10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-13957

RED LION HOTELS CORPORATION

(Exact name of registrant as specified in its charter)

Washington	91-1032187
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
201 W. North River Drive, Suite 100 Spokane Washington	99201
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (509) 459-6100

 __________________________________________

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  ý    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  o

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	o	Accelerated filer	ý
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)    Yes  o    No  ý

As of May 3, 2016, there were 20,143,657 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS

Item No.	Description	Page No.
	PART I – FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited):
	Consolidated Balance Sheets at March 31, 2016 and December 31, 2015	3
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2016 and 2015	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	5
	Condensed Notes to Consolidated Financial Statements	7
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4	Controls and Procedures	35
	PART II – OTHER INFORMATION
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3	Defaults Upon Senior Securities	36
Item 4	Mine Safety Disclosures	36
Item 5	Other Information	36
Item 6	Exhibits	37
	Signatures	38

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

RED LION HOTELS CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, 2016 and December 31, 2015

	March 31, 2016			December 31, 2015
	(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents ($6,729 and $7,226 attributable to VIEs)	$	18,852		$	23,898
Restricted cash ($12,250 and $10,978 attributable to VIEs)	14,269			11,304
Short-term investments	17,720			18,085
Accounts receivable, net ($2,621 and $2,383 attributable to VIEs)	9,497			8,164
Notes receivable, net	1,278			929
Inventories ($432 and $497 attributable to VIEs)	642			721
Prepaid expenses and other ($1,018 and $1,081 attributable to VIEs)	2,782			2,149
Total current assets	65,040			65,250
Property and equipment, net ($168,041 and $163,746 attributable to VIEs)	198,736			195,390
Goodwill	8,512			8,512
Intangible assets	15,389			15,301
Notes receivable, long term	1,660			1,676
Other assets, net ($74 and $103 attributable to VIEs)	1,121			1,089
Total assets	$	290,458		$	287,218
LIABILITIES
Current liabilities:
Accounts payable ($5,384 and $7,178 attributable to VIEs)	$	7,653		$	9,263
Accrued payroll and related benefits ($16 and $1,763 attributable to VIEs)	2,539			6,163
Other accrued entertainment liabilities	10,715			9,211
Other accrued liabilities ($2,456 and $1,588 attributable to VIEs)	5,842			3,225
Long-term debt, due within one year ($272 and $0 attributable to VIEs)	272			—
Total current liabilities	27,021			27,862
Long-term debt, due after one year, net of debt issuance costs ($95,518 and $87,557 attributable to VIEs)	95,518			87,557
Deferred income	1,208			1,326
Deferred income taxes	2,906			2,872
Total liabilities	126,653			119,617
Commitments and contingencies
STOCKHOLDERS’ EQUITY
RLHC stockholders' equity
Preferred stock- 5,000,000 shares authorized; $0.01 par value; no shares issued or outstanding	—			—
Common stock - 50,000,000 shares authorized; $0.01 par value; 20,131,363 and 20,051,145 shares issued and outstanding	201			201
Additional paid-in capital	144,753			143,901
Accumulated deficit	(14,909		)	(10,110		)
Total RLHC stockholders' equity	130,045			133,992
Noncontrolling interests	33,760			33,609
Total stockholders' equity	163,805			167,601
Total liabilities and stockholders’ equity	$	290,458		$	287,218

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

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RED LION HOTELS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

For the Three Months EndedMarch 31, 2016 and 2015

	Three Months Ended
	March 31,
	2016			2015
	(In thousands, except per share data)
Revenue:
Company operated hotels	$	24,149		$	23,772
Other revenues from managed properties	1,185			163
Franchised hotels	3,296			2,093
Entertainment	4,031			3,677
Other	13			10
Total revenues	32,674			29,715
Operating expenses:
Company operated hotels	21,599			20,922
Other costs from managed properties	1,185			163
Franchised hotels	3,356			2,377
Entertainment	3,437			3,126
Other	13			8
Depreciation and amortization	3,502			2,976
Hotel facility and land lease	1,161			1,600
Gain on asset dispositions, net	(117		)	(16,415		)
General and administrative expenses	3,057			2,324
Total operating expenses	37,193			17,081
Operating income (loss)	(4,519		)	12,634
Other income (expense):
Interest expense	(1,461		)	(1,502		)
Loss on early retirement of debt	—			(1,159		)
Other income, net	219			272
Income (loss) from operations before taxes	(5,761		)	10,245
Income tax expense (benefit)	59			112
Net income (loss)	(5,820		)	10,133
Net (income) loss attributable to noncontrolling interest	1,021			30
Net income (loss) attributable to RLHC	$	(4,799	)	$	10,163
Earnings (loss) per share - basic	$	(0.24	)	$	0.51
Earnings (loss) per share - diluted	$	(0.24	)	$	0.51
Weighted average shares - basic	20,088			19,895
Weighted average shares - diluted	20,088			20,067

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

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RED LION HOTELS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Three Months EndedMarch 31, 2016 and 2015

	Three Months Ended
	March 31,
	2016			2015
	(In thousands)
Operating activities:
Net income (loss)	$	(5,820	)	$	10,133
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	3,502			2,976
Amortization of debt issuance costs	302			132
Gain on disposition of property, equipment and other assets, net	(117		)	(16,415		)
Loss on early retirement of debt	—			1,159
Deferred income taxes	34			7
Equity in investments	(170		)	(33		)
Stock based compensation expense	608			250
Provision for doubtful accounts	99			(2		)
Change in current assets and liabilities:
Restricted cash for interest payments and other	(687		)	(5,358		)
Accounts receivable	(1,432		)	(343		)
Notes receivable	(22		)	(175		)
Inventories	79			135
Prepaid expenses and other	(600		)	(25		)
Accounts payable	(3,367		)	626
Accrued other liabilities	(1,197		)	4,684
Net cash used in operating activities	(8,788		)	(2,249		)
Investing activities:
Capital expenditures	(5,180		)	(2,234		)
Proceeds from disposition of property and equipment	—			37,729
Collection of notes receivable related to property sales	18			336
Advance of note receivable	(329		)	(15		)
Sales of short-term investments	365			—
Change in restricted cash for property improvements	(585		)	—
Other, net	78			(54		)
Net cash provided by (used in) investing activities	(5,633		)	35,762
Financing activities:
Borrowings on long-term debt	7,993			53,807
Repayment of long-term debt	—			(30,528		)
Debt issuance costs	(34		)	(2,423		)
Proceeds from sale of interests in joint ventures	1,500			17,071
Reduction of additional paid in capital for canceled restricted stock units	(161		)	49
Other, net	77			—
Net cash provided by financing activities	9,375			37,976
Change in cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents	(5,046		)	71,489
Cash and cash equivalents at beginning of period	23,898			5,126
Cash and cash equivalents at end of period	$	18,852		$	76,615

The accompanying condensed notes are an integral part of the consolidated financial statements

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RED LION HOTELS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - (Continued)

For the Three Months EndedMarch 31, 2016 and 2015

	Three Months Ended
	March 31,
	2016		2015
	(In thousands)
Supplemental disclosure of cash flow information:
Cash paid during periods for:
Income taxes	$	14	$	13
Interest on long-term debt	$	1,298	$	1,366
Non-cash investing and financing activities:
Funds received in advance for sale of joint venture - classified as restricted cash	$	1,693	$	—
Reclassification between short and long term notes receivable	$	2	$	227
Property and equipment, purchases not yet paid	$	1,757	$	—
Reclassification between accounts receivable and notes receivable	$	—	$	80

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

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RED LION HOTELS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

Red Lion Hotels Corporation ("RLHC", "we", "our", "us" or "our company") is a NYSE-listed hospitality and leisure company (ticker symbols RLH) primarily engaged in the management, franchising and ownership of hotels under our proprietary brands, including Hotel RL, Red Lion Hotels, Red Lion Inns & Suites, GuestHouse International and Settle Inn & Suites (collectively the "RLHC Brands"). All of our hotels currently operate under the RLHC Brands which represent upper, midscale and economy hotels.

A summary of our properties as of March 31, 2016 is provided below:

	Hotels	Total Available Rooms
Company operated hotels
Majority owned and consolidated	14	2,761
Leased and consolidated	4	867
Managed	2	361
Franchised hotels	102	10,744
Total systemwide	122	14,733

We are also engaged in entertainment operations, which derive revenues from promotion and presentation of entertainment productions and ticketing services under the operations of WestCoast Entertainment and TicketsWest. The ticketing service offers online ticket sales, ticketing inventory management systems, call center services, and outlet/electronic distributions for event locations.

We were incorporated in the state of Washington in April 1978.

2. Summary of Significant Accounting Policies

The unaudited consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Certain information and footnote disclosures normally included in financial statements have been condensed or omitted as permitted by such rules and regulations.

The consolidated balance sheet as of December 31, 2015 has been compiled from the audited balance sheet as of such date. We believe the disclosures included herein are adequate; however, they should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2015, filed with the SEC on Form 10-K on February 29, 2016.

In the opinion of management, these unaudited consolidated financial statements contain all of the adjustments of a normal and recurring nature necessary to present fairly our consolidated financial position at March 31, 2016, the consolidated statements of comprehensive income (loss) for the three months endedMarch 31, 2016 and 2015, and the consolidated cash flows for the three months ended March 31, 2016 and 2015. The comprehensive income (loss) for the periods presented may not be indicative of that which may be expected for a full year.

Principles of Consolidation

The consolidated financial statements include all accounts and wholly and majority-owned subsidiaries' accounts. All inter-company and inter-segment transactions and accounts have been eliminated upon consolidation.

The financial statements encompass the accounts of Red Lion Hotels Corporation and all of its consolidated subsidiaries, including:

Wholly-owned subsidiaries:

•Red Lion Hotels Holdings, Inc.

•Red Lion Hotels Franchising, Inc.

•Red Lion Hotels Management, Inc. ("RL Management")

•Red Lion Hotels Limited Partnership

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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 Balt Venture LLC ("RLS Balt Venture") in which we hold a 73% member interest

•RLS DC Venture LLC ("RLS DC Venture") in which we hold a 55% member interest (effective April 1, 2016)

Cash and Cash Equivalents

All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. At times, cash balances at banks and other financial institutions may be in excess of federal insurance limits.

Restricted Cash

In accordance with our various borrowing arrangements, at March 31, 2016 cash of $14.3 million was held primarily as reserves for debt service (interest only), property improvements, funds held in escrow for additional member interest sale and other requirements from the lenders.

Short-Term Investments

Short-term investments consist of variable rate demand notes with maturities that range from two to thirty-five years. They are all classified as available-for-sale investments and have been further classified as short term as the investments contain options which allow us to put them to the trustee with one day to one week's notice. The carrying amounts are reasonable estimates of their fair values due to interest rates which are variable in nature and the put provision at par plus accrued interest.

Allowance for Doubtful Accounts

The ability to collect individual accounts receivable is reviewed on a routine basis. An allowance for doubtful accounts is recorded based on specifically identified amounts believed to be uncollectible. If actual collection experience changes, revisions to the allowance may be required and if all attempts to collect a receivable fail, it is recorded against the allowance. The estimate of the allowance for doubtful accounts is impacted by, among other things, national and regional economic conditions.

The following schedule summarizes the activity in the allowance account for trade accounts receivable:

	Three Months Ended March 31,
	2016			2015
	(In thousands)
Allowance for doubtful accounts, operations
Balance, January 1	$	657		$	303
Additions to allowance	99			(68		)
Write-offs, net of recoveries	(2		)	(35		)
Balance, March 31	$	754		$	200

Inventories

Inventories consist primarily of food and beverage products held for sale at the company-operated restaurants and guest supplies. Inventories are valued at the lower of cost, determined on a first-in, first-out basis, or net realizable value.

Prepaid and other expenses

Prepaid and other expenses include prepaid insurance and taxes and deposits.

Property and Equipment

Property and equipment are stated at cost. The cost of improvements that extend the life of property and equipment is capitalized. Repairs and maintenance charges are expensed as incurred.

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Depreciation is provided using the straight-line method over the estimated useful life of each asset, which ranges as follows:

Buildings	25 to 39 years
Equipment	2 to 15 years
Furniture and fixtures	2 to 15 years
Landscaping and improvements	15 years

Valuation of Long-Lived Assets

We test long-lived asset groups for recoverability when changes in circumstances indicate the carrying value may not be recoverable, for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. We also perform a test for recoverability when management has committed to a plan to sell or otherwise dispose of an asset group. We evaluate recoverability of an asset group by comparing its carrying value to the future net undiscounted cash flows that we expect will be generated by the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the estimated fair value. When we recognize an impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life.

We base our calculations of the estimated fair value of an asset group on the income approach or the market approach. The assumptions and methodology utilized for the income approach are the same as those described in the "Goodwill and Intangible Assets" caption. For the market approach, we use analyses based primarily on market comparables, recent appraisals and assumptions about market capitalization rates, growth rates, and inflation.

Variable Interest Entities

We analyze the investments we make in joint venture entities based on the accounting guidance for variable interest entities or "VIEs”. These joint ventures are evaluated to determine whether (1) sufficient equity at risk exists for the legal entity to finance its activities without additional subordinated financial support or, (2) as a group, the holders of the equity investment at risk lack one of the following characteristics (a) the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance or, (b) the obligation to absorb the expected losses of the legal entity or (c) the right to receive expected residual returns of the legal entity, or (3) the voting rights of some equity investors are not proportional to their obligations to absorb the losses or the right to receive benefits and substantially all of the activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. If any one of the above three conditions are met then the joint venture entities are considered to be VIEs.

We consolidate the results of any such VIE in which we determine that we have a controlling financial interest. We would have a “controlling financial interest” (i.e., be deemed the primary beneficiary) in such an entity if we had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive the benefits from, the VIE that could be potentially significant to the VIE.

Business Combinations

On the date of acquisition, the assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree are recorded at their fair values. The acquiree's results of operations are also included as of the date of acquisition in our consolidated results. Intangible assets that arise from contractual/legal rights, or are capable of being separated are measured and recorded at fair value, and amortized over the estimated useful life. If practicable, assets acquired and liabilities assumed arising from contingencies are measured and recorded at fair value. If not practicable, such assets and liabilities are measured and recorded when it is probable that a gain or loss has occurred and the amount can be reasonably estimated. The residual balance of the purchase price, after fair value allocations to all identified assets and liabilities, represents goodwill. Acquisition-related costs are expensed as incurred. Restructuring costs associated with an acquisition are generally expensed in periods subsequent to the acquisition date, and changes in deferred tax asset valuation allowances and acquired income tax uncertainties, including penalties and interest, after the measurement period are recognized as a component of the provision for income taxes. Our acquisitions may include contingent consideration, which require us to recognize the fair value of the estimated liability at the time of the acquisition. Subsequent changes in the estimate of the amount to be paid under the contingent consideration arrangement are recognized in the consolidated statements of comprehensive income (loss). Cash payments for contingent or deferred consideration up to the

9

amount of liability recognized on the acquisition date are classified within cash flows from financing activities within the consolidated statements of cash flows and any excess is classified as cash flows from operating activities.

Goodwill and Intangible Assets

Goodwill and intangible assets may result from our business acquisitions. Intangible assets may also result from the purchase of assets and intellectual property in a transaction that does not qualify as a business combination. We use estimates, including estimates of useful lives of intangible assets, the amount and timing of related future cash flows, and fair values of the related operations, in determining the value assigned to goodwill and intangible assets. Our finite-lived intangible assets are amortized over their expected useful lives based on estimated discounted cash flows. Our brand name and trademark assets are considered indefinite-lived intangible assets and are not subject to amortization. Finite-lived intangible assets are tested for impairment at the asset group level when events or changes in circumstances indicate the carrying value may not be recoverable. Indefinite-lived intangible assets are tested for impairment annually, when events or changes in circumstances indicate the asset may be impaired, or at the time when their useful lives are determined to be no longer indefinite.

Goodwill is assigned to our reporting units based on the expected benefit from the synergies arising from each business combination, determined by using certain financial metrics, including the forecast discounted cash flows associated with each reporting unit. The reporting units are aligned with our reporting segments.

We test goodwill for impairment each year as of October 1, or more frequently should a significant impairment indicator occur. As part of the impairment test, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit, including goodwill, is less than its carrying amount, or if we elect to bypass the qualitative assessment, we would then proceed with the two-step impairment test. The impairment test involves comparing the fair values of the reporting units to their carrying amounts. If the carrying amount of a reporting unit exceeds its fair value, a second step is required to measure the goodwill impairment loss amount. This second step determines the current fair values of all assets and liabilities of the reporting unit and then compares the implied fair value of the reporting unit's goodwill to the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. We forecast discounted future cash flows at the reporting unit level using risk-adjusted discount rates and estimated future revenues and operating costs, which take into consideration factors, such as expectations of competitive and economic environments. We also identify similar publicly traded companies and develop a correlation, referred to as a multiple, to apply to the operating results of the reporting units. These combined fair values are then reconciled to the aggregate market value of our common stock on the date of valuation, while considering a reasonable control premium.

Notes Receivable

We carry notes receivable at their estimated collection amount, and they are classified as either current or noncurrent depending on the expected collection date. Interest income on notes receivable is recognized using the interest method.

Other Assets

Other assets primarily consist of key money arrangements and IT system implementation costs for franchisees. We recognize key money paid in conjunction with entering into long-term franchise agreements as prepaid expenses and amortize the amount paid against revenue over the term of the franchise agreements. IT system implementation costs represent costs incurred to implement RevPAK applications for new franchises and are amortized over the initial term of the software license arrangement.

Fair Value Measurements

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the following three levels of the fair value hierarchy:

• Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

• Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset

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or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

• Level 3 includes unobservable inputs that reflect assumptions about what factors market participants would use in pricing the asset or liability. We develop these inputs based on the best information available, including our own data.

Deferred Income

In 2003, we sold a hotel to an unrelated party in a sale-operating leaseback transaction. The pre-tax gain on the transaction of approximately $7.0 million was deferred and is being amortized into income over the period of the lease term, which expires in November 2018 and is renewable for three, five-year terms at our option. During the three months ended March 31, 2016 and 2015, we recognized income of approximately $0.1 million each period for the amortization of the deferred gain. The remaining balance at March 31, 2016, was $1.2 million.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning, and results of recent operations. At March 31, 2016 and December 31, 2015, a valuation allowance has been recorded to reduce our deferred tax assets to an amount that is more likely than not to be realized. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

We classify any interest expense and penalties related to underpayment of taxes and any interest income on tax overpayments as components of income tax expense.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. See Note 10.

Revenue Recognition

Revenue is generally recognized as services are provided. When payments from customers are received before services have been performed, the amount received is recorded as deferred revenue until the service has been completed. We recognize revenue from the following sources:

• Company-Operated Hotels - Room rental and food and beverage sales from majority owned and leased hotels and management fees from hotels under management contract. Revenues are recognized when services have been performed, generally at the time of the hotel stay or guests visit to the restaurant and at the time the management services are provided. We recognize other revenue and costs from managed properties when we incur the related reimbursable costs. These costs primarily consist of payroll and related expenses at managed properties where we are the employer. As these costs have no added markup, the revenue and related expense have no impact on either our operating or net income.

• Franchised Hotels - Fees received in connection with the franchise and marketing of our brand names. Franchise revenues are recognized as earned in accordance with the contractual terms of the franchise agreements.

• Entertainment - Online ticketing services, ticketing inventory management systems, promotion of Broadway-style shows and other special events. Where we act as an agent and receive a net fee or commission, revenue is recognized in the period the services are performed. When we are the promoter of an event and are at-risk for the production, revenues and expenses are recorded in the period of the event performance.

Advertising and Promotion

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Costs associated with advertising and promotional efforts are generally expensed as incurred. During the three months ended March 31, 2016 and 2015 we incurred approximately $1.4 million and $1.3 million in advertising expense.

Basic and Diluted Earnings (Loss) Per Share

Basic earnings (loss) per share attributable to Red Lion Hotels Corporation is computed by dividing income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings (loss) per share attributable to Red Lion Hotels Corporation gives effect to all dilutive potential shares that are outstanding during the period and include outstanding stock options, other outstanding employee equity grants and warrants, by increasing the weighted-average number of shares outstanding by their effect. When we report a net loss during the period, basic and diluted earnings (loss) per share are the same. See Note 12.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.

Restatement for Cash Flow Misclassification

During the fourth quarter of 2015, we identified a cash flow misclassification related to the proceeds from the sales of interests in our joint venture entities during the period ended March 31, 2015. This error did not affect net income, stockholders' equity, cash flows from operations or the net increase or decrease in cash and cash equivalents for the period. The classification error incorrectly included these cash inflows as investing activities when they should have been classified as inflows from financing activities in the Consolidated Statement of Cash Flows for the period ended March 31, 2015. In accordance with the SEC Staff Accounting Bulletin (SAB) No. 99, "Materiality," and SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," we evaluated the materiality of the error from qualitative and quantitative perspectives and concluded that the error was immaterial to the current and prior interim period. Consequently, the Consolidated Statement of Cash Flows contained in this Report has been restated for the three months ended March 31, 2015. This change resulted in a decrease of $17.1 million from cash flows provided by investing activities and a corresponding increase to cash inflows from financing activities.

New and Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 may be applied using either a full retrospective or a modified retrospective approach and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. In July 2015, the FASB voted to defer the effective date to January 1, 2018 with early adoption beginning January 1, 2017. We are continuing our evaluation of this guidance and our method of adoption.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 became effective for us beginning January 1, 2016. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or, recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. The adoption of this new standard did not have any impact on our financial condition or results of operations.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. ASU 2015-05 became effective for us beginning January 1, 2016. Upon adoption, this ASU did not have a material impact on our financial condition or results of operations.

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In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

We have assessed the potential impact of other recently issued, but not yet effective, accounting standards and determined that the provisions are either not applicable to us or are not anticipated to have a material impact on our consolidated financial statements.

3.    Business Segments

As of March 31, 2016, we had three reporting segments: company operated hotels, franchised hotels and entertainment. The "other" segment consists of miscellaneous revenues and expenses, cash and cash equivalents, certain receivables, certain property and equipment and general and administrative expenses, which are not specifically associated with an operating segment. Management reviews and evaluates the operating segments exclusive of interest expense, income taxes and certain corporate expenses; therefore, they have not been allocated to the operating segments. All balances have been presented after the elimination of inter-segment and intra-segment revenues and expenses.

