income attributable to common stockholders	173		28		213		11
Basic and diluted	$	(0.42)	$	1.10
Comprehensive income attributable to common stockholders	$	37,148	$	22,228	$	117,472	$	45,748
Net income per share of common stock attributable to common stockholders:
Basic and diluted	$	2.49	$	1.52	$	7.90	$	3.14

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

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TravelCenters of America Inc.

Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021
	2023		2022
Cash flows from operating activities:
Net income	$	117,259	$	45,404
Net (loss) income	$	(6,298)	$	16,304
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash rent credits, net	(17,284)		(17,527)
Deferred rent payments and noncash rent adjustments	(5,991)		(5,725)
Depreciation and amortization expense	8027,~~260~~099		7224,~~244~~231
Deferred income taxes	32,568		13,336
Gain on sale of assets	(152)		(2,182)
Gain on sale of assets, net	(2,622)		(642)
Deferred income taxes	(5,523)		4,804
Changes in operating assets and liabilities:
Accounts receivable	~~(108~~11,~~413)~~911		(5590,~~345~~503)
Inventory	~~(44~~19,~~821)~~620		3(29,~~288~~987)
Other current assets	4,216		8,700
Other assets	(4,627)		3,642
Accounts payable and other liabilities	~~123~~(30,~~463~~740)		~~108~~137,~~369~~266
Other, net	(43,~~652)~~522		31,~~459~~269
Net cash provided by operating activities	~~179~~8,~~974~~821		~~181~~59,~~286~~119
Cash flows from investing activities:
Capital expenditures	(~~135~~38,~~602~~803)		(4650,~~782~~053)
Acquisitions of travel centers and other sites, net of cash acquired	(109,506)		—
Investment in equity investee	—		(1,000)
Proceeds from the sale of assets	722		8,803
Other	1,942		1,833
Investment in equity investees	(1,000)		(1,350)
Net cash used in investing activities	(36,861)		(49,220)
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 long term debt	(704)		(666)
Payments on Term Loan Facility	(1,500)		(1,500)
Other, net	(1,365)		(1,118)
Distributions to noncontrolling interest	—		(80)
Net cash used in financing activities	(2,069)		(1,784)
Acquisition of stock from employees	(63)		(110)
Effect of exchange rate changes on cash	—		36
Other, net	(3,471)		(2,029)
Net (decrease) increase in cash and cash equivalents	(30,109)		8,151
Net cash used in financing activities	(5,532)		(4,217)
Cash and cash equivalents at the beginning of the period	416,012		536,002
Effect of exchange rate changes on cash	132		64
Cash and cash equivalents at the end of the period	$	385,903	$	544,153
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	$	12,387	$	10,984
Interest paid, net of capitalized interest	33,855		33,069
Income taxes paid, net	(25)		(155)
Income taxes paid, net	3,532		74

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

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TravelCenters of America Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(dollars and shares in thousands)

	Number of Shares ofCommon Stock	CommonStock		Additional Paid-In Capital		AccumulatedOtherComprehensive Income (Loss)		Retained Earnings (AccumulatedDeficit)		Total TA Stockholders’ Equity		~~Noncontrolling Interest~~		~~Total Stockholders’Equity~~
June 30, 2022	14,856	$	14	$	788,710	$	(158)	$	(2,276)	$	786,290	$	—	$	786,290
December 31, 2022	15,105	$	14	$	791,711	$	(19)	$	81,500	$	873,206
Grants under share award plan and stock based compensation, net	(25)	—2		1,~~145~~570		—		—		1,~~145~~572		—		~~1,145~~
Other comprehensive income, net of taxes	—	—		—		~~173~~11		—		~~173~~11		—		~~173~~
Net income	—	—		—		—		36,975		36,975		—		36,975
Net loss	—	—		—		—		(6,298)		(6,298)
September 30, 2022	14,854	$	14	$	789,855	$	15	$	34,699	$	824,583	$	—	$	824,583
March 31, 2023	15,100	$	16	$	793,281	$	(8)	$	75,202	$	868,491
June 30, 2021	14,581	$	14	$	783,137	$	(222)	$	(117,547)	$	665,382	$	—	$	665,382
December 31, 2021	14,839	$	14	$	785,597	$	(198)	$	(82,560)	$	702,853
Grants under share award plan and stock based compensation, net	(2)	—		~~641~~1,201		—		—		~~641~~1,201		—		~~641~~
Other comprehensive loss, net of taxes	—	—		—		28(26)		—		28(26)		—		28
Net income	—	—		—		—		2216,~~200~~304		2216,~~200~~304		—		~~22,200~~
September 30, 2021	14,579	$	14	$	783,778	$	(194)	$	(95,347)	$	688,251	$	—	$	688,251
March 31, 2022	14,837	$	14	$	786,798	$	(224)	$	(66,256)	$	720,332

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

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TravelCenters of America Inc.

~~Consolidated~~Notes ~~Statements~~to ofConsolidated ~~Stockholders’~~Financial ~~Equity~~Statements (Unaudited)

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

	Number of Shares ofCommon Stock	CommonStock		Additional Paid-In Capital		AccumulatedOtherComprehensive Loss		AccumulatedDeficit		Total TA Stockholders’ Equity		Noncontrolling Interest		Total Stockholders’Equity
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	15	—		4,258		—		—		4,258		—		4,258
Other comprehensive income, net of taxes	—	—		—		213		—		213		—		213
Net income	—	—		—		—		117,259		117,259		—		117,259
September 30, 2022	14,854	14		789,855		15		34,699		824,583		—		824,583
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	5	—		2,537		—		—		2,537		—		2,537
Distribution to noncontrolling interest	—	—		—		—		—		—		(80)		(80)
Other changes	—	—		(600)		—		—		(600)		—		(600)
Other comprehensive loss, net of taxes	—	—		—		11		—		11		—		11
Net income	—	—		—		—		45,737		45,737		(333)		45,404
September 30, 2021	14,579	14		783,778		(194)		(95,347)		688,251		—		688,251

1.Business Description and Basis of Presentation

~~The~~TravelCenters ~~accompanying~~of ~~notes~~America Inc. ~~are~~is ana ~~integral~~Maryland ~~part~~corporation. As of ~~these~~March 31, ~~consolidated~~2023, ~~financial~~we ~~statements~~operated or franchised 286 travel centers, three standalone truck service facilities and one standalone restaurant. 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 March 31, 2023, our business included 286 travel centers in 44 states in the United States, primarily along the U.S. interstate highway system, operated primarily under the “TravelCenters of America,” “TA,” “TA Express,” “Petro Stopping Centers” and “Petro” brand names. Of these travel centers, we owned 56, we leased 181, we operated two for a joint venture and 47 were owned or leased from others by our franchisees. We operated 239 of our travel centers and franchisees operated 47 travel 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 and various customer amenities.

As of March 31, 2023, our business included three standalone truck service facilities that we operate under the “TA Truck Service” brand name. Of these standalone truck service facilities, we leased two and owned one. Our standalone truck service facilities offer extensive maintenance and emergency repair and roadside services to large trucks.

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.

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, 2022, 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 current economic conditions have, and may in the future, significantly alter the seasonal aspects of our 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.

The Proposed Merger

On February 15, 2023, we entered into an Agreement and Plan of Merger, the Merger Agreement, with BP Products North America Inc., or BP, and Bluestar RTM Inc., or Merger Subsidiary, pursuant to which Merger Subsidiary will merge with and into TA, or the Merger, with TA surviving the Merger.

As a result of the Merger, at the effective time of the Merger, or the Effective Time, each share of our common stock outstanding immediately prior to the Effective Time (other than shares of our common stock (i) owned by BP or Merger Subsidiary immediately prior to the Effective Time, or (ii) held by any subsidiary of ours or BP (other than Merger Subsidiary) immediately prior to the Effective Time), will be converted into the right to receive $86.00 in cash, without interest, or the Merger Consideration.

Immediately prior to the Effective Time, each then-outstanding share of our common stock granted subject to vesting or other lapse restrictions under any TA stock plan that is outstanding immediately prior to the Effective Time will vest in full and become free of such restrictions and will be converted into the right to receive the Merger Consideration under the same terms and conditions as apply to the receipt of the Merger Consideration by holders of our common stock generally.

The closing of the Merger is subject to the satisfaction or waiver of certain conditions, including, among other things, (i) receipt by us of approval from our stockholders, or the Company Stockholder Approval, (ii) that there is no temporary restraining order, preliminary or permanent injunction or other judgment issued by any court of competent jurisdiction in effect

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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~~enjoining ~~Description~~or otherwise prohibiting the consummation of the Merger, (iii) the expiration or termination of any applicable waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, which expired on April 10, 2023, and ~~Basis~~all other approvals under antitrust laws, (iv) the accuracy of ~~Presentation~~the representations and warranties contained in the Merger Agreement (subject to specified materiality qualifiers), (v) compliance with the covenants and obligations under the Merger Agreement in all material respects; (vi) the absence of a material adverse effect with respect to TA; and (vii) the execution, release and delivery of the Consent and Amendment Agreement, dated as of February 15, 2023, by and among us, our subsidiary TA Operating LLC, BP, Service Properties Trust, or SVC, and certain of SVC’s subsidiaries, or the SVC Consent Agreement, and all agreements entered into pursuant thereto.

~~TravelCenters~~We ofhave ~~America Inc.~~made iscustomary arepresentations ~~Maryland corporation. As of September 30, 2022, we operated or franchised 284 travel centers, standalone truck service facilities~~ and ~~standalone~~warranties ~~restaurants.~~in ~~Our~~the ~~customers~~Merger ~~include~~Agreement ~~trucking fleets~~ and ~~their~~have ~~drivers,~~agreed ~~independent~~to ~~truck~~customary ~~drivers,~~covenants ~~highway~~regarding ~~and~~the ~~local~~operation ~~motorists~~of ~~and~~our ~~casual~~business ~~diners.~~prior Weto ~~also~~the ~~collect~~Effective ~~rents, royalties and other fees from our tenants and franchisees~~Time.

AsThe ofMerger ~~September 30~~Agreement also includes a covenant requiring us not to solicit any acquisition proposal, ~~2022~~and, ~~our~~subject ~~business~~to ~~included~~certain ~~278~~exceptions, ~~travel~~not ~~centers~~to inenter 44into ~~states~~or participate or engage in ~~the~~any ~~United~~discussions ~~States~~or negotiations with, ~~primarily~~related ~~along~~to ~~the~~an Uacquisition proposal or enter into any letter of intent, acquisition agreement or other similar agreement relating to an acquisition proposal.S. ~~interstate~~Further, ~~highway~~our ~~system~~board of directors will not withhold, ~~operated~~withdraw, ~~primarily~~amend ~~under~~or ~~the~~modify, ~~“TravelCenters~~or publicly propose to do any of ~~America~~the foregoing,” ~~“TA~~its recommendation in a manner adverse to BP,” ~~“TA~~adopt, ~~Express~~approve or recommend to our stockholders an acquisition proposal,” ~~“Petro~~fail ~~Stopping~~to ~~Centers”~~reaffirm ~~and~~its ~~“Petro”~~recommendation ~~brand~~within ~~names~~10 business days following BP’s written request, fail to recommend against acceptance of a tender or exchange offer for shares of our common stock within 10 business days after the commencement thereof, nor fail to include its recommendation in the proxy statement related to the Merger. Of Notwithstanding these ~~travel~~restrictions, ~~centers~~at any time prior to obtaining the Company Stockholder Approval, if we ~~owned~~have 55received a written, webona ~~leased~~fide, ~~181~~unsolicited acquisition proposal from any third party (or a group of third parties) that our board of directors determines in good faith, weafter ~~operated~~consultation ~~two~~with ~~for~~its financial advisor and outside legal counsel, constitutes or could reasonably be expected to lead to a ~~joint~~superior ~~venture~~proposal, and 40the ~~were~~failure ~~owned~~to take the following actions would reasonably be expected to be inconsistent with its duties under applicable law, then we, directly or ~~leased~~indirectly ~~from~~through ~~others~~certain byspecified ~~our~~representatives ~~franchisees.~~may, Wesubject ~~operated~~to ~~238~~certain ofconditions, ~~our~~engage ~~travel~~in ~~centers~~discussions with such third party and ~~franchisees~~furnish ~~operated~~to 40such ~~travel~~third ~~centers~~party non-public information relating to us pursuant to an acceptable confidentiality agreement. ~~Our~~Further, ~~travel~~at ~~centers~~any ~~offer~~time prior to obtaining the Company Stockholder Approval, in respect to a ~~broad~~superior ~~range~~proposal we receive after the date of ~~products~~the ~~and~~Merger ~~services~~Agreement on an unsolicited basis, ~~including~~if ~~diesel~~our ~~fuel~~board ~~and~~of ~~gasoline~~directors determines in good faith, asafter ~~well~~consultation aswith ~~nonfuel~~its ~~products~~financial advisors and ~~services~~outside legal counsel, that the failure to take such asaction ~~truck~~would ~~repair~~be ~~and~~reasonably ~~maintenance~~expected ~~services~~to be inconsistent with its duties under applicable law, ~~diesel~~our ~~exhaust~~board ~~fluid~~of directors may, ~~full~~subject ~~service~~to ~~restaurants~~compliance with certain conditions, ~~quick~~(i) ~~service~~make ~~restaurants~~an ~~and~~Adverse ~~various~~Recommendation ~~customer~~Change ~~amenities~~(as defined in the Merger Agreement) or (ii) cause us to terminate the Merger Agreement in compliance with the terms of the Merger Agreement in order to enter into a binding written definitive agreement providing for such superior proposal.

