This quarterly report on Form 10-Q includes forward-looking statements, including statements concerning operational and financial impacts of the COVID-19 pandemic. We have based these statements on our current expectations, assumptions, and projections about future events. When words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "seek," "should," "will" and similar expressions or their negatives are used in this quarterly report, these are forward-looking statements. Many possible events or factors, including the effects of the COVID-19 pandemic and those discussed in "Risk Factors" under Item 1A below and under Item 1A of our annual report on Form 10-K for the year endedDecember 31, 2019 , which we filed with theSecurities and Exchange Commission onFebruary 27, 2020 , could affect our future financial results and performance, and could cause actual results or performance to differ materially from those expressed. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this quarterly report. We undertake no obligation to update or revise any forward-looking statements except as required by law. In this report, "we," "our," "us," "our company," "RLHC," and "RLH Corporation " refer toRed Lion Hotels Corporation , doing business asRLH Corporation , and as the context requires all, of its consolidated subsidiaries as follows: Wholly owned subsidiaries: •Red Lion Hotels Holdings, Inc. •Red Lion Hotels Franchising, Inc. •Red Lion Hotels Canada Franchising, Inc. •Red Lion Hotels Management, Inc. ("RL Management") •Red Lion Hotels Limited Partnership •RL Baltimore LLC ("RL Baltimore") •WestCoast Hotel Properties, Inc. •RedLion Anaheim , LLC •RLabs, Inc. Joint venture entities: •RL Venture LLC ("RL Venture") in which we hold a 55% member interest •RLS Atla Venture LLC ("RLS Atla Venture") in which we hold a 55% member interest •RLS DC Venture LLC ("RLS DC Venture") in which we hold a 55% member interest
The terms "the network," "systemwide hotels," "system of hotels," or "network of hotels" refer to our entire group of owned, managed and franchised hotels.
The following discussion and analysis should be read in connection with our unaudited condensed consolidated financial statements and the condensed notes thereto and other financial information included elsewhere in this quarterly report, as well as in conjunction with the consolidated financial statements and the notes thereto for the year endedDecember 31, 2019 , which are included in our annual report on Form 10-K for the year endedDecember 31, 2019 .
COVID-19 Update
COVID-19 was first identified inWuhan, China inDecember 2019 , and subsequently declared a pandemic by theWorld Health Organization . To date, COVID-19 has surfaced in nearly all regions around the world and resulted in travel restrictions and business slowdowns or shutdowns in affected areas. The economic impact of the pandemic thus far has been extremely punitive to travel related businesses across the nation, significantly affecting the operating results of companies within the hospitality industry. The measures enacted by most governments to combat the pandemic have included intensive restrictions on travel, required closure of businesses deemed non-essential, and shelter in place orders for civilians. We have undertaken a series of organizational changes and cost cutting measures including changes to senior management, a reduction in force and the consolidation of office space to mitigate the impact of the COVID-19 pandemic on our operating results. As our business is reliant in part on the financial success and cooperation of our franchisees, we have also implemented policy changes to address the impact of the pandemic on their financial condition, including the implementation of a fee deferral program to certain of our franchisees in which billings related to fees for March through May of 2020 could be deferred for up to 12 months, temporary fee reductions for review responses, guest relations fees, and certain other fees, and a delay in implementation of capital intensive brand standards. These changes are expected to reduce cash flow, as our franchisees defer paying royalty fees to future periods. 21 -------------------------------------------------------------------------------- While we did experience some impact from the COVID-19 pandemic on our operations in March of 2020, the impact of the pandemic is ongoing, and the extent to which the COVID-19 pandemic further impacts our business, operations and financial results will depend on numerous evolving factors that we are not able to accurately predict, including the length of travel restrictions and government-mandated stay-at-home orders, the duration and spread of the virus, and the extent to which people are willing to resume travel and hotel stays, as well as the financial condition and recovery of our franchisees. Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows for the foreseeable future. However, we expect it will have a material, adverse impact on future revenue growth as well as overall profitability.