Selected financial information is provided below (in thousands):

Three months ended March 31, 2016	Company Operated Hotels			Franchised Hotels			Entertainment		Other			Total
Revenue	$	25,334		$	3,296		$	4,031	$	13		$	32,674
Segment operating expenses	$	22,784		$	3,356		$	3,437	$	13		$	29,590
Depreciation and amortization	3,319			(86		)	54		215			3,502
Other operating expenses and gains on asset dispositions	1,045			—			—		3,056			4,101
Operating income (loss)	$	(1,814	)	$	26		$	540	$	(3,271	)	$	(4,519	)
Capital expenditures	$	6,580		$	—		$	—	$	107		$	6,687
Identifiable assets as of March 31, 2016	$	255,680		$	21,316		$	5,407	$	8,055		$	290,458

Three months ended March 31, 2015	Company Operated Hotels			Franchise Hotels			Entertainment		Other			Total
Revenue	$	23,935		$	2,093		$	3,677	$	10		$	29,715
Segment operating expenses	$	21,085		$	2,377		$	3,126	$	8		$	26,596
Depreciation and amortization	2,761			11			74		130			2,976
Other operating expenses and gains on asset dispositions	(14,889		)	—			—		2,398			(12,491		)
Operating income (loss)	$	14,978		$	(295	)	$	477	$	(2,526	)	$	12,634
Capital expenditures	$	1,849		$	—		$	88	$	297		$	2,234
Identifiable assets as of December 31, 2015	$	255,876		$	20,180		$	5,256	$	5,906		$	287,218

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4.     Variable Interest Entities

Our joint venture entities have been determined to be variable interest entities ("VIEs"), and RLHC has been determined to be the primary beneficiary of each VIE. Therefore, we consolidate the assets, liabilities, and results of operations of (1) RL Venture, (2) RLS Balt Venture, (3) RLS Atla Venture and (4) RLS DC Venture. See Note 2 for discussion of the significant judgments and assumptions made by us in determining whether an entity is a VIE and if we are the primary beneficiary and therefore must consolidate the VIE. See Note 7 for further discussion of the terms of the long-term debt at each of the joint venture entities.

RL Venture

In January 2015, we transferred 12 of our wholly-owned hotels into RL Venture, a newly created entity that was initially wholly-owned by us. Subsequently, we sold a 45% ownership stake in RL Venture to Shelbourne Falcon RLHC Hotel Investors LLC ("Shelbourne Falcon"), an entity that is led by Shelbourne Capital LLC ("Shelbourne"). We maintain a 55% interest in RL Venture and the 12 hotels are managed by RL Management, one of our wholly-owned subsidiaries, subject to a management agreement. RL Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest and substantially all of RL Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over two of the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our 55% equity interest and management fees. As a result, we consolidate RL Venture. The equity interest owned by Shelbourne Falcon is reflected as noncontrolling interest in the consolidated financial statements. When ownership changes without a loss of control GAAP requires the difference between consideration received and the carrying amount of a noncontrolling interest to be recorded in equity. Accordingly, we recognized $12.4 million upon sale of the equity interests as a reduction to RLHC's additional paid in capital.

Cash distributions are made periodically based on calculated distributable income. During the first quarter of 2016, RL Venture made no cash distributions.

Refer to Note 7 for further discussion of the long-term debt of RL Venture.

RLS Balt Venture

In April 2015, we sold a 21% member interest in our wholly-owned RLS Balt Venture to Shelbourne Falcon Charm City Investors LLC ("Shelbourne Falcon II"), an entity led by Shelbourne. Shelbourne Falcon II had an option exercisable until December 31, 2015 to purchase an additional 24% member interest for $2.3 million. RL Baltimore, LLC ("RL Baltimore"), which is wholly-owned by RLS Balt Venture, owns the Hotel RL Baltimore Inner Harbor, which is managed by RL Management. RLS Balt Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest and substantially all of RLS Balt Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our 73% equity interest and management fees. As a result, we consolidate RLS Balt Venture. The equity interest owned by Shelbourne Falcon II is reflected as a noncontrolling interest in the consolidated financial statements.

In October 2015, RLHC provided $1.5 million to RLS Balt Venture to fund renovations costs and for operating losses. This funding is not treated as a loan or as a capital contribution. Rather, it is a long-term obligation of RLS Balt Venture and would be repaid only when the Baltimore hotel property is sold or when RLS Balt Venture is liquidated. RLHC would receive the $1.5 million plus a preferred return of 11%, compounded annually, prior to any liquidation proceeds being returned to the members.

In December 2015, Shelbourne Falcon II elected to purchase additional member interests of 5.876% based on an aggregate purchase price of $560,000. With the sale of additional member interest without a corresponding change in control, $0.1 million was recognized as an increase in RLHC's additional paid in capital.

Cash distributions are made periodically based on calculated distributable income. There were no cash distributions made during the three months ended March 31, 2016.

Refer to Note 7 for further discussion of the long-term debt of RLS Balt Venture.

RLS Atla Venture

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In September 2015, we formed a joint venture, RLS Atla Venture, with Shelbourne Falcon Big Peach Investors LLC ("Shelbourne Falcon III"), an entity led by Shelbourne. We own a 55% interest in the joint venture and Shelbourne Falcon III owns a 45% interest. RLH Atlanta LLC ("RLH Atlanta"), which is wholly-owned by RLS Atla Venture, owns a hotel adjacent to the Atlanta International Airport that opened in April 2016 as the Red Lion Hotel Atlanta International Airport. RLS Atla Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest and substantially all of RLS Atla Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our 55% equity interest and management fees. As a result, we consolidate RLS Atla Venture. The equity interest owned by Shelbourne Falcon III is reflected as a noncontrolling interest in the consolidated financial statements.

Cash distributions are made periodically based on calculated distributable income. There were no cash distributions made during the three months ended March 31, 2016.

Refer to Note 7 for further discussion of the long-term debt of RLS Atla Venture.

RLS DC Venture

In October 2015, we formed a joint venture, RLS DC Venture, with Shelbourne Falcon DC Investors LLC ("Shelbourne Falcon IV"), an entity led by Shelbourne. Initially, we owned an 86% interest in the joint venture, and Shelbourne Falcon IV owned a 14% interest. On October 29, 2015, RLH DC LLC ("RLH DC"), which is wholly-owned by RLS DC Venture, acquired 100% of The Quincy, an existing hotel business now operated as the Hotel RL Washington DC, in a business combination. The property is managed by RL Management. RLS DC Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest, and substantially all of RLS DC Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our equity interest and management fees. As a result, we consolidate RLS DC Venture. The equity interest owned by Shelbourne Falcon IV is reflected as a noncontrolling interest in the consolidated financial statements.

Cash distributions are made periodically based on calculated distributable income. There were no cash distributions made during the three months ended March 31, 2016.

As part of the organization of RLS DC Venture, Shelbourne Falcon IV had an option to purchase from us up to an additional 31% of the member interests. On February 3, 2016, Shelbourne Falcon IV elected to purchase from us an additional 15% of the member interests of RLS DC Venture, based on an aggregate purchase price of $1.5 million. Shelbourne Falcon IV, with a 29% member interest, is still considered a noncontrolling interest in the consolidated financial statements. With the sale of the additional member interest without a corresponding change in control $0.2 million was recognized as an increase in additional paid in capital in February 2016. As of March 31, 2016, Shelbourne Falcon IV still had the option to purchase from us an additional 16% of the member interests of RLS DC Venture. This purchase was completed on April 1, 2016 for $1.7 million, for a gain of $277,000 in RLHC's additional paid in capital, as we continue to consolidate RLS DC Venture since we are the primary beneficiary. Following the April 1, 2016 transaction, we now own 55% of RLS DC Venture, and Shelbourne Falcon IV owns 45%.

Refer to Note 7 for further discussion of the long-term debt of RLS DC Venture.

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5.    Property and Equipment

Property and equipment is summarized as follows (in thousands):

	March 31, 2016			December 31, 2015
Buildings and equipment	$	221,630		$	217,787
Furniture and fixtures	33,706			32,821
Landscaping and land improvements	7,559			7,253
	262,895			257,861
Less accumulated depreciation	(126,913		)	(123,084		)
	135,982			134,777
Land	43,242			43,242
Construction in progress	19,512			17,371
Property and equipment, net	$	198,736		$	195,390

6.     Goodwill and Intangible Assets

Goodwill represents the excess of the estimated fair value of the net assets acquired during business combinations over the net tangible and identifiable intangible assets acquired. Goodwill was recorded in prior years in connection with the acquisitions of franchises and entertainment businesses.

The Red Lion and GuestHouse International brand names are identifiable, indefinite-lived intangible assets that represent the separable legal right to a trade name and associated trademarks. We acquired the Red Lion brand name in a business combination we entered into in 2001. We purchased the GuestHouse International and Settle Inn & Suites brand names from GuestHouse International LLC in April 2015 and allocated the purchase price of $5.5 million.

In the table below, the customer contracts represent the franchise license agreements acquired with the GuestHouse International brand. We have allocated $3.3 million of the final purchase price to the customer. Franchise license agreements are amortized over 10 years which represents the period of expected cash flows, using an accelerated amortization method that matches the economic benefit of the agreements.

In the third quarter of 2015, we determined the contingent consideration due to the sellers of GuestHouse International had not been earned and reduced our allocation of the purchase price by $1.5 million.

We estimated the fair value of our customer contracts and brand names purchased from GuestHouse International using expected future payments discounted at risk-adjusted rates, both of which are Level 3 inputs. See Note 13 for additional information.

We assess goodwill and the other intangible assets for potential impairments annually as of October 1, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the assets. We did not impair any goodwill or intangible assets during the three months endedMarch 31, 2016 or 2015.

The following table summarizes the balances of goodwill and other intangible assets (in thousands):

	March 31, 2016		December 31, 2015
Goodwill	$	8,512	$	8,512
Intangible assets
Brand names	$	12,460	$	12,314
Customer contracts	2,795		2,853
Trademarks	134		134
Total intangible assets	$	15,389	$	15,301

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Goodwill and other intangible assets attributable to each of our business segments were as follows (in thousands):

	March 31, 2016				December 31, 2015
			Other				Other
	Goodwill		Intangibles		Goodwill		Intangibles
Company operated hotels	$	—	$	4,659	$	—	$	4,659
Franchised hotels	5,351		10,724		5,351		10,636
Entertainment	3,161		6		3,161		6
Total	$	8,512	$	15,389	$	8,512	$	15,301

The following table summarizes the balances of amortized customer contracts (in thousands):

	March 31, 2016			December 31, 2015
Historical cost	$	3,273		$	3,420
Accumulated amortization	(478		)	(567		)
Net carrying amount	$	2,795		$	2,853

As of March 31, 2016, estimated future amortization expenses related to intangible assets is as follows (in thousands):

Year Ending December 31,	Amount
2016	$	451
2017	531
2018	433
2019	366
2020	307
Thereafter	707
Total	$	2,795

7. Long-Term Debt

The current and non-current portions of long-term debt as of March 31, 2016 and December 31, 2015 are as follows (in thousands):

	March 31, 2016					December 31, 2015
	Current		Non-Current			Current		Non-Current
RL Venture	$	272	$	60,347		$	—	$	56,307
RL Baltimore	—		13,300			—		13,300
RLH Atlanta	—		9,400			—		6,000
RLH DC	—		15,446			—		15,165
Total debt	272		98,493			—		90,772
Unamortized debt issuance costs	—		(2,975		)	—		(3,215		)
Long-term net of debt issuance costs	$	272	$	95,518		$	—	$	87,557

The collateral for each of the borrowings within the joint venture entities is the assets and proceeds of each respective entity.

RL Venture

In January 2015, RL Venture Holding LLC, a wholly-owned subsidiary of RL Venture, and each of its 12 wholly-owned subsidiaries entered into a loan agreement with Pacific Western Bank. The original principal amount of the loan was $53.8 million with an additional $26.2 million to be drawn over a two-year period to cover improvements related to the 12 hotels owned by the subsidiaries. We drew $2.5 million during the year ended December 31, 2015 and $4.3 million in the three months ended March 31,

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2016. At March 31, 2016, the remaining amount of funds available to draw on the loan was $19.4 million, and there were unamortized debt issuance fees of $1.7 million.

The loan matures in January 2019 and has a one-year extension option. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 4.75%. Fixed monthly principal payments begin in January 2017 in an amount that would repay the outstanding principal balance over a twenty-five year amortization period.

The liabilities of RL Venture, other than its long-term debt, are non-recourse to our general credit and assets. The long-term debt is non-recourse as to RLHC, but several investors in RL Venture, including us, are guarantors regarding completion of certain improvements to the hotels, environmental covenants in the loan agreement, losses incurred by the lender and in the event of a voluntary bankruptcy filing involving RL Venture, any of its subsidiaries or the guarantors. RLHC has no other obligation to provide financial support to RL Venture.

The loan requires us to comply with customary reporting and operating covenants applicable to RL Venture, including requirements relating to debt service loan coverage ratios. It also includes customary events of default. We were in compliance with these covenants at March 31, 2016.

RL Baltimore

In April 2015, RL Baltimore obtained a new mortgage loan from PFP Holding Company IV LLC, an affiliate of Prime Finance, secured by the Hotel RL Baltimore Inner Harbor. The initial principal amount of the loan was $10.1 million, and the lender agreed to advance an additional $3.2 million to cover expenses related to improvements to the hotel, which we drew during the year ended December 31, 2015. At March 31, 2016 the funds on the loan were fully disbursed. At March 31, 2016, there were unamortized debt issuance fees of $0.6 million.

The loan matures in May 2018 and has twoone-year extension options. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 6.25%. No principal payments are required during the initial term of the loan. Principal payments of $16,000 per month are required beginning in May 2018 if the extension option is exercised.

The loan agreement includes customary requirements for lender approval of annual operating and capital budgets, under certain conditions. It also includes customary events of default. The liability of RL Baltimore under the loan agreement is generally non-recourse.  However, the lender may obtain a monetary judgment against RL Baltimore if the lender suffers losses under certain circumstances listed in the loan agreement, including but not limited to fraud, criminal activity, waste, misappropriation of revenues, and breach of environmental representations.  RLHC has guaranteed these recourse obligations of RL Baltimore and agreed to customary reporting and operating covenants. We were in compliance with these covenants at March 31, 2016.

RLH Atlanta

In September 2015, RLH Atlanta obtained a new mortgage loan from PFP Holding Company IV LLC, an affiliate of Prime Finance, secured by a hotel adjacent to the Atlanta International Airport, which opened in April 2016 as the Red Lion Hotel Atlanta International Airport. The initial principal amount of the loan was $6.0 million, and the lender has agreed to advance an additional $3.4 million to cover expenses related to improvements to the hotel, which we drew in the three months ended March 31, 2016, and with this advancement of funds the loan was fully disbursed. At March 31, 2016, there were unamortized debt issuance fees of $0.2 million.

The loan matures in September 2018 and has twoone-year extension options. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 6.35%. No principal payments are required during the initial term of the loan.

The loan agreement includes customary requirements for lender approval of annual operating and capital budgets, under certain conditions. It also includes customary events of default. The liability of RLH Atlanta under the loan agreement is generally non-recourse.  However, the lender may obtain a monetary judgment against RL Atlanta if the lender suffers losses under certain circumstances listed in the loan agreement, including but not limited to fraud, criminal activity, waste, misappropriation of revenues, and breach of environmental representations.  RLHC has guaranteed these recourse obligations of RL Atlanta and agreed to customary reporting and operating covenants. We were in compliance with these covenants at March 31, 2016.

RLH DC

In October 2015, RLH DC obtained a new mortgage loan from Pacific Western Bank secured by the Hotel RL Washington DC. The initial principal amount of the loan was $15.2 million, and the lender agreed to advance an additional $2.3 million to

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cover expenses related to improvements to the hotel. We drew $0.3 million in additional funds during the three months ended March 31, 2016. At March 31, 2016, the remaining amount of funds available to draw on the loan was $2.0 million, and there were unamortized debt issuance costs of $0.4 million.

The loan matures in October 2019 and has a one-year extension option. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 4.55%. Fixed monthly principal payments begin in October 2018 in an amount that would repay the outstanding principal balance over an amortization period of twenty-five years.

The loan agreement includes customary requirements for lender approval of annual operating and capital budgets, under certain conditions. It also includes customary events of default. The liability of RLH DC under the loan agreement is generally non-recourse.  However, the lender may obtain a monetary judgment against RLH DC if the lender suffers losses under certain circumstances listed in the loan agreement, including but not limited to fraud, criminal activity, waste, misappropriation of revenues, and breach of environmental representations.  RLHC has guaranteed these recourse obligations of RLH DC and agreed to customary reporting and operating covenants. We were in compliance with these covenants at March 31, 2016.

Wells Fargo

In January 2015, in connection with the RL Venture transaction, we repaid the outstanding balance of our Wells Fargo term loan. We recognized a $1.1 million "Loss on early retirement of debt" on the Consolidated Statement of Comprehensive Income (Loss) related to termination fees and write-off of the previously recorded prepaid debt fees and unamortized debt discount balances.

In January 2015, in connection with the sale of the Bellevue property, we terminated the $10 million revolving credit facility associated with the term loan. There was no impact on our financial statements.

Debentures

In December 2015, Red Lion Hotels Capital Trust (the "Trust") redeemed $29.9 million of its issued and outstanding 9.5% Trust Preferred Securities and all $0.9 million of its issued and outstanding 9.5% Trust Common Securities for a total redemption price of $30.8 million. The redemptions occurred concurrently with our redemption of all $30.8 million of our 9.5% Junior Subordinated Debentures due 2044, all of which were held by the Trust.

8.    Derivative Financial Instruments

We do not enter into derivative transactions for trading purposes, but rather to hedge our exposure to interest rate fluctuations. We manage our floating rate debt using interest rate caps in order to reduce our exposure to the impact of changing interest rates and future cash outflows for interest. We estimate the fair value of our interest rate caps via standard calculations that use as their basis readily available observable market parameters. This option-pricing technique utilizes a one-month LIBOR forward yield curve, obtained from an independent external service, which is a Level 2 input. Changes in fair value of these instruments are recognized in interest expense on the Consolidated Statements of Comprehensive Income (Loss).

RL Venture

As required under our RL Venture loan, we entered into an interest rate cap with Commonwealth Bank of Australia to cap our interest rate exposure. The cap had an original notional amount of $80.0 million and caps the LIBOR reference rate at 4.0%. The cap expires in January 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $2,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

RL Baltimore

As required under our RL Baltimore loan, we entered into an interest rate cap with Commonwealth Bank of Australia to cap our interest rate exposure. The cap had an original notional amount of $13.3 million and caps the LIBOR reference rate at 3.0%. The cap expires in May 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $2,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

RLH Atlanta

As required under our RLH Atlanta loan, we entered into an interest rate cap with SMBC Capital Markets, Inc. to cap our interest rate exposure. The cap had an original notional amount of $9.4 million and caps the LIBOR reference rate at 3.0%. The

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cap expires in September 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $3,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

RLH DC

As required under our RLH DC loan, we entered into an interest rate cap with Commonwealth Bank of Australia to cap our interest rate exposure. The cap had an original notional amount of $17.5 million and caps the LIBOR reference rate at 3.0%. The cap expires in November 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $7,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

Wells Fargo

In January 2015, in connection with the early retirement of the Wells Fargo credit facility, we settled and terminated the associated interest rate swap with Wells Fargo. The outstanding notional amount at the time of the termination was approximately $16.2 million. Of the $2.8 million "Loss on early retirement of debt" on the Consolidated Statement of Comprehensive Income (Loss) $1.2 million resulted from the termination of the credit facility and the swap, including $0.2 million attributable to termination of the swap. See Note 7 for additional information.

9.    Commitments and Contingencies

At any given time we are subject to claims and actions incidental to the operations of our business. Based on information currently available, we do not expect that any sums we may receive or have to pay in connection with any legal proceeding would have a materially adverse effect on our consolidated financial position or net cash flow.

10.    Income Taxes

There was an income tax provision of $59,000 for the three months ended March 31, 2016 and a $112,000 income tax provision for the three months ended March 31, 2015. The income tax provision varies from the statutory rate primarily due to a full valuation allowance against our deferred assets.

We have federal operating loss carryforwards, which will expire beginning in 2033, state operating loss carryforwards, which will expire beginning in 2017, and tax credit carryforwards, which will begin to expire in 2024.

11.    Stockholders' Equity

We are authorized to issue 50 million shares of common stock, par value $0.01 per share, and 5 million shares of preferred stock, par value $0.01 per share. As of March 31, 2016, there were 20,131,363 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. The board of directors has the authority, without action by the shareholders, to designate and issue preferred stock in one or more series and to designate the rights, preferences and privileges of each series, which may be greater than the rights of the common stock.

Each holder of common stock is entitled to one vote for each share held on all matters to be voted upon by the shareholders with no cumulative voting rights. Holders of common stock are entitled to receive ratably the dividends, if any, that are declared from time to time by the board of directors out of funds legally available for that purpose. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate in the future.

Stock Incentive Plans

The 2006 Stock Incentive Plan authorizes the grant or issuance of various option and other awards including restricted stock units and other stock-based compensation. The plan was approved by our shareholders and allowed awards of 2.0 million shares, subject to adjustments for stock splits, stock dividends and similar events. As of March 31, 2016, there were 44,869 shares of common stock available for issuance pursuant to future stock option grants or other awards under the 2006 plan.

The 2015 Stock Incentive Plan authorizes the grant or issuance of various option and other awards including restricted stock units and other stock-based compensation. The plan was approved by our shareholders and allows awards of 1.4 million shares, subject to adjustments for stock splits, stock dividends and similar events. As of March 31, 2016, there were 475,185 shares of common stock available for issuance pursuant to future stock option grants or other awards under the 2015 plan.

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Stock based compensation expense reflects the fair value of stock based awards measured at grant date, including an estimated forfeiture rate, and is recognized over the relevant service period. For the quarters ended March 31, stock-based compensation expense is as follows:

	Three Months Ended March 31,
	2016		2015
	(In thousands)
Restricted stock units	$	496	$	214
Unrestricted stock awards	105		122
ESPP	7		3
Total stock-based compensation	$	608	$	339

Stock Options

Stock options issued are valued based upon the Black-Scholes option pricing model and we recognize this value as an expense over the periods in which the options vest. Use of the Black-Scholes option-pricing model requires that we make certain assumptions, including expected volatility, forfeiture rate, risk-free interest rate, expected dividend yield and expected life of the options, based on historical experience. Volatility is based on historical information with terms consistent with the expected life of the option. The risk free interest rate is based on the quoted daily treasury yield curve rate at the time of grant, with terms consistent with the expected life of the option. For the three months ended March 31, 2016 and 2015 the stock options granted were 81,130 and no shares, respectively. There were no stock option expenses recognized for the three months ended March 31, 2016 and 2015.