AsThe Merger Agreement contains certain termination rights for us and BP. Upon termination of ~~September 30~~the Merger Agreement in accordance with its terms, ~~2022~~under certain specified circumstances, ~~our~~we ~~business~~will ~~included~~be ~~five~~required ~~standalone~~to ~~truck~~pay ~~service~~BP ~~facilities~~a ~~operated~~termination ~~under~~fee in an amount equal to $51,900, including if the ~~“TA~~Merger ~~Truck~~Agreement ~~Service”~~is ~~brand~~terminated ~~name~~due to our acceptance of an unsolicited superior proposal or due to our board of directors changing its recommendation to our stockholders to vote to approve the Merger Agreement. OfThe ~~these~~Merger ~~standalone~~Agreement ~~truck~~further ~~service~~provides ~~facilities~~that BP will be required to pay us a termination fee in an amount equal to $90,900 wein ~~leased~~the ~~three~~event the Merger Agreement is terminated under certain specified circumstances and ~~owned~~receipt ~~two.~~of ~~Our~~antitrust ~~standalone~~approval ~~truck~~has ~~service~~not ~~facilities~~been ~~offer~~obtained ~~extensive~~by ~~maintenance~~such ~~and~~time. ~~emergency~~Subject ~~repair~~to certain exceptions and ~~roadside~~limitations, ~~services~~either party may terminate the Merger Agreement if the Merger is not consummated by November 15, 2023, subject to ~~large~~(x) ~~trucks~~an automatic 90-day extension and (y) an additional 90-day extension under certain circumstances.

In Onconnection ~~April 21,~~with ~~2021~~entering into the Merger Agreement, we ~~completed~~agreed ~~the~~with ~~sale~~BP ofand SVC to amend and restate our ~~Quaker~~subsidiary’s ~~Steak~~leases &with ~~Lube~~certain of SVC’s subsidiaries, orand ~~QSL~~corresponding guaranty agreements, ~~business~~in ~~for~~each $5case effective at the Effective Time,~~000,~~ ~~excluding~~conditioned ~~costs~~on tothe ~~sell~~occurrence ~~and~~of ~~certain~~the closing ~~adjustments~~of the Merger. ~~See~~SVC ~~Note~~has 3consented to the entry by TA into the Merger Agreement and the consummation of ~~this~~the ~~Quarterly~~transactions ~~Report~~contemplated onthereby ~~Form~~and ~~10-Q,~~any resulting change in control or ~~this~~assignment ~~Quarterly~~of ~~Report,~~TA ~~for~~resulting ~~more~~from ~~information~~either ~~about~~or both of the ~~sale~~Merger ofand ~~our~~such ~~QSL~~transactions. In ~~business~~addition, SVC has agreed to vote its shares in favor of the sale.

WeSubject ~~manage~~to ~~our~~the ~~business~~satisfaction ~~as one segment. We make specific disclosures concerning fuel and nonfuel products and services because they facilitate our discussion~~ of ~~trends~~the ~~and~~remaining ~~operational~~conditions ~~initiatives within our business and industry. On April 26, 2022, we ceased operations at our only travel center located in a foreign country, Canada, which we did not consider material~~ to ~~our~~the ~~operations. On~~closing ~~March~~of 2,the ~~2022~~Merger, we ~~entered~~expect ~~into~~the anclosing ~~agreement~~of tothe ~~sell~~transactions ~~our~~contemplated ~~Canadian~~by ~~travel~~the ~~center~~Merger ~~for~~Agreement ~~C$26,000 (subsequently revised~~ to ~~C$23,000,~~occur orby ~~approximately~~May ~~US$17~~15,~~000~~ ~~based on foreign exchange rates as of September 30, 2022), excluding costs to sell and certain closing adjustments~~2023. ~~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, 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 current economic conditions have, and may in the future, significantly alter the seasonal aspects of our 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, 2022, was $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)

Fair Value Measurement

Senior Notes

Recently Issued Accounting Pronouncement and Other Accounting Matters

The following table summarizes recent accounting standard updates, or ASUs, issued by the Financial Accounting Standards Board, or FASB, that could have an impact on our consolidated financial statements.

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.

ASU 2020-04 - Reference Rate Reform (Topic 848) Facilitation of the effects of Reference Rate Reform of Financial Reporting, as amended by ASU 2021-01 and ASU 2022-06

These updates provide 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; clarifies that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition; and defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

January 1, 2023

These updates did not have a material impact on our consolidated financial statements.

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, less estimates for variable consideration (such as customer loyalty programs and customer rebates), and 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 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. Nonfuel revenues disaggregated by type of good or service for the three months ended March 31, 2023 and 2022, were as follows:

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. Nonfuel revenues disaggregated by type of good or service for the three and nine months ended September 30, 2022 and 2021, were as follows:


	Three Months Ended March 31,
	2023		2022
Nonfuel revenues:
Store and retail services	$	179,437	$	179,540
Truck service	207,441		188,384
Restaurant	82,880		74,338
Diesel exhaust fluid	45,916		44,820
Total nonfuel revenues	$	515,674	$	487,082

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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 EndedSeptember 30,				Nine Months EndedSeptember 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

	CustomerLoyalty Programs		Deferred Franchise Fees and Other		Total
December 31, 2021	$	26,120	$	6,156	$	32,276
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	(109,567)		(2,197)		(111,764)
Other	14,050		(430)		13,620
September 30, 2022	$	26,804	$	5,973	$	32,777

As of December 31, 2022, our contract liability balances (for customer loyalty programs, deferred franchise fees and gift cards) totaled $32,132, of which $27,807 was recognized as revenue during three months ended March 31, 2023. As of March 31, 2023, our contract liabilities totaled $31,889 and are presented in our consolidated balance sheets in other current and other noncurrent liabilities. As of March 31, 2023, we expect that the unsatisfied performance obligations relating to our customer loyalty programs and other contract liabilities of $25,124, will generally be satisfied within 12 months. As of March 31, 2023, the deferred initial and renewal franchise fee revenue expected to be recognized in future periods is approximately $750 for each of the years 2023 through 2027.

~~As of September 30, 2022, we expect the unsatisfied performance obligations, relating to our customer loyalty programs and other contract liabilities, will generally be satisfied within 12 months~~3. Stockholders’ Equity

The following table presents a reconciliation of net income attributable to common stockholders to net (loss) income available to common stockholders and the related (loss) earnings per share of common stock for the three months ended March 31, 2023 and 2022.

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.


	Three Months Ended March 31,
	2023		2022
Net (loss) income attributable to common stockholders	$	(6,298)	$	16,304
Less: net (loss) income attributable to participating securities	(231)		512
Net (loss) income available to common stockholders	$	(6,067)	$	15,792

Weighted average shares of common stock(1)	14,547		14,372

Basic and diluted net (loss) income per share of common stock attributable to common stockholders	$	(0.42)	$	1.10

3(1) Excludes unvested shares of common stock awarded under our share award plan, 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. ~~Acquisition~~ The weighted average number of unvested shares of common stock outstanding for the three months ended March 31, 2023 and 2022, ~~Disposition~~was 554 and 466, ~~Activity~~respectively.

~~2022~~4. Leasing ~~Acquisitions~~Transactions

As 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.~~Lessee

We have lease agreements covering many of our properties, as well as various equipment, with the most significant leases being our five leases with 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 March 31, 2023, 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 were classified as finance leases. 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, in our consolidated balance sheets.

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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 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.

4. Stockholders’ Equity

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 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 327, 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 334, respectively.

5. Goodwill

Our Goodwill balance as of September 30, 2022 and December 31, 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, 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 increase in goodwill of $12,619 primarily relates to provisional goodwill recorded as a result of acquisitions completed in 2022 and relates to 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 five 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, 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 were classified as finance leases. 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, in our consolidated balance sheets.

Leasing Agreements with SVC

As of ~~September~~March 3031, ~~2022~~2023, we leased from SVC a total of ~~179~~177 properties under five leases. We refer to these five leases collectively as the SVC Leases. The SVC Leases expire between 2029 and 2035, subject to our right to extend those leases. We have two renewal options of 15 years under each of the SVC Leases.

OnWe ~~March 9,~~recognized ~~2021,~~total wereal ~~and~~estate ~~SVC~~rent ~~amended~~expense ~~one~~under of the SVC Leases toof ~~reflect~~$63,601 and $63,907 for the ~~renewal~~three months ended March 31, 2023 and 2022, respectively. Included in these rent expense amounts are percentage rent payable of a$2,385 ~~third~~and ~~party~~$2,499 ~~ground~~respectively, ~~lease~~which atare ~~one~~based on a percentage of the ~~179~~increases ~~travel~~in ~~center~~total ~~properties~~nonfuel ~~that~~revenues weat ~~lease~~each ~~from~~leased ~~SVC. This~~property ~~ground~~over ~~lease~~base year levels, ~~which~~net ~~was~~adjustments ~~previously~~to ~~accounted~~record ~~for~~minimum asannual anrent ~~operating~~on ~~lease~~a straight line basis over the terms of the leases, isthe ~~now~~estimated ~~accounted~~future payments by us for asthe acost ~~finance~~of ~~lease.~~removing Asunderground astorage ~~result~~tanks ofon ~~this~~a ~~ground~~straight ~~lease~~line ~~modification,~~basis weand ~~recorded~~the ~~$28,201~~benefit inof other ~~noncurrent~~lease ~~assets~~incentives. As of March 31, $12023,~~158~~ inthe ~~other~~present ~~current~~value ~~liabilities~~of ~~and~~the estimated future payments related to these underground storage tanks were $27,~~046~~775 and are recorded in other noncurrent liabilities on our consolidated balance sheets. As inof December 31, 2022, the ~~first~~remaining ~~quarter~~balance of ~~2021~~our deferred rent obligations was $4,404 and we paid that amount in January 2023.

