Reading International Inc.
Annual Report 2015

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KREADING INTERNATIONAL INC - RDIFiled: April 29, 2016 (period: December 31, 2015)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results.UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KþANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2015 or¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _______ to ______Commission File No. 1-8625 READING INTERNATIONAL, INC.(Exact name of registrant as specified in its charter) NEVADA(State or other jurisdiction of incorporation or organization)6100 Center Drive, Suite 900Los Angeles, CA(Address of principal executive offices)95-3885184(I.R.S. Employer Identification Number) 90045(Zip Code)Registrant’s telephone number, including Area Code: (213) 235-2240Securities Registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredClass A Nonvoting Common Stock, $0.01 par valueNASDAQClass B Voting Common Stock, $0.01 par valueNASDAQSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934. Yes ☐ No ☑Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during thepreceding 12 months (or for shorter period than the Registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes ☑ No ☐Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorterperiod that the registrant was required to submit and post such files). Yes ☑ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, tothe best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K of any amendmentsto this Form 10-K. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reportingcompany. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Smaller reporting company ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of April 25, 2016,there were 21,654,302 shares of class A non-voting common stock, par value $0.01 per share and 1,680,590 shares of class B voting common stock, par value$0.01 per share, outstanding. The aggregate market value of voting and nonvoting stock held by non-affiliates of the Registrant was $195,571,016 as ofDecember 31, 2015.Documents Incorporated by Reference Certain portions of the registrant’s definitive proxy statement, in connection with its 2016 annual meeting of stockholders, to be filed within 120 daysof December 31, 2015, are incorporated by reference into Part III, Items 10-14, of this annual report on Form 10-K. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.READING INTERNATIONAL, INC.ANNUAL REPORT ON FORM 10-KYEAR ENDED DECEMBER 31, 2015INDEX​PART I3​Item 1 – Our Business3​Item 1A – Risk Factors11​Item 1B - Unresolved Staff Comments19​Item 2 – Properties20​Item 3 – Legal Proceedings24​PART II28​Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities28​Item 6 – Selected Financial Data30​Item 7 – Management’s Discussions and Analysis of Financial Condition and Results of Operations32​Item 7A – Quantitative and Qualitative Disclosure about Market Risk52​Item 8 – Financial Statements and Supplementary Data53​Report of Independent Registered Public Accounting Firm54​Consolidated Balance Sheets as of December 31, 2015 and 201455​Consolidated Statements of Operations for the Three Years Ended December 31, 201557​Consolidated Statements of Comprehensive Income (Loss) for the Three Years Ended December 31, 201558​Consolidated Statements of Stockholders’ Equity for the Three Years Ended December 31, 201559​Consolidated Statements of Cash Flows for the Three Years Ended December 31, 201560​Notes to Consolidated Financial Statements61​Schedule II – Valuation and Qualifying Accounts96​Item 9 – Change in and Disagreements with Accountants on Accounting and Financial Disclosure97​Item 9A – Controls and Procedures98​PART III101​PART IV129​Item 15 – Exhibits, Financial Statement Schedules129​SIGNATURES132 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART I Item 1 – Our BusinessGENERALReading International, Inc., a Nevada corporation (“RDI” and collectively with our consolidated subsidiaries and corporate predecessors,the “Company,” “Reading” and “we,” “us,” or “our”), was incorporated in 1999 incident to our reincorporation in Nevada. Our class A non-voting common stock (“Class A Stock”) and class B voting common stock (“Class B Stock”) are listed for trading on the NASDAQ CapitalMarket (Nasdaq-CM) under the symbols RDI and RDIB, respectively. Our principal executive offices are located at 6100 Center Drive,Suite 900, Los Angeles, California 90045. Our general telephone number is (213) 235-2240 and our website is www.readingrdi.com. It isour practice to make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reportson Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Exchange Act as soon asreasonably practicable after we have electronically filed such material with or furnished it to the Securities and Exchange Commission. We are an internationally diversified company principally focused on the development, ownership and operation of entertainment and realproperty assets in the United States, Australia, and New Zealand. Currently, we have two business segments:·Cinema Exhibition, through our 58 cinemas, and·Real Estate, including real estate development and the rental or licensing of retail, commercial and live theater assets.We synergistically bring together real-estate based entertainment and real estate and believe that these two business segments complementone another, as our cinemas have historically provided the steady cash flows that allow us to be opportunistic in acquiring and holding realestate assets (including non-income producing land) and support our real estate development activities. Our real estate allows us todevelop an asset base that will stand the test of time and develop a long-term asset base that is capable of being leveraged. Morespecifically, the combination of these two segments provides advantages as follows:·Cinemas can be used as anchors for larger retail developments (referred to as entertainment-themed centers, or ETCs), and ourinvolvement in the cinema business can give us an advantage over other real estate developers or redevelopers who must identifyand negotiate with third-party anchor tenants. We have used cinemas to create our own anchors in our Sydney, Australia,Belmont, Australia, and Wellington, New Zealand ETCs and are adding a new cinema to our Brisbane, Australia shopping center,and, we have acquired the real estate underlying our cinema in Townsville, Australia.·Pure cinema operators can encounter financial difficulty as demands upon them to produce cinema-based earnings growth temptthem into reinvesting their cash flow into increasingly marginal cinema sites or overpaying for existing cinemas. While we believethat there will continue to be attractive opportunities to acquire cinema assets and/or to develop upper end specialty type theatersin the future, we do not feel pressure to build or acquire cinemas for the sake of adding units or building gross revenues. Thisstrategy has, over the years, allowed us to acquire cinemas at multiples of trailing theater cash flow below those paid by thirdparties in recent acquisitions. We intend to focus our use of cash flow on our real estate development and operating activities, tothe extent that attractive cinema opportunities are not available to us.·We are always open to the idea of converting an entertainment property to another use, if there is a higher and better use for theproperty, or to sell individual assets, if we are presented with an attractive opportunity. Our fee interests on Union Square and onThird Avenue (near 60th Street) in New York City, each of which is now slated for redevelopment, were initially acquired as, and inthe case of our Third Avenue property, continues to be used as, entertainment properties.Insofar as we are aware, we are the only publicly traded company in the world to apply this two-track, synergistic approach to the cinemaand real estate development businesses on an international basis. None of the major cinema exhibition companies (other than MarcusTheatres) have any material landholdings as they operate on a leased-facility model.We have worked to maintain a balance between our U.S. and our Australia/New Zealand assets. In recent periods, this has adverselyimpacted our reported revenues and earnings, as the Australian Dollar has since 2010 dropped 28% from 1.0122 to 0.7286 and the NewZealand Dollar has over that same period decreased 11% from 0.7687 to 0.6842. However, we continue to believe that, over the long term,this is a prudent diversification of risk. In recent periods, the Australian Dollar has traded as high as 1.1001 and the New Zealand Dollar hastraded as high as 0.8776. Australia has been identified by the United Nations as having the highest natural resources per person in theworld. In 2013, the Organisation for Economic Co-operation and Development rated Australia as the best place to live and work in theworld. Dalian Wanda Group ("Wanda"), the purchaser of AMC Entertainment Holdings, Inc. ("AMC"), in June 2015, has recently purchasedHoyts, the second largest exhibiter in Australia and New Zealand.3 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.At December 31, 2015, the book value of our assets was $375.1 million, and, as of that same date, we had a consolidated stockholders’ bookequity of $137.2 million. Calculated based on book value, $107.8 million, or 29% of our assets, relate to our cinema exhibition activitiesand $219.8 million, or 58%, of our assets, relate to our real estate activities.For additional segment financial information, please see Note 1 – Description of Business and Segments Reporting to our 2015consolidated financial statements. We have diversified our assets among three countries: the United States, Australia, and New Zealand. Based on book value, at December 31,2015, we had approximately 35% of our assets in the United States, 46% in Australia and 19% in New Zealand compared to 35%, 44%, and21% respectively, at the end of 2014.At December 31, 2015, we had cash and cash equivalents of $19.7 million, which are accounted for as a corporate asset. Our cash included$9.3 million denominated in U.S. dollars, $6.8 million (AU$9.3 million) in Australian dollars, and $3.6 million (NZ$5.2 million) in NewZealand dollars. We had non-current assets of $113.3 million in the United States, $161.2 million (AU$221.2 million) in Australia and$63.6 million in New Zealand (NZ$93.0 million).For 2015, our gross revenue in these jurisdictions was $138.2 million, $93.5 million, and $25.6 million, respectively, compared to $130.8million, $97.3 million, and $26.6 million for 2014. These changes are due primarily to the increased box office sales experienced in theUnited States, due primarily to higher average ticket prices, compared to reduced revenue in our Australia and New Zealandoperations. Revenues fell in Australia and New Zealand primarily as a result of the strengthening U.S. dollar when compared to theAustralian and New Zealand dollars; this was partially offset by greater box office and concession sales in local currencies as a result ofhigher attendance. Measured in local currency, revenues in Australia and New Zealand both increased.4 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CINEMA EXHIBITIONWe are dedicated to creating inspiring cinema experiences for our guests through hospitality-styled comfort and service, cinematicpresentation, uniquely designed venues, curated film and event programming, and crafted food and beverage options. We manage ourworldwide cinema exhibition business under various brands:·In the U.S.: under the Reading Cinemas, Angelika Film Center, Consolidated