Stock option fair value assumptions are as follows for stock options granted during the three months ended March 31, 2016:

Grant Date	Volatility	Forfeiture Rate	Risk-free Interest Rate	Dividend Yield	Expected Life (Years)
March 28, 2016	61.12%	21.07%	1.37%	—%	5

A summary of stock option activity for the three months ended March 31, 2016, is as follows:

	Number of Shares	Weighted Average Exercise Price
Balance, December 31, 2015	71,676	$	10.41
Options granted	81,130	8.20
Options exercised	—	—
Options forfeited	—	—
Balance, March 31, 2016	152,806	$	9.23
Exercisable, March 31, 2016	71,676	$	10.41

Additional information regarding stock options outstanding and exercisable as of March 31, 2016, is as follows:

Exercise Price	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Expiration Date	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)
$8.20	81,130	9.99	2026	$	8.20	$	18,660	—	$	—	$	—
$8.74	40,836	2.14	2018	8.74		—		40,836	8.74		—
$12.21	15,195	0.64	2016	12.21		—		15,195	12.21		—
$13.00	15,645	1.38	2017	13.00		—		15,645	13.00		—
	152,806	6.80	2016-2026	$	9.23	$	18,660	71,676	$	10.41	$	—

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(1) The aggregate intrinsic value is before applicable income taxes and represents the amount option recipients would have received if all options had been fully vested and exercised on the last trading day of the first three months of 2016, or March 31, 2016, based upon our closing stock price on that date of $8.43.

Restricted Stock Units, Shares Issued as Compensation

As of March 31, 2016 and 2015, there were 1,382,344 and 640,459 unvested restricted stock units outstanding. Since we began issuing restricted stock units, approximately 22.1% of total units granted have been forfeited. In the first quarter of 2016, we recognized approximately $0.5 million in compensation expense related to restricted stock units compared to $0.2 million in the comparable period in 2015. As the restricted stock units vest, we expect to recognize approximately $6.8 million in additional compensation expense over a weighted average period of 38 months, including $1.7 million during the remainder of 2016.

A summary of restricted stock unit activity for the three months ended March 31, 2016, is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Balance, January 1, 2016	1,224,920		$	6.95
Granted	242,989		$	8.17
Vested	(75,407	)	$	6.70
Forfeited	(10,158	)	$	6.33
Balance, March 31, 2016	1,382,344		$	7.18

In 2016, 75,407 shares of common stock were issued to employees as their restricted stock units vested. Under the terms of the 2006 and 2015 plans and upon issuance, we authorized a net settlement of distributable shares to employees after consideration of individual employees' tax withholding obligations, at the election of each employee. The fair value of restricted stock that vested during three months ended March 31, 2016 and 2015 was approximately $0.5 million and $0.2 million, respectively.

Unrestricted Stock Awards

Unrestricted stock awards are granted to members of our Board of Directors as part of their compensation. Awards are fully vested and expensed when granted. The fair value of unrestricted stock awards is the market close price of our common stock on the date of the grant.

The following table summarizes unrestricted stock award activity for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016		2015
Shares of unrestricted stock granted	14,934		19,285
Weighted average grant date fair value per share	$	7.03	$	6.34

Employee Stock Purchase Plan

In 2008, we adopted a new employee stock purchase plan ("ESPP") upon expiration of our previous plan. Under the ESPP, 300,000 shares of common stock are authorized for purchase by eligible employees at a 15% discount through payroll deductions. No employee may purchase more than $25,000 worth of shares, or more than 10,000 total shares, in any calendar year. As allowed under the ESPP, a participant may elect to withdraw from the plan, effective for the purchase period in progress at the time of the election with all accumulated payroll deductions returned to the participant at the time of withdrawal. During the three months ended March 31, 2016 and 2015, there were 12,735 and 10,614 shares, respectively, issued, and approximately $7,289 and $3,329 was recorded in compensation expense related to the discount associated with the plan in each period, respectively.

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	Three Months Ended March 31,
	2016		2015
Shares of stock sold to employees	12,735		10,614
Weighted average fair value per ESPP share	$	5.96	$	4.64

Warrants

In January 2015, in connection with Shelbourne Falcon’s purchase of equity interests in RL Venture, we issued Shelbourne a warrant to purchase 442,533 shares of common stock. The warrants have a five year term from the date of issuance and a per share exercise price of $6.78. The warrants have been classified as equity due to required share settlement upon exercise. Accordingly, the estimated fair value of the warrants was recorded in additional paid in capital upon issuance, and we do not recognize subsequent changes in fair value in our financial statements. As of March 31, 2016 all warrants were still outstanding.

12.    Earnings (Loss) Per Share

The following table presents a reconciliation of the numerators and denominators used in the basic and diluted net income (loss) per share computations for the three months endedMarch 31, 2016 and 2015 (in thousands, except per share amounts):

	Three Months Ended March 31,
	2016			2015
Numerator - basic and diluted:
Net income (loss)	$	(5,820	)	$	10,133
Less: net (income) loss attributable to noncontrolling interest	1,021			30
Net income (loss) attributable to Red Lion Hotels Corporation	$	(4,799	)	$	10,163
Denominator:
Weighted average shares - basic	20,088			19,895
Weighted average shares - diluted	20,088			20,067
Earnings (loss) per share - basic	$	(0.24	)	$	0.51
Earnings (loss) per share - diluted	$	(0.24	)	$	0.51

For the three months ended March 31, 2016, all of the 152,806 options to purchase common shares, all of the 1,382,344 restricted stock units outstanding, and all of the 442,533 warrants to purchase common shares were not included in the diluted per share calculation as they were antidilutive. For the three months ended March 31, 2015, all of the 75,176 options to purchase common shares, 469,424 of the 640,459 restricted stock units outstanding, and all of the 442,533 warrants to purchase common shares were not included in the diluted per share calculation as they were antidilutive.

13.    Fair Value of Financial Instruments

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the Level 1, Level 2 and Level 3 of the fair value hierarchy.

Estimated fair values of financial instruments (in thousands) are shown in the table below. The carrying amounts for cash and cash equivalents, accounts receivable and current liabilities are reasonable estimates of their fair values due to their short maturities. The carrying amounts for short-term investments are reasonable estimates of their fair values due to interest rates which are variable in nature and a put provision at par plus accrued interest. We estimate the fair value of our notes receivable using expected future payments discounted at risk-adjusted rates, both of which are Level 3 inputs. We estimate the fair value of our long-term debt using expected future payments discounted at risk-adjusted rates, both of which are Level 3 inputs. The fair values provided below are not necessarily indicative of the amounts we or the debt holders could realize in a current market exchange. In addition, potential income tax ramifications related to the realization of gains and losses that would be incurred in an actual sale or settlement have not been taken into consideration.

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	March 31, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:	(in thousands)
Cash and cash equivalents and restricted cash	$	33,121	$	33,121	$	35,202	$	35,202
Short-term investments	$	17,720	$	17,720	$	18,085	$	18,085
Accounts receivable	$	9,497	$	9,497	$	8,164	$	8,164
Notes receivable	$	2,938	$	2,938	$	2,605	$	2,605
Interest rate caps	$	14	$	14	$	42	$	42
Financial liabilities:
Total debt	$	98,765	$	103,792	$	90,772	$	94,029

14. Related Party Transactions

RL Venture has agreed to pay to Shelbourne Falcon an investor relations fee each month equal to 0.50% of its total aggregate revenue. Columbia Pacific Opportunity Fund, LP, one of our company's largest shareholders, is an investor in Shelbourne Falcon. During the three months ended March 31, 2016 and 2015, Shelbourne Falcon earned $100,400 and $0, respectively.

RL Venture has also agreed to pay CPA Development, LLC, an affiliate of Columbia Pacific Opportunity Fund, LP, a construction management fee of $200,000. During the three months ended March 31, 2016 and 2015, RL Venture paid $33,300 and $18,200, respectively, of this fee.

In May 2015, we entered into a management agreement with the LLC that owns Red Lion Hotel Woodlake Conference Center Sacramento. A member of our board of directors is a 50% owner of the entity that serves as the manager of that LLC. During the three months ended March 31, 2016 we recognized management fee revenue from the LLC of $29,800.

Effective March 29, 2016, our wholly owned subsidiary, Red Lion Hotels Management, Inc., entered into a one-year contract to manage the Hudson Valley Resort and Spa, a hotel located in Kerhonkson, New York. The hotel is owned by HNA Hudson Valley Resort & Training Center LLC, an affiliate of HNA RLH Investments LLC, one of our largest shareholders, and is controlled by HNA Group North America LLC, for which Enrico Marini Fichera, one of our directors, serves as the Head of Investments. Under that contract, our subsidiary is entitled to a monthly management fee equal to $8,333 or three percent of the hotel’s gross operating revenues, whichever is larger.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report on Form 10-Q includes forward-looking statements. We have based these statements on our current expectations 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 those discussed in “Risk Factors” under Item 1A of our annual report filed with the Securities and Exchange Commission (“SEC”) on Form 10-K for the year ended December 31, 2015, filed February 29, 2016, 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.

In this report, "we," "us," "our," "our company" and "RLHC" refer to Red Lion Hotels 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 Management, Inc. ("RL Management")

•Red Lion Hotels Limited Partnership

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 Balt Venture LLC ("RLS Balt Venture") in which we hold a 73% member interest

•RLS DC Venture LLC ("RLS DC Venture") in which we hold a 55% member interest (effective April 1, 2016)

The terms "the network", "systemwide 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 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 ended December 31, 2015, filed with the SEC on Form 10-K.

Introduction

We are a NYSE-listed hospitality and leisure company (ticker symbol RLH) primarily engaged in the management, franchising and ownership of hotels under our proprietary brands, including Hotel RL, Red Lion Hotel, Red Lion Inns & Suites, GuestHouse and Settle Inn & Suites (collectively the “RLHC Brands”). The RLHC Brands represent upscale, midscale and economy hotels.

A summary of our properties as of March 31, 2016 is provided below:

	Hotels	Total Available Rooms
Company operated hotels
Majority owned and consolidated	14	2,761
Leased	4	867
Managed	2	361
Franchised hotels	102	10,744
Total systemwide	122	14,733

We operate in three reportable segments:

• 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 are also derived from management fees and related charges for hotels with which we contract to perform management services.

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• The franchised hotels segment is engaged primarily in licensing our brands to franchisees. This segment generates revenue from franchise fees that are typically based on a percentage of room revenue and are charged to hotel owners in exchange for the use of our brand and access to our central services programs. These programs include our reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards.

• The entertainment segment is composed of our WestCoast Entertainment and TicketsWest operations.

Our remaining activities, none of which constitutes a reportable segment, have been aggregated into "other".

Overview

Revenue per available room ("RevPAR") for company operated hotels on a comparable basis from operations increased 1.5% in the first quarter of 2016 from the same period in 2015. Average Daily Rate ("ADR") on a comparable basis from operations decreased 0.4% in the first quarter of 2016 to $88.26 from $88.61 in the first quarter of 2015. Occupancy on a comparable basis from operations increased 120 basis points in the first quarter of 2016 from the first quarter of 2015.

Comparable RevPAR for midscale franchised hotels increased 7.6% in the first quarter of 2016 from the first quarter of 2015. Comparable ADR increased 0.3% in the first quarter of 2016 to $83.94 from $83.65 in 2015. Comparable occupancy increased 370 basis points in the first quarter of 2016 as compared to the first quarter of 2015.

Comparable RevPAR for economy franchised hotels increased 3.6% in the first quarter of 2016 from the first quarter of 2015. Comparable ADR decreased 1.0% in the first quarter of 2016 to $62.51 from $63.13 in 2015. Comparable occupancy increased 180 basis points in the first quarter of 2016 as compared to the first quarter of 2015.

Average occupancy, ADR and RevPAR statistics are provided below on a comparable basis from operations.

Comparable Hotel Statistics from Operations (1)(2)
	Three months ended March 31,
	2016									2015
	AverageOccupancy			ADR			RevPAR			Average Occupancy		ADR		RevPAR
Company operated hotels
Midscale	60.7	%		$	88.26		$	53.54		59.5	%	$	88.61	$	52.75
Franchised hotels
Midscale	54.3	%		$	83.94		$	45.57		50.6	%	$	83.65	$	42.37
Economy (pro forma) (2)	41.8	%		$	62.51		$	26.13		40.0	%	$	63.13	$	25.22
Systemwide
Midscale	57.4	%		$	86.19		$	49.49		55.0	%	$	86.29	$	47.48
Economy (pro forma) (2)	41.8	%		$	62.51		$	26.13		40.0	%	$	63.13	$	25.22
Change from prior comparative period:	AverageOccupancy			ADR			RevPAR
Company operated hotels
Midscale	120		bps	(0.4		)%	1.5		%
Franchised hotels
Midscale	370		bps	0.3		%	7.6		%
Economy (pro forma) (2)	180		bps	(1.0		)%	3.6		%
Systemwide
Midscale	240		bps	(0.1		)%	4.2		%
Economy (pro forma) (2)	180		bps	(1.0		)%	3.6		%

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(1	)	Certain operating results for the periods included in this report are shown on a comparable hotel basis. With the exception of pro forma economy hotels, comparable hotels are defined as hotels that were in the system for at least one full calendar year as of the beginning of the current period under materially similar operations.
(2	)	We acquired the franchise license agreements of GuestHouse International and Settle Inn & Suites properties on April 24, 2015. Results presented prior to that date are attributable to the prior owner and therefore are presented as pro forma.

Average occupancy, ADR and RevPAR, as defined below, are widely used in the hospitality industry and appear throughout this document as important measures to the discussion of our operating performance.

• Average occupancy represents total paid rooms occupied divided by total available rooms. We use average occupancy as a measure of the utilization of capacity in our network of hotels.

• RevPAR represents total room and related revenues divided by total available rooms. We use RevPAR as a measure of performance yield in our network of hotels.

• ADR represents total room revenues divided by the total number of paid rooms occupied by hotel guests. We use ADR as a measure of room pricing in our network of hotels.

• Total available rooms represents the number of rooms available multiplied by the number of days in the reported period. We use total available rooms as a measure of capacity in our network of hotels and do not adjust total available rooms for rooms temporarily out of service for remodel or other short-term periods.

• Comparable hotels are hotels that have been owned, leased, managed, or franchised by us and were in operation for at least one full calendar year as of the end of the current period and excluding properties for which comparable results were not available.

Throughout this document and unless otherwise stated, RevPAR, ADR and average occupancy statistics are calculated using statistics for comparable hotels. Some of the terms used in this report, such as"upscale", "midscale" and "economy" are consistent with those used by Smith Travel Research, an independent statistical research service that specializes in the lodging industry.

Results of Operations

A summary of our consolidated statements of comprehensive (loss) income is provided below (in thousands):

	Three Months Ended March 31,
	2016			2015
Total revenue	$	32,674		$	29,715
Total operating expenses	37,193			17,081
Operating income (loss)	(4,519		)	12,634
Other income (expense):
Interest expense	(1,461		)	(1,502		)
Loss on early retirement of debt	—			(1,159		)
Other income, net	219			272
Income (loss) from operations before taxes	(5,761		)	10,245
Income tax expense (benefit)	59			112
Net income (loss)	(5,820		)	10,133
Less net (income) loss attributable to noncontrolling interest	1,021			30
Net income (loss) attributable to RLHC	(4,799		)	10,163
Non-GAAP Financial Measures (1)
EBITDA	$	(798	)	$	14,723
Adjusted EBITDA	$	(670	)	$	83
Adjusted net income (loss)	$	(5,692	)	$	(4,507	)
(1) The definitions of "EBITDA", "Adjusted EBITDA" and Adjusted net income (loss) and how those measures relate to net income (loss) are discussed and reconciled under Non-GAAP Financial Measures below.

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For the three months ended March 31, 2016, we reported net loss $5.8 million. The three month period in 2016 includes an environmental cleanup charge of $128,000 related to one of our hotel properties. For the three months ended March 31, 2015, we reported net income of 10.1 million, which includes $16.4 million in gains on the sales of the Bellevue and Wenatchee properties. Net income in 2015 also includes a $1.2 million loss on early retirement of debt incurred in paying off the Wells Fargo term loan. In addition, net income in 2015 includes $0.6 million in amortized lease termination fees related to the amended lease for the Red Lion Hotel Vancouver at the Quay.

The above special items are excluded from operating results in Adjusted EBITDA and adjusted net income (loss). For the three months ended March 31, 2016, Adjusted EBITDA was a loss of $0.7 million, compared to earnings of $0.1 million for the three months ended March 31, 2015.

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 and Adjusted net income (loss) are additional measures of financial performance. We believe that the inclusion or exclusion of certain special items, such as gains and losses on asset dispositions and impairments, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results.

EBITDA, Adjusted EBITDA and Adjusted net income (loss) are commonly used measures of performance in the industry. We utilize these measures because management finds them a useful tool to calculate more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core, ongoing operations. We believe they are a complement to reported operating results. EBITDA, Adjusted EBITDA and Adjusted net income (loss) are not intended to represent net income (loss) defined by generally accepted accounting principles in the United States ("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 and Adjusted net income (loss) differently than we do or may not calculate them at all, limiting the usefulness of EBITDA, Adjusted EBITDA and Adjusted net income (loss) as comparative measures.

The following is a reconciliation of EBITDA, Adjusted EBITDA and Adjusted net income (loss) to net income (loss) for the periods presented (in thousands):

			Three Months Ended March 31,
			2016			2015
Net income (loss)			(5,820		)	10,133
		Depreciation and amortization	3,502			2,976
		Interest expense	1,461			1,502
		Income tax expense (benefit)	59			112
EBITDA			$	(798	)	$	14,723
		Gain on asset dispositions (1)	—			(16,362		)
		Loss on early retirement of debt (2)	—			1,159
		Lease termination costs (3)	—			563
		Reserve for Environmental Cleanup (4)	128			—
Adjusted EBITDA			$	(670	)	$	83
(1	)	In the first quarter of 2015, we recorded $16.4 million in gain on the sales of the Bellevue and Wenatchee properties. This amount is included in the line item "Gain on asset dispositions, net" on the accompanying consolidated statements of comprehensive income (loss).
(2	)	In the first quarter of 2015, we recorded $1.2 million in loss on the early retirement of debt.
(3	)	In the fourth quarter of 2014, we amended the lease for the Red Lion Hotel Vancouver at the Quay and recorded $0.6 million of additional amortized lease termination fees in the first quarter of 2015.
(4	)	In the first quarter of 2016, a reserve account was recorded for environment clean up at one of our hotel properties.

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The following is a reconciliation of Adjusted net income (loss) to net income (loss) for the periods presented (in thousands):

			Three Months Ended March 31,
			2016			2015
Net income (loss)			(5,820		)	10,133
		Gain on asset dispositions (1)	—			(16,362		)
		Loss on early retirement of debt (2)	—			1,159
		Lease termination costs (3)	—			563
		Reserve for Environmental Cleanup (4)	128			—
Adjusted net income (loss)			$	(5,692	)	$	(4,507	)
(1	)	In the first quarter of 2015, we recorded $16.4 million in gain on the sales of the Bellevue and Wenatchee properties. This amount is included in the line item "Gain on asset dispositions, net" on the accompanying consolidated statements of comprehensive income (loss).
(2	)	In the first quarter of 2015, we recorded $1.2 million in loss on the early retirement of debt.
(3	)	In the fourth quarter of 2014, we amended the lease for the Red Lion Hotel Vancouver at the Quay and recorded $0.6 million of additional amortized lease termination fees in the first quarter of 2015.
(4	)	In the first quarter of 2016, a reserve account was recorded for environment clean up at one of our hotel properties.

Revenues

A detail of our revenues for the three months ended March 31,2016 and 2015 is as follows (in thousands):

	Three Months Ended March 31,
	2016		2015
Company operated hotels	$	24,149	$	23,772
Other revenues from managed properties	1,185		163
Franchised hotels	3,296		2,093
Entertainment	4,031		3,677
Other	13		10
Total revenues	$	32,674	$	29,715

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Comparable Company Operated Hotel Revenue From Operations

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Company operated hotel revenue from operations	$	24,149		$	23,772
less: revenue from sold and closed hotels	—			(2,128		)
less: revenue from hotels without comparable results	(2,312		)	(32		)
Comparable company operated hotel revenue	$	21,837		$	21,612
Company operated hotel operating expenses from operations	$	21,599		$	20,922
less: hotel divisional general and administrative expenses	(3,256		)	(2,960		)
less: operating expenses from sold and closed hotels	—			(1,838		)
less: operating expenses from hotels without comparable results	(2,105		)	(79		)
Comparable company operated hotel operating expenses	$	16,238		$	16,045
Company operated hotel direct operating profit from operations	$	2,550		$	2,850
less: hotel divisional general and administrative expenses	3,256			2,960
less: operating profit from sold and closed hotels	—			(290		)
less: operating profit from hotels without comparable results	(207		)	47
Comparable company operated hotel direct profit	$	5,599		$	5,567
Comparable company operated hotel direct margin %	25.6		%	25.8		%

Comparable hotels are defined as properties that were operated by our company for at least one full calendar year as of the end of the current period other than hotels for which comparable results were not available. Comparable results excludes one hotel that was converted from owned to managed, one hotel that was converted from owned to franchised and one hotel that closed.

We utilize these comparable measures because management finds them a useful tool to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core, ongoing operations. We believe they are a complement to reported operating results. Comparable operating results are not intended to represent reported operating results defined by GAAP, and such information should not be considered as an alternative to reported information or any other measure of performance prescribed by GAAP.

Three months ended March 31,2016 and 2015

During the first quarter of 2016, revenue from the company operated hotel segment increased $0.4 million or 1.6% compared to the first quarter of 2015. On a comparable hotel basis, excluding the results of the sold and closed properties and the hotels for which comparable results were not available, revenue from the company operated hotel segment increased $0.2 million or 1.0% in the first quarter of 2016 compared to the first quarter of 2015, primarily driven by increases in permanent and other room revenues. Occupancy increased for the company operated hotels 120 basis points compared to the first quarter of 2015.

Revenue from our franchised hotels segment increased $1.2 million to $3.3 million in the first quarter of 2016 compared to the same period in 2015. This was primarily due to an increase in the number of franchises in the system, resulting from new additions to the RLHC hotel system and the GuestHouse International acquisition during the second quarter of 2015.

Revenue in the entertainment segment increased $0.4 million to $4.0 million in the first quarter of 2016 compared to the first quarter of 2015. This was primarily due to a $0.3 million in lower ticketing revenue, more than offset by $0.7 million in increased entertainment revenue.