WeAs ~~recognized total real estate rent expense under the SVC Leases~~ of ~~$64,056 and $61,283 for the three months ended September~~March 3031, ~~2022 and 2021~~2023, ~~respectively,~~our ~~and~~aggregate ~~$192,262~~annual ~~and~~minimum ~~$183,343 for the nine months ended September 30, 2022 and 2021, respectively. Included in these~~ rent ~~expense amounts are percentage rent~~ payable ofto ~~$2,692~~SVC ~~and~~under ~~$1,850 for~~ the ~~three~~SVC ~~months~~Leases ~~ended~~was ~~September 30, 2022 and 2021, respectively, and~~ $8243,~~029~~914. ~~and~~Pursuant ~~$4,827~~to ~~for~~ the ~~nine~~SVC ~~months ended September 30~~Leases, ~~2022~~we ~~and~~may ~~2021,~~request ~~respectively,~~that ~~which~~SVC ~~are~~purchase ~~based~~qualifying oncapital aimprovements ~~percentage~~we ofmake ~~the increases in total nonfuel revenues~~ at ~~each~~the leased ~~property~~travel ~~over~~centers ~~base~~in ~~year~~return ~~levels, deferred rent of $4,404 and $13,211~~ for ~~the~~increased ~~three~~annual ~~and nine month periods, respectively, and adjustments to record~~ minimum ~~annual~~ rent. onWe adid ~~straight~~not ~~line~~sell ~~basis~~to ~~over~~SVC ~~the~~any ~~terms~~improvements ofwe ~~the~~made ~~leases~~to ~~and~~properties ~~estimated~~leased ~~future~~from ~~payments~~SVC ~~by us~~ for the ~~cost~~three ofmonths ~~removing~~ended ~~underground storage tanks on a straight line basis. As of September~~March 3031, ~~2022,~~2023 ~~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 $8,807 as of September 30,~~ 2022 ~~and is scheduled to be fully paid by January 31, 2023~~.

As ofpermitted ~~September 30,~~by ~~2022, our aggregate annual minimum rent payable to SVC under~~ the SVC Leases ~~was $243~~,~~914. Pursuant~~ ~~to the SVC Leases,~~ we ~~may~~sublease ~~request~~a ~~that~~portion ~~SVC~~of ~~purchase~~certain ~~qualifying~~travel ~~capital~~centers ~~improvements~~to wethird ~~make~~parties atto ~~the~~operate ~~leased~~other ~~travel~~retail ~~centers~~operations. inThese ~~return~~subleases ~~for~~are ~~increased~~classified ~~annual~~as ~~minimum~~operating ~~rent~~leases. We ~~did~~recognized ~~not~~sublease ~~sell~~rental toincome ~~SVC~~of ~~any~~$576 ~~improvements~~and we$423 ~~made to properties leased from SVC~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively.

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 $509 and $502 for the three months ended September 30, 2022 and 2021, respectively, and $1,413 and $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 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 (loss) income, as shown in the following ~~tables~~table. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, our lease costs consisted of the following:

Classification in our Consolidated Statements of Operations and Comprehensive Income

Three Months EndedSeptember 30,

Classification in our Consolidated Statements of Operations and Comprehensive (Loss) Income

Three Months EndedMarch 31,

2022

2021

2023

2022

Operating lease costs: SVC Leases

Real estate rent expense

60,~~886~~738

5860,~~951~~964

Operating lease costs: other

Real estate rent expense

~~684~~906

~~2,447~~552

Variable lease costs: SVC Leases

Real estate rent expense

32,~~169~~863

2,~~332~~943

Variable lease costs: other

Real estate rent expense

~~215~~194

~~168~~187

Total real estate rent expense

64,~~954~~701

6364,~~898~~646

Operating lease costs: equipment and other

Site level operating expense and selling, general and administrative expense

~~324~~832

~~710~~942

Financing lease costs: equipment and other

Site level operating expense

7560

53155

Short-term lease costs

Site level operating expense and selling, general and administrative expense

~~101~~216

~~171~~105

Amortization of finance lease assets: SVC Leases

Depreciation and amortization expense

553

Amortization of finance lease assets: other

Depreciation and amortization expense

~~922~~983

~~553~~757

Interest on finance lease liabilities: SVC Leases

Interest expense, net

~~291~~282

~~305~~298

Interest on finance lease liabilities: other

Interest expense, net

~~177~~167

~~134~~164

Sublease income

Nonfuel revenues

(~~509~~576)

(~~502~~423)

Net lease costs

6667,~~888~~218

6567,~~875~~197

129

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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	Nine Months EndedSeptember 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~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, our operating lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:

	September 30,2022		December 31,2021
	March 31,2023		December 31,2022
Operating lease assets:
SVC Leases	$	1,~~583~~531,~~634~~944	$	1,~~649~~560,~~142~~616
Other	1625,~~917~~745		1015,~~384~~922
Total operating lease assets	$	1,~~600~~557,~~551~~689	$	1,~~659~~576,~~526~~538
Current operating lease liabilities:
SVC Leases	$	~~112~~107,~~447~~984	$	~~114~~110,~~372~~521
Other	3,~~856~~797		3,~~633~~419
Total current operating lease liabilities	$	~~116~~111,~~303~~781	$	~~118~~113,~~005~~940
Noncurrent operating lease liabilities:
SVC Leases	$	1,~~565~~505,~~516~~574	$	1,~~648~~538,~~112~~031
Other	1322,~~548~~451		712,~~247~~996
Total noncurrent operating lease liabilities	$	1,~~579~~528,~~064~~025	$	1,~~655~~551,~~359~~027

~~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.~~10

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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~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, our finance lease assets and liabilities consisted of the following, and for SVC leases shown below, include amounts for properties we sublease from SVC:

	September 30,2022		December 31,2021
	March 31,2023		December 31,2022
Finance lease assets:
SVC Leases	$	2423,~~883~~777	$	2624,~~542~~330
Other	1715,~~109~~513		1516,~~781~~205
Total finance lease assets	$	4139,~~992~~290	$	4240,~~323~~535
Current finance lease liabilities:
SVC Leases	$	1,~~519~~586	$	1,~~517~~552
Other	3,~~628~~756		23,~~814~~690
Total current finance lease liabilities	$	5,~~147~~342	$	45,~~331~~242
Noncurrent finance lease liabilities:
SVC Leases	$	24,~~924~~106	$	2524,~~974~~517
Other	1412,~~031~~327		13,~~240~~934
Total noncurrent finance lease liabilities	$	3836,~~955~~433	$	3938,~~214~~451

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~~Maturities ~~annual~~of ~~and~~our ~~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~~March 3031, ~~2022~~2023, were as follows:

	SVC Leases		Other		Total
	SVC Leases (1)		Other		Total
Years ended December 31:
2022	$	67,213	$	1,185	$	68,398
2023	$	187,645	$	3,942	$	191,587
2023	255,469		4,059		259,528
2024	250,388		4,922		255,310
2024	251,295		2,961		254,256
2025	250,375		4,848		255,223
2025	251,283		2,851		254,134
2026	250,371		4,335		254,706
2026	251,278		2,495		253,773
2027	250,392		3,464		253,856
Thereafter	1,~~538~~285,~~649~~536		711,~~249~~541		1,~~545~~297,~~898~~077
Total operating lease payments	2,~~615~~474,~~187~~707		2033,~~800~~052		2,~~635~~507,~~987~~759
Less: present value discount(1)	(~~937~~861,~~224~~149)		(36,~~396~~799)		(~~940~~867,~~620~~948)
Present value of operating lease liabilities	$	1,~~677~~613,~~963~~558	$	1726,~~404~~253	$	1,~~695~~639,~~367~~811

(1) ~~The~~Includes ~~discount~~rent ~~rate~~for ~~used~~properties towe ~~derive~~sublease ~~the~~from ~~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~~.

(2) The ~~weighted~~discount ~~average~~rate ~~remaining~~used ~~lease~~to ~~term~~derive ~~for~~the ~~our~~present ~~operating~~value ~~leases~~of asunpaid oflease ~~September 30,~~payments ~~2022,~~is ~~was~~based ~~approximately~~on 11the ~~years.~~rates ~~Our~~implicit ~~weighted~~in ~~average~~the ~~discount~~SVC ~~rate~~Leases ~~for~~and our ~~operating~~incremental ~~leases~~borrowing asrate offor ~~September 30,~~all ~~2022,~~other ~~was approximately 9~~leases.~~1%.~~

14The weighted average remaining lease term for our operating leases as of March 31, 2023, was approximately 10 years. Our weighted average discount rate for our operating leases as of March 31, 2023, was approximately 9.1%.

During the three months ended March 31, 2023 and 2022, we paid real estate rent payments of $70,693 and $70,371, 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)

~~The~~Maturities ~~annual~~of ~~and~~our ~~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~~March 3031, ~~2022~~2023, were as follows:

	SVC Lease		Other		Total
	SVC Leases (1)		Other		Total
Years ended December 31:
2022	$	660	$	1,065	$	1,725
2023	$	1,996	$	3,297	$	5,293
2023	2,656		4,262		6,918
2024	2,722		3,954		6,676
2024	2,722		3,820		6,542
2025	2,790		3,349		6,139
2025	2,790		3,227		6,017
2026	2,860		2,982		5,842
2026	2,860		3,024		5,884
2027	2,932		2,685		5,617
Thereafter	2219,~~126~~194		41,~~177~~416		2620,~~303~~610
Total finance lease payments	3332,~~814~~494		1917,~~575~~683		5350,~~389~~177
Less: present value discount(1)	(76,~~371~~802)		(1,~~916~~600)		(98,~~287~~402)
Present value of finance lease liabilities	$	2625,~~443~~692	$	1716,~~659~~083	$	4441,~~102~~775

(1) ~~The~~Includes ~~discount~~rent ~~rate~~for ~~used~~properties towe ~~derive~~sublease ~~the~~from ~~present value of unpaid lease payments is based on our incremental borrowing rate~~SVC.

(2) The ~~weighted~~discount ~~average~~rate ~~remaining~~used ~~lease~~to ~~term~~derive ~~for~~the ~~our~~present ~~finance~~value ~~leases as~~ of ~~September 30,~~unpaid ~~2022,~~lease ~~was~~payments ~~approximately~~is 9based ~~years.~~on ~~Our weighted average discount rate for~~ our ~~finance~~incremental ~~leases~~borrowing ~~as of September 30, 2022, was approximately 4~~rate.~~3%.~~

The weighted average remaining lease term for our finance leases as of March 31, 2023, was approximately 8 years. Our weighted average discount rate for our finance leases as of March 31, 2023, was approximately 4.3%.

During the three months ended March 31, 2023 and 2022, we paid $1,818 and $1,035, respectively, for amounts that had been included in the measurement of our finance lease liabilities.

In connection with entering into the Merger Agreement, we and our wholly-owned subsidiary, TA Operating LLC, or together the TCA Parties, entered into the SVC Consent Agreement with SVC pursuant to which, among other things, SVC consented to our entering into the Merger Agreement and the consummation of the Merger and agreed to enter into amended and restated lease and guarantee agreements with the applicable TCA Parties, which would be entered into at the effective time of the Merger. For more information about the Merger and the SVC Consent Agreement, see Notes 1 and 6 of this Quarterly Report.

As a Lessor

During ~~the second and third quarters of~~ 2022, we acquired the operating assets related to two travel centers we previously leased to franchisees. Rent revenues from these operating leases totaled ~~zero and~~ $595 for the three months ended ~~September 30,~~March ~~2022 and 2021~~31, ~~respectively, and $1,190 and $1,763 for the nine months ended September 30,~~ 2022 ~~and 2021, respectively~~. See ~~Note 3 of this Quarterly Report for more information about these 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.

75. 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 $43,~~427~~544 and $3,~~822~~639 for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively, and $12,315 and $10,418 for the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively. These amounts are included in selling, general and administrative expense in our consolidated statements of operations and comprehensive (loss) income. For more information about our relationship with RMR, see Note 86 of this Quarterly Report and ~~Note 12 of~~ our Annual Report.

~~8. Related Party Transactions~~12

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 one 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., the chair of the board of directors, a managing director, 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 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)

~~subsidiaries provide management services~~6. Related ~~Mr.~~Party Portnoy serves as chair of the 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.Transactions

We Ashave 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 ~~September 30~~which have directors, ~~2022~~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 one of our Managing Directors, MrAdam D. Portnoy, ~~beneficially~~is ~~owned~~the ~~(including~~sole ~~indirectly~~trustee, ~~through~~an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of The RMR) ~~approximately~~Group 4Inc.5%, 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 ~~outstanding~~other ~~shares~~Managing Director and Chief Executive Officer, also serves as an officer and employee of ~~common~~RMR. ~~stock~~Certain of our other officers and SVC’s officers also serve as officers and employees of RMR. Some of our Independent Directors also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the board and as a managing trustee of these public companies, including SVC. Other officers of RMR, including certain of our officers, serve as managing trustees or officers of certain of these companies.

