Financial Performance - Total revenue for Q1 2022 was $40.2 million, a 88.6% increase from $21.3 million in Q1 2021[11] - Cinema revenue increased to $37.3 million in Q1 2022, up 106.5% from $18.1 million in Q1 2021[11] - Net loss for Q1 2022 was $15.5 million, compared to a net income of $22.1 million in Q1 2021[11] - Basic earnings per share for Q1 2022 were $(0.70), compared to $0.87 in Q1 2021[11] - Comprehensive loss for Q1 2022 was $(11.8) million, compared to a comprehensive income of $16.4 million in Q1 2021[13] - Net loss attributable to Reading International, Inc. for Q1 2022 was $15,354,000, compared to a net income of $18,965,000 in Q1 2021[34] - The total stockholders' equity decreased from $105,060,000 on January 1, 2022, to $93,494,000 on March 31, 2022, primarily due to a net loss of $15,354,000 during the period[97] Assets and Liabilities - Total current assets decreased to $83.5 million as of March 31, 2022, down from $100.3 million at the end of 2021, a decline of 16.7%[9] - Total liabilities decreased slightly to $577.1 million as of March 31, 2022, from $582.6 million at the end of 2021[9] - Cash and cash equivalents at the end of Q1 2022 were $67.3 million, down from $83.3 million at the end of 2021, a decrease of 19.2%[9] - Total stockholders' equity decreased to $93.5 million as of March 31, 2022, down from $105.1 million at the end of 2021, a decline of 11.0%[9] - As of March 31, 2022, total borrowings amounted to $238.142 million, a slight increase from $236.948 million as of December 31, 2021[62] Operating Performance - Operating income for Q1 2022 was a loss of $11.8 million, compared to a loss of $14.0 million in Q1 2021[11] - Cinema exhibition segment reported an operating loss of $7,216,000 for Q1 2022, an improvement from a loss of $8,275,000 in Q1 2021[18] - The total segment operating loss decreased from $9.6 million to $7.1 million, a reduction of 26% due to easing government restrictions and improved film content[173] - Operating expenses for the cinema segment increased by $17.8 million to $39.8 million, driven by higher film rent and occupancy costs[183] - General and administrative expenses for the non-segment increased by 7% to $4.4 million, attributed to higher salaries and wages[175] Cash Flow and Investments - Cash used in operating activities increased by $10.3 million to $14.1 million for the three months ended March 31, 2022, primarily due to a $22.3 million increase in net changes in operating assets and liabilities[197] - Cash used in investing activities increased by $65.7 million to $1.8 million for the three months ended March 31, 2022, compared to the same period in 2021[198] - Cash used in financing activities decreased by $44.1 million to $1.6 million for the three months ended March 31, 2022[199] Debt and Financing - The debt-to-equity ratio increased to 2.55 as of March 31, 2022, compared to 2.26 in the previous year[200] - Total contractual obligations amount to $585.668 million as of March 31, 2022[205] - Debt repayments scheduled for 2022 total $31.582 million, increasing to $115.764 million in 2023[205] - Estimated interest on debt is expected to total $21.929 million, with $7.889 million due in 2022[205] Real Estate and Asset Management - The company has completed plans to refinance certain properties and monetize real estate assets to alleviate concerns regarding going concern status[26] - The sale of the Auburn/Redyard property was completed for $69.6 million, resulting in a net gain of $38.726 million after direct costs[41] - The Manukau property was sold for $56.1 million, yielding a net gain of $40.926 million after direct costs[43] - The Coachella land sale generated a net gain of $6.348 million from a sales price of $11 million[45] - The Royal George Theatre was sold for $7.075 million, resulting in a net gain of $4.956 million after direct costs[47] Legal and Regulatory Matters - The company agreed to settle California employment litigation for a total payment of $4.0 million, contingent upon final court approval[92] - The company has accrued estimates of probable losses for ongoing legal proceedings, although it believes these will not materially affect its financial position[88] - Legal proceedings are ongoing, with accrued estimates for probable losses related to these claims[207] COVID-19 Impact - The company continues to face challenges in cinema operations due to COVID-19, with patron attendance not returning to pre-pandemic levels[24] - The company continues to face risks associated with COVID-19, including delayed releases of major motion pictures and government-mandated restrictions[140] - The company reported that no cinemas are currently closed due to COVID-19, with only one cinema in the U.S. and one in New Zealand closed for unrelated reasons[160] Future Outlook and Developments - The company anticipates adding an eight-screen complex in Brisbane, QLD by the end of 2022 and a five-screen Reading Cinema in Busselton, WA by the end of 2023[152] - The company is focused on prudent development of its real estate assets as it emerges from the pandemic, with ongoing projects in New York and Wellington, New Zealand[163] - The company has upgraded its cinema circuits to include digital formats in all 63 locations and 515 screens[153]

