<PAGE>



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

[X]                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                        Commission file number 333-52442

                         TRAVELCENTERS OF AMERICA, INC.
             (Exact name of Registrant as specified in its charter)

          DELAWARE                                               36-3856519
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                              Identification No.)

                       24601 Center Ridge Road, Suite 200
                             Westlake, OH 44145-5639
          (Address of principal executive offices, including zip code)

                                 (440) 808-9100
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

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 [X]  No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

As of March 15, 2002, there were outstanding 6,932,196 shares of common stock,
par value $0.00001 per share. The outstanding shares of our common stock were
issued in transactions not involving a public offering. As a result, there is no
public market for our common stock.


<PAGE>



                                      INDEX



<TABLE>
PART I
<S>            <C>                                                                                              <C>
          Item 1.          Business...................................................................          2
          Item 2.          Properties.................................................................          15
          Item 3.          Legal Proceedings..........................................................          15
          Item 4.          Submission of Matters to a Vote of Security Holders........................          15

PART II
          Item 5.          Market for Our Common Equity and Related Stockholder Matters...............          16
          Item 6.          Selected Financial Data....................................................          19
          Item 7.          Management's Discussion and Analysis.......................................          21
          Item 7A.         Quantitative and Qualitative Disclosures About Market Risk.................          37
          Item 8.          Financial Statements and Supplementary Data................................          38
          Item 9.          Changes in and Disagreements With Accountants..............................          80

PART III
          Item 10.         Our Directors and Executive Officers.......................................          81
          Item 11.         Executive Compensation.....................................................          81
          Item 12.         Security Ownership of Certain Beneficial Owners and Management.............          81
          Item 13.         Certain Relationships and Related Transactions.............................          81

PART IV
          Item 14.         Exhibits, Financial Statement Schedules and Reports on Form 8-K............          81


SIGNATURES............................................................................................          83


</TABLE>





                                       1
<PAGE>



                                     PART I

ITEM 1.  BUSINESS

BUSINESS OVERVIEW

         We are a holding company which, through our wholly owned subsidiaries,
owns, operates and franchises travel centers along the United States interstate
highway system to serve long-haul trucking fleets and their drivers, independent
truck drivers and general motorists. Our network is the largest, and only
nationwide, full-service travel center network in the United States. At December
31, 2001, our geographically diverse network consisted of 153 sites located in
40 states. Our operations are conducted through three distinct types of travel
centers:

         -   sites owned or leased and operated by us, which we refer to as
             company-operated sites;

         -   sites owned by us and leased to independent
             lessee-franchisees, which we refer to as leased sites; and

         -   sites owned and operated by independent franchisees, which we
             refer to as franchisee-owned sites.

         Our travel centers are located at key points along the U.S. interstate
highway system, typically on 20- to 25-acre sites. Most of our network
properties were developed more than 20 years ago when prime real estate
locations along the interstate highway system were more readily available than
they are today, making a network such as ours difficult to replicate. Operating
under the "TravelCenters of America" and "TA" brand names, our nationwide
network provides an advantage to long-haul trucking fleets by enabling them to
route their trucks within a single network from coast to coast.

         One of the primary strengths of our business is the diversity of our
revenue sources. We have a broad range of product and service offerings,
including diesel fuel and gasoline, truck repair and maintenance services,
full-service restaurants, 20 different brands of fast food restaurants, which we
refer to as quick service restaurants, or QSRs, travel and convenience stores
with a selection of over 4,000 items, and other driver amenities.

         The U.S. travel center and truck stop industry in which we operate
consists of travel centers, truck stops, diesel fuel outlets and similar
facilities designed to meet the needs of long-haul trucking fleets and their
drivers, independent truck drivers and general motorists. According to the
National Association of Truck Stop Operators, or "NATSO," the travel center and
truck stop industry is highly fragmented, with in excess of 3,000 travel centers
and truck stops located on or near interstate highways nationwide, of which we
consider approximately 500 to be full-service facilities. Further, only nine
chains in the United States have 25 or more travel center and truck stop
locations on the interstate highways, which we believe is the minimum number of
locations needed to provide even regional coverage to truck drivers and trucking
fleets.

HISTORY AND ORGANIZATION

         We were formed in December 1992 by a group of institutional investors.
We were originally incorporated as National Auto/Truckstops Holdings Corporation
but changed our name to TravelCenters of America, Inc. in March 1997. We
primarily have created our network through the following series of acquisitions:

         -   In April 1993, we acquired the truckstop network assets of a
             subsidiary of Unocal Corporation, which sites we refer to as
             the "Unocal network." The Unocal network included a total of
             139 facilities, of which 95 were leased sites, 42 were
             franchisee-owned sites and two sites were company-operated
             sites.

         -   In December 1993, we acquired the truckstop network assets of
             certain subsidiaries of The British Petroleum Company p.l.c.,
             which assets we refer to as the "BP network." The BP network
             included 38 company-operated sites and six franchisee-owned
             sites.




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         -   In December 1998, we acquired substantially all of the
             truckstop network assets of Burns Bros., Inc. and certain of
             its affiliates, which assets we refer to as the Burns Bros.
             network. The Burns Bros. network included 17 company-operated
             sites, located in nine western and northwestern states.

         -   In June 1999, we acquired the travel center and truck stop
             network assets of Travel Ports of America, Inc. through the
             acquisition of 100% of the stock of Travel Ports. The Travel
             Ports network consisted of 16 company-operated sites in seven
             states, primarily in the northeastern region of the United
             States.

         Historically, until 1997, the Unocal network operated principally as a
fuel wholesaler and franchisor, with relatively few company-operated sites. In
contrast to the Unocal network, the BP network operated principally as an
owner-operator of travel centers. In January 1997, we instituted a plan to
combine the Unocal network and the BP network, which had been previously managed
and financed separately, into a single network to be operated under the
"TravelCenters of America" and "TA" brand names under the leadership of a single
management team. Prior to combining the Unocal and BP networks, the Unocal
network was operated through National Auto/Truckstops, Inc. and the BP network
was operated through TA Operating Corporation, each of National Auto/Truckstops,
Inc. and TA Operating Corporation being a wholly owned subsidiary of ours. At
the time we approved the plan to combine our networks, there were 122 sites
operating in the Unocal network and 49 sites operating in the BP network. In
November 2000, National Auto/Truckstops, Inc. merged with and into TA Operating
Corporation.

         In July 1999, we signed an agreement with Freightliner LLC to become an
authorized provider of express service, minor repair work and a specified menu
of warranty repairs to Freightliner's customers through the Freightliner
ServicePoint Program. Under the agreement, our truck repair facilities have been
added to Freightliner's 24-hour customer assistance center database as a major
referral point for emergency and roadside repairs and also have access to
Freightliner's parts distribution, service and technical information systems.
Freightliner, a DaimlerChrysler company, has an approximately 40% market share
of heavy truck sales in North America. Freightliner also acquired a minority
ownership interest in us at that time.

         On May 31, 2000, we and shareholders owning a majority of our voting
stock entered into a recapitalization agreement and plan of merger, as amended,
with TCA Acquisition Corporation, a newly created corporation formed by Oak Hill
Capital Partners, L.P. and its affiliates ("Oak Hill"), under which TCA
Acquisition Corporation agreed to merge with and into us. This merger was
completed on November 14, 2000. Concurrent with the closing of the merger, we
completed a series of transactions to effect a recapitalization and a
refinancing that included the following:

         -   TCA Acquisition Corporation issued 6,456,698 shares of common
             stock to Oak Hill and a group of other institutional
             investors, which we refer to as the Other Investors, for
             proceeds of $205.0 million and then merged TCA Acquisition
             Corporation with and into us. At the time of the merger, the
             Other Investors were Olympus Growth Fund III, L.P., Olympus
             Executive Fund, L.P., Monitor Clipper Equity Partners, L.P.,
             Monitor Clipper Equity Partners (Foreign), L.P., UBS Capital
             Americas II, LLC, Credit Suisse First Boston LFG Holdings
             2000, L.P. and Credit Suisse First Boston Corporation, each of
             whom is an affiliate of certain of our former shareholders.
             Since that time, certain of these investors have sold their
             shares to other investors, including affiliates of certain of
             the Other Investors. Such sales of our shares are not frequent
             but could occur in the future.

         -   We redeemed all shares of our common and preferred stock
             outstanding prior to the closing of the merger, with the
             exception of 473,064 shares of common stock with a market
             value at that time of $15.0 million that were retained by
             continuing stockholders, and cancelled all then outstanding
             common stock options and warrants for cash payments totaling
             $263.2 million.

         -   We repaid all amounts outstanding under our then existing debt
             agreements.




                                       3
<PAGE>



         -   We borrowed $328.3 million under a secured credit agreement
             with a group of lenders and issued units consisting of Senior
             Subordinated Notes due 2009 with a face amount of $190.0
             million and initial warrants and contingent warrants that in
             the aggregate could be exercised in exchange for 277,165
             shares of our common stock.

         -   We merged National Auto/Truckstops, Inc. with and into TA
             Operating Corporation.

         Prior to the closing of the transactions described above, we issued
137,572 shares of common stock for cash proceeds of $3.7 million upon the
exercise of stock options held by existing shareholders, which shares remain
outstanding. After the transactions described above, Oak Hill owned 60.5% of our
outstanding common stock, the Other Investors owned, in the aggregate, 32.7% of
our outstanding common stock, Freightliner owned 4.3% of our outstanding common
stock and certain members of our management owned 2.5% of our outstanding common
stock. The total market value of our equity capitalization after these
transactions was $220.0 million.

         At December 31, 2001, we had two wholly owned subsidiaries, TA
Operating Corporation, which is our primary travel center operating entity, and
TA Franchise Systems Inc, which maintains our franchise agreements and
relationships. TA Operating Corporation has the following direct or indirect
wholly owned subsidiaries:

     -   TA Licensing, Inc.

     -   TA Travel, L.L.C.

     -   TravelCenters Properties, LP

     -   TravelCenters Realty, Inc.

NETWORK DEVELOPMENT

         Due to historical competition between the Unocal and BP networks, there
were certain markets in which each of these networks had an existing site at the
time we instituted our plan to combine these two networks. Likewise, there was
competition in certain markets between our networks and the networks of Burns
Bros. and of Travel Ports. In addition, there were certain franchisee-owned
sites in the Unocal network that were not considered to be in strategic
locations. Further, there were, and continue to be, locations on the interstate
highway system that we consider to be strategic but in which we do not have an
adequate presence. As a result, since 1997 we have significantly reshaped the
composition of our network through the following:

     -   17 company-operated sites were acquired from Burns Bros. in 1998;

     -   16 company-operated sites in the Travel Ports network were acquired
         in 1999;

     -   35 leased sites were converted to company-operated sites, three during
         2000, five during 1998 and 27 during 1997 (two more of these
         conversions were completed in the first two months of 2002 and a third
         conversion is expected to occur in April 2002);

     -   one franchisee-owned site was converted to a company-operated site
         during 2000;

     -   four new network sites were constructed, one in 2001, one in 2000 and
         two in 1999 (an additional new site is under construction and expected
         to open by July 2002);

     -   two company-operated sites were added to our network through
         individual site acquisitions during 2000;

     -   franchise agreements covering 28 franchisee-owned sites were
         terminated, one in 2000 and 27 in 1997;

     -   28 sites we owned were sold, four during 2001, two during 2000, five
         during 1999, two during 1998 and 15 during 1997 (one additional site
         was sold in March 2002 and the sale of another site is expected to
         close by the end of March 2002 or early April 2002);




                                       4
<PAGE>



     -   two franchisee-owned sites were added to our network, one in 1999 and
         one in 1998; and

     -   two company-operated sites were closed during 1999 and are being held
         for sale.

         In 1997, we initiated a capital program to upgrade, rebrand and
re-image our travel centers and to build new travel centers. Under this capital
program, as revised as a result of the Burns Bros. acquisition and the Travel
Ports acquisition, we intend to invest approximately $410 million in our sites
by the end of 2002, with approximately $364 million having been spent by the end
of 2001. Through December 31, 2001, we completed full re-image projects at 33 of
our sites at an average investment of $2.0 million per site. These full re-image
projects typically include expanding the square footage of the travel and
convenience store, adding a fast food court with two or three QSRs, upgrading
showers and restrooms and updating the full-service restaurant. We also had
completed smaller scale re-image projects at another 56 sites at an average cost
of $0.3 million. During 2002, we intend to complete full re-image projects at
another five of our sites and to complete smaller scale re-image projects at an
additional five of our sites. During 2003, we intend to finish our re-imaging
program for the company-operated sites by completing full re-image projects at
an additional three sites and completing smaller scale re-image projects at one
additional site. In addition to improving our existing sites, we have identified
several new interstate areas available for our network's expansion. We have
designed a "protoype" facility and a smaller "protolite" facility to standardize
our travel centers and expand our brand name into new geographic markets while
also increasing our appeal to motorists. The prototype and protolite designs
combine an improved and efficient facility layout with nationally branded QSRs
and gasoline brands as well as expanded product and service offerings. Since May
1999, we have completed construction of two protolite and seven prototype
facilities, and one prototype facility and two protolite facilities are
currently under development. Most of our future expansion will be with the
protolite format, which requires significantly less land and capital investment
than the prototype design and enables us to quickly and cost efficiently gain a
presence in smaller markets. We also intend to pursue strategic acquisitions.
Our franchisees will also continue to invest additional amounts of their own
capital for reimaging and other projects at the sites they operate.

REFINANCINGS

         In order to complete the Burns Bros. acquisition and facilitate future
network growth and development, including the Travel Ports acquisition, in
December 1998 we completed a refinancing that increased our secured term loan
indebtedness by $150 million, which refinancing we refer to as the "1998
Refinancing." Of the total amount borrowed, $50 million was utilized to retire
existing senior secured debt, $58 million was invested in the Burns Bros.
acquisition, $12 million was utilized during 1999 to fund capital expenditures
and $30 million was used to partially fund the Travel Ports acquisition.

         As part of the transactions we completed to consummate our merger with
TCA Acquisition Corporation and the related recapitalization, we completed a
refinancing of our indebtedness, which refinancing transactions we refer to as
the "2000 Refinancing." In the 2000 Refinancing, we issued $190 million of
senior subordinated notes due 2009 and borrowed $328.3 million under our amended
and restated senior credit facility that consists of a fully-drawn $328 million
term loan facility and a $100 million revolving credit facility. The proceeds
from these borrowings, along with proceeds from the issuance of common stock and
other cash on hand, were used to:

     -   pay for the tender offer and consent solicitation for our 10 1/4%
         Senior Subordinated Notes due 2007, including accrued interest,
         premiums and a prepayment penalty;

     -   repay all amounts, including accrued interest, then outstanding under
         our existing amended and restated credit agreement;

     -   redeem in full all of our then existing senior secured notes and pay
         related accrued interest and prepayment penalties;



                                       5
<PAGE>



    -    make cash payments to certain of our then current equity owners, whose
         shares and unexercised stock options and warrants were redeemed and
         cancelled pursuant to the recapitalization agreement and plan of
         merger; and

    -    pay fees and expenses related to the financings and the merger and
         recapitalization transactions.

         The $190 million of Senior Subordinated Notes were issued as part of
units that also included initial warrants exercisable for 207,874 shares of our
common stock and contingent warrants exercisable, under certain conditions, for
69,291 shares of our common stock. See "Liquidity and Capital Resources" in Item
7 for further discussion of the 2000 Refinancing.

OUR TRAVELCENTERS

         Our travel centers are designed to appeal to drivers seeking either a
quick stop or a more extended visit. Each of our travel centers is a
full-service facility located on or near an interstate highway and offers fuel
and non-fuel products and services 24 hours per day, 365 days per year.

         PROPERTY. The layouts of the travel centers we own vary from site to
site. The facilities we own are located on properties averaging 22 acres, of
which an average of approximately 19 acres are developed. The majority of the
developed acreage consists of truck and car fuel islands, separate truck and car
paved parking and the main building, which contains a full-service restaurant
and one or more QSRs, a travel and convenience store and driver amenities and a
truck maintenance and repair shop. The remaining developed acreage contains
landscaping and access roads.

         PRODUCT AND SERVICE OFFERINGS. We have developed an extensive and
diverse offering of products and services to complement our diesel fuel
business, which includes:

    -   GASOLINE. We sell nationally recognized branded gasoline, consistently
        offering one of the top three gasoline brands in each geographic region.
        Of our 119 company-operated sites as of December 31, 2001, we offered
        branded gasoline at 100 sites and unbranded gasoline at nine sites.

    -   FULL-SERVICE AND FAST FOOD RESTAURANTS. Most of our travel centers have
        both full-service restaurants and QSRs that offer customers a wide
        variety of nationally recognized brand names and food choices. Our
        full-service restaurants, branded under our "Country Pride," "Buckhorn
        Family Restaurants" and "Fork in the Road" proprietary brands, offer
        "home style" meals through menu table service and buffets. We also offer
        nationally branded QSRs such as Arby's, Burger King, Dunkin' Donuts,
        Pizza Hut, Popeye's Chicken & Biscuits, Sbarro, Subway and Taco Bell. We
        generally attempt to locate QSRs within the main travel center building,
        as opposed to constructing stand-alone buildings. As of December 31,
        2001, 95 of our network travel centers offered at least one branded QSR.

    -   TRUCK REPAIR AND MAINTENANCE SHOPS. All but 12 of our network travel
        centers have truck repair and maintenance shops. The typical repair shop
        has between two and four service bays, a parts storage room and fully
        trained mechanics on duty at all times. These shops, which generally
        operate 24 hours per day, 365 days per year, offer extensive maintenance
        and emergency repair and road services, ranging from basic services such
        as oil changes and tire repair to specialty services such as diagnostics
        and repair of air conditioning, air brake and electrical systems. Our
        work is backed by a warranty honored at all of our other repair and
        maintenance facilities. As of December 31, 2001, all but one of our
        network sites that have truck repair and maintenance shops were
        participating in the Freightliner ServicePoint Program.

    -   TRAVEL AND CONVENIENCE STORES. Each travel center has a travel and
        convenience store that caters to truck drivers, motorists, recreational
        vehicle operators and bus drivers and passengers. Each travel and
        convenience store has a selection of over 4,000 items, including food
        and snack items, beverages, non-prescription drug and beauty aids,
        batteries, automobile accessories, music and audio products. In addition



                                       6
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        to complete travel and convenience store offerings, the stores sell
        items specifically designed for the truck driver's on-the-road
        lifestyle, including laundry supplies and clothing as well as truck
        accessories. Many stores also have a "to go" snack bar installed as an
        additional food offering.

    -   ADDITIONAL DRIVER SERVICES. We believe that fleets can improve the
        retention and recruitment of truck drivers by directing them to visit
        high-quality, full-service travel centers. We strive to provide a
        consistently high level of service and amenities to drivers at all of
        our travel centers, making our network an attractive choice for trucking
        fleets. Most of our travel centers provide truck drivers with access to
        specialized business services, including an information center where
        drivers can send and receive faxes, overnight mail and other
        communications and a banking desk where drivers can cash checks and
        receive fund transfers from fleet operators. Most sites have installed
        telephone rooms with 25 to 30 pay telephones with AT&T long distance
        service. The typical travel center also has a video game room and
        designated "truck driver only" areas, including a television room with a
        VCR and comfortable seating for drivers, a laundry area with washers and
        dryers and an average of six to 12 private showers.

        Additionally, we offer truck drivers a loyal fueler program, which we
        call the RoadKing Club, that is similar to the frequent flyer programs
        offered by airlines. Drivers receive a point for each gallon of diesel
        fuel purchased and can redeem their points for discounts on non-fuel
        products and services at any of our travel centers.

    -   MOTELS. Twenty of our company-operated travel centers offer motels, with
        an average capacity of 39 rooms. Sixteen of these motels are operated
        under franchise grants from nationally branded motel chains, including
        Days Inn, HoJo Inn, Super 8, Rodeway and Travelodge.

OPERATIONS

         FUEL SUPPLY. We purchase diesel fuel from various suppliers at rates
that fluctuate with market prices and are reset daily, and resell fuel to
certain franchisees and to the public at prices that we establish daily. By
establishing supply relationships with an average of four to five alternate
suppliers per location, we have been able to effectively create competition for
our purchases among various diesel fuel suppliers on a daily basis. We believe
that this positioning with our suppliers will help our sites avoid product
outages during times of diesel fuel supply disruptions. We have a single source
of supply for gasoline at most of our sites that offer branded gasoline. Sites
selling unbranded gasoline do not have exclusive supply arrangements.

         Other than pipeline tenders, fuel purchases made by us are delivered
directly from suppliers' terminals to our travel centers. Until March 2002, we
operated a fleet of 25 tankers to haul fuel to certain of our sites and to
deliver supply to a select number of wholesale customers, but contract with
common carriers for the majority of our fuel hauling needs. In March 2002, we
sold our fuel tanker fleet to our primary fuel hauling service provider, who is
providing this service for us at the sites formerly served by our fleet. This
sale is not expected to materially change our operating costs. We do not
contract to purchase substantial quantities of fuel for our inventory and are
therefore susceptible to price increases and interruptions in supply. In the
western United States, we use pipeline tenders and leased terminal space to
mitigate the risk of supply disruptions, while in the eastern United States, we
own and operate our own product terminal for this purpose. We are currently
negotiating the sale of our fuel terminal. However, we will continue to utilize
leased space at this terminal to manage our fuel supply needs in the region. The
susceptibility to market price increases for diesel fuel is substantially
mitigated by the significant percentage of our total diesel fuel sales volume
that is sold under pricing formulae that are indexed to market prices, which
reset daily. We do not engage in any fixed-price contracts with customers. We
sell a majority of our diesel fuel on the basis of a daily industry index of
average fuel costs plus a pumping fee and we hold less than three days of diesel
fuel inventory at our sites. We engage in only a minimal level of hedging of our
fuel purchases with futures and other derivative instruments that primarily are
traded on the New York Mercantile Exchange.




                                       7
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         The Environmental Protection Agency has promulgated regulations to
decrease the sulfur content of diesel fuel by 2006. The enactment of these
regulations could reduce the supply and/or increase the cost of diesel fuel. A
material decrease in the volume of diesel fuel sold for an extended period of
time or instability in the prices of diesel fuel could have a material adverse
effect on us.

         NON-FUEL PRODUCTS SUPPLY. There are many sources for the large variety
of non-fuel products that we purchase and sell. We have developed strategic
relationships with several suppliers of key non-fuel products, including
Freightliner LLC for truck parts, Bridgestone/Firestone Tire Sales Company for
truck tires, and Equilon Enterprises LLC for Shell brand lubricants and oils. We
believe that our relationships with these and our other suppliers are
satisfactory and that supply of the non-fuel products we require is adequate.

         CENTRALIZED PURCHASING AND DISTRIBUTION. We maintain a distribution and
warehouse center that services our network. The distribution center is located
near Nashville, Tennessee and has approximately 85,000 square feet of storage
space. Approximately every two weeks, the distribution center delivers products
to our network sites using a combination of contract carriers and our fleet of
trucks and trailers. In 2001, the distribution center shipped approximately
$42.9 million of products. The distribution center's cost savings allow our
travel centers to offer products at reduced prices while maintaining higher
profit margins than many industry competitors.

         The distribution center provides us with cost savings by using its
consolidated purchasing power to negotiate volume discounts with third-party
suppliers. The distribution center is also able to obtain further price
reductions from suppliers in the form of reduced shipping charges, as suppliers
need only deliver their products to the distribution center warehouse, as
opposed to each site individually. The distribution center's sophisticated
inventory management system provides administrative cost savings to us. The
system handles returns of defective or obsolete items and provides us with
information regarding product sales volumes, allowing us to react quickly to
changing market conditions. In addition, use of the system has reduced the time
that site managers spend on inventory matters and has allowed them to focus on
product merchandising.

COMPETITION

         The travel center and truck stop industry is highly competitive and
fragmented. According to NATSO, there are in excess of 3,000 travel center and
truck stops located on or near highways nationwide, of which we consider
approximately 500 to be full-service facilities. Further, only nine chains in
the United States have 25 or more travel center and truck stop locations on the
interstate highways, which we believe is the minimum number of locations needed
to provide even regional coverage to truck drivers and trucking fleets. In the
United States, there are generally two types of facilities designed to serve the
trucking industry:

    -   pumper-only truck stops, which provide fuel, typically at discounted
        prices, with limited additional services; and

    -   full-service travel centers, such as those in our network, which offer a
        broad range of products and services to long-haul trucking fleets and
        their drivers, independent truck drivers and general motorists. These
        products and services include diesel fuel and gasoline; full-service and
        fast food dining; truck repair and maintenance; travel and convenience
        stores; secure parking areas and other driver amenities.

         Fuel and non-fuel products and services can be obtained by long-haul
truck drivers from a wide variety of sources other than us, including regional
full-service travel center and pumper-only truck stop chains, independently
owned and operated truck stops, some large service stations and fleet-operated
fueling terminals.

         We believe that we experience substantial competition from pumper-only
truck stop chains and that this competition is based principally on diesel fuel
prices. In the pumper-only truck stop segment, the largest network, based on the
number of facilities, is Pilot LLP, with approximately 250 sites. Pilot LLP's
network was formed during 2001 by the combination of the networks formerly
separately operated by Pilot Corporation and Marathon Ashland Petroleum LLC. We
experience additional substantial competition from major full-service networks
and





                                       8
<PAGE>



independent chains, which is based principally on diesel fuel prices, non-fuel
product and service offerings and customer service. In the full-service travel
center segment, the only large networks, other than ours, are operated by Flying
J Inc., with approximately 140 sites, and Petro Stopping Centers, L.P., with
approximately 55 sites. Our truck repair and maintenance shops compete with
regional full-service travel center and truck stop chains, full-service
independently owned and operated truck stops, fleet maintenance terminals,
independent garages, truck dealerships and auto parts service centers. We also
compete with a variety of establishments located within walking distance of our
travel centers, including full-service restaurants, QSRs, electronics stores,
drugstores and travel and convenience stores.

         A significant portion of all intercity diesel fuel consumption by
trucking fleets and companies with their own trucking capability occurs through
self-fueling at both dedicated terminals and at fuel depots strategically
located across the country. These terminals often provide facilities for truck
repair and maintenance. Our pricing decisions for diesel fuel and truck repair
and maintenance services cannot be made without considering the existence of
these operations and their capacity for expansion. However, we believe that a
trucking industry trend has been to reduce the use of these terminals and to
outsource fuel, repair and maintenance services to maximize the benefits of
competitive fuel pricing, superior driver amenities and reduced environmental
compliance expenditures.

RELATIONSHIPS WITH THE OPERATORS AND FRANCHISEE-OWNERS

         TA Licensing, Inc., a wholly owned subsidiary of TA Operating
Corporation, licenses its trademarks to us, TA Operating Corporation and TA
Franchise Systems. We enter into franchise agreements with operators and
franchisee-owners of travel centers through TA Franchise Systems, and TA
Franchise Systems collects franchise fees and royalties under these agreements.
TA Franchise System's assets consist primarily of the rights under the original
franchise agreements, the network franchise agreements and its trademark
licenses from TA Licensing. TA Franchise Systems has no significant tangible
assets.

NETWORK FRANCHISE AGREEMENT

         As of December 31, 2001, there were 25 leased sites operating under
network franchise agreements. Two of these network franchise agreements were
mutually terminated in 2002, one in January and one in February, and as a
result, these leased sites were converted to company-operated sites. Further, we
expect to terminate a third network franchise agreement in April 2002 and to
convert this leased site into a company-operated site.

        INITIAL FRANCHISE FEE. The initial franchise fee for a new franchise is
$100,000.

         TERM OF AGREEMENT. The initial term of the network franchise agreement
is five years. The network franchise agreement provides for five three-year
renewals on the terms being offered to prospective franchisees at the time of
the franchisee's renewal. We reserve the right to decline renewal under certain
circumstances or if specified terms and conditions are not satisfied by the
franchisee. The average remaining term of these agreements, including all
renewal periods, is approximately 16 years. The initial terms of the current
network franchise agreements expire in July 2002 through January 2003. We intend
to circulate a revised network franchise agreement to our franchisee group. The
key provisions of the revised network franchise agreement are substantially the
same as in the current agreement, except that the initial term will be 10 years
instead of five and there will be two five-year renewal terms.

         PROTECTED TERRITORY. Subject to specified exceptions, including
existing operations, so long as the franchisee is not in default under the
network franchise agreement, we agree not to operate, or allow another person to
operate, a travel center or travel center business that uses the "TA" brand,
within 75 miles in either direction along the primary interstate on which the
franchised site is located.

         RESTRICTIVE COVENANTS. Except for the continued operation of specified
businesses identified by the franchisee at the time of execution of the network
franchise agreement, the franchisee cannot, during the term of the agreement,
operate any travel center or truck stop-related business under a franchise
agreement, licensing agreement





                                       9
<PAGE>



or marketing plan or system of its own or another person or entity. If the
franchisee owns the franchised premises, the franchisee may continue to operate
a travel center at the franchised premises after termination of the franchise
agreement, but if the termination is for any reason other than a termination at
the expiration of the term of the agreement, the franchisee is restricted for a
two-year period from re-branding the facility with any other truck stop or
travel center company or other organization offering similar services and/or
fleet billing services.

         ROYALTY PAYMENTS. Franchisees are required to pay us a continuing
services and royalty fee equal to 3.75% of all non-fuel revenues. If branded
fast food is sold from the franchised premises, the franchisee must pay us 3% of
all net revenues earned directly or indirectly in connection with those sales
after deduction of royalties paid to the fast food franchisor.

         ADVERTISING, PROMOTION AND IMAGE ENHANCEMENT. The network franchise
agreement establishes a system-wide advertising, marketing and promotional fund
to which the franchisees are required to contribute 0.6% of their non-fuel
revenues and net revenues from fast food sales.