As of March 31, 2023, Mr. Portnoy beneficially owned 662 shares of our common stock (including indirectly through RMR), representing approximately 4.4% of our outstanding shares of common stock.

Relationship with SVC

We are SVC’s largest tenant and SVC is our principal landlord and ~~second~~a ~~largest~~significant stockholder of ours. As of ~~September~~March 3031, ~~2022~~2023, SVC owned 1,185 shares of our common stock, representing approximately 87.08% of our outstanding shares of common stock. As of ~~September~~March 3031, ~~2022~~2023, we leased from SVC a total of ~~179~~177 travel center properties under the SVC Leases. See Note 64 of this Quarterly Report for more information about our lease agreements with SVC.

In connection with our entering into the Merger Agreement, SVC entered into the SVC Consent Agreement. SVC also entered into a voting agreement with BP pursuant to which SVC agreed to vote all of its shares of our common stock in favor of our sale to BP and against any alternative acquisition proposal. See Notes 1 and 4 of this Quarterly Report for more information about our sale to BP and the Consent Agreement.

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

~~Sale~~In connection with the Merger Agreement, on February 15, 2023, RMR entered into a voting agreement with BP pursuant to which RMR agreed to vote all of ~~Property~~its shares of our common stock in favor of our sale to BP and against any alternative acquisition proposal.

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 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.

97. 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.

1613

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TravelCenters of America Inc.

Notes to Consolidated Financial Statements (Unaudited)

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

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.

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~~March 3031, ~~2022~~2023, we ~~accrued~~had a current liability of $2,~~835,~~572 ~~of which $589 related to the potential sale of our travel center located in Canada,~~ and a noncurrent liability of $1,~~209~~068 for environmental matters as well as a receivable, which is recorded in noncurrent assets in our consolidated ~~balances~~balance sheets, for expected recoveries of certain of these estimated future expenditures of $~~768, resulting in an estimated net amount of $3,276 that we expect to fund in the future~~578. ~~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 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 and our directors are also involved in litigation related to the Merger and certain of our disclosures about the Merger. 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.

108. Inventory

Inventory as of March 31, 2023 and December 31, 2022 consisted of the following:

	September 30,2022		December 31,2021
	March 31,2023		December 31,2022
Nonfuel products	$	~~186~~205,~~781~~569	$	~~146~~212,~~313~~811
Fuel products	5546,~~825~~886		4559,~~530~~263
Total inventory	$	~~242~~252,~~606~~455	$	~~191~~272,~~843~~074

~~11. Equity Investments~~14

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)

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, net in our consolidated statements of operations and comprehensive income during the nine months ended September 30, 2021. 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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Item 2. 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 Part I, Item 1 of 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, ~~2021~~2022, or our Annual Report. Unless indicated otherwise, amounts are in thousands of dollars, ~~gallons and~~ shares of common stock, asor ~~applicable~~gallons, ~~unless~~as ~~indicated otherwise~~applicable.

Company Overview

TravelCenters of America Inc. is a Maryland corporation. As of ~~September~~March 3031, ~~2022~~2023, we operated or franchised ~~284~~286 travel centers, three standalone truck service facilities and one standalone ~~restaurants~~restaurant. 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.

~~Economic~~Recent ~~Conditions~~Significant Events

The ~~United~~Proposed 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 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 our realizing increased fuel margins and fuel revenues during 2022. It is unclear whether the current economic conditions and government responses to these conditions, including inflation, increasing interest rates, the war between Russia and Ukraine and high fuel prices, will result in an economic slowdown or recession in the United States. If that occurs, demand for the transporting of products across the United States by trucks may decline, possibly significantly, which may significantly adversely impact our business, results of operations and financial position. Merger

~~COVID~~On February 15, 2023, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with BP Products North America Inc., or BP, Bluestar RTM Inc., a Maryland corporation and an indirect wholly-19owned ~~Pandemic~~subsidiary of BP, or Merger Subsidiary, pursuant to which Merger Subsidiary will merge with and into the Company, or the Merger, with the Company surviving the Merger.

~~Many~~As a result of the ~~restrictions~~Merger, ~~that~~at ~~had~~the ~~been~~effective ~~imposed~~time inof the ~~United~~Merger, ~~States~~or ~~during~~ the ~~COVID-19~~Effective ~~pandemic~~Time, ~~have~~each ~~since~~share ~~been~~of ~~lifted~~our ~~and~~common ~~commercial~~stock, ~~activity~~par invalue ~~the~~$0.001 ~~United~~per ~~States~~share, ~~generally~~outstanding ~~has~~immediately ~~increasingly~~prior ~~returned~~ to ~~pre-pandemic~~the ~~practices~~Effective ~~and~~Time ~~operations.~~(other Tothan ~~date,~~shares ~~the~~of ~~COVID-19~~our ~~pandemic~~common ~~has~~stock ~~not~~(i) ~~had~~owned aby ~~significant~~BP ~~adverse~~or ~~impact~~Merger onSubsidiary ~~our~~immediately ~~business. However,~~prior weto ~~continue~~the toEffective ~~closely~~Time, ~~monitor~~or ~~the~~(ii) ~~impact~~held ofby ~~the~~any ~~COVID-19~~Subsidiary ~~pandemic~~(as ondefined ~~all~~in ~~aspects~~the Merger Agreement) of ~~our~~the ~~business.~~Company ~~For~~or ~~more~~BP ~~information~~(other ~~and~~than ~~risks~~Merger ~~relating~~Subsidiary) immediately prior to the ~~COVID-19~~Effective ~~pandemic~~Time), onwill usbe ~~and~~converted ~~our~~into ~~business,~~the ~~see~~right ~~Part~~to I,receive ~~Item~~$86.00 1Ain cash, ~~“Risk~~without ~~Factors”~~interest, ofor ~~our~~the ~~Annual~~Merger ~~Report~~Consideration.

19Immediately prior to the Effective Time, each then-outstanding share of our common stock granted subject to vesting or other lapse restrictions under any TA stock plan that is outstanding immediately prior to the Effective Time will vest in full and become free of such restrictions and will be converted into the right to receive the Merger Consideration under the same terms and conditions as apply to the receipt of the Merger Consideration by holders of our common stock generally.

The closing of the Merger is subject to the satisfaction or waiver of certain conditions, including, among other things, (i) receipt by us of the affirmative vote of the holders of a majority of the outstanding shares of our common stock, or the Company Stockholder Approval, (ii) that there is no temporary restraining order, preliminary or permanent injunction or other judgment issued by any court of competent jurisdiction in effect enjoining or otherwise prohibiting the consummation of the Merger, (iii) the expiration or termination of any applicable waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, which occurred April 10, 2023, and all other approvals under antitrust laws, (iv) the accuracy of the representations and warranties contained in the Merger Agreement (subject to specified materiality qualifiers), (v) compliance with the covenants and obligations under the Merger Agreement in all material respects; (vi) the absence of a material adverse effect with respect to the Company; and (vii) the execution, release and delivery of the Consent and Amendment Agreement, dated as of February 15, 2023, by and among us, our subsidiary TA Operating LLC, BP, Service Properties Trust, or SVC, and certain of SVC’s subsidiaries, and all agreements entered into pursuant thereto.

We made customary representations and warranties in the Merger Agreement and agreed to customary covenants regarding the operation of our business and the business of our subsidiaries prior to the Effective Time.

The Merger Agreement also includes a covenant requiring us not to solicit any acquisition proposal, and, subject to certain exceptions, not to enter into or participate or engage in any discussions or negotiations with, related to an acquisition proposal or enter into any letter of intent, acquisition agreement or other similar agreement relating to an acquisition proposal. Further, our Board of Directors will not withhold, withdraw, amend or modify, or publicly propose to do any of the foregoing, its recommendation in a manner adverse to BP, adopt, approve or recommend to our stockholders an acquisition proposal, fail to reaffirm its recommendation within ten business days following BP’s written request, fail to recommend against acceptance of a tender or exchange offer for shares of our common stock within ten business days after the commencement thereof, nor fail to include its recommendation in the proxy statement that will be prepared in connection with the company stockholder meeting,

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or the Proxy Statement. Notwithstanding these restrictions, at any time prior to obtaining the Company Stockholder Approval, if we have received a written, bona fide, unsolicited acquisition proposal from any third party (or a group of third parties) that our board of directors determines in good faith, after consultation with its financial advisor and outside legal counsel, constitutes or could reasonably be expected to lead to a superior proposal, and the failure to take the following actions would reasonably be expected to be inconsistent with its duties under applicable law, then we, directly or indirectly through certain specified representatives, may, subject to certain conditions, engage in discussions with such third party and furnish to such third party non-public information relating to TA or any of its subsidiaries pursuant to an acceptable confidentiality agreement. Further, at any time prior to obtaining the Company Stockholder Approval, in respect to a superior proposal we receive after the date of the Merger Agreement on an unsolicited basis, if our board of directors determines in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such action would be reasonably expected to be inconsistent with its duties under applicable law, the board of directors may, subject to compliance with certain conditions, (i) make an Adverse Recommendation Change (as defined in the Merger Agreement) or (ii) cause us to terminate the Merger Agreement in compliance with the terms of the Merger Agreement in order to enter into a binding written definitive agreement providing for such superior proposal.

Subject to the satisfaction of the remaining conditions to the closing of the Merger, we expect the closing of the transactions contemplated by the Merger Agreement to occur by May 15, 2023.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to a Current Report on Form 8-K we filed with the Securities and Exchange Commission, or SEC, on February 16, 2023.

Economic Conditions

The United States economy has experienced high inflation since the beginning of 2022 and there are market expectations that inflation may remain at elevated levels for a sustained period. Labor availability has continued to be constrained and market labor costs have continued to increase and may further increase. The U.S. Federal Reserve Board also increased interest rates multiple times since early 2022, with the most recent increase occurring in March 2023. Recent developments in the financial markets has also added another element of uncertainty. These conditions may give rise to an economic slowdown, and perhaps a recession, and could further increase our costs and/or impact our revenues. It is unclear whether the current economic conditions and government responses to these conditions, including inflation, increasing or sustained high interest rates, the continuing war between Russia and Ukraine and high fuel prices, will result in an economic slowdown or recession in the United States. If that occurs, demand for the transporting of products across the United States by trucks may decline, which may significantly adversely impact our business, results of operations and financial position.

Executive Summary of Financial Results

~~During~~We ~~the three months ended September 30, 2022 and 2021, we~~ generated ~~income~~a loss before income taxes of $489,~~710~~059 ~~and~~during ~~$29,047, respectively. During~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, we generated~~ income before ~~income~~ taxes of $~~154~~21,~~131~~153 ~~and~~during ~~$59~~the three months ended March 31,~~180,~~ ~~respectively~~2022. The ~~changes~~change in (loss) income before income taxes of $1930,~~663~~212 ~~for~~compared to the ~~three~~prior ~~months~~year ~~ended~~was ~~September 30,~~primarily ~~2022~~due ~~and~~to ~~2021~~decreased ~~and~~fuel ~~$94,951~~margins ~~for~~as ~~the~~a ~~nine~~result ~~months~~of ~~ended~~lower ~~September 30,~~fuel ~~2022~~market ~~and~~volatility ~~2021~~in ~~were~~comparison ~~primarily due~~ to ~~site~~particularly ~~level~~favorable ~~gross~~market ~~margin~~conditions in ~~excess~~the ofprior ~~site~~year, ~~level~~inflationary ~~operating~~pressures ~~expense~~in ~~increasing,~~several ~~primarily~~areas ~~resulting~~of ~~from~~our ~~incremental~~business, ~~diesel~~including ~~fuel~~higher ~~margin,~~labor ~~the~~costs ~~result~~due ofto ~~fuel~~wage ~~market~~increases, ~~volatility~~higher ~~creating~~product ~~favorable~~costs ~~market~~and ~~conditions~~other ~~for~~operating ~~our business~~expenses, ~~and~~higher ~~increases~~selling, ingeneral ~~nonfuel~~and ~~revenues~~administrative expense, primarily due to ~~inflation-driven~~increased ~~price~~compensation ~~increases~~costs, ~~along~~costs ~~with~~incurred ~~the~~by ~~re-opening~~us ~~and~~with ~~expanded~~respect ~~hours~~to ofthe ~~more~~Merger ~~restaurants,~~Agreement ~~partially~~and ~~offset~~higher bydepreciation ~~higher~~and ~~labor~~amortization ~~costs~~expense primarily due to ~~wage~~the ~~increases~~growth ~~and~~from ~~higher~~increased ~~other~~capital ~~operating~~expenditures ~~expenses~~and acquisitions.