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Operating Expenses

Operating expenses generally include direct operating expenses for each of the operating segments, depreciation and amortization, hotel facility and land lease expense, gain or loss on asset dispositions and general and administrative expenses.

The detail of our operating expenses and direct margin by major expense category as reported for the three months ended March 31,2016 and 2015 is as follows (in thousands):

	Three Months Ended March 31,
	2016			2015
Company operated hotels	$	21,599		$	20,922
Other costs from managed properties	1,185			163
Franchised hotels	3,356			2,377
Entertainment	3,437			3,126
Other	13			8
Depreciation and amortization	3,502			2,976
Hotel facility and land lease	1,161			1,600
Gain on asset dispositions, net	(117		)	(16,415		)
General and administrative expenses	3,057			2,324
Total operating expenses	$	37,193		$	17,081

The detail of our comparablehotel operating expenses and direct margin for the three months ended March 31,2016 and 2015 is as follows (in thousands):

Comparable Hotel Expenses (Non-GAAP Data)

	Three Months Ended March 31,
	2016			2015
Company operated hotel operating expenses from operations	$	21,599		$	20,922
less: hotel divisional general and administrative expenses	(3,256		)	(2,960		)
less: operating expenses from sold and closed hotels	—			(1,838		)
less: operating expenses from hotels without comparable results	(2,105		)	(79		)
Comparable company operated hotel operating expenses	$	16,238		$	16,045

Comparable hotels are defined as properties that were operated by our company for at least one full calendar year as of the end of the current period other than hotels for which comparable results were not available. Comparable results excludes one hotel that was converted from owned to managed, one hotel that was converted from owned to franchised and one hotel that closed.

We utilize these comparable measures because management finds them a useful tool to perform more meaningful comparisons of past, present and future operating results and as a means to evaluate the results of core, ongoing operations. We believe they are a complement to reported operating results. Comparable operating results are not intended to represent reported operating results defined by GAAP, and such information should not be considered as an alternative to reported information or any other measure of performance prescribed by GAAP.

Three months ended March 31,2016 and 2015

Direct company operated hotel expenses were $21.6 million in the first quarter of 2016 compared with $20.9 million in the first quarter of 2015. The primary driver of the increase was an environmental cleanup obligation of $0.1 million, along with higher costs associated with increased revenue. On a comparable basis, direct company operated hotel expenses were $16.2 million in the first quarter of 2016 compared with $16.0 million in the first quarter of 2015. The increase was driven primarily by the environmental cleanup obligation of $0.1 million.

Direct expenses for the franchise segment in the first quarter of 2016 increased $1.0 million compared with the first quarter of 2015, primarily driven by a greater number of franchises in the system.

31

32

Direct expenses for the entertainment segment in the first quarter of 2016 increased by $0.3 million compared with the first quarter of 2015, primarily due to increased costs in our entertainment division for upcoming shows.

Depreciation and amortization expenses increased $0.5 million in the first quarter of 2016 compared with the first quarter of 2015, primarily due to the start of operations at the RL Venture (on January 15, 2015), Hotel RL Baltimore Inner Harbor (on August 1, 2015) and the Hotel RL Washington DC (on October 29, 2015).

Hotel facility and land lease costs decreased $0.4 million compared with the first quarter of 2015, primarily due to amortized lease termination fees for the Red Lion Hotel Vancouver at the Quay in 2015.

General and administrative expenses increased by $0.7 million in the first quarter of 2016 compared with the first quarter of 2015, primarily due to increased employee medical claims expense.

Interest Expense

Interest expense increased $41,000 in the first quarter of 2016 compared with the first quarter of 2015. The increase is primarily due to a higher principal amount of debt outstanding for the joint ventures which is offset by the reduction of the debenture interest paid during the first quarter of 2015.

Income Taxes

For the three months ended March 31, 2016 and 2015, we reported an income tax expense of $59,000 and $112,000. The income tax provision varies from the statutory rate primarily due to a full valuation allowance against our deferred tax assets.

Liquidity and Capital Resources

Our principal source of liquidity is cash flows 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. Working capital, which represents current assets less current liabilities, was $38.0 million and $37.4 million at March 31,2016 and 2015. We believe that we have sufficient liquidity to fund our operations at least through May 2017.

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 keeping our properties well maintained and attractive to our customers in order to maintain our competitiveness within the industry and keep our hotels properly positioned in their markets. This requires ongoing access to capital for replacement of outdated furnishings as well as for facility repair, modernization and renovation. For most of the past seven to eight years, our levels of capital expenditures for these purposes have been lower than preceding periods due to the general economic conditions impacting our industry. As a result, we have included property improvement expenditures in the borrowing arrangements for our RL Venture Holding LLC properties, as well as the Baltimore, Atlanta, and Washington, DC locations.

In January 2015, RL Venture Holding LLC, a wholly-owned subsidiary of RL Venture, and each of its 12 wholly-owned subsidiaries entered into a loan agreement with Pacific Western Bank. The original principal amount of the loan was $53.8 million with an additional $26.2 million to be drawn over a two-year period to cover improvements related to the 12 hotels owned by the subsidiaries. The loan matures in January 2019 and has a one-year extension option. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 4.75%. Fixed monthly principal payments begin in January 2017 in an amount that would repay the outstanding principal balance over a twenty-five year amortization period. Our joint venture partner owns 45% of RL Venture at March 31, 2016.

In April 2015, RL Baltimore, a wholly-owned subsidiary of RLS Balt Venture LLC, obtained a new mortgage loan from PFP Holding Company IV LLC, an affiliate of Prime Finance, secured by the Hotel RL Baltimore Inner Harbor. The initial principal amount of the loan was $10.1 million, and the lender has agreed to advance an additional $3.2 million to cover expenses related to improvements to the hotel. The loan matures in May 2018 and has two one-year extension options. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 6.25%. No principal payments are required during the initial term of the loan. Principal payments of $16,000 per month are required beginning in May 2018 if the extension option is exercised. Our joint venture partner owns 27% of RLS Balt Venture at March 31, 2016.

32

In September 2015, RLH Atlanta obtained a new mortgage loan from PFP Holding Company IV LLC, an affiliate of Prime Finance, which was used to acquire, and is secured by, a hotel adjacent to the Atlanta International Airport which is expected to open in the first quarter of 2016 as the Red Lion Hotel Atlanta International Airport. The initial principal amount of the loan was $6.0 million, and the lender has agreed to advance an additional $3.4 million to cover expenses related to improvements to the hotel. The loan matures in September 2018 and has two one-year extension options. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 6.35%. No principal payments are required during the initial term of the loan. Our joint venture partner owns 45% of RLS Atla Venture at March 31, 2016.

In October 2015, RLH DC obtained a new mortgage loan from Pacific Western Bank, which was used, along with cash on hand, to acquire, and is secured by, the Hotel RL Washington, D.C. The initial principal amount of the loan was $15.2 million and the lender has agreed to advance an additional $2.3 million to cover expenses related to improvements to the hotel. The loan has a two-year term with a one-year extension option, and interest under the advanced portions of the loan will be calculated at LIBOR plus 4.55%. Interest only payments are due monthly commencing November 2015. Monthly principal payments of $58,333 are required beginning in October 2018. Our joint venture partner owns 45% of RLS DC Venture as of April 2016.

At March 31, 2016 total outstanding debt was $95.8 million, net of discount, all of which are at variable interest rates. Our average pre-tax interest rate on debt was 5.5% at March 31, 2016. Refer to Note 7 in Item 1. Financial Information for further information on the specific terms of our debt.

Operating Activities

Net cash used in operating activities totaled $8.8 million during the first three months of 2016 compared with $2.2 million during the first three months of 2015. The primary drivers for the change in cash flows was related to working capital. During the first quarter of 2016, payments on accounts payable and accrued other liabilities were greater than in 2015. Also, we experienced lower collections on accounts receivable during 2016.

Investing Activities

Net cash used in investing activities totaled $5.6 million during the first three months of 2016 compared with net cash provided by investing activities of $35.8 million during the first three months of 2015. The primary driver of the change was the proceeds from the sales of the Bellevue and Wenatchee properties in 2015. Additionally, capital expenditures were $5.2 million in first quarter of 2016 compared with $2.2 million for the same period in 2015.

Financing Activities

Net cash provided by financing activities was $9.4 million during the first three months of 2016 compared with $38.0 million in the first three months of 2015. During the first quarter of 2016, we borrowed $8.0 million under our joint venture loan agreements and sold a $1.5 million interest in DC Venture. In the same period in 2015, there were two significant cash inflows - $53.8 million received on the new debt of RL Venture and the $17.1 million in proceeds from the sale of the joint venture interest to Shelbourne Falcon. These two inflows were partially offset by $30.5 million in repayment of the Wells Fargo debt in 2015.

Contractual Obligations

The following table summarizes our significant contractual obligations, including principal and estimated interest on debt, as of March 31, 2016 (in thousands):

	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Debt(1)	$	113,980	$	5,450	$	10,477	$	24,641	$	73,412
Operating and capital leases	88,022		5,464		9,626		7,990		64,942
Service agreements	275		275		—		—		—
Total contractual obligations (2)	$	202,277	$	11,189	$	20,103	$	32,631	$	138,354

⁽¹⁾  Includes estimated interest payments and commitment fees over the life of the debt agreement.

⁽²⁾  With regard to purchase obligations, we are not party to any material agreements to purchase goods or services that are enforceable or legally binding as to fixed or minimum quantities to be purchased or stated price terms.

33

We have leasehold interests at various hotel properties, as well as our corporate headquarters located in Spokane, Washington and our design center in Denver, Colorado. These leases require us to pay fixed monthly rent and have expiration dates of 2017 and beyond, which are reflected in the table above. The table below summarizes the terms of the leases, including extension periods at our option, for our hotel properties:

Property	Expiration date of lease	Extension periods
Red Lion River Inn	October 2018	Three renewal terms of five years each
Red Lion Hotel Seattle Airport (1)	December 2024	One renewal term of five years
Red Lion Anaheim	April 2021	17 renewal terms of five years each
Red Lion Hotel Kalispell	April 2028	Three renewal terms of five years each
Corporate headquarters	September 2017	None
Denver Design Center	February 2020	One renewal term of five years
Hotel RL Washington DC (1)	December 2080	None

⁽¹⁾ Ground lease only

Off-Balance Sheet Arrangements

As of March 31, 2016, we had no off-balance sheet arrangements, as defined by SEC regulations, 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 consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect: (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. Our significant accounting policies are described in Note 2 of the Condensed Notes to Consolidated Financial Statements included in this quarterly report on Form 10-Q.

Management has discussed the development and selection of our critical accounting policies and estimates with the audit committee of our board of directors, and the audit committee has reviewed the disclosures presented on Form 10-K for the year ended December 31, 2015. Since the date of our 2015 Form 10-K, there have been no material changes to our critical accounting policies, nor have there been any changes to our methodology and assumptions applied to these policies.

New and Recent Accounting Pronouncements

Please refer to 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 U.S. GAAP accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our earnings and cash flows are subject to fluctuations due to changes in interest rates primarily from outstanding debt. As of March 31, 2016, our outstanding debt, including current maturities and excluding unamortized origination fees, was $98.8 million.

At March 31, 2016, our outstanding debt totals $98.8 million which is under term loans subject to variable rates, but are subject to interest rate caps.

We do not enter into derivative transactions for trading purposes, but rather to hedge our exposure to interest rate fluctuations. We manage our floating rate debt using interest rate caps in order to reduce our exposure to the impact of changing interest rates and future cash outflows for interest.

34

We do not foresee any changes of significance in our exposure to fluctuations in interest rates, although we will continue to manage our exposure to this risk by monitoring available financing alternatives.

The below table summarizes the principal payment requirements on our debt obligations at March 31, 2016 on our consolidated balance sheet (in thousands):

	2016		2017		2018		2019		2020		Thereafter		Total			Fair Value
Debt	$	—	$	1,162	$	24,191	$	73,412	$	—	$	—	$	98,765		$	103,792
Average interest rate													5.5		%

Item 4. Controls and Procedures

As of March 31, 2016, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our interim Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective to ensure that material information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within time periods specified in Securities and Exchange Commission rules and forms.

There were no changes in internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), during the first three months of 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

35

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

At any given time, we are subject to claims and actions incidental to the operation of our business. While the outcome of these proceedings cannot be predicted, it is the opinion of management that none of such proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, cash flows or results of operations. See Note 9 of Condensed Notes to Consolidated Financial Statements.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in our annual report on Form 10-K for the year ended December 31, 2015, which could materially affect our business, financial condition or future results. The risks described in our annual report may not be the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results in the future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

36

Item 6. Exhibits

Index to Exhibits

Exhibit Number	Description
10.1	2016 RLHC Executive Officers Bonus Plan (incorporated by reference to Exhibit 10.1 in the Current Report on Form 8-K (Commission File No. 001‑13957) filed on April 1, 2016)
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)
31.2	Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a)
32.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(b)
32.2	Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(b)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

37

SIGNATURES

Pursuant to the requirements 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.

Red Lion Hotels Corporation

Registrant

Signature		Title	Date
By:	/s/ Gregory T. Mount	President and Chief Executive Officer (Principal Executive Officer)	May 10, 2016
	Gregory T. Mount
By:	/s/ David M. Wright	Vice President and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	May 10, 2016
	David M. Wright

38

EX-31.1

Exhibit 31.1

RED LION HOTELS CORPORATION

CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)

I, Gregory T. Mount, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Red Lion Hotels Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016

/s/ Gregory T. Mount

Gregory T. Mount

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

RED LION HOTELS CORPORATION

CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)

I, David M. Wright, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Red Lion Hotels Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016

/s/ David M. Wright

David M. Wright

Vice President, Interim Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

RED LION HOTELS CORPORATION

CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(b)

In connection with the quarterly report of Red Lion Hotels Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory T. Mount, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

May 10, 2016

/s/ Gregory T. Mount

Gregory T. Mount

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

RED LION HOTELS CORPORATION

CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(b)

In connection with the quarterly report of Red Lion Hotels Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David M. Wright, Vice President and Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

May 10, 2016

/s/ David M. Wright

David M. Wright

Vice President, Interim Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 03, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Red Lion Hotels CORP
Entity Central Index Key	0001052595
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		20,143,657

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents ($6,729 and $7,226 attributable to VIEs)	$ 18,852	$ 23,898
Restricted cash ($12,250 and $10,978 attributable to VIEs)	14,269	11,304
Short-term investments	17,720	18,085
Accounts receivable, net ($2,621 and $2,383 attributable to VIEs)	9,497	8,164
Notes receivable, net	1,278	929
Inventories ($432 and $497 attributable to VIEs)	642	721
Prepaid expenses and other ($1,018 and $1,081 attributable to VIEs)	2,782	2,149
Total current assets	65,040	65,250
Property and equipment, net ($168,041 and $163,746 attributable to VIEs)	198,736	195,390
Goodwill	8,512	8,512
Intangible assets	15,389	15,301
Notes receivable, long term	1,660	1,676
Other assets, net ($74 and $103 attributable to VIEs)	1,121	1,089
Total assets	290,458	287,218
Current liabilities:
Accounts payable ($5,384 and $7,178 attributable to VIEs)	7,653	9,263
Accrued payroll and related benefits ($16 and $1,763 attributable to VIEs)	2,539	6,163
Other accrued entertainment liabilities	10,715	9,211
Other accrued liabilities ($2,456 and $1,588 attributable to VIEs)	5,842	3,225
Long-term debt, due within one year ($272 and $0 attributable to VIEs)	272	0
Total current liabilities	27,021	27,862
Long-term debt, due after one year, net of debt issuance costs ($95,518 and $87,557 attributable to VIEs)	95,518	87,557
Deferred income	1,208	1,326
Deferred income taxes	2,906	2,872
Total liabilities	$ 126,653	$ 119,617
Commitments and contingencies
RLHC stockholders' equity
Preferred stock- 5,000,000 shares authorized; $0.01 par value; no shares issued or outstanding	$ 0	$ 0
Common stock - 50,000,000 shares authorized; $0.01 par value; 20,131,363 and 20,051,145 shares issued and outstanding	201	201
Additional paid-in capital	144,753	143,901
Accumulated deficit	(14,909)	(10,110)
Total RLHC stockholders' equity	130,045	133,992
Noncontrolling interests	33,760	33,609
Total stockholders' equity	163,805	167,601
Total liabilities and stockholders’ equity	$ 290,458	$ 287,218

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Cash and cash equivalents	$ 18,852	$ 23,898
Restricted cash	14,269	11,304
Accounts receivable, net	9,497	8,164
Inventories	642	721
Prepaid expenses and other assets	2,782	2,149
Property and equipment, net	198,736	195,390
Other assets, net	1,121	1,089
Accounts payable	7,653	9,263
Accrued payroll and related benefits	2,539	6,163
Other accrued expenses	5,842	3,225
Long-term debt, due within one year	272	0
Long-term debt, due after one year, net of debt issuance costs	$ 95,518	$ 87,557
RLHC stockholders' equity
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	20,131,363	20,051,145
Common stock, shares outstanding (in shares)	20,131,363	20,051,145
Variable Interest Entity, Primary Beneficiary
Cash and cash equivalents	$ 6,729	$ 7,226
Restricted cash	12,250	10,978
Accounts receivable, net	2,621	2,383
Inventories	432	497
Prepaid expenses and other assets	1,018	1,081
Property and equipment, net	168,041	163,746
Other assets, net	74	103
Accounts payable	5,384	7,178
Accrued payroll and related benefits	16	1,763
Other accrued expenses	2,456	1,588
Long-term debt, due within one year	272	0
Long-term debt, due after one year, net of debt issuance costs	$ 95,518	$ 87,557

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue:
Company operated hotels	$ 24,149	$ 23,772
Other revenues from managed properties	1,185	163
Franchised hotels	3,296	2,093
Entertainment	4,031	3,677
Other	13	10
Total revenues	32,674	29,715
Operating expenses:
Company operated hotels	21,599	20,922
Other costs from managed properties	1,185	163
Franchised hotels	3,356	2,377
Entertainment	3,437	3,126
Other	13	8
Depreciation and amortization	3,502	2,976
Hotel facility and land lease	1,161	1,600
Gain on asset dispositions, net	(117)	(16,415)
General and administrative expenses	3,057	2,324
Total operating expenses	37,193	17,081
Operating income (loss)	(4,519)	12,634
Other income (expense):
Interest expense	(1,461)	(1,502)
Loss on early retirement of debt	0	(1,159)
Other income, net	219	272
Income (loss) from operations before taxes	(5,761)	10,245
Income tax expense (benefit)	59	112
Net income (loss)	(5,820)	10,133
Net (income) loss attributable to noncontrolling interest	1,021	30
Net income (loss) attributable to RLHC	$ (4,799)	$ 10,163
Earnings (loss) per share - basic (in dollars per share)	$ (0.24)	$ 0.51
Earnings (loss) per share - diluted (in dollars per share)	$ (0.24)	$ 0.51
Weighted average shares - basic (in shares)	20,088	19,895
Weighted average shares - diluted (in shares)	20,088	20,067

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities:
Net income (loss)	$ (5,820)	$ 10,133
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	3,502	2,976
Amortization of debt issuance costs	302	132
Gain on disposition of property, equipment and other assets, net	(117)	(16,415)
Loss on early retirement of debt	0	1,159
Deferred income taxes	34	7
Equity in investments	(170)	(33)
Stock based compensation expense	608	250
Provision for doubtful accounts	99	(2)
Change in current assets and liabilities:
Restricted cash for interest payments and other	(687)	(5,358)
Accounts receivable	(1,432)	(343)
Notes receivable	(22)	(175)
Inventories	79	135
Prepaid expenses and other	(600)	(25)
Accounts payable	(3,367)	626
Accrued other liabilities	(1,197)	4,684
Net cash used in operating activities	(8,788)	(2,249)
Investing activities:
Capital expenditures	(5,180)	(2,234)
Proceeds from disposition of property and equipment	0	37,729
Collection of notes receivable related to property sales	18	336
Advance of note receivable	(329)	(15)
Proceeds from Sale of Short-term Investments	365	0
Change in restricted cash for property improvements	(585)	0
Other, net	78	(54)
Net cash provided by (used in) investing activities	(5,633)	35,762
Financing activities:
Borrowings on long-term debt	7,993	53,807
Repayment of long-term debt	0	(30,528)
Debt issuance costs	(34)	(2,423)
Proceeds from sale of interests in joint ventures	1,500	17,071
Reduction of additional paid in capital for canceled restricted stock units	(161)	49
Other, net	77	0
Net cash provided by financing activities	9,375	37,976
Change in cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents	(5,046)	71,489
Cash and cash equivalents at beginning of period	23,898	5,126
Cash and cash equivalents at end of period	18,852	76,615
Cash paid during periods for:
Income taxes	14	13
Interest on long-term debt	1,298	1,366
Non-cash investing and financing activities:
Funds received in advance for sale of joint venture - classified as restricted cash	1,693	0
Reclassification between short and long term notes receivable	2	227
Property and equipment, purchases not yet paid	1,757	0
Reclassification between accounts receivable and notes receivable	$ 0	$ 80

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Organization

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Red Lion Hotels Corporation ("RLHC", "we", "our", "us" or "our company") is a NYSE-listed hospitality and leisure company (ticker symbols RLH) primarily engaged in the management, franchising and ownership of hotels under our proprietary brands, including Hotel RL, Red Lion Hotels, Red Lion Inns & Suites, GuestHouse International and Settle Inn & Suites (collectively the "RLHC Brands"). All of our hotels currently operate under the RLHC Brands which represent upper, midscale and economy hotels.

A summary of our properties as of March 31, 2016 is provided below:

	Hotels	Total Available Rooms
Company operated hotels
Majority owned and consolidated	14	2,761
Leased and consolidated	4	867
Managed	2	361
Franchised hotels	102	10,744
Total systemwide	122	14,733

We are also engaged in entertainment operations, which derive revenues from promotion and presentation of entertainment productions and ticketing services under the operations of WestCoast Entertainment and TicketsWest. The ticketing service offers online ticket sales, ticketing inventory management systems, call center services, and outlet/electronic distributions for event locations.

We were incorporated in the state of Washington in April 1978.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The unaudited consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Certain information and footnote disclosures normally included in financial statements have been condensed or omitted as permitted by such rules and regulations.

The consolidated balance sheet as of December 31, 2015 has been compiled from the audited balance sheet as of such date. We believe the disclosures included herein are adequate; however, they should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2015, filed with the SEC on Form 10-K on February 29, 2016.