         FUEL PURCHASES AND SALES. Under the network franchise agreement, we
agree to sell to franchisees, and franchisees agree to buy from us, 100% of
their requirements of diesel fuel. The franchisee agrees to purchase gasoline
from only those suppliers that we approve in writing. The franchisee must pay a
$0.03 per gallon royalty fee to us on all gallons of gasoline sold.

         NON-FUEL PRODUCT OFFERINGS. Franchisees are required to operate their
sites in conformity with guidelines that we establish and offer any products and
services that we deem integral to the network.

         TERMINATION/NONRENEWAL. The network franchise agreement may be
terminated by the franchisee without cause or reason upon 180 days' prior
written notice. We may terminate the network franchise agreement for the
following reasons:

    -    the default of the franchisee;

    -    our withdrawal from the marketing of motor fuel in the state, county
         or parish where the franchise is located; or

    -    the default or termination of the lease.

         The foregoing reasons also constitute grounds for nonrenewal of the
network franchise agreement. In addition, we can decline to renew the network
franchise agreement for the following reasons:

    -    we and the operator fail to agree to changes or additions to the
         network franchise agreement;

    -    we make a good faith determination not to renew the network franchise
         agreement because it would be uneconomical to us; or

    -    if we own the franchise premises, we make a good faith determination
         to sell the premises or convert it to a use other than for a truck
         stop or travel center.

         If we do not renew the network franchise agreement due to any of the
three foregoing reasons, we may not enter into another network franchise
agreement relating to the same franchised premises with another party within 180
days of the expiration date on terms materially different from those offered to
the prior franchisee, unless the prior franchisee is offered the right, for a
period of 30 days, to accept a renewal of the network franchise agreement on
those different terms. If we do not renew the network franchise agreement
because we make a good faith determination to withdraw from the marketing of
fuel in the area of the franchised premises, we may not sell the franchised
premises or franchised business for 90 days following the expiration of the
network franchise agreement. The prior franchisee does not have a right of first
refusal on the sale of the franchised premises.




                                       10
<PAGE>



NETWORK LEASE AGREEMENT

         In addition to franchise fees, we also collect rent from those
franchisees that operate a travel center owned by us. As of December 31, 2001,
there were 25 leased sites. Each operator of a leased site that enters into a
network franchise agreement also must enter into a network lease agreement. Two
of these network lease agreements were mutually terminated in 2002, one in
January and one in February, and as a result, these leased sites were converted
to company-operated sites. Further, we expect to terminate a third network lease
agreement in April 2002 and to convert this leased site into a company-operated
site.

         TERM. The lease agreements we have with our franchisees have a term of
five years and allow for five renewals of three years each. We reserve the right
to decline renewal under certain circumstances or if specified terms and
conditions are not satisfied by the operator. The average remaining term of
these agreements, including all renewal periods, is approximately 16 years. The
initial terms of the current network lease agreements expire in July 2002
through January 2003. We intend to circulate a revised network lease agreement
to our franchisee group. The key provisions of the revised network lease
agreement are substantially the same as in the current agreement, except that
the initial term will be 10 years instead of five, there will be two five-year
renewal terms, and the revised agreement requires the lessee to complete certain
specific capital improvements to the site by December 31, 2003.

         RENT. Under the network lease, an operator must pay annual fixed rent
equal to the sum of

         -   base rent agreed upon by the operator and us, plus

         -   an amount equal to 14% of the cost of all capital improvements
             we fund that w e and the operator mutually agree will enhance
             the value of the leased premises and which cost in excess of
             $2,500, plus

         -   an annual inflator equal to the percentage increase in the
             consumer price index.

The base rent will not be increased if the operator elects to pay for capital
improvements. If we and the operator agree upon an amortization schedule for a
capital improvement funded by the operator, we will, upon termination of the
network lease, reimburse the operator for an amount equal to the unamortized
portion of the cost of the capital improvement. The fixed rent, as adjusted by
the annual inflator, may not increase more than 20% during the initial five-year
term or 12% during any three-year renewal term of the network lease. The
operator is responsible for the payment of all charges and expenses in
connection with the operation of the leased sites, including certain maintenance
costs.

         USE OF THE LEASED SITE. The operator must operate the leased site as a
travel center in compliance with all laws, including all environmental laws. The
operator must submit to quality inspections that we request and appoint a
manager that we approve, who is responsible for the day-to-day operations at the
leased site.

         TERMINATION/NONRENEWAL/TRANSFERABILITY/RIGHT OF FIRST REFUSAL. The
network lease agreement contains terms and provisions regarding termination,
nonrenewal, transferability and our right of first refusal which are
substantially the same as the terms and provisions of the network franchise
agreement.

ORIGINAL FRANCHISE AGREEMENT WITH BP NETWORK INDEPENDENT FRANCHISEES

         There are nine sites that continue to operate under the franchise
agreements they had with TA Franchise Systems prior to the network franchise
agreement being revised to its current form in 1997. The terms of these
franchise agreements are generally the same as the network franchise agreement,
but they do not require the franchises to purchase their diesel fuel from us and
their provisions vary. At the expiration of these agreements, the respective
franchisees may be offered an option to renew their franchises under a form of
our then-current franchise agreement for franchisee-owned sites.




                                       11
<PAGE>



         TERM OF AGREEMENT. In general, the initial terms of the original
franchise agreements are 10 years. The original franchise agreements provide for
one or two renewals for an aggregate of 10 years. The original franchise
agreements offer no assurance that the terms of the renewal will be the same as
those of the initial franchise agreements. We may decline renewal under some
circumstances or if specified terms and conditions are not satisfied by the
franchisee. The average remaining term of these agreements is approximately five
years.

         PROTECTED TERRITORY. So long as the franchisee is not in default under
the franchise agreement, we agree not to operate, or allow another person to
operate, the travel center or travel center business that uses the "TA" brand,
within a specified area in either direction along one or more interstates at
which the franchised site is located.

         RESTRICTIVE COVENANTS. Although the restrictive covenants in the
original franchise agreements may vary slightly from franchise to franchise,
each franchisee is subject to restrictions that prohibit two or more of the
following during the term of the franchise agreement and for two years after its
expiration:

         -   operation of any other truck stop or travel center within its
             protected territory;

         -   operation of the franchise location under any national brand
             other than "TA";

         -   operation of the branded facility within a certain distance of
             any other TA facility; and

         -   operation of any competitive business or a business that
             trades upon the franchise within the area adjacent to the
             franchise location.

         ROYALTY PAYMENTS. In general, we require franchisees to pay us a
continuing services and royalty fee equal to 4% of all revenues earned directly
or indirectly by the franchisee from any business conducted at or from the
franchised premises, excluding fuel sales and sales of branded fast food. As
part of the royalty fee, we require the franchise to pay us $0.004 per gallon on
all sales of fuel.

         ADVERTISING, PROMOTION AND IMAGE ENHANCEMENT. The original franchise
agreement establishes a system-wide advertising, marketing and promotional fund
to which franchisees are required to contribute 0.25% of all revenues, including
revenues from fuel and fast food sales, and mandates certain minimum franchisee
expenditures on advertising.

         FUEL PURCHASES AND SALES. We do not require franchisees to purchase
gasoline or diesel fuel from us. However, we charge royalty fees generally on
diesel fuel sales at the franchised premises.

         NON-FUEL PRODUCT OFFERINGS. Franchisees are required to operate their
travel centers in conformity with our guidelines, participate in and comply with
all programs that we prescribe as mandatory and offer any products and services
we deem integral to the network.

         TERMINATION OF AN ORIGINAL FRANCHISE AGREEMENT. We may terminate the
franchise agreement upon the occurrence of certain defaults, upon notice and
without affording the franchisee an opportunity to cure the defaults. When other
defaults occur, we may terminate the franchise agreement if, after receipt of a
notice of default, the franchisee has not cured the default within the
applicable cure period. The franchisee may terminate the franchise agreement
upon thirty days notice, if we are in material default under the franchise
agreement and we fail to cure or attempt to cure the default within a reasonable
period after notification.

REGULATION

         FRANCHISE REGULATION. State franchise laws apply to TA Franchise
Systems, and some of these laws require TA Franchise Systems to register with
the state before it may offer a franchise, require TA Franchise Systems to
deliver specified disclosure documentation to potential franchisees, and impose
special regulations upon petroleum franchises. Some state franchise laws also
impose restrictions on TA Franchise Systems' ability to terminate or not to
renew its respective franchises, and impose other limitations on the terms of
the franchise relationship or the conduct



                                       12
<PAGE>


of the franchisor. Finally, a number of states include, within the scope of
their petroleum franchising statutes, prohibitions against price discrimination
and other allegedly anticompetitive conduct. These provisions supplement
applicable antitrust laws at the federal and state levels.

         The Federal Trade Commission, or the FTC, regulates us under their rule
entitled "Disclosure Requirements and Prohibitions Concerning Franchising and
Business Opportunity Ventures." Under this rule, the FTC requires that
franchisors make extensive disclosure to prospective franchisees but does not
require registration. We believe that we are in compliance with this rule.

         We cannot predict the effect of any future federal, state or local
legislation or regulation on our franchising operations.

         ENVIRONMENTAL REGULATION. Our operations and properties are extensively
regulated by Environmental Laws that:

    -    govern operations that may have adverse environmental
         effects, such as discharges to air, soil and water, as well as the
         management of Hazardous Substances or

    -    impose liability for the costs of cleaning up sites affected by, and
         for damages resulting from disposal or other releases of Hazardous
         Substances.

         We own and use underground storage tanks and aboveground storage tanks
to store petroleum products and waste at our facilities. These tanks must comply
with requirements of Environmental Laws regarding tank construction, integrity
testing, leak detection and monitoring, overfill and spill control, release
reporting, financial assurance and corrective action in case of a release. At
some locations, we must also comply with Environmental Laws relating to vapor
recovery and discharges to water. We have completed necessary upgrades to
underground storage tanks to comply with federal regulations that took effect on
December 22, 1998, and believe that all of our travel centers are in material
compliance with applicable requirements of Environmental Laws.

         We have received notices of alleged violations of Environmental Laws,
or are otherwise aware of the need to undertake corrective actions to comply
with Environmental Laws, at travel centers owned by us in a number of
jurisdictions. We do not expect that any financial penalties associated with
these alleged violations, or instances of noncompliance, or compliance costs
incurred in connection with these violations or corrective actions, will be
material to our results of operations or financial condition. We are conducting
investigatory and/or remedial actions with respect to releases of Hazardous
Substances that have occurred subsequent to the acquisition of the Unocal and BP
networks and also regarding historical contamination at certain of the former
Burns Bros. and Travel Ports facilities. While we cannot precisely estimate the
ultimate costs we will incur in connection with the investigation and
remediation of these properties, based on our current knowledge, we do not
expect that the costs to be incurred at these properties, individually or in the
aggregate, will be material to our results of operations or financial condition.
While the matters discussed above are, to the best of our knowledge, the only
proceedings for which we are currently exposed to potential liability,
particularly given the Unocal and BP indemnities discussed below, we cannot
assure you that additional contamination does not exist at these or additional
network properties, or that material liability will not be imposed on us in the
future. If additional environmental problems arise or are discovered, or if
additional environmental requirements are imposed by government agencies,
increased environmental compliance or remediation expenditures may be required,
which could have a material adverse effect on us. As of December 31, 2001, we
had a reserve for those matters of $4.2 million. In addition, we have obtained
environmental insurance of up to $25.0 million for unanticipated costs regarding
certain known environmental liabilities and for up to $40.0 million regarding
certain unknown environmental liabilities.




                                       13
<PAGE>



         As part of the acquisition of the Unocal network, Phase I environmental
assessments were conducted at the 97 Unocal network properties purchased by us.
Under an agreement with Unocal, Phase II environmental assessments of all Unocal
network properties were completed by Unocal by December 31, 1998. Under the
terms of this agreement, Unocal is responsible for all costs incurred for:

    -    remediation of environmental contamination, and

    -    otherwise bringing the properties into compliance with Environmental
         Laws as in effect at the date of the acquisition of the Unocal network,

with respect to the matters identified in the Phase I or Phase II environmental
assessments, which matters existed on or prior to the date of the acquisition of
the Unocal network. Under the terms of this agreement, Unocal also must
indemnify us against any other environmental liabilities that arise out of
conditions at, or ownership or operations of, the Unocal network prior to the
date of the acquisition of the Unocal network. The remediation must achieve
compliance with the Environmental Laws in effect on the date the remediation is
completed. We must make claims for indemnification prior to April 14, 2004.
Except as described above, Unocal does not have any responsibility for any
environmental liabilities arising out of the ownership or operations of the
Unocal network after the date of the acquisition of the Unocal network. We
cannot assure you that Unocal, if additional environmental claims or liabilities
were to arise under the agreement with Unocal, would not dispute our claims for
indemnification.

         Prior to the acquisition of the BP network, all of the 38 company-owned
locations purchased by us were subject to Phase I and Phase II environmental
assessments, undertaken at BP's expense. The environmental agreement with BP
provides that, with respect to environmental contamination or non-compliance
with Environmental Laws identified in the Phase I or Phase II environmental
assessments, BP is responsible for:

    -    all costs incurred for remediation of the environmental contamination,
         and

    -    for otherwise bringing the properties into compliance with
         Environmental Laws as in effect at the date of the acquisition of the
         BP network.

The remediation must achieve compliance with the Environmental Laws in effect on
the date the remedial action is completed. The environmental agreement with BP
requires BP to indemnify us against any other environmental liabilities that
arise out of conditions at, or ownership or operations of, the BP network
locations prior to the date of the acquisition of the BP network. We must make
claims for indemnification before December 11, 2004. BP must also indemnify us
for liabilities relating to non-compliance with Environmental Laws for which
claims were made before December 11, 1996. Except as described above, BP does
not have any responsibility for any environmental liabilities arising out of the
ownership or operations of the BP network after the date of the acquisition of
the BP network. We cannot assure you that BP, if additional environmental claims
or liabilities were to arise under the environmental agreement with BP, would
not dispute our claims for indemnification.

         As part of the Burns Bros. acquisition, Phase I environmental
assessments were conducted on all 17 sites acquired. Based on the results of
those assessments, Phase II environmental assessments were conducted on nine of
the sites. The purchase price paid to Burns Bros. was adjusted based on the
findings of the Phase I and Phase II environmental assessments. Under the asset
purchase agreement with Burns Bros., we released Burns Bros. from any
environmental liabilities that may have existed as of the Burns Bros.
acquisition date, other than specified non-waived environmental claims as
described in the agreement with Burns Bros.

         As part of the Travel Ports acquisition, Phase I environmental
assessments were conducted on all 16 sites acquired. Based on the results of
those assessments, Phase II environmental assessments were conducted on five of
these sites. The results of these assessments were taken into account in
recognizing the related environmental contingency accrual for purchase
accounting purposes.




                                       14
<PAGE>



EMPLOYEES

         As of December 31, 2001, we employed approximately 10,255 people on a
full- or part-time basis. Of this total, approximately 9,880 were employees at
our company-operated sites and in fuel transportation, approximately 320
performed managerial, operational or support services at our headquarters or
elsewhere and approximately 55 employees staffed the distribution center. All of
our employees are non-union. We believe that our relationship with our employees
is satisfactory.

ITEM 2.  PROPERTIES

         Our principal executive offices are leased and are located at 24601
Center Ridge Road, Suite 200, Westlake, Ohio 44145-5639. Our distribution center
is a leased facility located at 1450 Gould Boulevard, LaVergne, Tennessee
37086-3535.

         Of our 144 owned sites in operation as of December 31, 2001, the land
and improvements at 11 are leased, the improvements but not the land at seven
are leased, four are subject to ground leases of the entire site and 10 are
subject to ground leases of portions of these sites. We consider our facilities
suitable and adequate for the purposes for which they are used. In addition to
these 144 sites, we own two sites that will be developed as travel centers and
two sites that are closed and being held for sale.

ITEM 3.  LEGAL PROCEEDINGS

         We are involved from time to time in various legal and administrative
proceedings and threatened legal and administrative proceedings incidental to
the ordinary course of our business. We believe we are currently not involved in
any litigation, individually or in the aggregate, which could have a material
adverse effect on our business, financial condition, results of operations or
cash flows.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On December 26, 2001, the holders of 6,456,698 shares of the 6,932,196
total shares of our outstanding voting stock, by written consent without a
meeting, approved in accordance with Section 280(g) of the Internal Revenue Code
of 1986, as amended, the adoption of our 2001 Stock Incentive Plan. In
accordance with Section 228 of the Delaware General Corporation Law, notice of
the action was provided to the holders of shares of voting stock who did not
participate in the consent solicitation.

         Our annual meeting of stockholders was held on December 26, 2001 for
the purpose of electing a board of directors. The nominees for director, Robert
J. Branson, Michael Greene, Steven B. Gruber, Edwin P. Kuhn, Louis J.
Mischianti, John Pangborn and Rowan G.P. Taylor, were all elected by the
following vote:

                  Shares voted "for"                 6,618,470
                  Shares voted "against"                     0

         Subsequent to this vote, Chris Patterson was appointed to our board of
directors to replace John Pangborn, who is retiring.




                                       15
<PAGE>



                                     PART II

ITEM 5.  MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         MARKET INFORMATION. The outstanding shares of our common stock were
         issued in transactions not involving a public offering. As a result,
         there is no public market for our common stock.

         HOLDERS. As of March 15, 2002, the outstanding shares of our common
         stock were held of record by 35 stockholders.

         DIVIDENDS. We have never paid or declared any cash dividends on our
         common stock, and we do not anticipate paying any cash dividends in the
         foreseeable future. We intend to retain our future earnings, if any, to
         fund the development and growth of our business. Our future decisions
         concerning the payment of dividends on the common stock will depend
         upon our results of operations, financial condition and capital
         expenditure plans, as well as other factors as the board of directors,
         in its sole discretion, may consider relevant. In addition, our
         existing indebtedness restricts, and we anticipate our future
         indebtedness may restrict, our ability to pay dividends.

         RECENT SALES OF UNREGISTERED SECURITIES. During 1999, 2000 and 2001, we
         sold or issued the unregistered securities described below. None of the
         following transactions involved any public offering. All sales were
         made in reliance on Section 4(2) of the Securities Act of 1933, as
         amended (the "Securities Act"), Rule 701 promulgated under the
         Securities Act and/or Regulation D promulgated under the Securities
         Act. These sales were made without general solicitation or advertising.
         The recipients in each such transaction represented their intention to
         acquire the securities for investment only and not with a view to sell
         or for sale in connection with any distribution thereof.

                  (1)      On June 3, 1999, in connection with, and as part of
                           the consideration for, the Travel Ports acquisition,
                           we issued 85,000 shares at $33.04 per share to a
                           stockholder of Travel Ports in exchange for 653,000
                           shares of Travel Ports that the stockholder owned.

                  (2)      In July 1999, we sold 200,000 shares to Freightliner
                           at $33.30 per share. The proceeds from this sale were
                           used for general corporate purposes.

                  (3)      In November 2000, in connection with our merger and
                           recapitalization transactions further described in
                           number (5) below, we sold 100,000 shares to
                           Freightliner at $33.30 per share.

                  (4)      In a series of sales to management, we sold the
                           following:

                           -        In 1999, we sold 6,182 shares at $25.00 per
                                    share. The proceeds from this sale were used
                                    for general corporate purposes.

                           -        In 2000, we sold 2,321 shares at $31.75 per
                                    share. The proceeds from this sale were used
                                    for general corporate purposes.

                           -        In November 2000, in connection with our
                                    merger and recapitalization transactions
                                    further described in number (5) below,
                                    certain members of management exercised
                                    options to purchase an aggregate of 37,572
                                    shares for aggregate proceeds of $421,726.

                           -        In 2001, we sold 2,434 shares at $31.75 per
                                    share. The proceeds from this sale were used
                                    for general corporate purposes.




                                       16
<PAGE>



                  (5)      We consummated an offering of Senior Subordinated
                           Notes due 2009 to "qualified institutional buyers,"
                           as defined in Rule 144A under the Securities Act and
                           to non-U.S. persons under Regulation S of the
                           Securities Act. The offering was consummated on
                           November 14, 2000 with the sale of 190,000 units,
                           each unit consisting of one 12 3/4% Senior
                           Subordinated Note due 2009 of TravelCenters of
                           America, Inc. with a principal amount of $1,000,
                           three initial warrants to purchase 0.36469 shares of
                           our common stock and one contingent warrant to
                           purchase 0.36469 shares of our common stock. We filed
                           an exchange offer registration statement on December
                           21, 2000 with respect to a proposed exchange of the
                           outstanding notes for registered notes having
                           substantially the same terms as the outstanding
                           notes. A second registration statement was filed on
                           December 21, 2000 to register the warrants and the
                           shares of common stock issuable upon exercise of the
                           warrants.

                           We received net proceeds of approximately $171.7
                           million from the sale of the units, which included
                           the sale of the outstanding notes, the initial
                           warrants and contingent warrants, (after deducting
                           discounts, commissions and certain expenses of the
                           offering of the notes). The net proceeds from the
                           unit sale, together with cash, borrowings under the
                           Senior Credit Facility and the proceeds from the sale
                           of common equity were used to:

                                    -        make cash payments totaling
                                             approximately $263.2 million to
                                             certain of our then current equity
                                             owners, whose shares and
                                             unexercised common stock options
                                             and warrants were redeemed or
                                             canceled in connection with the
                                             Transactions;

                                    -        pay $16.3 million for the merger
                                             transaction expense of certain of
                                             our then current equity owners;

                                    -        repay all amounts outstanding under
                                             our Amended and Restated Credit
                                             Agreement dated as of November 24,
                                             1998;

                                    -        redeem in full all of our then
                                             existing senior secured notes and
                                             pay a prepayment penalty;

                                    -        pay for the tender offer and
                                             consent solicitation for our
                                             10 1/4% Senior Subordinated Notes
                                             due 2007, including related
                                             premiums and a prepayment penalty;
                                             and

                                    -        pay other transaction fees and
                                             expenses.

                           The initial warrants may be exercised at any time on
                           or after November 14, 2001, and the contingent
                           warrants may be exercised at any time after the
                           contingent warrant release date. However, holders of
                           warrants will be able to exercise their warrants only
                           if the shelf registration statement is effective or
                           the exercise of the warrants is exempt from the
                           registration requirements of the Securities Act and
                           only if the shares of common stock are qualified for
                           sale or exempt from qualification under the
                           applicable securities laws of the states or other
                           jurisdictions in which the holders reside. Unless
                           earlier exercised, the warrants will expire on May 1,
                           2009.




                                       17
<PAGE>




         SUMMARY OF EQUITY COMPENSATION PLANS. The following table sets forth
         information about all our equity compensation plans in effect as of
         December 31, 2001, which consisted solely of the 2001 Stock Incentive
         Plan, which plan was approved by our stockholders during 2001. All of
         our equity compensation plans currently in effect have been approved by
         our stockholders.

<TABLE>
<CAPTION>

                                                                                              (C)
                                                                                           Number of
                                                                                           securities
                                                    (A)                                    remaining
                                                 Number of                               available for
                                              securities to be            (B)           future issuance
                                                issued upon         Weighted-average      under equity
                                                exercise of         exercise price        compensation
                                                outstanding         of outstanding      plans (excluding
                                                  options,             options,            securities
                                                warrants and           warrants           reflected in
                  Plan Category                    rights             and rights          column (A))
          -------------------------------    -------------------    ----------------    ----------------
<S>                                                     <C>              <C>                   <C>
          Equity compensation
          plans approved by
          stockholders...................           944,881          $     31.75                --
          Equity compensation plans
            not approved by
            stockholders...................              --                   --                --
                                             -------------------    ----------------    -------------------
          Total............................         944,811          $     31.75                --
                                             ===================    ================    ===================



</TABLE>





























                                       18
<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA

         The following table sets forth our selected historical consolidated
financial data for each of the last five fiscal years. Such data should be read
in conjunction with "Management's Discussion and Analysis" and our audited
consolidated financial statements included elsewhere in this annual report. The
results of operations and other financial and operating data of the 17 sites
acquired from Burns Bros. and the 16 sites acquired in the Travel Ports
acquisition are included in our consolidated financial statements beginning on
the dates we completed the acquisitions, December 3, 1998 and June 3, 1999,
respectively.

<TABLE>
<CAPTION>

                                                                         YEAR ENDED DECEMBER 31,
                                               -----------------------------------------------------------------------------
                                                    1997         1998(1)         1999(2)           2000           2001
                                                    ----         -------         -------           ----           ----
                                                           (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<S>                                             <C>            <C>             <C>            <C>             <C>
INCOME STATEMENT DATA:
     Revenues:
         Fuel.................................. $   708,637    $   554,735     $   955,105    $  1,485,732    $ 1,331,807
         Non-fuel..............................     293,843        347,531         479,059         555,491        585,717
         Rent and royalties....................      36,848         21,544          20,460          18,822         17,491
                                                -----------    -----------     -----------     -----------    -----------
             Total revenues....................   1,039,328        923,810       1,454,624       2,060,045      1,935,015
     Gross profit (excluding depreciation).....     266,244        296,661         403,544         448,725        467,262
     Income from operations(3).................      24,055         20,576          39,724          19,141         41,527
     Extraordinary loss (net of applicable
       income taxes)...........................      (5,554)        (3,905)              -         (13,800)             -
     Net income (loss).........................      (5,763)        (8,082)             99         (37,714)        (9,842)
     Income (loss) before extraordinary item
       per common share (basic and diluted)....       (7.56)        (21.12)         (12.96)         (17.20)         (1.42)

 BALANCE SHEET DATA (END OF PERIOD):
     Total assets.............................. $   506,988    $   609,219     $   651,716    $    735,055    $   679,856
     Long-term debt (net of unamortized
           discount)...........................     289,625        390,865         404,369         547,607        548,869
     Mandatorily redeemable preferred
           stock(4)............................      61,404         69,974          79,739               -              -
     Working capital...........................      86,103         97,378          35,232          38,727         26,949
OTHER FINANCIAL AND OPERATING DATA:
     Total diesel fuel sold (in thousands of
          gallons).............................     975,495        973,812       1,370,017       1,384,759      1,369,251
     Capital expenditures, excluding business
          acquisitions......................... $    60,818    $    65,704     $    87,401     $    68,107    $    54,490
     EBITDA(5).................................      63,553         68,708          97,976         103,547        105,035
     Cash flows (used in) provided by:
         Operating activities..................      41,670         48,521          44,712          65,952         37,106
         Investing activities..................     (37,987)      (125,505)       (136,016)        (77,115)       (46,234)
         Financing activities..................      44,294         94,428          20,144          22,142             (3)
NUMBER OF SITES (END OF PERIOD):
     Company-operated sites......................        86            105             118             122            119
     Leased sites................................        35             30              29              26             25
     Franchisee-owned sites......................         9             10              11               9              9
                                                 ----------    -----------     -----------    ------------    -----------
         Total network sites.....................       130            145             158             157            153
                                                 ==========    ===========     ===========    ============    ===========


</TABLE>




                                       19
<PAGE>


Notes to Selected Financial Data

(1)      Reflects the operating results of 17 sites we acquired from Burns Bros.
         on December 3, 1998.

(2)      Reflects the operating results of 16 sites we acquired as part of our
         acquisition of Travel Ports on June 3, 1999.

(3)      For the year ended December 31, 2000, income from operations was
         reduced by $22,004,000 of merger and recapitalization expenses incurred
         in connection with the transactions we completed to consummate our
         merger with TCA Acquisition Corporation and related recapitalization.

(4)      "Mandatorily redeemable preferred stock" was comprised of two series of
         convertible preferred stock that were redeemed as part of our merger
         and recapitalization transactions in November 2000.

(5)      "EBITDA," as used here for years after 1999, is based on the definition
         for EBITDA in our debt agreements and consists of net income plus the
         sum of (a) income taxes, (b) interest expense, net, (c) depreciation,
         amortization and other noncash charges, which includes stock
         compensation expense, (d) transition expense and (e) costs of the
         merger and recapitalization transactions. For years prior to 2000,
         gains or losses on sales of property and equipment were also adjusted
         out of net income to determine EBITDA, as this was the definition for
         EBITDA in our prior debt agreements. We have included certain
         information concerning EBITDA because management believes that EBITDA
         is generally accepted as providing useful information regarding a
         company's ability to service and/or incur debt. EBITDA should not be
         considered in isolation from, or as a substitute for, net income, cash
         flows or other consolidated income or cash flow statement data prepared
         in accordance with generally accepted accounting principles or as a
         measure of a company's profitability or liquidity. While EBITDA is
         frequently used as a measure of operations and ability to meet debt
         service requirements, it is not necessarily comparable to similarly
         titled captions of other companies due to differences in methods of
         calculation.





                                       20
<PAGE>



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS

CRITICAL ACCOUNTING POLICIES

         Our discussion and analysis of our financial position and results of
operations is based upon, and should be read in conjunction with, our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities. Management believes the
critical accounting policies and areas that require the most significant
judgments and estimates to be used in the preparation of our consolidated
financial statements are the allowance for doubtful accounts, asset impairment,
environmental liabilities, income tax accounting and consolidation of special
purpose entities.

         Allowances for doubtful accounts and notes receivable are maintained
based on historical payment patterns, aging of accounts receivable, periodic
review of our customers' financial condition, and actual writeoff history. If
the financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required.

         We record impairment losses on long-lived assets used in operations
when events and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying value of those assets, and when the carrying value of a long-lived
asset to be disposed of exceeds the estimated fair value of the asset less the
estimated cost to sell the asset. The net carrying value of assets not
recoverable is then reduced to fair value. Our estimated cash flows are based on
historical results adjusted to reflect the best estimate of future market and
operating conditions. The estimates of fair value represent the best estimate
based on industry trends and reference to market rates and transactions. If
these estimates or their underlying assumptions change in the future, we may be
required to record additional impairment charges for these assets or to reverse
previously recognized impairment charges.