Theatres, and City Cinemas brands;·In Australia: under the Reading Cinemas brand; and·In New Zealand: under the Reading Cinemas and Rialto brands.Historically, we have focused on the ownership and/or operation of three categories of cinemas:·Modern stadium-seating multiplex cinemas featuring conventional film product;·Specialty and art cinemas, such as Angelika Film Centers in the U.S. and Rialto Cinema in New Zealand; and·Conventional sloped-floor cinemas in certain markets, including New York City with its prohibitory occupancy and constructioncosts and small town markets that will not support the development of a modern stadium-design multiplex cinema. Currently, we are focused on upgrading our existing cinemas and developing new cinema opportunities to provide our customers withpremium offerings, including luxury seating, state-of-the-art presentation including sound, lounges, cafés and bar service, and otheramenities. In 2015, we added the first IMAX auditorium to our circuit, but endeavor, where possible to include one or more large formatTITAN XC screen offerings.We believe that the cinema exhibition business will continue to generate fairly consistent cash flows in the years ahead, even inrecessionary or inflationary environments, because people will continue to spend a reasonable portion of their entertainment dollars onentertainment outside of the home. When compared to other forms of outside-the-home entertainment, movies continue to be a popular andcompetitively priced option.Although the cinema exhibition business is considered a mature business, we see growth opportunities in our cinema exhibition businessprincipally from (i) the enhancement of our existing cinemas, (ii) the development in select markets of art and specialty cinemas, (iii) thedevelopment of new state-of-the-art cinemas on land that we already own or may in the future acquire, and (iv) the development of newcinemas in selected markets. While we continue to consider possible opportunities in third party developments, we prefer to put our capitalto work on properties that we own rather than take on potentially burdensome lease obligations. Our circuit has been completely convertedto digital projection and sound systems.We continue to expand and upgrade our circuit on an opportunistic basis. During 2015 we opened a new state-of-the-art cinema (eightscreens) in Auckland, New Zealand, and entered into a lease for a to-be-built state-of-the art eight-screen cinema in Kapolei, Hawaii. Weanticipate that the Kapolei theater will open in the fourth quarter of this year. We completed the renovation and rebranding as an“Angelika” luxury art cinema of our conventional cinema at the Carmel Mountain Plaza in San Diego, California and completely renovatedour fourteen-screen Harbourtown cinema in Queensland, Australia, converting an auditorium in that theater to a TITAN XC auditorium. Weadded the first IMAX to our circuit, which opened at our Bakersfield cinema in time for the opening of “Star Wars: The Force Awakens”. Wecontinue to progress the construction of a new state-of-the art eight-screen cinema at our Newmarket Shopping Center in Brisbane,Australia. We anticipate opening that cinema in the fourth quarter of 2017.In 2015 we upgraded the food and beverage menu at a number of our U.S. cinemas. We are focused on the renovation and upgrading of ourexisting U.S. cinemas, along the lines of our Carmel Mountain cinema. Working with veteran Food Network Executive Bruce Seidel of HotLemon Productions and chef Santos Loo we are upgrading our food and beverage offerings. We have obtained beer and wine, and in somecases liquor, licenses for six of our venues and are in the application process for an additional 10 venues. We intend to be able to offeralcoholic beverages at 16 or more of our venues by the end of 2017.As discussed in greater detail below, as a part of our real estate operations, we acquired the fee interest in the ETC in which our Townsville,Australia cinema is located and in the adjacent discount center.In January of 2015, we amended the lease of our Ward Theater in Honolulu as part of a planned renovation and further development by TheHoward Hughes Company of its Ward Village development.On January 31, 2016, following our run of “Star Wars: The Force Awakens”, we surrendered our Gaslamp Cinema in San Diego. We paid thelandlord a $1.0 million negotiated termination fee, which was less expensive than continuing to operate an unprofitable5 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.theater at this location. This cinema was acquired in 2008 as a part of the acquisition of a package of 15 locations from Pacific Theatres.The cinema was, at that time, a substantial money-loser and the purchase price was calculated taking into account the losses generated bythat cinema and the likelihood that such losses would continue into the future.In 2014, we completed an upgrade of our Cinemas 1,2,3 in New York City, which included the installation of luxury recliner seats. Thisproperty is slated for redevelopment. No determination has been made as to whether a cinema use will be maintained as a part of thatredevelopment. If it is not, then the equipment used at this property will be used elsewhere in our circuit. In 2014, we entered into a long-term lease for a new, state-of-the-art Angelika Film Center in the Union Market district of WashingtonD.C. However, the lease was terminated as the anticipated location for this cinema ultimately was determined by the landlord, Edens, to notbe feasible. We are currently finalizing with Edens the terms and conditions of a new lease for a cinema in a different location in the UnionMarket area.REAL ESTATEWe engage in real estate development and the ownership and rental or licensing to third parties of retail, commercial and live theater assets.We own the fee interests in all of our live theaters, and in 11 of our cinemas. Our real estate business creates long-term value for ourstockholders through the continuous improvement and development of our investment and operating properties, including our ETCs.Our real estate activities have historically consisted principally of:·the ownership of fee or long-term leasehold interests in properties used in our cinema exhibition activities or which were acquiredfor the development of cinemas or cinema-based real estate development projects;·the acquisition of fee interests in land for general real estate development;·the licensing to production companies of our live theaters; and·the redevelopment of our existing fee-owned cinema or live theater sites to their highest and best use. Given the substantial increase in Manhattan rents and commercial real estate values in recent periods, we are currently advancing plans forthe redevelopment of our Union Square and Cinemas 1,2,3 properties.We currently anticipate that our Union Square property will be redeveloped into approximately 70,200 square feet of net leaseable area,comprised of retail and office space. BKSK Architects has designed the building with an iconic glass dome which has been approved bythe City of New York Landmarks Preservation Commission. On March 22, 2016, our application for a variance was approved by the Boardof Standards and Appeals. This was the last major regulatory hurdle to our commencement of construction at the site. While our buildingplans still must be approved by the New York City Department of Buildings, we do not currently anticipate encountering any materialissues in obtaining such approval. All tenancies have been terminated. The building has been vacated, and we have begun internaldemolition activities at the site. We currently anticipate that construction will be completed by the second quarter of 2018. We haveretained Edifice Real Estate Partners, LLC as our development manager, Newmark Grubb Knight Frank as our leasing agent, and, an affiliateof CNY Construction LLC to provide pre-construction management services. BKSK and Gensler have assisted with the internal layout andinterior design of the building.We have completed a preliminary feasibility study and are currently in negotiations with the owner of the approximately 2,600 square footcorner parcel adjacent to our Cinemas 1,2,3 property on the corner of 60th Street and 3rd Avenue for the joint development of ourproperties. A combination of the properties would produce approximately 121,000 square foot of FAR and approximately 140,000 squarefeet of gross buildable area. No assurances can be given that we will be able to come to terms with the adjacent owners.On April 11, 2016, we purchased for $11.2 million a 24,000 square foot Class B office building with 72 parking spaces located at 5995Sepulveda Boulevard in Culver City, California. We intend to use approximately 50% of the leasable area for our headquarters offices andto lease the remainder to unaffiliated third parties. Culver City has in recent years developed as a center of entertainment and high-techactivity in Los Angeles County. Major tenants in the area include SONY and Google, with Facebook slated to take space in the near future. We anticipate, when the move is complete and the excess space is leased, we will be able to reduce our headquarters occupancy cost byapproximately $350,000 per annum.Overseas, on December 23, 2015, we acquired two adjoining ETCs in Townsville, Queensland, Australia for a total of $24.3 million(AU$33.6 million) comprising approximately 5.6 acres. The total gross leasable area of the two properties, the Cannon Park City Centre andthe Cannon Park Discount Centre, is 133,000 square feet. Our multiplex cinema at the Cannon Park City Centre is the anchor tenant of thatcenter. This acquisition is consistent with our business plan to own, where practical, the land underlying our entertainment assets. Foradditional information, see Note 4 – Acquisitions, Disposals, and Assets Held for Sale – 2015 Transactions – Cannon Park, Queensland,Australia. 