Financial Performance - As of December 31, 2021, cash and cash equivalents totaled $83.3 million, up from $26.8 million at the end of 2020, indicating a significant improvement in liquidity[23] - Net debt was reduced from $285.0 million as of December 31, 2020, to $236.9 million as of December 31, 2021, reflecting effective debt management strategies[23] - Gross revenues for 2021 were $61.8 million in the United States, $64.7 million in Australia, and $12.6 million in New Zealand, representing increases from $25.7 million, $31.3 million, and $5.8 million in 2020 respectively[83] - 2021 cinema revenue was generated approximately 58% from box office receipts, with ticket prices varying by location[39] - Food and beverage (F&B) sales accounted for approximately 33% of total 2021 cinema revenue, with a strategic focus on expanding F&B offerings[41] - Screen advertising and other revenue contributed approximately 8% of total 2021 cinema revenue[43] Real Estate Operations - The company has approximately 8.9 million square feet of developed and undeveloped real estate in the U.S., Australia, and New Zealand, along with cash and cash equivalents of $83.3 million[34] - The real estate team secured a long-term lease for the 44 Union Square redevelopment project in January 2022, indicating progress in leasing activities despite pandemic challenges[21] - Newmarket Village in Brisbane comprises approximately 102,000 square feet of net rentable area and is 92% leased as of December 31, 2021[30] - Cannon Park in Townsville has a total of 408,000 square feet of land and 105,000 square feet of net rentable area, with an occupancy rate of 87% as of December 31, 2021[30] - The Belmont Common in Perth has a lease occupancy rate of 94% as of December 31, 2021, with 103,000 square feet of land and 15,000 square feet of net rentable area[30] - The company owns approximately 713,000 square feet of income-producing properties, with a net book value of $234.3 million as of December 31, 2021[162] Cinema Operations and Expansion - The cinema business has seen a positive shift in box office results with the release of blockbuster films, contributing to a gradual recovery in attendance[18] - The company opened five new cinemas in Australia since Q3 2019 and has two more cinemas planned to open in 2022, indicating ongoing expansion efforts[19] - The company has completed two top-to-bottom renovations in the U.S. in 2021, enhancing the customer experience in its cinema locations[19] - The cinema segment is equipped with state-of-the-art digital screens, with 178 cinemas featuring luxury recliner seating as of December 31, 2021, enhancing the overall customer experience[29] - The company continues to explore opportunities for expanding its specialty theater portfolio in the U.S., Australia, and New Zealand, indicating a strategic focus on niche markets[29] - The company plans to add two new cinemas totaling 13 screens to its Australian cinema circuit by the end of 2022, focusing on state-of-the-art projection and sound, luxury recliner seating, and enhanced food and beverage offerings[208] Challenges and Risks - The adverse impact of the COVID-19 pandemic has led to decreased attendance at cinemas and theatres, with ongoing health concerns and changes in consumer behavior contributing to this decline[95] - Operating margins have been negatively affected due to the implementation of social distancing and health protocols, resulting in potential negative operating margins[95] - The company faces competition from cinema operators who have successfully reduced their debt and rent exposure through debtor laws, impacting market dynamics[96] - The COVID-19 pandemic continues to affect tenants' ability to pay rent in real estate operations across the United States, Australia, and New Zealand[96] - The company is experiencing increased labor costs and shortages, which are exacerbated by new labor laws and regulations[101] - Supply chain disruptions have led to difficulties in maintaining a consistent supply of food and beverage items, impacting operations and sales[108] Strategic Initiatives - Angelika Anywhere, an art-focused streaming platform, was launched in December 2020 to expand the reach of the Angelika cinema experience in the U.S. and Australia[30] - The company has invested approximately $9.6 million in upgrading historic cinema assets and $4.2 million in non-cinema real estate assets in 2021[32] - The company has launched its streaming service, Angelika Anywhere, in the U.S. and Australia, with plans to expand to New Zealand in 2023[54] - The company has upgraded its food and beverage menu in 17 U.S. locations, focusing on locally inspired and freshly prepared items[203] Market Position and Competition - The competitive landscape includes major exhibitors controlling over 57% of the North American market, impacting the company's ability to license top-grossing films[47] - The company operates 238 screens in 24 cinemas in the U.S., representing 1% of the box office market share[50] - In Australia, the company has 191 screens, accounting for approximately 8% of the total box office, making it the fourth largest exhibitor[51] - In New Zealand, the company operates 57 screens, holding an 11% market share and ranking as the third largest exhibitor[52] - The company is vulnerable to competition from larger cinema operators with better access to films and funding, which may adversely affect revenue and profitability[110] Governance and Control - The Cotter Entities have the power to elect all members of the Board of Directors and determine the outcome of stockholder votes, including mergers and acquisitions[154] - Ongoing disputes among the Cotter family regarding control of the company may distract management and affect operations[144] - The California Superior Court has jurisdiction over a potentially controlling block of voting power, which could lead to a change of control if shares are ordered to be sold[151] - The ongoing uncertainty regarding management and control could adversely impact the company's ability to maintain business relationships and attract key personnel[153]