         We establish an environmental contingency reserve when the
responsibility to remediate is probable and the amount of associated costs is
reasonably determinable. The estimates of these costs are based on our best
estimates of our future obligations given current and pending laws and the
currently available facts concerning each environmental incident, as well as our
estimate of amounts recoverable under indemnification agreements and/or state or
private insurance plans. Should the actual costs to remediate an incident differ
from our estimates, or should new facts come to light or laws become enacted
that modify the scope of our remediation projects, revisions to the estimated
environmental contingency reserve would be required.

         As part of the process of preparing our consolidated financial
statements, we are required to estimate income taxes in each of the
jurisdictions in which we operate. The process involves estimating actual
current tax expense along with assessing temporary differences resulting from
differing treatment of items for financial statement and tax purposes. These
timing differences result in deferred tax assets and liabilities, which are
included in our consolidated balance sheet. It is our policy to record a
valuation allowance to reduce our deferred tax assets to the amount that is more
likely than not to be realized, although we have not to date recognized such a
valuation allowance. Increases in the valuation allowance result in additional
expenses to be reflected within the tax provision in the consolidated statement
of operations.




                                       21
<PAGE>



         We have entered into lease transactions of travel centers with a
special purpose entity. These lease transactions are evaluated for lease
classification in accordance with Statement of Financial Accounting Standards
(FAS) No. 13, "Accounting for Leases." We do not consolidate the special purpose
entity so long as the owners of the special purpose entity maintain a
substantial residual equity investment of at least three percent that is at risk
during the entire term of the lease, which has been the case to date and is
expected to remain the case, although the Financial Accounting Standards Board
(FASB) is currently discussing changes to generally accepted accounting
principles that could require changes to our accounting with  respect to the
special purpose entity. Consolidating the special purpose entity would affect
our consolidated balance sheet by increasing property and equipment, other
assets and long-term debt and would affect our consolidated statement of
operations by reducing operating expenses, increasing depreciation expense and
increasing interest expense.

OVERVIEW

         We are a holding company which, through our wholly owned subsidiaries,
owns, operates and franchises travel centers along the United States interstate
highway system to serve long-haul trucking fleets and their drivers, independent
truck drivers and general motorists. Our network is the largest, and only
nationwide, full-service travel center network in the United States. Our
geographically diverse network consists of 153 sites located in 40 states. Our
operations are conducted through three distinct types of travel centers:

    -    sites owned or leased and operated by us, which we refer to as
         company-operated sites;

    -    sites owned by us and leased to independent lessee-franchisees, which
         we refer to as leased sites; and

    -    sites owned and operated by independent franchisees, which we refer to
         as franchisee-owned sites.

         Our travel centers are located at key points along the U.S. interstate
highway system, typically on 20- to 25-acres sites. Most of our network
properties were developed more than 20 years ago when prime real estate
locations along the interstate highway system were more readily available than
they are today, making a network such as ours difficult to replicate. Operating
under the "TravelCenters of America" and "TA" brand names, our nationwide
network provides an advantage to long-haul trucking fleets by enabling them to
route their trucks within a single network from coast to coast.

         One of the primary strengths of our business is the diversity of our
revenue sources. We have a broad range of product and service offerings,
including diesel fuel and gasoline, truck repair and maintenance services,
full-service restaurants, 20 different brands of fast food restaurants, travel
and convenience stores with a selection of over 4,000 items and other driver
amenities.

         The non-fuel products and services we offer to our customers complement
our fuel business and provide us a means to increase our revenues and gross
profit despite price pressure on fuel as a result of competition and volatile
crude oil and petroleum product prices, particularly in times of historically
high prices. For the year ended December 31, 2001, we earned gross profit on our
fuel sales and non-fuel sales of 7.8% and 59.2%, respectively. Accordingly, for
the year ended December 31, 2001, while fuel sales constituted 68.8% of our
total revenues and non-fuel sales constituted 30.3% of our total revenues, our
non-fuel business generated 74.2% of our total gross profit while our fuel
business generated 22.1% of our total gross profit. Rents and royalties
constituted 0.9% of our total revenues and 3.7% of our total gross profit.




                                       22
<PAGE>



COMPOSITION OF OUR NETWORK

         Since December 31, 1998, the changes in the number of sites within our
network and in their method of operation (company-operated, leased or
franchisee-owned) are significant factors influencing the changes in our results
of operations. The following table summarizes the changes in the composition of
our network from December 31, 1998 through December 31, 2001:

<TABLE>
<CAPTION>

                                           COMPANY-                     FRANCHISEE-
                                           OPERATED        LEASED          OWNED          TOTAL
                                             SITES          SITES          SITES          SITES
                                         -------------- -------------- -------------- --------------
<S>                                            <C>            <C>            <C>            <C>
Number of sites at December 31, 1998(1)        105            30             10             145

1999 Activity:
   New sites                                    3             --              1              4
   Sales of sites                              (4)            (1)            --             (5)
   Closed sites (held for sale)                (2)            --             --             (2)
   Travel Ports acquisition                    16             --             --             16
                                             ------         ------         ------         ----
Number of sites at December 31, 1999(1)        118            29             11             158

2000 Activity:
   New sites                                    2             --             --              2
   Sales of sites                              (2)            --             --             (2)
   Conversion of franchisee-owned site
     to company-operated site                   1             --             (1)             -
   Conversions of leased sites to
       company-operated sites                   3             (3)             -              -
   Termination of franchisee-owned site        --             --             (1)            (1)
                                             ------         ------         ------         -----
Number of sites at December 31, 2000(1)        122            26              9             157

2001 Activity:
   Sales of sites                             (3)             (1)            --             (4)
                                             ------         ------         ------         -----
Number of sites at December 31, 2001           119            25              9             153
                                             ======         ======         ======         =====

</TABLE>

         (1) Includes one company-operated site held for development until its
construction was completed during 2001.

         In 2002, the lease and franchise agreements covering two leased sites
were mutually terminated and, as a result these sites were converted into
company-operated sites. We expect to convert one additional leased site into a
company-operated site in April 2002 upon the termination of the lease and
franchise agreements covering that site. We sold one company-operated site in
March 2002, and at March 25, 2002, we also had one additional company-operated
site under contract to be sold.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

         REVENUES. Our consolidated revenues for the year ended December 31,
2001 were $1,935.0 million, which represents a decrease from the year ended
December 31, 2000 of $125.0 million, or 6.1%. This decrease was primarily the
result of a decrease in our fuel revenue, largely due to fuel commodity prices.
Our level of sales during the first eight months of 2001 was adversely affected
by the worsening United States economy that began to weaken during 2000. The
September 11, 2001 terrorist attacks on the United States disrupted the
financial markets and consumer confidence, further exacerbating the adverse
effect of the economic slowdown on our sales levels.




                                       23
<PAGE>



         Fuel revenue for the year ended December 31, 2001 decreased by $153.9
million, or 10.4%, from 2000. The decrease was attributable principally to
decreases in diesel fuel average selling prices. This decrease was also caused
by a decline in the average selling prices of gasoline and a slight decrease in
diesel fuel sales volume, partially offset by increased gasoline sales volume.
Average diesel fuel and gasoline sales prices for the year ended December 31,
2001 decreased by 11.0% and 11.6%, respectively, as compared to the same period
in 2000, primarily reflecting decreases in commodity prices but also reflecting
our more competitive fuel pricing. Diesel fuel and gasoline sales volumes for
the year ended December 31, 2001 decreased 1.1% and increased 23.3%,
respectively, as compared to the year ended December 31, 2000. For the year
ended December 31, 2001, we sold 1,369.3 million gallons of diesel fuel and
125.9 million gallons of gasoline, as compared to 1,384.8 million gallons of
diesel fuel and 102.1 million gallons of gasoline for the year ended December
31, 2000. The diesel fuel sales volume decrease resulted from a decline in our
wholesale diesel fuel sales of 53.2 million gallons, or 50.7%, as a result of a
planned retrenchment in this area and reduced sales volumes at sites we sold
during 2000 and 2001, partially offset by increased sales volume on a same-site
basis and at new sites acquired or constructed during 2000 and 2001. The
gasoline sales volume increase was due to increased sales volume on a same-site
basis and at new sites acquired or constructed during 2000 and 2001, partially
offset by reduced sales volumes at sites sold during 2000 and 2001. Same-site
diesel fuel sales volume for 2001 reflected a 4.3% increase from 2000 and
same-site gasoline sales volume for 2001 reflected a 24.1% increase from 2000.
We believe the same-site diesel fuel sales volume increase was a result of our
more competitive retail fuel pricing posture adopted in July 2000, in
combination with the September 2000 introduction of our enhanced customer
loyalty program, which we refer to as the RoadKing Club. We believe the
same-site increase in gasoline sales volume resulted primarily from increased
general motorist visits to our sites as a result of our gasoline and QSR
offering upgrades and additions under our capital program, as well as our more
competitive retail gasoline pricing.

         Non-fuel revenues for the year ended December 31, 2001 of $585.7
million reflected an increase of $30.2 million, or 5.4%, from the year ended
December 31, 2000. The increase was attributable to both same-site sales
increases and the increased sales at the company-operated sites added to our
network in 2000 and 2001. On a same-site basis, non-fuel revenue increased 3.3%
for the year ended December 31, 2001 versus the same period in 2000. We believe
the same-site increase reflected increased customer traffic resulting, in part,
from both the significant capital improvements that we have made in the network
under our capital investment program to re-image, re-brand and upgrade our
travel centers, and our more competitive fuel prices, partially offset by the
weakening of the United States economy throughout 2001.

         Rent and royalty revenues for the year ended December 31, 2001
reflected a $1.3 million, or 6.9%, decrease from the same period in 2000. This
decrease was primarily attributable to the rent and royalty revenue lost as a
result of the conversions of three leased sites to company-operated sites; the
termination of the franchise agreements with the franchisees of one
franchisee-owned site that was converted to a company-operated site and one
leased site that was sold; and the termination of the franchise agreement
covering one franchisee-owned site that left our network. This decrease was
partially offset by a 1.1% increase in same-site royalty revenue and a 3.0%
increase in same-site rent revenue.

         GROSS PROFIT (EXCLUDING DEPRECIATION). Our gross profit for the year
ended December 31, 2001 was $467.2 million, compared to $448.7 million for the
same period in 2000, an increase of $18.5 million, or 4.1%. The increase in our
gross profit was primarily due to increases in gasoline and non-fuel sales
volume that were partially offset by a decrease in diesel fuel volume, a reduced
level of diesel fuel and gasoline margins per gallon and decreased rent and
royalty revenue.

         OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Operating
expenses included the direct expenses of company-operated sites and the
ownership costs of leased sites. Selling, general and administrative expenses
included corporate overhead and administrative costs.




                                       24
<PAGE>



         Our operating expenses increased by $17.2 million, or 5.6%, to $325.7
million for the year ended December 31, 2001 compared to $308.5 million for the
year ended December 31, 2000. This increase reflected both increased non-fuel
sales volume and a $2.8 million increase in utility expenses that resulted from
significantly higher electricity prices and relatively colder weather in early
2001 as compared to 2000. On a same-site basis, operating expenses as a
percentage of non-fuel revenues for the year ended December 31, 2001 were 54.0%,
compared to 53.7% for the same period in 2000, reflecting the increased utility
costs, partially offset by the results of our cost-cutting measures at our
sites.

         Our selling, general and administrative expenses for the year ended
December 31, 2001 were $38.3 million, as compared to $38.2 million for the year
ended December 31, 2000. This increase of $0.1 million, or 0.1%, was
attributable to increased salary expense almost completely offset by decreases
in travel costs, professional fees and other costs.

         TRANSITION EXPENSES. Transition expenses were the costs incurred in
combining the Unocal, BP, Burns Bros. and Travel Ports networks. As the
integration of sites from our acquisitions was completed during 2000, we did not
incur transition expenses in 2001, and we do not anticipate incurring transition
expenses in 2002.

         DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expense for the year ended December 31, 2001 was $63.5 million, compared to
$62.8 million for the year ended December 31, 2000. The increase in depreciation
and amortization expense was attributable to a larger base of depreciable assets
due to our capital expenditures during 2000 and 2001, $2.5 million of impairment
charges we recognized during 2001 with respect to sites we are holding for sale,
and partially offset by reduced depreciation expense resulting from a change in
the estimated useful lives of certain types of our assets that extended the
estimated lives by five years. This change, which was effective as of April 1,
2001, decreased depreciation expense for the year ended December 31, 2001 by
approximately $8.5 million from what it would have been. The impairment charges
recognized during 2001 were based on our best estimates of sales proceeds for
the sites we are holding for sale, based on current market factors. As market
factors change, it is reasonably likely that our estimates of sales proceeds for
the sites held for sale could change, resulting in additional impairment charges
or the reversal of a previously recognized impairment charge. The many factors
involved in sales of real estate make it possible that not all of these sites
will be sold within a year.

         MERGER AND RECAPITALIZATION EXPENSES. Merger and recapitalization
expenses were the costs we incurred during 2000 in completing a recapitalization
and a merger with TCA Acquisition Corporation, a newly created company formed by
Oak Hill Capital Partners, L.P. and its affiliates. These costs principally
consisted of legal, accounting, investment banker and other consultants' fees as
well as bonus payments to certain members of our management, and totaled $22.0
million during 2000. We incurred no such costs during 2001.

         INCOME FROM OPERATIONS. We generated income from operations of $41.5
million for the year ended December 31, 2001, compared to income from operations
of $19.1 million for the same period in 2000. The most significant reason for
this increase of $22.4 million, or 117.3%, was the lack of merger and
recapitalization expenses in 2001 as compared to $22.0 million of such expenses
in 2000. The increase in gross profit was also attributable to the variations in
gross profit and expenses described above, as well as a $0.3 million increase in
gain on sales of property and equipment and our recognizing no stock
compensation expense or benefit in 2001 as compared to a $1.4 million benefit
for stock compensation in 2000.

         EBITDA for the year ended December 31, 2001 was $105.0 million, as
compared to EBITDA of $103.5 million for the year ended December 31, 2000, an
increase of $1.5 million, or 1.4%. EBITDA, as used here, is based on the
definition for EBITDA in our debt agreements and consists of net income plus the
sum of (a) income taxes, (b) interest and other financial costs, net, (c)
depreciation, amortization and other noncash charges, which includes stock
compensation expense and (d) transition expense. EBITDA for the year ended
December 31, 2001 increased over the year ended December 31, 2000 primarily as a
result of the increases in gross profit, partially offset by the increase in
operating expenses.



                                       25
<PAGE>



         INTEREST AND OTHER FINANCIAL COSTS--NET. Interest and other financial
costs, net, for the year ended December 31, 2001 increased by $10.7 million, or
22.7%, compared to the year ended December 31, 2000. This increase resulted from
the increased debt levels associated with the refinancing we completed in
November 2000 as part of our merger and recapitalization transactions. In
addition, we recognized an increase in amortization of debt discount and of
deferred financing costs as a result of the debt discount and deferred financing
costs incurred as part of our refinancing in November 2000. These increases were
partially offset by reduced interest rates on our term loan and revolving credit
agreement borrowings as a result of the decline in market interest rates.

         INCOME TAXES. Our effective income tax benefit rates for the years
ended December 31, 2001 and 2000 were 39.6% and 14.6%, respectively. These rates
differed from the federal statutory rate due primarily to state income taxes and
nondeductible expenses, partially offset by the effect of certain tax credits.
The change between years in the effective tax rate was primarily the result of
recognizing the differences between the estimated and actual amounts of
non-deductible merger and recapitalization expenses incurred in 2000 and a
decrease in the amount of nondeductible expenses incurred in 2001 as compared to
2000. We have not recognized a valuation allowance for our net deferred tax
assets, as we believe we are more likely than not to realize those assets. We
need to generate $67.9 million of future taxable income to realize our net
deferred tax assets. Our existing level of pretax earnings for financial
reporting purposes, as represented by our 2001 results, would not be sufficient
to generate that amount of future taxable income. However, we believe we will
generate sufficient future taxable income to realize our net deferred tax assets
for the reasons, and based on the estimates, described below. Different
assumptions as to our future expected taxable income could lead to revisions in
the estimated amount of valuation allowance required to be recognized against
our deferred tax assets.

-     We expect to increase our profitability as compared to that generated in
      2001. Earnings from the significant capital improvements made to our
      network sites over the past few years are expected to increase as these
      assets fully mature. We intend to add new company-operated and
      franchisee-owned travel centers to our network. We also intend to increase
      the earnings capability of our existing sites through other capital
      investments, such as for site re-image projects, additional truck and
      maintenance repair shop capacity, expanded QSR offerings, expanded parking
      areas and other similar projects. We also expect to benefit from a
      strengthening United States economy during and after 2002.

-     We expect that our interest expense will decline as we begin to reduce our
      level of indebtedness, through scheduled repayments, reducing our
      outstanding revolver borrowings and making required excess cash flow
      prepayments in future years as our EBITDA increases while we maintain a
      relatively lower level of capital expenditures.

-     We have made significant capital investments in our business since our
      formation, especially in 1993 and in 1998 through 2000. Many of these
      assets, which typically have depreciable lives of five to 15 years, are
      at or near the ends of their depreciable lives. As our level of capital
      expenditures is anticipated to remain at a relatively lower level than
      these periods, we expect our depreciation expense to decline. This is
      particularly so for tax depreciation due to the double-declining
      balance depreciation method we followed for our tax returns. Beginning
      with our income tax returns for 2001, we will elect to use the
      alternative depreciation system, which generally depreciates assets on
      a straight-line basis over longer depreciable lives than those we have
      been using.

-     We have available to us tax planning strategies we could employ to
      increase our taxable income. The principal tax planning strategy we could
      undertake is the sale/leaseback of certain of our travel centers. The
      sale/leaseback transaction would be expected to generate a sufficient
      taxable gain in the year consummated to fully utilize any expiring unused
      net operating loss carryforwards and could be expected to increase our
      taxable income in subsequent years as lower interest expense and
      depreciation deductions would, in all likelihood, more than offset the
      additional operating lease expense. Although we would not ordinarily
      execute this tax planing strategy, we would do so to prevent our net
      operating loss carryforwards from expiring unused in 2020 and subsequent
      years.




                                       26
<PAGE>



         The following table sets forth the historical relationship between
pretax earnings for financial reporting purposes and taxable income for income
tax purposes.

<TABLE>
<CAPTION>

                                                                                  YEAR ENDED DECEMBER 31,
                                                                       ----------------------------------------------
                                                                            1999            2000           2001
                                                                       --------------- ------------------------------
                                                                                 (IN MILLIONS OF DOLLARS)
<S>                                                                      <C>             <C>            <C>
         Pretax earnings (loss) for financial
              reporting purposes.......................................  $     1.2       $   (48.9)     $   (16.3)
         State income tax expense......................................       (0.9)           (0.8)          (1.6)
         Accelerated tax depreciation..................................        0.2            (8.0)         (12.2)
         Benefit of tax credits........................................        0.6             0.8            0.9
         Non-deductible expenses.......................................        1.4            11.9            1.6
         Temporary differences, net....................................        2.0            (4.5)          (7.4)
                                                                         ---------       ---------      ---------
         Federal taxable income (loss).................................  $     4.5       $   (49.5)     $   (35.0)
                                                                         =========       =========      =========

</TABLE>

         Of our total net operating loss carryforwards at December 31, 2001 of
$84.3 million, $49.3 million generated in 2000 expires in 2020 and $35.0 million
generated in 2001 expires in 2021. Tax law limits the amount of the $49.3
million net operating loss carryforward we generated in 2000 that can be
utilized to approximately $12 million per year. As none of the 2000 net
operating loss was utilized in 2001, the usage of the net operating loss
generated in 2000 will be limited to approximately $24 million for 2002. Use of
the net operating loss generated in 2001 is unlimited.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

         Revenues. Our consolidated revenues for the year ended December 31,
2000 were $2,060.0 million, which represents an increase from the year ended
December 31, 1999 of $605.4 million, or 41.6%.

         Fuel revenue for the year ended December 31, 2000 increased by $530.6
million, or 55.6%, over the same period in 1999. The increase was attributable
principally to the significant increase in average sales prices and also to
increases in diesel fuel and gasoline sales volumes. Average diesel fuel and
gasoline sales prices for the year ended December 31, 2000 increased by 53.1%
and 36.3%, respectively, as compared to the same period in 1999. The increase in
average sales prices was attributable to increased refined products prices in
2000 that were driven by crude oil price increases and reduced domestic refined
product inventories. Diesel fuel and gasoline sales volumes for the year ended
December 31, 2000 increased 1.1% and 20.8%, respectively, as compared to the
same period in 1999. For the year ended December 31, 2000, we sold 1,384.8
million gallons of diesel fuel and 102.1 million gallons of gasoline, as
compared to 1,370.0 million gallons of diesel fuel and 84.5 million gallons of
gasoline for the year ended December 31, 1999. These sales volume increases were
due to added volumes from the increased number of network sites, particularly
company-operated sites with respect to gasoline, and changes in same-site sales
volumes. Same-site diesel fuel sales volume for 2000 reflected a 6.8% decrease
from 1999, while same-site gasoline sales volume for 2000 reflected an 8.4%
increase from 1999. This same-site decrease in diesel fuel sales volume was
primarily attributable to reduced demand for diesel fuel on the U.S. interstate
highway system, primarily from smaller trucking fleets and independent truck
drivers, as a result of both the sharp rise in, and the volatility of, diesel
fuel prices experienced throughout 2000 and was also attributable to a slowdown
in trucking activity as a result of the slowdown in the general U.S. economy in
the latter half of 2000. We believe the same-site increase in gasoline sales
volume resulted primarily from increased general motorist visits to our sites as
a result of our gasoline and QSR offering upgrades and additions under our
capital program, as well as our more competitive retail gasoline pricing.




                                       27
<PAGE>



         Non-fuel revenues for the year ended December 31, 2000 of $555.5
million reflected an increase of $76.4 million, or 15.9%, from the same period
in 1999. The increase was primarily attributable to the increased number of
company-operated sites in the network. Further, on a same-site basis, non-fuel
revenue increased 4.6% for the year ended December 31, 2000 versus the same
period in 1999. This same-site increase reflected increased customer traffic
resulting, in part, from the significant capital improvements that we have made
in the network under our capital investment program to re-image, re-brand and
upgrade our travel centers, despite the depressing effects of the significant
increases in fuel prices on both the disposable income of our customers and the
volume of truck traffic on the highways.

         Rent and royalty revenues for the year ended December 31, 2000
reflected a $1.7 million, or 8.3%, decrease from the same period in 1999. This
decrease was attributable to the rent and royalty revenue lost as a result of
the conversions of leased and franchisee-owned sites to company-operated sites
and the termination of the franchise agreement with one franchisee-owned site.
This decrease was somewhat offset by a same-site rent increase of 2.4% and a
same-site royalty revenue increase of 0.6%.

         GROSS PROFIT (EXCLUDING DEPRECIATION). Our gross profit for the year
ended December 31, 2000 was $448.7 million, compared to $403.5 million for the
same period in 1999, an increase of $45.2 million, or 11.2%. The increase in our
gross profit was primarily due to increases in fuel and non-fuel sales volume,
partially offset by reduced fuel margin per gallon and decreased rent and
royalty revenue.

         OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Operating
expenses included the direct expenses of company-operated sites and the
ownership costs of leased sites. Selling, general and administrative expenses
included corporate overhead and administrative costs.

         Our operating expenses increased by $41.4 million, or 15.5%, to $308.5
million for the year ended December 31, 2000 compared to $267.1 million for the
same period in 1999. This increase reflected the increased number of
company-operated sites, as well as increased non-fuel sales volume at continuing
sites. On a same-site basis, operating expenses as a percentage of non-fuel
revenues for 2000 were 52.4%, compared to 54.0% for the same period in 1999,
reflecting the results of our cost-cutting measures at our sites.

         Our selling, general and administrative expenses for the year ended
December 31, 2000 were $38.2 million, which reflected a decrease of $0.3
million, or 0.8%, from the same period in 1999.

         TRANSITION EXPENSES. Transition expenses were the costs incurred in
combining the Unocal, BP, Burns Bros. and Travel Ports networks. These expenses
primarily included employee severance and relocation expenses, legal expenses,
site closing and franchise termination costs, site training costs, deferred site
maintenance and certain asset write-offs. Transition expenses for 2000 decreased
to $1.0 million from $3.9 million during 1999, as the integration of sites from
our acquisitions was completed during 2000.

         DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expense for 2000 was $62.8 million, compared to $51.9 million for 1999. This
increase resulted from a larger base of assets in 2000 due to the Travel Ports
acquisition and continued capital investments.

         MERGER AND RECAPITALIZATION EXPENSES. Merger and recapitalization
expenses were the costs we incurred in completing a recapitalization and a
merger with TCA Acquisition Corporation, a newly created company formed by Oak
Hill Capital Partners, L.P. and its affiliates. These costs principally
consisted of legal, accounting, investment banker and other consultants' fees as
well as bonus payments to certain members of our management, and totaled $22.0
million during 2000. We incurred no such costs during 1999.




                                       28
<PAGE>



         INCOME FROM OPERATIONS. We generated income from operations of $19.1
million for the year ended December 31, 2000, compared to income from operations
of $39.7 million for the same period in 1999. This decrease of $20.6 million, or
51.9%, was primarily attributable to the following factors: (a) a $10.9 million
increase in depreciation and amortization expense, (b) the $22.0 million of
merger and recapitalization expenses, (c) a $6.4 million decrease in stock
compensation expense, (d) a $2.9 million decrease in transition expenses, and
(e) a $45.2 million increase in gross profit partially offset by a $41.4 million
increase in operating expenses. EBITDA for the year ended December 31, 2000 was
$103.5 million. EBITDA, as used here, is based on the definition for EBITDA in
our debt agreements and consists of net income plus the sum of (a) income taxes,
(b) interest and other financial costs, net, (c) depreciation, amortization and
other noncash charges, which includes stock compensation expense, (d) transition
expense and (e) costs of the merger and recapitalization transactions. EBITDA
for 2000 increased from 1999 primarily as a result of a full year's results from
the additional company-operated sites obtained in the Travel Ports acquisition
and increased non-fuel revenues resulting from the significant capital
improvements we have made.

         INTEREST AND OTHER FINANCIAL COSTS--NET. Interest and other financial
costs, net, for the year ended December 31, 2000 increased by $8.6 million, or
22.3%, compared to 1999. This increase resulted from increasing interest rates
throughout 1999 and 2000, in conjunction with increased debt levels associated
with the Travel Ports acquisition in June 1999 and the refinancing we completed
in November 2000 as part of our merger and recapitalization transactions. In
addition, we recognized an increase in amortization of debt discount and of
deferred financing costs as a result of the debt discount and deferred financing
costs incurred as part of our refinancing in November 2000.

         INCOME TAXES. Our effective income tax rates for the years December 31,
2000 and 1999 were a benefit of 14.6% and expense of 91.6%, respectively. These
rates differed from the federal statutory rate due primarily to state income
taxes and nondeductible expenses, partially offset by the benefit of certain tax
credits. The change between years in the effective tax rate was due to the
taxable losses incurred in 2000 as opposed to the low level of pre-tax income
earned in 1999. As a result of the low level of pre-tax income in 1999,
permanent differences and state tax provisions had a significantly larger effect
on the 1999 effective tax rate than in 2000. Further, we incurred a significant
amount of non-deductible costs in 2000 in connection with our merger and
recapitalization transactions, resulting in us deriving fewer tax benefits from
the pre-tax losses.

         EXTRAORDINARY LOSS. During the fourth quarter of 2000 we recognized an
extraordinary loss of $13.8 million in connection with the early extinguishment
of indebtedness. This amount was net of the applicable income tax benefits of
$7.1 million. This extraordinary loss consisted of (a) the write off of $7.6
million of unamortized deferred financing costs we had incurred when we had
issued the extinguished indebtedness, (b) $11.6 million of tender offer and
consent solicitation premium and related fees related to redeeming our then
outstanding Senior Subordinated Notes due 2007, (c) $0.8 million of prepayment
penalties related to redeeming our then outstanding senior secured notes and (d)
$0.9 million to exit an interest rate swap agreement related to the extinguished
debt. We incurred no extraordinary items during 1999.

LIQUIDITY AND CAPITAL RESOURCES

         Our principal liquidity requirements are to meet our working capital
and capital expenditure needs, including expenditures for acquisitions and
expansion, and to service the payments of principal and interest on outstanding
indebtedness. Our principal source of liquidity to meet these requirements is
operating cash flows. The revolving credit facility of our Senior Credit
Facility provides us a secondary source of liquidity, primarily to better match
the timing of cash expenditures to the timing of our cash receipts due to the
somewhat seasonal nature of our operations, the uneven level of capital
expenditures throughout the year and the timing of debt and interest payments.
The primary risks we face with respect to the expected levels of operating cash
flows are a decrease in the demand of our customers for our products and
services and increases in crude oil and/or petroleum products and increases in
interest rates. It is reasonably likely that the United States economy could
fall into a deeper recession, or make a slower recovery, than expected.
Similarly, it is reasonably likely that interest rates and petroleum products
prices will increase during 2002 from levels that existed during 2001, possibly
to levels greater than that contemplated in





                                       29
<PAGE>



our expectations. If the economy stagnates or worsens, our customers could be
adversely affected, which could further intensify competition within our
industry and reduce the level of cash we could generate from our operations. A
one-percentage point increase in interest rates increases our annual cash
outlays by approximately $3.5 million. A significant increase in diesel fuel and
gasoline prices increases our cash investment in working capital and can also
have a depressing effect on our sales volumes and fuel margins per gallon. The
primary risk we face with respect to the expected availability of borrowing
under our revolving credit facility are the limitations imposed upon us by the
covenants contained in our Senior Credit Facility. Should our level of sales
volume or interest rate and petroleum products price levels vary adversely and
significantly from expectations, it is reasonably likely that we would need to
reduce our capital expenditures or be effectively barred from further revolving
credit facility borrowings in order to maintain compliance with our debt
covenants, in the absence of a debt covenant waiver or an amendment to the
related agreement.