6 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We continue to work on the expansion of our Auburn ETC in Sydney, Australia, our Newmarket Shopping Center in Brisbane, Australia,and our Courtenay Central ETC in Wellington, New Zealand.At Auburn, we have entered into agreements to lease for approximately 15,000 square feet of to-be-constructed retail space. Uponcompletion, this will increase the square footage of that center from approximately 117,000 to approximately 132,000 square feet. At Newmarket, we have received all necessary land use approvals for the addition of a state-of-the art eight-screen cinema, approximately10,000 square feet of additional retail space and approximately 142 additional car parks. Construction is expected to commence in thesecond quarter of 2016, with a projected opening in the fourth quarter of 2017. On November 30, 2015, we acquired an approximately23,000 square foot parcel adjacent to our tenant Coles supermarket. This property is currently improved with an office building. We intend,over time, to integrate this property into our Newmarket development. This will increase our Newmarket footprint from approximately204,000 to approximately 227,000 square feet.At Courtenay Central, we continue to advance the addition of an approximately 36,000 square foot Countdown supermarket andapproximately 4,000 square feet of general retail space. The agreement to lease the supermarket was signed in 2013, all necessary land useapprovals have been obtained, construction budgets for the supermarket have been approved by all parties, and we anticipate beginningconstruction in the third quarter of this year and occupancy by the fourth quarter 2017. Simultaneously, we are working on the renovationof our existing center and the seismic upgrading of the contiguous 9-story parking structure.In addition to certain historic railroad properties (such as our 2.1 acre Viaduct Property in downtown Philadelphia) and certain expansionspace associated with our existing ETC operations, we have two unimproved properties that we acquired for, and are currently being heldfor, development: our 202-acre parcel in Coachella, California (near Palm Springs) and our 70.4 acre parcel in Manukau, a suburb ofAuckland, New Zealand (located adjacent to the Auckland Airport). The Coachella property is currently zoned for residential and mixed-use uses. The Manukau property is currently zoned for agricultural purposes, but we are in the process of seeking a zoning change toindustrial.Over the past 24 months, we have culled our real estate holdings to focus on those projects which we believe offer more upside potential tous. As part of this process we sold our property in Lake Taupo, New Zealand, for $2.5 million (NZ$3.4 million), which closed in twotranches, with a balance of $821,000 (NZ$1.2 million) received on March 31, 2016. We sold our land holdings in Moonee Ponds, Australiaon April 15, 2015 for $17.8 million (AU$23.0 million), for which all monies have now been received and our land holdings in Burwood,Australia, for $47.4 million (AU$65.0 million) on May 12, 2014, with a balance due of $42.6 million (AU$58.5 million) scheduled to bepaid at closing in December 2017. Our Burwood agreement provides for mandatory pre-payments in the event that any of the land is soldby the buyer, any such prepayment being in an amount equal to the greater of (a) 90% of the net sales price or (b) the balance of thepurchase price multiplied by a fraction the numerator of which is the square footage of property being sold by the buyer and thedenominator of which is the original square footage of the property being sold to the buyer. The buyer has informed us that it is undercontract to sell a portion of this property and a potential prepayment of approximately $18.2 million (AU$25 million) is possible in 2016.We sold our Doheny Drive Condominium in Los Angeles for $3.0 million, which closed on February 25, 2015. These sales were madebased on our belief that the assets involved had reached the highest value that we could reasonably achieve without investing substantialadditional sums for land use planning, construction, and marketing.OPERATING INFORMATIONAt December 31, 2015, our principal tangible assets included:·interests in 57 currently operational cinemas comprising some 472 screens;·fee interests in three live theaters (the Orpheum and Minetta Lane in Manhattan and the Royal George in Chicago);·fee interest in one cinema (the Cinemas 1,2,3), in New York City;·fee interest in our Union Square property, previously used by us as a live theater venue and for rental to third parties and nowbeing redeveloped for retail and office uses;·our ETCs and shopping centers in Sydney (Auburn Center), Brisbane (Newmarket Center), Townsville (Cannon Park) andWellington (Courtenay Central);·In addition to the fee interests described immediately above, fee ownership of approximately 20,700,000 square feet of developedand undeveloped real estate in the United States, Australia and New Zealand; and·cash and cash equivalents, aggregating $19.7 million.7 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cinema ExhibitionWe own and/or manage cinema assets as follows:December 31, 2015Wholly OwnedConsolidated(1)Unconsolidated(2)Total ownedManaged(3)Total owned andoperatedUnited StatesCinemas251--26127Screens2453--2484252AustraliaCinemas1721(4)20--20Screens1301116157--157New ZealandCinemas9--2(5)11--11Screens54--1367--67Total Cinemas513357158Total Screens42914294724476(1) Cinemas owned and operated through consolidated, but not wholly owned, subsidiaries.(2) Cinemas owned and operated through interests in unconsolidated joint venture associates.(3) Cinemas in which we have no ownership interest, but which are operated by us under management agreements.(4) 33.3% unincorporated joint venture interest.(5) 50% unincorporated joint venture interest.Although we operate cinemas in three jurisdictions, the general nature of our operations and operating strategies does not vary materiallyfrom jurisdiction-to-jurisdiction. In each jurisdiction, our gross receipts are primarily from box office receipts, food and beverage sales,concession sales, and screen advertising. Our ancillary revenue is created principally from theater rentals (for example, for film festivals andspecial events), and ancillary programming (such as concerts and sporting events).Our cinemas generated approximately 65% of their 2015 revenue from box office receipts. Ticket prices vary by location, and we offerreduced rates for senior citizens, children and, in certain markets, military and students.Show times and features are placed in advertisements on our various websites, on internet sites and, in some markets, in local newspapers.Film distributors may also advertise certain feature films in various print, radio and television media, as well as on the internet, and thosecosts are generally paid by distributors. We are increasing our presence in social media, thereby reducing our dependency on printadvertising.Concession sales accounted for approximately 29% of our total 2015 cinema revenue. Although certain cinemas have licenses for the saleand consumption of alcoholic beverages, historically concession products have been primarily popcorn, candy, and soda. This is changing,as more of our theaters are offering expanded food and beverage offerings. One of our focuses for 2016 and 2017 is to upgrade our existingcinemas with expanded food and beverage offerings. We intend to have alcoholic beverage licenses for at least 16 of our domestic cinemasby 2017.Screen advertising and other revenue contribute approximately 6% of our total 2015 cinema revenue. With the exception of certain rightsthat we have retained to sell to local advertisers, generally speaking, we are not in the screen advertising business and nationallyrecognized screen-advertising companies provide such advertising for us.In New Zealand, we also own a one-third interest in Rialto Distribution, an unincorporated joint venture engaged in the business ofdistributing art film in New Zealand and Australia. The remaining two-thirds interest in Rialto Distribution is owned by the founders ofRialto Distribution, who have been in the art film distribution business since 1993. Management of CinemasWith the exception of our three unconsolidated cinemas, we manage all of our cinemas with executives located in Los Angeles; Manhattan;Melbourne, Australia; and Wellington, New Zealand. Approximately 2,506 individuals were employed (on a full-time or part-time basis) inour cinema operations as of December 31, 2015. Our two New Zealand Rialto cinemas are owned by a joint venture8 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.in which Reading New Zealand is a 50% joint venture partner. While we are principally responsible for the booking of these two cinemas,our joint venture partner, Event Cinemas, manages their day-to-day operations. In addition, we have a one-third interest in a 16-screenBrisbane cinema managed by Event Cinemas.Licensing and PricingFilm product is available from a variety of sources, ranging from the major film distributors, such as Paramount Pictures, Twentieth CenturyFox, Warner Bros, Buena Vista Pictures (Disney), Sony Pictures Releasing, Universal Pictures and Lionsgate, to a variety of smallerindependent film distributors. In Australia and New Zealand, some of those major distributors distribute through local unaffiliateddistributors. Worldwide, the major film distributors dominate the market for mainstream conventional films. In the U.S. art and specialtyfilm is distributed through the art and specialty divisions of these major distributors, such as Fox Searchlight and Sony Pictures Classics,and through independent distributors such as The Weinstein Company. Generally speaking, film payment terms are based upon an agreed-upon percentage of box office receipts that will vary from film-to-film.Competition In certain markets in the U.S. in which we operate, film may be allocated by the distributor among competitive cinemas, commonly knownas “clearance”, while in other U.S. markets we have access to all available film. This is discussed in greater detail below. Accordingly, we,from time-to-time, are unable to license every film that we may desire to play. In the Australian and New Zealand markets, we generallyhave access to all available film product.We believe that the success of a cinema depends on its access to popular film product because film patrons tend to decide on a film theywould like to see first and then a cinema where the film is available. If a particular film is only offered at one cinema in a given market, thencustomers wishing to see that film will, of necessity, go to that cinema. If two or more cinemas in the same market offer the same film, thencustomers will typically take into account factors such as the relative convenience, quality and cost of the various cinemas. For example,most cinema patrons seem to prefer a modern stadium-design multiplex to an older sloped-floor cinema, and to prefer a cinema that eitheroffers convenient access to free parking (or public transport) over a cinema that does not.This view is being challenged by some exhibitors, who are now promoting a “dine-in” concept. These exhibitors believe that if offered theright environment, consumers will choose the venue first, and the movie second. We believe that the jury is out as to the economicviability of this concept given, among other things, the space and fit-out costs involved, the necessarily reduced seat count where food isserved at the seat, the split between consumers who want and who oppose having in-auditorium dining (some people just want to see themovie, and find in-auditorium service and dinning to be a distraction from the movie itself), and the pricing of such offerings. It alsoappears to us, that one still needs to at least offer top film product. So, even with these dine-in theaters, access to film remains a principalconcern.In the United States in certain markets, distributors typically take the position that they are free to provide or not provide their films toparticular exhibitors, at their complete and absolute discretion, even though the number of “digital prints” is theoretically unlimited and alladvertising for conventional film is paid for by the distributors. Some competitors, like AMC, are becoming increasing aggressive in theirefforts to prevent competitors’ access to film product in film zones where they have cinemas. We face clearance situations in severalmarkets in which we show film.The use of clearances is currently under attack. We believe that, as the two principal justifications for clearances (the cost of producing anadditional print and the shared advertising cost) no longer exist, that ultimately clearances should (except in exceptional cases – forexample where a distributor’s strategy is for a limited or staged release) go away. If this occurred, on balance, we believe that this will be apositive development for us, as it will generally speaking increase our access to film in competitive markets. Pressure on the major chainsto stop using “clearances” is increasing. An investigation by the United States Department of Justice, Antitrust Division, into the possibleanticompetitive activities of major chains has been