In the opinion of management, these unaudited consolidated financial statements contain all of the adjustments of a normal and recurring nature necessary to present fairly our consolidated financial position at March 31, 2016, the consolidated statements of comprehensive income (loss) for the three months endedMarch 31, 2016 and 2015, and the consolidated cash flows for the three months ended March 31, 2016 and 2015. The comprehensive income (loss) for the periods presented may not be indicative of that which may be expected for a full year.

Principles of Consolidation

The consolidated financial statements include all accounts and wholly and majority-owned subsidiaries' accounts. All inter-company and inter-segment transactions and accounts have been eliminated upon consolidation.

The financial statements encompass the accounts of Red Lion Hotels Corporation and all of its consolidated subsidiaries, including:

Wholly-owned subsidiaries:

•Red Lion Hotels Holdings, Inc.

•Red Lion Hotels Franchising, Inc.

•Red Lion Hotels Management, Inc. ("RL Management")

•Red Lion Hotels Limited Partnership

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 Balt Venture LLC ("RLS Balt Venture") in which we hold a 73% member interest

•RLS DC Venture LLC ("RLS DC Venture") in which we hold a 55% member interest (effective April 1, 2016)

Cash and Cash Equivalents

All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. At times, cash balances at banks and other financial institutions may be in excess of federal insurance limits.

Restricted Cash

In accordance with our various borrowing arrangements, at March 31, 2016 cash of $14.3 million was held primarily as reserves for debt service (interest only), property improvements, funds held in escrow for additional member interest sale and other requirements from the lenders.

Short-Term Investments

Short-term investments consist of variable rate demand notes with maturities that range from two to thirty-five years. They are all classified as available-for-sale investments and have been further classified as short term as the investments contain options which allow us to put them to the trustee with one day to one week's notice. The carrying amounts are reasonable estimates of their fair values due to interest rates which are variable in nature and the put provision at par plus accrued interest.

Allowance for Doubtful Accounts

The ability to collect individual accounts receivable is reviewed on a routine basis. An allowance for doubtful accounts is recorded based on specifically identified amounts believed to be uncollectible. If actual collection experience changes, revisions to the allowance may be required and if all attempts to collect a receivable fail, it is recorded against the allowance. The estimate of the allowance for doubtful accounts is impacted by, among other things, national and regional economic conditions.

The following schedule summarizes the activity in the allowance account for trade accounts receivable:

	Three Months Ended March 31,
	2016			2015
	(In thousands)
Allowance for doubtful accounts, operations
Balance, January 1	$	657		$	303
Additions to allowance	99			(68		)
Write-offs, net of recoveries	(2		)	(35		)
Balance, March 31	$	754		$	200

Inventories

Inventories consist primarily of food and beverage products held for sale at the company-operated restaurants and guest supplies. Inventories are valued at the lower of cost, determined on a first-in, first-out basis, or net realizable value.

Prepaid and other expenses

Prepaid and other expenses include prepaid insurance and taxes and deposits.

Property and Equipment

Property and equipment are stated at cost. The cost of improvements that extend the life of property and equipment is capitalized. Repairs and maintenance charges are expensed as incurred.

Depreciation is provided using the straight-line method over the estimated useful life of each asset, which ranges as follows:

Buildings	25 to 39 years
Equipment	2 to 15 years
Furniture and fixtures	2 to 15 years
Landscaping and improvements	15 years

Valuation of Long-Lived Assets

We test long-lived asset groups for recoverability when changes in circumstances indicate the carrying value may not be recoverable, for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. We also perform a test for recoverability when management has committed to a plan to sell or otherwise dispose of an asset group. We evaluate recoverability of an asset group by comparing its carrying value to the future net undiscounted cash flows that we expect will be generated by the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the estimated fair value. When we recognize an impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life.

We base our calculations of the estimated fair value of an asset group on the income approach or the market approach. The assumptions and methodology utilized for the income approach are the same as those described in the "Goodwill and Intangible Assets" caption. For the market approach, we use analyses based primarily on market comparables, recent appraisals and assumptions about market capitalization rates, growth rates, and inflation.

Variable Interest Entities

We analyze the investments we make in joint venture entities based on the accounting guidance for variable interest entities or "VIEs”. These joint ventures are evaluated to determine whether (1) sufficient equity at risk exists for the legal entity to finance its activities without additional subordinated financial support or, (2) as a group, the holders of the equity investment at risk lack one of the following characteristics (a) the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance or, (b) the obligation to absorb the expected losses of the legal entity or (c) the right to receive expected residual returns of the legal entity, or (3) the voting rights of some equity investors are not proportional to their obligations to absorb the losses or the right to receive benefits and substantially all of the activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. If any one of the above three conditions are met then the joint venture entities are considered to be VIEs.

We consolidate the results of any such VIE in which we determine that we have a controlling financial interest. We would have a “controlling financial interest” (i.e., be deemed the primary beneficiary) in such an entity if we had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive the benefits from, the VIE that could be potentially significant to the VIE.

Business Combinations

On the date of acquisition, the assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree are recorded at their fair values. The acquiree's results of operations are also included as of the date of acquisition in our consolidated results. Intangible assets that arise from contractual/legal rights, or are capable of being separated are measured and recorded at fair value, and amortized over the estimated useful life. If practicable, assets acquired and liabilities assumed arising from contingencies are measured and recorded at fair value. If not practicable, such assets and liabilities are measured and recorded when it is probable that a gain or loss has occurred and the amount can be reasonably estimated. The residual balance of the purchase price, after fair value allocations to all identified assets and liabilities, represents goodwill. Acquisition-related costs are expensed as incurred. Restructuring costs associated with an acquisition are generally expensed in periods subsequent to the acquisition date, and changes in deferred tax asset valuation allowances and acquired income tax uncertainties, including penalties and interest, after the measurement period are recognized as a component of the provision for income taxes. Our acquisitions may include contingent consideration, which require us to recognize the fair value of the estimated liability at the time of the acquisition. Subsequent changes in the estimate of the amount to be paid under the contingent consideration arrangement are recognized in the consolidated statements of comprehensive income (loss). Cash payments for contingent or deferred consideration up to the amount of liability recognized on the acquisition date are classified within cash flows from financing activities within the consolidated statements of cash flows and any excess is classified as cash flows from operating activities.

Goodwill and Intangible Assets

Goodwill and intangible assets may result from our business acquisitions. Intangible assets may also result from the purchase of assets and intellectual property in a transaction that does not qualify as a business combination. We use estimates, including estimates of useful lives of intangible assets, the amount and timing of related future cash flows, and fair values of the related operations, in determining the value assigned to goodwill and intangible assets. Our finite-lived intangible assets are amortized over their expected useful lives based on estimated discounted cash flows. Our brand name and trademark assets are considered indefinite-lived intangible assets and are not subject to amortization. Finite-lived intangible assets are tested for impairment at the asset group level when events or changes in circumstances indicate the carrying value may not be recoverable. Indefinite-lived intangible assets are tested for impairment annually, when events or changes in circumstances indicate the asset may be impaired, or at the time when their useful lives are determined to be no longer indefinite.

Goodwill is assigned to our reporting units based on the expected benefit from the synergies arising from each business combination, determined by using certain financial metrics, including the forecast discounted cash flows associated with each reporting unit. The reporting units are aligned with our reporting segments.

We test goodwill for impairment each year as of October 1, or more frequently should a significant impairment indicator occur. As part of the impairment test, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit, including goodwill, is less than its carrying amount, or if we elect to bypass the qualitative assessment, we would then proceed with the two-step impairment test. The impairment test involves comparing the fair values of the reporting units to their carrying amounts. If the carrying amount of a reporting unit exceeds its fair value, a second step is required to measure the goodwill impairment loss amount. This second step determines the current fair values of all assets and liabilities of the reporting unit and then compares the implied fair value of the reporting unit's goodwill to the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. We forecast discounted future cash flows at the reporting unit level using risk-adjusted discount rates and estimated future revenues and operating costs, which take into consideration factors, such as expectations of competitive and economic environments. We also identify similar publicly traded companies and develop a correlation, referred to as a multiple, to apply to the operating results of the reporting units. These combined fair values are then reconciled to the aggregate market value of our common stock on the date of valuation, while considering a reasonable control premium.

Notes Receivable

We carry notes receivable at their estimated collection amount, and they are classified as either current or noncurrent depending on the expected collection date. Interest income on notes receivable is recognized using the interest method.

Other Assets

Other assets primarily consist of key money arrangements and IT system implementation costs for franchisees. We recognize key money paid in conjunction with entering into long-term franchise agreements as prepaid expenses and amortize the amount paid against revenue over the term of the franchise agreements. IT system implementation costs represent costs incurred to implement RevPAK applications for new franchises and are amortized over the initial term of the software license arrangement.

Fair Value Measurements

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the following three levels of the fair value hierarchy:

• Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

• Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

• Level 3 includes unobservable inputs that reflect assumptions about what factors market participants would use in pricing the asset or liability. We develop these inputs based on the best information available, including our own data.

Deferred Income

In 2003, we sold a hotel to an unrelated party in a sale-operating leaseback transaction. The pre-tax gain on the transaction of approximately $7.0 million was deferred and is being amortized into income over the period of the lease term, which expires in November 2018 and is renewable for three, five-year terms at our option. During the three months ended March 31, 2016 and 2015, we recognized income of approximately $0.1 million each period for the amortization of the deferred gain. The remaining balance at March 31, 2016, was $1.2 million.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning, and results of recent operations. At March 31, 2016 and December 31, 2015, a valuation allowance has been recorded to reduce our deferred tax assets to an amount that is more likely than not to be realized. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

We classify any interest expense and penalties related to underpayment of taxes and any interest income on tax overpayments as components of income tax expense.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. See Note 10.

Revenue Recognition

Revenue is generally recognized as services are provided. When payments from customers are received before services have been performed, the amount received is recorded as deferred revenue until the service has been completed. We recognize revenue from the following sources:

• Company-Operated Hotels - Room rental and food and beverage sales from majority owned and leased hotels and management fees from hotels under management contract. Revenues are recognized when services have been performed, generally at the time of the hotel stay or guests visit to the restaurant and at the time the management services are provided. We recognize other revenue and costs from managed properties when we incur the related reimbursable costs. These costs primarily consist of payroll and related expenses at managed properties where we are the employer. As these costs have no added markup, the revenue and related expense have no impact on either our operating or net income.

• Franchised Hotels - Fees received in connection with the franchise and marketing of our brand names. Franchise revenues are recognized as earned in accordance with the contractual terms of the franchise agreements.

• Entertainment - Online ticketing services, ticketing inventory management systems, promotion of Broadway-style shows and other special events. Where we act as an agent and receive a net fee or commission, revenue is recognized in the period the services are performed. When we are the promoter of an event and are at-risk for the production, revenues and expenses are recorded in the period of the event performance.

Advertising and Promotion

Costs associated with advertising and promotional efforts are generally expensed as incurred. During the three months ended March 31, 2016 and 2015 we incurred approximately $1.4 million and $1.3 million in advertising expense.

Basic and Diluted Earnings (Loss) Per Share

Basic earnings (loss) per share attributable to Red Lion Hotels Corporation is computed by dividing income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings (loss) per share attributable to Red Lion Hotels Corporation gives effect to all dilutive potential shares that are outstanding during the period and include outstanding stock options, other outstanding employee equity grants and warrants, by increasing the weighted-average number of shares outstanding by their effect. When we report a net loss during the period, basic and diluted earnings (loss) per share are the same. See Note 12.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.

Restatement for Cash Flow Misclassification

During the fourth quarter of 2015, we identified a cash flow misclassification related to the proceeds from the sales of interests in our joint venture entities during the period ended March 31, 2015. This error did not affect net income, stockholders' equity, cash flows from operations or the net increase or decrease in cash and cash equivalents for the period. The classification error incorrectly included these cash inflows as investing activities when they should have been classified as inflows from financing activities in the Consolidated Statement of Cash Flows for the period ended March 31, 2015. In accordance with the SEC Staff Accounting Bulletin (SAB) No. 99, "Materiality," and SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," we evaluated the materiality of the error from qualitative and quantitative perspectives and concluded that the error was immaterial to the current and prior interim period. Consequently, the Consolidated Statement of Cash Flows contained in this Report has been restated for the three months ended March 31, 2015. This change resulted in a decrease of $17.1 million from cash flows provided by investing activities and a corresponding increase to cash inflows from financing activities.

New and Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 may be applied using either a full retrospective or a modified retrospective approach and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. In July 2015, the FASB voted to defer the effective date to January 1, 2018 with early adoption beginning January 1, 2017. We are continuing our evaluation of this guidance and our method of adoption.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 became effective for us beginning January 1, 2016. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or, recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. The adoption of this new standard did not have any impact on our financial condition or results of operations.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. ASU 2015-05 became effective for us beginning January 1, 2016. Upon adoption, this ASU did not have a material impact on our financial condition or results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

We have assessed the potential impact of other recently issued, but not yet effective, accounting standards and determined that the provisions are either not applicable to us or are not anticipated to have a material impact on our consolidated financial statements.

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Business Segments

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Segments

Business Segments

As of March 31, 2016, we had three reporting segments: company operated hotels, franchised hotels and entertainment. The "other" segment consists of miscellaneous revenues and expenses, cash and cash equivalents, certain receivables, certain property and equipment and general and administrative expenses, which are not specifically associated with an operating segment. Management reviews and evaluates the operating segments exclusive of interest expense, income taxes and certain corporate expenses; therefore, they have not been allocated to the operating segments. All balances have been presented after the elimination of inter-segment and intra-segment revenues and expenses.

Selected financial information is provided below (in thousands):

Three months ended March 31, 2016	Company Operated Hotels			Franchised Hotels			Entertainment		Other			Total
Revenue	$	25,334		$	3,296		$	4,031	$	13		$	32,674
Segment operating expenses	$	22,784		$	3,356		$	3,437	$	13		$	29,590
Depreciation and amortization	3,319			(86		)	54		215			3,502
Other operating expenses and gains on asset dispositions	1,045			—			—		3,056			4,101
Operating income (loss)	$	(1,814	)	$	26		$	540	$	(3,271	)	$	(4,519	)
Capital expenditures	$	6,580		$	—		$	—	$	107		$	6,687
Identifiable assets as of March 31, 2016	$	255,680		$	21,316		$	5,407	$	8,055		$	290,458

Three months ended March 31, 2015	Company Operated Hotels			Franchise Hotels			Entertainment		Other			Total
Revenue	$	23,935		$	2,093		$	3,677	$	10		$	29,715
Segment operating expenses	$	21,085		$	2,377		$	3,126	$	8		$	26,596
Depreciation and amortization	2,761			11			74		130			2,976
Other operating expenses and gains on asset dispositions	(14,889		)	—			—		2,398			(12,491		)
Operating income (loss)	$	14,978		$	(295	)	$	477	$	(2,526	)	$	12,634
Capital expenditures	$	1,849		$	—		$	88	$	297		$	2,234
Identifiable assets as of December 31, 2015	$	255,876		$	20,180		$	5,256	$	5,906		$	287,218

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Variable Interest Entities

3 Months Ended

Mar. 31, 2016

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities

Our joint venture entities have been determined to be variable interest entities ("VIEs"), and RLHC has been determined to be the primary beneficiary of each VIE. Therefore, we consolidate the assets, liabilities, and results of operations of (1) RL Venture, (2) RLS Balt Venture, (3) RLS Atla Venture and (4) RLS DC Venture. See Note 2 for discussion of the significant judgments and assumptions made by us in determining whether an entity is a VIE and if we are the primary beneficiary and therefore must consolidate the VIE. See Note 7 for further discussion of the terms of the long-term debt at each of the joint venture entities.

RL Venture

In January 2015, we transferred 12 of our wholly-owned hotels into RL Venture, a newly created entity that was initially wholly-owned by us. Subsequently, we sold a 45% ownership stake in RL Venture to Shelbourne Falcon RLHC Hotel Investors LLC ("Shelbourne Falcon"), an entity that is led by Shelbourne Capital LLC ("Shelbourne"). We maintain a 55% interest in RL Venture and the 12 hotels are managed by RL Management, one of our wholly-owned subsidiaries, subject to a management agreement. RL Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest and substantially all of RL Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over two of the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our 55% equity interest and management fees. As a result, we consolidate RL Venture. The equity interest owned by Shelbourne Falcon is reflected as noncontrolling interest in the consolidated financial statements. When ownership changes without a loss of control GAAP requires the difference between consideration received and the carrying amount of a noncontrolling interest to be recorded in equity. Accordingly, we recognized $12.4 million upon sale of the equity interests as a reduction to RLHC's additional paid in capital.

Cash distributions are made periodically based on calculated distributable income. During the first quarter of 2016, RL Venture made no cash distributions.

Refer to Note 7 for further discussion of the long-term debt of RL Venture.

RLS Balt Venture

In April 2015, we sold a 21% member interest in our wholly-owned RLS Balt Venture to Shelbourne Falcon Charm City Investors LLC ("Shelbourne Falcon II"), an entity led by Shelbourne. Shelbourne Falcon II had an option exercisable until December 31, 2015 to purchase an additional 24% member interest for $2.3 million. RL Baltimore, LLC ("RL Baltimore"), which is wholly-owned by RLS Balt Venture, owns the Hotel RL Baltimore Inner Harbor, which is managed by RL Management. RLS Balt Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest and substantially all of RLS Balt Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our 73% equity interest and management fees. As a result, we consolidate RLS Balt Venture. The equity interest owned by Shelbourne Falcon II is reflected as a noncontrolling interest in the consolidated financial statements.

In October 2015, RLHC provided $1.5 million to RLS Balt Venture to fund renovations costs and for operating losses. This funding is not treated as a loan or as a capital contribution. Rather, it is a long-term obligation of RLS Balt Venture and would be repaid only when the Baltimore hotel property is sold or when RLS Balt Venture is liquidated. RLHC would receive the $1.5 million plus a preferred return of 11%, compounded annually, prior to any liquidation proceeds being returned to the members.

In December 2015, Shelbourne Falcon II elected to purchase additional member interests of 5.876% based on an aggregate purchase price of $560,000. With the sale of additional member interest without a corresponding change in control, $0.1 million was recognized as an increase in RLHC's additional paid in capital.

Cash distributions are made periodically based on calculated distributable income. There were no cash distributions made during the three months ended March 31, 2016.

Refer to Note 7 for further discussion of the long-term debt of RLS Balt Venture.

RLS Atla Venture

In September 2015, we formed a joint venture, RLS Atla Venture, with Shelbourne Falcon Big Peach Investors LLC ("Shelbourne Falcon III"), an entity led by Shelbourne. We own a 55% interest in the joint venture and Shelbourne Falcon III owns a 45% interest. RLH Atlanta LLC ("RLH Atlanta"), which is wholly-owned by RLS Atla Venture, owns a hotel adjacent to the Atlanta International Airport that opened in April 2016 as the Red Lion Hotel Atlanta International Airport. RLS Atla Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest and substantially all of RLS Atla Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our 55% equity interest and management fees. As a result, we consolidate RLS Atla Venture. The equity interest owned by Shelbourne Falcon III is reflected as a noncontrolling interest in the consolidated financial statements.

Cash distributions are made periodically based on calculated distributable income. There were no cash distributions made during the three months ended March 31, 2016.

Refer to Note 7 for further discussion of the long-term debt of RLS Atla Venture.

RLS DC Venture

In October 2015, we formed a joint venture, RLS DC Venture, with Shelbourne Falcon DC Investors LLC ("Shelbourne Falcon IV"), an entity led by Shelbourne. Initially, we owned an 86% interest in the joint venture, and Shelbourne Falcon IV owned a 14% interest. On October 29, 2015, RLH DC LLC ("RLH DC"), which is wholly-owned by RLS DC Venture, acquired 100% of The Quincy, an existing hotel business now operated as the Hotel RL Washington DC, in a business combination. The property is managed by RL Management. RLS DC Venture is considered a variable interest entity because our voting rights are not proportional to our financial interest, and substantially all of RLS DC Venture's activities involve and are conducted on our behalf. We have determined that we are the primary beneficiary as (a) we exert power over the entity's key activities (hotel operations and property renovations) and share power over the remaining key activities with Shelbourne. Further, Shelbourne does not have the unilateral ability to exercise kick-out rights, and (b) we have the obligation to absorb losses and right to receive benefits that could be significant to the entity through our equity interest and management fees. As a result, we consolidate RLS DC Venture. The equity interest owned by Shelbourne Falcon IV is reflected as a noncontrolling interest in the consolidated financial statements.

Cash distributions are made periodically based on calculated distributable income. There were no cash distributions made during the three months ended March 31, 2016.

As part of the organization of RLS DC Venture, Shelbourne Falcon IV had an option to purchase from us up to an additional 31% of the member interests. On February 3, 2016, Shelbourne Falcon IV elected to purchase from us an additional 15% of the member interests of RLS DC Venture, based on an aggregate purchase price of $1.5 million. Shelbourne Falcon IV, with a 29% member interest, is still considered a noncontrolling interest in the consolidated financial statements. With the sale of the additional member interest without a corresponding change in control $0.2 million was recognized as an increase in additional paid in capital in February 2016. As of March 31, 2016, Shelbourne Falcon IV still had the option to purchase from us an additional 16% of the member interests of RLS DC Venture. This purchase was completed on April 1, 2016 for $1.7 million, for a gain of $277,000 in RLHC's additional paid in capital, as we continue to consolidate RLS DC Venture since we are the primary beneficiary. Following the April 1, 2016 transaction, we now own 55% of RLS DC Venture, and Shelbourne Falcon IV owns 45%.

Refer to Note 7 for further discussion of the long-term debt of RLS DC Venture.

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Property and Equipment

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment is summarized as follows (in thousands):

	March 31, 2016			December 31, 2015
Buildings and equipment	$	221,630		$	217,787
Furniture and fixtures	33,706			32,821
Landscaping and land improvements	7,559			7,253
	262,895			257,861
Less accumulated depreciation	(126,913		)	(123,084		)
	135,982			134,777
Land	43,242			43,242
Construction in progress	19,512			17,371
Property and equipment, net	$	198,736		$	195,390

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill represents the excess of the estimated fair value of the net assets acquired during business combinations over the net tangible and identifiable intangible assets acquired. Goodwill was recorded in prior years in connection with the acquisitions of franchises and entertainment businesses.

The Red Lion and GuestHouse International brand names are identifiable, indefinite-lived intangible assets that represent the separable legal right to a trade name and associated trademarks. We acquired the Red Lion brand name in a business combination we entered into in 2001. We purchased the GuestHouse International and Settle Inn & Suites brand names from GuestHouse International LLC in April 2015 and allocated the purchase price of $5.5 million.