         We anticipate that we will be able to fund our 2002 working capital
requirements and capital expenditures primarily from funds generated from
operations and proceeds from the sales of travel centers we are holding for
sale, and, to the extent necessary, from borrowings under our revolving credit
facility. Our long-term liquidity requirements, including capital expenditures,
are expected to be financed by a combination of internally generated funds,
borrowings and other sources of external financing as needed. Our ability to
fund our capital investment requirements, interest and principal payment
obligations and working capital requirements and to comply with all of the
financial covenants under our debt agreements depends on our future operations,
performance and cash flow. These are subject to prevailing economic conditions
and to financial, business and other factors, some of which are beyond our
control.

HISTORICAL CASH FLOWS

         Net cash provided by operating activities totaled $37.1 million in
2001, $66.0 million in 2000 and $44.7 million in 1999. The $28.9 million
decrease in cash provided by operating activities in 2001 as compared to 2000
was primarily attributable to two factors: interest expense increased by $10.7
million and cash from working capital decreased by $22.5 million. In 2001, we
invested $10.3 million in working capital while in 2000 we generated $12.2
million of cash from working capital. The increase in cash provided by
operations for 2000 as compared to 1999 resulted primarily from the changes
between years in cash invested in working capital.

         Net cash used in investing activities for 2001 was $46.2 million versus
$77.1 million in 2000 and $136.0 million in 1999. During 2001, we invested $54.5
million of capital expenditures into our network and generated $8.3 million of
proceeds from sales of assets for net capital expenditures of $46.2 million.
This reduced level of capital spending as compared to 2000 was as planned.
During 2000, we invested $9.7 million to convert three leased sites to
company-operated sites, to convert one franchisee-owned site to a
company-operated site, to acquire two new company-operated sites and to acquire
a minority interest in a related business. For the same period in 1999, we
invested $57.0 million to acquire Travel Ports. Capital expenditures for 2000
were $19.3 million less than in 1999. This decrease was primarily attributable
to a planned reduction in capital spending in 2000 as compared to 1999,
primarily reflecting a reduced level of one-time investments, such as
re-branding and information systems, at the sites acquired from Burns Bros. and
Travel Ports. Net cash used in investing activities in 1999 included $87.4
million for capital expenditures and $57.8 million for the Travel Ports
acquisition. These outlays were partially offset by $9.1 million of cash
proceeds from sales of property and equipment, which primarily consisted of the
sales of five travel center sites during 1999.

         As part of our capital investment program, through which we have
invested approximately $364 million in 1997 through 2001 to maintain, re-image,
rebrand, upgrade and expand our network of travel centers, we have budgeted
future expenditures to add additional sites, re-brand and re-image sites, add
additional non-fuel offerings, such as truck maintenance and repair shops and
QSRs at existing sites, make required environmental improvements, and purchase,
install and upgrade our information systems. The capital expenditures budget for
2002 is approximately $42 million.




                                       30
<PAGE>



         For the year ended December 31, 2001, cash flows from financing
activities were negligible. We made net borrowings of $3.6 million under our
revolving credit facility, paid $3.3 million of costs of our merger and
recapitalization transactions of November 2000, and had net payments of $0.3
million for other financing activities. Net cash flows provided by financing
activities were $22.1 in 2000 and $20.1 million in 1999. During 2000, we had net
borrowings under our revolving credit facilities of $25.3 million. We also
completed the 2000 Refinancing in connection with our merger and
recapitalization transactions, which included proceeds from new debt borrowings
of $511.0 million, proceeds from the issuances of stock of $208.7 million,
repurchases of equity securities of $263.2 million, repayments of indebtedness
of $423.6 million and payment of various related fees, expenses and prepayment
penalties of $67.1 million. We also made $1.8 million of scheduled debt payments
during 2000. The cash provided during 1999 was the result of a $6.7 million
capital investment and net borrowings of $15.0 million under our revolving
credit facility. We made $1.6 million of scheduled debt repayments during 1999.

DESCRIPTION OF INDEBTEDNESS

         The Senior Credit Facility provides senior secured financing of up to
$428.0 million, consisting of a $328.0 million term loan facility with a
maturity of eight years and a $100.0 million revolving credit facility with a
maturity of six years. At December 31, 2001, we had outstanding borrowings and
issued letters of credit of $43.9 million and $4.8 million, respectively,
leaving $51.3 million of our $100 million revolving credit facility available
for borrowings. The term loan facility and the revolving credit facility bear
interest at a rate equal to:

         -   in the case of the revolving credit facility, Adjusted LIBOR
             plus a margin of 2.75% or, at our election, the alternate base
             rate plus a margin of 1.75%; or

         -   in the case of the term loan facility, Adjusted LIBOR plus a
             margin of 3.25% or, at our election, the alternate base rate
             plus a margin of 2.25%.

         In addition to paying interest on outstanding principal under the
Senior Credit Facility, we are required to pay a commitment fee to the lenders
under the revolving credit facility equal to 0.50% per year of the unused
commitments thereunder. The term loan facility will amortize each year in
quarterly amounts in the following approximate aggregate principal amounts for
each year set forth below.

<TABLE>
<CAPTION>

                                                                                              SCHEDULED
           YEAR ENDED                                                                         PRINCIPAL
           DECEMBER 31,                                                                       REPAYMENTS
           ------------                                                                     ----------------
<S>                                                                                          <C>
           2002........................................................................     $     3,280,000
           2003........................................................................           3,280,000
           2004........................................................................           3,280,000
           2005........................................................................           3,280,000
           2006........................................................................           3,280,000
           2007........................................................................          80,360,000
           2008........................................................................         231,240,000
                                                                                            ---------------
           Total.......................................................................     $   328,000,000
                                                                                            ===============

</TABLE>

         Principal amounts outstanding under the revolving credit facility are
due and payable in full at maturity in November 2006.

         The Senior Credit Facility contains a number of covenants that, among
other things, restrict our ability to dispose of assets, incur additional
indebtedness, incur guarantee obligations, repay other indebtedness, make
certain restricted payments and dividends, create liens on assets, make
investments, loans or advances, make certain acquisitions, engage in mergers or
consolidations, engage in material businesses other than our current businesses,
make capital expenditures, enter into sale and leaseback transactions, or engage
in certain transactions with affiliates.




                                       31
<PAGE>




         The Senior Subordinated Notes mature in 2009. Our obligations under the
notes are junior in right of payment to all of our existing and future senior
indebtedness, including all indebtedness under the Senior Credit Facility. The
indenture restricts, among other things, our ability to incur additional
indebtedness, issue shares of disqualified stock and preferred stock, pay
dividends or make certain other restricted payments and enter into certain
transactions with affiliates, and prohibits certain restrictions on the ability
of our subsidiaries to pay dividends or make certain payments to us, and
contains certain restrictions on our ability to merge or consolidate with any
other person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of our assets.

         As of December 31, 2001, $4.4 million was outstanding under a note
payable by us to a former operator of a site, which we refer to as the Santa
Nella Note. The note bears interest at an annual rate of 5%, requires quarterly
principal and interest payments of $98,000 through October 1, 2018 and is
secured by the real estate and improvements located at the site.

OFF-BALANCE SHEET ARRANGEMENTS

         On September 9, 1999, we entered into a master lease program with a
special purpose entity that has been, and will be, used to finance the
construction of eight travel centers on land we own. These lease transactions
are evaluated for lease classification in accordance with FAS 13. We do not
consolidate the special purpose entity so long as the owners of the special
purpose entity maintain a substantial residual equity investment of at least
three percent that is at risk during the entire term of the lease, which has
been the case to date and is expected to remain the case. Consolidating the
special purpose entity would affect our consolidated balance sheet by increasing
property and equipment, other assets and long-term debt and would affect our
consolidated statement of operations by reducing operating expenses, increasing
depreciation expense and increasing interest expense. The total committed amount
of the facility, as amended, is $72.0 million, of which $63.7 million was used
as of December 31, 2001. The remaining amount available under the program will
be used by July 2002, at which time construction of the eighth site is expected
to be completed. Construction of the first seven travel centers had been
completed by December 31, 2001. The initial term of the lease expires on
September 9, 2006, at which time, if the lease is not renewed and extended, we
have the option to either purchase the improvements for an amount equal to the
sum of (a) the outstanding indebtedness of the lessor and (b) the equity capital
balance, or to make a termination payment to the lessor and abandon the travel
centers. We anticipate that on September 9, 2006 we will renew and extend the
lease agreement, but may either be unable to do so or elect not to do so and
instead either pay approximately $58.1 million to acquire the leased assets or
make the termination payment of approximately $44.0 million.

         Under the related lease agreement, our quarterly lease payments are
based on the capitalization and weighted-average cost of capital of the lessor.
The lessor was initially capitalized with $2.4 million of equity and has entered
into a loan and security agreement through which it has borrowed $61.3 million
through December 31, 2001 and can borrow an additional $8.3 million as the funds
are needed to pay the construction costs of our site. We do not guarantee the
indebtedness of the lessor. The lessor's equity holders receive a return on
their contributed capital equal to LIBOR plus 10.75%, while the interest rate
for the indebtedness is equal to LIBOR plus a spread that will decrease from
4.0% to 3.0% if our ratio of total debt to EBITDA improves. Our quarterly rent
payments are calculated to equal the quarterly interest expense, return on
equity and debt amortization requirements of the lessor, based on a
straight-line amortization schedule that ensures 20% of the underlying
indebtedness is repaid by the expiration of the initial lease term on September
9, 2006.




                                       32
<PAGE>



      The following are additional amounts related to the master lease program
(all amounts are as of December 31, 2001):

         -   The lessor's total capitalization of $61.7 million consisted
             of $59.3 of a term loan secured by the related travel centers
             assets and underlying leasehold interests, and $2.4 million of
             general and limited partners' contributed capital.

         -   The lessors assets related to the master lease program
             consisted of $59.5 million of tangible fixed assets, $1.6 of
             capitalized interest and $2.6 of deferred financing costs.

         -   We had a receivable of $1.1 million from the lessor for
             reimbursement of travel center construction costs we had
             funded for the lessor in our role as construction agent.

         -   During 2001, for the five sites that were leased for the full
             year and the two sites that opened in July and September
             during the year, we recognized and paid lease rent expense
             under this master lease program of $6.1 million. Excluding
             this rent expense, the seven sites completed under this
             program as of December 31, 2001 generated EBITDA of $7.0
             million for the year ended December 31, 2001.

         -   The depreciation expense and interest expense we would have
             recognized with respect to these leased travel centers if we had
             capitalized them and not leased them was approximately $4.0 million
             and $4.7 million, respectively, for the year ended December 31,
             2001.

SUMMARY OF CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

         The following table summarizes our expected obligations to make future
required payments under various types of agreements.

<TABLE>
<CAPTION>

                                                                          PAYMENTS DUE BY PERIOD
                                               -----------------------------------------------------------------------------
          CONTRACTUAL OBLIGATIONS                  TOTAL           2002         2003-2004       2005-2006      THEREAFTER
          -----------------------                  -----           ----         ---------       ---------      ----------
                                                                         (IN MILLIONS OF DOLLARS)
<S>                                             <C>            <C>              <C>             <C>              <C>
          Long-term debt......................  $    566.3     $    3.4         $   6.9         $    50.9        $ 505.1
          Operating leases(1).................       219.7         19.2            33.5              85.3           81.7
          Other long-term obligations(2)......         3.3          3.3              --                --             --
                                                ----------     --------         -------         ---------        -------
          Total contractual cash obligations..  $    789.3     $   25.9         $  40.4         $   136.2        $ 586.8
                                                ==========     ========         =======         =========        =======
</TABLE>

         (1)      Assumes that the master lease facility is not renewed at the
                  expiration of the initial lease term and the travel centers
                  are acquired by us in 2006 for $58.1 million.

         (2)      Reflects amounts related to our interest rate protection
                  agreement with a notional amount of $80 million, assuming the
                  variable interest rate in effect at December 31, 2001 remains
                  unchanged through maturity of the agreement in December 2002.

         Our only commercial commitments of any significance are the $4.8
million of standby letters of credit we had outstanding as of December 31, 2001.




                                       33
<PAGE>



LEVERAGED RECAPITALIZATION

         On May 31, 2000, we and shareholders owning a majority of our voting
stock entered into a recapitalization agreement and plan of merger, as
subsequently amended, with TCA Acquisition Corporation, a newly created
corporation formed by Oak Hill Capital Partners, L.P. and its affiliates, under
which TCA Acquisition Corporation agreed to merge with and into us. This merger
was completed on November 14, 2000. Concurrent with the closing of the merger,
we completed a series of transactions to effect a recapitalization that included
the following.

         -   TCA Acquisition Corporation issued 6,456,698 shares of common
             stock to Oak Hill and the Other Investors for proceeds of
             $205.0 million and then merged with and into us. We incurred
             $3.0 million of fees and expenses related to the issuance of
             these shares of common stock. These stock issuance costs were
             charged against additional paid-in capital.

         -   We redeemed all shares of our common and preferred stock
             outstanding prior to the closing of the merger, with the
             exception of 473,064 shares of common stock with a market
             value at that time of $15.0 million that were retained by
             continuing stockholders, and cancelled all outstanding common
             stock options and warrants for cash payments totaling $263.2
             million.

         -   All shares of treasury stock were cancelled.

         After the transactions described above, Oak Hill owned 60.5% of our
outstanding common stock, the Other Investors owned, in the aggregate, 32.7% of
our outstanding common stock, Freightliner owned 4.3% of our outstanding common
stock and certain members of our management owned 2.5% of our outstanding common
stock. The total amount of our equity capitalization after these transactions,
given the $31.75 per share merger consideration that was paid in our merger and
recapitalization transactions, was $220.0 million. The transactions described
above, which resulted in a change of control of us, have been accounted for as a
leveraged recapitalization, as opposed to a purchase business combination, since
the change of control was effected through issuance of new shares to our new
control group in conjunction with a redemption of most of our then outstanding
equity securities. We followed leveraged recapitalization accounting because of
the significance of the ownership interest in us that was retained by continuing
stockholders. In accounting for our leveraged recapitalization, we retained the
historical cost bases of our assets and liabilities and consequently recorded
charges totaling $179.0 million to our equity accounts upon the redemption of
equity securities. This accounting treatment contrasts with that followed in a
purchase business combination, in which a company reflects the new basis in its
assets and liabilities of its new control group by increasing or decreasing its
historical balances based on the estimated fair values at that time and avoids
the charge to equity that accompanies the redemption of equity securities. Based
on a limited appraisal of our owned network sites performed in connection with
the merger and recapitalization transactions, the estimated fair value of our
sites at June 15, 2000 was approximately $1.05 billion.

ENVIRONMENTAL MATTERS

         We own and operate underground storage tanks and aboveground storage
tanks at company-operated sites and leased sites that must comply with
Environmental Laws. We have estimated the current ranges of remediation costs at
currently active sites and what we believe will be our ultimate share for those
costs and, as of December 31, 2001, we had a reserve of $4.2 million for
unindemnified environmental matters for which we are responsible. Under the
environmental agreements entered into as part of the acquisition of the Unocal
and BP networks, Unocal and BP are required to provide indemnification for, and
conduct remediation of, certain pre-closing environmental conditions. In
addition, we have obtained insurance of up to $25.0 million for known and up to
$40.0 million for unknown environmental liabilities, subject, in each case, to
certain limitations. While it is not possible to quantify with certainty our
environmental exposure, we believe that the potential liability, beyond that
considered in the reserve, for all environmental proceedings, based on
information known to date, will not have a material adverse effect on our
financial condition, results of operations or our liquidity.




                                       34
<PAGE>

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In June 2001, the FASB issued FAS 141, "Business Combinations" and No.
142, "Goodwill and Other Intangible Assets." FAS 141 requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method. Under FAS 142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed annually (or more frequently if
impairment indicators arise) for impairment. Separable intangible assets that
are not deemed to have indefinite lives will continue to be amortized over their
useful lives. We adopted FAS 142 effective January 1, 2002. The adoption of the
provisions of FAS 142 that are effective January 1, 2002 will reduce our annual
amortization expense by approximately $1.8 million due to not amortizing our
goodwill and trademarks, which have indefinite lives. We are still evaluating
the other provisions of FAS 142, particularly the necessity of an impairment
charge related to our intangible assets, and their potential effect on our
financial statements. Adopting FAS 142 will have no effect on our liquidity.

         In June 2001, the FASB issued FAS 143, "Accounting for Asset Retirement
Obligations." FAS 143 requires recognition of the fair value of the liability
associated with the legal obligation to retire long-lived assets in the period
in which the obligation is incurred. At that time, an asset retirement cost of
an equal amount is to be capitalized and subsequently allocated to expense using
a systematic and rational approach over the estimated useful life of the related
asset. We are required to adopt FAS 143 effective January 1, 2003. We are
currently evaluating the effects of adopting FAS 143, but do not anticipate that
adopting FAS 143 will have a material effect on our results of operations or
financial position. Adopting FAS 143 will have no effect on our liquidity.

         In August 2001, the FASB issued FAS 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." FAS 144 supersedes FAS 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," and the accounting and reporting provisions of APB Opinion No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." FAS 144 addresses financial reporting for the
impairment or disposal of long-lived assets. We adopted FAS 144 effective
January 1, 2002. We are currently evaluating the effects of adopting FAS 144,
but do not anticipate that the adoption of FAS 144 will have a material effect
on our results of operations or financial position. Adopting FAS 144 will have
no effect on our liquidity.

FORWARD-LOOKING STATEMENTS

         This annual report includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements relate to our future prospects, developments and business strategies.
The statements contained in this annual report that are not statements of
historical fact may include forward-looking statements that involve a number of
risks and uncertainties. We have used the words "may," "will," "expect,"
"anticipate," "believe," "estimate," "plan," "intend" and similar expressions in
this report to identify forward-looking statements. These forward-looking
statements are made based on our expectations and beliefs concerning future
events affecting us and are subject to uncertainties and factors relating to our
operations and business environment, all of which are difficult to predict and
many of which are beyond our control, that could cause our actual results to
differ materially from those matters expressed in or implied by forward-looking
statements. The following factors are among those that could cause our actual
results to differ materially from the forward-looking statements:

         -   competition from other travel center and truck stop operators,
             including additional or improved services or facilities of
             competitors;

         -   the economic condition of the trucking industry, which in turn
             is dependent on general economic factors;

         -   increased environmental regulation;

         -   changes in governmental regulation of the trucking industry,
             including regulations relating to diesel fuel and gasoline;




                                       35
<PAGE>



         -   changes in interest rates;

         -   diesel fuel and gasoline pricing;

         -   availability of diesel fuel and gasoline supply;

         -   delays in completing our capital investment program to
             re-image, re-brand and upgrade our travel center sites; and

         -   availability of sufficient qualified personnel to staff
             company-operated sites.

         All of our forward-looking statements should be considered in light of
these factors. We do not undertake to update our forward-looking statements or
risk factors to reflect future events or circumstances.















































                                       36
<PAGE>



ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We are exposed to commodity price risk and interest rate risk. Our fuel
purchase contracts provide for purchase prices based on average market prices
for diesel fuel and gasoline, exposing us to commodity price risk. We mitigate
this risk exposure in several ways, but primarily by holding less than three
days of diesel fuel inventory at our sites and selling a large portion of our
fuel volume on the basis of a daily industry index of average fuel costs plus a
pumping fee, which minimize the effect on our margins of sudden sharp changes in
commodity market prices. We manage the price exposure related to sales volumes
not covered by the daily industry index pricing formulae through the use, on a
limited basis, of derivative instruments designated by management as hedges of
anticipated purchases. We had no open derivative contracts at any point in time
during the year ended December 31, 2001.

         The interest rate risk faced by us results from our highly-leveraged
position and our level of variable rate indebtedness, the rates for which are
based on short-term lending rates, primarily the London Interbank Offered Rate.
We use interest rate protection agreements to reduce our exposure to market
risks from changes in interest rates by fixing interest rates on variable rate
debt and reducing certain exposures to interest rate fluctuation. Amounts
currently due to or from interest rate protection agreement counterparties are
recorded in interest expense in the period in which they accrue. At December 31,
2001, we were involved in an interest rate protection agreement with a notional
principal amount of $80.0 million. Notional amounts do not quantify risk or
represent our assets or liabilities, but are used in the determination of cash
settlements under the agreements. We are exposed to credit losses from
counterparty nonperformance, but do not anticipate any losses from our
agreement, which is with a major financial institution.

         The following table summarizes information about our financial
instruments that are subject to changes in interest rates:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31, 2001
                                            --------------------------------------------------------------
                                                      FIXED RATE                    VARIABLE RATE
                                                     INDEBTEDNESS                   INDEBTEDNESS
                                            ------------------------------- ------------------------------
                                              PRINCIPAL        WEIGHTED       PRINCIPAL       WEIGHTED
                                               PAYMENT         AVERAGE         PAYMENT        AVERAGE
                                                AMOUNT      INTEREST RATE      AMOUNT      INTEREST RATE
                                            --------------- --------------- ------------------------------
                                                               (DOLLARS IN THOUSANDS)
<S>                                             <C>                <C>          <C>                <C>
Year Ended December 31:
     2002...................................  $       129        12.57%       $     3,280        5.19%
     2003...................................          180        12.58%             3,280        5.19%
     2004...................................          189        12.59%             3,280        5.19%
     2005...................................          198        12.60%             3,280        5.19%
     2006...................................          209        12.60%            47,180        5.19%
Thereafter..................................      193,508        12.37%           311,600        5.19%
                                              -----------                     -----------
Total.......................................  $   194,413        12.52%       $   371,900        5.19%
                                              ===========                     ===========
Fair value..................................  $   204,342                     $   371,900
                                              ===========                     ===========


</TABLE>



                                       37
<PAGE>



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>

Index to Consolidated Financial Statements and Supplementary Data:                                           PAGE
                                                                                                             ----
<S>                                                                                                           <C>
   Financial Statements:
       Report of Independent Accountants.................................................................     39
       Consolidated Balance Sheet at December 31, 2000 and 2001..........................................     40
       Consolidated Statement of Operations for each of the three years in the period ended
         December 31, 2001...............................................................................     41
       Consolidated Statement of Cash Flows for each of the three years in the period ended
         December 31, 2001...........................................................................         42
       Consolidated Statement of Stockholders' Equity for each of the three years in the period
         ended December 31, 2001.....................................................................         43
       Notes to the Consolidated Financial Statements....................................................     44
   Financial Statement Schedule:
       II - Valuation and Qualifying Accounts............................................................     81



</TABLE>



















                                       38
<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors
and Stockholders of
TravelCenters of America, Inc.

         In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of TravelCenters of America, Inc. and its subsidiaries at December 31,
2001 and 2000, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements. These financial statements and the financial statement
schedule are the responsibility of the Company's management; our responsibility
is to express an opinion on these financial statements and the financial
statement schedule based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Note 20 to the consolidated financial statements, the Company
adopted the provisions of Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," in 2001.

PricewaterhouseCoopers LLP

Cleveland, Ohio
March 8, 2002




                                       39
<PAGE>


                         TRAVELCENTERS OF AMERICA, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>

                                                                                              DECEMBER 31,
                                                                                   -----------------------------------
                                                                                         2000              2001
                                                                                     ------------      ------------
                                                                                       (IN THOUSANDS OF DOLLARS)
<S>                                                                                  <C>               <C>
 ASSETS
 Current assets:
    Cash...........................................................................  $     29,019      $     19,888
    Accounts receivable (less allowance for doubtful accounts of $4,291 for 2000
       and $3,060 for 2001)........................................................        81,388            43,856
    Inventories....................................................................        61,772            57,419
    Deferred income taxes..........................................................         7,288             5,044
    Other current assets...........................................................        13,501             8,121
                                                                                     ------------      ------------

         Total current assets......................................................       192,968           134,328
 Property and equipment, net.......................................................       465,633           461,167
 Intangible assets, net............................................................        27,079            23,561
 Deferred financing costs, net.....................................................        32,662            30,202
 Deferred income taxes.............................................................         7,933            19,908
 Other noncurrent assets...........................................................         8,780            10,690
                                                                                     ------------      ------------
         Total assets..............................................................  $    735,055      $    679,856
                                                                                     ============      ============

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
    Current maturities of long-term debt...........................................  $        123      $      3,409
    Accounts payable...............................................................        82,844            60,429
    Other accrued liabilities......................................................        71,274            43,541
                                                                                     ------------      ------------
         Total current liabilities.................................................       154,241           107,379
 Commitments and contingencies.....................................................            --                --
 Long-term debt (net of unamortized discount)......................................       547,607           548,869
 Deferred income taxes.............................................................         3,167             2,851
 Other noncurrent liabilities......................................................         5,416             7,857
                                                                                     ------------      ------------
                                                                                          710,431           666,956

 Redeemable equity.................................................................           527               565
 Nonredeemable stockholders' equity:
    Common stock and other nonredeemable stockholders' equity......................       215,843           213,923
    Accumulated deficit (Note 16)..................................................      (191,746)         (201,588)
                                                                                     ------------      ------------
       Total nonredeemable stockholders' equity....................................        24,097            12,335
                                                                                     ------------      ------------
       Total liabilities, redeemable equity and nonredeemable stockholders' equity.  $    735,055      $    679,856
                                                                                     ============      ============

</TABLE>


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



                                       40
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                 YEAR ENDED DECEMBER 31,
                                                                   ----------------------------------------------------
                                                                         1999              2000               2001
                                                                   ----------------  ---------------     --------------
                                                                                (IN THOUSANDS OF DOLLARS
                                                                                EXCEPT PER SHARE AMOUNTS)
<S>                                                                  <C>             <C>               <C>
 Revenues:
    Fuel...........................................................  $    955,105    $   1,485,732     $   1,331,807
    Non-fuel.......................................................       479,059          555,491           585,717
    Rent and royalties.............................................        20,460           18,822            17,491
                                                                     ------------    -------------     -------------
        Total revenues.............................................     1,454,624        2,060,045         1,935,015
 Cost of goods sold (excluding depreciation):
    Fuel...........................................................       849,234        1,382,224         1,228,544
    Non-fuel.......................................................       201,846          229,096           239,209
                                                                     ------------    -------------     -------------
        Total cost of goods sold (excluding depreciation)..........     1,051,080        1,611,320         1,467,753
                                                                     ------------    -------------     -------------

 Gross profit (excluding depreciation).............................       403,544          448,725           467,262

 Operating expenses................................................       267,107          308,480           325,736
 Selling, general and administrative expenses......................        38,461           38,160            38,279
 Transition expense................................................         3,952              996                 -
 Merger and recapitalization expenses..............................             -           22,004                 -
 Depreciation and amortization expense.............................        51,853           62,768            63,508
 (Gain) on sales of property and equipment.........................        (2,615)          (1,462)           (1,788)
 Stock compensation expense (benefit)..............................         5,062           (1,362)                -
                                                                     ------------    --------------    -------------

 Income from operations............................................        39,724           19,141            41,527
 Interest and other financial costs, net...........................       (38,543)         (47,143)          (57,818)
                                                                     ------------    -------------     -------------

 Income (loss) before income taxes and extraordinary item..........         1,181          (28,002)          (16,291)
 Provision (benefit) for income taxes..............................         1,082           (4,088)           (6,449)
                                                                     ------------    -------------     -------------
 Income (loss) before extraordinary item...........................            99          (23,914)           (9,842)
 Extraordinary loss, less income tax benefits of $7,110............            --          (13,800)               --
                                                                     ------------    -------------     -------------

 Net income (loss).................................................            99          (37,714)           (9,842)

 Less: preferred dividend accretion................................        (9,765)          (8,255)               --
                                                                     ------------    -------------     -------------
 (Loss) available to common stockholders...........................  $     (9,666)   $     (45,969)    $      (9,842)
                                                                     ============    =============     =============
 Loss per common share (basic and diluted):
    Loss before extraordinary item                                   $     (12.96)   $      (17.20)    $       (1.42)
    Extraordinary loss                                                         --            (7.38)               --
                                                                   --------------    -------------    --------------
    Net loss                                                         $     (12.96)   $      (24.58)    $       (1.42)
                                                                     ============    =============     =============


</TABLE>

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




                                       41
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                      YEAR ENDED DECEMBER 31,
                                                                          ------------------------------------------------
                                                                               1999            2000             2001
                                                                          ---------------  -------------   ---------------
                                                                                     (IN THOUSANDS OF DOLLARS)
<S>                                                                         <C>             <C>             <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss) ....................................................  $        99     $   (37,714)    $    (9,842)
    Adjustments to reconcile net income (loss) to net cash provided by
       operating activities:
       Extraordinary loss, less income tax benefits.......................           --          13,800              --
       Merger and recapitalization expenses...............................           --          22,004              --
       Depreciation and amortization......................................       51,853          62,768          63,508
       Amortization of deferred financing costs...........................        1,349           1,457           2,620
       Deferred income tax provision......................................       (3,151)         (7,281)         (8,056)
       Provision for doubtful accounts....................................        1,339           1,560           1,000
       Provision (benefit) for stock compensation.........................        5,062          (1,362)             --
       (Gain) on sales of property and equipment..........................       (2,615)         (1,462)         (1,788)
       Changes in assets and liabilities, adjusted for the effects of
         business acquisitions:
         Accounts receivable..............................................        5,837         (22,332)         34,444
         Inventories......................................................       (9,933)         (1,148)          4,353
         Other current assets.............................................         (400)          2,902           3,259
         Accounts payable and other accrued liabilities...................       (7,678)         36,079         (47,832)
       Other, net.........................................................        2,950          (3,319)         (4,560)
                                                                            -----------     -----------     ------------

       Net cash provided by operating activities..........................       44,712          65,952          37,106
                                                                            -----------     -----------     -----------

 CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions.................................................      (57,762)         (9,675)             --
    Proceeds from sales of property and equipment.........................        9,147             667           8,256
    Capital expenditures..................................................      (87,401)        (68,107)        (54,490)
                                                                            -----------     -----------     ------------

       Net cash used in investing activities..............................     (136,016)        (77,115)        (46,234)
                                                                            -----------     -----------     ------------

 CASH FLOWS FROM FINANCING ACTIVITIES:
    Revolving loan borrowings (repayments), net...........................       15,000          25,300           3,600
    Long-term debt borrowings.............................................           --         510,962              --
    Long-term debt repayments.............................................       (1,594)       (388,685)           (165)
    Proceeds from issuance of stock.......................................        6,738         208,717              38
    Repurchase of equity securities.......................................           --        (267,055)             --
    Debt issuance costs...................................................           --         (32,932)           (160)
    Stock issuance costs..................................................           --          (3,015)             --
    Premiums paid on debt extinguishment .................................           --         (12,778)           (899)
    Merger and recapitalization expenses paid.............................           --         (18,253)         (2,417)
    Other.................................................................           --            (119)             --
                                                                            -----------     -----------     -----------
       Net cash provided by (used in) financing activities................       20,144          22,142              (3)
                                                                            -----------     -----------     ------------

         Net increase (decrease) in cash..................................      (71,160)         10,979          (9,131)

 Cash at the beginning of the year........................................       89,200          18,040          29,019
                                                                            -----------     -----------     -----------

 Cash at the end of the year..............................................  $    18,040     $    29,019     $    19,888
                                                                            ===========     ===========     ===========

</TABLE>


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




                                       42
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                    YEAR ENDED DECEMBER 31,
                                                                      -------------------------------------------------
                                                                          1999              2000             2001
                                                                      ------------       -------------    -------------
                                                                                 (IN THOUSANDS OF DOLLARS)
<S>                                                                   <C>               <C>              <C>

 PREFERRED STOCK:
    Balance at beginning of year....................................  $          38     $          38    $          --
                                                                                                                    --
       Leveraged recapitalization equity security redemptions.......             --               (38)              --
                                                                      ------------      -------------    -------------
    Balance at end of year..........................................  $          38     $          --    $          --
                                                                      =============     =============    =============

 COMMON STOCK:
    Balance at beginning of year....................................  $          14     $          17    $           3
           Issuance of common stock.................................              3                --               --
           Stock option exercises...................................             --                 1               --
           Classify management shares as redeemable equity..........             --                (1)              --
           Leveraged recapitalization equity security redemptions...             --               (14)              --
                                                                      -------------     -------------    -------------
    Balance at end of year..........................................  $          17     $           3    $           3
                                                                      =============     =============    =============

 TREASURY STOCK:
    Balance at beginning of year....................................  $      (8,887)    $      (9,058)   $          --
           Purchases of treasury stock..............................           (171)           (1,894)              --
           Cancel treasury shares...................................             --            10,952               --
                                                                      -------------     -------------    -------------
    Balance at end of year..........................................  $      (9,058)    $          --    $          --
                                                                      =============     =============    =============

 ADDITIONAL PAID-IN CAPITAL:
    Balance at beginning of year....................................  $      51,540     $      61,122    $     215,840
           Issuance of common stock.................................          9,582           205,038               --
           Stock option exercises...................................             --             4,521               --
           Issuance of stock warrants...............................             --             6,600               --
           Stock issuance costs.....................................             --            (3,015)              --
           Classify management shares as redeemable equity..........             --              (526)              --
           Leveraged recapitalization equity security redemptions...             --           (57,900)              --
                                                                      -------------     -------------    -------------
    Balance at end of year..........................................  $      61,122     $     215,840    $     215,840
                                                                      =============     =============    =============

 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
    Balance at beginning of year....................................  $          --     $          --    $          --
           Change in accounting principle, net of tax of $176.......             --                --             (343)
           Change in fair value of interest rate swap agreement,
               net of tax of $814...................................             --                --           (1,577)
                                                                      -------------     -------------    -------------
    Balance at end of year..........................................  $          --     $          --    $      (1,920)
                                                                      =============     =============    =============

 ACCUMULATED DEFICIT:
    Balance at beginning of year....................................  $     (15,098)    $     (24,764)   $    (191,746)
           Net income (loss)........................................             99           (37,714)          (9,842)
           Accretion of preferred stock dividends...................         (9,765)           (8,255)              --
           Leveraged recapitalization equity security redemptions ..             --          (121,013)              --
                                                                      -------------     -------------    -------------
    Balance at end of year..........................................  $     (24,764)    $    (191,746)   $    (201,588)
                                                                      =============     =============    =============

</TABLE>


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





                                       43
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

    1.   BUSINESS DESCRIPTION AND SUMMARY OF OPERATING STRUCTURE

         We are a holding company which, through our wholly owned subsidiaries,
owns, operates and franchises travel centers along the United States interstate
highway system to serve long-haul trucking fleets and their drivers, independent
truck drivers and general motorists. At December 31, 2001, our geographically
diverse nationwide network of full-service travel centers consisted of 153 sites
located in 40 states. Our operations are conducted through three distinct types
of travel centers:

         -   sites owned or leased and operated by us, which we refer to as
             company-operated sites;

         -   sites owned by us and leased to independent
             lessee-franchisees, which we refer to as leased sites; and

         -   sites owned and operated by independent franchisees, which we
             refer to as franchisee-owned sites.

         Our travel centers are located at key points along the U.S. interstate
highway system, typically on 20- to 25-acre sites. Operating under the
"TravelCenters of America" and "TA" brand names, our nationwide network provides
our customers with diesel fuel and gasoline as well as non-fuel products and
services such as truck repair and maintenance services, full-service
restaurants, fast food restaurants, travel and convenience stores and other
driver amenities. We also collect rents and franchise royalties from the
franchisees who operate the leased sites and franchisee-owned sites and, as a
franchisor, assist our franchisees in providing service to long-haul trucking
fleets and their drivers, independent truck drivers and general motorists.

   2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of
TravelCenters of America, Inc. and its wholly owned subsidiaries, TA Operating
Corporation and TA Franchise Systems Inc., as well as TA Licensing, Inc., TA
Travel, L.L.C., TravelCenters Realty, Inc. and TravelCenters Properties, L.P.,
which are all direct or indirect wholly owned subsidiaries of TA Operating
Corporation. National Auto/Truckstops, Inc. was a wholly owned subsidiary of
ours until November 14, 2000, at which time it was merged with and into TA
Operating Corporation. Intercompany accounts and transactions have been
eliminated.

         We have entered into lease transactions of travel centers with a
special purpose entity. These lease transactions are evaluated for lease
classification in accordance with Statement of Financial Accounting Standards
(FAS) No. 13, "Accounting for Leases." We do not consolidate the special purpose
entity so long as the owners of the special purpose entity maintain a
substantial residual equity investment of at least three percent that is at risk
during the entire term of the lease, which has been the case to date.

REVENUE RECOGNITION

         Sales revenues and related costs are recognized at the time of delivery
of motor fuel to customers at either the terminal or the customer's facility for
wholesale fuel sales and at the time of final sale to consumers at our
company-operated sites for retail fuel and non-fuel sales.




                                       44
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

         Initial franchise fee revenues are recognized at the point when the
franchisee opens for business under our brand name, which is when we have
fulfilled all of our obligations under the related agreements. Franchise royalty
revenues are collected and recognized monthly and are determined as a percentage
of the franchisees' revenues.

CASH

         For purposes of the statement of cash flows, we consider all highly
liquid investments with an initial maturity of three months or less to be cash.

INVENTORIES

         Inventories are stated at the lower of cost or market value, cost being
determined principally on the weighted average cost method.

PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost. Depreciation is computed on
a straight-line basis over the following estimated useful lives of the assets:

 Buildings and site improvements..............................   15-20  years
 Pumps and underground storage tanks..........................    5-10  years
 Machinery and equipment......................................    3-15  years
 Furniture and fixtures.......................................    5-10  years

         Repair and maintenance costs are charged to expense as incurred, while
major renewals and betterments are capitalized. The cost and related accumulated
depreciation of property and equipment sold, replaced or otherwise disposed of
are removed from the accounts. Any resulting gains or losses are recognized in
operations.

DEFERRED FINANCING COSTS AND INTANGIBLE ASSETS

         Deferred financing costs were incurred in conjunction with issuing
long-term debt and are amortized into interest expense over the lives of the
related debt instruments using the effective interest method (see Note 14).
Intangible assets with finite lives are amortized on a straight-line basis over
their estimated lives, principally the terms of the related contractual
agreements giving rise to them. Until December 31, 2001 goodwill and intangible
assets with indefinite lives were amortized on a straight-line basis over 15
years. Effective January 1, 2002, we adopted the provisions of FAS 142,
"Goodwill and Other Intangible Assets." Under FAS 142, goodwill and intangible
assets with indefinite lives are no longer amortized but are reviewed annually
(or more frequently if impairment indicators arise) for impairment. Separable
intangible assets that are not deemed to have indefinite lives will continue to
be amortized over their useful lives. Accordingly, effective January 1, 2002, we
stopped amortizing our goodwill and our trademarks, which have indefinite lives.
All of our intangible assets will then be subject to the impairment tests
required by FAS 142 (see Note 11.)




                                       45
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

INTERNAL-USE SOFTWARE COSTS

         During the application development stage of an internal-use computer
software project, we capitalize (i) the external direct costs of materials and
services consumed in developing or obtaining the internal-use computer software,
(ii) to the extent of time spent directly on the project, payroll costs of
employees directly associated with and who devote time to the project, and (iii)
related interest costs incurred. Internal and external costs incurred in the
preliminary project stage and post-implementation stage, such as for exploring
alternative technologies, vendor selection and maintenance, are expensed as
incurred, as are all training costs. The costs of significant upgrades and
enhancements that result in additional functionality are accounted for in the
same manner as similar costs for new software projects. The costs of all other
upgrades and enhancements are expensed as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

         Impairment charges are recognized when the carrying values of a
long-lived asset to be held and used in the business exceeds the estimated
undiscounted future cash flows of the asset, and when the carrying value of a
long-lived asset to be disposed of exceeds the estimated fair value of the asset
less the estimated cost to sell the asset. Such impairment charges are
recognized in the period during which the circumstances surrounding an asset to
be held and used have changed such that the carrying value is no longer
recoverable, or during which a commitment to a plan to dispose of the asset is
made. Such tests are performed at the individual travel center level. In
addition, intangible assets are subjected to further evaluation and impairment
charges are recognized when events and circumstances indicate the carrying value
of the intangible asset exceeds the fair market value of the asset. Impairment
charges are included in depreciation and amortization expense in our
consolidated statement of operations.

         In August 2001, the FASB issued FAS 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." FAS 144 supersedes FAS 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," and the accounting and reporting provisions of APB Opinion No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." FAS 144 addresses financial reporting for the
impairment or disposal of long-lived assets. We adopted FAS 144 effective
January 1, 2002. We are currently evaluating the effects of adopting FAS 144,
but do not anticipate that the adoption of FAS 144 will have a material effect
on our results of operations or financial position. Adopting FAS 144 will have
no effect on our liquidity.

CLASSIFICATION OF COSTS AND EXPENSES

         Cost of goods sold represents the costs of fuels and other products
sold, including freight. Operating expenses principally represent costs incurred
in operating our sites, consisting primarily of labor, maintenance, supplies,
utilities and occupancy costs. Transition expenses represent the nonrecurring
costs we incurred in integrating the BP network, the Unocal network, the Burns
Bros. network and the Travel Ports network into a single network under one
management, including severance and relocation expenses, costs to convert
acquired sites, costs to dispose of leased sites, convert leased sites to
company-operated sites and terminate franchise agreements, and related travel
and training expenses. See Note 5 for a discussion of the Combination Plan under
which the majority of these costs have been incurred. Merger and
recapitalization expenses represent the nonrecurring costs incurred in
completing a recapitalization and a merger with TCA Acquisition Corporation.
These costs principally consist of legal, accounting, investment banker and
other consultants' fees as well as bonus payments to certain members of our
management. See Note 3 for a discussion of the recapitalization and merger
transactions. Costs of advertising are expensed as incurred.




                                       46
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ENVIRONMENTAL REMEDIATION

         We provide for remediation costs and penalties when the responsibility
to remediate is probable and the amount of associated costs is reasonably
determinable. Generally, the timing of remediation accruals coincides with
completion of a feasibility study or the commitment to a formal plan of action.
If recoveries of remediation costs from third parties are probable, a receivable
is recorded. Accruals are not recorded for the costs of remediation activities
undertaken on our behalf by Unocal and BP, at Unocal's and BP's sole expense
(see Note 19). In our consolidated balance sheet, the accrual for environmental
matters is included in other noncurrent liabilities, with the amount estimated
to be expended within the subsequent year reported as a current liability within
the other accrued liabilities balance.

ASSET RETIREMENT OBLIGATIONS

         In June 2001, the FASB issued FAS 143, "Accounting for Asset Retirement
Obligations." FAS 143 requires recognition of the fair value of the liability
associated with the legal obligation to retire long-lived assets in the period
in which the obligation is incurred. At that time, an asset retirement cost of
an equal amount is to be capitalized and subsequently allocated to expense using
a systematic and rational approach over the estimated useful life of the related
asset. We are required to adopt FAS 143 effective January 1, 2003. We are
currently evaluating the effects of adopting FAS 143, which primarily applies to
us with respect to our underground storage tanks, but do not anticipate that
adopting FAS 143 will have a material effect on our results of operations or
financial position. Adopting FAS 143 will have no effect on our liquidity.

INCOME TAXES

         Deferred income tax assets and liabilities are established to reflect
the future tax consequences of differences between the tax bases and financial
statement bases of assets and liabilities. The measurement of deferred tax
assets is reduced, if necessary, by a valuation allowance.

CONCENTRATION OF CREDIT RISK

         We grant credit to our customers and may require letters of credit or
other collateral.

DERIVATIVE INSTRUMENTS

     In the first quarter of fiscal 2001, we adopted FAS 133, "Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments and for hedging activities. FAS
133 requires that an entity recognize derivatives as either assets or
liabilities on the balance sheet and measure those instruments at fair value.
The accounting for changes in the fair value of a derivative depends on the
intended use of the derivative and the resulting designation. We designate our
derivatives based upon criteria established by FAS 133. For a derivative
designated as a fair value hedge, the change in fair value is recognized in
earnings in the period of change together with the offsetting loss or gain on
the hedged item attributed to the risk being hedged. For a derivative designated
as a cash flow hedge, the effective portion of the derivative's gain or loss is
initially reported as a component of accumulated other comprehensive income
(loss) and subsequently reclassified into earnings when the hedged exposure
affects earnings. The ineffective portion of the gain or loss is reported in
earnings immediately. We use derivatives to manage risk arising from changes in
interest rates. Our objectives for holding derivatives are to decrease the
volatility of earnings and cash flows associated with changes in interest rates.




                                       47
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

         The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which estimation is
practicable:

         CASH AND SHORT-TERM INVESTMENTS, ACCOUNTS RECEIVABLE AND ACCOUNTS
PAYABLE: The fair values of financial instruments classified as current assets
or liabilities approximate the carrying values due to the short-term maturity of
the instruments.

         LONG-TERM DEBT: The fair value of our fixed-rate indebtedness that is
publicly traded is estimated based on the quoted price for those notes. The fair
value of our fixed-rate indebtedness that is not publicly traded is estimated
based on the current borrowing rates available to us for financings with similar
terms and maturities. (See Note 14.)

         INTEREST RATE PROTECTION AGREEMENTS: The fair values of our interest
rate protection agreements are based on bank-quoted market prices. (See Note
14.)

RECLASSIFICATIONS

         Certain reclassifications of prior years' data have been made to
conform to the current year presentation.

    3.   MERGER AND RECAPITALIZATION TRANSACTIONS

         On May 31, 2000, we and shareholders owning a majority of our voting
stock entered into a recapitalization agreement and plan of merger, as
subsequently amended, with TCA Acquisition Corporation, a newly created
corporation formed by Oak Hill Capital Partners, L.P. and its affiliates, under
which TCA Acquisition Corporation agreed to merge with and into us. This merger
was completed on November 14, 2000. Concurrent with the closing of the merger,
we completed a series of transactions to effect a recapitalization and a
refinancing that included the following.

         -   TCA Acquisition Corporation issued 6,456,698 shares of common
             stock to Oak Hill and the Other Investors for proceeds of
             $205,000,000 and then merged with and into us.

         -   We redeemed all shares of our common and preferred stock
             outstanding prior to the closing of the merger, with the
             exception of 473,064 shares of common stock with a market
             value at that time of $15,020,000 that were retained by
             continuing stockholders, and cancelled all outstanding common
             stock options and warrants for cash payments totaling
             $263,153,000.

         -   All shares of treasury stock were cancelled.

         -   We repaid all amounts outstanding under our then existing debt
             agreements.

         -   We borrowed $328,300,000 under a secured credit agreement with
             a group of lenders and issued units consisting of Senior
             Subordinated Notes due 2009 with a face amount of $190,000,000
             and initial warrants and contingent warrants that in the
             aggregate could be exercised in exchange for 277,165 shares of
             our common stock.

         -   We merged National Auto/Truckstops, Inc. with and into TA
             Operating Corporation and formed two new wholly owned
             subsidiaries of TA Operating Corporation to maintain our real
             property in certain states.

         Prior to the closing of the transactions described above, we issued
137,572 shares of common stock for cash proceeds of $3,752,000 upon the exercise
of stock options held by existing shareholders, which shares remain outstanding.
After the transactions described above, Oak Hill owned 60.5% of our outstanding
common stock, the






                                       48
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Other Investors owned, in the aggregate, 32.7% of our outstanding common stock,
Freightliner owned 4.3% of our outstanding common stock and certain members of
our management owned 2.5% of our outstanding common stock. The total amount of
our equity capitalization after these transactions, given the $31.75 per share
merger consideration paid in our merger and recapitalization transactions, was
$220,020,000. The transactions described above have been accounted for as a
leveraged recapitalization (see Note 16). We have retained the historical cost
basis of our assets and liabilities, due to the significance of the ownership
interest in us that was retained by continuing stockholders. We incurred
$22,004,000 of expenses charged against operations in connection with the merger
and recapitalization transactions. We also recognized an extraordinary loss of
$13,800,000 (which is net of $7,110,000 of applicable income tax benefits) as a
result of the early extinguishment of indebtedness completed as part of these
transactions.

    4.   ACQUISITION

         On June 3, 1999, we consummated the acquisition of Travel Ports by
acquiring 100% of the common stock of Travel Ports at a price of $4.30 per
share. Under the terms of the related merger agreement and certain ancillary
agreements, we paid cash of approximately $27,760,000 for all of Travel Ports'
outstanding common shares and common stock equivalents except approximately
653,000 common shares that were exchanged for 85,000 shares of our common stock.
In addition, we paid cash of approximately $31,007,000 to retire all of Travel
Ports' indebtedness outstanding as of the merger date. Travel Ports operated a
network of 16 travel centers in seven states, primarily in the northeastern
United States and a single fuel terminal in Pennsylvania. Upon consummation of
the acquisition, Travel Ports was merged into TA Operating Corporation. This
acquisition was accounted for under the purchase method. The results of
operations of the acquired business was included in our consolidated financial
statements from the date of the acquisition.

         The total cost of the Travel Ports acquisition was $86,003,000. This
was comprised of cash paid to purchase the Travel Ports stock and repay the
Travel Ports debt of $58,767,000, the value of the 85,000 shares of our common
stock issued in exchange for Travel Ports shares of $2,808,000, liabilities
assumed of $22,124,000 and direct costs of the acquisition of $2,304,000. The
cost was allocated to the assets and liabilities acquired on the basis of their
estimated fair values at the acquisition date, including $27,585,000 of assets
other than the property and equipment acquired. The excess of purchase price
over the estimated fair values of the net assets acquired, in the amount of
$11,679,000, was recorded as goodwill and, until December 31, 2001, was being
amortized on a straight-line basis over 15 years. The cash portion of the Travel
Ports acquisition was initially funded with $30,000,000 of cash provided by term
loan borrowings as part of the 1998 Refinancing, $25,000,000 of borrowings under
our revolving credit facility and other available cash.

         The following unaudited pro forma information presents our results of
operations as if the acquisition of the Travel Ports network had taken place on
January 1, 1999.


                                                            YEAR ENDED
                                                         DECEMBER 31, 1999
                                                       ------------------------
                                                      (IN THOUSANDS OF DOLLARS
                                                      EXCEPT PER SHARE AMOUNTS)

Total revenue......................................       $     1,511,083
Gross profit (excluding depreciation)..............       $       428,070
Income from operations.............................       $        42,281
Net income.........................................       $         1,808
Loss per common share (basic and diluted)..........       $       (10.67)



                                       49
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         These pro forma results of operations have been prepared for
comparative purposes only and do not purport to be indicative of the results of
operations that actually would have resulted had the acquisition occurred on
January 1, 1999, or that may result in the future.

    5.   COMBINATION PLAN AND TRANSITION EXPENSE

         In January 1997, we adopted a plan (which we refer to as the
"combination plan"), to combine the operations of the Unocal network and the BP
network into one network under the TravelCenters of America brand. There were
three primary elements to the combination plan: (1) integrating the management
of the BP and Unocal networks, (2) converting the Unocal and BP network sites to
one network, and (3) rationalizing and further developing our network. These
expenses related to implementing the combination plan are referred to as
transition expenses and included, among other things, (i) employee separations,
(ii) the costs to convert Unocal network travel centers, (iii) the costs to
dispose of travel centers or terminate lease or franchise agreements, and (iv)
the costs of integrating the management and operations of the Unocal and BP
networks, including relocation, travel, training, and legal expenses. The
combination plan was substantially completed during 1999.

         We have also incurred transition expenses as a result of the Burns
Bros. acquisition and the Travel Ports acquisition, primarily related to
integrating the acquired sites into our network. As a result of implementing the
combination plan and integrating the Burns Bros. network and Travel Ports
network sites, for the years ended December 31, 1999 and 2000, we incurred
approximately $3,952,000 and $996,000, respectively, of expense, included in
transition expense in our consolidated financial statements. No such expenses
were incurred during 2001 and we anticipate incurring no such expenses in 2002.

    6.   EARNINGS PER SHARE

         The computation of basic earnings per common share is based upon the
weighted-average number of shares of common stock outstanding. A reconciliation
of the income or loss and shares used in the computation follows:

<TABLE>
<CAPTION>

                                                                             FOR THE YEAR ENDED DECEMBER 31, 1999
                                                                       -------------------------------------------------
                                                                        INCOME (LOSS)      SHARES          PER-SHARE
                                                                         (NUMERATOR)    (DENOMINATOR)       AMOUNT
                                                                         -----------    -------------       ------
                                                                              (DOLLARS AND SHARES IN THOUSANDS)

<S>                                                                      <C>                      <C>     <C>
         Basic EPS and Diluted EPS:
              Net income...............................................  $         99
              Less:  Preferred stock dividend accretion................        (9,765)
                                                                         ------------

                  Net loss available to common stockholders............  $     (9,666)            746     $   (12.96)
                                                                         ============                     ==========

</TABLE>

<TABLE>
<CAPTION>

                                                                             FOR THE YEAR ENDED DECEMBER 31, 2000
                                                                       -------------------------------------------------
                                                                        INCOME (LOSS)      SHARES          PER-SHARE
                                                                         (NUMERATOR)    (DENOMINATOR)       AMOUNT
                                                                         -----------    -------------       ------
                                                                              (DOLLARS AND SHARES IN THOUSANDS)
<S>                                                                           <C>               <C>       <C>

         Basic EPS and Diluted EPS:
              Loss before extraordinary item...........................  $    (23,914)
              Less:  Preferred stock dividend accretion................        (8,255)
                                                                         ------------

                  Loss before extraordinary item available to common
                  stockholders.........................................       (32,169)          1,870     $   (17.20)

              Extraordinary loss.......................................       (13,800)          1,870          (7.38)
                                                                         ------------                     ----------
                  Net loss available to common stockholders............  $    (45,969)          1,870     $   (24.58)
                                                                         ============                     ==========

</TABLE>





                                       50
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



<TABLE>
<CAPTION>

                                                                             FOR THE YEAR ENDED DECEMBER 31, 2001
                                                                       -------------------------------------------------
                                                                        INCOME (LOSS)      SHARES          PER-SHARE
                                                                         (NUMERATOR)    (DENOMINATOR)       AMOUNT
                                                                         -----------    -------------       ------
                                                                              (DOLLARS AND SHARES IN THOUSANDS)
<S>                                                                      <C>                    <C>       <C>

         Basic EPS and Diluted EPS:
                  Net loss available to common stockholders............  $     (9,842)          6,931     $    (1.42)
                                                                         =============                    ===========

</TABLE>

         The assumed conversion of stock options, warrants and convertible
series of preferred stock would have an anti-dilutive effect on earnings per
share for 1999; the period in 2000 prior to the exercise, cancellation or
conversion to common stock of all of our stock options, warrants and convertible
preferred stock as part of our merger and recapitalization in November 2000; and
for 2001. At December 31, 2001, there were outstanding 78,740 vested stock
options exercisable for $31.75 per share and warrants to purchase 207,874 shares
of common stock at an exercise price of $0.001 per share.

7.       COMPREHENSIVE INCOME

         Comprehensive income (loss) consists of the following:

<TABLE>
<CAPTION>

                                                                                  YEAR ENDED DECEMBER 31,
                                                                        --------------------------------------------
                                                                            1999           2000           2001
                                                                        -------------- ----------   ----------------
                                                                                 (IN THOUSANDS OF DOLLARS)

<S>                                                                       <C>            <C>           <C>
  Net income (loss)....................................................   $       99     $  (37,714)   $   (9,842)
  Change in accounting principle, net of tax of $176...................           --             --          (343)
  Loss on fair value of interest rate swap agreement, net of tax of
    $814...............................................................           --             --        (1,577)
                                                                          ----------     ----------    -----------
    Total comprehensive income (loss)..................................   $       99     $  (37,714)   $  (11,762)
                                                                          ==========     ==========    ==========

</TABLE>

8.       INVENTORIES

         Inventories consist of the following:

<TABLE>
<CAPTION>

                                                                                DECEMBER 31,
                                                                       ------------------------------
                                                                             2000           2001
                                                                       ------------------------------
                                                                          (IN THOUSANDS OF DOLLARS)

<S>                                                                       <C>            <C>
  Non-fuel merchandise................................................    $   50,809     $   51,808
  Petroleum products..................................................        10,963          5,611
                                                                          ----------     ----------
       Total inventories..............................................    $   61,772     $   57,419
                                                                          ==========     ==========

</TABLE>

9.       NOTES RECEIVABLE

         We have notes receivable agreements with certain customers to finance
on a long-term basis past due accounts receivable owed by those customers and
with other parties to finance all or a portion of the purchases of travel center
sites we have sold. The notes have original terms ranging from six months to six
years and principally accrue interest at a variable rate of the prime lending
rate plus 1% to 2%.



                                       51
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

         We also have notes receivable from management stockholders received as
partial consideration for purchases of common stock (see Note 15). These notes
accrue interest at fixed rates between 4.86% and 7.0%, compounded semi-annually.
Accrued and unpaid interest together with unpaid principal, if not sooner paid,
is due and payable on the earliest of:

    -    the date of cessation of employment of the employee;

    -    the date the employee is no longer the owner of the related shares of
         common stock; or

    -    generally, 14 1/2 years from the date of the note.

         Notes receivable consists of the following:

<TABLE>
<CAPTION>

                                                                                DECEMBER 31,
                                                                        ------------------------------
                                                                            2000            2001
                                                                        --------------  --------------
                                                                          (IN THOUSANDS OF DOLLARS)

<S>                                                                       <C>             <C>
  Principal amount of notes receivable outstanding.....................   $   2,276       $   1,621
  Less: amount due for stock purchases.................................         917             956
  Less: allowance for doubtful notes...................................         927             325
                                                                          ---------       ---------
                                                                                432             340
  Less: amounts due within one year, net of allowance..................         218             340
                                                                          ---------       ---------
  Notes receivable, net................................................   $     214       $       -
                                                                          =========       =========

</TABLE>

         The amount due within one year is included within other current assets
in our balance sheet and the amount of notes receivable, net is included within
other assets in our balance sheet. The amount due for stock purchases is
included as a reduction to the redeemable equity balance in our balance sheet
(see Note 15).

10.      PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:

<TABLE>
<CAPTION>

                                                                                   DECEMBER 31,
                                                                       --------------------------------------
                                                                             2000                2001
                                                                       ------------------ -------------------
                                                                             (IN THOUSANDS OF DOLLARS)

<S>                                                                        <C>                <C>
         Land .........................................................    $    63,778        $    67,003
         Buildings and improvements....................................        340,671            368,251
         Machinery, equipment and furniture............................        215,258            233,043
         Construction in progress......................................         51,039             44,694
                                                                           -----------        -----------
              Total cost...............................................        670,746            712,991
         Less: accumulated depreciation................................        205,113            251,824
                                                                           -----------        -----------
              Property and equipment, net..............................    $   465,633        $   461,167
                                                                           ===========        ===========

</TABLE>

         At December 31, 2001, we were holding for sale eight facilities, two of
which had been closed during 1999 and the remaining six of which we intend to
continue to operate until such time as they are sold. Based on the estimated
sales proceeds and costs of selling these sites, impairment charges of
$2,489,000 were recognized during the year ended December 31, 2001. This charge
was included in depreciation and amortization expense in our consolidated
statement of operations. The total carrying value of these eight facilities at
December 31, 2001, after reflecting the impairment charges, was $9,904,000 and
the operations at these eight sites, excluding the impairment charges, generated
income from operations of $345,000 for the year ended December 31, 2001. We are
actively marketing these sites for sale and intend to dispose of them within a
year.




