Travel Centers of America

Executive Summary:

The following is an analysis of the Travel Centers of America (TA) and recommended best investment strategies as Trifthorn Capital pertains to additional investment opportunities. Based on HPT-TA deal structures and where we believe our investors to be headed we recommend the following actions:

• Holding New-TA stocks you received in the spinoff

• Buying shares in New-TA in addition to the stocks received from spinoff

In this memo, we would analyze the HPT share holders' benefit from acquisition, noting that the company's restructuring plan have allowed Travel Centers of America to run business without being exposed to financial risk from high leverage or less cash.

We will then analyze the deal structure by comparing our own calculation using comparable and DCF with HPT's original deal structure. And we figure out the acquisition cost of $1.9billion was plausible.In addition, we provide a detailed valuation on new-TA's future with comparable analysis, DCF and other methods, showing that the new-TA can become a successful and profitable investment for our investors.Finally, we talk about risk factor regarding conflict of interest between two companies and further possibility of unfavorable action on TA by HPT management.

1. After its USD 1.9billion acquisition of Travel Centers of America (TA), the Hospitality Properties Trust (HPT) keeps most of TA's properties and leased them back to the new, publicly traded company (New TA). To HPT, this complex transaction has some strategic advantages.

First, with the complex structure, HPT could retain its status as a REIT and avoid paying federal income taxes. To preserve its tax free status, a REIT has to collect all of its income and has all of its assets in real estate. Second, HPT could make stable revenue structure. Since hotel industry is highly cyclical, HPT was in need to buy new investment portfolio which can offsets revenue fluctuation. As a nation's leading service travel centers, Travel Centers America had well diversified business and has made relatively stable gross profit. By acquiring TA and spun it off, HPT is expecting to receive $170millions of annual rent income for 16years.

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