Good day, and welcome to the TravelCenters of America LLC Fourth Quarter and Year-End 2011 Financial Results Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Carlynn Finn, TA's Senior Manager of Investor Relations. Please go ahead.

Thank you. Good morning, and welcome, everyone. Our agenda today includes remarks by Tom O'Brien, our Chief Executive Officer; and Andy Rebholz, our Chief Financial Officer. After the presentation, there will be a question-and-answer session. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Federal Securities laws. These forward-looking statements are based on TA's present beliefs and expectations as of today, March 15, 2012. TA undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made today other than as required by law. Actual results may differ materially from those implied or included in these forward-looking statements. Additional information concerning factors that could cause our forward-looking statements not to occur is contained in our filings within the Securities and Exchange Commission. Investors are cautioned not to place undue reliance upon any forward-looking statements. The recording and retransmission of today's conference call is strictly prohibited without the prior written consent of TA. Now, I will turn the call over to Tom O'Brien. Thomas M. O'Brien: Good morning. Thank you for joining our call. 2011 was indeed a banner year for TA's financial results. Full year 2011 results included net income of $0.98 a share or $23.6 million, a $90-million improvement over 2010. EBITDAR for the 2011 fourth quarter was $62 million, an increase of $13 million or 28% over the 2010 quarter. For the 2011 full year, our EBITDAR was $272 million, an increase of $35 million or 15% over 2010. Rent and interest expense declined by $59 million. A closer look at our results shows how broad-based our success in 2011 has been. While Andy will run down the results in more detail in a moment, a few highlights include: One, the continued steadiness in fuel gross margin per gallon which settled in for the year and for the fourth quarter at about $0.15 per gallon; two, healthy top line nonfuel growth of 7.5% for the fourth quarter and 8.4% for the full year; three, nonfuel gross margin percentages declined 80 and 90 basis points on the same site basis for the fourth quarter and the full year, however, this is largely due as reported in prior quarters to our decision to trade some margin percentage for volume and margin dollars. All told on a same-site basis, margin dollars increased about $45 million for the full year, outpacing growth in operating expenses in both dollars and on a percentage basis. And four, operations excluded from the same-site analysis largely sites acquired in 2011 contributed about $16.5 million of gross margin over operating expenses, the measure which I take is validation of our acquisition activities. During 2011, we acquired 8 operating sites for about $37 million and invested $12 million during the year in improvements at those sites. I'm particularly encouraged by these results, because they represent only a partial year and not all of our planned improvements were completed in 2011. We ended the year with over $100 million in cash and an undrawn $200 million line of credit. 15 operating sites as of year-end that we owned outright and debt free may serve as an additional longer term source of liquidity. I believe these sources will enable us to continue to capitalize on acquisition and internal growth opportunities and to provide a cushion for the working capital risks of possible rising fuel costs. We continue to believe that the attention we've shown to customer service, improving our facilities and controlling our operating costs allowed us to turn profitable in a slowly improving economy in 2011 and has positioned TA for continued profitability in 2012. Our focus for 2012 includes: One, the continuation of prudent, selective acquisition of additional operating travel centers. Indeed, last week, we acquired a travel center on I-85 in Georgia for $5 million. Two, the continuation of internal growth capital investment. For example during 2011 at the travel centers we operated all year, we added 8 quick service restaurants, rebranded dozens of gasoline stations and installed both diesel exhaust fluid dispensers at 42 travel centers. And three, continued improvement in operating metrics and customer service delivery. I believe that the TA and Petro brands have clearly lead the industry in delivery of service, efficiency and convenience for drivers. And now, Andy Rebholz, our Chief Financial Officer, will review our fourth quarter and full year results in more detail. And after Andy's comments, I'll make some closing remarks and then we'll try to answer questions. Andrew J. Rebholz: Thanks, Tom. Good morning, everybody. I'll discuss some of our key financial results for the 2011 fourth quarter and full year. In this discussion, I will refer to same-site results, which are the results that only those sites that we have continuously operated since January 1, 2010. First, I'll cover our fourth quarter results. In the fourth quarter of 2011, TA generated a net loss of $2.5 million or $0.09 per share, a $27.5-million improvement over the prior year quarter when we had posted a net loss of $30 million. Approximately $15 million of this improvement related to lower rent and interest expense that largely resulted from the amendment agreement we entered with HPT effective January 2011. As a reminder, I want to point out that TA's business is impacted by seasonal changes. The first and fourth quarters of each calendar