PACKAGING CORPORATION OF AMERICA This management's discussion and analysis includes statements regarding our expectations with respect to our future performance, expected business conditions, liquidity, and capital resources. Such statements, along with any other statements that are not historical in nature, are forward-looking. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in our 2019 Annual Report on Form 10-K, as well as those factors listed in other documents we file with theSecurities and Exchange Commission (SEC). We do not assume any obligation to update any forward-looking statement. Our actual results may differ materially from those contained in or implied by any of the forward-looking statements in this Form 10-Q. Please see "Forward Looking Statements" elsewhere in this Item 2.
Overview
PCA is the third largest producer of containerboard products and the third largest producer of uncoated freesheet paper inNorth America . We operate six containerboard mills, two paper mills, and 94 corrugated products manufacturing plants. Our containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. We also manufacture and sell uncoated freesheet papers, including both commodity and specialty papers, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. We are headquartered inLake Forest, Illinois and operate primarily inthe United States .
This Item 2 is intended to supplement, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2019 Annual Report on Form 10-K.
Executive Summary
First quarter net sales were$1.71 billion in 2020 and$1.73 billion in 2019. We reported$142 million of net income, or$1.49 per diluted share, during the first quarter of 2020, compared to$187 million , or$1.97 per diluted share, during the same period in 2019. Net income included$1 million of expense for special items in the first quarter of 2020, compared to$0.5 million of expense in 2019 (discussed below). Excluding special items, net income was$143 million , or$1.50 per diluted share, during the first quarter of 2020, compared to$187 million , or$1.98 per diluted share, in the first quarter of 2019. The decrease was driven primarily by lower prices and mix in our Packaging and Paper segments, lower volumes in our Paper segment, higher annual outage expenses, higher depreciation and other expenses, and a higher tax rate. These items were partially offset by higher volumes in our Packaging segment, lower operating and converting costs, lower freight and logistic costs, and lower interest expense and non-operating pension expense. PCA's facilities have been permitted to continue to operate as "essential operations" during the COVID-19 pandemic. PCA did not experience significant disruptions in its operations as a result of the pandemic and has maintained adequate availability of its workforce and supply of raw materials and services. For additional detail on special items included in reported GAAP results, as well as segment income (loss) excluding special items, earnings before non-operating pension expense, interest, income taxes, and depreciation, amortization, and depletion (EBITDA), and EBITDA excluding special items, see "Item 2. Reconciliations of Non-GAAP Financial Measures to Reported Amounts." Packaging segment income from operations was$200 million in the first quarter of 2020, compared to$250 million in the first quarter of 2019. Packaging segment EBITDA excluding special items was$290 million in the first quarter of 2020 compared to$334 million in the first quarter of 2019. The decrease in EBITDA excluding special items was due primarily to lower prices and mix, partially offset by higher sales and production volumes, lower operating and converting costs, and lower freight and logistic expenses. With the onset of the COVID-19 pandemic, PCA experienced higher than expected sales volume in the Packaging segment. We cannot predict the future impact of the pandemic on our packaging operations, economic and operating conditions affecting our packaging business or demand for our packaging products. Paper segment income from operations was$33 million in the first quarter of 2020, compared to$46 million in the first quarter of 2019. Paper segment EBITDA excluding special items was$42 million in the first quarter of 2020, compared to$55 million in the first quarter of 2019. The decrease in EBITDA excluding special items was due to lower prices and mix, lower sales and production volumes, and higher annual outage and other expenses, partially offset by lower operating costs. Demand for our paper products was slightly better than expected during the quarter. Due to the COVID-19 pandemic, we expect significantly lower demand in the second quarter and will temporarily cease operations at ourJackson, Alabama paper mill during the months of May and June, which will reduce production by approximately 70,000 tons. Due to lower sales and production, we expect lower segment income for the quarter. As more fully described in Note 20, Subsequent Events, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q, onApril 27, 2020 , we announced the closure of ourSan Lorenzo, California corrugated products plant. We expect to incur$23 million to$31 million in total charges relating to this action, most of which will be taken in the second quarter of 2020. 16
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Special Items and Earnings per Diluted Share, Excluding Special Items
A reconciliation of reported earnings per diluted share to earnings per diluted share, excluding special items, for the three months endedMarch 31, 2020 and 2019 are as follows: Three Months Ended March 31, 2020 2019 Earnings per diluted share, as reported$ 1.49 $
1.97
Special items: Incremental costs for COVID-19 (a) 0.01 - Wallula mill restructuring (b) -
0.01
Total special items 0.01
0.01
Earnings per diluted share, excluding special items
(a) Includes
COVID-19 pandemic, including supplies, cleaning and sick pay.