Revenue Performance - Total revenue for Q3 2021 was $31,803,000, a significant increase of 212% compared to $10,191,000 in Q3 2020[10] - Cinema revenue reached $28,751,000 in Q3 2021, up from $7,339,000 in Q3 2020, reflecting a growth of 292%[10] - Total revenue for the nine months ended September 30, 2021, was $89,142,000, up from $62,841,000 in the same period of 2020, reflecting a year-over-year increase of 42%[18] - The company’s real estate segment reported revenue of $3.2 million for the quarter ended September 30, 2021, a 5% increase from $3.0 million in the prior year[199] Net Income and Loss - Net income for the nine months ended September 30, 2021, was $34,461,000, compared to a net loss of $48,195,000 for the same period in 2020[14] - The company reported a comprehensive loss of $14,229,000 for Q3 2021, compared to a loss of $15,764,000 in Q3 2020[12] - The net loss attributable to the company for the quarter ended September 30, 2021, decreased to $10.1 million, a $9.1 million improvement from the same period in the previous year[200] - For the nine months ended September 30, 2021, net income attributable to the company increased by $79.4 million to $31.6 million compared to the same period in the prior year[201] Cash and Liquidity - Cash and cash equivalents increased to $90,887,000 as of September 30, 2021, from $26,826,000 at the end of 2020[9] - The company generated net cash provided by investing activities of $127,506,000 for the nine months ended September 30, 2021[14] - The company generated net proceeds of $139.4 million from the monetization of certain real estate assets to support cash flow during the pandemic[169] Operating Performance - Operating income for Q3 2021 was a loss of $10,951,000, an improvement from a loss of $17,375,000 in Q3 2020[10] - The company experienced a total operating loss of $6,542,000 for Q3 2021, compared to a loss of $14,254,000 in Q3 2020, showing a reduction in losses by 54%[18] - The cinema segment reported an operating loss of $5,057,000 for Q3 2021, an improvement from a loss of $13,410,000 in Q3 2020[18] Assets and Liabilities - Total assets rose to $695,161,000 as of September 30, 2021, compared to $690,169,000 at the end of 2020[9] - Total liabilities decreased to $591,588,000 as of September 30, 2021, down from $608,996,000 at the end of 2020[9] - As of September 30, 2021, the company reduced its debt from $282.6 million at December 31, 2020, to $242.6 million[33] Real Estate Transactions - The company sold its Invercargill, New Zealand property for $3.8 million (NZ$5.4 million), resulting in a net gain of $2.372 million[50] - The Auburn/Redyard property was sold for $69.6 million (AU$90.0 million), generating a net gain of $38.726 million[52] - The Royal George Theatre was sold for $6.8 million, resulting in a net gain of $4.956 million[54] - The company recognized a gain of $6.3 million from the sale of approximately 202 acres of raw land in Coachella, California, sold for $11.0 million[190] COVID-19 Impact and Recovery - The ongoing impact of COVID-19 has led to a significant decrease in revenues and earnings compared to pre-COVID-19 levels, although there has been a recovery compared to the same period in 2020[30] - The company has successfully reopened its Australian cinema circuit, despite a resurgence of COVID-19 in Q3 2021[28] - The company has not lost any cinema assets due to the COVID-19 pandemic and continues to engage with landlords regarding rent abatements and deferrals[168] Stock and Compensation - The 2020 Stock Incentive Plan allows for the issuance of up to 1,250,000 shares of Class A Common Stock, with 784,296 shares remaining available for future issuance as of September 30, 2021[118] - No stock options were issued in the nine months ended September 30, 2021, with total compensation expense recorded for stock options at $302,000 for the same period[121][122] - The company recorded a share-based compensation expense of $101,000 for the quarter ended September 30, 2021[122] Legal and Regulatory Matters - The company has accrued a settlement amount of $4.0 million related to California employment litigation, which is to be paid in two installments[109] - The company is involved in ongoing legal proceedings but does not expect these to have a material adverse effect on its business or financial position[100] Future Outlook - The company forecasts sufficient resources to meet its obligations for the next year, relying on the recovery of the global cinema industry[34] - The company believes that the impact of the COVID-19 pandemic will be a passing event, with expectations to return to pre-pandemic operational results[170]