                                       52
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         Effective April 1, 2001, we changed our accounting estimates related to
depreciation. Based upon our evaluation of our assets, our estimates of the
useful lives for certain types of property and equipment were extended five
years. These changes reduced depreciation expense by $8,514,000, net loss by
$5,142,000 and loss per share by $0.74 per share for the year ended December 31,
2001.

11.      INTANGIBLE ASSETS

         Intangible assets consist of the following:

<TABLE>
<CAPTION>

                                                                                            DECEMBER 31,
                                                                                -------------------------------------
                                                                                      2000               2001
                                                                                ------------------ ------------------
                                                                                     (IN THOUSANDS OF DOLLARS)

<S>                                                                               <C>                <C>
         Noncompetition agreements..........................................      $     26,200       $     26,200
         Leasehold interest ................................................             1,724              1,724
         Trademarks.........................................................             2,713              2,713
         Goodwill...........................................................            31,340             31,485
         Other..............................................................               843                849
                                                                                  ------------       ------------
              Total cost....................................................            62,820             62,971
         Less:  accumulated amortization....................................            35,741             39,410
                                                                                  ------------       ------------
              Intangible assets, net........................................      $     27,079       $     23,561
                                                                                  ============       ============

</TABLE>

         As part of acquisitions of the Unocal and BP networks, we entered into
noncompetition agreements with Unocal and BP pursuant to which Unocal and BP
each agreed to refrain from re-entering the truckstop business for periods of
ten and seven years, respectively, from the acquisition dates. The intangible
assets related to these noncompetition agreements represent the present values
of the estimated cash flows we would lose due to competition resulting from
re-entry of Unocal or BP into the travel center market were they not constrained
from doing so. The Unocal noncompetition agreement is being amortized over its
ten year life and the BP noncompetition agreement was amortized over its seven
year life.

         Leasehold interest represents the value, obtained through the BP
acquisition, of favorable lease provisions at one location, the lease for which
extended 11 1/2 years from the date of the BP acquisition. The leasehold
interest is being amortized over the 11-1/2 year period. Trademarks relate
primarily to our purchase of the trademarks, service marks, trade names and
commercial symbols from BP and Travel Ports. The trademarks were being amortized
over their estimated economic life of 15 years.

         Goodwill results from our business acquisitions and represents the
excess of amounts paid to the related sellers over the fair values of the
tangible assets acquired. For the years ended December 31, 1999, 2000 and 2001,
we recorded goodwill of $11,679,000, $3,030,000 and $145,000, respectively.
Until December 31, 2001, goodwill was amortized on a straight-line basis over 15
years.

         Effective January 1, 2002, we adopted the provisions of FAS 142,
"Goodwill and Other Intangible Assets." Accordingly, effective on that date, we
ceased amortization of our goodwill and our trademarks, which have indefinite
lives, thereby reducing our annual depreciation and amortization expense by
approximately $1,772,000. We are still evaluating the other provisions of FAS
142, particularly the necessity of an impairment charge related to our
intangible assets, and their potential effect on our financial statements.




                                       53
<PAGE>




                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


12.      OTHER ACCRUED LIABILITIES

         Other accrued liabilities consist of the following:

<TABLE>
<CAPTION>

                                                                              DECEMBER 31,
                                                                  --------------------------------------
                                                                         2000               2001
                                                                  ------------------- ------------------
                                                                        (IN THOUSANDS OF DOLLARS)

<S>                                                                  <C>                 <C>
         Taxes payable, other than income taxes...................   $    15,495         $    13,872
         Accrued wages and benefits...............................        15,842              10,498
         Interest payable.........................................         8,731               5,105
         Other accrued liabilities................................        31,206              14,066
                                                                     -----------         -----------

         Total other accrued liabilities..........................   $    71,274         $    43,541
                                                                     ===========         ===========

</TABLE>

13.      REVOLVING LOAN

         We have available a revolving loan facility of $100,000,000 (see Note
14). The interest rate for borrowings under this revolving loan facility is
based on either a prime rate-based alternate base rate plus 1.75% or an adjusted
London Interbank Offered Rate (LIBOR) plus 2.75%. Commitment fees are calculated
as 0.5% of the daily average unused amount of the revolving loan commitment. At
December 31, 2000 and 2001, there were outstanding borrowings under our
revolving credit facilities of $40,300,000 and $43,900,000, respectively. There
were $4,843,000 of available borrowings reserved for letters of credit at
December 31, 2001. The revolving loan facility matures in November 2006.

14.      LONG-TERM DEBT

         In November 2000, in connection with our recapitalization and merger
transactions (see Note 3), we completed a refinancing, which we refer to as the
"2000 Refinancing." In the 2000 Refinancing, we issued $190,000,000 of senior
subordinated notes due 2009 and borrowed $328,300,000 under our amended and
restated senior credit facility that consists of a fully-drawn $328,000,000 term
loan facility and a $100,000,000 revolving credit facility. The proceeds from
these borrowings, along with proceeds from the issuance of common stock and
other cash on hand, were utilized to:

    -    pay for the tender offer and consent solicitation for our
         10 1/4% Senior Subordinated Notes due 2007, including accrued
         interest, premiums and a prepayment penalty;

    -    repay all amounts, including accrued interest, outstanding
         under our existing amended and restated credit agreement;

    -    redeem in full all of our senior secured notes and pay related
         accrued interest and prepayment penalties;

    -    make cash payments to certain of our equity owners, whose
         shares and unexercised stock options and warrants were
         redeemed and cancelled pursuant to the recapitalization
         agreement and plan of merger; and

    -    pay fees and expenses related to the financings and the merger
         and recapitalization transactions.



                                       54
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         Long-term debt consists of the following:

<TABLE>
<CAPTION>

                                                                                         DECEMBER 31,
                                                                                  ---------------------------
                                                       INTEREST      MATURITY         2000           2001
                                                      ------------  ------------  --------------  -----------
                                                                                  (IN THOUSANDS OF DOLLARS)
<S>                                                      <C>           <C>             <C>            <C>

Senior Credit Facility - Term Loan (a)...............       (b)        2008         $  328,000    $   328,000
Senior Credit Facility - Revolver (a)................       (c)        2006             40,300         43,900
Senior Subordinated Notes due 2009 (d)...............    12.75%        2009            190,000        190,000
Note payable (e).....................................     5.00%        2018              4,577          4,413
                                                                                    ----------    -----------

     Total...........................................                                  562,877        566,313
Less: amounts due within one year....................                                      123          3,409
Less: unamortized discount...........................                                   15,147         14,035
                                                                                    ----------    -----------

     Long-term debt (net of unamortized discount)....                               $  547,607    $   548,869
                                                                                    ==========    ===========

</TABLE>

-----------------

(a)  On November 14, 2000, in connection with the 2000 Refinancing, we entered
     into a $428,000,000 Amended and Restated Credit Agreement with a group of
     lenders, which borrowing we refer to as our Senior Credit Facility. The
     Senior Credit Facility consists of a $328,000,000 term loan facility, which
     was fully drawn at closing, and a $100,000,000 revolving credit facility
     (see Note 13). Principal payments are due at each quarter end.

(b)  Interest accrues at variable rates based on either adjusted LIBOR plus
     3.25% or, at our election, a prime rate-based alternate base rate plus
     2.25%. We have the option to select which rate will be applied at the
     beginning of each loan period, the term of which, for LIBOR borrowings,
     varies, at our election, from one to six months and, for alternate base
     rate borrowings, extends until we elect to convert to LIBOR borrowings. The
     interest rate was set on December 17, 2001 at 5.19% for a 30 day period.
     Interest payments are due at each quarter end for interest related to
     alternate base rate borrowings and at the end of each loan period, but not
     less frequently than quarterly, for LIBOR borrowings.

(c)  Interest accrues at variable rates based on either adjusted LIBOR plus
     2.75% or, at our election, a prime rate-based alternate base rate plus
     1.75%. We have the option to select which rate will be applied at the
     beginning of each loan period, the term of which, for LIBOR borrowings,
     varies, at our election, from one to six months and, for alternate base
     rate borrowings, extends until we elect to convert to LIBOR borrowings. At
     December 31, 2001 we had $33,000,000 of LIBOR borrowings at an average rate
     of 4.8% for various 30-day periods ending in January 2002 and $10,900,000
     of alternate base rate borrowings at 6.5%. Interest payments are due at
     each quarter end for interest related to alternate base rate borrowings and
     at the end of each loan period, but not less frequently than quarterly, for
     LIBOR borrowings.

(d)  On November 14, 2000, in connection with the 2000 Refinancing, we issued
     Senior Subordinated Notes with an aggregate face amount of $190,000,000.
     These notes were issued at a discount of 3.704% and each $1,000 note was
     accompanied by detachable warrants (see Note 15). The warrants had an
     aggregate fair value at issuance of $6,600,000. The original issue discount
     and the fair value of the warrants were initially recognized as unamortized
     debt discount in our balance sheet and are being amortized into interest
     expense using the effective interest method. Interest payments on these
     notes are due semiannually on May 1 and November 1. Optional prepayments
     are allowed under certain circumstances, any such payments reducing the
     required payment of $190,000,000 due on May 1, 2009.





                                       55
<PAGE>





                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


(e)  On September 1, 1998, in connection with the purchase of the operating
     assets of a leased site, we issued a note payable to the former operator of
     the site for $4,919,000. The note bears interest at 5% and requires
     quarterly payments of principal and interest of $98,000 thru October 1,
     2018. The note was recorded net of a discount of $1,875,000. This note is
     secured by a mortgage interest in the related travel center.

         DEBT EXTINGUISHMENTS AND ISSUANCE COSTS. As part of the 2000
Refinancing, we retired all of our outstanding indebtedness under the Amended
and Restated Credit Agreement, all of our Series I Senior Secured Notes and all
of our outstanding Senior Subordinated Notes due 2007, resulting in the early
extinguishment of $423,557,000 of debt. As a result, in 2000 we recognized an
extraordinary loss, net of the applicable income tax benefits of $7,110,000, of
$13,800,000. This extraordinary loss consisted of (a) the write off of
$7,632,000 of unamortized deferred financing costs incurred when issuing the
extinguished indebtedness, (b) $11,629,000 of tender offer and consent
solicitation premium and related fees related to redeeming the Senior
Subordinated Notes due 2007, (c) $750,000 of prepayment penalties related to
redeeming the Series I Senior Secured Notes, and (d) $899,000 to exit an
interest rate swap agreement related to the extinguished debt. We capitalized as
deferred financing costs $32,932,000 of costs associated with issuing the Senior
Credit Facility and the Senior Subordinated Notes due 2009.

         PLEDGED ASSETS. The borrowings under the Senior Credit Facility are
secured by mortgages on substantially all of our property and equipment, liens
on all of our accounts receivable and inventories and security agreements
related to our cash balances and significant operating contracts.

         CHANGE OF CONTROL. In the event of a change in control (as defined in
the relevant instruments) of the company, the total amount outstanding under the
debt agreements described above may be declared immediately due and payable.

         DEBT COVENANTS. Under the terms of the Senior Credit Facility, we are
required to maintain certain affirmative and negative covenants, that, among
other things, limit the amount of indebtedness we can incur, limit the amount of
lease payments we can make, limit the amount of dividend payments and debt
prepayments we can make, limit the amount of capital expenditures we can make
and require us to maintain a minimum interest coverage ratio and a maximum
leverage ratio. We were in compliance with the covenants throughout 2001 and at
December 31, 2001.

         Under the terms of the Indenture for the Senior Subordinated Notes due
2009, we are required to maintain certain affirmative and negative covenants
that, among other things, limit our ability to incur indebtedness, pay
dividends, redeem stock or sell assets or subsidiaries. We were in compliance
with the covenants throughout 2001 and at December 31, 2001.

         FUTURE PAYMENTS. Scheduled payments of long-term debt in the next five
years are $3,409,000 in 2002; $3,460,000 in 2003; $3,469,000 in 2004; $3,478,000
in 2005 and $47,389,000 in 2006.

         FAIR VALUE. Based on the borrowing rates currently available to us for
bank loans and other indebtedness with similar terms and average maturities and
the year-end quoted market price of the Senior Subordinated Notes due 2009, the
fair value of long-term debt at December 31, 2001 was $576,242,000. Based on
bank-quoted market prices, the fair value of the interest rate swap agreement we
have in place as of December 31, 2001 was a liability of $2,911,000.




                                       56
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


15.      REDEEMABLE EQUITY

         At December 31, 2000 and 2001, there were 173,064 and 175,498 shares,
respectively, of our common stock owned by certain of our management employees.
We refer to these shares of common stock as management shares. For the purchase
of management shares, each of the management employees who entered into the
management subscription agreement received financing from us for no more than
one-half of the purchase price of the management shares. In connection with this
financing each management employee executed a note in our favor and a pledge
agreement. At December 31, 2000 and 2001, the aggregate principal amount of such
notes due us from the management employees was $917,000 and $956,000,
respectively (see Note 9), and is reflected as a reduction to the redeemable
common stock balance.

         Under the terms of the management subscription agreements and other
agreements governing the management shares, the management employees have rights
to require us to repurchase the management shares at market value upon the
employee's termination of employment due to death, disability or scheduled
retirement. Repurchase will generally be for cash at the fair market value on
the date of termination if termination is due to death or disability or
scheduled retirement at or after age 62, or for cash in installments over a
period of years at fair market value each year if termination is due to
scheduled retirement prior to age 62. If there is a change of control of us
which involves the sale by stockholders of their equity interest to a third
party during the time that installments are being paid to the management
employees, we will accelerate the installment payments at the time of the close
of the change of control. In other cases of termination, we will have call
rights at fair market value that generally will be exercised for cash, although
in limited circumstances the call rights may be exercised by promissory note. In
all cases, repurchase rights are restricted under law, credit agreements,
financing documents and other contracts, and our board's good faith
determination that repurchases would not cause undue financial strain on us. The
Senior Credit Facility and the Senior Subordinated Notes limit our ability to
repurchase the management shares. The amount paid upon repurchase of any
management shares will be reduced by the principal balance of and unpaid accrued
interest on the related notes receivable. At the point in time that redemption
of shares of redeemable common stock becomes probable, the fair value of the
shares will be accreted by a charge to retained earnings as redeemable common
stock. Such a charge to retained earnings will occur only if our value, and
therefore the fair value of our common stock, has increased.

16.         NONREDEEMABLE STOCKHOLDERS' EQUITY

         Common stock and other nonredeemable stockholders' equity consists of
the following:

<TABLE>
<CAPTION>

                                                                                       DECEMBER 31,
                                                                           --------------------------------------
                                                                                 2000                2001
                                                                           ------------------ -------------------
                                                                                 (IN THOUSANDS OF DOLLARS)
<S>                                                                           <C>                      <C>
        Common Stock - 20,000,000 shares authorized, $0.00001
             par value 6,929,762 and 6,932,196 shares outstanding at
             December 31, 2000 and 2001, respectively......................   $         3        $         3
        Accumulated other comprehensive income.............................             -             (1,920)
        Additional paid-in capital.........................................       215,840            215,840
                                                                              -----------        -----------

                   Total...................................................   $   215,843        $   213,923
                                                                              ===========        ===========

</TABLE>



                                       57
<PAGE>




                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MERGER AND RECAPITALIZATION

         On May 31, 2000, we and shareholders owning a majority of our voting
stock entered into a recapitalization agreement and plan of merger, as
subsequently amended, with TCA Acquisition Corporation, a newly created
corporation formed by Oak Hill Capital Partners, L.P. and its affiliates, under
which TCA Acquisition Corporation agreed to merge with and into us. This merger
was completed on November 14, 2000. Concurrent with the closing of the merger,
we completed a series of transactions to effect a recapitalization that included
the following.

         -   TCA Acquisition Corporation issued 6,456,698 shares of common
             stock to Oak Hill and other institutional investors for
             proceeds of $205,000,000 and then merged with and into us. We
             incurred $3,015,000 of fees and expenses related to the
             issuance of these shares of common stock. These stock issuance
             costs were charged against additional paid-in capital.

         -   We redeemed all shares of our common and preferred stock
             outstanding prior to the closing of the merger, with the
             exception of 473,064 shares of common stock with a market
             value at that time of $15,020,000 that were retained by
             continuing stockholders, and cancelled all outstanding common
             stock options and warrants for cash payments totaling
             $263,153,000.

         -   All shares of treasury stock were cancelled.

         After the transactions described above, Oak Hill owned 60.5% of our
outstanding common stock, the Other Investors owned, in the aggregate, 32.7% of
our outstanding common stock, Freightliner owned 4.3% of our outstanding common
stock and certain members of our management owned 2.5% of our outstanding common
stock. The total amount of our equity capitalization after these transactions,
given the $31.75 per share merger consideration that was paid in our merger and
recapitalization transactions, was $220,020,000. The transactions described
above, which resulted in a change of control over us, have been accounted for as
a leveraged recapitalization, as opposed to a purchase business combination,
since the change of control was effected through issuance of new shares to our
new control group in conjunction with a redemption of most of our then
outstanding equity securities. We followed leveraged recapitalization accounting
because of the significance of the ownership interest in us that was retained by
continuing stockholders. In accounting for our leveraged recapitalization, we
retained the historical cost bases of our assets and liabilities and
consequently recorded charges totaling $178,965,000 to our equity accounts upon
the redemption of equity securities. This accounting treatment contrasts with
that followed in a purchase business combination, in which a company reflects
the new basis in its assets and liabilities of its new control group by
increasing or decreasing its historical balances based on the estimated fair
values at that time and avoids the charge to equity that accompanies the
redemption of equity securities.

OTHER COMMON STOCK ISSUANCES

         During the years ended December 31, 1999, 2000 and 2001, we issued
6,182, 39,893 and 2,434, respectively, shares of common stock to certain members
of management for cash and notes receivable (see Notes 9, 15 and 18) aggregating
$154,000, $495,000 and $77,000, respectively.

         In June 1999, we issued 85,000 shares of common stock valued at
$2,808,000 in exchange for common shares of Travel Ports as part of the Travel
Ports acquisition (see Note 4). In July 1999, we issued 200,000 shares of common
stock to Freightliner for cash consideration of $6,660,000 and also issued to
Freightliner an option to purchase an additional 100,000 shares at the same
price per share. In November 2000, Freightliner exercised this option for cash
consideration of $3,330,000.




                                       58
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


PREFERRED STOCK

         The board of directors has the authority to issue preferred stock in
one or more classes or series and to fix the designations, powers, preferences
and dividend rates, conversion rights, terms of redemption, and liquidation
preferences and the number of shares constituting each class or series. Our
authorized capital stock includes 5,000,000 shares of preferred stock with a par
value of $0.00001.

COMMON STOCK

         VOTING RIGHTS. Each share of common stock entitles the holder to one
vote on all matters submitted to a vote of our stockholders.

         DIVIDENDS. Holders of common stock are entitled to receive dividends
if, as and when declared by our board of directors out of funds legally
available. Our debt agreements limit the amount of dividends we are able to pay.

         LIQUIDATION RIGHTS AND OTHER RIGHTS. Upon our liquidation, dissolution
or winding up, the holders of our common stock will be entitled to share pro
rata in the distribution of all of our assets remaining after satisfaction of
all of our liabilities and the payment of the liquidation preference of any
outstanding preferred stock. The holders of our common stock do not have any
conversion, redemption or preemptive rights.

         REPURCHASE RIGHTS. Certain members of our senior management have
purchased shares of our common stock pursuant to individual management
subscription agreements. We have the right to repurchase, and the employees have
the right to require us to repurchase, subject to certain limitations, at fair
market value, these shares of common stock upon termination of employment due to
death, disability or a scheduled retirement. These shares are classified as
redeemable equity in our consolidated balance sheet (see Note 15).

         TREASURY SHARES. From time to time we have acquired shares of our
common stock from former stockholders. For the years ended December 31, 1999,
and 2000, we purchased 10,000 and 7,995,138 treasury shares, respectively. These
shares were recorded at their acquisition costs of $170,000 and $253,649,000 for
the years ended December 31, 1999 and 2000, respectively. As part of our
recapitalization, we cancelled all of the treasury shares we owned, such that
there were no shares of treasury stock at December 31, 2000 and 2001.

REGISTRATION RIGHTS

         Under a stockholders' agreement to which all of our stockholders are
party, certain of our stockholders have the right, under certain circumstances,
to require us to register under the Securities Act of 1933 shares of our common
stock held by them and allow them to include shares of common stock held by them
in a registration under the Securities Act commenced by us.

COMMON STOCK WARRANTS

         In connection with the issuance of our Senior Subordinated Notes due
2009 as part of our merger and recapitalization transactions, we issued warrants
exercisable for shares of our common stock. The warrants were issued under a
warrant agreement between us and State Street Bank and Trust Company, as warrant
agent. We originally issued initial warrants in connection with a private
placement of 190,000 units, each unit consisting of one Senior Subordinated Note
due 2009, three initial warrants and one contingent warrant. Each warrant,
whether initial or contingent, entitles its holder to purchase 0.36469 shares of
our common stock at an exercise price of $0.001 per share, subject to
anti-dilution adjustments under some circumstances. We have no warrants
outstanding other than the 570,000 initial warrants and the 190,000 contingent
warrants.




                                       59
<PAGE>


                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         INITIAL WARRANTS. The initial warrants, when exercised, will entitle
the holders to purchase 207,874 shares of our common stock at an exercise price
of $0.001 per share.

         CONTINGENT WARRANTS. The contingent warrants will, if released from
escrow, entitle the holders to purchase 69,291 shares of common stock at an
exercise price of $0.001 per share. The contingent warrants will be held in
escrow under an escrow agreement between us and State Street Bank and Trust
Company, as escrow agent and, subject to some conditions, will be released from
escrow and distributed to holders of the initial warrants on March 31, 2003, the
contingent warrant release date. The contingent warrants will be released from
escrow and delivered to us for cancellation only if, as of December 31, 2002:

    -    the Consolidated Leverage Ratio, as defined in the indenture governing
         the notes, is equal to or less than 4.5 to 1.0 and our chief financial
         officer delivers a certificate to that effect to the escrow agent prior
         to the contingent warrant release date, or

    -    all of the notes have been repaid, redeemed or repurchased by us.

If the contingent warrants are required to be released to the holders of the
initial warrants on the contingent warrant release date, the contingent warrants
will be distributed pro rata to all the registered holders of initial warrants
determined as of the contingent warrant release date. To the extent an initial
warrant is exercised prior to the contingent warrant release date, the last
registered holder of the initial warrant will be treated as the registered
holder of the initial warrant as of the contingent warrant release date for
purposes of participating in the distribution of contingent warrants.

         EXERCISE OF WARRANTS. The initial warrants may be exercised at any time
on or after November 14, 2001, and the contingent warrants may be exercised at
any time after the contingent warrant release date. However, holders of warrants
will be able to exercise their warrants only if the shelf registration statement
is effective or the exercise of the warrants is exempt from the requirements of
the Securities Act and only if the shares of common stock are qualified for sale
or exempt from qualification under the applicable securities laws of the states
or other jurisdiction in which the holders reside. Unless earlier exercised, the
warrants will expire on May 1, 2009.

         At our option, fractional shares of common stock may not be issued upon
exercise of the warrants. If any fraction of a share of common stock would,
except for the foregoing provision, be issuable upon the exercise of any
warrants, we will pay an amount in cash equal to the current market value per
share of common stock, as determined on the day immediately preceding the date
the warrant is presented for exercise, multiplied by the fraction, computed to
the nearest whole cent.

         The exercise price and the number of shares of common stock issuable
upon exercise of a warrant are both subject to adjustment in certain cases.

         NO RIGHTS AS STOCKHOLDERS. The holders of unexercised warrants are not
entitled, as such, to receive dividends, to vote, to consent, to exercise any
preemptive rights or to receive notice as our stockholders of any stockholders
meeting for the election of our directors or any other purpose, or to exercise
any other rights whatsoever as our stockholders.




                                       60
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


STOCK AWARD AND OPTION PLANS

         2001 STOCK PLAN. During 2001, we granted to certain of our executives
non-qualified stock options to purchase 944,881 shares of our common stock under
a stock incentive plan our board of directors adopted in November 2000 and which
was approved by a vote of our stockholders in 2001. All of the options have a
term of 10 years from the date of grant, although the options will be terminated
earlier if certain customary events occur. For example, if an executive's
employment is terminated by us without cause or by the executive for good reason
or due to death, disability or scheduled retirement, all vested options will
expire 60 days following termination of employment. Under certain circumstances,
the executive will be allowed to hold a limited portion of his unvested options
for a longer period of time following termination of employment for further
vesting. Each option grant consists of 41.67% time options and 58.33%
performance options. Time options become exercisable with the passage of time,
while performance options become exercisable if certain investment return
targets are achieved. Time options generally vest 20% per year over a period of
five years. Performance options vest if Oak Hill achieves specified internal
rates of return on specified measurement dates. In general, the number of
performance options that will vest is based upon Oak Hill achieving internal
rates of return between 22.5% and 30.0% on a measurement date. A measurement
date is generally defined as the earliest of (1) five years from the closing of
the merger and recapitalization transactions (November 14, 2000), (2) specified
dates following an initial public offering of our stock, depending on the date
the initial public offering occurs, or (3) the date that at least 30% of our
shares owned by Oak Hill are distributed to its limited partners or sold, except
that a subsequent measurement date may occur if less than 100% of our shares
owned by Oak Hill are so sold or distributed. Vesting is partially accelerated
for time options following termination of employment due to death, disability or
scheduled retirement. If a change of control occurs, the vesting of time options
will fully accelerate. Option holders will have rights to require us to
repurchase shares obtained upon the exercise of vested options upon a
termination of employment due to disability, death or, subject to a six-month
holding period, scheduled retirement, and, in certain limited cases, upon a
change of control. In connection with our initial grant of options under this
plan, we established and granted a discretionary pool of options that will be
allocated periodically, first to new members of management who become option
holders after the date of the initial grant, and then to other members on a pro
rata basis. The total number of shares underlying the initial grant of options
will not increase as a result. The time options are subject to fixed plan
accounting and, accordingly, no charge to earnings will be required with respect
to them. The performance options are subject to variable plan accounting and,
accordingly, a non-cash charge to earnings will be required when it becomes
probable that the performance triggers for such options will be achieved. It is
not possible to determine at this time, nor may it be possible until close to
the end of the five-year performance period, whether it will be probable that we
will achieve the performance triggers. It is not possible to predict whether any
such required non-cash charge will be material to our results for the period in
which the charge is recognized, as we expect that the performance triggers can
only be attained as a result of a significant increase in our results of
operations. The options granted to future participants in the option plan under
the discretionary pool also may be subject to a compensation charge.

         As part of our merger and recapitalization transactions in November
2000, all of the outstanding options to purchase shares of our common stock were
required to be either exercised or cancelled. These options had been granted to
certain members of management and nonemployee directors under the 1997 Stock
Incentive Plan and the 1993 Stock Incentive Plan, each of which is described
further below.

         1997 STOCK PLAN. During 1997, the board of directors approved the
adoption of the 1997 Stock Incentive Plan, which we refer to as the "1997 Stock
Plan". The principal terms and conditions of the 1997 Stock Plan were as
follows: a maximum of 750,000 shares of our common stock (subject to adjustment)
could be issued pursuant to options and stock appreciation rights granted to our
officers, non-employee directors and key employees designated by the
compensation committee; the option exercise price for each option granted was
the stated market value of the stock on the respective grant date, such stated
market value determined annually based on a formula, specified in the 1997 Stock
Plan, that was based on our consolidated operating results and indebtedness; the
options vested on the December 31 of the year of grant upon the attainment of
performance targets (outstanding options and options with





                                       61
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


respect to shares reserved for future awards vested upon a "change of control"
or "initial public offering" of us (as such terms are defined in the 1997 Stock
Plan)), and remain exercisable for limited periods following termination of
employment; shares of common stock acquired upon exercise of options were
subject to call and put options upon termination of employment; if a change of
control occurred within six months after termination of the employment of a
former employee for "good reason," death, "disability" or termination other than
for "cause" (as defined), an adjustment was to be made to the amount paid upon
exercise of any call options or put options (but, in the case of put options,
only to the extent the proceeds received by the former employee upon exercise of
the put option were used to repay indebtedness to us) so that the former
employee was able to receive any amounts in excess of the call or put price
payable in the change of control transaction. The 1997 Stock Plan was amended
during 2000 to increase to 900,000 the maximum number of shares of our common
stock that could be issued pursuant to options and stock appreciation rights
awarded under the plan. All options granted under the 1997 Plan were either
exercised or cancelled as part of our merger and recapitalization transactions
in November 2000.

         1993 STOCK PLAN. The 1993 Stock Incentive Plan, which we refer to as
the "1993 Stock Plan" was approved by the board of directors and was effective
as of December 10, 1993. The 1993 Stock Plan provided for the granting of stock
options and other stock-based awards to our employees and directors. Stock
awards granted under the 1993 Stock Plan could be in the form of (i) stock
options, (ii) stock appreciation rights related to an option and (iii) stock
appreciation rights unrelated to an option. Stock options granted under the 1993
Stock Plan allow the purchase of common stock (formerly Class B Common Stock) at
prices generally not less than fair market value at the time of the grant as
determined by the compensation committee of the board of directors. The total
number of shares of common stock with respect to which awards could be granted
was 572,000. Common stock obtained as a result of the exercise of the options is
subject to call and put rights at formula prices upon termination of employment.
The formula prices are based on our consolidated operating results and
indebtedness. A portion of the options vested at the end of each year in the
five year period ending December 31, 1997, based on attainment of certain
specified financial objectives at the end of each year, but no more quickly than
ratably from the date of grant through December 31, 1996. Vested options must be
exercised within 10 years of the date of grant. All unvested options under the
1993 Plan at December 31, 1996 were cancelled upon the adoption of the 1997
Stock Plan. All vested options under the 1993 Plan were either exercised or
cancelled as part of our merger and recapitalization transactions in November
2000.