initiated. Also, there have been private lawsuits by small chains to stop the practice. For example, iPic Theaters has obtained a temporary injunction against clearance practices by one major chain in Harris County, Texas, andis seeking further injunctions against other major chains in Texas as well as in other jurisdictions, such as the District of Columbia.For now, competition for films can be intense, depending upon the number of cinemas in a particular market. Our ability to obtain topgrossing first run feature films may be adversely impacted by our comparatively small size, and the limited number of screens and marketsthat we can supply to distributors. Moreover, in the United States, because of the dramatic consolidation of screens into the hands of a fewvery large and powerful exhibitors such as Regal, AMC, Cinemark and Carmike, these mega-exhibition companies are in a position to offerdistributors access to many more screens in major markets than we can. Also, the majors have a significant number of markets where theyoperate without material competition, meaning that the distributors have no alternative exhibitor for their films in thesemarkets. Accordingly, distributors may decide to give preference to these mega-exhibitors when it comes to licensing top grossing films,rather than deal with independents such as ourselves. The situation is different in Australia and New Zealand, where typically every majormultiplex cinema has access to all of the film currently in distribution, regardless of the9 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ownership of that multiplex cinema. However, on the reverse side, we have suffered somewhat in these markets from competition fromboutique operators, who are able to book top grossing commercial films for limited runs, thus increasing competition for customers wishingto view such top grossing films.Generally speaking, our cinemas are modern multiplex cinemas with good and convenient parking. The availability of state-of-the-arttechnology and/or luxury seating can also be a factor in the preference of one cinema over another. In recent periods, a number of cinemashave been opened or re-opened featuring luxury seating and/or expanded food and beverage service, including the sale of alcoholicbeverages and food served to the seat. We have for a number of years offered alcoholic beverages in certain of our Australia and NewZealand cinemas and at certain of our Angelika Film Centers in the U.S. We are currently working to upgrade the seating and food andbeverage offerings (including the offering of alcoholic beverages) at a number of our existing cinemas.The film exhibition markets in the United States, Australia, and New Zealand are to a certain extent dominated by a limited number ofmajor exhibition companies. The principal exhibitors in the United States are Regal (with 7,361 screens in 572 cinemas), AMC (with 4,937screens in 348 cinemas), Cinemark (with 4,489 screens in 334 cinemas), and Carmike (with 2,881 screens in 270 cinemas). As of December31, 2015, we were the 11th largest exhibitor with 1% of the box office in the United States with 252 screens in 27 cinemas undermanagement. AMC and Carmike have recently announced the acquisition of Carmike by AMC. If this acquisition goes through,AMC/Carmike will be the largest exhibitor in the United States with 9,426 screens in 682 theaters.The principal exhibitors in Australia are Greater Union, which does business under the Event Cinemas name (a subsidiary of AmalgamatedHoldings Limited), Hoyts Cinemas (“Hoyts”), and Village Cinemas. The major exhibitors control approximately 65% of the total cinemabox office: Event 31%, Hoyts 19%, and Village 15%. Event has 503 screens nationally, Hoyts 344 screens, and Village 214 screens. Bycomparison, our 141 screens (excluding any partnership theaters) represent approximately 7% of the total box office. In June 2015, Hoytswas acquired by Wanda, which also holds a controlling interest in AMC.The principal exhibitors in New Zealand are Event Cinemas with 105 screens nationally and Hoyts with 63 screens. Reading has 54 screens(excluding its interest in unconsolidated joint ventures). The major exhibitors in New Zealand control approximately 56% of the total boxoffice: Event 35% and Hoyts 21%. Reading has 13% of the market (Event and Reading market share figures exclude any partnershiptheaters).In Australia and New Zealand, the industry is somewhat vertically integrated in that Roadshow Film Distributors, a subsidiary of Village,serves as a distributor of film in Australia and New Zealand for Warner Brothers. Films produced or distributed by the majority of the localinternational independent producers are also distributed by Roadshow Film Distributors.Many of our competitors have substantial financial resources which could allow them to operate in a more competitive manner than we can.In-Home and Mobile Device CompetitionThe “in-home” and mobile device entertainment industry has experienced significant leaps in recent periods in both the quality andaffordability of in-home and mobile device entertainment systems and in the accessibility to and quality of entertainment programmingthrough cable, satellite, internet distribution channels, and Blu-ray/DVD. The success of these alternative distribution channels putsadditional pressure on film distributors to reduce and/or eliminate the time period between theatrical and secondary release dates and thewillingness of consumers to take the time and pay the admission price to go to the movie theater. To a certain extent, it appears thatconsumers are willing to trade convenience for presentation. These are issues common to both our U.S. and international cinemaoperations. Competitive issues are discussed in greater detail under the caption, Item 1A - Risk Factors.SeasonalityMajor films are generally released to coincide with holidays. With the exception of Christmas and New Year’s Days, this fact provides somebalancing of our revenue because there is no material overlap between holidays in the United States and those in Australia and NewZealand. Distributors will delay, in certain cases, releases in Australia and New Zealand to take advantage of Australian and New Zealandholidays that are not celebrated in the United States. However, the deferral of releases is becoming increasing less common, given the needto address internet and other channels of distribution that operate on a worldwide basis.Real EstateOur real estate activities have historically consisted principally of:10 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.·the ownership of fee or long-term leasehold interests in properties used in our cinema exhibition activities or which were acquiredfor the development of cinemas or cinema-based real estate development projects;·the operation of our various ETCs and shopping centers and properties,·the acquisition of fee interests in land for general real estate development;·the leasing to production companies of our live theaters; and·the redevelopment of our existing fee-owned cinema or live theater sites to their highest and best use. While we report our real estate as a separate segment, it has historically operated as an integral portion of our overall business and,historically, has principally been in support of that business. We have, however, acquired or developed certain properties that do notcurrently have any cinema or other entertainment component. Our real estate activities, holdings and developments are described in greater detail in Item 2 – Properties. EmployeesAs of December 31, 2015, we had 88 full-time executive and administrative employees and 2,506 cinema employees. A small number of ourcinema employees in New Zealand are union members, as are our projectionists in Hawaii. None of our Australian-based employees or otheremployees are subject to union contracts. Overall, we are of the view that the existence of these collective-bargaining agreements does notmaterially increase our costs of labor or our ability to compete. We believe our relations with our employees to be generally good. Item 1A – Risk FactorsInvesting in our securities involves risk. Set forth below is a summary of various risk factors that you should consider in connection withyour investment in the Company. This summary should be considered in the context of our overall Annual Report on Form 10K, as many ofthe topics addressed below are discussed in significantly greater detail in the context of specific discussions of our business plan, ouroperating results, and the various competitive forces that we face.BUSINESS RISK FACTORSWe are currently engaged principally in the cinema exhibition and real estate businesses. Because we operate in two business segments(cinema exhibition and real estate), we discuss separately below the risks we believe to be material to our involvement in each of thesesegments. We have discussed separately certain risks relating to the international nature of our business activities, our use of leverage, andour status as a controlled corporation. Please note that, while we report the results of our live theater operations as real estate operations –because we are principally in the business of renting space to producers rather than in licensing or producing plays ourselves – the cinemaexhibition and live theater businesses share certain risk factors and are, accordingly, discussed together below.Cinema Exhibition and Live Theater Business Risk FactorsWe operate in a highly competitive environment with many competitors who are significantly larger and may have significantly betteraccess to funds than we do.We are a comparatively small cinema operator and face competition from much larger cinema exhibitors. These larger exhibitors are able tooffer distributors more screens in more markets – including markets where they may be the exclusive exhibitor – than can we. Faced withsuch competition, we may not be able to get access to all of the films we want, which may adversely affect our revenue and profitability.These larger competitors may also enjoy (i) greater cash flow, which can be used to develop additional cinemas, including cinemas thatmay be competitive with our existing cinemas, (ii) better access to equity capital and debt, (iii) better visibility to landlords and real estatedevelopers; and (iv) better economies of scale, than we do.In the case of our live theaters, we compete for shows not only with other “for profit” Off-Broadway theaters, but also with “not-for-profit”operators and, increasingly, with Broadway theaters. We believe our live theaters are generally competitive with other Off-Broadwayvenues. However, due to the increased cost of staging live theater productions, we are seeing an increasing tendency for plays that wouldhistorically have been staged in an Off-Broadway theater moving directly to larger Broadway venues.We face competition from other sources of entertainment and other entertainment delivery systems.Both our cinema and live theater operations face competition from “in-home” and mobile device sources of entertainment. These includecompetition from network, cable and satellite television, internet streaming video services, Video on Demand, Blu-ray/DVD,11 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.the internet, video games and other sources of entertainment. The quality of in-house entertainment systems, as well as programmingavailable on an in-home and mobile basis, has increased, while the cost to consumers of such systems (and such programming) hasdecreased in recent periods, and some consumers may prefer the security and/or convenience