Introduction
We are a NYSE-listed hospitality and leisure company (ticker symbol: RLH) doing business asRLH Corporation and primarily engaged in the franchising and ownership of hotels under the following proprietary brands:Hotel RL ,Red Lion Hotels ,Red Lion Inn & Suites , GuestHouse,Settle Inn ,Americas Best Value Inn ("ABVI"),Canadas Best Value Inn ("CBVI"), Signature andSignature Inn ,Knights Inn , andCountry Hearth Inn & Suites ("Country Hearth").
We operate in two reportable segments:
•The franchised hotels segment is engaged primarily in licensing our brands to franchisees. This segment generates revenue from royalty, marketing, and other fees that are primarily based on a percentage of room revenue or on room count or on transaction count and are charged to hotel owners in exchange for the use of our brand and access to our marketing and central services programs. These central services and marketing programs include our reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards. Additionally, this segment includes our initial contracts for Canvas Integrated Systems. •The company operated hotel segment derives revenues primarily from guest room rentals and food and beverage offerings at owned and leased hotels for which we consolidate results. Revenues have also been derived from management fees and related charges for hotels with which we contract to perform management services, however our last management agreement terminated inFebruary 2019 .
Our remaining activities, none of which constitutes a reportable segment, are aggregated into "other."
A summary of our open franchise and company operated hotels fromJanuary 1, 2020 throughMarch 31, 2020 , including the approximate number of available rooms, is provided below: Midscale Brand Economy Brand Total Total Available Total Available Total Available Hotels Rooms Hotels Rooms Hotels Rooms Beginning quantity, January 1, 2020 96 13,500 966 54,200 1,062 67,700 Newly opened - - 6 300 6 300 Terminated properties (1) (300) (43) (2,800) (44) (3,100) Ending quantity, March 31, 2020 95 13,200 929 51,700 1,024 64,900 A summary of activity relating to our open midscale franchise and company operated hotels by brand fromJanuary 1, 2020 throughMarch 31, 2020 is provided below: Red Lion Red Lion Inn Midscale Brand Hotels Hotel RL Hotels and Suites Signature Other Total Beginning quantity, January 1, 2020 9 39 40 4 4 96 Terminated properties - (1) - - - (1) Ending quantity, March 31, 2020 9 38 40 4 4 95 Ending rooms, March 31, 2020 1,400 7,700 3,300 300 500 13,200 22
--------------------------------------------------------------------------------
A summary of activity relating to our open economy franchise hotels by brand
from
Country Economy Brand Hotels ABVI and CBVI Knights Inn Hearth Guest House Other Total Beginning quantity, January 1, 2020 657 232 47 19 11 966 Newly opened 3 3 - - - 6 Terminated properties (28) (11) (2) (1) (1) (43) Ending quantity, March 31, 2020 632 224 45 18 10 929 Ending rooms, March 31, 2020 33,500 13,500 2,200 1,200 1,300 51,700
A summary of our executed franchise agreements for the three months ended
Midscale Brand Economy Brand Total
Executed franchise license agreements, three months ended
2 14 16 New contracts for existing locations 4 50 54 Total executed franchise license agreements, three months ended March 31, 2020 6 64 70 Overview Consistent with our previously stated business strategy to move towards operating as primarily a franchise company, in the first quarter of 2020, we sold two of our remaining company operated hotels. OnFebruary 7, 2020 , we sold the only hotel in our consolidated joint venture, RLS DC Venture, for$16.4 million . Using proceeds from the sale, together with the release of$2.3 million in restricted cash held by our lenderCP Business Finance I, LP , RLS DC Venture repaid the remaining outstanding principal balance and accrued exit fee under the RLH DC Venture loan agreement of$17.7 million . OnFebruary 27, 2020 , we sold our leasehold interest in the RedLion Anaheim for$21.5 million . Using net proceeds from the sale, the Company repaid the$10.0 million outstanding principal balance owing under the revolving line of credit with Deutsche Bank AG New York Branch, and other lenders party thereto. Upon repayment of the outstanding balance, the Line of Credit was terminated and these funds are no longer available to us. 23 --------------------------------------------------------------------------------
Results of Operations
A summary of our Condensed Consolidated Statements of Comprehensive Income (Loss) is provided below (in thousands):
Three Months Ended
2020 2019 Total revenues$ 17,265 $ 25,984 Total operating expenses 25,504 29,612 Operating income (loss) (8,239) (3,628) Other income (expense): Interest expense (506) (882) Loss on early retirement of debt (1,309) - Other income (loss), net 48 33 Income (loss) before taxes (10,006) (4,477) Income tax expense (benefit) (752) 82 Net income (loss) (9,254) (4,559) Net (income) loss attributable to noncontrolling interest 1,155 286
Net income (loss) and comprehensive income (loss) attributable to
$ (8,099) $ (4,273) Non-GAAP Financial Measures (1) EBITDA$ (6,963) $ (148) Adjusted EBITDA$ (10,315) $ 999
(1) The definitions of "EBITDA," and "Adjusted EBITDA" and how those measures relate to net income (loss) are discussed and reconciled under Non-GAAP Financial Measures below.