         STOCK OPTION STATUS SUMMARY. The following table reflects the status
and activity of options under our stock plans:

<TABLE>
<CAPTION>

                                                                     YEAR ENDED DECEMBER 31,
                                                   ------------------------------------------------------------
                                                        1999                   2000                 2001
                                                   ----------------      -----------------     ----------------

<S>                                                        <C>                   <C>                <C>
Options outstanding, beginning of year.........            538,529               777,280                    --
Granted........................................            238,751               325,000               944,881
Exercised......................................                 --               (37,572)                   --
Canceled.......................................                 --            (1,064,708)                   --
                                                     -------------         -------------         -------------

Options outstanding, end of year...............            777,280                    --               944,881
                                                     =============         =============         =============
Options exercisable, end of year...............            777,280                    --                78,740
Options available for grant, end of year.......            187,749                    --                    --

</TABLE>

         The weighted-average exercise price was $31.75 per share for those
options granted during 2001 and for all outstanding options as of December 31,
2001. The weighted-average exercise price was $25.00 and $33.30 for those
options granted during 1999 and 2000, respectively, and $21.35 for all
outstanding options as of December 31, 1999, respectively.



                                       62
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         The fair value at December 31, 1999 used to determine compensation
expense related to options granted under our stock plans was based on the
formula specified in the 1997 Stock Plan as applied by the compensation
committee of our board of directors and was $33.30. Based on this price and the
number of vested options, compensation expense recognized in relation to these
options for the year ended December 31, 1999 was $4,966,000. For the year ended
December 31, 2000, the compensation recognized in relation to these options was
based on the $31.75 fair market value per share reflected in the merger and
recapitalization transactions and represented a benefit of $1,362,000 as a
result of the decreased fair market value per share from 1999. Due to the
proximity of the grant date for the options granted in 2001 to the date of the
merger and recapitalization transactions, the fair value at the date of grant of
those options was estimated to be $31.75. No stock compensation expense was
recognized during the year ended December 31, 2001.

         In accordance with the provisions of FAS No. 123, "Accounting for
Stock-Based Compensation," we have elected to apply the intrinsic value approach
under the Accounting Principles Board Opinion No. 25 in accounting for our
option plans. Accordingly, we do not recognize compensation expense for stock
options when the stock price at the grant date is equal to or greater than the
fair market value of the stock at that date. The following pro forma information
presents our net loss and loss per share as if the fair value method for valuing
stock options, as prescribed in FAS 123, had been applied.

<TABLE>
<CAPTION>

                                                                                    YEAR ENDED
                                                                                 DECEMBER 31, 2001
                                                                            ----------------------------
                                                                             (IN THOUSANDS OF DOLLARS
                                                                             EXCEPT PER SHARE AMOUNTS)

<S>                                                                               <C>
Net loss....................................................................      $      (10,479)
Loss per share:
     Basic..................................................................      $        (1.51)
     Diluted................................................................      $        (1.51)

</TABLE>

         The fair value of these options was estimated at the date of grant
using the Black-Sholes option-pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>

                                                                                    YEAR ENDED
                                                                                 DECEMBER 31, 2001
                                                                            ----------------------------

<S>                                                                                        <C>
Risk-free interest rate.....................................................               5.500%
Dividend yield..............................................................               0.000%
Volatility factor...........................................................               0.001%
Expected life of options in years...........................................                10.0

</TABLE>



                                       63
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


17.      INCOME TAXES

         The (benefit) provision for income taxes is as follows:

<TABLE>
<CAPTION>

                                                                YEAR ENDED DECEMBER 31,
                                                     -----------------------------------------------
                                                          1999            2000            2001
                                                     --------------- --------------- ---------------
                                                               (IN THOUSANDS OF DOLLARS)
<S>                                                    <C>             <C>             <C>
Current:
   Federal...........................................  $    3,335      $    2,418      $       --
   State.............................................         898             775           1,607
                                                       ----------      ----------      ----------
                                                            4,233           3,193           1,607
                                                       ----------      ----------      ----------
Deferred:
   Federal...........................................      (3,047)         (8,285)         (8,447)
   State.............................................        (104)          1,004             391
                                                       ----------      ----------      ----------
                                                           (3,151)         (7,281)         (8,056)
                                                       ----------      ----------      -----------

        Total........................................  $    1,082      $   (4,088)     $   (6,449)
                                                       ==========      ==========      ===========

</TABLE>

         The difference between taxes calculated at the U. S. federal statutory
tax rate of 35% and our total income tax provision is as follows:

<TABLE>
<CAPTION>

                                                                    YEAR ENDED DECEMBER 31,
                                                         ----------------------------------------------
                                                              1999            2000            2001
                                                         ---------------  ------------   --------------
                                                                   (IN THOUSANDS OF DOLLARS)
<S>                                                        <C>             <C>            <C>

U.S. federal statutory rate applied to income before
   taxes and extraordinary items.........................  $     413       $  (9,801)     $  (5,702)
State income taxes, net of federal income tax benefit....        518           1,508          1,450
Non-deductible meals and entertainment...................        336             132            172
Non-deductible amortization..............................        140             240            240
Non-deductible merger and recapitalization expenses......          -           3,745         (2,212)
Benefit of tax credits...................................       (377)           (423)          (569)
Other - net..............................................         52             511            172
                                                           ---------       ---------      ---------

        Total............................................  $   1,082       $  (4,088)     $  (6,449)
                                                           =========       =========      ==========

</TABLE>

         For 2000, income tax benefits of $7,110,000 allocated to the
extraordinary loss of $20,910,000 differ from the amount calculated at the
federal statutory rate of 35% by $209,000. This difference is due to graduated
tax rates.




                                       64
<PAGE>


                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


     Deferred income tax assets and liabilities resulted from the following

<TABLE>
<CAPTION>

                                                                            DECEMBER 31,
                                                                   -------------------------------
                                                                        2000            2001
                                                                   --------------- ---------------
                                                                     (IN THOUSANDS OF DOLLARS)
<S>                                                                  <C>             <C>
Deferred tax assets:
   Accounts receivable.............................................  $    2,191      $    1,330
   Inventory.......................................................         498             337
   Intangible assets...............................................      10,896           9,424
   Deferred revenues...............................................       1,649             749
   Minimum tax credit..............................................       5,304           5,304
   Net operating loss carryforward (expiring 2020-2021)............      13,909          28,657
   General business credits (expiring 2009-2021)...................       2,909           4,047
   Fair value of derivative instruments............................           -             990
   Other accrued liabilities.......................................       6,411           4,899
                                                                     ----------      ----------

        Total deferred tax assets..................................      43,767          55,737
                                                                     ----------      ----------
Deferred tax liabilities:
   Property and equipment..........................................     (31,713)        (33,636)
                                                                     ----------      -----------

        Total deferred tax liabilities.............................     (31,713)        (33,636)
                                                                     ----------      -----------

        Net deferred tax assets....................................  $   12,054      $   22,101
                                                                     ==========      ==========

</TABLE>

         At December 31, 2001, we had available to us a net operating loss
carryforward of approximately $84,286,000 that consisted of $49,335,000
generated in 2000 that expires in 2020 and $34,951,000 generated in 2001 that
expires in 2021. Internal Revenue Code Section 382 restricts our ability to
utilize in the future the net operating loss that we generated in 2000 because
of the change of control we experienced as a result of our merger and
recapitalization transaction in November 2000. The amount of net operating loss
we can utilize will be limited to approximately $12,000,000 per year and unused
amounts of the annual Section 382 limitation can be carried forward to
subsequent years within the carryforward period. As none of the 2000 net
operating loss was utilized in 2001, usage of the net operating loss generated
in 2000 will be limited to approximately $24,000,000 for 2002. Usage of the net
operating loss generated in 2001 is unlimited. Realization of our net deferred
tax assets is dependent on future taxable income. We believe it is more likely
than not such net deferred tax assets will be realized and, accordingly, we have
not recognized a valuation allowance with respect to our net deferred tax
assets. Most of our net operating loss carryforwards were generated as a result
of our merger and recapitalization transactions in November 2000. The remainder
of our net operating loss carryforwards result largely from depreciation and
interest deductions and the trends for these items relative to operating income
are expected to decline, enabling us to generate sufficient taxable income to
utilize net operating loss carryforwards. The level of tax depreciation on our
significant capital investments in 1993 and 1997 through 1999 will begin to
diminish in 2002 and our level of capital investment in 2001 and future years as
compared to prior years has been, and will be, reduced. The relative level of
interest expense to operating income should diminish as the capital projects
completed in 1999 through 2001 continue to mature and produce greater amounts of
taxable income while our debt levels decrease or hold relatively steady,
enabling us to keep our interest expense relatively constant or growing at a
slower rate than operating income. Further, we could complete a sale/leaseback
of certain of our travel centers. Although we would not ordinarily execute this
tax planning strategy, we would do so to prevent our net operating loss
carryforwards from expiring unused. The sale/leaseback would be expected to
generate a sufficient taxable gain in



                                       65
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


the year consummated to fully utilize any expiring unused net operating loss
carryforwards and could be expected to increase our taxable income in subsequent
years as lower interest expense and depreciation deductions would, in all
likelihood, more than offset the additional operating lease expense. However,
ultimate realization of our net deferred tax assets could be negatively affected
by market conditions and other variables not known or anticipated at this time.

         Our tax returns for 1998 through 2001 are subject to examination by the
Internal Revenue Service and state tax authorities. An audit by the Internal
Revenue Services of our federal tax returns for 1998 through 2000 is currently
nearing completion and is not expected to result in a material amount of
adjustments to our income tax liability. We believe we have made adequate
provision for income taxes and interest that may become payable for years not
yet examined.

18.      RELATED PARTY TRANSACTIONS

         We lease one of our travel centers from a realty company owned by two
individuals, one of whom was a stockholder and director of ours during portions
of 1999 and 2000. This lease relationship commenced during 1999 and total rent
expenses related to this lease for the years ended December 31, 1999 and 2000
were $263,000 and $450,000, respectively.

         During 1999 and 2000 certain of our former shareholders were paid fees
aggregating $250,000 and $1,250,000, respectively as consideration for their
financial advisory services provided in completing the Burns Bros. acquisition,
the 1998 Refinancing, the Travel Ports acquisition and the merger and
recapitalization transactions. In addition, during 2000, Oak Hill and the Other
Investors were paid fees aggregating $8,310,000 as consideration for their
financial advisory services and other services provided as part of the merger
and recapitalization transactions, including the related debt and equity
financing transactions.

         During the years ended December 31, 2000 and 2001, we made purchases of
diesel fuel in the amount of $200,190,000 and $201,291,000, respectively, from a
company in which we have a minority investment and made sales of diesel fuel in
the amount of $16,622,000 and $12,742,000, respectively, to this affiliate. Such
purchases and sales are believed to be made on the same basis as any other
unrelated party. We also lease a travel center from this affiliate. Rent expense
related to this site for the years ended December 31, 2000 and 2001 was $335,000
and $408,000, respectively. At December 31, 2000 and 2001, our receivables from
this affiliate were $1,015,000 and $789,000, respectively, while our payables to
this affiliate were $3,001,000 and $944,000, respectively.

         Certain members of our senior management have purchased common stock
pursuant to management subscription agreements (see Note 16 - Repurchase
Rights). As a result of such purchases, we have notes and related interest
receivable from the management stockholders totaling $1,200,000 and $1,310,000
at December 31, 2000 and 2001, respectively.




                                       66
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


19.      COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

         We have entered into lease agreements covering certain of our travel
center locations, warehouse and office space, computer and office equipment and
vehicles. Most long-term leases include renewal options, escalation clauses and,
in certain cases, purchase options. Future minimum lease payments required under
operating leases that have remaining noncancelable lease terms in excess of one
year, as of December 31, 2001, were as follows:


                                                        MINIMUM LEASE PAYMENTS
        YEAR ENDING                                     ----------------------
        DECEMBER 31,                                   (IN THOUSANDS OF DOLLARS)
        ------------
2002.....................................................   $      19,177
2003.....................................................          17,169
2004.....................................................          16,354
2005.....................................................          15,609
2006.....................................................          69,724
Thereafter...............................................          81,650
                                                            -------------
                                                            $     219,683
                                                            =============

         We are party to a $72,000,000 master lease agreement under which we
will finance by mid-2002 the construction of eight travel centers on land we
own. As of December 31, 2001, $63,720,000 has been used in the construction of
seven travel centers that had been completed by December 31,2001. The initial
term of this master lease agreement expires in September 2006, at which time, if
the lease is not renewed and extended, we have the option to either purchase the
improvements for an amount equal to the sum of (a) the outstanding indebtedness
of the lessor and (b) the equity capital balance, or to make a termination
payment to the lessor and abandon the travel centers. We estimate that, at that
time, the cost to acquire the leased assets would be approximately $58,076,000,
while the termination payment would equal approximately $43,993,000.

ENVIRONMENTAL MATTERS

         Our operations and properties are extensively regulated through
environmental laws and regulations ("Environmental Laws") that (1) govern
operations that may have adverse environmental effects, such as discharges to
air, soil and water, as well as the management of petroleum products and other
hazardous substances ("Hazardous Substances") or (2) impose liability for the
costs of cleaning up sites affected by, and for damages resulting from, disposal
or other releases of Hazardous Substances.

         We own and use underground storage tanks and aboveground storage tanks
to store petroleum products and waste at our facilities. We must comply with
requirements of Environmental Laws regarding tank construction, integrity
testing, leak detection and monitoring, overfill and spill control, release
reporting, financial assurance and corrective action in case of a release from a
storage tank into the environment. At some locations, we must also comply with
Environmental Laws relating to vapor recovery and discharges to water. We
believe that all of our travel centers are in material compliance with
applicable requirements of Environmental Laws. While the costs of compliance for
these matters have not had a material adverse impact on us, it is impossible to
predict accurately the ultimate effect changing laws and regulations may have on
us in the future. We incurred capital expenditures, maintenance, remediation and
other environmental related costs of approximately $2,635,000, $3,363,000 and
$3,222,000 in 1999, 2000 and 2001, respectively.



                                       67
<PAGE>


                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         We have received notices of alleged violations of Environmental Laws,
or are otherwise aware of the need to undertake corrective actions to comply
with Environmental Laws, at company-owned travel centers in a number of
jurisdictions. We do not expect that any financial penalties associated with
these alleged violations or instances of noncompliance, or compliance costs
incurred in connection therewith, will be material to our results of operation
or financial condition. We are conducting investigatory and/or remedial actions
with respect to releases and/or spills of Hazardous Substances at a number of
sites. While we cannot precisely estimate the ultimate costs we will incur in
connection with the investigation and remediation of these matters, based on our
current knowledge, we do not expect that the costs to be incurred for these
matters, individually or in the aggregate, will be material to our results of
operation or financial condition. While the aforementioned matters are, to the
best of our knowledge, the only proceedings for which we are currently exposed
to potential liability (particularly given the Unocal and BP indemnities
discussed below), there can be no assurance that additional contamination does
not exist at these or other of our properties, or that material liability will
not be imposed in the future. If additional environmental problems arise or are
discovered, or if additional environmental requirements are imposed by
government agencies, increased environmental compliance or remediation
expenditures may be required, which could have a material adverse effect on us.
As of December 31, 2001, we had a reserve for these matters of $4,153,000. We
expect that the cash outlays related to the matters for which we have accrued
this reserve will be paid out over a period of several years. While it is not
possible to quantify with certainty the environmental exposure, in our opinion
the potential liability, beyond that considered in the reserve, for all
proceedings, based on information known to date, will not have a material
adverse effect on our financial condition, results of operations or liquidity.
However, it is reasonably possible that a material change in estimate will occur
in the near term as new matters, or new facts regarding established matters, are
identified and/or as Environmental Laws and other requirements of government
agencies continue to evolve.

         In connection with the acquisitions of the Unocal network, Phase I
environmental assessments were conducted of the 97 Unocal network properties
purchased by us. Pursuant to an agreement with Unocal, Phase II environmental
assessments of all Unocal network properties were completed by Unocal by
December 31, 1998. Under the terms of this agreement, Unocal is responsible for
all costs incurred for (a) remediation of environmental contamination, and (b)
otherwise bringing the properties into compliance with Environmental Laws as in
effect at the date of the acquisition of the Unocal network, with respect to the
matters identified in the Phase I or Phase II environmental assessments, which
matters existed on or prior to the date of the acquisition of the Unocal
network. Under the terms of this agreement, Unocal must also indemnify us
against any other environmental liabilities that arise out of conditions at, or
ownership or operations of, the Unocal network prior to the date of the
acquisition of the Unocal network. The remediation must achieve compliance with
the Environmental Laws in effect on the date the remediation is completed. We
must make claims for indemnification prior to April 14, 2004. Except as
described above, Unocal does not have any responsibility for any environmental
liabilities arising out of the ownership or operations of the Unocal network
after the date of the acquisition of the Unocal network. We cannot assure you
that Unocal, if additional environmental claims or liabilities were to arise
under the agreement with Unocal, would not dispute our claims for
indemnification.

         Prior to the acquisition of the BP network, all of the 38 company-owned
locations purchased by us were subject to Phase I and Phase II environmental
assessments, undertaken at BP's expense. The environmental agreement with BP
provides that, with respect to environmental contamination or noncompliance with
Environmental Laws identified in the Phase I or Phase II environmental
assessments, BP is responsible for (a) all costs incurred for remediation of
such environmental contamination, and (b) for otherwise bringing the properties
into compliance with Environmental Laws as in effect at the date of the
acquisition of the BP network.

         The remediation must achieve compliance with the Environmental Laws in
effect on the date the remedial action is completed. The environmental agreement
with BP requires BP to indemnify us against any other environmental liabilities
that arise out of conditions at, or ownership or operations of, the BP network
locations prior to the date of the acquisitions of the BP network. We must make
such claims for indemnification before December 11, 2004. BP must also indemnify
us for liabilities relating to non-compliance with Environmental Laws for which






                                       68
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


claims were made before December 11, 1996. Except as described above, BP does
not have any responsibility for any environmental liabilities arising out of the
ownership or operations of the BP network after the date of the acquisition of
the BP network. There can be no assurance that BP, if additional environmental
claims or liabilities were to arise under the environmental agreement with BP,
would not dispute our claims for indemnification thereunder.

         In connection with the Burns Bros. acquisition, all of the 17 sites
acquired were subject to Phase I environmental assessments, and, based on the
results of those assessments, nine of the sites were subject to Phase II
environmental assessments. The purchase price paid to Burns was adjusted based
on the findings of the Phase I and Phase II environmental assessments. Under the
asset purchase agreement with Burns Bros., we released Burns Bros. from any
environmental liabilities that may have existed as of the Burns Bros.
acquisition date, other than specified non-waived environmental claims as
described in the agreement with Burns Bros.

         In connection with the Travel Ports acquisition, all of the 16 sites
acquired were subject to Phase I environmental assessments, and, based on the
results of those assessments, five of the sites were subject to Phase II
environmental assessments. The results of these assessments were taken into
account in recognizing the related environmental contingency accrual for
purchase accounting purposes.

PENDING LITIGATION

         We are involved from time to time in various legal and administrative
proceedings and threatened legal and administrative proceedings incidental to
the ordinary course of our business. We believe we are currently not involved in
any litigation, individually or in the aggregate, which could have a material
adverse effect on our business, financial condition, results of operations or
cash flows.

20.      DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

         We attempt to manage the risk arising from changes in interest rates by
using derivative financial instruments such as interest rate swaps. On November
14, 2000, we entered into an interest rate swap agreement with a notional
principal amount of $80,000,000 to exchange our variable rate of LIBOR plus
3.25% with a fixed interest rate of 6.0875%.

         On January 1, 2001, we adopted FAS 133, as amended. To qualify for
hedge accounting, derivative contracts must meet defined correlation and
effectiveness criteria, be designated as hedges and result in cash flows and
financial statement effects which substantially offset those of the position
being hedged. Amounts receivable or payable under derivative financial
instrument contracts, when recognized, are reported in our consolidated balance
sheet. Pursuant to the provisions of FAS 133, we have determined that the
interest rate swap agreement is 100% effective and qualifies for cash flow hedge
accounting.

         The fair value of the interest rate swap at the time of transition
resulted in a reduction of accumulated other comprehensive income of $343,000
(net of tax), which was recorded as the cumulative effect of an accounting
change in the first quarter of 2001. In addition, the decline in the fair value
of the swap agreement for the year ended December 31, 2001, based on bank-quoted
market prices, resulted in the recognition of a further decrease in other
comprehensive income of $1,577,000 (net of tax), and a liability of $2,911,000
as of December 31, 2001.




                                       69
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


21.      OPERATING LEASES AS A LESSOR

         Twenty-six of the travel centers we owned during the year ended
December 31, 2001 were leased to franchisees under operating lease agreements.
At December 31, 2001, we had such lease arrangements in place at 25 of our
sites. One of these travel centers was sold to the lessee in January 2001. An
additional two of these leases were mutually terminated through February 28,
2002, and, as a result, these sites were converted to company-operated sites.
These cancelable lease arrangements generally have initial terms of five years
with five renewal terms of three years each. Our new form of lease agreement,
which we intend to begin offering to our franchisees in 2002, provides for an
initial term of 10 years with two renewal terms of five years each. Rent revenue
from such operating lease arrangements totaled $13,023,000, $11,808,000 and
$10,981,000 for the years ended December 31, 1999, 2000 and 2001, respectively.
At December 31, 2001, the cost and accumulated depreciation of the assets
covered by these lease agreements was $71,407,000 and $31,532,000, respectively.

22.      OTHER INFORMATION

<TABLE>
<CAPTION>

                                                                                  YEAR ENDED DECEMBER 31,
                                                                       ----------------------------------------------
                                                                            1999            2000           2001
                                                                       --------------- ------------------------------
                                                                                 (IN THOUSANDS OF DOLLARS)
<S>                                                                      <C>             <C>            <C>
         Operating expenses and Selling, general and administrative expenses
            include the following:
            Rent expense under operating leases........................  $    9,576      $   17,986     $   21,197
            Repairs and maintenance expenses...........................  $   11,008      $    7,863     $   12,596
            Advertising expenses.......................................  $   10,106      $    9,262     $    6,676
            Taxes other than payroll and income taxes..................  $    5,817      $    5,580     $    6,480

         Interest and other financial costs consists of the following:
            Cash interest expense......................................  $  (38,838)     $  (45,712)    $  (54,206)
            Cash interest income.......................................       1,750             260            120
            Amortization of discount on debt...........................        (106)           (234)        (1,112)
            Amortization of deferred financing costs...................      (1,349)         (1,457)        (2,620)
                                                                         -----------     -----------    -----------
            Interest and other financial costs, net....................  $  (38,543)     $  (47,143)    $  (57,818)
                                                                         ==========      ==========     ===========

</TABLE>



                                       70
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


23.        SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>

                                                                                  YEAR ENDED DECEMBER 31,
                                                                       ----------------------------------------------
                                                                            1999            2000           2001
                                                                       --------------- ------------------------------
                                                                                 (IN THOUSANDS OF DOLLARS)

<S>                                                                     <C>             <C>            <C>
         Revolving loan borrowings..................................... $    75,500     $   364,800    $   669,600
         Revolving loan repayments.....................................     (60,500)       (339,500)      (666,000)
                                                                        -----------     -----------    -----------
            Revolving loan borrowings (repayments), net................ $    15,000     $    25,300    $     3,600
                                                                        ===========     ===========    ===========

         Cash paid during the year for:
            Interest................................................... $    36,951     $    43,507    $    57,830
            Income taxes (net of refunds).............................. $     3,386     $     1,931    $    (4,356)

         Inventory, property and equipment, and treasury
            stock received in liquidation of trade
            accounts and notes receivable.............................. $       170     $       646    $         -
         Notes received from sales of property and equipment........... $     2,650     $       340    $         -
         Notes received upon common stock issuance..................... $        77     $        37    $        39

</TABLE>

         In 1999, we issued $2,808,000 of common stock as part of the
consideration for the Travel Ports acquisition. In 2000, we assumed a note
payable for $549,000 as part of the consideration in acquiring a travel center
business and we recognized a receivable of $2,088,000 upon the sale of a travel
center for the cash proceeds we did not receive from an escrow account until
2001.

24.      CONDENSED CONSOLIDATING FINANCIAL STATEMENT SCHEDULES

         The following schedules set forth our condensed consolidating balance
sheet schedules as of December 31, 2000 and 2001 and our condensed consolidating
statement of operations schedules and condensed consolidating statement of cash
flows schedules for the years ended December 31, 1999, 2000 and 2001. In the
following schedules, "Parent Company" refers to the unconsolidated balances of
TravelCenters of America, Inc., "Guarantor Subsidiaries" refers to the combined
unconsolidated balances of TA Operating Corporation and its subsidiaries and
National Auto/Truckstops, Inc. (until its merger into TA Operating Corporation
on November 14, 2000), and "Nonguarantor Subsidiary" refers to the balances of
TA Franchise Systems Inc. "Eliminations" represent the adjustments necessary to
(a) eliminate intercompany transactions and (b) eliminate our investments in our
subsidiaries.

         The Guarantor Subsidiaries, (TA Operating Corporation, National
Auto/Truckstops, Inc. (until its merger into TA Operating Corporation on
November 14, 2000), TA Licensing, Inc., TA Travel, L.L.C., TravelCenters Realty,
Inc. and TravelCenters Properties, L.P.), are direct or indirect wholly-owned
subsidiaries of ours and have fully and unconditionally, jointly and severally,
guaranteed our indebtedness.