of an ”in-home” or mobile entertainmentexperience to the more public and presentation oriented experience offered by our cinemas and live theaters. Film distributors have beenresponding to these developments by, in some cases, decreasing or eliminating the period of time between cinema release and the date suchproduct is made available to “in-home” forms of distribution.The narrowing and/or elimination of this so-called “window” for cinema exhibition may be problematic for the cinema exhibitionindustry. However, to date, attempts by the major film distributors to continue to narrow or eliminate the window have been strenuouslyresisted by the cinema exhibition industry, and we view the total elimination of the cinema exhibition window by major film distributors,while theoretically possible, to be unlikely.However, there is the risk that, over time, distributors may move towards simultaneous release of motion picture product in multiplechannels of distribution. Also, some traditional in-home and mobile distributors have begun the production of full-length movies,specifically for the purpose of direct or simultaneous release to the in-home and mobile markets. These factors may adversely affect thecompetitive advantage enjoyed by cinemas over “in-home” and mobile forms of entertainment, as it may be that the cinema market and the“in-home” and mobile markets will have simultaneous access to the same motion picture product. In recent times a number of movies werereleased on a simultaneous basis to movie exhibitors and to in-home and mobile markets. It is likely that this trend will continue, making itincreasingly important for exhibitors to enhance the convenience and quality of the theater-going experience.We also face competition from various other forms of “beyond-the-home” entertainment, including sporting events, concerts, restaurants,casinos, video game arcades, and nightclubs. Our cinemas also face competition from live theaters and vice versa.Our cinema and live theater businesses may be vulnerable to fears of terrorism, other natural disasters which could cause customers toavoid public assembly seatingPolitical events, such as terrorist attacks, and health-related epidemics, such as flu outbreaks, could cause patrons to avoid our cinemas orother public places where large crowds are in attendance. In addition, a natural disaster, such as a typhoon or an earthquake, could impactour ability to operate certain of our cinemas, which could adversely affect our results of operations.Our cinema operations depend upon access to film that is attractive to our patrons, and our live theater operations depend upon thecontinued attractiveness of our theaters to producers.Our ability to generate revenue and profits is largely dependent on factors outside of our control, specifically, the continued ability ofmotion picture and live theater producers to produce films and plays that are attractive to audiences, the amount of money spent by filmdistributors and theatrical producers to promote their motion pictures and plays, and the willingness of these producers to license their filmson terms that are financially viable to our cinemas and to rent our theaters for the presentation of their plays. To the extent that popularmovies and plays are produced, our cinema and live theater activities are ultimately dependent upon our ability, in the face of competitionfrom other cinema and live theater operators to book these movies and plays into our facilities, and to provide a superior customer offering.We rely on film distributors to supply the films shown in our theatres. In the U.S., the film distribution business is highly concentrated, withseven major film distributors accounting for approximately 89.5% of U.S. box office revenues. Numerous antitrust cases and the consentdecree resulting from these antitrust cases affect the distribution of films. Consequently, we cannot guarantee a supply of films by enteringinto long-term arrangements with major distributors. We are therefore required to negotiate licenses for each film and for each theatre. Adeterioration of our relationship with any of the seven major film distributors could adversely affect our ability to obtain commerciallysuccessful films and to negotiate favorable licensing terms for such films, both of which could adversely affect our business and operatingresults.In the U.S., at least until recently, distributors have had broad discretion not to show the same film at competitive cinemas. This has, inmany situations, given the larger exhibitors (as a result of their market power) power to influence distributors to exercise their discretion inthis regard in favor of the larger exhibitors. In this industry, this is called “clearance.” Recent judicial decisions, however, have throwndoubt on the extent to which this practice will continue to be permitted under applicable antitrust laws.Adverse economic conditions could materially affect our business by reducing discretionary income and by limiting or reducing sourcesof film and live theater funding.Cinema and live theater attendance is a luxury, not a necessity. Accordingly, a decline in the economy resulting in a decrease indiscretionary income, or a perception of such a decline, may result in decreased discretionary spending, which could adversely affect ourcinema and live theater businesses. Adverse economic conditions can also affect the supply side of our business, as reduced12 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.liquidity can adversely affect the availability of funding for movies and plays. This is particularly true in the case of Off-Broadway plays,which are often times financed by high net worth individuals (or groups of such individuals) and that are very risky due to the absence ofany ability to recoup investment in secondary markets like Blu-ray/DVD, cable, satellite or internet distribution.Our screen advertising revenue may decline. Over the past several years, cinema exhibitors have been looking increasingly to screen advertising as a way to improve income. Noassurances can be given that this source of income will be continuing, or that the use of such advertising will not ultimately prove to becounterproductive, by giving consumers a disincentive to choose going to the movies over “in-home” or mobile entertainment alternatives.We face uncertainty as to the timing and direction of technological innovations in the cinema exhibition business and as to our access tothose technologies.We have converted all of our cinema auditoriums to digital projection. However, no assurances can be given that other technologicaladvances will not require us to make further material investments in our cinemas or face loss of business. Also, equipment is currentlybeing developed for holographic or laser projection. The future of these technologies in the cinema exhibition industry is uncertain.We face competition from new competitors offering food and beverage as an integral part of their cinema offerings.A number of new entrants, such as Alamo Drafthouse and iPic, offering an expanded food and beverage menu (including the sale ofalcoholic beverages), have emerged in recent periods. In addition, some competitors are converting existing cinemas to provide suchexpanded menu offerings and in-theater dining options. The existence of such cinemas may alter traditional cinema selection practices ofmoviegoers, as they seek out cinemas with such expanded offerings as a preferred alternative to traditional cinemas.We may be subject to increased labor and benefits costs.We are subject to laws governing such matters as minimum wages, working conditions and overtime. As minimum wage rates increase, wemay need to increase not only the wages of our minimum wage employees, but also the wages paid to employees at wage rates that areabove minimum wage. Labor shortages, increased employee turnover and health care mandates could also increase our labor costs. This inturn could lead us to increase prices which could impact our sales. Conversely, if competitive pressures or other factors prevent us fromoffsetting increased labor costs by increases in prices, our results of operations may be adversely impacted.Cyber security threats and our failure to protect our electronically stored data could adversely affect our business.We store and maintain electronic information and data necessary to conduct our business. Data maintained in electronic form is subject tothe risk of intrusion, tampering and theft. While we have adopted industry-accepted security measures and technology to protect theconfidential and proprietary information, the development and maintenance of these systems is costly and require ongoing monitoring andupdating as technologies change and efforts to overcome security measures become more sophisticated. As such, we may be unable toanticipate and implement adequate preventive measures in time. This may adversely affect our business, including exposure to governmentenforcement actions and private litigation, and our reputation with our customers and employees may be injured. In addition to Company-specific cyber threats or attacks, our business and results of operations could also be impacted by breaches affecting our peers and partnerswithin the entertainment industry, as well as other retail companies.Real Estate Development and Ownership Business RisksWe operate in a highly competitive environment in which we must compete against companies with much greater financial and humanresources than we have.We have limited financial and human resources, compared to our principal real estate competitors. In recent periods, we have relied heavilyon outside professionals in connection with our real estate development activities. Many of our competitors have significantly greaterresources and may be able to achieve greater economies of scale than we can.Risks Related to the Real Estate Industry GenerallyOur financial performance will be affected by risks associated with the real estate industry generally.Events and conditions generally applicable to developers, owners, and operators of real property will affect our performance as well. Theseinclude (i) changes in the national, regional and local economic climate, (ii) local conditions, such as an oversupply of, or a reduction indemand for, commercial space and/or entertainment-oriented properties, (iii) reduced attractiveness of our properties to13 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.tenants, (iv) the rental rates and capitalization rates applicable to the markets in which we operate and the quality of properties that we own,(v) competition from other properties, (vi) inability to collect rent from tenants, (vii) increased operating costs, including labor, materials,real estate taxes, insurance premiums, and utilities, (viii) costs of complying with changes in government regulations, (ix) the relativeilliquidity of real estate investments, and (x) decreases in sources of both construction and long-term lending as traditional sources of suchfunding leave or reduce their commitments to real estate-based lending. In addition, periods of economic slowdown or recession, risinginterest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in declining rentsor increased lease defaults.We may incur costs complying with the Americans with Disabilities Act and similar laws.Under the Americans with Disabilities Act and similar statutory regimes in Australia and New Zealand or under applicable state or local law,all places of public accommodation (including cinemas and theaters) are required to meet certain governmental requirements related toaccess and use by persons with disabilities. A determination that we are not in compliance with those governmental requirements withrespect to any of our properties could result in the imposition of fines or an award of damages to private litigants. The cost of addressingthese issues could be substantial. Illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties.Real estate investments are relatively illiquid and, therefore, tend to limit our ability to vary our portfolio promptly in response to changesin economic or other conditions. Many of our properties are either (i) “special purpose” properties that could not be readily converted togeneral residential, retail or office use, or (ii) undeveloped land. In addition, certain significant expenditures associated with real estateinvestment, such as real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income fromthe investment, and competitive factors may prevent the pass-through of such costs to tenants.Real estate development involves a variety of risks.Real estate development involves a variety of risks, including the following:·The identification and acquisition of suitable development properties. Competition for suitable development properties isintense. Our ability to identify and acquire development properties may be limited by our size and resources. Also, as we and ouraffiliates are considered to be “foreign owned” for purposes of certain Australian and New Zealand statutes, we have been in thepast, and may in the future be, subject to regulations that are not applicable to other persons doing business in those countries.