Financial Performance - Total revenue for Q2 2021 was $36,033,000, a significant increase from $3,422,000 in Q2 2020, representing a growth of approximately 950%[10] - Net income for the six months ended June 30, 2021, was $44,661,000, compared to a net loss of $28,843,000 for the same period in 2020[14] - Basic earnings per share for Q2 2021 was $1.04, a significant recovery from $(1.04) in Q2 2020[10] - The company reported comprehensive income of $21,110,000 for Q2 2021, compared to a loss of $(11,977,000) in Q2 2020[12] - For the quarter ended June 30, 2021, the company recorded a net income of $22,702,000, compared to a net income of $(5,875,000) for the same quarter in 2020[111] Cash and Liquidity - Cash and cash equivalents increased to $111,752,000 as of June 30, 2021, up from $26,826,000 at the end of 2020, marking a growth of 317%[14] - The company continues to evaluate its liquidity position and cash flow estimates in light of ongoing COVID-19 impacts, which may affect future operations[32] - The company generated cash inflows of $179.1 million from refinancing and monetizing real estate assets, including $43.0 million from refinancing the 44 Union Square property and $136.1 million from various property sales[34] Assets and Liabilities - Total assets increased to $732,426,000 as of June 30, 2021, compared to $690,169,000 at the end of 2020, reflecting a growth of approximately 6%[9] - Total liabilities stood at $615,227,000 as of June 30, 2021, slightly up from $608,996,000 at the end of 2020[9] - The company's total borrowings as of June 30, 2021, amounted to $252.696 million, net of deferred financing costs[70] Revenue Segments - Cinema exhibition revenue for Q2 2021 was $32.715 million, a significant increase from $1.217 million in Q2 2020, while real estate revenue rose to $3.448 million from $2.303 million[18] - Total revenue for the six months ended June 30, 2021, was $57.339 million, compared to $52.650 million for the same period in 2020, reflecting a year-over-year increase of approximately 8.1%[18] Operational Updates - As of June 30, 2021, 20 out of 24 cinemas in the U.S. had reopened, with plans to open the remaining locations when operationally feasible[27] - The company experienced a significant decrease in revenues and earnings due to COVID-19, but revenues increased compared to the same period in 2020 as many theatres reopened[31] - As of June 30, 2021, 57 out of 62 cinemas worldwide were operational, indicating a recovery trend in the cinema industry[35] Real Estate Transactions - The company completed the sale of the Auburn/Redyard property for $69.6 million (AU$90.0 million), resulting in a net gain of $38.726 million after direct costs[52] - The company sold two industrial properties in New Zealand for $56.1 million, recognizing a gain of $41.0 million over the net book value[173] Legal and Compliance - The company has accrued a settlement amount of $4.0 million related to California employment litigation, to be paid in two installments[103] - The company is involved in ongoing legal proceedings but does not expect these to have a material adverse effect on its financial position[99] Stock and Equity - The total number of Class A Common Stock shares authorized under the 2020 Stock Incentive Plan was 1,250,000, with 1,096,938 shares remaining available for future issuance as of June 30, 2021[114] - The company has repurchased 1,792,819 shares of Class A Common Stock at an average price of $13.39 per share through June 30, 2021[208] Future Outlook - Management remains optimistic about the anticipated movie releases for the remainder of 2021 and 2022, despite uncertainties regarding their performance and scheduling[29] - The company anticipates a return to pre-pandemic operational results in the long term, although risks from COVID-19 variants remain[162] Operational Costs - Operating lease costs for the quarter ended June 30, 2021, were $8,516,000, compared to $8,079,000 for the same quarter in 2020, indicating a 5.4% increase[133] - Total lease costs for the six months ended June 30, 2021, were $14,064,000, down from $15,516,000 in the same period of 2020, representing a decrease of 9.3%[133]

PART I - Financial Information [Financial Statements](index=3&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements) Unaudited Q1 2021 financials reflect pandemic-driven revenue declines offset by a net profit from significant real estate asset sales [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets and liabilities decreased, while stockholders' equity increased due to debt reduction and asset sale gains Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$668,030** | **$690,169** | | Cash and cash equivalents | $40,920 | $26,826 | | Operating property, net | $317,153 | $353,125 | | **Total Liabilities** | **$572,280** | **$608,996** | | Debt - current portion | $1,606 | $41,459 | | Debt - long-term portion | $211,836 | $213,779 | | **Total Stockholders' Equity** | **$95,750** | **$81,173** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)) A sharp revenue decline led to an operating loss, but a large gain on asset sales resulted in significant net income Q1 2021 vs Q1 2020 Income Statement (in thousands, except per share data) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Total Revenue | $21,307 | $49,228 | | Cinema Revenue | $18,115 | $46,310 | | Operating Loss | ($13,977) | ($7,039) | | Gain on sale of assets | $46,545 | $0 | | Net Income (Loss) | $22,068 | ($5,955) | | Diluted EPS | $0.86 | ($0.27) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating cash flow remained negative, but asset sales provided a large cash inflow used for debt repayment Q1 2021 vs Q1 2020 Cash Flow Summary (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,774) | ($8,672) | | Net cash provided by (used in) investing activities | $63,906 | ($9,804) | | Net cash provided by (used in) financing activities | ($45,713) | $60,905 | | **Net increase in cash** | **$14,094** | **$42,758** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) Notes detail the pandemic's impact, asset monetization strategy to ensure liquidity, and debt reduction efforts - The company's two primary business segments are cinema exhibition and real estate, with the cinema segment reporting an **operating loss of $8.3 million** and the real estate segment an **operating loss of $1.4 million** for Q1 2021[16](index=16&type=chunk)[18](index=18&type=chunk) - Due to the COVID-19 pandemic's impact on liquidity, management has monetized non-core real estate assets, which is deemed probable to **alleviate substantial doubt about the company's ability to continue as a going concern**[36](index=36&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The company repaid its **$40.6 million Union Square construction financing** on March 26, 2021, and subsequently refinanced the property with a new **$55.0 million loan facility** on May 7, 2021[33](index=33&type=chunk)[87](index=87&type=chunk)[151](index=151&type=chunk) Q1 2021 Real Estate Sales (in thousands) | Property | Sale Price | Net Book Value | Gain on Sale (Net) | | :--- | :--- | :--- | :--- | | Manukau, NZ | $56,058 | $13,483 | $41,062 | | Coachella, CA | $11,000 | $4,351 | $6,348 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=33&type=section&id=Item%202%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the pandemic's severe impact on cinema operations, mitigated by strategic real estate sales that generated liquidity - The company's **'two business/three country' strategy** (cinemas and real estate in the U.S., Australia, and New Zealand) helped mitigate the adverse impacts of COVID-19[155](index=155&type=chunk) - To generate liquidity, the company sold non-income producing land in Manukau, NZ for **$56.1 million** and Coachella, CA for **$11.0 million** in Q1 2021, and is pursuing further sales[157](index=157&type=chunk) - As of March 31, 2021, cash and cash equivalents were **$40.9 million**, up from $26.8 million at year-end 2020, while total outstanding borrowings decreased to **$243.0 million** from $285.0 million[246](index=246&type=chunk) Q1 2021 vs Q1 2020 Consolidated Results (in thousands) | Metric | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $21,307 | $49,228 | (57)% | | Gain on sale of assets | $46,545 | $0 | N/A | | Net Income (Loss) Attributable to RDI | $18,965 | ($5,875) | >100% | [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Consolidated revenue fell 57% due to cinema closures, but a gain on asset sales drove net income despite operating losses - U.S. cinema revenue saw the steepest decline, **falling 84% to $3.8 million** due to an 88% decrease in attendance as most cinemas remained closed[229](index=229&type=chunk)[232](index=232&type=chunk) - Australian and New Zealand cinema revenues **decreased by 38% and 35% respectively**, impacted by a lack of major film releases and social distancing measures[233](index=233&type=chunk)[234](index=234&type=chunk) Segment Operating Income (Loss) (in thousands) | Segment | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Cinema Exhibition | ($8,275) | ($2,654) | | Real Estate | ($1,368) | $187 | [Liquidity and Capital Resources](index=50&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity was bolstered by $65.2 million in net proceeds from asset sales, used to repay debt and increase cash reserves - In Q1 2021, the company monetized non-income producing land, generating **net proceeds of $65.2 million**, which resulted in after-tax proceeds of $37.4 million[245](index=245&type=chunk) - Cash from investing activities was **$63.9 million**, primarily from asset sales, which was used for financing activities including **$42.6 million in loan repayments**[260](index=260&type=chunk)[261](index=261&type=chunk) Liquidity Metrics (in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $40,920 | $26,826 | | Total debt (gross) | $242,972 | $284,959 | | Working capital (deficit) | ($12,995) | ($64,140) | [Quantitative and Qualitative Disclosure about Market Risk](index=60&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company's primary market risks involve foreign currency fluctuations and changes in variable interest rates - As of March 31, 2021, approximately **49% of the company's assets were denominated in Australian and New Zealand dollars**, exposing the company to foreign currency translation risk[293](index=293&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt; a hypothetical **1% change in short-term interest rates would change quarterly interest expense by about $460,000**[299](index=299&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes - Management concluded that the company's disclosure controls