In the table below, the customer contracts represent the franchise license agreements acquired with the GuestHouse International brand. We have allocated $3.3 million of the final purchase price to the customer. Franchise license agreements are amortized over 10 years which represents the period of expected cash flows, using an accelerated amortization method that matches the economic benefit of the agreements.

In the third quarter of 2015, we determined the contingent consideration due to the sellers of GuestHouse International had not been earned and reduced our allocation of the purchase price by $1.5 million.

We estimated the fair value of our customer contracts and brand names purchased from GuestHouse International using expected future payments discounted at risk-adjusted rates, both of which are Level 3 inputs. See Note 13 for additional information.

We assess goodwill and the other intangible assets for potential impairments annually as of October 1, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the assets. We did not impair any goodwill or intangible assets during the three months endedMarch 31, 2016 or 2015.

The following table summarizes the balances of goodwill and other intangible assets (in thousands):

	March 31, 2016		December 31, 2015
Goodwill	$	8,512	$	8,512
Intangible assets
Brand names	$	12,460	$	12,314
Customer contracts	2,795		2,853
Trademarks	134		134
Total intangible assets	$	15,389	$	15,301

Goodwill and other intangible assets attributable to each of our business segments were as follows (in thousands):

	March 31, 2016				December 31, 2015
			Other				Other
	Goodwill		Intangibles		Goodwill		Intangibles
Company operated hotels	$	—	$	4,659	$	—	$	4,659
Franchised hotels	5,351		10,724		5,351		10,636
Entertainment	3,161		6		3,161		6
Total	$	8,512	$	15,389	$	8,512	$	15,301

The following table summarizes the balances of amortized customer contracts (in thousands):

	March 31, 2016			December 31, 2015
Historical cost	$	3,273		$	3,420
Accumulated amortization	(478		)	(567		)
Net carrying amount	$	2,795		$	2,853

As of March 31, 2016, estimated future amortization expenses related to intangible assets is as follows (in thousands):

Year Ending December 31,	Amount
2016	$	451
2017	531
2018	433
2019	366
2020	307
Thereafter	707
Total	$	2,795

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Long-Term Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The current and non-current portions of long-term debt as of March 31, 2016 and December 31, 2015 are as follows (in thousands):

	March 31, 2016					December 31, 2015
	Current		Non-Current			Current		Non-Current
RL Venture	$	272	$	60,347		$	—	$	56,307
RL Baltimore	—		13,300			—		13,300
RLH Atlanta	—		9,400			—		6,000
RLH DC	—		15,446			—		15,165
Total debt	272		98,493			—		90,772
Unamortized debt issuance costs	—		(2,975		)	—		(3,215		)
Long-term net of debt issuance costs	$	272	$	95,518		$	—	$	87,557

The collateral for each of the borrowings within the joint venture entities is the assets and proceeds of each respective entity.

RL Venture

In January 2015, RL Venture Holding LLC, a wholly-owned subsidiary of RL Venture, and each of its 12 wholly-owned subsidiaries entered into a loan agreement with Pacific Western Bank. The original principal amount of the loan was $53.8 million with an additional $26.2 million to be drawn over a two-year period to cover improvements related to the 12 hotels owned by the subsidiaries. We drew $2.5 million during the year ended December 31, 2015 and $4.3 million in the three months ended March 31, 2016. At March 31, 2016, the remaining amount of funds available to draw on the loan was $19.4 million, and there were unamortized debt issuance fees of $1.7 million.

The loan matures in January 2019 and has a one-year extension option. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 4.75%. Fixed monthly principal payments begin in January 2017 in an amount that would repay the outstanding principal balance over a twenty-five year amortization period.

The liabilities of RL Venture, other than its long-term debt, are non-recourse to our general credit and assets. The long-term debt is non-recourse as to RLHC, but several investors in RL Venture, including us, are guarantors regarding completion of certain improvements to the hotels, environmental covenants in the loan agreement, losses incurred by the lender and in the event of a voluntary bankruptcy filing involving RL Venture, any of its subsidiaries or the guarantors. RLHC has no other obligation to provide financial support to RL Venture.

The loan requires us to comply with customary reporting and operating covenants applicable to RL Venture, including requirements relating to debt service loan coverage ratios. It also includes customary events of default. We were in compliance with these covenants at March 31, 2016.

RL Baltimore

In April 2015, RL Baltimore obtained a new mortgage loan from PFP Holding Company IV LLC, an affiliate of Prime Finance, secured by the Hotel RL Baltimore Inner Harbor. The initial principal amount of the loan was $10.1 million, and the lender agreed to advance an additional $3.2 million to cover expenses related to improvements to the hotel, which we drew during the year ended December 31, 2015. At March 31, 2016 the funds on the loan were fully disbursed. At March 31, 2016, there were unamortized debt issuance fees of $0.6 million.

The loan matures in May 2018 and has twoone-year extension options. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 6.25%. No principal payments are required during the initial term of the loan. Principal payments of $16,000 per month are required beginning in May 2018 if the extension option is exercised.

The loan agreement includes customary requirements for lender approval of annual operating and capital budgets, under certain conditions. It also includes customary events of default. The liability of RL Baltimore under the loan agreement is generally non-recourse.  However, the lender may obtain a monetary judgment against RL Baltimore if the lender suffers losses under certain circumstances listed in the loan agreement, including but not limited to fraud, criminal activity, waste, misappropriation of revenues, and breach of environmental representations.  RLHC has guaranteed these recourse obligations of RL Baltimore and agreed to customary reporting and operating covenants. We were in compliance with these covenants at March 31, 2016.

RLH Atlanta

In September 2015, RLH Atlanta obtained a new mortgage loan from PFP Holding Company IV LLC, an affiliate of Prime Finance, secured by a hotel adjacent to the Atlanta International Airport, which opened in April 2016 as the Red Lion Hotel Atlanta International Airport. The initial principal amount of the loan was $6.0 million, and the lender has agreed to advance an additional $3.4 million to cover expenses related to improvements to the hotel, which we drew in the three months ended March 31, 2016, and with this advancement of funds the loan was fully disbursed. At March 31, 2016, there were unamortized debt issuance fees of $0.2 million.

The loan matures in September 2018 and has twoone-year extension options. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 6.35%. No principal payments are required during the initial term of the loan.

The loan agreement includes customary requirements for lender approval of annual operating and capital budgets, under certain conditions. It also includes customary events of default. The liability of RLH Atlanta under the loan agreement is generally non-recourse.  However, the lender may obtain a monetary judgment against RL Atlanta if the lender suffers losses under certain circumstances listed in the loan agreement, including but not limited to fraud, criminal activity, waste, misappropriation of revenues, and breach of environmental representations.  RLHC has guaranteed these recourse obligations of RL Atlanta and agreed to customary reporting and operating covenants. We were in compliance with these covenants at March 31, 2016.

RLH DC

In October 2015, RLH DC obtained a new mortgage loan from Pacific Western Bank secured by the Hotel RL Washington DC. The initial principal amount of the loan was $15.2 million, and the lender agreed to advance an additional $2.3 million to cover expenses related to improvements to the hotel. We drew $0.3 million in additional funds during the three months ended March 31, 2016. At March 31, 2016, the remaining amount of funds available to draw on the loan was $2.0 million, and there were unamortized debt issuance costs of $0.4 million.

The loan matures in October 2019 and has a one-year extension option. Interest under the advanced portions of the loan is payable monthly at LIBOR plus 4.55%. Fixed monthly principal payments begin in October 2018 in an amount that would repay the outstanding principal balance over an amortization period of twenty-five years.

The loan agreement includes customary requirements for lender approval of annual operating and capital budgets, under certain conditions. It also includes customary events of default. The liability of RLH DC under the loan agreement is generally non-recourse.  However, the lender may obtain a monetary judgment against RLH DC if the lender suffers losses under certain circumstances listed in the loan agreement, including but not limited to fraud, criminal activity, waste, misappropriation of revenues, and breach of environmental representations.  RLHC has guaranteed these recourse obligations of RLH DC and agreed to customary reporting and operating covenants. We were in compliance with these covenants at March 31, 2016.

Wells Fargo

In January 2015, in connection with the RL Venture transaction, we repaid the outstanding balance of our Wells Fargo term loan. We recognized a $1.1 million "Loss on early retirement of debt" on the Consolidated Statement of Comprehensive Income (Loss) related to termination fees and write-off of the previously recorded prepaid debt fees and unamortized debt discount balances.

In January 2015, in connection with the sale of the Bellevue property, we terminated the $10 million revolving credit facility associated with the term loan. There was no impact on our financial statements.

Debentures

In December 2015, Red Lion Hotels Capital Trust (the "Trust") redeemed $29.9 million of its issued and outstanding 9.5% Trust Preferred Securities and all $0.9 million of its issued and outstanding 9.5% Trust Common Securities for a total redemption price of $30.8 million. The redemptions occurred concurrently with our redemption of all $30.8 million of our 9.5% Junior Subordinated Debentures due 2044, all of which were held by the Trust.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We do not enter into derivative transactions for trading purposes, but rather to hedge our exposure to interest rate fluctuations. We manage our floating rate debt using interest rate caps in order to reduce our exposure to the impact of changing interest rates and future cash outflows for interest. We estimate the fair value of our interest rate caps via standard calculations that use as their basis readily available observable market parameters. This option-pricing technique utilizes a one-month LIBOR forward yield curve, obtained from an independent external service, which is a Level 2 input. Changes in fair value of these instruments are recognized in interest expense on the Consolidated Statements of Comprehensive Income (Loss).

RL Venture

As required under our RL Venture loan, we entered into an interest rate cap with Commonwealth Bank of Australia to cap our interest rate exposure. The cap had an original notional amount of $80.0 million and caps the LIBOR reference rate at 4.0%. The cap expires in January 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $2,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

RL Baltimore

As required under our RL Baltimore loan, we entered into an interest rate cap with Commonwealth Bank of Australia to cap our interest rate exposure. The cap had an original notional amount of $13.3 million and caps the LIBOR reference rate at 3.0%. The cap expires in May 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $2,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

RLH Atlanta

As required under our RLH Atlanta loan, we entered into an interest rate cap with SMBC Capital Markets, Inc. to cap our interest rate exposure. The cap had an original notional amount of $9.4 million and caps the LIBOR reference rate at 3.0%. The cap expires in September 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $3,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

RLH DC

As required under our RLH DC loan, we entered into an interest rate cap with Commonwealth Bank of Australia to cap our interest rate exposure. The cap had an original notional amount of $17.5 million and caps the LIBOR reference rate at 3.0%. The cap expires in November 2018. At March 31, 2016, the valuation of the interest rate cap resulted in the recognition of an asset totaling $7,000, which is included in "Other assets, net" on the Consolidated Balance Sheets.

Wells Fargo

In January 2015, in connection with the early retirement of the Wells Fargo credit facility, we settled and terminated the associated interest rate swap with Wells Fargo. The outstanding notional amount at the time of the termination was approximately $16.2 million. Of the $2.8 million "Loss on early retirement of debt" on the Consolidated Statement of Comprehensive Income (Loss) $1.2 million resulted from the termination of the credit facility and the swap, including $0.2 million attributable to termination of the swap. See Note 7 for additional information.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

At any given time we are subject to claims and actions incidental to the operations of our business. Based on information currently available, we do not expect that any sums we may receive or have to pay in connection with any legal proceeding would have a materially adverse effect on our consolidated financial position or net cash flow.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

There was an income tax provision of $59,000 for the three months ended March 31, 2016 and a $112,000 income tax provision for the three months ended March 31, 2015. The income tax provision varies from the statutory rate primarily due to a full valuation allowance against our deferred assets.

We have federal operating loss carryforwards, which will expire beginning in 2033, state operating loss carryforwards, which will expire beginning in 2017, and tax credit carryforwards, which will begin to expire in 2024.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stockholders' Equity

Stockholders' Equity

We are authorized to issue 50 million shares of common stock, par value $0.01 per share, and 5 million shares of preferred stock, par value $0.01 per share. As of March 31, 2016, there were 20,131,363 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. The board of directors has the authority, without action by the shareholders, to designate and issue preferred stock in one or more series and to designate the rights, preferences and privileges of each series, which may be greater than the rights of the common stock.

Each holder of common stock is entitled to one vote for each share held on all matters to be voted upon by the shareholders with no cumulative voting rights. Holders of common stock are entitled to receive ratably the dividends, if any, that are declared from time to time by the board of directors out of funds legally available for that purpose. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate in the future.

Stock Incentive Plans

The 2006 Stock Incentive Plan authorizes the grant or issuance of various option and other awards including restricted stock units and other stock-based compensation. The plan was approved by our shareholders and allowed awards of 2.0 million shares, subject to adjustments for stock splits, stock dividends and similar events. As of March 31, 2016, there were 44,869 shares of common stock available for issuance pursuant to future stock option grants or other awards under the 2006 plan.

The 2015 Stock Incentive Plan authorizes the grant or issuance of various option and other awards including restricted stock units and other stock-based compensation. The plan was approved by our shareholders and allows awards of 1.4 million shares, subject to adjustments for stock splits, stock dividends and similar events. As of March 31, 2016, there were 475,185 shares of common stock available for issuance pursuant to future stock option grants or other awards under the 2015 plan.

Stock based compensation expense reflects the fair value of stock based awards measured at grant date, including an estimated forfeiture rate, and is recognized over the relevant service period. For the quarters ended March 31, stock-based compensation expense is as follows:

	Three Months Ended March 31,
	2016		2015
	(In thousands)
Restricted stock units	$	496	$	214
Unrestricted stock awards	105		122
ESPP	7		3
Total stock-based compensation	$	608	$	339

Stock Options

Stock options issued are valued based upon the Black-Scholes option pricing model and we recognize this value as an expense over the periods in which the options vest. Use of the Black-Scholes option-pricing model requires that we make certain assumptions, including expected volatility, forfeiture rate, risk-free interest rate, expected dividend yield and expected life of the options, based on historical experience. Volatility is based on historical information with terms consistent with the expected life of the option. The risk free interest rate is based on the quoted daily treasury yield curve rate at the time of grant, with terms consistent with the expected life of the option. For the three months ended March 31, 2016 and 2015 the stock options granted were 81,130 and no shares, respectively. There were no stock option expenses recognized for the three months ended March 31, 2016 and 2015.

Stock option fair value assumptions are as follows for stock options granted during the three months ended March 31, 2016:

Grant Date	Volatility	Forfeiture Rate	Risk-free Interest Rate	Dividend Yield	Expected Life (Years)
March 28, 2016	61.12%	21.07%	1.37%	—%	5

A summary of stock option activity for the three months ended March 31, 2016, is as follows:

	Number of Shares	Weighted Average Exercise Price
Balance, December 31, 2015	71,676	$	10.41
Options granted	81,130	8.20
Options exercised	—	—
Options forfeited	—	—
Balance, March 31, 2016	152,806	$	9.23
Exercisable, March 31, 2016	71,676	$	10.41

Additional information regarding stock options outstanding and exercisable as of March 31, 2016, is as follows:

Exercise Price	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Expiration Date	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)
$8.20	81,130	9.99	2026	$	8.20	$	18,660	—	$	—	$	—
$8.74	40,836	2.14	2018	8.74		—		40,836	8.74		—
$12.21	15,195	0.64	2016	12.21		—		15,195	12.21		—
$13.00	15,645	1.38	2017	13.00		—		15,645	13.00		—
	152,806	6.80	2016-2026	$	9.23	$	18,660	71,676	$	10.41	$	—

(1) The aggregate intrinsic value is before applicable income taxes and represents the amount option recipients would have received if all options had been fully vested and exercised on the last trading day of the first three months of 2016, or March 31, 2016, based upon our closing stock price on that date of $8.43.

Restricted Stock Units, Shares Issued as Compensation

As of March 31, 2016 and 2015, there were 1,382,344 and 640,459 unvested restricted stock units outstanding. Since we began issuing restricted stock units, approximately 22.1% of total units granted have been forfeited. In the first quarter of 2016, we recognized approximately $0.5 million in compensation expense related to restricted stock units compared to $0.2 million in the comparable period in 2015. As the restricted stock units vest, we expect to recognize approximately $6.8 million in additional compensation expense over a weighted average period of 38 months, including $1.7 million during the remainder of 2016.

A summary of restricted stock unit activity for the three months ended March 31, 2016, is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Balance, January 1, 2016	1,224,920		$	6.95
Granted	242,989		$	8.17
Vested	(75,407	)	$	6.70
Forfeited	(10,158	)	$	6.33
Balance, March 31, 2016	1,382,344		$	7.18

In 2016, 75,407 shares of common stock were issued to employees as their restricted stock units vested. Under the terms of the 2006 and 2015 plans and upon issuance, we authorized a net settlement of distributable shares to employees after consideration of individual employees' tax withholding obligations, at the election of each employee. The fair value of restricted stock that vested during three months ended March 31, 2016 and 2015 was approximately $0.5 million and $0.2 million, respectively.

Unrestricted Stock Awards

Unrestricted stock awards are granted to members of our Board of Directors as part of their compensation. Awards are fully vested and expensed when granted. The fair value of unrestricted stock awards is the market close price of our common stock on the date of the grant.

The following table summarizes unrestricted stock award activity for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016		2015
Shares of unrestricted stock granted	14,934		19,285
Weighted average grant date fair value per share	$	7.03	$	6.34

Employee Stock Purchase Plan

In 2008, we adopted a new employee stock purchase plan ("ESPP") upon expiration of our previous plan. Under the ESPP, 300,000 shares of common stock are authorized for purchase by eligible employees at a 15% discount through payroll deductions. No employee may purchase more than $25,000 worth of shares, or more than 10,000 total shares, in any calendar year. As allowed under the ESPP, a participant may elect to withdraw from the plan, effective for the purchase period in progress at the time of the election with all accumulated payroll deductions returned to the participant at the time of withdrawal. During the three months ended March 31, 2016 and 2015, there were 12,735 and 10,614 shares, respectively, issued, and approximately $7,289 and $3,329 was recorded in compensation expense related to the discount associated with the plan in each period, respectively.

	Three Months Ended March 31,
	2016		2015
Shares of stock sold to employees	12,735		10,614
Weighted average fair value per ESPP share	$	5.96	$	4.64

Warrants

In January 2015, in connection with Shelbourne Falcon’s purchase of equity interests in RL Venture, we issued Shelbourne a warrant to purchase 442,533 shares of common stock. The warrants have a five year term from the date of issuance and a per share exercise price of $6.78. The warrants have been classified as equity due to required share settlement upon exercise. Accordingly, the estimated fair value of the warrants was recorded in additional paid in capital upon issuance, and we do not recognize subsequent changes in fair value in our financial statements. As of March 31, 2016 all warrants were still outstanding.

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Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per Share

The following table presents a reconciliation of the numerators and denominators used in the basic and diluted net income (loss) per share computations for the three months endedMarch 31, 2016 and 2015 (in thousands, except per share amounts):

	Three Months Ended March 31,
	2016			2015
Numerator - basic and diluted:
Net income (loss)	$	(5,820	)	$	10,133
Less: net (income) loss attributable to noncontrolling interest	1,021			30
Net income (loss) attributable to Red Lion Hotels Corporation	$	(4,799	)	$	10,163
Denominator:
Weighted average shares - basic	20,088			19,895
Weighted average shares - diluted	20,088			20,067
Earnings (loss) per share - basic	$	(0.24	)	$	0.51
Earnings (loss) per share - diluted	$	(0.24	)	$	0.51

For the three months ended March 31, 2016, all of the 152,806 options to purchase common shares, all of the 1,382,344 restricted stock units outstanding, and all of the 442,533 warrants to purchase common shares were not included in the diluted per share calculation as they were antidilutive. For the three months ended March 31, 2015, all of the 75,176 options to purchase common shares, 469,424 of the 640,459 restricted stock units outstanding, and all of the 442,533 warrants to purchase common shares were not included in the diluted per share calculation as they were antidilutive.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the Level 1, Level 2 and Level 3 of the fair value hierarchy.

Estimated fair values of financial instruments (in thousands) are shown in the table below. The carrying amounts for cash and cash equivalents, accounts receivable and current liabilities are reasonable estimates of their fair values due to their short maturities. The carrying amounts for short-term investments are reasonable estimates of their fair values due to interest rates which are variable in nature and a put provision at par plus accrued interest. We estimate the fair value of our notes receivable using expected future payments discounted at risk-adjusted rates, both of which are Level 3 inputs. We estimate the fair value of our long-term debt using expected future payments discounted at risk-adjusted rates, both of which are Level 3 inputs. The fair values provided below are not necessarily indicative of the amounts we or the debt holders could realize in a current market exchange. In addition, potential income tax ramifications related to the realization of gains and losses that would be incurred in an actual sale or settlement have not been taken into consideration.

	March 31, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:	(in thousands)
Cash and cash equivalents and restricted cash	$	33,121	$	33,121	$	35,202	$	35,202
Short-term investments	$	17,720	$	17,720	$	18,085	$	18,085
Accounts receivable	$	9,497	$	9,497	$	8,164	$	8,164
Notes receivable	$	2,938	$	2,938	$	2,605	$	2,605
Interest rate caps	$	14	$	14	$	42	$	42
Financial liabilities:
Total debt	$	98,765	$	103,792	$	90,772	$	94,029

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Related-Party Transactions

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

RL Venture has agreed to pay to Shelbourne Falcon an investor relations fee each month equal to 0.50% of its total aggregate revenue. Columbia Pacific Opportunity Fund, LP, one of our company's largest shareholders, is an investor in Shelbourne Falcon. During the three months ended March 31, 2016 and 2015, Shelbourne Falcon earned $100,400 and $0, respectively.

RL Venture has also agreed to pay CPA Development, LLC, an affiliate of Columbia Pacific Opportunity Fund, LP, a construction management fee of $200,000. During the three months ended March 31, 2016 and 2015, RL Venture paid $33,300 and $18,200, respectively, of this fee.

In May 2015, we entered into a management agreement with the LLC that owns Red Lion Hotel Woodlake Conference Center Sacramento. A member of our board of directors is a 50% owner of the entity that serves as the manager of that LLC. During the three months ended March 31, 2016 we recognized management fee revenue from the LLC of $29,800.

Effective March 29, 2016, our wholly owned subsidiary, Red Lion Hotels Management, Inc., entered into a one-year contract to manage the Hudson Valley Resort and Spa, a hotel located in Kerhonkson, New York. The hotel is owned by HNA Hudson Valley Resort & Training Center LLC, an affiliate of HNA RLH Investments LLC, one of our largest shareholders, and is controlled by HNA Group North America LLC, for which Enrico Marini Fichera, one of our directors, serves as the Head of Investments. Under that contract, our subsidiary is entitled to a monthly management fee equal to $8,333 or three percent of the hotel’s gross operating revenues, whichever is larger.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation

The unaudited consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Certain information and footnote disclosures normally included in financial statements have been condensed or omitted as permitted by such rules and regulations.