For the three months endedMarch 31, 2020 , we reported a net loss of$9.3 million , which includes$9.7 million of bad debt expense related to reserves recognized for accounts receivable, key money, and notes receivable for certainInner Circle franchisees and other customer balances determined to be uncollectible as ofMarch 31, 2020 , a$1.8 million asset impairment on ourRed Lion Hotel Seattle Airport as a result of the impact of the COVID-19 pandemic on the operating results of that hotel, a$1.3 million loss on early retirement of debt,$0.5 million of employee separation costs,$0.4 million of stock based compensation,$0.4 million of transaction and integration costs, and$0.2 million of expense related to a non-income tax assessment, partially offset by$7.9 million in gains from the disposal of two hotel properties For the three months endedMarch 31, 2019 , we reported a net loss of$4.6 million , which included$0.9 million of stock based compensation,$0.2 million related to a non-income tax expense assessment and$0.1 million of transaction and integration costs. For the three months endedMarch 31, 2020 , Adjusted EBITDA was$(10.3) million compared with$1.0 million in 2019. This decrease was primarily due to$9.7 million of bad debt expense recognized in the first quarter of 2020 to establish reserves for certainInner Circle franchisees in bankruptcy and other customer balances determined to be uncollectible as ofMarch 31, 2020 .
Non-GAAP Financial Measures
EBITDA is defined as net income (loss), before interest, taxes, depreciation and amortization. We believe it is a useful financial performance measure due to the significance of our long-lived assets and level of indebtedness. Adjusted EBITDA is an additional measure of financial performance. We believe that the inclusion or exclusion of certain special items, such as gains and losses on asset dispositions and impairments and discontinued operations, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results. Adjusted EBITDA also excludes the effect of non-cash stock compensation expense. We believe that the exclusion of this item is consistent with the purposes of the measure described below.
EBITDA and Adjusted EBITDA are commonly used measures of performance in our industry. We utilize these measures because management finds them a useful tool to calculate more meaningful comparisons of past, present and future operating
24 -------------------------------------------------------------------------------- results and as a means to evaluate the results of core, ongoing operations. Our board of directors and executive management team consider Adjusted EBITDA to be a key performance metric and compensation measure. We believe they are a complement to reported operating results. EBITDA and Adjusted EBITDA are not intended to represent net income (loss) defined by generally accepted accounting principles inthe United States of America ("GAAP"), and such information should not be considered as an alternative to reported information or any other measure of performance prescribed by GAAP. In addition, other companies in our industry may calculate EBITDA and, in particular, Adjusted EBITDA differently than we do or may not calculate them at all, limiting the usefulness of EBITDA and Adjusted EBITDA as comparative measures.