and procedures were **effective as of the end of the period covered by this report**, March 31, 2021[302](index=302&type=chunk) - **No changes in internal control over financial reporting occurred** during the first quarter of 2021 that have materially affected, or are reasonably likely to materially affect, internal controls[303](index=303&type=chunk) PART II – Other Information [Legal Proceedings](index=62&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) No material changes to litigation are reported, with details incorporated by reference from the financial statement notes - Information on legal proceedings is **incorporated by reference from Note 14** – Commitments and Contingencies[306](index=306&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) A new risk factor concerning corporate social responsibility and reputation has been identified - A **new risk factor was identified** concerning risks related to corporate social responsibility and reputation, which could adversely affect the business if damaged[307](index=307&type=chunk) [Exhibits](index=64&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists filed exhibits, including credit agreement variations, officer certifications, and iXBRL data files - Key exhibits filed include a variation to the Westpac New Zealand credit agreement, **Sarbanes-Oxley Section 302 and 906 certifications**, and financial statements in iXBRL format[313](index=313&type=chunk)

Part I [Business](index=3&type=section&id=Item%201%20%E2%80%93%20Our%20Business) A diversified cinema and real estate company, Reading International's operations were severely impacted by COVID-19, prompting a strategic response focused on liquidity and asset monetization - The company operates through two primary segments: **Theatrical Motion Picture Exhibition (61 cinemas)** and **Real Estate (development and rental)**[15](index=15&type=chunk) - The company's business strategy is described as a **"two business/three country" model** (cinemas and real estate in the U.S., Australia, and New Zealand), which helped mitigate the full impact of the COVID-19 pandemic[16](index=16&type=chunk) - In response to COVID-19, the company monetized significant non-income producing land assets, selling its Manukau, New Zealand land for **$56.1 million** (a $41.0 million gain) and its Coachella, California land for **$11.0 million** (a $6.3 million gain)[18](index=18&type=chunk)[31](index=31&type=chunk) - Strategic responses to the pandemic included terminating most hourly U.S. staff, suspending non-essential expenditures, negotiating rent deferrals, obtaining debt covenant waivers, and launching new income streams like the **Angelika Anywhere streaming service**[28](index=28&type=chunk)[31](index=31&type=chunk) Asset and Revenue Distribution by Geography (FY 2020) | Geography | Asset Percentage (Book Value) | 2020 Revenue | 2019 Revenue | | :--- | :--- | :--- | :--- | | United States | 49% | $25.7 million | $151.5 million | | Australia | 39% | $31.3 million | $103.0 million | | New Zealand | 12% | $5.8 million | $22.3 million | Global Cinema Portfolio as of Dec 31, 2020 | Country | Locations | Screens | Owned Properties | Leased Properties | | :--- | :--- | :--- | :--- | :--- | | United States | 24 | 238 | 1 | 23 | | Australia | 25 | 196 | 6 | 19 | | New Zealand | 12 | 70 | 5 | 7 | | **Total** | **61** | **504** | **12** | **49** | [Risk Factors](index=23&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic's impact, competition from streaming, real estate tenant defaults, and ongoing litigation among controlling family heirs - Cinema business risks are dominated by the adverse effects of the **COVID-19 pandemic**, including government-ordered closures, social distancing requirements, and changes in film release patterns[112](index=112&type=chunk) - The company faces intense competition from **in-home entertainment (streaming, VOD)** and other larger cinema exhibitors who may have better access to films and capital[114](index=114&type=chunk)[116](index=116&type=chunk) - Real estate risks include **tenant defaults and rent reductions** due to the pandemic's impact on retail operations, as well as long-term threats from the growth of e-commerce[123](index=123&type=chunk)[124](index=124&type=chunk) - Significant risk stems from **ongoing disputes among the heirs** of the late controlling stockholder, creating uncertainty regarding the company's future control and management[147](index=147&type=chunk)[152](index=152&type=chunk)[156](index=156&type=chunk) - The company is a **"Controlled Company"** under NASDAQ regulations, as the Cotter family entities control approximately **72% of the Class B voting stock**[157](index=157&type=chunk)[160](index=160&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B%20%E2%80%93%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[163](index=163&type=chunk) [Properties](index=32&type=section&id=Item%202%20%E2%80%93%20Properties) This section details the company's significant owned and leased real estate holdings, including cinemas, live theatres, and key development properties across its operating regions - The company owns three Off-Broadway live theatres: the Minetta Lane and Orpheum in Manhattan, and the Royal George Theatre in Chicago, which is **currently being marketed for sale**[172](index=172&type=chunk) - A detailed table of