year generally produce our weakest financial results. And the second and third calendar quarters generally produce our best financial results. We recorded EBITDAR of $61.9 million for the 2011 fourth quarter, an increase of about $13.5 million or 28% versus the fourth quarter of 2010. EBITDAR in the fourth quarter of 2011 exceeded cash rent and interest by $9.6 million, and exceeded GAAP rent and interest expense by $11.1 million. As Tom just noted, the improvement over the prior year results is attributable to improvements in nearly all areas of our business. Our fuel sales volume on a same-site basis decreased by 2.6% in the fourth quarter 2011 versus the 2010 quarter. We believe this metric was affected by the capital activities Tom mentioned, as well as our efforts to avoid the lower margin sales. On a same site basis, our 2011 fourth quarter fuel gross margin was approximately $10.7 million or 17.9% more than in the comparable 2010 quarter. Our nonfuel revenue on a same-site basis during the 2011 fourth quarter increased by $20.9 million or about 7.5% versus the 2010 fourth quarter. We believe that the increase in nonfuel sales reflects the impact of the improving economic conditions on trucking companies and their drivers, including increased use of our truck maintenance and repair services. Our nonfuel gross margin as a percentage of nonfuel sales on same-site basis decreased by 80 basis points to 56.8% for the 2011 fourth quarter, largely as a result of the same factors we have noted throughout the year. Our decisions to lower our prices for certain products in order to drive more sales, fixed dollar margin sales for certain tires while tire prices have increased and a delay in passing along certain price increases we have incurred from our suppliers. Our site level operating expenses on a same-site basis increased by $6.2 million or 4% versus the 2010 fourth quarter. This increase reflects the higher volume of sales in the 2011 quarter. Although the dollar amount of operating expenses increased, the ratio of operating expenses to nonfuel revenues improved, declining by 180 basis points from the 2010 quarter to 53.5% in the 2011 fourth quarter. Our selling, general and administrative costs of $23.4 million for the fourth quarter of 2011 were $2.7 million more than in 2010. Now I will turn to the results for the year ended December 31, 2011. TA's net income for the full year 2011 was $23.6 million or $0.98 per share compared to a net loss of $66.7 million or $3.84 per share for 2010. This $90-million improvement over the prior year was partially due to an approximately $59-million decrease in rent and interest expense that largely resulted from the amendment agreement. However, our improved operating results were also a very important contributor to this improvement. EBITDAR for 2011 is $272.4 million was about $35.3 million or 15% greater than for 2010. EBITDAR for 2011 exceeded cash rent and interest by $65 million and exceeded GAAP rent and interest expense by $71.6 million. Our fuel sales volume on a same-site basis in 2011 was even with 2010 and was affected by the same factors as were discussed for the fourth quarter, but slightly less so as the related projects were more prevalent later in the year. On a same-site basis, our 2011 fuel gross margin was approximately $34.7 million or 13.4% more than in 2010, as a result of a slightly higher margin per gallon. Our nonfuel revenue on a same-site basis during 2011 increased by $44.7 million or about 6.7% versus 2010. Our nonfuel gross margin as a percentage of nonfuel sales, on a same-site basis, was 56.9% for 2011, representing a 90 basis point decline from 2010. Our site level operating expenses on a same-site basis increased by $38.9 million or 6.3% versus 2010, largely due to the increase in sales. While the amount of operating expenses increased in 2011 over 2010, the ratio of operating expenses in nonfuel revenues improved, declining by 110 basis points to 52.8% for the full year 2011. Our selling, general and administrative costs of $89.2 million for the year 2011 were $8.6 million more than in 2010. And now, I'll turn the call back over to Tom. Thomas M. O'Brien: Thanks, Andy. I believe our results in 2011 were indeed very good. They say a lot about our employees and franchisees' dedication to our brand and our ability to deliver outstanding customer service. While the 2011 economic environment was better than it was in 2010, it was still quite a challenging backdrop in which to generate such positive results. Now some of you may want to know what we see for 2012. What I'm prepared to say on that topic is, with most of the first quarter 2012 in my rearview mirror, while I do expect the seasonal net loss for that quarter, I again expect a profitable year for 2012. I continue to believe in our balance growth strategy, which mixes external prospects and internal ones including those that require capital and those who simply require more hard work. I believe our operational delivery is getting better, that our customer loyalty program, food service and truck service offerings continue to increase their lead over our competitors. We do, indeed, have continued risks and challenges to overcome in 2012 and thereafter. However, our travel centers off of both fleets and drivers, the unparalleled opportunity to capitalize on our value proposition, including the combination of competitive fuel pricing, higher efficiency and better service, all of which are critically important to our customers' ability to optimize their business. And Andy and I will now take your questions. Operator, do we have any?