(b) Includes
discontinuation of uncoated free sheet and coated one-side grades at the
machine to produce virgin kraft linerboard.
Included in this Item 2 are various non-GAAP financial measures, including
diluted EPS excluding special items, segment income excluding special items and
EBITDA excluding special items. Management excludes special items as it believes
these items are not necessarily reflective of the ongoing results of operations
of our business. We present these measures because they provide a means to
evaluate the performance of our segments and our Company on an ongoing basis
using the same measures that are used by our management, because these measures
assist in providing a meaningful comparison between periods presented and
because these measures are frequently used by investors and other interested
parties in the evaluation of companies and the performance of their segments. A
reconciliation of diluted EPS to diluted EPS excluding special items is included
above and the reconciliations of other non-GAAP measures used in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations, to the most comparable measure reported in accordance with GAAP, are
included in Item 2 under "Reconciliations of Non-GAAP Financial Measures to
Reported Amounts." Any analysis of non-GAAP financial measures should be done in
conjunction with results presented in accordance with GAAP. The non-GAAP
measures are not intended to be substitutes for GAAP financial measures and
should not be used as such.
Industry and Business Conditions
Trade publications reported North American industry-wide corrugated products shipments per work day were up 2.7% during the first quarter of 2020 compared to the same quarter of 2019. Reported industry containerboard production increased 7.6% compared to the first quarter of 2019. Reported industry containerboard inventories at the end of the first quarter of 2020 were approximately 2.5 million tons, down 7.9% compared to the same period in 2019. Reported containerboard export shipments were up 43.6% compared to the first quarter of 2019. Prices reported by trade publications decreased by$10 per ton for linerboard and$15 per ton for corrugating medium inJanuary 2020 . Trade publications reported North American uncoated freesheet paper shipments were down 5.6% in the first quarter of 2020, compared to the same quarter of 2019. Average prices reported by a trade publication for cut size office papers were flat in the first quarter of 2020 compared to the fourth quarter of 2019. Average prices were lower by$13 per ton, or 1.2%, in the first quarter of 2020, compared to the first quarter of 2019. 17
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Results of Operations
Three Months Ended
The historical results of operations of PCA for the three months ended
Three Months Ended
March 31,
2020 2019 Change
Packaging $ 1,467.5 $ 1,477.6 $ (10.1 )
Paper 217.4 239.7 (22.3 )
Corporate and Other 60.2 56.7 3.5
Intersegment eliminations (36.4 ) (40.3 ) 3.9
Net sales $ 1,708.7 $ 1,733.7 $ (25.0 )
Packaging $ 199.8 $ 249.6 $ (49.8 )
Paper 32.5 45.6 (13.1 )
Corporate and Other (23.2 ) (19.8 ) (3.4 )
Income from operations $ 209.1 $ 275.4 $ (66.3 )
Non-operating pension income (expense) 0.6 (2.0 ) 2.6
Interest expense, net (19.6 ) (24.1 ) 4.5
Income before taxes 190.1 249.3 (59.2 )
Income tax provision (48.4 ) (62.5 ) 14.1
Net income $ 141.7 $ 186.8 $ (45.1 )
Non-GAAP Measures (a)
Net income excluding special items $ 142.6 $ 187.3 $ (44.7 )
Consolidated EBITDA 309.4 370.2 (60.8 )
Consolidated EBITDA excluding special items 310.6 370.6 (60.0 )
Packaging EBITDA 288.8 333.6 (44.8 )
Packaging EBITDA excluding special items 289.9 333.8 (43.9 )
Paper EBITDA 41.9 54.7 (12.8 )
Paper EBITDA excluding special items 42.0 54.9 (12.9 )
(a) See "Reconciliations of Non-GAAP Financial Measures to Reported Amounts"
included in this Item 2 for a reconciliation of non-GAAP measures to the most
comparable GAAP measure.
Net Sales
Net sales decreased $25 million , or 1.4%, to $1,709 million during the three
months ended March 31, 2020 , compared to $1,734 million during the same period
in 2019.
Packaging. Net sales decreased $10 million , or 0.7%, to $1,468 million , compared
to $1,478 million in the first quarter of 2019 due to lower containerboard and
corrugated products prices and mix ($94 million ), partially offset by higher
containerboard and corrugated products volume ($84 million ). In the first
quarter of 2020, our domestic containerboard prices were 8.0% lower, while
export prices were 25.2% lower, than the same period in 2019. In the first
quarter of 2020, export and domestic containerboard outside shipments increased
12.9%, compared to the first quarter of 2019. Total corrugated products
shipments were up 5.6% with one additional workday, and up 3.9% per day compared
to the same period in 2019.