The following is a reconciliation of EBITDA and Adjusted EBITDA to net income (loss) for the periods presented (in thousands):
Three Months Ended March 31, 2020 2019 Net income (loss)$ (9,254) $ (4,559) Depreciation and amortization 2,537 3,447 Interest expense 506 882 Income tax expense (benefit) (752) 82 EBITDA (6,963) (148) Stock-based compensation (1) 373 916 Asset impairment (2) 1,760 - Transaction and integration costs (3) 398 62 Employee separation and transition costs (4) 528 - Loss on early retirement of debt (5) 1,309 - Loss (gain) on asset dispositions (6) (7,892) 6 Non-income tax expense assessment (7) 172 163 Adjusted EBITDA (10,315) 999 Adjusted EBITDA attributable to noncontrolling interests (78) (547) Adjusted EBITDA attributable to RLH Corporation$ (10,393) $ 452 (1) Costs represent total stock-based compensation for each period. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Condensed Consolidated Statements of Comprehensive Income (Loss). (2) In the three months endedMarch 31, 2020 , we recognized an impairment on ourRed Lion Hotel Seattle Airport leased property. (3) Transaction and integration costs include incremental expenses incurred for potential and executed acquisitions and dispositions of assets. (4) The costs recognized relate to severance payments due to our Chief Financial Officer upon her departure inMarch 2020 , along with a reduction in force that was implemented in the first quarter of 2020. These costs are included within Selling, general, administrative and other expenses and Marketing, reservations and reimbursables on the Condensed Consolidated Statements of Comprehensive Income (Loss). (5) The Loss on early retirement of debt relates to unamortized deferred debt issuance costs and prepayment fees incurred related to the payoff of a secured debt agreement atRL Venture -Olympia and the outstanding balance on our Line of Credit. (6) The gains relate to the sale of two properties during the first quarter of 2020. There was no comparable activity during the three months endedMarch 31, 2019 . (7) Costs relate to estimated non-income taxes we have concluded we are probable of being assessed. These estimated taxes have been accrued in Selling, general, administrative and other expenses on the Condensed Consolidated Statements of Comprehensive Income (Loss). 25
--------------------------------------------------------------------------------
Franchise and Marketing, Reservations and Reimbursables Revenues
Three Months Ended March 31, 2020 2019 (in thousands) Royalty$ 4,357 $ 5,740 Marketing, reservations and reimbursables 5,805 6,729 Other franchise 774 542
Three months ended
Royalty revenue decreased$1.4 million or 24% and revenues from Marketing, reservations, and reimbursables revenue decreased by$0.9 million or 14%. These decreases were primarily due to terminated franchise agreements in 2019 and the first quarter of 2020, along with the impact of COVID-19 on our midscale brand hotels who generally pay royalties and marketing fees as a percentage of gross rooms revenue. Other franchise revenues increased$0.2 million or 43% primarily due to an increase in various other fees, partially offset by the impact of terminated agreements.
Company Operated Hotels Revenues
Three Months EndedMarch 31 , (in thousands) 2020
2019
Company operated hotels revenues$ 6,329 $
12,970
Three months ended
During the three months endedMarch 31, 2020 , revenue from our Company operated hotels segment decreased$6.6 million or 51% compared with the same period in 2019. The decrease was driven primarily by the disposal of two company operated hotel properties in the fourth quarter of 2019 and two additional company operated hotel properties in the first quarter of 2020. Revenues for the four company operated hotels held during the entirety of both periods decreased by$1.0 million , to$3.9 million in the first quarter of 2020 compared to$4.9 million in the first quarter of 2019. This decrease was primarily due to the negative impact of the COVID-19 pandemic on hotel occupancy during March of 2020. Operating Expenses
Selling, General, Administrative and Other Expenses
Three Months Ended March 31, (in thousands) 2020 2019 Franchise development and operations, including labor$ 1,936 $ 2,005 General and administrative labor and labor-related costs 1,983 1,877 Stock-based compensation 160 474 Non-income tax expense assessment 172 163 Bad debt expense 9,720 211 Legal fees 528 588 Professional fees and outside services 568 417 Facility lease 213 278 Information technology costs 201 217 Other 784 1,161 Total Selling, general, administrative and other expenses$ 16,265 $ 7,391 26 --------------------------------------------------------------------------------
Three months ended
Selling, general, administrative and other expenses increased by$8.9 million for the three months endedMarch 31, 2020 compared with the three months endedMarch 31, 2019 . Bad debt expense increased primarily due to$6.3 million of expense arising from a reserve recognized for accounts receivable, key money, and notes receivable for certainInner Circle franchisees. The remaining increase relates primarily to reserves recognized for accounts and notes receivable related to large balances under legal dispute, aged balances from terminated agreements, or aged balances placed with third party collections. See Note 7. Revenue from Contracts with Customers within Item 8. Financial Statements for additional detail. Labor and labor-related costs increased primarily due to accrued severance costs related to the departure of our Chief Financial Officer inMarch 2020 , partially offset by a decrease in headcount compared to the prior period. Stock-based compensation decreased primarily due to executive terminations in the fourth quarter of 2019 and a reduction in force in the first quarter of 2020.