The above factors ~~for the changes in income before income taxes~~ were partially offset by ~~higher~~increases ~~selling,~~in ~~general~~nonfuel ~~and~~revenues ~~administrative expense,~~ primarily due to ~~higher wages and compensation costs, costs related to the transition to cloud~~inflation-~~based~~driven ~~technology~~price ~~solutions,~~increases analong ~~increase~~with ~~in revenue-based business management fees and higher general corporate expenses, in addition to higher depreciation and amortization expense primarily resulting from~~ the ~~growth~~opening ~~in the amount~~ of our new ~~assets~~and ~~placed~~reopening inof ~~service~~certain ~~from~~existing ~~capital~~restaurants ~~expenditures~~ and ~~locations~~recent ~~we acquired~~acquisitions.

Effects of Fuel Prices and Supply and Demand Factors

Our fuel revenues and 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 factor. Over the past several years there have been significant changes in the cost of fuel. 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, 2022 as compared to the beginning of those respective periods. The average fuel price during the three and nine months ended September 30, 2022, was 74.4% and 96.7% higher than the average fuel price during the three and nine months ended September 30, 2021, respectively. These 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 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 increase our working capital requirements.

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~~Due~~decreased todemand ~~the~~for ~~volatility~~oil ofin ~~our~~response ~~fuel~~to ~~costs~~market and ~~our~~governmental ~~methods~~factors, ofincluding ~~pricing~~increased ~~fuel~~demand tofor ~~our~~alternative ~~customers,~~energy wesources ~~believe~~in ~~that~~response ~~fuel~~to ~~revenues~~global ~~are~~climate ~~not~~change. aThese ~~reliable~~and ~~metric~~other factors, for ~~analyzing~~example ~~our~~the ~~results~~ongoing ofwar ~~operations~~between ~~from~~Russia ~~period~~and toUkraine ~~period.~~and Asvarious acountries’ ~~result~~actions ~~solely~~in ofresponse ~~changes~~to inthat ~~fuel prices~~war, ~~our~~are ~~fuel~~believed ~~revenues~~to ~~may~~have ~~materially~~contributed ~~increase~~to orrecent ~~decrease,~~fears inof ~~both~~supply ~~absolute~~constraint ~~amounts~~ and, onas a ~~percentage basis~~result, ~~without~~increases ain ~~comparable~~the ~~change~~cost inof ~~fuel~~oil ~~sales~~and ~~volume~~other orfossil inenergy ~~fuel~~sources. ~~gross~~While ~~margin,~~the asunprecedented ~~evidenced~~fuel byprice ~~the~~volatility ~~three~~we ~~and~~experienced ~~nine~~throughout ~~months~~2022 ~~ended~~has ~~September 30~~begun to stabilize, ~~2022.~~albeit Wenot ~~therefore~~to ~~consider~~typical ~~fuel~~historic ~~sales~~levels, ~~volume~~the ~~and~~lower ~~fuel~~volatility ~~gross~~during ~~margin~~the tothree bemonths ~~better~~ended ~~measures~~March 31, of2023 has put downward pressure on our ~~performance~~fuel margins.

~~While~~Although wethere ~~experienced~~are ~~slightly~~several ~~higher~~components ~~diesel~~that ~~sales~~comprise ~~volumes~~and ~~combined~~impact ~~with~~our ~~significantly~~fuel ~~lower~~product ~~gasoline~~costs, ~~sales~~including ~~volumes~~the ~~during~~cost ~~the~~of ~~three~~fuel, freight and ~~nine~~mix, the cost of fuel is the primary factor. Over the past several years there have been significant changes in the cost of fuel. During the three months ended ~~September~~March 3031, ~~2022~~2023, average fuel prices trended downward, decreasing 17.7% as compared to the ~~three~~beginning ~~and~~of ~~nine~~the period, though still higher than typical historic levels. The average fuel price during the three months ended ~~September~~March 3031, ~~2021~~2023, ~~primarily~~was ~~due~~7.6% tolower ~~higher~~than the average fuel ~~prices~~price ~~and~~during ~~inflationary~~the ~~and~~three ~~competitive~~months ~~pressures~~ended March 31, we2022. ~~believe~~These ~~that~~decreases ~~demand~~in ~~for~~ fuel byprices ~~trucking~~were ~~companies~~primarily due to milder weather conditions and ~~motorists~~softer ~~for~~demand aduring ~~constant~~the ~~level~~first quarter of ~~miles~~2023, ~~driven~~which ~~will~~contributed ~~remain~~to ~~relatively~~higher ~~unchanged~~inventory levels in the ~~near-term,~~industry. Uncertainty ~~subject~~in tofuel asupply ~~possible~~still ~~economic~~exists, ~~recession~~however, orin ~~substantial~~light ~~economic~~of ~~downturn,~~the ~~but~~continuing ~~could~~war ~~continue~~between toRussia ~~decline~~and ~~over~~Ukraine ~~time~~and ~~because~~the ofvarious ~~changes~~economic insanctions ~~consumer~~and ~~behavior~~other ~~due~~punitive tomeasures ~~COVID-19~~the United States and ~~inflation,~~other ~~technological~~countries ~~innovations~~have ~~that~~taken ~~improve~~against ~~fuel~~Russia ~~efficiency~~in ofresponse, ~~motor~~including ~~vehicle~~with ~~engines,~~respect ~~other~~to ~~fuel~~Russian ~~conservation~~oil ~~practices~~exports and ~~alternative~~further ~~fuels~~cuts in Russia's oil production and ~~technologies~~other factors. ~~For~~In the ~~first~~aggregate, ~~half~~we ofgenerally ~~2022,~~are able to pass changes in our cost for fuel ~~sales~~products ~~volumes~~to ~~increased~~our ~~primarily~~customers, ~~due~~but totypically ~~improved~~with ~~market~~timing ~~conditions~~differences ~~within~~associated ~~the~~with ~~freight~~on-hand ~~industry~~inventory, ~~traffic~~such ~~increases~~that ~~associated~~during ~~with~~periods ~~the~~of ~~ongoing~~volatile ~~COVID-19~~and ~~pandemic~~rising ~~recovery~~fuel commodity prices, fuel gross margin per gallon tends to be higher than it otherwise may have been and ~~the~~during ~~success~~periods of ~~our~~static ~~marketing~~and ~~initiatives;~~falling ~~however~~fuel commodity prices, ~~these~~fuel ~~factors~~gross ~~were~~margin ~~less~~per ~~significant~~gallon intends ~~the~~to ~~third~~be ~~quarter~~lower ofthan ~~2022~~it asotherwise ~~our~~may have been. For example, steadily rising fuel ~~sales~~prices ~~volume~~typically ~~was~~improve ~~down~~short-term ~~slightly~~fuel asmargins ~~compared~~due to athe ~~strong~~sell-through ~~recovery~~of lower cost inventory at current market prices. Increases in the ~~prior~~prices ~~year~~we ~~quarter.~~pay for fuel can increase our working capital requirements.

InDue ~~addition,~~to wethe ~~believe~~volatility ~~that~~of toour ~~some~~fuel ~~degree~~costs ~~higher~~and our methods of pricing fuel ~~prices~~to ~~and~~our ~~inflationary~~customers, ~~pressures~~we ~~resulted~~believe inthat ~~less~~fuel ~~disposable~~revenues ~~income~~are ~~for~~not ~~our~~a ~~customers~~reliable tometric ~~purchase~~for analyzing our ~~nonfuel~~results ~~products~~of ~~and~~operations ~~services.~~from ~~While~~period ~~nonfuel~~to ~~revenues~~period. ~~and~~As ~~nonfuel~~a ~~margin~~result ~~increased~~solely ~~10.5%~~of ~~and~~changes ~~11.4%,~~in ~~respectively~~fuel prices, ~~during~~our ~~the~~fuel ~~three~~revenues ~~months~~may ~~ended~~materially ~~September~~increase ~~30,~~or ~~2022~~decrease, asin ~~compared~~both toabsolute ~~the~~amounts ~~three~~and ~~months~~on ~~ended~~a ~~September~~percentage 30basis, ~~2021,~~without ~~higher~~a ~~fuel~~comparable ~~prices~~change ~~and~~in ~~inflationary~~fuel ~~pressures~~sales volume or in ~~the~~fuel ~~third~~gross ~~quarter~~margin. ofWe ~~2022~~therefore ~~tempered~~consider ~~certain~~fuel ~~nonfuel~~sales ~~transaction~~volume ~~volumes~~and fuel gross margin to be better measures of our performance.

We experienced slightly lower fuel sales volumes during the three months ended March 31, 2023, as compared to the three months ended March 31, 2022. These decreases primarily resulted from a decline in market conditions within the freight industry in addition to the initial stabilization of the unprecedented fuel price volatility we experienced throughout 2022. Despite experiencing that decline in fuel sales volume, we believe that future 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 decline over time because of changes in trucking industry trends or consumer behavior due to inflationary pressures, technological innovations that improve fuel efficiency of motor vehicle engines, other fuel conservation practices and alternative fuels and technologies as well as possible further government regulation. We believe these factors, combined with competitive pressures, impact the level of fuel sales volume we realize.

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 margins increased 5.9% and 9.7%, respectively, during the three months ended March 31, 2023, as compared to the three months ended March 31, 2022, continuing inflationary pressures may temper certain nonfuel transaction volumes.

Other Factors Affecting Comparability

Growth Strategies

We continue to prioritize and focus on key initiatives across our organization ~~with~~including ~~the~~top-line ~~purpose of network~~ growth through high return capital investments, bottom-line growth through process improvement and cost discipline, continued introduction of efficient technology and 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. The growth strategies and plans discussed in this section are subject to change if the Merger is completed.

Acquiring high quality existing travel centers isand aviable truck services facilities are key ~~aspect~~aspects of our strategic network growth plan. ~~We completed the acquisitions of certain assets of five travel centers and two truck service facilities during the first nine months of 2022.~~ Our ~~active~~ acquisition pipeline may enable us to add independent and franchised sites along active corridors to strengthen the geographic coverage of our network~~. See~~ ~~Note~~and 3expand inour ~~Item~~scope 1.of products and services and customer segments through investments of ~~this~~capital ~~Quarterly~~and ~~Report~~human ~~for~~resources ~~more~~in ~~information~~our ~~about~~truck ~~these~~service ~~acquisitions~~business.

Our growth strategy also includes adding franchised travel centers to our network. Since the beginning of 2020, we have entered into franchise agreements covering approximately 56 travel centers to be operated under our travel center brand names. Five of these franchised travel centers began operations during 2020, two began operations during 2021 and one began operations during the second quarter of 2022. We expect the remaining 48 to all open by the fourth quarter of 2024.17

Our capital expenditures for 2022 are expected to be in the range of $175,000 to $200,000 and includes projects to improve the guest experience through significant upgrades at our travel centers, the expansion of restaurants and food offerings and improvements to our technology systems infrastructure. Approximately 55% of our expected capital expenditures for 2022 are focused on growth initiatives that we expect will meet or exceed our 15% to 20% cash on cash return hurdle.