[Operator Instructions] And our first question goes from the line of Ben Brownlow from Morgan Keegan.

Apologize, my line dropped off for a second, so I apologize if you went over this, but the DEF count year end and sort of what -- if you could talk around what the fuel comp impact was there from that? Thomas M. O'Brien: Sure. Year-end, we had 42 bulk facilities. Right now, we're at about 75. We will have both DEF in every location before the end of the year. And DEF is not a fuel, so we don't have it in the fuel margin. The contribution currently is not all that significant, frankly, well for 2011, simply because demand is ramping up only in proportion to the new trucks that use it.

All right. And on the -- can you talk around some of the capital improvements that you have planned for 2012, and specifically, with the 8 acquired sites, what remains there for the capital improvements? Thomas M. O'Brien: Sure. First, the 8 acquired sites, there's one reasonably large site in Indiana where we made some improvements but the bulk of them have not yet come. We're working through -- right now, we're at the permitting and bid stage. There were some land issues that we worked out with largely with the city, so that's to come in 2012. Also on those acquisitions, some of them were acquired without truck service facilities, and we'll add 2 or 3 to those in 2012. The other big items aside from acquisitions in 2012 include the finishing the buildout of the bulk DEF and replacement of dispensers. We'll do a little bit of adding of quick service restaurants and... Andrew J. Rebholz: The gasoline rebranding. Thomas M. O'Brien: Yes, I'm sorry. Thank you, Andy. And we're going to continue the gasoline rebranding projects.

And then just last question. Just -- what are you seeing with the truck repair and sort of the maintenance trends there? Thomas M. O'Brien: For 2011, they are very positive. For the early part of 2012, we have had a pretty mild winter and extremes of cold or heat are very good for truck service. It's not as favorable to have a mild winter, but by and large, other parts of our business are able to pick up that slack. The mild winter also has some impact, of course, on our costs, particularly energy. Positive impact.

[Operator Instructions] And now I'd like to go to the line of Mark [ph] Franklin [ph] from Wells Fargo Advisor.

Could you -- for my benefit and I hope it's not a waste of your time, what is diesel exhaust fluid dispenser? What the heck is that stuff? Thomas M. O'Brien: It's an additive. Basically, it's a technology called the selective catalytic reduction. It's for engines 2010 and after. In a sense, simply put -- that additive is injected into the exhaust to reduce the particulates and other harmful things in the exhaust.

It's injected directly into the truck's exhaust or into the fuel? Thomas M. O'Brien: It's not mixed with the fuel. It goes into the exhaust. It's afterburn.

And it's some kind of fluid? Thomas M. O'Brien: Yes.

Okay. Well, I guess, I'll have to Google it and not waste your time trying to understand what the heck it is. One other thing, well, 2 things. One, net of your sales to your major lessor, what would -- did you mention what the capital expenditure estimate was for 2012? Thomas M. O'Brien: I didn't. But for 2011, excluding acquisitions and related improvements to acquisitions, we spent about $105 million, $106 million in 2011, and sold a little less than $70 million were long-term assets at leased locations that were sold to our landlord. And we're going to be in that same neighborhood in 2012 or those same neighborhoods. Of course, we'll adjust as we have in the past to the extent that we find external growth opportunities that are -- if we find more external growth opportunities, our internal capital spend will come down; if we find less, it might go up versus 2011.

That's $35 million net. That's net $35 million, but if you include your improvements to -- and your acquisitions, I guess, I didn't see a cash flow statement on the press release but... Thomas M. O'Brien: For the total, it's about $156 million.

So it's $156 million less $70 million would be the net capital budget for last year. And so we're looking about the same. Okay. Was that reasonable? Thomas M. O'Brien: Yes.