Paper. Net sales during the three months ended
Gross Profit
Gross profit decreased$56 million during the three months endedMarch 31, 2020 , compared to the same period in 2019. The decrease was driven primarily by lower prices and mix in our Packaging and Paper segments, lower volume in our Paper segment, higher annual outage expenses, partially offset by higher volumes in our Packaging segment, lower operating and converting costs, and lower freight and logistic costs. In the three months endedMarch 31, 2020 , gross profit included$1 million of special items for incremental out-of-pocket costs related to the COVID-19 pandemic, including supplies, cleaning and sick pay. There were no significant special items in the three months endedMarch 31, 2019 . 18
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Selling, General, and Administrative Expenses
Selling, general, and administrative expenses ("SG&A") increased
Other Expense, Net
Other expense, net, for the three months ended
Three Months Ended
March 31,
2020 2019
Asset disposals and write-offs $ (6.0 ) $ (4.3 )
Facilities closure and other costs (0.4 ) -
Wallula mill restructuring - (0.4 )
Other (3.6 ) (1.3 )
Total $ (10.0 ) $ (6.0 ) We discuss these items in more detail in Note 5, Other Expense, Net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q.
Income from Operations
Income from operations decreased$66 million , or 24.0%, during the three months endedMarch 31, 2020 , compared to the same period in 2019. The first quarter of 2020 included$1 million of special items expense for incremental, out-of-pocket costs related to COVID-19, compared to$1 million of expense primarily related to theWallula Mill restructuring in the first quarter of 2019. Packaging. Packaging segment income from operations decreased$50 million to$200 million , compared to$250 million during the three months endedMarch 31, 2019 . The decrease related primarily to lower containerboard and corrugated products prices and mix ($81 million ), higher depreciation expense ($5 million ), and other fixed costs ($2 million ), partially offset by higher sales and production volumes ($18 million ), lower operating and converting costs ($18 million ), and lower freight expenses ($2 million ). Special items during the first quarter of 2020 included$1 million of incremental, out-of-pocket costs related to COVID-19, compared to an insignificant amount of special items in the Packaging segment in the first three months of 2019. Paper. Paper segment income from operations decreased$13 million to$33 million , compared to$46 million during the three months endedMarch 31, 2019 . The decrease primarily related to lower prices and mix ($6 million ), lower sales and production volumes ($4 million ), higher annual outage expenses ($5 million ), and other fixed costs ($3 million ), partially offset by lower operating costs ($5 million ). There were no material special items in the Paper segment in the first quarter of 2020 or 2019.
Non-Operating Pension Expense, Interest Expense, Net and Income Taxes
Non-operating pension expense decreased$3 million during the three months endedMarch 31, 2020 , compared to the same period in 2019. The decrease in non-operating pension expense was primarily related to the favorable 2019 asset performance, partially offset by assumption changes. Interest expense, net decreased$5 million during the three months endedMarch 31, 2020 , compared to the same period in 2019. The decrease in interest expense, net was primarily related to lower earnings on deferred compensation balances, no treasury lock amortization due to the write-off of the remaining balances of treasury locks in connection with the Company's debt refinancing completed inDecember 2019 , and higher interest income due to higher cash balances during the first quarter of 2020 compared to the first quarter of 2019. During the three months endedMarch 31, 2020 , we recorded$48 million of income tax expense, compared to$63 million of expense during the three months endedMarch 31, 2019 . The effective tax rate for the three months endedMarch 31, 2020 and 2019 was 25.5% and 25.1%, respectively. The increase in our effective tax rate was primarily due to higher employee compensation related impacts from the elimination of the performance based exclusion in tax reform and reduced benefit associated with Foreign Derived Intangible Income. 19
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Liquidity and Capital Resources
Sources and Uses of Cash
Our primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under our revolving credit facility. AtMarch 31, 2020 , we had$764 million of cash and cash equivalents,$149 million of marketable debt securities, and$329 million of unused borrowing capacity under the revolving credit facility, net of letters of credit. Currently, our primary uses of cash are for operations, capital expenditures, acquisitions, debt service, common stock dividends, and repurchases of common stock. We believe that net cash generated from operating activities, cash on hand, available borrowings under our revolving credit facility, and available capital through access to capital markets will be adequate to meet our liquidity and capital requirements, including payments of any declared common stock dividends, for the foreseeable future. As our debt or credit facilities become due, we will need to repay, refinance, extend, or replace such debt or credit facilities. Our ability to do so will be subject to future economic conditions and financial, business, and other factors, many of which are beyond our control.