We are committed to embracing environmentally friendly energy sources through our eTA division, which seeks to deliver sustainable and alternative energy to the marketplace by working with the public sector, private companies and customers and guests to facilitate this initiative. Recent accomplishments include expanding of our biodiesel and renewable diesel blending capabilities, increasing the availability of diesel exhaust fluid, or DEF, at all diesel pumps nationwide and 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 will allow us to make both fossil and, eventually, non-fossil fuels available throughout our nationwide network of sites.

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Our growth strategy also includes adding franchised travel centers to our network. Since the beginning of 2020, we have entered into franchise agreements covering 68 travel centers to be operated under our travel center brand names. Five of these franchised travel centers began operations during 2020, two began operations during 2021, three began operations during 2022, and five began operations during the first quarter of 2023. We expect the remaining 53 to open by the second quarter of 2025.

Our capital expenditures plan for 2023 contemplates aggregate investments in the range of $135,000 to $150,000 and includes projects to enhance the guest experience through significant upgrades at our travel centers, the expansion of restaurants and food offerings and improvements to our technology systems infrastructure. Approximately 40% of our capital expenditures in 2023 are focused on growth initiatives that we expect to meet or exceed our 15% to 20% cash on cash return hurdle.

We are committed to embracing environmentally friendly energy sources through our eTA division, which seeks to deliver sustainable and alternative energy to the marketplace by working with the public sector and private companies to facilitate this initiative. Recent accomplishments expanding of our biodiesel and renewable diesel blending capabilities, increasing the availability of DEF at all diesel pumps nationwide and installing electric vehicle charging stations. We are also exploring ultra-high power truck charging and hydrogen fuel dispensing to provide energy alternatives as the transportation sector transitions to a lighter carbon footprint. We believe our large, well-located sites along highways will allow us to make EV charging and non-fossil fuel dispensing easily available to travelers.

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.

Results of Operations

~~All~~We present our results of operations on a consolidated basis. Currently all of our company operated locations are same site locations with the exception of ~~the~~ recently acquired travel centers and truck service facilities and the travel center located in Canada that we stopped operating during the second quarter of 2022. AsSame ~~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~~and 3are innot ~~Item~~presented 1.as part of this ~~Quarterly~~discussion ~~Report for more information about acquisition~~ and ~~disposition activity~~analysis.

2218

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Consolidated Financial Results

The following table presents changes in our operating results for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

	Three Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		$ Change		% Change
	2023		2022		$ Change		% Change
Revenues:
Fuel	$	21,~~242~~720,~~821~~057	$	1,~~424~~806,~~997~~114	$	~~817~~(86,~~824~~057)	~~57.~~(4.8)	%
Nonfuel	~~564~~515,~~941~~674		~~511~~487,~~063~~082		5328,~~878~~592		~~10.~~5.9	%
Rent and royalties from franchisees	3,~~317~~287		3,~~886~~877		(~~569~~590)		(1415.62)	%
Total revenues	2,~~811~~239,~~079~~018		12,~~939~~297,~~946~~073		~~871~~(58,~~133~~055)		44(2.95)	%
Gross margin:
Fuel	~~132~~95,~~402~~255		~~106~~112,~~010~~919		26(17,~~392~~664)		24(15.96)	%
Nonfuel	~~339~~324,~~560~~078		~~304~~295,~~798~~297		3428,~~762~~781		119.47	%
Rent and royalties from franchisees	3,~~317~~287		3,~~886~~877		(~~569~~590)		(1415.62)	%
Total gross margin	~~475~~422,~~279~~620		~~414~~412,~~694~~093		6010,~~585~~527		142.6	%
Site level operating expense	~~276~~278,~~717~~917		~~246~~252,~~871~~044		2926,~~846~~873		1210.17	%
Selling, general and administrative expense	4651,~~497~~559		3941,~~563~~309		610,~~934~~250		1724.58	%
Real estate rent expense	64,~~954~~701		6364,~~898~~646		~~1,056~~55		10.71	%
Depreciation and amortization expense	2927,~~267~~099		24,~~276~~231		42,~~991~~868		2011.68	%
Other operating expense, net	692		230		462		200.9	%
Other operating (expense) income, net	698		(2,182)		2,880		132.0	%
Income from operations	57,152		39,856		17,296		43.4	%
(Loss) Income from operations	(354)		32,045		(32,399)		(101.1)	%
Interest expense, net	9,~~800~~611		11,~~843~~530		(21,~~043~~919)		(1716.36)	%
Other income, net	(~~1,358~~906)		(~~1,034~~638)		(~~324~~268)		(3142.30)	%
Income before income taxes	48,710		29,047		19,663		67.7	%
(Loss) Income before income taxes	(9,059)		21,153		(30,212)		(142.8)	%
Provision for income taxes	(11,735)		(6,847)		(4,888)		(71.4)	%
Benefit (provision) for income taxes	2,761		(4,849)		7,610		156.9	%
Net income	36,975		22,200		14,775		66.6	%
Net (loss) income attributable to common stockholders	$	(6,298)	$	16,304	$	(22,602)	(138.6)	%
Less: net loss for noncontrolling interest	—		—		—		—	%
Net income attributable to common stockholders	$	36,975	$	22,200	$	14,775	66.6	%

2319

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	Nine Months EndedSeptember 30,
	2022		2021		$ Change		% Change
Revenues:
Fuel	$	6,570,691	$	3,830,886	$	2,739,805	71.5	%
Nonfuel	1,605,385		1,460,787		144,598		9.9	%
Rent and royalties from franchisees	11,123		11,649		(526)		(4.5)	%
Total revenues	8,187,199		5,303,322		2,883,877		54.4	%
Gross margin:
Fuel	401,951		283,732		118,219		41.7	%
Nonfuel	966,636		883,592		83,044		9.4	%
Rent and royalties from franchisees	11,123		11,649		(526)		(4.5)	%
Total gross margin	1,379,710		1,178,973		200,737		17.0	%
Site level operating expense	788,864		708,097		80,767		11.4	%
Selling, general and administrative expense	134,206		112,083		22,123		19.7	%
Real estate rent expense	194,753		191,378		3,375		1.8	%
Depreciation and amortization expense	80,260		72,244		8,016		11.1	%
Other operating income, net	(1,795)		(642)		(1,153)		(179.6)	%
Income from operations	183,422		95,813		87,609		91.4	%
Interest expense, net	32,503		34,966		(2,463)		(7.0)	%
Other (income) expense, net	(3,212)		1,667		(4,879)		(292.7)	%
Income before income taxes	154,131		59,180		94,951		160.4	%
Provision for income taxes	(36,872)		(13,776)		(23,096)		(167.7)	%
Net income	117,259		45,404		71,855		158.3	%
Less: net loss for noncontrolling interest	—		(333)		333		100.0	%
Net income attributable to common stockholders	$	117,259	$	45,737	$	71,522	156.4	%

Three Months Ended March 31, 2023, as Compared to Three Months Ended March 31, 2022

Fuel Revenues. Fuel revenues for the three months ended March 31, 2023 decreased by $86,057, or 4.8%, as compared to the three months ended March 31, 2022. The decrease in fuel revenues was primarily due to a decrease in fuel sales volume and lower market prices for fuel. The table below presents the factors causing the changes in total fuel sales volume and revenues between periods. See “Effects of Fuel Prices and Supply and Demand Factors” for more information regarding the impact market prices for fuel has on our financial results.

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


	Gallons Sold	Fuel Revenues
Results for the three months ended March 31, 2022	555,261	$	1,806,114
Decrease due to petroleum products price changes		(49,381)
Decrease due to volume changes	(13,096)	(41,979)
Increase in wholesale fuel sales volume	2,095	5,303
Net change from prior year period	(11,001)	(86,057)
Results for the three months ended March 31, 2023	544,260	$	1,720,057

	Gallons Sold	Fuel Revenues
Results for the three months ended September 30, 2021	585,848	$	1,424,997
Increase due to petroleum products price changes		830,094
Decrease due to volume changes	(3,688)	(12,026)
Increase (decrease) in wholesale fuel sales volume	479	(244)
Net change from prior year period	(3,209)	817,824
Results for the three months ended September 30, 2022	582,639	2,242,821

Nonfuel Revenues. Nonfuel revenues for the three months ended March 31, 2023 increased by $28,592, or 5.9%, as compared to the three months ended March 31, 2022, primarily as a result of increases in our truck services, restaurants and diesel exhaust fluid, or DEF, revenue due to inflation-driven price increases, the opening of our new and reopening of certain existing restaurants and recent acquisitions. These increases were partially offset by lower overall transaction volumes.

24Rent and Royalties from Franchisees. Rent and royalties from franchisees for the three months ended March 31, 2023 decreased by $590, or 15.2%, as compared to the three months ended March 31, 2022, primarily as a result of the elimination of rent and royalties due to the acquisitions of franchised travel centers during 2022, partially offset by franchised travel centers that began operations after March 31, 2022.

Fuel Gross Margin. Fuel gross margin for the three months ended March 31, 2023 decreased by $17,664, or 15.6%, as compared to the three months ended March 31, 2022, primarily as a result of the comparison against particularly favorable market conditions in the prior year and a decrease in fuel sales volume.

Nonfuel Gross Margin. Nonfuel gross margin for the three months ended March 31, 2023 increased by $28,781, or 9.7%, as compared to the three months ended March 31, 2022, primarily as a result of the increase in total nonfuel revenues. Nonfuel gross margin percentage for the three months ended March 31, 2023, increased 220 basis points to 62.8% from 60.6% for the three months ended March 31, 2022, primarily due to price increases and higher value work orders in Truck Service, improved DEF margins and efficiency improvements in restaurants associated with longer operating hours.

Site Level Operating Expense. Site level operating expense for the three months ended March 31, 2023 increased by $26,873, or 10.7%, as compared to the three months ended March 31, 2022, primarily as a result of inflationary pressures on labor costs and other operating expenses during the three months ended March 31, 2023. Site level operating expense as a percentage of nonfuel revenues increased 240 basis points to 54.1% for the three months ended March 31, 2023, from 51.7% for the three months ended March 31, 2022, primarily as a result of the above factors.

Selling, General and Administrative Expense. Selling, general and administrative expense for the three months ended March 31, 2023 increased by $10,250, or 24.8%, as compared to the three months ended March 31, 2022, primarily as a result of increased compensation costs, costs incurred by us with respect to the Merger Agreement, and other inflationary pressures on general corporate expenses.

Real Estate Rent Expense. Real estate rent expense for the three months ended March 31, 2023 increased by $55, or 0.1%, as compared to the three months ended March 31, 2022, primarily due to an increase in percentage rent payable on increased total nonfuel revenues at our applicable travel centers.

Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended March 31, 2023 increased by $2,868, or 11.8%, as compared to the three months ended March 31, 2022, primarily as a result of the growth in capital expenditures and acquisitions.

Interest Expense, Net. Interest expense, net for the three months ended March 31, 2023 decreased by $1,919, or 16.6%, as compared to the three months ended March 31, 2022 primarily as a result of higher interest income earned on money market investments due to higher short-term investment interest rates.

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~~Nonfuel~~Benefit ~~Revenues~~(provision) for Income Taxes. ~~Nonfuel~~Benefit ~~revenues~~(provision) for income taxes for the three months ended ~~September~~March 3031, ~~2022~~2023 ~~increased~~was bya ~~$53,878,~~benefit orof ~~10.5%~~$2,761 as compared to a provision of $4,849 for the three months ended ~~September~~March 3031, ~~2021,~~2022. The ~~primarily~~effective asincome atax ~~result~~rates ofwere ~~increases~~27.5% inand ~~DEF~~22.4% ~~due~~for to the ~~growth~~three ofmonths ~~newer~~ended ~~trucks~~March 31, on2023 ~~the~~and ~~road~~2022, ~~that require DEF~~respectively, and ~~truck~~were ~~services~~higher ~~and~~than ~~full~~the ~~service~~U.S. ~~restaurants,~~federal ~~due~~income totax ~~inflation-driven~~rate ~~pricing~~of ~~increases~~21.0% ~~along~~primarily ~~with~~due to the ~~reopening~~impact ~~and~~of ~~expanded~~state ~~hours~~income attaxes ~~our~~and ~~full~~additional ~~service~~tax ~~restaurants. These~~expense ~~increases~~related ~~were~~to compensation, partially offset by ~~lower~~federal ~~overall~~tax ~~transaction volumes~~credits.