·The procurement of necessary land use entitlements for the project. This process can take many years, particularly if opposed bycompeting interests. Competitors and community groups (sometimes funded by such competitors) may object based on variousfactors, including, for example, impacts on density, parking, traffic, noise levels and the historic or architectural nature of thebuilding being replaced. If they are unsuccessful at the local governmental level, they may seek recourse to the courts or othertribunals. This can delay projects and increase costs. ·The construction of the project on time and on budget. Construction risks include the availability and cost of financing; theavailability and costs of material and labor; the costs of dealing with unknown site conditions (including addressing pollution orenvironmental wastes deposited upon the property by prior owners); inclement weather conditions; and the ever-present potentialfor labor-related disruptions.·The leasing or sell-out of the project. Ultimately, there are risks involved in the leasing of a rental property or the sale of acondominium or built-for-sale property. For our ETCs, the extent to which our cinemas can continue to serve as an anchor tenantwill be influenced by the same factors as will influence generally the results of our cinema operations. Leasing or sale can beinfluenced by economic factors that are neither known nor knowable at the commencement of the development process and bylocal, national, and even international economic conditions, both real and perceived.·The refinancing of completed properties. Properties are often developed using relatively short-term loans. Upon completion ofthe project, it may be necessary to find replacement financing for these loans. This process involves risk as to the availability ofsuch permanent or other take-out financing, the interest rates, and the payment terms applicable to such financing, which may beadversely influenced by local, national, or international factors. To date, we have been successful in negotiating developmentloans with “roll over” or other provisions mitigating our need to refinance immediately upon completion of construction. 14 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The ownership of properties involves risk. The ownership of investment properties involves risks, such as: (i) ongoing leasing and re-leasing risks, (ii) ongoing financing and re-financing risks, (iii) market risks as to the multiples offered by buyers of investment properties, (iv) risks related to the ongoing compliancewith changing governmental regulation (including, without limitation, environmental laws and requirements to remediate environmentalcontamination that may exist on a property (such as, by way of example, asbestos), even though not deposited on the property by us), (v)relative illiquidity compared to some other types of assets, and (vi) susceptibility of assets to uninsurable risks, such as biological, chemicalor nuclear terrorism, or risks that are subject to caps tied to the concentration of such assets in certain geographic areas, such as earthquakes.Furthermore, as our properties are typically developed around an entertainment use, the attractiveness of these properties to tenants, sourcesof finance and real estate investors will be influenced by market perceptions of the benefits and detriments of such entertainment-typeproperties. A number of our assets are in geologically active areas, presenting risk of earthquake and land movement.We have cinemas in California and New Zealand, areas that present a greater risk of earthquake and/or land movement than other locations.New Zealand has in recent periods had several major earthquakes damaging our facilities in Christchurch and Wellington. The ability toinsure for such casualties is limited and may become more difficult and/or more expensive in future periods.We may be subject to liability under environmental laws and regulations.We own and operate a large number of cinemas and other properties within the U.S. and internationally, which may be subject to variousforeign, federal, state and local laws and regulations relating to the protection of the environment or human health. Such environmentallaws and regulations include those that impose liability for the investigation and remediation of spills or releases of hazardous materials.We may incur such liability, including for any currently or formerly owned, leased or operated property, or for any site, to which we mayhave disposed, or arranged for the disposal of, hazardous materials or wastes. Certain of these laws and regulations may impose liability,including on a joint and several liability, which can result in a liable party being obliged to pay for greater than its share, regardless of faultor the legality of the original disposal. Environmental conditions relating to our properties or operations could have an adverse effect onour business and results of operations and cash flows.Legislative or regulatory initiatives related to global warming/climate change concerns may negatively impact our business.Recently, there has been an increasing focus and continuous debate on global climate change including increased attention from regulatoryagencies and legislative bodies. This increased focus may lead to new initiatives directed at regulating an as yet unspecified array ofenvironmental matters. Legislative, regulatory or other efforts in the U.S. to combat climate change could result in future increases in thecost of raw materials, taxes, transportation and utilities for our vendors and for us which would result in higher operating costs for theCompany. Also, compliance by our cinemas and accompanying real estate with new and revised environmental, zoning, land-use orbuilding codes, laws, rules or regulations, could have a material and adverse effect on our business. However, we are unable to predict atthis time, the potential effects, if any, that any future environmental initiatives may have on our business.International Business RisksOur international operations are subject to a variety of risks, including the following:Currency Risk: while we report our earnings and net assets in U.S. dollars, substantial portions of our revenue and of our obligations aredenominated in either Australian or New Zealand dollars. The value of these currencies can vary significantly compared to the U.S. dollarand compared to each other. We do not hedge the currency risk, but rather have relied upon the natural hedges that exist as a result of thefact that our film costs are typically fixed as a percentage of the box office, and our local operating costs and obligations are likewisetypically denominated in local currencies. However, we do have debt at our parent company level that is serviced by our overseas cashflow, and our ability to service this debt could be adversely impacted by declines in the relative value of the Australian and New Zealanddollar compared to the U.S. dollar. Also, our use of local borrowings to mitigate the business risk of currency fluctuations has reduced ourflexibility to move cash between jurisdictions. Set forth below is a chart of the exchange ratios between these three currencies over the pasttwenty years: 15 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.·Risk of adverse government regulation: currently, we believe that relations between the United States, Australia, and New Zealandare good. However, no assurances can be given that this relationship will continue and that Australia and New Zealand will not inthe future seek to regulate more highly the business done by U.S. companies in their countries. ·Risk of adverse labor relations: deterioration in labor relations could lead to an increased cost of labor (including futuregovernment requirements with respect to pension liabilities, disability insurance and health coverage, and vacations and leave).Risks Associated with Certain Discontinued OperationsCertain of our subsidiaries were previously in industrial businesses. As a consequence, properties that are currently owned or may have inthe past been owned by these subsidiaries may prove to have environmental issues. Where we have knowledge of such environmentalissues and are in a position to make an assessment as to our exposure, we have established what we believe to be appropriate reserves, butwe are exposed to the risk that currently unknown problems may be discovered. These subsidiaries are also exposed to potential claimsrelated to exposure of former employees to coal dust, asbestos, and other materials now considered to be, or which in the future may befound to be, carcinogenic or otherwise injurious to health. Operating Results, Financial Structure and Borrowing RiskFrom time to time, we may have negative working capital. In recent years, as we have invested our cash in new acquisitions and the development of our existing properties, we have from time-to-timehad negative working capital. This negative working capital is typical in the cinema exhibition industry because our short-term liabilitiesare in part financing our long-term assets instead of long-term liabilities financing short-term assets, as is the case in other industries such asmanufacturing and distribution.16 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We have substantial short to medium term debt.Generally speaking, we have historically financed our operations through relatively short-term debt. No assurances can be given that wewill be able to refinance this debt, or if we can, that the terms will be reasonable. However, as a counterbalance to this debt, we havesignificant unencumbered real property assets, which could be sold to pay debt or encumbered to assist in the refinancing of existing debt,if necessary. We have substantial lease liabilities.Most of our cinemas operate in leased facilities. These leases typically have “cost of living” or other rent adjustment features and requirethat we operate the properties as cinemas. A downturn in our cinema