Below is a summary table of our cash flows, followed by a discussion of our sources and uses of cash through operating activities, investing activities, and financing activities (dollars in millions):
Three Months Ended
March 31,
2020 2019 Change
Net cash provided by (used for):
Operating activities $ 236.7 $ 236.0 $ 0.7
Investing activities (77.0 ) (80.1 ) 3.1
Financing activities (75.2 ) (75.0 )
(0.2 )
Net increase in cash and cash equivalents
Operating Activities Our operating cash flow is primarily driven by our earnings and changes in operating assets and liabilities, such as accounts receivable, inventories, accounts payable and other accrued liabilities, as well as factors described below. Cash requirements for operating activities are subject to PCA's operating needs and the timing of collection of receivables and payments of payables and expenses. During the three months endedMarch 31, 2020 , net cash provided by operating activities was$237 million , compared to$236 million in the same period in 2019, an increase of$1 million . Cash increased by$49 million due to changes in operating assets and liabilities, primarily due to the following:
a) a smaller increase in inventory for 2020 compared to 2019 primarily
related to lower containerboard inventory on hand in the Packaging
segment for the first quarter of 2020,
b) a smaller increase in accrued liabilities for 2020 compared to 2019primarily related to lower payouts and higher accruals for employee
compensation and benefits liabilities for the first quarter of 2020, and
c) an increase in accounts payable levels in 2020 compared to 2019 related
to the timing of payments.
Cash from operations excluding changes in cash used for operating assets and liabilities decreased$48 million , primarily due to lower income from operations as discussed above. Investing Activities We used$77 million for investing activities during the three months endedMarch 31, 2020 compared to$80 million during the same period in 2019. We spent$71 million for internal capital investments during the three months endedMarch 31, 2020 , compared to$79 million during the same period in 2019. We expect capital investments in 2020 to be between$400 million and$425 million , not including acquisitions. These expenditures could increase or decrease as a result of a number of factors, including our financial results, strategic opportunities, future economic conditions, and our regulatory compliance requirements. We currently estimate capital expenditures to comply with environmental regulations will be about$10 million in 2020. Our estimated environmental expenditures could vary significantly depending upon the enactment of new environmental laws and regulations, including those related to greenhouse gas emissions and industrial boilers. For additional information, see "Environmental Matters" in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2019 Annual Report on Form 10-K. Financing Activities
During both three month periods ended
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For more information about our debt, see Note 11, Debt, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2019 Annual Report on Form 10-K.
Contractual Obligations
There have been no material changes to the contractual obligations table disclosed in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2019 Annual Report on Form 10-K.
Reconciliations of Non-GAAP Financial Measures to Reported Amounts
Income from operations excluding special items, net income excluding special items, EBITDA, and EBITDA excluding special items are non-GAAP financial measures. Management excludes special items, as it believes that these items are not necessarily reflective of the ongoing operations of our business. These measures are presented because they provide a means to evaluate the performance of our segments and our Company on an ongoing basis using the same measures that are used by our management, because these measures assist in providing a meaningful comparison between periods and because these measures are frequently used by investors and other interested parties in the evaluation of companies and the performance of their segments. Any analysis of non-GAAP financial measures should be done in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such. Reconciliations of the non-GAAP measures to the most comparable measure reported in accordance with GAAP for the three months endedMarch 31, 2020 and 2019 follow (dollars in millions): Three Months Ended March 31, 2020 2019 Income Income before Income Net before Income Net Taxes Taxes Income Taxes Taxes Income As reported in accordance with GAAP$ 190.1 $ (48.4 ) $ 141.7 $ 249.3 $ (62.5 ) $ 186.8 Special items: Incremental costs for COVID-19 (a) 0.8 (0.2 ) 0.6 - - -
Facilities closure and other costs (b) 0.4 (0.1 ) 0.3
- - -
Wallula mill restructuring (c) - - - 0.6 (0.1 ) 0.5
Total special items 1.2 (0.3 ) 0.9 0.6 (0.1 ) 0.5
Excluding special items $ 191.3 $ (48.7 ) $ 142.6 $ 249.9 $ (62.6 ) $ 187.3 (a) Includes
COVID-19, including supplies, cleaning and sick pay.
(b) Includes
corrugated products facilities.
(c) Includes $0.6 million of charges related to the second quarter 2018
discontinuation of uncoated free sheet and coated one-side grades at the
machine to produce virgin kraft linerboard.
