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.

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