operating properties lists key assets, including **44 Union Square (book value $92.8M)**, **Newmarket Village ($48.9M)**, and **Auburn Redyard ($27.6M)**, along with their occupancy rates[176](index=176&type=chunk) - Key investment and development properties include developable land at Auburn Redyard in Sydney and the **Courtenay Central redevelopment project** in Wellington, New Zealand[183](index=183&type=chunk) - The company owns various parcels from its historic railroad operations, primarily **197 acres of vacant land in Pennsylvania**, including the Reading Viaduct in Philadelphia[185](index=185&type=chunk)[186](index=186&type=chunk) Leased Cinema Space | Region | Aggregate Square Footage | Remaining Lease Term Range (incl. renewals) | | :--- | :--- | :--- | | United States | 938,000 | 2022 – 2052 | | Australia | 769,000 | 2022 – 2049 | | New Zealand | 202,000 | 2023 – 2040 | [Legal Proceedings](index=36&type=section&id=Item%203%20%E2%80%93%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 13 of the Consolidated Financial Statements - This section incorporates by reference the information contained in **Note 13 – Commitments and Contingencies**[187](index=187&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204%20%E2%80%93%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[188](index=188&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205%20%E2%80%93%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on NASDAQ, no cash dividends have been declared, and restricted stock units were awarded to management in 2020 - The company's Class A Nonvoting Common Stock (RDI) and Class B Voting Common Stock (RDIB) are traded on the **NASDAQ**[190](index=190&type=chunk) - The company has **never declared a cash dividend** on its common stock[190](index=190&type=chunk) - In December 2020, the company awarded **114,803 restricted stock units** to certain members of management and key employees under its 2020 Stock Incentive Plan[196](index=196&type=chunk) [Selected Financial Data](index=39&type=section&id=Item%206%20%E2%80%93%20Selected%20Financial%20Data) This disclosure is no longer required following amendments to Regulation S-K - Item 6 is no longer required due to amendments in **Regulation S-K**[199](index=199&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=39&type=section&id=Item%207%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A details the severe financial impact of COVID-19, the company's strategic response, and management's plan to ensure its continuation as a going concern [Overall Results of Operations](index=50&type=section&id=Item%207.1%20-%20OVERALL%20RESULTS%20OF%20OPERATIONS) The company's net loss increased significantly to $65.2 million in 2020, driven by pandemic-related operating losses in both cinema and real estate segments Consolidated Results of Operations (2020 vs. 2019) | (In thousands) | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Cinema exhibition operating income (loss) | $(45,056) | $23,329 | (>100)% | | Real estate operating income (loss) | $(2,463) | $5,141 | (>100)% | | General and administrative expense | $(12,824) | $(18,933) | 32% | | Income (loss) before income taxes | $(70,824) | $2,334 | (>100)% | | Income tax benefit (expense) | $4,967 | $(28,837) | >100% | | Net income (loss) attributable to RDI | $(65,200) | $(26,429) | (>100)% | [Business Segment Results](index=51&type=section&id=Item%207.2%20-%20BUSINESS%20SEGMENT%20RESULTS) Both the Cinema Exhibition and Real Estate segments suffered substantial operating losses in 2020 due to pandemic-related closures and revenue declines - Cinema revenue decreased by **74% to $67.0 million** in 2020, from $262.2 million in 2019, due to theater closures, capacity restrictions, and a lack of major film releases[274](index=274&type=chunk)[278](index=278&type=chunk) - Real estate revenue decreased by **41% to $13.0 million** in 2020, from $21.9 million in 2019, due to the closure of U.S. Live Theatres and rent abatements for tenants[290](index=290&type=chunk)[293](index=293&type=chunk) Segment Operating Income (Loss) (2020 vs. 2019) | (In thousands) | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | **Cinema Exhibition** | **$(45,056)** | **$23,329** | **(>100)%** | | *United States* | $(39,371) | $4,457 | (>100)% | | *Australia* | $(4,267) | $15,974 | (>100)% | | *New Zealand* | $(1,418) | $2,898 | (>100)% | | **Real Estate** | **$(2,463)** | **$5,141** | **(>100)%** | | *United States* | $(3,399) | $64 | (>100)% | | *Australia* | $2,336 | $5,449 | (57)% | | *New Zealand* | $(1,400) | $(372) | (>100)% | [Liquidity and Capital Resources](index=59&type=section&id=Item%207.3%20-%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity was severely strained by the pandemic, necessitating credit drawdowns, covenant waivers, and a strategic plan to sell assets to remain a going concern - In response to the pandemic, the company drew down its available operating borrowing capacity, resulting in total outstanding borrowings of **$285.0 million** at year-end 2020[307](index=307&type=chunk) - The company obtained **waivers and amendments for financial covenants** on its loans with Bank of America, NAB, and Westpac to maintain compliance[309](index=309&type=chunk) - Management concluded that while **substantial doubt exists** about the company's ability to continue as a going