The consolidated balance sheet as of December 31, 2015 has been compiled from the audited balance sheet as of such date. We believe the disclosures included herein are adequate; however, they should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2015, filed with the SEC on Form 10-K on February 29, 2016.

In the opinion of management, these unaudited consolidated financial statements contain all of the adjustments of a normal and recurring nature necessary to present fairly our consolidated financial position at March 31, 2016, the consolidated statements of comprehensive income (loss) for the three months endedMarch 31, 2016 and 2015, and the consolidated cash flows for the three months ended March 31, 2016 and 2015. The comprehensive income (loss) for the periods presented may not be indicative of that which may be expected for a full year.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include all accounts and wholly and majority-owned subsidiaries' accounts. All inter-company and inter-segment transactions and accounts have been eliminated upon consolidation.

The financial statements encompass the accounts of Red Lion Hotels Corporation and all of its consolidated subsidiaries, including:

Wholly-owned subsidiaries:

•Red Lion Hotels Holdings, Inc.

•Red Lion Hotels Franchising, Inc.

•Red Lion Hotels Management, Inc. ("RL Management")

•Red Lion Hotels Limited Partnership

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 Balt Venture LLC ("RLS Balt Venture") in which we hold a 73% member interest

•RLS DC Venture LLC ("RLS DC Venture") in which we hold a 55% member interest (effective April 1, 2016)

Cash and Cash Equivalents

Cash and Cash Equivalents

All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. At times, cash balances at banks and other financial institutions may be in excess of federal insurance limits.

Restricted Cash

Restricted Cash

In accordance with our various borrowing arrangements, at March 31, 2016 cash of $14.3 million was held primarily as reserves for debt service (interest only), property improvements, funds held in escrow for additional member interest sale and other requirements from the lenders.

Short-term Investment

Short-Term Investments

Short-term investments consist of variable rate demand notes with maturities that range from two to thirty-five years. They are all classified as available-for-sale investments and have been further classified as short term as the investments contain options which allow us to put them to the trustee with one day to one week's notice. The carrying amounts are reasonable estimates of their fair values due to interest rates which are variable in nature and the put provision at par plus accrued interest.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The ability to collect individual accounts receivable is reviewed on a routine basis. An allowance for doubtful accounts is recorded based on specifically identified amounts believed to be uncollectible. If actual collection experience changes, revisions to the allowance may be required and if all attempts to collect a receivable fail, it is recorded against the allowance. The estimate of the allowance for doubtful accounts is impacted by, among other things, national and regional economic conditions.

Inventories

Inventories

Inventories consist primarily of food and beverage products held for sale at the company-operated restaurants and guest supplies. Inventories are valued at the lower of cost, determined on a first-in, first-out basis, or net realizable value.

Prepaid and other expenses

Prepaid and other expenses

Prepaid and other expenses include prepaid insurance and taxes and deposits.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost. The cost of improvements that extend the life of property and equipment is capitalized. Repairs and maintenance charges are expensed as incurred.

Valuation of Long-Lived Assets

Valuation of Long-Lived Assets

We test long-lived asset groups for recoverability when changes in circumstances indicate the carrying value may not be recoverable, for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. We also perform a test for recoverability when management has committed to a plan to sell or otherwise dispose of an asset group. We evaluate recoverability of an asset group by comparing its carrying value to the future net undiscounted cash flows that we expect will be generated by the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the estimated fair value. When we recognize an impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life.

We base our calculations of the estimated fair value of an asset group on the income approach or the market approach. The assumptions and methodology utilized for the income approach are the same as those described in the "Goodwill and Intangible Assets" caption. For the market approach, we use analyses based primarily on market comparables, recent appraisals and assumptions about market capitalization rates, growth rates, and inflation.

Variable Interest Entities

Variable Interest Entities

We analyze the investments we make in joint venture entities based on the accounting guidance for variable interest entities or "VIEs”. These joint ventures are evaluated to determine whether (1) sufficient equity at risk exists for the legal entity to finance its activities without additional subordinated financial support or, (2) as a group, the holders of the equity investment at risk lack one of the following characteristics (a) the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance or, (b) the obligation to absorb the expected losses of the legal entity or (c) the right to receive expected residual returns of the legal entity, or (3) the voting rights of some equity investors are not proportional to their obligations to absorb the losses or the right to receive benefits and substantially all of the activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. If any one of the above three conditions are met then the joint venture entities are considered to be VIEs.

We consolidate the results of any such VIE in which we determine that we have a controlling financial interest. We would have a “controlling financial interest” (i.e., be deemed the primary beneficiary) in such an entity if we had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive the benefits from, the VIE that could be potentially significant to the VIE.

Business Combinations

Business Combinations

On the date of acquisition, the assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree are recorded at their fair values. The acquiree's results of operations are also included as of the date of acquisition in our consolidated results. Intangible assets that arise from contractual/legal rights, or are capable of being separated are measured and recorded at fair value, and amortized over the estimated useful life. If practicable, assets acquired and liabilities assumed arising from contingencies are measured and recorded at fair value. If not practicable, such assets and liabilities are measured and recorded when it is probable that a gain or loss has occurred and the amount can be reasonably estimated. The residual balance of the purchase price, after fair value allocations to all identified assets and liabilities, represents goodwill. Acquisition-related costs are expensed as incurred. Restructuring costs associated with an acquisition are generally expensed in periods subsequent to the acquisition date, and changes in deferred tax asset valuation allowances and acquired income tax uncertainties, including penalties and interest, after the measurement period are recognized as a component of the provision for income taxes. Our acquisitions may include contingent consideration, which require us to recognize the fair value of the estimated liability at the time of the acquisition. Subsequent changes in the estimate of the amount to be paid under the contingent consideration arrangement are recognized in the consolidated statements of comprehensive income (loss). Cash payments for contingent or deferred consideration up to the amount of liability recognized on the acquisition date are classified within cash flows from financing activities within the consolidated statements of cash flows and any excess is classified as cash flows from operating activities.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill and intangible assets may result from our business acquisitions. Intangible assets may also result from the purchase of assets and intellectual property in a transaction that does not qualify as a business combination. We use estimates, including estimates of useful lives of intangible assets, the amount and timing of related future cash flows, and fair values of the related operations, in determining the value assigned to goodwill and intangible assets. Our finite-lived intangible assets are amortized over their expected useful lives based on estimated discounted cash flows. Our brand name and trademark assets are considered indefinite-lived intangible assets and are not subject to amortization. Finite-lived intangible assets are tested for impairment at the asset group level when events or changes in circumstances indicate the carrying value may not be recoverable. Indefinite-lived intangible assets are tested for impairment annually, when events or changes in circumstances indicate the asset may be impaired, or at the time when their useful lives are determined to be no longer indefinite.

Goodwill is assigned to our reporting units based on the expected benefit from the synergies arising from each business combination, determined by using certain financial metrics, including the forecast discounted cash flows associated with each reporting unit. The reporting units are aligned with our reporting segments.

We test goodwill for impairment each year as of October 1, or more frequently should a significant impairment indicator occur. As part of the impairment test, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit, including goodwill, is less than its carrying amount, or if we elect to bypass the qualitative assessment, we would then proceed with the two-step impairment test. The impairment test involves comparing the fair values of the reporting units to their carrying amounts. If the carrying amount of a reporting unit exceeds its fair value, a second step is required to measure the goodwill impairment loss amount. This second step determines the current fair values of all assets and liabilities of the reporting unit and then compares the implied fair value of the reporting unit's goodwill to the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. We forecast discounted future cash flows at the reporting unit level using risk-adjusted discount rates and estimated future revenues and operating costs, which take into consideration factors, such as expectations of competitive and economic environments. We also identify similar publicly traded companies and develop a correlation, referred to as a multiple, to apply to the operating results of the reporting units. These combined fair values are then reconciled to the aggregate market value of our common stock on the date of valuation, while considering a reasonable control premium.

Notes Receivable

Notes Receivable

We carry notes receivable at their estimated collection amount, and they are classified as either current or noncurrent depending on the expected collection date. Interest income on notes receivable is recognized using the interest method.

Other Assets

Other Assets

Other assets primarily consist of key money arrangements and IT system implementation costs for franchisees. We recognize key money paid in conjunction with entering into long-term franchise agreements as prepaid expenses and amortize the amount paid against revenue over the term of the franchise agreements. IT system implementation costs represent costs incurred to implement RevPAK applications for new franchises and are amortized over the initial term of the software license arrangement.

Fair Value Measurements

Fair Value Measurements

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the following three levels of the fair value hierarchy:

• Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

• Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

• Level 3 includes unobservable inputs that reflect assumptions about what factors market participants would use in pricing the asset or liability. We develop these inputs based on the best information available, including our own data.

Deferred Income

Deferred Income

In 2003, we sold a hotel to an unrelated party in a sale-operating leaseback transaction. The pre-tax gain on the transaction of approximately $7.0 million was deferred and is being amortized into income over the period of the lease term, which expires in November 2018 and is renewable for three, five-year terms at our option. During the three months ended March 31, 2016 and 2015, we recognized income of approximately $0.1 million each period for the amortization of the deferred gain. The remaining balance at March 31, 2016, was $1.2 million.

Income Taxes

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning, and results of recent operations. At March 31, 2016 and December 31, 2015, a valuation allowance has been recorded to reduce our deferred tax assets to an amount that is more likely than not to be realized. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

We classify any interest expense and penalties related to underpayment of taxes and any interest income on tax overpayments as components of income tax expense.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. See Note 10.

Revenue Recognition

Revenue Recognition

Revenue is generally recognized as services are provided. When payments from customers are received before services have been performed, the amount received is recorded as deferred revenue until the service has been completed. We recognize revenue from the following sources:

• Company-Operated Hotels - Room rental and food and beverage sales from majority owned and leased hotels and management fees from hotels under management contract. Revenues are recognized when services have been performed, generally at the time of the hotel stay or guests visit to the restaurant and at the time the management services are provided. We recognize other revenue and costs from managed properties when we incur the related reimbursable costs. These costs primarily consist of payroll and related expenses at managed properties where we are the employer. As these costs have no added markup, the revenue and related expense have no impact on either our operating or net income.

• Franchised Hotels - Fees received in connection with the franchise and marketing of our brand names. Franchise revenues are recognized as earned in accordance with the contractual terms of the franchise agreements.

• Entertainment - Online ticketing services, ticketing inventory management systems, promotion of Broadway-style shows and other special events. Where we act as an agent and receive a net fee or commission, revenue is recognized in the period the services are performed. When we are the promoter of an event and are at-risk for the production, revenues and expenses are recorded in the period of the event performance.

Advertising and Promotion

Advertising and Promotion

Costs associated with advertising and promotional efforts are generally expensed as incurred. During the three months ended March 31, 2016 and 2015 we incurred approximately $1.4 million and $1.3 million in advertising expense.

Basic and Diluted Earnings (Loss) Per Share

Basic and Diluted Earnings (Loss) Per Share

Basic earnings (loss) per share attributable to Red Lion Hotels Corporation is computed by dividing income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings (loss) per share attributable to Red Lion Hotels Corporation gives effect to all dilutive potential shares that are outstanding during the period and include outstanding stock options, other outstanding employee equity grants and warrants, by increasing the weighted-average number of shares outstanding by their effect. When we report a net loss during the period, basic and diluted earnings (loss) per share are the same. See Note 12.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.

Restatement for Cash Flow Misclassification

Restatement for Cash Flow Misclassification

During the fourth quarter of 2015, we identified a cash flow misclassification related to the proceeds from the sales of interests in our joint venture entities during the period ended March 31, 2015. This error did not affect net income, stockholders' equity, cash flows from operations or the net increase or decrease in cash and cash equivalents for the period. The classification error incorrectly included these cash inflows as investing activities when they should have been classified as inflows from financing activities in the Consolidated Statement of Cash Flows for the period ended March 31, 2015. In accordance with the SEC Staff Accounting Bulletin (SAB) No. 99, "Materiality," and SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," we evaluated the materiality of the error from qualitative and quantitative perspectives and concluded that the error was immaterial to the current and prior interim period. Consequently, the Consolidated Statement of Cash Flows contained in this Report has been restated for the three months ended March 31, 2015. This change resulted in a decrease of $17.1 million from cash flows provided by investing activities and a corresponding increase to cash inflows from financing activities.

New and Recent Accounting Pronouncements

New and Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 may be applied using either a full retrospective or a modified retrospective approach and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. In July 2015, the FASB voted to defer the effective date to January 1, 2018 with early adoption beginning January 1, 2017. We are continuing our evaluation of this guidance and our method of adoption.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 became effective for us beginning January 1, 2016. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or, recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. The adoption of this new standard did not have any impact on our financial condition or results of operations.

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. ASU 2015-05 became effective for us beginning January 1, 2016. Upon adoption, this ASU did not have a material impact on our financial condition or results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

We have assessed the potential impact of other recently issued, but not yet effective, accounting standards and determined that the provisions are either not applicable to us or are not anticipated to have a material impact on our consolidated financial statements.

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Organization (Tables)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of summary of properties

A summary of our properties as of March 31, 2016 is provided below:

	Hotels	Total Available Rooms
Company operated hotels
Majority owned and consolidated	14	2,761
Leased and consolidated	4	867
Managed	2	361
Franchised hotels	102	10,744
Total systemwide	122	14,733

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Schedule of Alowance for Doubtful Accounts

The following schedule summarizes the activity in the allowance account for trade accounts receivable:

	Three Months Ended March 31,
	2016			2015
	(In thousands)
Allowance for doubtful accounts, operations
Balance, January 1	$	657		$	303
Additions to allowance	99			(68		)
Write-offs, net of recoveries	(2		)	(35		)
Balance, March 31	$	754		$	200

Schedule of Property, Plant, and Equipment, Estimated Useful Life

Depreciation is provided using the straight-line method over the estimated useful life of each asset, which ranges as follows:

Buildings	25 to 39 years
Equipment	2 to 15 years
Furniture and fixtures	2 to 15 years
Landscaping and improvements	15 years

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Selected financial information is provided below (in thousands):

Three months ended March 31, 2016	Company Operated Hotels			Franchised Hotels			Entertainment		Other			Total
Revenue	$	25,334		$	3,296		$	4,031	$	13		$	32,674
Segment operating expenses	$	22,784		$	3,356		$	3,437	$	13		$	29,590
Depreciation and amortization	3,319			(86		)	54		215			3,502
Other operating expenses and gains on asset dispositions	1,045			—			—		3,056			4,101
Operating income (loss)	$	(1,814	)	$	26		$	540	$	(3,271	)	$	(4,519	)
Capital expenditures	$	6,580		$	—		$	—	$	107		$	6,687
Identifiable assets as of March 31, 2016	$	255,680		$	21,316		$	5,407	$	8,055		$	290,458

Three months ended March 31, 2015	Company Operated Hotels			Franchise Hotels			Entertainment		Other			Total
Revenue	$	23,935		$	2,093		$	3,677	$	10		$	29,715
Segment operating expenses	$	21,085		$	2,377		$	3,126	$	8		$	26,596
Depreciation and amortization	2,761			11			74		130			2,976
Other operating expenses and gains on asset dispositions	(14,889		)	—			—		2,398			(12,491		)
Operating income (loss)	$	14,978		$	(295	)	$	477	$	(2,526	)	$	12,634
Capital expenditures	$	1,849		$	—		$	88	$	297		$	2,234
Identifiable assets as of December 31, 2015	$	255,876		$	20,180		$	5,256	$	5,906		$	287,218

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property and equipment is summarized as follows (in thousands):

	March 31, 2016			December 31, 2015
Buildings and equipment	$	221,630		$	217,787
Furniture and fixtures	33,706			32,821
Landscaping and land improvements	7,559			7,253
	262,895			257,861
Less accumulated depreciation	(126,913		)	(123,084		)
	135,982			134,777
Land	43,242			43,242
Construction in progress	19,512			17,371
Property and equipment, net	$	198,736		$	195,390

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Other Intangibles

The following table summarizes the balances of goodwill and other intangible assets (in thousands):

	March 31, 2016		December 31, 2015
Goodwill	$	8,512	$	8,512
Intangible assets
Brand names	$	12,460	$	12,314
Customer contracts	2,795		2,853
Trademarks	134		134
Total intangible assets	$	15,389	$	15,301

Goodwill and other intangible assets attributable to each of our business segments were as follows (in thousands):

	March 31, 2016				December 31, 2015
			Other				Other
	Goodwill		Intangibles		Goodwill		Intangibles
Company operated hotels	$	—	$	4,659	$	—	$	4,659
Franchised hotels	5,351		10,724		5,351		10,636
Entertainment	3,161		6		3,161		6
Total	$	8,512	$	15,389	$	8,512	$	15,301

Schedule of Intangible Assets

The following table summarizes the balances of amortized customer contracts (in thousands):

	March 31, 2016			December 31, 2015
Historical cost	$	3,273		$	3,420
Accumulated amortization	(478		)	(567		)
Net carrying amount	$	2,795		$	2,853

Schedule of Estimated Future Amortization Expenses

As of March 31, 2016, estimated future amortization expenses related to intangible assets is as follows (in thousands):

Year Ending December 31,	Amount
2016	$	451
2017	531
2018	433
2019	366
2020	307
Thereafter	707
Total	$	2,795

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of current and non-current portions of long-term debt and capital lease obligations

The current and non-current portions of long-term debt as of March 31, 2016 and December 31, 2015 are as follows (in thousands):

	March 31, 2016					December 31, 2015
	Current		Non-Current			Current		Non-Current
RL Venture	$	272	$	60,347		$	—	$	56,307
RL Baltimore	—		13,300			—		13,300
RLH Atlanta	—		9,400			—		6,000
RLH DC	—		15,446			—		15,165
Total debt	272		98,493			—		90,772
Unamortized debt issuance costs	—		(2,975		)	—		(3,215		)
Long-term net of debt issuance costs	$	272	$	95,518		$	—	$	87,557

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Compensation Cost

For the quarters ended March 31, stock-based compensation expense is as follows:

	Three Months Ended March 31,
	2016		2015
	(In thousands)
Restricted stock units	$	496	$	214
Unrestricted stock awards	105		122
ESPP	7		3
Total stock-based compensation	$	608	$	339

Schedule of Stock Option Fair Value Assumptions

Stock option fair value assumptions are as follows for stock options granted during the three months ended March 31, 2016:

Grant Date	Volatility	Forfeiture Rate	Risk-free Interest Rate	Dividend Yield	Expected Life (Years)
March 28, 2016	61.12%	21.07%	1.37%	—%	5

Schedule of Stock Options Activity

A summary of stock option activity for the three months ended March 31, 2016, is as follows:

	Number of Shares	Weighted Average Exercise Price
Balance, December 31, 2015	71,676	$	10.41
Options granted	81,130	8.20
Options exercised	—	—
Options forfeited	—	—
Balance, March 31, 2016	152,806	$	9.23
Exercisable, March 31, 2016	71,676	$	10.41

Schedule of Stock Option Plans, by Exercise Price Range

Additional information regarding stock options outstanding and exercisable as of March 31, 2016, is as follows:

Exercise Price	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Expiration Date	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value(1)
$8.20	81,130	9.99	2026	$	8.20	$	18,660	—	$	—	$	—
$8.74	40,836	2.14	2018	8.74		—		40,836	8.74		—
$12.21	15,195	0.64	2016	12.21		—		15,195	12.21		—
$13.00	15,645	1.38	2017	13.00		—		15,645	13.00		—
	152,806	6.80	2016-2026	$	9.23	$	18,660	71,676	$	10.41	$	—

(1) The aggregate intrinsic value is before applicable income taxes and represents the amount option recipients would have received if all options had been fully vested and exercised on the last trading day of the first three months of 2016, or March 31, 2016, based upon our closing stock price on that date of $8.43.