Rent and Royalties from Franchisees. Rent and royalties from franchisees for the three months ended September 30, 2022 decreased by $569, or 14.6%, as compared to the three months ended September 30, 2021, primarily as a result of the elimination of rent and royalties due to acquisitions of franchised travel centers, partially offset by higher nonfuel revenues at franchised travel centers.

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

Nonfuel Gross Margin. Nonfuel gross margin for the three months ended September 30, 2022 increased by $34,762, or 11.4%, as compared to the three months ended September 30, 2021, due to the increase in total nonfuel revenues. Nonfuel gross margin percentage for the three months ended September 30, 2022, increased 50 basis points to 60.1% from 59.6% for the three months ended September 30, 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 three months ended September 30, 2022 increased by $29,846, or 12.1%, as compared to the three months ended September 30, 2021, primarily due to higher labor costs as a result of inflationary wage increases and the reopening and expanded hours at certain full service restaurants and increased other operating expenses during the three months ended September 30, 2022. Site level operating expense as a percentage of nonfuel revenues increased 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, primarily due to the above factors.

Selling, General and Administrative Expense. Selling, general and administrative expense for the three months ended September 30, 2022 increased by $6,934, or 17.5%, as compared to the three months ended September 30, 2021, primarily due to higher wages and compensation costs, costs related to the transition to cloud-based technology solutions, 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, 2022 increased by $1,056, or 1.7%, as compared to the three months ended September 30, 2021, primarily as a result of an increase in percentage rent payable as a result of the increase in total nonfuel revenues at our applicable travel centers during the three months ended September 30, 2022.

Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended September 30, 2022 increased by $4,991, or 20.6%, as compared to the three months ended September 30, 2021, primarily as a result of the growth in the amount of our new assets placed in service from capital expenditures and locations we acquired.

Interest Expense, Net. Interest expense, net for the three months ended September 30, 2022, decreased by $2,043, or 17.3%, as compared to the three months ended September 30, 2021, primarily as a result of higher interest income earned on investments due to higher interest rates.

Provision for Income Taxes. Provision for income taxes was $11,735 and $6,847 for the three months ended September 30, 2022 and 2021, respectively. The effective income tax rates were 24.1% and 23.4% for the three months ended September 30, 2022 and 2021, respectively. The effective income tax rates for the three months ended September 30, 2022 and 2021, were higher than the U.S. federal income tax rate of 21.0% primarily due to the 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, 2022, as Compared to Nine Months Ended September 30, 2021

	Gallons Sold	Fuel Revenues
Results for the nine months ended September 30, 2021	1,713,351	$	3,830,886
Increase due to petroleum products price changes		2,745,169
Decrease due to volume changes	(4,535)	(13,313)
Increase in wholesale fuel sales volume	3,429	7,949
Net change from prior year period	(1,106)	2,739,805
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, 2022, increased by $144,598, or 9.9%, as compared to the nine months ended September 30, 2021, primarily as a result of increases in DEF due to the growth of newer trucks on the road that require DEF, and truck services and full service restaurants, due to inflation-driven pricing increases along with the reopening and expanded hours at our full service restaurants. These increases were partially offset by lower overall transaction volumes.

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

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

Nonfuel Gross Margin. Nonfuel gross margin for the nine months ended September 30, 2022 increased by $83,044, or 9.4%, as compared to the nine months ended September 30, 2021, primarily as a result of the increase in total nonfuel revenues. Nonfuel gross margin percentage for the nine months ended September 30, 2022, declined 30 basis points to 60.2% from 60.5% for the nine months ended September 30, 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, 2022 increased by $80,767, or 11.4%, as compared to the nine months ended September 30, 2021, primarily due to higher labor costs as a result of inflationary wage increases and the reopening and expanded hours at certain full service restaurants and increased other operating expenses during the nine months ended September 30, 2022. Site level operating expense as a percentage of nonfuel revenues 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, primarily due to the above factors.

Selling, General and Administrative Expense. Selling, general and administrative expense for the nine months ended September 30, 2022 increased by $22,123, or 19.7%, as compared to the nine months ended September 30, 2021, primarily due to higher wages and compensation costs, costs related to the transition to cloud-based technology solutions, an increase in revenue-based management fees and higher general corporate expenses.

Real Estate Rent Expense. Real estate rent expense for the nine months ended September 30, 2022 increased by $3,375, or 1.8%, as compared to the nine months ended September 30, 2021, primarily as a result of an increase in percentage rent payable as a result of the increase in total nonfuel revenues at our applicable travel centers during the nine months ended September 30, 2022.

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Depreciation and Amortization Expense. Depreciation and amortization expense for the nine months ended September 30, 2022 increased by $8,016, or 11.1%, as compared to the nine months ended September 30, 2021, primarily as a result of the growth in the amount of our new assets placed in service from capital expenditures and 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, 2022 decreased by $2,463, or 7.0%, as compared to the nine months ended September 30, 2021, primarily as a result of higher interest income earned on investments due to higher interest rates.

Provision for Income Taxes. Provision for income taxes was $36,872 and $13,776 for the nine months ended September 30, 2022 and 2021, respectively. The effective income tax rates were 23.7% and 23.0% for the nine months ended September 30, 2022 and 2021, respectively. The effective income tax rates for the nine months ended September 30, 2022 and 2021 were higher than the U.S. federal income tax rate of 21.0% primarily due to the 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~~issuances ~~to SVC~~ of ~~improvements~~new wedebt ~~make~~and toequity ~~the sites we lease from SVC~~securities;

•potential ~~issuances~~financing or selling of ~~new~~unencumbered ~~debt~~real ~~and~~estate ~~equity~~that ~~securities~~we own; and

•potential ~~financing~~sales orto ~~selling~~SVC of ~~unencumbered~~improvements ~~real~~we ~~estate~~make ~~that~~to the sites we ~~own~~lease from SVC.

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

•inflationary pressures;

•recessionary pressures;

•increasing labor costs;

•labor availability;

•adverse impacts from supply chain challenges;

•potential 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, as a result;

•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, economic slowdown 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;

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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 and ~~interest~~credit ~~rate~~ spreads; and

•~~increased~~the ~~costs~~negative weimpacts ~~may~~on ~~need~~our togross ~~incur~~margins toand ~~operate~~working ~~our~~capital ~~business~~requirements indue ~~response~~ to ~~the~~increasing ~~COVID-19~~or ~~pandemic,~~sustained ~~including~~high ~~enhancing~~cost ~~sanitation~~of ~~and~~our ~~other~~fuel ~~preventative~~or ~~measures,~~nonfuel ~~and~~products ~~sick~~resulting ~~pay;~~from ~~and~~inflation generally.

•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.21

~~Our~~Table ~~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 $467,342 at September 30, 2022, and net cash provided by operating activities of $179,974 for the nine months ended September 30, 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.Contents

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 $385,903 at March 31, 2023, and net cash provided by operating activities of $8,821 for the three months ended March 31, 2023, 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. As of March 31, 2023, we had no off balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. We believe we have sufficient financial resources to fund operating and financing costs and required capital expenditures for greater than 12 months.

Merger Agreement

We have agreed to customary covenants regarding the operation of our business and the business of our subsidiaries prior to the Effective Time. The Merger Agreement restricts us from entering into certain corporate transactions, entering into certain material contracts, making certain changes to our capital budget, incurring certain indebtedness and taking other specified actions without the consent of BP, and generally requires us to continue our operations in the ordinary course of business during the pendency of the Merger. Until the Merger is consummated or the Merger Agreement is terminated, if earlier, without BP’s consent (not to be unreasonably withheld), we may not (i) repurchase, prepay, assume, endorse, guarantee or incur, or otherwise become liable for, any indebtedness for borrowed money, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its subsidiaries, enter into any “keep well” or other contract to maintain any financial statement or similar condition of another person, or enter into any arrangement having the economic effect of any of the foregoing (other than (A) in connection with the financing of ordinary course trade payables or (B) accounts payable in the ordinary course of business) or (ii) make any loans, advances, capital commitments or capital contributions to, or investments in (other than (A) to ourself or our wholly-owned subsidiaries in the ordinary course of business or (B) accounts receivable and extensions of credit in the ordinary course of business). These restrictions may prevent us from pursuing attractive business opportunities or adjusting our capital plan prior to the completion of the Merger.

In addition, the Merger Agreement contains certain termination rights for us and BP. Upon termination of the Merger Agreement in accordance with its terms, under certain specified circumstances, we will be required to pay BP a termination fee in an amount equal to $51,900, including if the Merger Agreement is terminated due to our acceptance of an unsolicited superior proposal or due to our Board of Directors changing its recommendation to our stockholders to vote to approve the Merger Agreement. If we are required to pay the termination fee, it may adversely impact our ability to finance our operations or to invest in anticipated capital expenditure and other initiatives, and may have an adverse impact on the value of common stock, which could constrain our ability to raise funds through equity offerings. The Merger Agreement further provides that BP will be required to pay us a termination fee in an amount equal to $90,900 in the event the Merger Agreement is terminated under certain specified circumstances and receipt of antitrust approval has not been obtained by such time. Subject to certain exceptions and limitations, either party may terminate the Merger Agreement if the Merger is not consummated by November 15, 2023, subject to (x) an automatic 90-day extension and (y) an additional 90-day extension under certain circumstances.

Our Investment and Financing Liquidity and Resources

Revolving Credit Facility

We and certain of our subsidiaries are parties to an 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 through June 30, 2023 or a base rate thereafter, plus a premium (which premium is subject to adjustment based upon facility availability, utilization and other matters). At ~~September~~March 3031, ~~2022~~2023, based on our qualified collateral, a total of $~~193~~172,~~369~~100 was available to us for loans and letters of credit under the Credit Facility. At ~~September~~March 3031, ~~2022~~2023, there were no borrowings outstanding under the Credit Facility and $13,928 of letters of credit issued under that facility, which reduced the amount available for borrowing under the Credit Facility, leaving $~~179~~158,~~441~~172 available for our use as of that date. ~~At September 30, 2022, we were in compliance with all covenants of the Credit Facility.~~ As of ~~November 1, 2022, there were no borrowings outstanding under the Credit Facility and approximately $179,441 available under the Credit Facility for our use as of that date.~~

2822

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March 31, 2023, we were in compliance with all covenants of the Credit Facility. As of April 20, 2023, there were no borrowings outstanding under the Credit Facility and approximately $158,172 available under the Credit Facility for our use as of that date.

Term Loan Facility

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 used the 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. In the absence of LIBOR, the Term Loan Facility provides an alternative base rate option for interest, which utilizes either the federal funds rate or the prime rate as the base. Our Term Loan Facility requires 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~~2022. We ~~Remaining~~may prepay the remaining principal amounts outstanding under the Term Loan Facility ~~may~~without bepenalty. The ~~prepaid,~~Term ~~without~~Loan ~~penalty,~~Facility ~~beginning~~contains onvarious ~~December 14,~~covenants ~~2022~~that we believe are usual and customary. AtThese ~~September~~covenants include a maximum allowed leverage ratio. As of March 3031, ~~2022~~2023, we were in compliance with all covenants of the Term Loan Facility.