Okay. I've done some work in an amateur way about this compressed natural gas business, and I know as your competitors announced some months ago that they were in league with one of the purveyors. I just happened to -- my opinion is that the natural gas is the transportation fuel of the future. I could be wrong, but that's my opinion. What are you -- are you guys doing anything in that area? Thomas M. O'Brien: Yes. At this point, we're monitoring demand, both real demand and demand that could be coming through conversations with fleet customers and what have you. The -- we're at the very early stage today of real availability, and for natural gas engines, the large ones that are acquired by long-haul and other class 8, it does seem to be, today, based on the numbers, compelling in some ways. But I'll tell you that right now, while people are looking at it, there's been few commitments. That's not to say there won't be commitments to the space by carriers very soon into the future. I think we're pretty well positioned with the number of different groups or frankly alone, if we decide that's the way to go to -- if and as demand ramps up do not fall behind our competition.

There should be so many guys out there providing that service, and one of the company I think was something Westlake or somebody like that announcing they're going to build like, I don't know, dozens of natural gas fueling stations around, I don't know, some part of the country, maybe all over the country. I think West Point [ph] innovation, I think, is the name of the company. So that would be -- if they were out there and they had the tremendous report on Wall Street, and Wall Street likes to throw hundreds of millions and billions of these concept companies, they may lose a lot of money, but they may take business away from you while they're doing it. So that's kind of a downside for you guys if Wall Street throws enough money at them. Thomas M. O'Brien: It's a downside if we're not on top of it, and I think we are, so.

[Operator Instructions] And now I'll go to the line of Krishan Leong from Red Oak Partners.

I was just curious if there was a rule of thumb for the amount of improvement you were able to sell back to HPT? Thomas M. O'Brien: In 2011, it's a little less than 70% of what we spent on, in total, on operating sites. So that's a reasonable rule of thumb. It does depend, of course, on what exactly is being modified, but that's a reasonable rule of thumb.

And then, how much is your rent increase? What's the conversion there? Thomas M. O'Brien: You mean with regard to the -- those assets that would be sold?

Right. Thomas M. O'Brien: It's, generally speaking, 8.5% of the amount, the proceed amount.

Right. And on the CapEx, I know the numbers for 2011 and you're saying that you might be in the same neighborhood for 2012. But historically, you've said that x growth spend to generate new revenue and new businesses, the maintenance was, I believe, between $30 million and $35 million a year. Is that still a good number or have things changed in such a way that the business might require a little more maintenance capital each year? Thomas M. O'Brien: We're probably at the higher end of that, but it is a good number. So to make sure that you understand what's being said though, that's a number that will allow us to, I believe, stay in place and maintain our relative position in the industry. Of course, that's not good enough for us.

And our next question comes from the line of Susan Anderson from Citi.

You may have already talked about this, but I was wondering if you can provide more color on the maintenance facilities in terms of the top line this quarter and the drivers behind that, and then your expectations for 2012 given the age of the fleet out there? Thomas M. O'Brien: Well, I can't get too specific, Susan. But I will tell you that truck service in 2011 showed a strong single-digit growth. In 2012, I think that the impact of a newer -- of a lower age of fleet, if you will, overall is kind of -- because folks are ordering new vehicles more than they were, say 2 years ago. It's twofold. On the negative side, newer equipment tends to require less repair, right? That make sense? On the positive side, newer equipment tends to require, relatively speaking, more repair that it's covered under warranty and that warranty repair, because it's under warranty, there seems to be less of a push to -- for large fleets to complete those repairs themselves, meaning, we'll get a larger percentage. The other thing that's happening is, frankly, there's a tightness in supply of trucks, in part because of equipment, but in large part, because of drivers. And the tighter the supply gets, the more difficult it may be for large companies' customers to reposition their equipment effectively for repair in their own facility, and so we see a little bit of a ramp up there. So by and large, the long answer to your question, although the first quarter has been very mild, I don't see much in the way of net-net change going forward versus looking at 2011.

Got it. And was the first quarter impacted by weather at all, meaning like the warmer weather, it didn't have as harsh of an impact on the trucks? Thomas M. O'Brien: Yes. Harsh weather generally leads to more truck service of business and the absence of harsh weather, we got to run out and scrap for it. And I think we're doing a good job, but it was a very, very mild winter.

And we have no further questions at this time. I would now like to turn the conference over to Tom O'Brien. Please go ahead. Thomas M. O'Brien: Well, thank you, everybody, for participating in our call, and we'll have more to say in our first quarter call here coming up in several weeks. Thanks a lot. We're going to get back to it.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.