exhibition business might, depending on its severity, adversely affectthe ability of our cinema operating subsidiaries to meet these rental obligations. Even if our cinema exhibition business remains relativelyconstant, cinema level cash flow will likely be adversely affected unless we can increase our revenue sufficiently to offset increases in ourrental liabilities. Unlike property rental leases, our newly added digital equipment leases do not have “cost of living” or other leaseadjustment features.Our stock is thinly traded.Our stock is thinly traded, with an average daily volume in 2015 of only approximately 56,000 Class A Common shares. This can result insignificant volatility, as demand by buyers and sellers can easily get out of balance.Ownership and Management Structure, Corporate Governance, and Change of Control Risks Pending disputes among the Cotter family raise uncertainty regarding the ongoing control of the Company and may distract the time andattention of our officers and directors from our business and operations or interfere with the effective management of the Company.Up until his death on September 13, 2014, James J. Cotter, Sr., the father of Ellen Cotter, James J. Cotter, Jr. and Margaret Cotter, was ourcontrolling stockholder, having the sole power to vote approximately 66.9% of the outstanding voting stock of the Company. Underapplicable Nevada Law, a stockholder holding more than 2/3rds of the Company’s voting stock has the power at any time, with or withoutcause, to remove any one or more directors (up to and including the entire board of directors) by written consent taken without a meeting ofthe stockholders.Since his death, disputes have arisen among Ellen Cotter, James J. Cotter, Jr. and Margaret Cotter concerning the voting control of thoseshares and regarding the exercise by the Estate of James J. Cotter, Sr. Deceased (the “Cotter Estate”) of options to acquire an additional100,000 shares of Class B Stock. At the present time, Ellen Cotter is the Chair, President and Chief Executive Officer of our Company.James J. Cotter, Jr. is a director and from June 2013 until June 12, 2015 was the President and from August 7, 2014 until June 12, 2015 wasthe Chief Executive Officer of our Company, having been removed from those positions by Board action on June 12, 2015. MargaretCotter is the Vice-Chair of our Company and the President of Liberty Theaters, LLC, the company through which we own and operate ourlive theaters. She heads up the management and redevelopment of our New York properties.As of December 31, 2015, according to the books of the Company, the Living Trust established by Declaration of Trust dated June 5, 2013,by James J. Cotter, Sr. (the “Cotter Trust”), held of record 696,080 shares of our Class B Voting Stock (“Voting Stock”) constitutingapproximately 41.4% of the voting power of our outstanding capital stock. According to the books of the Company, the Cotter Estate as ofthat date held of record an additional 427,808 shares of Voting Stock, constituting approximately 25.5% of the voting power of ouroutstanding capital stock. We are advised, based upon public filings made by one or more of Ellen Cotter, Margaret Cotter and James J.Cotter, Jr. (the “Cotter Filings”) that the Voting Stock currently held of record by the Cotter Estate will eventually pour over into the CotterTrust. We are further advised from the Cotter Filings that the Cotter Trust also provides for the establishment of a voting trust (the “CotterVoting Trust”) which will eventually hold the Voting Stock currently held by the Cotter Estate and the Cotter Trust. At the present time,however, such Voting Stock is held of record by the Cotter Trust and the Cotter Estate, respectively.Ellen Cotter, James J. Cotter, Jr. and Margaret Cotter are currently the trustees of the Cotter Trust. On December 22, 2014, the District Courtof Clark County, Nevada appointed Ellen Cotter and Margaret Cotter as co-executors of the Cotter Estate. Accordingly, at the present time,Ellen Cotter and Margaret Cotter acting as a majority of the Trustees of the Cotter Trust with respect to the shares held by the Cotter Trustand as the co-executors of the Cotter Estate with respect to the shares held by the Cotter Estate (including the 100,000 shares of VotingStock acquired by the Cotter Estate through the exercise of stock options previously granted to Mr. Cotter, Sr.), and voting in theirindividual capacity their direct holdings of 50,000 shares and 35,100 shares respectively of the Voting Stock, have the power to voteVoting Stock representing 71.9% of our outstanding Voting Stock.17 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The identity of the trustee(s) of the Cotter Voting Trust and the terms of that trust are in dispute as between Ellen Cotter, James J. Cotter, Jr.and Margaret Cotter.We are advised by the Cotter Filings that the 2013 amended and restated declaration of trust for the Cotter Trust names Margaret Cotter asthe sole trustee of the Cotter Voting Trust and names James J. Cotter, Jr., as the first alternate trustee in the event that Margaret Cotter isunable or unwilling to act as trustee. We are further advised by the Cotter Filings that a 2014 partial amendment to the declaration of trust,signed by Mr. Cotter, Sr. while he was in the hospital, names Margaret Cotter and James J. Cotter, Jr. as co-trustees of the Cotter VotingTrust and provides that, in the event they are unable to agree upon an important trust decision, they shall rotate the voting of the VotingStock between them annually on each January 1st. It further directs the trustees of the Cotter Voting Trust to, among other things, vote suchshares of our Voting Stock held by the Cotter Voting Trust in favor of the election of Ellen Cotter, Margaret Cotter and James J. Cotter, Jr.to our board of directors and to rotate annually the chairmanship of our board between Ellen Cotter, Margaret Cotter and James J. Cotter, Jr.On February 6, 2015, Ellen Cotter and Margaret Cotter filed a Petition in the Superior Court of the State of California, County of LosAngeles, captioned In re James J. Cotter Living Trust dated August 1, 2000 (Case No. BP159755) (the “Trust Case”). The Petition, amongother things, seeks relief that could determine the validity of the 2014 partial amendment and who, as between Margaret Cotter and James J.Cotter Jr., has authority as trustee or co-trustees of the Cotter Voting Trust to vote the Cotter Voting Trust’s shares of our Voting Stock (inwhole or in part) and the scope and extent of such authority. James J. Cotter, Jr. has filed an opposition to the Petition and has filedpleadings in that proceeding seeking the removal of Ellen Cotter and Margaret Cotter as trustees of the Cotter Trust. The Trust Case iscurrently scheduled to be tried in July of this year.In addition, James J. Cotter, Jr. and certain other stockholders have filed two derivative actions (discussed in greater detail below) againstEllen Cotter and Margaret Cotter and certain of our Directors and officers, alleging a variety of misconduct on their part, and among otherthings seeking the reinstatement of James J. Cotter, Jr. as president and chief executive officer of our Company, challenging the voting byEllen Cotter and Margaret Cotter of the shares held by the Cotter Estate, and seeking to void the result of the election of directors held atour 2015 Annual Meeting of Stockholders. See discussion under the heading, Legal Proceedings; Derivative Litigation and James J.Cotter, Jr. Arbitration, infra.Although the Company is not a party to the Trust Case and takes no position as to the claims asserted or the relief sought therein, thematters raised in the Trust Case create uncertainty regarding the ongoing control of the Company. Until these matters can be resolved, it isunclear whether, upon the creation of and the transfer of ownership of the Voting Stock to the Cotter Voting Trust, Margaret Cotter will bethe sole trustee of the Cotter Voting Trust or whether Margaret Cotter and James J. Cotter. Jr. will be co-trustees of the Cotter VotingTrust. It is likewise uncertain, in the event that the court should determine that Margaret Cotter and James J. Cotter are co-trustees of theCotter Voting Trust, how the power-sharing authority would be applied in practice.These pending matters could, in the future, potentially distract the time and attention of Ellen Cotter, James J. Cotter, Jr. and MargaretCotter from the business and operations of our Company and thus potentially have an adverse effect on the effective management of ourCompany. Furthermore, the uncertainty as to the future management and control of our Company could potentially adversely impact,among other things (i) our ability to develop and maintain favorable business relationships, (ii) our ability to attract and retain talented andexperienced directors, executives and employees, (iii) the compensation and other terms needed to attract and retain such individuals, (iv)our ability to borrow money on favorable long-term terms, and (v) our ability to pursue and complete long-term business objectives. The interests of our controlling stockholder may conflict with your interests.As of December 31, 2015, the Cotter Estate and the Cotter Trust beneficially own 66.9% of our outstanding Class B Stock. At the presenttime, according to the books of the Company, Ellen Cotter and Margaret Cotter vote (including their direct holdings of 50,000 shares and35,100 shares respectively of the Class B Stock), Class B Stock representing 71.9% of our outstanding Class B Stock. Our Class A Stock isnon-voting, while our Class B Stock represents all of the voting power of our Company. For as long as the Cotter Estate, the Cotter Trustand/or the Cotter Voting Trust (referred to herein collectively as the “Cotter Entities”) continue to own shares of Class B Stock representingmore than 50% of the voting power of our common stock, the Cotter Entities will be able to elect all of the members of our Board ofDirectors and determine the outcome of all matters submitted to a vote of our stockholders, including matters involving mergers or otherbusiness combinations, the acquisition or disposition of assets, the incurrence of indebtedness, the issuance of any additional shares ofcommon stock or other equity securities and the payment of dividends on common stock. The Cotter Entities will also have the power toprevent or cause a change in control, and could take other actions that might be desirable to the Cotter Entities but not to otherstockholders. To the extent that the Cotter Entities hold more than 2/3rds of our outstanding Class B Stock, the Cotter Entities will havethe power at any time, with or without cause, to remove any one or more Directors (up to and including the entire board of directors) bywritten consent taken without a meeting of the stockholders. 