Other expenses decreased primarily due to various efficiencies and cost cutting initiatives implemented by management.
Company Operated Hotels Expenses
Three Months Ended March 31, (in thousands) 2020 2019 Company operated hotels expenses$ 6,678 $
11,545
Three months ended
Company operated hotels expenses decreased by$4.9 million or 42% in the first three months of 2020. The decrease was driven primarily by the disposal of two company operated hotel properties in the fourth quarter of 2019 and two additional company operated hotel properties in the first quarter of 2020. Operating expenses for the four company operated hotels held during the entirety of both periods decreased by$0.8 million , to$4.2 million in the first quarter of 2020 compared to$5.0 million in the first quarter of 2019, primarily due to the impact of COVID-19 on hotel operations inMarch 2020 and other cost cutting initiatives implemented by management.
Marketing, Reservations and Reimbursables Expenses
Three Months Ended March 31, (in thousands) 2020 2019 Marketing, reservations and reimbursables expenses$ 5,758 $ 7,161
Three months ended
Marketing, reservations and reimbursables expenses decreased by$1.4 million or 20% in the first three months of 2020. This decrease was primarily due a decrease in marketing expenditures in an effort by management to reduce costs in the first quarter of 2020, along with a decrease in reservation volume. Depreciation and Amortization Three Months Ended March 31, (in thousands) 2020 2019 Depreciation and amortization$ 2,537 $ 3,447 27
--------------------------------------------------------------------------------
Three months ended
Depreciation and amortization expense decreased$0.9 million or 26% during the first three months of 2020. This decrease was driven primarily by the disposal of two company operated hotel properties in the fourth quarter of 2019 and two additional company operated hotel properties in the first quarter of 2020. This decrease was partially offset by additional depreciation recognized from other fixed assets placed in service during the remainder of 2019 and the first three months of 2020. Asset Impairment Three Months Ended March 31, (in thousands) 2020 2019 Asset impairment $ 1,760 $ -
Three months ended
We recognized an impairment loss of$1.8 million on ourRed Lion Hotel Seattle Airport leased property in the first quarter of 2020. See Note 5. Property and Equipment within Item 8. Financial Statements for additional detail.
Loss (Gain) on Asset Dispositions, net
Three Months Ended March 31, (in thousands) 2020 2019 Loss (gain) on asset dispositions, net$ (7,892) $ 6
Three months ended
We recognized a net gain on asset dispositions of$7.9 million from the disposal of two hotel properties during the first quarter of 2020, with no comparable activity in 2019. Interest Expense Interest expense decreased$0.4 million in the first quarter of 2020 compared to the first quarter of 2019. This decrease is primarily due to hotel sales and the related reduction in our average corporate and hotel-specific debt outstanding in 2020 as compared to 2019.
Loss on Early Retirement of Debt
In the first quarter of 2020, we recognized a Loss on early retirement of debt of$1.3 million related to the early payoff of our Line of Credit and a secured debt agreement at RLH DC Venture. These loans were paid off using proceeds from the sale of theHotel RL Washington DC joint venture property and our leasehold interest in the RedLion Anaheim .
