TA 4Q19 Fuel Sales Volume Up 5.3%%, Revenues DN 1.4%% YoY
2/25 8:30 AM
TA 4Q19 Fuel Sales Volume Up 5.3%, Revenues DN 1.4% YoY OAKHURST, N.J. (DTN) --- TravelCenters of America Inc. reported fourth quarter 2019 fuel sales volume increased by 25 million gallons compared to the fourth quarter 2018 while fuel revenues for the period fell $15.4 million during the same period primarily due to a decrease in market prices for fuel during the fourth quarter 2019. In December 2019, the U.S. government retroactively reinstated the federal biodiesel blenders' tax credit for 2018 and 2019, as well as approved the federal biodiesel blenders' tax credit through 2022. As a result, TA recognized $70.2 million as a reduction to TA's fuel costs of goods sold in the 2019 quarter relating to 2018 and 2019. It typically has taken TA approximately six to eight months to collect the cash refunds related to the federal biodiesel blenders' tax credit and TA expects to collect the full amount for 2018 and 2019 by the fourth quarter. For the years 2020 through 2022, the benefit of the federal biodiesel blenders' tax credit will be included in the price TA pays for biodiesel. TA anticipates the benefit it will realize in future periods for the credit may be less than the benefit realized for each of the years 2017 through 2019. "Net income for the fourth quarter benefited from a significant increase in fuel gross margin as a result of the reinstatement of the federal biodiesel blenders' tax credit for 2018 and 2019, a 5.3% increase in fuel sales volumes and a more favorable fuel purchasing environment, as well as a 1.4% increase in nonfuel gross margin," said Jonathan M. Pertchik, TA's CEO. Fuel gross margin for the 2019 fourth quarter increased by $61.8 million as compared to the 2018 fourth quarter primarily due to the $70.2 million benefit from the federal biodiesel blenders' tax credit, a 5.3% increase in fuels sales volume and a more favorable fuel purchasing environment in the quarter profiled. The increase was partially offset by the higher cost associated with increased rewards under TA's customer loyalty program to incentivize drivers to purchase higher fuel volume. Adjusted fuel gross margin for the 2019 fourth quarter decreased by $8.4 million compared to the 2018 fourth quarter primarily due to higher cost associated with increased rewards under TA's customer loyalty program and an unusually strong trucking freight environment in the 2018 fourth quarter, partially offset by the increase in fuel sales volume and a more favorable fuel repurchasing environment in the 2019 fourth quarter. (c) 2020 DTN. All rights reserved.
 
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