Schedule of Restricted Stock

A summary of restricted stock unit activity for the three months ended March 31, 2016, is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Balance, January 1, 2016	1,224,920		$	6.95
Granted	242,989		$	8.17
Vested	(75,407	)	$	6.70
Forfeited	(10,158	)	$	6.33
Balance, March 31, 2016	1,382,344		$	7.18

Schedule of Unrestricted Stock Awards

The following table summarizes unrestricted stock award activity for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016		2015
Shares of unrestricted stock granted	14,934		19,285
Weighted average grant date fair value per share	$	7.03	$	6.34

Schedule Employee Stock Purchase Plan

	Three Months Ended March 31,
	2016		2015
Shares of stock sold to employees	12,735		10,614
Weighted average fair value per ESPP share	$	5.96	$	4.64

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Earnings (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents a reconciliation of the numerators and denominators used in the basic and diluted net income (loss) per share computations for the three months endedMarch 31, 2016 and 2015 (in thousands, except per share amounts):

	Three Months Ended March 31,
	2016			2015
Numerator - basic and diluted:
Net income (loss)	$	(5,820	)	$	10,133
Less: net (income) loss attributable to noncontrolling interest	1,021			30
Net income (loss) attributable to Red Lion Hotels Corporation	$	(4,799	)	$	10,163
Denominator:
Weighted average shares - basic	20,088			19,895
Weighted average shares - diluted	20,088			20,067
Earnings (loss) per share - basic	$	(0.24	)	$	0.51
Earnings (loss) per share - diluted	$	(0.24	)	$	0.51

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value and Carrying Amount

	March 31, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:	(in thousands)
Cash and cash equivalents and restricted cash	$	33,121	$	33,121	$	35,202	$	35,202
Short-term investments	$	17,720	$	17,720	$	18,085	$	18,085
Accounts receivable	$	9,497	$	9,497	$	8,164	$	8,164
Notes receivable	$	2,938	$	2,938	$	2,605	$	2,605
Interest rate caps	$	14	$	14	$	42	$	42
Financial liabilities:
Total debt	$	98,765	$	103,792	$	90,772	$	94,029

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Organization (Details)	Mar. 31, 2016 room hotel
Real Estate Properties [Line Items]
Hotels | hotel	122
Total Available Rooms | room	14,733
Franchised hotels
Real Estate Properties [Line Items]
Hotels | hotel	102
Total Available Rooms | room	10,744
Majority owned and consolidated
Real Estate Properties [Line Items]
Hotels | hotel	14
Total Available Rooms | room	2,761
Leased and consolidated
Real Estate Properties [Line Items]
Hotels | hotel	4
Total Available Rooms | room	867
Managed
Real Estate Properties [Line Items]
Hotels | hotel	2
Total Available Rooms | room	361

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Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands		1 Months Ended			3 Months Ended
	Apr. 01, 2016	Oct. 31, 2015	Sep. 30, 2015	Jan. 31, 2015	Mar. 31, 2016 USD ($) term	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2003 USD ($)
Accounting Policies [Line Items]
Restricted cash					$ 14,269		$ 11,304
Deferred Income
Deferred gain								$ 7,000
Number of renewable terms | term					3
Renewable lease period					5 years
Recognized income					$ 100
Deferred revenue					1,200
Advertising expense					1,400	$ 1,300
Net cash provided by (used in) investing activities					$ (5,633)	35,762
Minimum [Member]
Accounting Policies [Line Items]
Short-term investments maturity term					2 years
Maximum [Member]
Accounting Policies [Line Items]
Short-term investments maturity term					35 years
Variable Interest Entity, Primary Beneficiary
Accounting Policies [Line Items]
Restricted cash					$ 12,250		$ 10,978
RL Venture LLC | Variable Interest Entity, Primary Beneficiary
Accounting Policies [Line Items]
Ownership percentage				55.00%	55.00%
RLS Atla Venture [Member] | Variable Interest Entity, Primary Beneficiary
Accounting Policies [Line Items]
Ownership percentage			55.00%		55.00%
RLS Balt Venture LLC | Variable Interest Entity, Primary Beneficiary
Accounting Policies [Line Items]
Ownership percentage				73.00%	73.00%
RLS DC Venture [Member] | Variable Interest Entity, Primary Beneficiary
Accounting Policies [Line Items]
Ownership percentage	55.00%	86.00%
Restatement Adjustment
Deferred Income
Net cash provided by (used in) investing activities						$ (17,100)

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Summary of Significant Accounting Policies (Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance, beginning of year	$ 657	$ 303
Additions to allowance	99	(68)
Write-offs, net of recoveries	(2)	(35)
Balance, end of year	$ 754	$ 200

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Summary of Significant Accounting Policies (Property and Equipment) (Details)	3 Months Ended
	Mar. 31, 2016
Buildings | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	25 years
Buildings | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	39 years
Equipment | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	2 years
Equipment | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	15 years
Furniture and fixtures | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	2 years
Furniture and fixtures | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	15 years
Landscaping and improvements
Property, Plant and Equipment [Line Items]
Useful life	15 years

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Business Segments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) segment	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | segment	3
Revenue	$ 32,674	$ 29,715
Segment operating expenses	29,590	26,596
Depreciation and amortization	3,502	2,976
Other operating expenses and gains on asset dispositions	4,101	(12,491)
Operating income (loss)	(4,519)	12,634
Capital expenditures	6,687	2,234
Identifiable assets as of March 31, 2016	290,458		$ 287,218
Operating segments | Company operated hotels
Segment Reporting Information [Line Items]
Revenue	25,334	23,935
Segment operating expenses	22,784	21,085
Depreciation and amortization	3,319	2,761
Other operating expenses and gains on asset dispositions	1,045	(14,889)
Operating income (loss)	(1,814)	14,978
Capital expenditures	6,580	1,849
Identifiable assets as of March 31, 2016	255,680		255,876
Operating segments | Franchised hotels
Segment Reporting Information [Line Items]
Revenue	3,296	2,093
Segment operating expenses	3,356	2,377
Depreciation and amortization	(86)	11
Other operating expenses and gains on asset dispositions	0	0
Operating income (loss)	26	(295)
Capital expenditures	0	0
Identifiable assets as of March 31, 2016	21,316		20,180
Operating segments | Entertainment
Segment Reporting Information [Line Items]
Revenue	4,031	3,677
Segment operating expenses	3,437	3,126
Depreciation and amortization	54	74
Other operating expenses and gains on asset dispositions	0	0
Operating income (loss)	540	477
Capital expenditures	0	88
Identifiable assets as of March 31, 2016	5,407		5,256
Other
Segment Reporting Information [Line Items]
Revenue	13	10
Segment operating expenses	13	8
Depreciation and amortization	215	130
Other operating expenses and gains on asset dispositions	3,056	2,398
Operating income (loss)	(3,271)	(2,526)
Capital expenditures	107	$ 297
Identifiable assets as of March 31, 2016	$ 8,055		$ 5,906

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Variable Interest Entities (Details)			1 Months Ended					3 Months Ended
	Apr. 01, 2016 USD ($)	Feb. 03, 2016 USD ($)	Feb. 26, 2016 USD ($)	Dec. 31, 2015 USD ($)	Oct. 31, 2015 USD ($)	Sep. 30, 2015	Jan. 31, 2015 USD ($) hotel	Mar. 31, 2016 USD ($)	Oct. 29, 2015	Apr. 30, 2015 USD ($)
RLS DC Venture [Member] | The Quincy Hotel [Member]
Variable Interest Entity [Line Items]
Voting interest acquired									100.00%
RL Venture LLC
Variable Interest Entity [Line Items]
Cash distributions								$ 0
RLS Balt Venture LLC
Variable Interest Entity [Line Items]
Ownership by non-controlling interest holders										21.00%
Option to purchase additional interest percent										24.00%
Option to purchase additional interest cost										$ 2,300,000
RLS Balt Venture LLC | Shelbourne Falcon II [Member]
Variable Interest Entity [Line Items]
Purchase of additional interest percent				5.876%
Purchase of additional interest				$ 560,000
Gain on purchase of equity interests in additional paid in capital				$ 100,000
RLS Atla Venture [Member] | Shelbourne Falcon III [Member]
Variable Interest Entity [Line Items]
Ownership percentage						45.00%
RLS DC Venture [Member] | Shelbourne Falcon IV [Member]
Variable Interest Entity [Line Items]
Ownership percentage	45.00%	29.00%			14.00%
Option to purchase additional interest percent								16.00%	31.00%
Purchase of additional interest percent		15.00%
Purchase of additional interest		$ 1,500,000
Gain on purchase of equity interests in additional paid in capital			$ 200,000
RLS DC Venture [Member] | Shelbourne Falcon IV [Member] | Subsequent Event
Variable Interest Entity [Line Items]
Purchase of additional interest	$ 1,700,000
Variable Interest Entity, Primary Beneficiary | RL Venture LLC
Variable Interest Entity [Line Items]
Ownership by non-controlling interest holders							45.00%
Number of hotels transfered | hotel							12
Ownership percentage							55.00%	55.00%
Loss on the sale of the equity interests as a reduction to additional paid in capital							$ 12,400,000
Variable Interest Entity, Primary Beneficiary | RLS Balt Venture LLC
Variable Interest Entity [Line Items]
Ownership percentage							73.00%	73.00%
Cash distributions								$ 0
Funding provided					$ 1,500,000
Funding preferred return					11.00%
Variable Interest Entity, Primary Beneficiary | RLS Atla Venture [Member]
Variable Interest Entity [Line Items]
Ownership percentage						55.00%		55.00%
Cash distributions								$ 0
Variable Interest Entity, Primary Beneficiary | RLS DC Venture [Member]
Variable Interest Entity [Line Items]
Ownership percentage	55.00%				86.00%
Cash distributions								$ 0
Gain on purchase of equity interests in additional paid in capital	$ 277,000

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Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 262,895	$ 257,861
Less accumulated depreciation	(126,913)	(123,084)
Property, plant and equipment, net, excluding land and construction in progress	135,982	134,777
Property and equipment, net	198,736	195,390
Buildings and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	221,630	217,787
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	33,706	32,821
Landscaping and land improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	7,559	7,253
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	43,242	43,242
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 19,512	$ 17,371

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2015	Sep. 30, 2015	Mar. 31, 2016	Dec. 31, 2015
Schedule of Goodwill and Intangible Assets [Line Items]
Goodwill			$ 8,512	$ 8,512
Intangible assets			15,389	15,301
Historical cost			3,273	3,420
Accumulated amortization			(478)	(567)
Net carrying amount			2,795	2,853
2015			451
2016			531
2017			433
2018			366
2019			307
Thereafter			707
GuestHouse International LLC [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Preliminary purchase price	$ 5,500
Reduction of purchase price		$ 1,500
Company operated hotels
Schedule of Goodwill and Intangible Assets [Line Items]
Goodwill			0	0
Intangible assets			4,659	4,659
Franchised hotels
Schedule of Goodwill and Intangible Assets [Line Items]
Goodwill			5,351	5,351
Intangible assets			10,724	10,636
Entertainment
Schedule of Goodwill and Intangible Assets [Line Items]
Goodwill			3,161	3,161
Intangible assets			6	6
Brand names
Schedule of Goodwill and Intangible Assets [Line Items]
Intangible assets			12,460	12,314
Customer contracts
Schedule of Goodwill and Intangible Assets [Line Items]
Intangible assets			2,795	2,853
Customer contracts | GuestHouse International LLC [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Amortization period	10 years
Trademarks
Schedule of Goodwill and Intangible Assets [Line Items]
Intangible assets			$ 134	$ 134

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Long-Term Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Long-term debt, due within one year	$ 272	$ 0
Total debt	98,493	90,772
Unamortized debt issuance costs	(2,975)	(3,215)
Long-term net of debt issuance costs	95,518	87,557
Long-term Debt | RL Venture
Debt Instrument [Line Items]
Long-term debt, due within one year	272	0
Total debt	60,347	56,307
Long-term Debt | RL Baltimore
Debt Instrument [Line Items]
Long-term debt, due within one year	0	0
Total debt	13,300	13,300
Long-term Debt | RLH Atlanta
Debt Instrument [Line Items]
Long-term debt, due within one year	0	0
Total debt	9,400	6,000
Long-term Debt | RLH DC
Debt Instrument [Line Items]
Long-term debt, due within one year	0	0
Total debt	$ 15,446	$ 15,165

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Long-Term Debt (RL Venture) (Details) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 31, 2015 USD ($) subsidiary	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Unamortized debt issuance fees		$ 2,975	$ 3,215
RL Venture Holding LLC [Member]
Debt Instrument [Line Items]
Number of wholly-owned subsidiaries | subsidiary	12
RL Venture Holding LLC [Member] | Long-term Debt
Debt Instrument [Line Items]
Principal amount of debt	$ 53,800
Additional advance	$ 26,200
Term of loan	2 years
Amount drawn		4,300	$ 2,500
Available to draw		19,400
Unamortized debt issuance fees		$ 1,700
Extension period	1 year
RL Venture Holding LLC [Member] | Long-term Debt | LIBOR
Debt Instrument [Line Items]
Amortization period	25 years
Basis spread on variable rate	4.75%

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Long-Term Debt (RL Baltimore) (Details) $ in Thousands	1 Months Ended
	Apr. 30, 2015 USD ($) extension	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Unamortized debt issuance fees		$ 2,975	$ 3,215
RL Baltimore | Long-term Debt
Debt Instrument [Line Items]
Principal amount of debt	$ 10,100
Additional advance	$ 3,200
Unamortized debt issuance fees		$ 600
Number of extension options | extension	2
Extension period	1 year
Monthly principal payments	$ 16
RL Baltimore | Long-term Debt | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	6.25%

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Long-Term Debt (RLH Atlanta) (Details) $ in Thousands	1 Months Ended
	Sep. 30, 2015 USD ($)	Mar. 31, 2016 USD ($) extension	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Unamortized debt issuance fees		$ 2,975	$ 3,215
RLH Atlanta | Long-term Debt
Debt Instrument [Line Items]
Principal amount of debt	$ 6,000
Additional advance	$ 3,400
Unamortized debt issuance fees		$ 200
Number of extension options | extension		2
Extension period	1 year
RLH Atlanta | Long-term Debt | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	6.35%

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Long-Term Debt (RLH DC) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2015	Mar. 31, 2016	Dec. 31, 2015	Oct. 30, 2015
Debt Instrument [Line Items]
Unamortized debt issuance fees		$ 2,975	$ 3,215
RLH DC | Long-term Debt
Debt Instrument [Line Items]
Principal amount of debt				$ 15,200
Additional advance				$ 2,300
Amount drawn		300
Available to draw		2,000
Unamortized debt issuance fees		$ 400
Extension period	1 year
Amortization period	25 years
RLH DC | Long-term Debt | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	4.55%

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Long-Term Debt (Wells Fargo) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Debt Instrument [Line Items]
Loss on early retirement of debt		$ 0	$ 1,159
Line of Credit | Wells Fargo Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000
Notes Payable to Banks | Term Loan
Debt Instrument [Line Items]
Loss on early retirement of debt	$ 1,100

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Long-Term Debt (Debentures) (Details) - Debentures [Member] - Red Lion Hotels Capital Trust $ in Millions	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Repurchase amount	$ 30.8
Stated interest rate	9.50%
Trust Preferred Securities [Member]
Debt Instrument [Line Items]
Repurchase amount	$ 29.9
Stated interest rate	9.50%
Trust Common Securities [Member]
Debt Instrument [Line Items]
Repurchase amount	$ 0.9
Stated interest rate	9.50%

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Derivative Financial Instruments (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Derivative [Line Items]
Loss on early retirement of debt		$ 0	$ 1,159,000
Early retirement of debt
Derivative [Line Items]
Loss on early retirement of debt	$ 2,800,000
Interest rate swap
Derivative [Line Items]
Derivative liabilities	16,200,000
Interest rate swap | Early retirement of debt
Derivative [Line Items]
Loss on early retirement of debt	200,000
Interest rate swap | Wells Fargo Credit Facility | Early retirement of debt
Derivative [Line Items]
Loss on early retirement of debt	$ 1,200,000
RL Venture Holding LLC [Member] | Interest rate cap
Derivative [Line Items]
Derivative notional amount		$ 80,000,000.0
Fixed interest rate		4.00%
RL Venture Holding LLC [Member] | Interest rate cap | Other Assets
Derivative [Line Items]
Derivative asset		$ 2,000
RL Baltimore | Interest rate cap
Derivative [Line Items]
Derivative notional amount		$ 13,300,000.0
Fixed interest rate		3.00%
RL Baltimore | Interest rate cap | Other Assets
Derivative [Line Items]
Derivative asset		$ 2,000
RLH Atlanta | Interest rate cap
Derivative [Line Items]
Derivative notional amount		$ 9,400,000.0
Fixed interest rate		3.00%
RLH Atlanta | Interest rate cap | Other Assets
Derivative [Line Items]
Derivative asset		$ 3,000
RLH DC | Interest rate cap
Derivative [Line Items]
Derivative notional amount		$ 17,500,000.0
Fixed interest rate		3.00%
RLH DC | Interest rate cap | Other Assets
Derivative [Line Items]
Derivative asset		$ 7,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 59	$ 112

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Stockholders' Equity (Narrative) (Details) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	20,131,363	20,051,145
Common stock, shares outstanding (in shares)	20,131,363	20,051,145
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01

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Stockholders' Equity (Stock Incentive Plans Narrative) (Details)	Mar. 31, 2016 shares
2006 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	2,000,000
Number of shares of common stock available for issuance	44,869
2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	1,400,000
Number of shares of common stock available for issuance	475,185

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Stockholders' Equity (Stock Based Compensation Expense) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 608,000	$ 339,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	0	0
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	496,000	214,000
Unrestricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	105,000	122,000
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 7,000	$ 3,000

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Stockholders' Equity Stockholders' Equity (Fair Value Assumptions) (Details) - Stock Options	3 Months Ended
	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	61.12%
Forfeiture Rate	21.07%
Risk-free Interest Rate	1.37%
Dividend Yield	0.00%
Expected Life (Years)	5 years

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Stockholders' Equity (Stock Option Activity) (Details) - Stock Options - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Number of Shares (in shares)
Balance, December 31, 2015	71,676
Options granted	81,130	0
Options exercised	0
Options forfeited	0
Balance, March 31, 2016	152,806
Exercisable, March 31, 2016	71,676
Weighted Average Exercise Price (in dollars per share)
Balance, December 31, 2015	$ 10.41
Options granted	8.20
Options exercised	0.00
Options forfeited	0.00
Balance, March 31, 2016	9.23
Exercisable, March 31, 2016	$ 10.41

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Stockholders' Equity (Exercise Price Range) (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Share Price	$ 8.43
Stock Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Options Outstanding | shares	152,806
Weighted Average Remaining Contractual Life	6 years 9 months 18 days
Weighted Average Exercise Price (in dollars per share)	$ 9.23
Aggregate Intrinsic Value | $	$ 19
Number of Exercisable Options | shares	71,676
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 10.41
Aggregate Intrinsic Value, Exercisable | $	$ 0
$8.20 | Stock Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Upper Limit	$ 8.20
Number of Options Outstanding | shares	81,130
Weighted Average Remaining Contractual Life	9 years 11 months 27 days
Weighted Average Exercise Price (in dollars per share)	$ 8.20
Aggregate Intrinsic Value | $	$ 19
Number of Exercisable Options | shares	0
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 0.00
Aggregate Intrinsic Value, Exercisable | $	$ 0
$8.74 | Stock Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Upper Limit	$ 8.74
Number of Options Outstanding | shares	40,836
Weighted Average Remaining Contractual Life	2 years 1 month 21 days
Weighted Average Exercise Price (in dollars per share)	$ 8.74
Aggregate Intrinsic Value | $	$ 0
Number of Exercisable Options | shares	40,836
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 8.74
Aggregate Intrinsic Value, Exercisable | $	$ 0
$12.21 | Stock Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Upper Limit	$ 12.21
Number of Options Outstanding | shares	15,195
Weighted Average Remaining Contractual Life	7 months 21 days
Weighted Average Exercise Price (in dollars per share)	$ 12.21
Aggregate Intrinsic Value | $	$ 0
Number of Exercisable Options | shares	15,195
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 12.21
Aggregate Intrinsic Value, Exercisable | $	$ 0
$13.00 | Stock Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Upper Limit	$ 13.00
Number of Options Outstanding | shares	15,645
Weighted Average Remaining Contractual Life	1 year 4 months 17 days
Weighted Average Exercise Price (in dollars per share)	$ 13.00
Aggregate Intrinsic Value | $	$ 0
Number of Exercisable Options | shares	15,645
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 13.00
Aggregate Intrinsic Value, Exercisable | $	$ 0

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Stockholders' Equity (Restricted Stock Units, Shares Issued as Compensation Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 608	$ 339
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)	242,989
Other than options outstanding (in shares)	1,382,344	640,459	1,224,920
Percentage of total units granted that are forfeited	22.10%
Shares vested	(75,407)
Fair value	$ 500	$ 200
Stock-based compensation expense	496	$ 214
Additional compensation expense	$ 6,800
Period for recognition	38 months
Additional compensation expense	$ 1,700

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Stockholders' Equity (Restricted Stock Units) (Details) - Restricted Stock Units (RSUs) - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Nonvested, Number of Shares [Roll Forward]
Other than options outstanding (in shares)	1,382,344	1,224,920	640,459
Shares granted (in shares)	242,989
Vested	(75,407)
Forfeited	(10,158)
Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Balance, January 1, 2016	$ 6.95
Granted	8.17
Vested	6.70
Forfeited	6.33
Balance, March 31, 2016	$ 7.18

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Stockholders' Equity (Unrestricted Stock Awards) (Details) - Unrestricted stock awards - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)	14,934	19,285
Granted	$ 7.03	$ 6.34

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Stockholders' Equity (Employee Stock Purchase Plan) (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2008	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 608,000	$ 339,000
2008 ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award	300,000
Discount on price	15.00%
Maximum amount employees can purchase	$ 25,000
Maximum number of shares employees can purchase	10,000
Number of shares issued to participants (in shares)		12,735	10,614
Weighted average fair value per ESPP award (in dollars per share)		$ 5.96	$ 4.64
Stock-based compensation expense		$ 7,000	$ 3,000

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Stockholders' Equity (Warrants) (Details) - Common stock	1 Months Ended
	Jan. 31, 2015 $ / shares shares
Class of Warrant or Right [Line Items]
Warrants issued (in shares) | shares	442,533
Warrant term	5 years
Warrants issued (in dollars per share) | $ / shares	$ 6.78

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Earnings (Loss) Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator - basic and diluted:
Net income (loss)	$ (5,820)	$ 10,133
Less: net (income) loss attributable to noncontrolling interest	1,021	30
Net income (loss) attributable to RLHC	$ (4,799)	$ 10,163
Denominator:
Weighted average shares - basic (in shares)	20,088	19,895
Weighted average shares - diluted (in shares)	20,088	20,067
Earnings (loss) per share - basic (in dollars per share)	$ (0.24)	$ 0.51
Earnings (loss) per share - diluted (in dollars per share)	$ (0.24)	$ 0.51

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Earnings (Loss) Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Stock Options
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Options outstanding (in shares)	152,806	75,176
Restricted Stock Units (RSUs)
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Other than options outstanding (in shares)	1,382,344	640,459	1,224,920
Warrants
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Other than options outstanding (in shares)	442,533	442,533
Stock Options
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	152,806	75,176
Restricted Stock Units (RSUs)
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	1,382,344	469,424
Warrants
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	442,533	442,533

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Carrying Amount
Financial assets:
Cash and cash equivalents and restricted cash	$ 33,121	$ 35,202
Short-term investments	17,720	18,085
Accounts receivable	9,497	8,164
Notes receivable	2,938	2,605
Financial liabilities:
Total debt	98,765	90,772
Fair Value
Financial assets:
Cash and cash equivalents and restricted cash	33,121	35,202
Short-term investments	17,720	18,085
Accounts receivable	9,497	8,164
Notes receivable	2,938	2,605
Financial liabilities:
Total debt	103,792	94,029
Interest rate cap | Carrying Amount
Financial assets:
Short-term investments	14	42
Interest rate cap | Fair Value
Financial assets:
Short-term investments	$ 14	$ 42

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Related-Party Transactions (Details) - USD ($)		1 Months Ended	3 Months Ended
	Mar. 29, 2016	May. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Red Lion Hotel Woodlake Conference Center Sacramento LLC | Management Agreement
Related Party Transaction [Line Items]
Ownership by member of board of directors		50.00%
Management fee revenue recognized			$ 29,800
RL Venture LLC | Shelbourne Falcon | Investor Relations Fee
Related Party Transaction [Line Items]
Monthly investor relations fee, percent of total revenue			0.50%
Construction management fee paid			$ 100,400	$ 0
RL Venture LLC | CPA Development, LLC | Construction Management Fee
Related Party Transaction [Line Items]
Construction management fee paid			33,300	$ 18,200
Construction management fee due			$ 200,000
Red Lion Hotels Management, Inc. | Hudson Valley Resort and Spa [Member] | Management Agreement
Related Party Transaction [Line Items]
Contract period	1 year
Monthly management fee	$ 8,333
Monthly management fee, percent of gross revenue	3.00%