West Greenwich Loan

We have a 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% through February 7, 2025, and resets thereafter, based on the five year Federal Home Loan Bank rate plus 198 basis 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 maturity plus, if repaid prior to February 7, 2023, a nominal penalty.~~

IHOP Secured Advance Note

We are party to a multi-unit franchise agreement with IHOP Franchisor LLC, or IHOP, pursuant to which we agreed to rebrand and convert certain of our full service restaurants to IHOP restaurants over a period through October 2024, or the IHOP Agreement. 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, 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 three months ended March 31, 2023 and 2022, as reflected in our consolidated statements of cash flows:

Nine Months EndedSeptember 30,

Three Months EndedMarch 31,

(in thousands)

2022

2021

$ Change

(dollars in thousands)

2023

2022

$ Change

Cash and cash equivalents at the beginning of the period

~~536~~416,~~002~~012

~~483~~536,~~151~~002

52(119,~~851~~990)

Net cash provided by (used in):

Operating activities

~~179~~8,~~974~~821

~~181~~59,~~286~~119

(150,~~312~~298)

Investing activities

(~~243~~36,~~234~~861)

(3949,~~181~~220)

~~(204~~12,~~053)~~359

Financing activities

(52,~~532~~069)

(41,~~217~~784)

(~~1,315~~285)

Effect of exchange rate changes on cash

~~132~~—

6436

68(36)

Cash and cash equivalents at the end of the period

~~467~~385,~~342~~903

~~621~~544,~~103~~153

(~~153~~158,~~761~~250)

Cash Flows from Operating Activities. ~~During~~The ~~the~~change ~~nine~~in ~~months ended September 30, 2022 and 2021, we had~~ net cash inflows from operating activities of $~~179~~50,~~974~~298 ~~and $181,286, respectively. The $1,312 change was~~ primarily ~~due~~resulted tofrom a ~~$71,855~~decrease ~~increase~~ in earnings, ~~offset~~and by the effect of changes in working capital ~~from~~primarily ~~higher~~due ~~accounts~~to ~~receivable~~a ~~and~~decrease ~~inventory~~in ~~during~~accounts ~~the nine months ended September 30~~payable, ~~2022,~~partially asoffset ~~compared~~by todecreases ~~the~~in ~~nine~~accounts ~~months~~receivable ~~ended~~and ~~September 30, 2021~~inventory.

29Cash Flows from Investing Activities. The change in net cash outflows from investing activities of $12,359 primarily resulted from a decrease in capital expenditures.

Cash Flows from Financing Activities. The change in net cash outflows from financing activities of $285 primarily resulted from an increase in finance lease principal payments.

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

Cash Flows from Financing Activities. During the nine months ended September 30, 2022 and 2021, we had net cash outflows from financing activities of $5,532 and $4,217, respectively. The $1,315 change primarily resulted from an increase in finance lease principal payments during the nine months ended September 30, 2022, as compared to the nine months ended September 30, 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 64, 75 and 86 to the Consolidated Financial Statements included in Item 1. of this Quarterly Report, our Annual Report, ~~our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders~~ and our other filings with the ~~Securities and Exchange Commission~~SEC. In addition, see Item 1A. “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

Governmental actions, including legislation, regulations, treaties and commitments, such as those seeking to reduce greenhouse gas emissions, and market actions in response to concerns about climate change, may decrease the demand for our major product, diesel fuel, and may require us to make significant capital or other expenditures related to alternative energy distribution or other changing fuel conservation practices. Federal and state governments require manufacturers to limit emissions from trucks and other motor vehicles, such as the U.S. Environmental Protection Agency, or EPA’s, gasoline and diesel sulfur control requirements that limit the concentration of sulfur in motor fuel. Further, legislative and regulatory initiatives requiring increased truck fuel efficiency have accelerated in the United States and these mandates have and may continue to result in decreased demand for diesel fuel.

For example, in ~~August~~April ~~2021~~2022, the ~~EPA and the~~ National Highway Traffic Safety Administration ~~proposed~~announced ~~new rules intended to phase in~~ more stringent fuel efficiency standards for passenger cars and light-duty trucks and has indicated its intent to develop new fuel efficiency standards for medium and heavy-duty trucks. In addition, the California Air Resources Board, and other similar state government agencies routinely consider rulemaking activity ~~the purpose of which is~~ to improve fuel efficiency and limit pollution from vehicles. In April 2023, the EPA proposed stricter emission standards to drive new light duty electric vehicle sales, or EV Sales, to 67% of total sales of light duty vehicles and medium and heavy duty EV Sales to 46% of medium and heavy duty vehicles by 2032. Moreover, market concerns regarding climate change may result in decreased demand for fossil fuels and increased adoption of higher -efficiency fuel technologies and alternative energy sources. Regulations that limit, or market demands to reduce carbon emissions, may cause our costs at our locations to significantly increase, make some ofsites ~~our locations~~ obsolete or completely disadvantaged, or require us to make material investments in our properties. In ~~pace~~For ~~with customer demand for alternative energy sources~~example, we have installed electric charging capacity at ~~certain~~four of our travel centers, ~~and~~provide ~~expect~~Tesla tosuperchargers ~~install them~~ at ~~additional~~three ~~travel~~other ~~centers~~locations, ~~over~~and ~~time. We~~expect ~~are~~to ~~also~~install ~~evaluating~~light-duty ~~hydrogen~~charging ~~dispensing as another alternative fuel offering~~ at ~~certain~~sites ofin ~~our travel centers~~Texas, ~~have~~Ohio ~~expanded DEF availability~~ and ~~installed~~ additional ~~biodiesel~~travel ~~blending~~centers ~~infrastructure~~of ours nationwide. We are also ~~evaluating~~preparing ~~the~~to ~~use~~offer of hydrogen ~~fuel~~dispensing ~~cell~~as ~~and~~another ~~natural~~alternative ~~gas~~fuel ~~generators~~at ~~for~~specific ~~both~~travel ~~emergency power and base electric load support~~centers.

~~Severe~~Some observers believe severe weather~~-related~~ ~~events~~activities ~~due~~in todifferent parts of the country over the last few years are evidence of global climate change. Such severe weather may have an adverse effect on ~~individual~~our ~~properties~~and weour ~~own,~~franchisees’ ~~lease~~sites or ~~operate, or~~ 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 weather-related events or other climate changes that may occur will not have 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” in Note 97 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

Our Credit Facility ismaximum ~~secured~~availability byis ~~substantially~~subject ~~all~~to oflimits ~~our~~based ~~cash,~~on ~~accounts~~qualified ~~receivable, inventory, equipment and intangible assets~~collateral. As of ~~September~~March 3031, ~~2022~~2023, 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 through June 30, 2023 or a base rate thereafter, 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 $5,826.24

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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, refinery or 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, such as 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 Russia’s decision to reduce its oil production or other hostilities or terrorism. Concerted efforts by major oil producing countries and cartels to limit oil supply may also impact prices. Additionally, consumer fears of a broader economic slowdown could have a negative impact on expected future demand and may affect supply expectations. 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 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 up to 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 March 31, 2023, and our fuel sales volume for the three months ended, March 31, 2023, each one cent change in the price of fuel would change our inventory value by $170 and our fuel revenues by $5,443.

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~~March 3031, ~~2022~~2023.

Changes in Internal Control over Financial Reporting

During the three months ended ~~September~~March 3031, ~~2022~~2023, 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” 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. 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 occur include statements that:

•The expected timing for closing our proposed sale to BP Products North America Inc., or BP, a subsidiary of BP p.l.c., which is subject to certain conditions, including shareholder approval; as a result, the sale may not be completed on the timing or the terms expected or at all;

•The terms and conditions of our Agreement and Plan of Merger with BP, or the Merger Agreement, will require us to operate in the ordinary course of business and will restrict our ability to take certain corporate actions during the pendency of the sale and, if we fail to satisfy these conditions, BP may not be required to close the transaction or may be permitted to terminate the Merger Agreement. In addition, due to the terms and conditions of the Merger Agreement, we may not be able to execute certain corporate initiatives, make acquisitions, develop new locations or enter into franchise agreements that we believe would benefit our business, which could impair our anticipated growth, profitability and operational efficiency;

•Our fuel purchasing and inventory management practices may allow us to mitigate the impact of fuel price volatility;

•Our operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 reflect certain ~~improvements~~areas asof ~~compared~~improvements toover the ~~three~~same ~~and~~period ~~nine~~last ~~months ended September 30, 2021~~year. This may imply that we will increase or maintain these improvements and that we will be as profitable in the future. However, there are no guarantees that we will be able to sustain this level of performance or growth in the future. In addition, customer demand, 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;

•We are executing initiatives that we believe have and will improve and enhance our growth, profitability and operational efficiency. However, we may not be able to grow or recognize the improvements to our operating results that we 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 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~~plan to make acquisitions and develop new locations in the future ~~including adding sites through franchising~~. Managing and integrating acquired, ~~developed~~ or ~~franchised~~developed locations can be difficult, time consuming and/or more expensive than anticipated and involve risks of financial 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~~expectation that, astravel ofcenters ~~the date of this Quarterly Report,~~ we ~~had~~acquire ~~sufficient~~will reach financial ~~resources~~stabilization towithin ~~fund~~approximately ~~operations~~one ~~for at least 12 months. However, our business is subject~~ to ~~risks,~~three ~~including~~years ~~risks~~after ~~beyond our control. If economic conditions decline for an extended period or if~~ we ~~fail~~complete tocapital ~~operate~~improvements ~~our~~following ~~business and compete successfully,~~ our ~~business,~~acquisition ~~results~~ of ~~operations~~the ~~and~~travel ~~financial~~center, ~~condition~~however, ~~may~~such betravel ~~materially~~centers ~~adversely impacted, which~~ may ~~result in our~~ not ~~having~~reach ~~sufficient~~ financial ~~resources~~stabilization toon ~~fund~~this ~~operations~~timeline ~~for~~or ~~the foreseeable future~~ever;

•We expect to expand our network by entering into new franchise 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;26

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•Our belief that, as of the date of this Quarterly Report, we had sufficient financial resources to fund operations for 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. However, we may not succeed in entering these agreements and the operating commencement and stabilization of any new franchises may not occur or may be delayed and these franchises may not be successful or generate the royalties for us that we expect;

•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 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~~March 3031, ~~2022~~2023, based on our eligible collateral at that date, our borrowing and letter of credit availability was $~~193~~172.41 million, of which we had used $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;

•We may not spend the $~~175~~135.0 million to $~~200~~150.0 million of the capital expenditures in ~~2022~~2023 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 realize our expected cash on cash return hurdle, and;

•~~The~~Our ~~sale~~commitment to embracing environmentally friendly sources of energy through our ~~travel~~eTA ~~center~~division ~~located~~may innot ~~Canada~~be issuccessful, ~~subject~~may tonot ~~conditions;~~result asin athe ~~result,~~benefits ~~that~~we ~~sale~~expect and may not ~~occur,~~be sufficient to offset declines we may beexperience ~~delayed~~in orour business if the ~~terms~~market ~~may~~moves ~~change.~~from fossil fuels to non-fossil fuels.

•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:

•The effect of the announcement of our proposed sale to BP on our operating results and business generally, risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction, the outcome of any legal proceedings related to the proposed transaction, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, including circumstances requiring a party to pay the other party a termination fee pursuant to the Merger Agreement, the ability of the parties to consummate the proposed transaction on a timely basis or at all, the satisfaction of the conditions precedent to consummation of the proposed transaction, including the ability to secure shareholder approval and the effects of proposals related to alternatives to our sale to BP;

•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;

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•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 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 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;

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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;

•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;

•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 or products;

•Adverse weather events, natural disasters and 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 Concerning Forward-Looking Statements” and Part I, Item 1A., “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~~PART II. ~~Other~~OTHER ~~Information~~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” section of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022.

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

Issuer Purchases of Equity Securities

The following table provides information about our purchases of our equity securities during the quarter ended March 31, 2023.

There were no purchases of our equity securities during the quarter ended September 30, 2022.


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
January 2023	813	$	43.64	—	$	—
February 2023	441	41.05		—	—
March 2023	949	84.87		—	—
Total	2,203	$	60.88	—	$	—

Calendar Month

Number of Shares 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 quarter ended March 31, 2023, 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

2.1

†

Agreement and Plan of Merger, dated as of February 15, 2023, by and among BP Products North America Inc., Bluestar RTM Inc. and TravelCenters of America Inc. (Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed February 16, 2023).

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)

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)

104

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

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Table of Contents

† Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.

Table of Contents

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~~April 227, ~~2022~~2023

Name:

Peter J. Crage

Title:

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

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Filing Compare · TravelCenters of America Inc. /MD/