                                       71
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


CONDENSED CONSOLIDATING BALANCE SHEET SCHEDULES:

<TABLE>
<CAPTION>

                                                                         DECEMBER 31, 2000
                                            -----------------------------------------------------------------------------
                                                PARENT       GUARANTOR      NONGUARANTOR
                                               COMPANY      SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                            ------------------------------ ------------------------------ ---------------
                                                                     (IN THOUSANDS OF DOLLARS)
<S>                                           <C>            <C>             <C>           <C>              <C>
 ASSETS
 Current assets:
    Cash..................................    $       --     $   29,019      $       --    $        --      $   29,019
    Accounts receivable, net..............            --         81,015           1,366           (993)         81,388
    Inventories...........................            --         61,772              --             --          61,772
    Deferred income taxes.................            --          7,288              --             --           7,288
    Other current assets..................         6,114          9,349             128         (2,090)         13,501
                                              ----------     ----------      ----------    -----------      ----------

         Total current assets.............         6,114        188,443           1,494         (3,083)        192,968
 Property and equipment, net..............            --        465,633              --             --         465,633
 Intangible assets........................            --         27,079              --             --          27,079
 Deferred financing costs.................        32,662             --              --             --          32,662
 Deferred income taxes....................        12,833         (4,900)             --             --           7,933
 Other noncurrent assets................             827          7,953              --             --          8,780
 Investment in subsidiaries...............       220,579             --              --       (220,579)            --
                                              ----------     ----------      ----------    -----------      ----------

         Total assets.....................    $  273,015     $  684,208      $    1,494    $  (223,662)     $  735,055
                                              ==========     ==========      ==========    ===========      ==========

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
    Current maturities of long-term debt..    $       --     $      123      $       --    $        --      $      123
    Accounts payable......................            --         82,615             229             --          82,844
    Other accrued liabilities.............         8,730         64,544           1,083         (3,083)         71,274
                                              ----------     ----------      ----------    -----------      ----------

         Total current liabilities........         8,730        147,282           1,312         (3,083)        154,241
 Long-term debt (net of unamortized
    discount).............................       544,788          2,819              --             --         547,607
 Deferred income taxes....................            --          3,167              --             --           3,167
 Intercompany advances....................      (306,382)       311,263          (4,881)            --               -
 Other noncurrent liabilities.............            --          5,416              --             --           5,416
                                              ----------     ----------      ----------    -----------      ----------

         Total liabilities................       247,136        469,947          (3,569)        (3,083)        710,431

 Redeemable equity........................           527            --               --             --             527
 Nonredeemable stockholders' equity:
    Common stock and other stockholders' equity  217,098        192,335              --       (193,590)        215,843
    Retained earnings (accumulated deficit)     (191,746)        21,926           5,063        (26,989)       (191,746)
                                              ----------     ----------      ----------    -----------      ----------

         Total nonredeemable  stockholders'
            equity........................        25,352        214,261           5,063       (220,579)         24,097
                                                  ------       ---------      ----------    -----------      ----------

         Total liabilities and
            stockholders' equity..........    $  273,015     $  684,208      $    1,494    $  (223,662)      $ 735,055
                                              ==========     ==========      ==========    ===========       =========


</TABLE>



                                       72
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                         DECEMBER 31, 2001
                                            -----------------------------------------------------------------------------
                                                PARENT       GUARANTOR      NONGUARANTOR
                                               COMPANY      SUBSIDIARIES     SUBSIDIARY    ELIMINATIONS    CONSOLIDATED
                                               -------      ------------     ----------    ------------    ------------
                                                                     (IN THOUSANDS OF DOLLARS)
<S>                                           <C>            <C>             <C>           <C>              <C>
 ASSETS
 Current assets:
    Cash..................................    $       --     $   19,888      $       --    $        --      $   19,888
    Accounts receivable, net..............            --         43,820           1,160         (1,124)         43,856
    Inventories...........................            --         57,419              --             --          57,419
    Deferred income taxes.................            --          4,997              47             --           5,044
    Other current assets..................           622          7,499              --             --           8,121
                                              ----------     ----------      ----------    -----------      ----------

         Total current assets.............           622        133,623           1,207         (1,124)        134,328
 Property and equipment, net..............            --        461,167              --             --         461,167
 Intangible assets........................            --         23,561              --             --          23,561
 Deferred financing costs.................        30,202             --              --             --         30,202
 Deferred income taxes....................        28,571         (8,663)             --             --          19,908
 Other noncurrent assets................           1,249          9,441              --             --          10,690
 Investment in subsidiaries...............       226,137             --              --       (226,137)             --
                                              ----------     ----------      ----------    ------------     ----------

         Total assets.....................    $  286,781     $  619,129      $    1,207    $  (227,261)     $  679,856
                                              ==========     ==========      ==========    ============     ==========

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
    Current maturities of long-term debt..    $    3,280     $      129      $       --    $        --      $    3,409
    Accounts payable......................             -         60,269             160             --          60,429
    Other accrued liabilities.............         2,605         40,818           1,242         (1,124)         43,541
                                              ----------     ----------      ----------    ------------     ----------

         Total current liabilities........         5,885        101,216           1,402         (1,124)        107,379
 Long-term debt (net of unamortized
    discount).............................       546,110          2,759              --              --         548,869
 Deferred income taxes....................            --          2,851              --              --           2,851
 Intercompany advances....................      (282,279)       287,346          (5,067)             --              --
 Other noncurrent liabilities.............         2,911          4,946              --              --           7,857
                                              ----------     ----------      ----------    -----------      ----------

         Total liabilities................       272,627        399,118          (3,665)        (1,124)        666,956

 Redeemable equity........................           565             --              --             --             565
 Nonredeemable stockholders' equity:
    Common stock and other stockholders'
      equity..............................       215,177        192,335              --       (193,589)        213,923
    Retained earnings (accumulated deficit)     (201,588)        27,676           4,872        (32,548)       (201,588)
                                              -----------    ----------      ----------    ------------     -----------

         Total nonredeemable stockholders'
            equity........................        13,589        220,011           4,872       (226,137)         12,335
                                              ----------     ----------      ----------    ------------     ----------

         Total liabilities, redeemable
            equity and nonredeemable
            stockholders' equity..........    $  286,781     $  619,129      $    1,207    $  (227,261)     $  679,856
                                              ==========     ==========      ==========    ============     ==========
</TABLE>



                                       73
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS SCHEDULES:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31, 1999
                                            -------------------------------------------------------------------------------
                                               PARENT         GUARANTOR     NONGUARANTOR
                                               COMPANY       SUBSIDIARIES    SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                               -------       ------------    ----------     ------------    ------------
                                                                      (IN THOUSANDS OF DOLLARS)
<S>                                            <C>             <C>             <C>            <C>                <C>
 Revenues:
    Fuel...................................   $       --     $   955,105      $       --     $       --     $    955,105
    Non-fuel...............................           --         477,786           1,476           (203)         479,059
    Rent and royalties.....................           --          33,775           7,326        (20,641)          20,460
                                              ----------     -----------      ----------     ----------     ------------

    Total revenues.........................           --       1,466,666           8,802        (20,844)       1,454,624
 Cost of goods sold  (excluding
    depreciation)..........................           --       1,051,080              --             --        1,051,080
                                              ----------       ---------      ----------     ----------     ------------

 Gross profit (excluding depreciation).....           --         415,586           8,802        (20,844)         403,544

 Operating expenses........................           --         287,267             481        (20,641)         267,107
 Selling, general and
     administrative expenses...............          806          32,099           5,759           (203)          38,461
 Transition expense........................           --           3,952              --             --            3,952
 Depreciation and amortization expense.....           --          51,853              --             --           51,853
 (Gain) loss on sale of property and
    equipment..............................           --          (2,615)             --             --           (2,615)
 Stock compensation expense................           --           5,062              --             --            5,062
                                              ----------     -----------      ----------     ----------     ------------

 Income (loss) from operations.............         (806)         37,968           2,562              -           39,724
 Interest and other financial costs, net...       (1,349)        (37,191)             (3)             -          (38,543)
 Equity income (loss)......................        1,318              --              --         (1,318)              --
                                              ----------     -----------      ----------     ----------     ------------
 (Loss) income before income taxes.........         (837)            777           2,559         (1,318)           1,181
 (Benefit) provision for income taxes......         (936)          1,068             950             --            1,082
                                              ----------     -----------      ----------     ----------     ------------

 Net (loss) income.........................           99            (291)          1,609         (1,318)              99

 Less: preferred dividends accretion.......       (9,765)             --              --             --           (9,765)
 Less: intercompany dividends..............           --          (1,375)             --          1,375               --
                                              ----------     -----------      ----------     ----------     ------------
 Income (loss) available to common
    stockholders...........................   $   (9,666)    $    (1,666)     $    1,609     $       57     $     (9,666)
                                              ==========     ===========      ==========     ==========     ============


</TABLE>



                                       74
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                     YEAR ENDED DECEMBER 31, 2000
                                            -------------------------------------------------------------------------------
                                               PARENT         GUARANTOR     NONGUARANTOR
                                               COMPANY       SUBSIDIARIES    SUBSIDIARY     ELIMINATIONS     CONSOLIDATED
                                               -------       ------------    ----------     ------------     ------------
                                                                      (IN THOUSANDS OF DOLLARS)
<S>                                           <C>            <C>              <C>            <C>            <C>
 Revenues:
    Fuel...................................   $       --     $ 1,485,732      $       --     $       --     $  1,485,732
    Non-fuel...............................           --         555,491              --             --          555,491
    Rent and royalties.....................           --          16,447           7,014         (4,639)          18,822
                                              ----------     -----------      ----------     ----------     ------------

    Total revenues.........................           --       2,057,670           7,014         (4,639)       2,060,045
 Cost of goods sold  (excluding
    depreciation)..........................           --       1,611,320              --             --        1,611,320
                                              ----------     -----------      ----------     ----------     ------------

 Gross profit (excluding depreciation).....           --         446,350           7,014         (4,639)         448,725

 Operating expenses........................           --         308,390           4,729         (4,639)         308,480
 Selling, general and
     administrative expenses...............          607          31,689           5,864             --           38,160
 Transition expense........................           --             996              --             --              996
 Merger and recapitalization expenses......       22,004              --              --             --           22,004
 Depreciation and amortization expense.....           --          62,768              --             --           62,768
 (Gain) loss on sale of property and
    equipment..............................           --          (1,462)             --             --           (1,462)
 Stock compensation expense (benefit)......           --          (1,362)             --             --           (1,362)
                                              ----------     -----------      ----------     ----------     ------------

 Income (loss) from operations.............      (22,611)         45,331          (3,579)            --           19,141
 Interest and other financial costs, net...      (11,069)        (36,071)             (3)            --          (47,143)
 Equity income (loss)......................      (11,471)             --              --         11,471               --
                                              ----------     -----------      ----------     ----------     ------------
 (Loss) income before income taxes and
    extraordinary item.....................      (45,151)          9,260          (3,582)        11,471          (28,002)
 (Benefit) provision for income taxes......       (7,603)          4,778          (1,263)            --           (4,088)
                                              ----------     -----------      ----------     ----------     ------------

 (Loss) income before extraordinary item...      (37,548)          4,482          (2,319)        11,471          (23,914)
 Extraordinary loss (less applicable income
    tax benefit)...........................      (13,800)             --              --             --          (13,800)
                                              ----------     -----------      ----------     ----------     ------------
 Net (loss) income.........................      (51,348)          4,482          (2,319)        11,471          (37,714)

 Less: preferred dividends accretion.......       (8,255)             --              --             --           (8,255)
                                              ----------     -----------      ----------     ----------     ------------
 Income (loss) available to common
    stockholders...........................   $  (59,603)    $     4,482      $   (2,319)    $   11,471     $    (45,969)
                                              ==========     ===========      ==========     ==========     ============


</TABLE>



                                       75
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                  YEAR ENDED DECEMBER 31, 2001
                                            --------------------------------------------------------------------------
                                               PARENT         GUARANTOR     NONGUARANTOR
                                               COMPANY       SUBSIDIARIES    SUBSIDIARY     ELIMINATIONS     CONSOLIDATED
                                               -------       ------------    ----------     ------------     ------------
                                                                    (IN THOUSANDS OF DOLLARS)
<S>                                           <C>          <C>              <C>             <C>              <C>

 Revenues:
    Fuel...................................   $       --   $  1,331,807     $       --      $       --       $  1,331,807
    Non-fuel...............................           --        585,717             --              --            585,717
    Rent and royalties.....................           --         15,395          6,510          (4,414)            17,491
                                              ----------     ----------     ----------      -----------        ----------

    Total revenues.........................           --      1,932,919          6,510          (4,414)         1,935,015
 Cost of goods sold  (excluding
    depreciation)..........................           --      1,467,753             --              --          1,467,753
                                              ----------     ----------     ----------      ----------         ----------

 Gross profit (excluding depreciation).....           --        465,166          6,510          (4,414)           467,262

 Operating expenses........................           --        325,676          4,474          (4,414)           325,736
 Selling, general and
     administrative expenses...............          609         35,288          2,382              --             38,279
 Depreciation and amortization expense.....           --         63,508             --              --             63,508
 (Gain) loss on sale of property and
    equipment..............................           --         (1,788)            --              --             (1,788)
                                              ----------     ----------     ----------      ----------        -----------

 Income (loss) from operations.............         (609)        42,482           (346)             --             41,527
 Interest and other financial costs, net...      (25,338)       (32,480)            --              --            (57,818)
 Equity income (loss)......................        5,559             --             --          (5,559)                --
                                              ----------     ----------     ----------      -----------       -----------
 (Loss) income before income taxes.........      (20,388)        10,002           (346)         (5,559)           (16,291)
 (Benefit) provision for income taxes......      (10,546)         4,252           (155)             --             (6,449)
                                              -----------    ----------     -----------     ----------        -----------

 Net (loss) income.........................   $   (9,842)    $    5,750     $     (191)     $   (5,559)       $    (9,842)
                                              ==========     ==========     ===========     ===========       ===========


</TABLE>


                                       76
<PAGE>


                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS SCHEDULES:

<TABLE>
<CAPTION>

                                                                 YEAR ENDED DECEMBER 31, 1999
                                           -------------------------------------------------------------------------
                                              PARENT         GUARANTOR     NONGUARANTOR
                                              COMPANY       SUBSIDIARIES    SUBSIDIARY     ELIMINATIONS     CONSOLIDATED
                                              -------       ------------    ----------     ------------     ------------
                                                                  (IN THOUSANDS OF DOLLARS)

<S>                                          <C>            <C>            <C>           <C>            <C>
 CASH FLOWS (USED IN) PROVIDED BY
    OPERATING ACTIVITIES:                    $    6,780     $   37,932     $       --       $       --       $   44,712
                                             ----------     ----------     ----------       ----------       ----------


 CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions.................           --        (57,762)            --               --          (57,762)
    Proceeds from sales of property and
       equipment..........................           --          9,147             --               --            9,147
    Capital expenditures..................           --        (87,401)            --               --          (87,401)
                                             ----------     ----------     ----------       ----------       ----------

       Net cash used in investing
         activities                                  --       (136,016)            --               --         (136,016)
                                             ----------     ----------     ----------       ----------       ----------

 CASH FLOWS FROM FINANCING ACTIVITIES:
    Revolving loan borrowings
       (repayments), net..................       15,000             --             --               --           15,000
    Long-term debt repayments.............       (1,446)          (148)            --               --           (1,594)
    Proceeds from issuance of common
       stock............................          6,738             --             --               --            6,738
    Intercompany advances...............        (86,737)        86,737             --               --               --
                                             ----------     ----------     ----------       ----------       ----------

       Net cash (used in) provided by
         financing activities.............      (66,445)        86,589             --               --           20,144
                                             ----------     ----------     ----------       ----------       ----------

         Net increase (decrease) in cash..      (59,665)       (11,495)            --               --          (71,160)

 Cash at the beginning of the year........       59,665         29,535             --               --           89,200
                                             ----------     ----------     ----------       ----------       ----------

 Cash at the end of the year..............   $        -     $   18,040     $       --       $       --       $   18,040
                                             ==========     ==========     ==========       ==========       ==========

</TABLE>



                                       77
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                 YEAR ENDED DECEMBER 31, 2000
                                           -------------------------------------------------------------------------
                                                PARENT       GUARANTOR     NONGUARANTOR
                                                COMPANY     SUBSIDIARIES    SUBSIDIARY     ELIMINATIONS     CONSOLIDATED
                                                -------     ------------    ----------     ------------     ------------
                                                                  (IN THOUSANDS OF DOLLARS)

<S>                                          <C>            <C>            <C>           <C>            <C>
 CASH FLOWS (USED IN) PROVIDED BY
    OPERATING ACTIVITIES:                    $  (26,962)    $   92,914     $       --      $       --       $   65,952
                                             ----------     ----------     ----------      ----------       ----------


 CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions.................           --         (9,675)            --              --           (9,675)
    Proceeds from sales of property and
       equipment..........................           --            667             --              --              667
    Capital expenditures..................           --        (68,107)            --              --          (68,107)
                                             ----------     ----------     ----------      ----------       ----------

       Net cash used in investing
         activities.......................           --        (77,115)            --              --          (77,115)
                                             ----------     ----------     ----------      ----------       ----------

 CASH FLOWS FROM FINANCING ACTIVITIES:
    Revolving loan borrowings
       (repayments), net..................       25,300             --             --              --           25,300
    Long-term debt borrowings.............      510,962             --             --              --          510,962
    Long-term debt repayments.............     (387,942)          (743)            --              --         (388,685)
    Proceeds from issuance of stock.....        208,717             --             --              --          208,717
    Repurchase of equity securities.....       (267,055)            --             --              --         (267,055)
    Debt issuance costs.................        (32,932)            --             --              --          (32,932)
    Stock issuance costs................         (3,015)            --             --              --           (3,015)
    Premiums paid on debt extinguishment        (12,778)            --             --              --          (12,778)
    Merger and recapitalization expenses        (18,253)            --             --              --          (18,253)
    Other...............................             --           (119)            --              --             (119)
    Intercompany advances...............          3,958         (3,958)            --              --               --
                                             ----------     ----------     ----------      ----------       ----------

       Net cash (used in) provided by
         financing activities.............       26,962         (4,820)            --              --           22,142
                                             ----------     ----------     ----------      ----------       ----------

         Net increase (decrease) in cash..           --         10,979             --              --           10,979

 Cash at the beginning of the year........           --         18,040             --              --           18,040
                                             ----------     ----------     ----------      ----------       ----------

 Cash at the end of the year..............   $       --     $   29,019     $       --      $       --       $   29,019
                                             ==========     ==========     ==========      ==========       ==========


</TABLE>


                                       78
<PAGE>



                         TRAVELCENTERS OF AMERICA, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                 YEAR ENDED DECEMBER 31, 2001
                                           -------------------------------------------------------------------------
                                              PARENT        GUARANTOR    NONGUARANTOR
                                              COMPANY     SUBSIDIARIES    SUBSIDIARY   ELIMINATIONS   CONSOLIDATED
                                           -------------- -------------- ---------------------------- --------------
                                                                  (IN THOUSANDS OF DOLLARS)
<S>                                          <C>            <C>            <C>           <C>            <C>

 CASH FLOWS (USED IN) PROVIDED BY
    OPERATING ACTIVITIES:                    $  (22,023)    $   61,185     $   (2,056)   $       --     $   37,106
                                             -----------    ----------     ----------    ----------     ----------


 CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sales of property and
       equipment..........................           --          8,256             --            --          8,256
    Capital expenditures..................           --        (54,490)            --            --        (54,490)
                                             ----------     -----------    ----------    ----------     -----------

       Net cash used in investing
         activities.......................           --        (46,234)            --            --        (46,234)
                                             ----------     -----------    ----------    ----------     -----------

 CASH FLOWS FROM FINANCING ACTIVITIES:
    Revolving loan borrowings (repayments,
       net)...............................        3,600             --             --            --          3,600
    Long-term debt repayments.............           --           (165)            --            --           (165)
    Proceeds from issuance of stock.....             38             --             --            --             38
    Debt issuance costs.................           (160)            --             --            --           (160)
    Premiums paid on debt extinguishment           (899)            --             --            --           (899)
    Merger and recapitalization
       expenses paid....................         (2,417)            --             --            --         (2,417)
    Intercompany advances...............         21,861        (23,917)         2,056            --              -
                                             ----------     ----------     ----------    ----------     ----------

       Net cash (used in) provided by
         financing activities.............       22,023        (24,082)         2,056            --             (3)
                                             ----------     -----------    ----------    ----------     -----------

         Net increase (decrease) in cash..           --         (9,131)            --            --         (9,131)

 Cash at the beginning of the year........           --         29,019             --            --         29,019
                                             ----------     ----------     ----------    ----------     ----------

 Cash at the end of the year..............   $       --     $   19,888     $       --    $       --     $   19,888
                                             ==========     ==========     ==========    ==========     ==========

</TABLE>


                                       79
<PAGE>






ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         Not applicable.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information concerning our directors and executive officers required by
this item is incorporated by reference to the material appearing under the
heading "Directors and Officers of the Registrant" in Exhibit 99.1 to this
annual report.

ITEM 11.  EXECUTIVE COMPENSATION

         Information concerning executive compensation required by this item is
incorporated by reference to the material appearing under the heading "Executive
Compensation" in Exhibit 99.1 to this annual report.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information concerning security ownership of certain of our beneficial
owners and management required by this item is incorporated by reference to the
material appearing under the heading "Security Ownership of Certain Beneficial
Owners and Management" in Exhibit 99.1 to this annual report.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information concerning certain relationships and related transactions
required by this item is incorporated by reference to the material appearing
under the heading "Certain Relationships and Related Transactions" in Exhibit
99.1 to this annual report.




                                       80
<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

A.       Documents filed as part of this report:

         1. Financial Statements

            Financial statements filed as part of this report are listed in the
            Index to Consolidated Financial Statements and Supplementary Data on
            page 38 of this annual report.

         2. Financial Statement Schedule

            Schedule II - Valuation and Qualifying Accounts

<TABLE>
<CAPTION>

                                             Balance at      Charged      Charged to                     Balance at
                                             Beginning    (Credited)        Other        Deductions      End of
                                             of Period     To Income      Accounts     from Reserves      Period
                                             ---------     ---------      --------     -------------      ------
                                                                 (In Thousands of Dollars)
<S>                                         <C>          <C>            <C>            <C>             <C>

        Year Ended December 31, 1999:
        ---------------------------------
        Deducted from accounts and          $    4,187   $    1,339     $   1,737(a)   $   (3,782)(c)  $     3,481
        notes receivable for doubtful
        accounts...........................

        Year Ended December 31, 2000:
        ---------------------------------
        Deducted from accounts and          $    3,481   $    1,560     $     340(b)   $     (163)(c)  $     5,218
        notes receivable for doubtful
        accounts...........................

        Year Ended December 31, 2001:
        ---------------------------------
        Deducted from accounts and          $    5,218   $    1,000     $      --      $   (2,833)(c)  $     3,385
        notes receivable for doubtful
        accounts...........................

</TABLE>


(a)      Amounts acquired in business acquisitions.
(b)      Amounts charged against gain on sale of property and equipment.
(c)      Uncollectible accounts and notes receivable charged off, net of amounts
         recovered.

         All other schedules are omitted because they are not applicable, not
         material or the required information is shown in the financial
         statements listed above.

         3.  Exhibits

         Reference is made to the Exhibit Index set forth at page i of this
         annual report.

B.       Reports on Form 8-K

         No reports on Form 8-K were filed during the fourth quarter of the year
         ended December 31, 2001.



                                       81
<PAGE>




 SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
   15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 BY REGISTRANTS WHICH HAVE NOT
     REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE
                                   ACT OF 1934


         No annual report or proxy statement has been furnished to our security
holders. We shall furnish to the Securities and Exchange Commission for its
information, at the time copies of such material are furnished to our security
holders, four copies of every proxy statement, form of proxy or other proxy
soliciting material sent to more than ten of our security holders with respect
to our annual meeting. The foregoing material shall not be deemed to be "filed"
with the Securities and Exchange Commission or otherwise subject to the
liabilities of Section 18 of the Securities Exchange Act of 1934, except to the
extent that we specifically incorporate it in this Form 10-K by reference.


































                                       82
<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.


<TABLE>
<CAPTION>
                                               TRAVELCENTERS OF AMERICA, INC.
<S>                                                 <C>

                 March 28, 2002                By:    /s/  James W. George
         -------------------------------              --------------------------------------
                      (Date)                           Name:  James W. George
                                                       Title: Senior Vice President,
                                                       Chief Financial Officer and Secretary

</TABLE>

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities on the date indicated.

<TABLE>
<CAPTION>

               Signature                                    Title                                  Date
               ---------                                    -----                                  ----
<S>                                                    <C>                                      <C>
   /s/      Edwin P. Kuhn                Chairman of the Board of Directors,                  March 28, 2002
   ------------------------------
            Edwin P. Kuhn                   President and Chief Executive Officer
                                            (Principal Executive Officer)

   /s/     James W. George               Senior Vice President, Chief Financial               March 28, 2002
   ------------------------------
           James W. George                  Officer and Secretary (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)

   /s/    Robert J. Branson              Director                                             March 28, 2002
   ------------------------------
          Robert J. Branson

   /s/     Michael Greene                Director                                             March 28, 2002
   ------------------------------
           Michael Greene

   /s/    Steven B. Gruber               Director                                             March 28, 2002
   ------------------------------
          Steven B. Gruber

   /s/   Louis J. Mischianti             Director                                             March 28, 2002
   ------------------------------
         Louis J. Mischianti

   /s/     Chris Patterson               Director                                             March 28, 2002
   ------------------------------
           Chris Patterson

   /s/   Rowan G. P. Taylor              Director                                             March 28, 2002
   ------------------------------
         Rowan G. P. Taylor


</TABLE>




                                       83
<PAGE>



                                                      EXHIBIT INDEX
<TABLE>
<CAPTION>

  Exhibit
  Number                                              Exhibit
-----------   ----------------------------------------------------------------------------------------- ------------------

<S>                    <C>                                                                                     <C>
    2.1       Recapitalization Agreement and Plan of Merger dated as of May 31, 2000...................        (e)

    2.2       Amendment No. 1 to Recapitalization Agreement and Plan of Merger dated as of October 2,          (f)
              2000.....................................................................................

    2.3       Agreement and Plan of Merger by and among TravelCenters of America, Inc., TP                     (c)
              Acquisition, Inc. and Travel Ports, dated as of February 26, 1999........................

    2.4       Share Exchange Agreement by and among TravelCenters of America, Inc., and E. Philip              (c)
              Saunders, dated as of February 26, 1999..................................................

    2.5       Voting Agreement, dated as of February 26, 1999, among TravelCenters of America, Inc.,           (c)
              TP Acquisition, Inc. and E. Philip Saunders and John M. Holohan..........................

    3.1       Amended and Restated Certificate of Incorporation of TravelCenters of America, Inc.......        (f)

    3.2       Amended and Restated By-laws of TravelCenters of America, Inc............................        (h)

    3.3       Restated Certificate of Incorporation of TA Operating Corporation........................        (a)

    3.4       Amended and Restated By-laws of TA Operating Corporation.................................        (a)

    3.5       Amended and Restated Certificate of Incorporation of TA Licensing, Inc...................        (f)

    3.6       By-laws of TA Licensing, Inc.............................................................        (f)

    3.7       Certificate of Limited Partnership of TravelCenters Properties, L.P......................        (f)

    3.8       Agreement of Limited Partnership of TravelCenters Properties, L.P........................        (f)

    3.9       Certificate of Incorporation of TravelCenters Realty, Inc................................        (f)

    3.10      By-laws of TravelCenters Realty, Inc.....................................................        (f)

    3.11      Certificate of Formation of TA Travel, L.L.C.............................................        (f)

    3.12      Operating Agreement of TA Travel, L.L.C..................................................        (f)

    4.1       Indenture, dated as of November 14, 2000 by and among TravelCenters of America, Inc.,
              TA Operating Corporation, TA Travel, L.L.C., TA Licensing, Inc., TravelCenters
              Properties, L.P., TravelCenters Realty, Inc. and State Street Bank and Trust Company.....        (f)

    4.2       Form of 12 3/4% Senior Subordinated Note due 2009 (included in Exhibit 4.1)...............       (f)

    4.3       Exchange and Registration Rights Agreement, dated as of November 14, 2000 by and among
              TravelCenters of America, Inc., TA Operating Corporation, TA Travel, L.L.C., TA
              Licensing, Inc., TravelCenters Properties, L.P., TravelCenters Realty, Inc., Credit
              Suisse First Boston Corporation, Chase Securities Inc. and Donaldson, Lufkin & Jenrette
              Securities Corporation....................................................................       (f)

    4.4       Form of Warrant Certificate (included in Exhibit 10.21)...................................       (f)

    4.5       Form of Common Stock Certificate..........................................................       (g)

   10.1       Amended and Restated Credit Agreement dated as of November 14, 2000.......................       (f)


</TABLE>



                                        i
<PAGE>




<TABLE>
<CAPTION>

  Exhibit
  Number                                              Exhibit
-----------   ----------------------------------------------------------------------------------------- ------------------

<S>                    <C>                                                                                     <C>

   10.2       Stockholders' Agreement among TravelCenters of America, Inc., Oak Hill Capital
              Partners, L.P., Oak Hill Capital Management Partners, L.P., Olympus Growth Fund III,
              L.P., Olympus Executive Fund, L.P., Monitor Clipper Equity Partners, L.P., Monitor
              Clipper Equity Partners (Foreign), L.P., UBS Capital America II, LLC, Credit Suisse
              First Boston LFG Holdings 2000, LLC and Freightliner LLC dated as of November 14, 2000....       (f)

   10.3       Operating Agreement of Freightliner Corporation and TA Operating Corporation dated as
              of July 21, 1999..........................................................................       (d)

   10.4       Amendment No. 1 to Operating Agreement of Freightliner LLC and TA Operating Corporation
              dated as of November 9, 2000..............................................................       (f)

   10.5       Agreement for Lease, dated as of September 9, 1999, among TA Operating Corporation,
              National Auto/Truckstops, Inc. and TCA Network Funding, LP................................       (d)

   10.6       Lease Agreement, dated as of September 9, 1999, among TA Operating Corporation,
              National Auto/Truckstops, Inc. and TCA Network Funding, LP................................       (d)

   10.7       Amendment No. 2, dated as of November 27, 2001, to Agreement for Lease among TCA
              Network Funding, LP and TA Operating Corporation

   10.8*      TA Operating Corporation Transition Plan..................................................        +

   10.9*      Employment Agreement, dated as of January 1, 2000, by and among TA Operating
              Corporation, TravelCenters of America, Inc. and Timothy L. Doane..........................       (f)

   10.10*     Employment Agreement, dated as of January 1, 2000, by and among TA Operating
              Corporation, TravelCenters of America, Inc. and James W. George...........................       (f)

   10.11*     Employment Agreement, dated as of January 1, 2000, by and among TA Operating
              Corporation, TravelCenters of America, Inc. and Michael H. Hinderliter....................       (f)

   10.12*     Employment Agreement, dated as of January 1, 2000, by and among TA Operating
              Corporation, TravelCenters of America, Inc. and Edwin P. Kuhn.............................       (f)

   10.13*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
              Operating Corporation, TravelCenters of America, Inc. and Timothy L. Doane................       (f)

   10.14*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
              Operating Corporation, TravelCenters of America, Inc. and James W. George.................       (f)

   10.15*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
              Operating Corporation, TravelCenters of America, Inc. and Michael H. Hinderliter..........       (f)

   10.16*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
              Operating Corporation, TravelCenters of America, Inc. and Edwin P. Kuhn...................       (f)

   10.17*     Success Bonus Letter......................................................................       (e)

   10.18      Warrant Agreement dated as of November 14, 2000 between TravelCenters of America, Inc.
              and State Street Bank and Trust Company, as warrant agent.................................       (f)

   10.19      Contingent Warrant Escrow Agreement dated as of November 14, 2000 between TravelCenters
              of America, Inc. and State Street Bank and Trust Company, as warrant escrow agent.........       (f)

   10.20*     Form of Management Subscription Agreement.................................................       (a)

   10.21*     Schedule of Management Subscription Agreements omitted pursuant to Instruction 2 to
              Item 601 of Regulation S-K................................................................       (b)

</TABLE>


                                       ii
<PAGE>



<TABLE>
<CAPTION>

  Exhibit
  Number                                              Exhibit
-----------   ----------------------------------------------------------------------------------------- ------------------

<S>                    <C>                                                                                     <C>
   10.22*     Form of Management Note...................................................................       (b)

   10.23*     Schedule of Management Notes omitted pursuant to Instruction 2 to Item 601 of
              Regulation S-K............................................................................       (b)

   10.24*     2001 Stock Incentive Plan of TravelCenters of America, Inc. ..............................        +
   10.25*     Form of 2001 Stock Incentive Plan - Nonqualified Stock Option Agreement...................        +
   21.1       List of Subsidiaries of TravelCenters of America, Inc.....................................       (f)

   99.1       Information Required by Part III of Form 10-K.............................................        +

</TABLE>


(a)      Incorporated by reference to exhibits filed with our Annual Report on
         Form 10-K for the year ended December 31, 1997.

(b)      Incorporated herein by reference to exhibits filed with our Annual
         Report on Form 10-K for the year ended December 31, 1998.

(c)      Incorporated herein by reference to exhibits filed with our Schedule
         13D dated as of February 26, 1999.

(d)      Incorporated herein by reference to exhibits filed with our Quarterly
         Report on Form 10-Q for the quarter ended September 30, 1999.

(e)      Incorporated herein by reference to exhibits filed with our Quarterly
         Report on Form 10-Q for the quarter ended June 30, 2000.

(f)      Incorporated herein by reference to exhibits filed with our
         Registration Statement on Form S-4 filed on December 21, 2000.

(g)      Incorporated herein by reference to exhibits filed with our
         Pre-Effective Amendment No. 1 to our Registration Statement on Form S-4
         filed on January 18, 2001.

(h)      Incorporated herein by reference to exhibits filed with our Annual
         Report on Form 10-K for the year ended December 31, 2000.

+        Filed herewith

*        Executive compensation plans.


                                       iii