concern, its plans to monetize assets and refinance properties are **probable to alleviate that doubt**[486](index=486&type=chunk)[492](index=492&type=chunk) Key Cash Flow and Liquidity Metrics (2020 vs. 2019) | (In thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $(30,201) | $24,607 | | Cash and cash equivalents | $26,826 | $12,135 | | Total debt (gross) | $284,959 | $209,218 | | Working capital (deficit) | $(64,140) | $(84,138) | [Critical Accounting Estimates](index=64&type=section&id=Item%207.4%20-%20CRITICAL%20ACCOUNTING%20ESTIMATES) Key accounting estimates, including asset impairment and deferred tax asset valuation, required significant judgment due to pandemic-induced uncertainties - **Impairment of Long-Lived Assets**: Due to COVID-19, impairment was tested quarterly, a **$217,000 impairment loss** was recorded for certain long-lived assets, but no impairment was recorded for goodwill[339](index=339&type=chunk)[417](index=417&type=chunk)[418](index=418&type=chunk) - **Tax Valuation Allowance**: The company determined that its U.S. and New Zealand deferred tax assets were not more-likely-than-not to be realized, resulting in an increase to the valuation allowance of **$13.1 million**[343](index=343&type=chunk)[515](index=515&type=chunk) [Quantitative and Qualitative Disclosure about Market Risk](index=65&type=section&id=Item%207A%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates and interest rates on its significant variable-rate debt - At year-end 2020, approximately **39% of assets were denominated in Australian dollars** and **12% in New Zealand dollars**, exposing the company to foreign currency risk[349](index=349&type=chunk) - The company primarily uses **natural hedges** (matching local currency revenues with local currency expenses and debt) to manage currency exposure and does not use speculative derivative instruments[335](index=335&type=chunk) - A hypothetical **1% change in short-term interest rates** would have resulted in an approximate **$2.0 million change** in the company's 2020 interest expense[357](index=357&type=chunk) [Financial Statements and Supplementary Data](index=67&type=section&id=Item%208%20%E2%80%93%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited financial statements, with the auditor's report highlighting critical audit matters related to the pandemic's impact - The independent auditor, Grant Thornton LLP, issued an **unqualified opinion** on the financial statements and the effectiveness of internal control over financial reporting[365](index=365&type=chunk)[379](index=379&type=chunk) - The auditor's report identified three **Critical Audit Matters** due to the complex judgments required by the COVID-19 pandemic: Liquidity (Going Concern), Valuation of Long-Lived Assets, and Impairment of Goodwill[369](index=369&type=chunk)[370](index=370&type=chunk)[373](index=373&type=chunk)[375](index=375&type=chunk) - **Note 13 (Commitments and Contingencies)** details the ongoing Cotter Trust litigation, which creates uncertainty over the company's voting control[569](index=569&type=chunk)[578](index=578&type=chunk) - **Note 23 (Subsequent Events)** confirms key events after year-end, including the sale of Manukau and Coachella land and the repayment of the $40.6 million 44 Union Square construction loan[641](index=641&type=chunk)[642](index=642&type=chunk) Consolidated Financial Highlights (as of and for the year ended Dec 31, 2020) | Metric (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Assets | $690,169 | $674,989 | | Total Liabilities | $608,996 | $535,373 | | Total Stockholders' Equity | $81,173 | $139,616 | | **Statement of Operations** | | | | Total Revenues | $77,862 | $276,768 | | Net Loss | $(65,857) | $(26,503) | | **Statement of Cash Flows** | | | | Net Cash from Operating Activities | $(30,201) | $24,607 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=125&type=section&id=Item%209%20%E2%80%93%20Change%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on any accounting or financial disclosure matters - None[646](index=646&type=chunk) [Controls and Procedures](index=125&type=section&id=Item%209A%20%E2%80%93%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the fiscal year-end 2020 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[648](index=648&type=chunk) - There were **no material changes** in internal control over financial reporting during the fourth quarter of 2020[649](index=649&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, Certain Relationships and Related Transactions, and Principal Accountant Fees and Services](index=126&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%20and%2014) Required information for these items is incorporated by reference from the company's 2021 Proxy Statement - Information for Part III (Items 10-14) is incorporated by reference from the company's **2021 Proxy Statement**[654](index=654&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=127&type=section&id=Item%2015%20%E2%80%93%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the annual report - This section provides a complete list of all financial statements, schedules, and exhibits filed with the annual report[658](index=658&type=chunk) - Key exhibits listed include **debt agreements** with major lenders, **stock incentive plans**, and certifications by the CEO and CFO[662](index=662&type=chunk)