Income Taxes
For the three months endedMarch 31, 2020 , we reported an income tax benefit of$752,000 compared with income tax expense of$82,000 for the same period in 2019. The income tax benefit recognized for the three months endedMarch 31, 2020 is principally related to the provisions of the CARES Act. The income tax expense recognized for the three months endedMarch 31, 2019 varies from the statutory rate primarily due to a partial valuation allowance against our deferred tax assets. See Note 13 Income Taxes within Item 1. Financial Statements. 28 --------------------------------------------------------------------------------
Liquidity and Capital Resources
Our principal source of liquidity is cash flow from operations. Cash flows may fluctuate and are sensitive to many factors including changes in working capital and the timing and magnitude of capital expenditures and payments on debt. We believe the ongoing effects of COVID-19 on our operations have had, and will continue to have, a material impact on our ability to generate cash from our operations and our financial results, and the impact may continue beyond the containment of the outbreak. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct given the dynamic nature of the situation. Working capital, which represents current assets less current liabilities, was$34.6 million and$23.0 million as ofMarch 31, 2020 andDecember 31, 2019 , respectively. As ofMarch 31, 2020 , we had cash and cash equivalents of$37.8 million and debt of$5.6 million . In order to preserve sufficient liquidity during these uncertain times, we implemented certain cost saving measures at the end of the first quarter of 2020, which included a reduction in force of approximately 40%, company-wide compensation reductions, consolidation of office space and a reduction in 2020 capital expenditures and key money commitments. Based upon our current liquidity position, and assumptions regarding the impact of COVID-19, including its duration, economic impact and impact on travel, we believe that we have sufficient liquidity to fund our operations at least throughMay 2021 . However, given the uncertain nature of the COVID-19 pandemic on our operations, we cannot assure you that our assumptions used to estimate our liquidity requirements will be correct. We may seek to raise additional funds through public or private financings, strategic relationships, sales of assets or other arrangements. We cannot assure that such funds, if needed, will be available on terms attractive to us, or at all. If we sell additional assets, these sales may result in future impairments or losses on the final sale. Finally, any additional equity financings may be dilutive to shareholders and debt financing, if available, may involve covenants that place substantial restrictions on our business. We are committed to maintaining our infrastructure for systems and services we provide to our franchisees. This requires ongoing access to capital investments in technology and related assets.
Sources and Uses of our Cash, Cash Equivalents, and Restricted Cash
The following table summarizes our net cash flows for operating, investing, and financing activities (in thousands):
Three Months Ended
2020 2019 Net cash provided by (used in) operating activities$ (2,294) $ (2,032) Net cash provided by (used in) investing activities 36,114 (1,569) Net cash provided by (used in) financing activities (27,753) 8,682 Operating Activities Net cash used in operating activities totaled$2.3 million during the first three months of 2020 compared with$2.0 million during the same period in 2019. The primary driver of the change was an increase in cash flows from working capital accounts of$1.7 million , partially offset by an increase in net loss excluding Loss (gain) on asset dispositions, net, Asset impairment, and Provision for doubtful accounts of approximately$1.3 million .
Investing Activities
Net cash provided by investing activities totaled$36.1 million during the first three months of 2020 compared with cash used in investing activities of$1.6 million during the same period in 2019. Cash flows increased in the first quarter of 2020 primarily due to net proceeds from hotel sales of$36.9 million during the first three months of 2020.
Financing Activities
Net cash used in financing activities was$27.8 million during the first three months of 2020 compared with cash provided by financing activities of$8.7 million in the first three months of 2019. During the three months endedMarch 31, 2020 , we paid off an outstanding loan for one company operated property along with the outstanding balance on our Line of Credit. During the three months endedMarch 31, 2019 we executed new mortgage loans for two company operated hotel properties. Some of the loan proceeds were distributed to joint venture partners. 29 --------------------------------------------------------------------------------
Debt
As of
InFebruary 2020 , we sold theHotel RL Washington DC for$16.4 million . Using proceeds from the sale, together with the release of$2.3 million in restricted cash held byCP Business Finance I, LP , RLH DC Venture repaid the remaining outstanding principal balance and accrued exit fee under the RLH DC Venture loan agreement of$17.7 million , plus a prepayment penalty of$0.6 million . Also in February of 2020, using the net proceeds from the sale of our leasehold interest in the RedLion Anaheim , we repaid the outstanding Line of Credit balance of$10.0 million . Upon repayment of the outstanding balance, the Line of Credit was terminated and these funds are no longer available to us. See Note 8 Debt and Line of Credit within Item 1. Financial Statements of this quarterly report on Form 10-Q, for further additional information about our debt obligations.
Off-Balance Sheet Arrangements
As ofMarch 31, 2020 , we had no off-balance sheet arrangements which have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that effect: (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and (ii) the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. We consider a critical accounting policy to be one that is both important to the portrayal of our financial condition and results of operations and requires management's most subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Since the date of our annual report on Form 10-K for the fiscal year endedDecember 31, 2019 , we have made no material changes to our critical accounting policies or the methodologies or assumptions that we apply under them.
New and Recent Accounting Pronouncements
See Note 2 Summary of Significant Accounting Policies within Item 1. Financial Statements of this quarterly report on Form 10-Q for information on new and recent GAAP accounting pronouncements.
30
--------------------------------------------------------------------------------
© Edgar Online, source