The following table reconciles net income to EBITDA and EBITDA excluding special items for the periods indicated (dollars in millions):
Three Months Ended
March 31,
2020 2019
Net income $ 141.7 $ 186.8
Non-operating pension (income) expense (0.6 ) 2.0
Interest expense, net 19.6 24.1
Income tax provision 48.4 62.5
Depreciation, amortization, and depletion 100.3 94.8 EBITDA
$ 309.4 $ 370.2 Special items: Incremental costs for COVID-19 0.8 - Facilities closure and other costs 0.4 - Wallula mill restructuring - 0.4 Total special items 1.2 0.4 EBITDA excluding special items$ 310.6 $ 370.6 21
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The following table reconciles segment income (loss) to EBITDA and EBITDA excluding special items for the periods indicated (dollars in millions):
Three Months Ended
March 31,
2020 2019
Packaging
Segment income $ 199.8 $ 249.6 Depreciation, amortization, and depletion 89.0 84.0 EBITDA
288.8 333.6
Incremental costs for COVID-19 0.7 -
Facilities closure and other costs 0.4 -
Wallula mill restructuring - 0.2
EBITDA excluding special items $ 289.9 $ 333.8 Paper
Segment income$ 32.5 $ 45.6
Depreciation, amortization, and depletion 9.4 9.1 EBITDA
41.9 54.7
Incremental costs for COVID-19 0.1 -
Wallula mill restructuring - 0.2
EBITDA excluding special items $ 42.0 $ 54.9
Corporate and Other
Segment loss $ (23.2 ) $ (19.8 ) Depreciation, amortization, and depletion 1.9 1.7 EBITDA
(21.3 ) (18.1 )
EBITDA excluding special items $ (21.3 ) $ (18.1 )
EBITDA $ 309.4 $ 370.2
EBITDA excluding special items $ 310.6 $ 370.6 Market Risk and Risk Management Policies
PCA is exposed to the impact of interest rate changes and changes in the market value of its financial instruments. We periodically enter into derivatives to minimize these risks, but not for trading purposes. We were not a party to any derivatives-based arrangements atMarch 31, 2020 . For a discussion of derivatives and hedging activities, see Note 16, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our 2019 Annual Report on Form 10-K.
At
Off-Balance-Sheet Activities
The Company does not have any off-balance sheet arrangements as of
Environmental Matters
There have been no material changes to the disclosure set forth in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters" filed with our 2019 Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
Management's discussion and analysis of financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America . 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 disclosures of contingent assets and liabilities. On an ongoing basis, PCA evaluates its estimates, including those related to business combinations, pensions and other postretirement benefits, goodwill and intangible assets, long-lived asset impairment, environmental liabilities, and income taxes, among others. PCA bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 22
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PCA has included in its 2019 Annual Report on Form 10-K a discussion of its critical accounting policies and estimates which require management's most difficult, subjective, or complex judgments used in the preparation of its consolidated financial statements. PCA has not had any changes to these critical accounting estimates during the first three months of 2020.
New and Recently Adopted Accounting Standards
For a listing of our new and recently adopted accounting standards, see Note 2, New and Recently Adopted Accounting Standards, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q.
Forward-Looking Statements
Some of the statements in this Quarterly Report on Form 10-Q, and in particular, statements found in this Management's Discussion and Analysis of Financial Condition and Results of Operations, that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our expectations regarding our future liquidity, earnings, expenditures, and financial condition. These statements are often identified by the words "will," "should," "anticipate," "believe," "expect," "intend," "estimate," "hope," or similar expressions. These statements reflect management's current views with respect to future events and are subject to risks and uncertainties. There are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. These factors, risks and uncertainties include the following:
• the impact of general economic conditions;
• the impact of the COVID-19 pandemic on the health of our employees, on our
vendors and customers and on economic conditions affecting our business;
• the impact of acquired businesses and risks and uncertainties regarding
operation, expected benefits and integration of such businesses;
• containerboard, corrugated products, and white paper general industry
conditions, including competition, product demand, product pricing, and
input costs;
• fluctuations in wood fiber and recycled fiber costs;
• fluctuations in purchased energy costs;
• the possibility of unplanned outages or interruptions at our principal
facilities;
• legislative or regulatory actions or requirements, particularly concerning
environmental or tax matters.
Our actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, and accordingly, we can give no assurances that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, what impact they will have on our results of operations or financial condition. Given these uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. We expressly disclaim any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date hereof. For a discussion of other factors, risks and uncertainties that may affect our business, see Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year endedDecember 31, 2019 , as supplemented by Part II, Item 1A. Risk Factors hereof. 23
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