18 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In addition, the Cotter Estate or the Cotter Trust and/or their respective affiliates have controlling interests in companies in related andunrelated industries. In the future, we may participate in transactions with these companies (see Note 18 – Related Parties andTransactions).While controlling stockholders may owe certain fiduciary duties to the company and/or minority stockholders, these duties are limited. Noassurances can be given that the Cotter Entities will not take action that, while beneficial to them and legally enforceable, would notnecessarily be in the best interests of our Company and/or our stockholders generally.We are a “Controlled Company” under applicable NASDAQ Regulations. As permitted by those Regulations, our Board has elected toopt out of certain corporate governance rules applicable to non-controlled companies.Generally speaking, the NASDAQ requires listed companies to meet certain minimum corporate governance provisions. However, a“Controlled Company”, such as we, may elect not to be governed by certain of these provisions. Our Board of Directors has elected toexempt our Company from requirements that (i) at least a majority of our Directors be independent, (ii) nominees to our Board of Directorsbe nominated by a committee comprised entirely of independent Directors or by a majority of our Company’s independent Directors, and(iii) the compensation of our Chief Executive Officer be determined or recommended to our Board of Directors by a compensationcommittee comprised entirely of independent Directors or by a majority of our Company’s independent Directors. Notwithstanding thedetermination by our Board of Directors to opt-out of these NASDAQ requirements, we believe that a majority of our Board of Directors isnevertheless currently comprised of independent Directors, and our compensation committee is nevertheless currently comprised entirely ofindependent Directors. Nominations are considered by the Board, acting as a whole. We depend on key personnel for our current and future performance.Our current and future performance depends to a significant degree upon the continued contributions of our senior management team andother key personnel. The loss or unavailability to us of any member of our senior management team or a key employee could significantlyharm us. We cannot assure you that we would be able to locate or employ qualified replacements for senior management or key employeeson acceptable terms. Due to the uncertainty of our control situation, the ongoing availability of these employees and our ability to replacethem is uncertain. Item 1B - Unresolved Staff CommentsNone.19 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 2 – Properties EXECUTIVE AND ADMINISTRATIVE OFFICESWe lease approximately 11,700 square feet of office space in Los Angeles, California to serve as our executive headquarters. This leaseexpires on December 31, 2016 and we will not renew it, since as discussed below we have purchased a headquarters building in CulverCity, California. We own an 8,100 square foot office building in Melbourne, Australia, approximately 5,200 square feet of which serves asthe headquarters for our Australian and New Zealand operations (the remainder being leased to an unrelated third party). We maintain ouraccounting personnel and certain IT and operational personnel in approximately 5,800 square foot of offices located in our WellingtonCourtenay Central ETC. We occupy approximately 3,500 square feet at our Village East leasehold property for administrative purposes.On April 11, 2016, we purchased a 24,000 square foot Class B office building with 72 parking spaces located at 5995 Sepulveda Boulevardin Culver City, California. We intend to use approximately 50% of the leasable area for our headquarters offices and to lease the remainderto unaffiliated third parties.ENTERTAINMENT PROPERTIESEntertainment Use Leasehold InterestsAs of December 31, 2015, we lease approximately 1,800,000 square feet of completed cinema space in the United States, Australia, and NewZealand as follows:Aggregate Square FootageApproximate Range of Remaining Lease Terms (including renewals)United States966,0002017 – 2050Australia659,0002019 – 2039New Zealand190,0002019 – 2050In 2014, we entered into a long term lease for a new state-of-the-art Angelika Film Center in the Union Market district of WashingtonDC. However, the lease was terminated as the anticipated location for this cinema ultimately was determined by the landlord, Edens, to notbe feasible. We are currently finalizing with Edens the terms and conditions of a new lease for a cinema in a different location in the UnionMarket area. In December 2014, we entered into a lease for a new luxury cinema, under the Consolidated Theatres brand, at the new Ka Makana Ali'iShopping Center being developed in Kapolei, Hawaii by an affiliate of DeBartolo Development and finalized terms for a new eight-screencinema complex in Auckland, New Zealand, which opened in November 2015. Fee InterestsIn Australia, as of December 31, 2015, we owned approximately 1,200,000 square feet of land at nine locations. Most of this land is locatedin the greater metropolitan areas of Brisbane, Melbourne, Perth, and Sydney. The foregoing does not include the 50.6-acre Burwood,Australia site, which has been sold but not yet recognized as a sale under accounting principles generally accepted in the United States ofAmerica (“US GAAP”). Of these fee interests, approximately 165,000 square feet are currently improved with cinemas. This figure includesan approximately 23,000 square foot parcel currently improved with an approximately 22,000 square foot office building that we intend tointegrate with and into our Newmarket Shopping Center and that, accordingly, is not listed above as a separate location.In New Zealand, as of December 31, 2015, we owned approximately 3,400,000 square feet of land at seven locations. The foregoingexcludes the 0.5-acre Taupo, New Zealand site, which has been sold but not yet recognized as a sale under US GAAP. The foregoingincludes the Courtenay Central ETC in Wellington, the development land behind the Courtenay Central ETC, the 70.4-acre Manukau site,and the fee interests underlying four cinemas in New Zealand, which properties include approximately 21,000 square feet of ancillary retailspace.In the United States, as of December 31, 2015, we owned approximately 74,000 square feet of improved real estate comprised of three livetheater buildings, which include approximately 16,000 square feet of leasable space, the fee interest in the Union Square property formallyused as a live theater, and the fee interest in our Cinemas 1, 2, 3 in Manhattan (held through a limited liability company in20 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.which we have a 75% managing member interest). We also own 202 acres of unimproved land in Coachella Valley, California, held througha limited liability company in which the Cotter Estate has a 50% non-managing member interest. As discussed above we purchased a property in Culver City to house our executive offices.Live TheatersIncluded among our real estate holdings are three Off-Broadway style live theaters, operated through our Liberty Theaters subsidiary. Welicense theater auditoriums to the producers of Off-Broadway theatrical productions and provide various box office and concessionservices. The terms of our licenses are, naturally, principally dependent upon the commercial success of our tenants. While we attempt tochoose productions that we believe will be successful, we have no control over the production itself. At the current time, we have twosingle-auditorium theaters in Manhattan:·the Minetta Lane (399 seats); and·the Orpheum (347 seats);We also own a four-auditorium theater complex, the Royal George in Chicago (main stage 452 seats, cabaret 199 seats, great room 100 seatsand gallery 60 seats), which has ancillary retail and office space.At the end of 2015, we closed our Union Square Theater as a part of our redevelopment of that property.Liberty Theaters is primarily in the business of renting theater space. However, we may from time-to-time participate as an investor in aplay, which can help facilitate the production of the play at one of our facilities, and do from time-to-time rent space on a basis that allowsus to share in a production’s revenue or profits. Revenue, expense, and profits are reported as a part of the real estate segment of ourbusiness.Joint Venture InterestsWe also hold real estate through several unincorporated joint ventures, two 75%-owned subsidiaries, and one majority-owned subsidiary, asdescribed below:·in Australia, we own a 75% interest in a subsidiary company that leases two cinemas with 11 screens in two Australian countrytowns, and a 33% unincorporated joint venture interest in a 16-screen leasehold cinema in a suburb of Brisbane. ·in New Zealand, we own a 50% unincorporated joint venture interest in two cinemas with 13 screens in the New Zealand cities ofAuckland and Dunedin. This Dunedin joint venture interest is in addition to our fee interest in our Dunedin six-screen Cinema.·In the United States, we own a 75% managing member interest in the limited liability company that owns our Cinemas 1,2,3property and a 50% managing member interest in Shadow View Land & Farming, LLC, which owns an approximately 202-acreproperty in Coachella, California that is currently zoned for residential and mixed use, and approved for approximately 550single-family lots. 21 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.OPERATING PROPERTYAs of December 31, 2015, we own fee interests in approximately 1,300,000 square feet of income-producing properties (including certainproperties principally occupied by our cinemas) as follows:PropertySquare Feet of Improvements(rental/entertainment)(1)PercentageLeased(2)Gross Book Value(3) (in USD)AddressIn United States1 Cinemas 1, 2, 3(4)0 / 21000N/A$25,041,416 1003 Third Avenue, Manhattan, NY2 Minetta Lane Theatre0 / 9000N/A$8,582,151 18-22 Minetta Lane, Manhattan, NY3 Orpheum Theatre1000 / 5000100%$3,617,926 126 2nd Street, Manhattan, NY4 Royal George16000 / 23000100%3,546,245 1633 N. Halsted Street, Chicago, ILplus a 55-space parkingstructure$In Australia1 Newmarket(5)126000 / 0100%$37,411,774 400 Newmarket Road, Newmarket, QLDplus a 521-space parkingstructure2 Auburn(5)60000 / 57000100%$26,531,321 100 Parramatta Road, Auburn, NSWplus a 871-space parkingstructure3 Cannon Park City Center36000 / 2800095%$17,465,973 High Range Drive, Thuringowa, Queensland4 Belmont15000 / 45000100%$11,422,186 Knutsford Avenue and Fulham Street,Belmont, WA5 Cannon Park DistributionCenter69000 / 0100%$6,986,132 High Range Drive, Thuringowa, Queensland6 York Street Office3000 / 5000N/A$2,149,622 98 York Street, South Melbourne, VIC7 Maitland Cinema0 / 22000N/A$1,733,329 Ken Tubman Drive, Maitland, NSW8 Bundaberg0 / 14000N/A$1,596,130 1 Johanna Boulevard, Bundaberg, QLDIn New Zealand1 Courtenay Central34000 / 7600070%$32,544,516 100 Courtenay Place, Wellingtonplus a 1,086-space parkingstructure2 Dunedin Cinema0 / 25000N/A$7,335,651 33 The Octagon, Dunedin3 Napier Cinema12000 / 18000100%$2,935,250 154 Station Street, Napier4 Invercargill Cinema9000 / 2400069%$2,703,722 29 Dee Street, Invercargill5 Rotorua Cinema0 / 19000N/A$2,519,445 1281 Eruera Street, Rotorua(1) Rental square footage refers to the amount of area available to be rented to third parties. A number of our real estate holdings include entertainment componentsrented to one or more of our subsidiaries at fair market rent. The rental area to such subsidiaries is noted under the entertainment square footage.(2) Represents the percentage of rental square footage currently leased to third parties.(3) Refers to the gross carrying cost of the land and buildings of the property.(4) Owned by a limited liability company in which we hold a 75% managing member interest. The remaining 25% is owned by Sutton Hill Capital, LLC (“SHC”), acompany owned in equal parts by the Cotter Estate or the Cotter Trust and a third party.(5) For further information on the developments of these properties, refer to succeeding section "Investment and Development Property".22 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.LONG-TERM LEASEHOLD OPERATING PROPERTYIn addition, in certain cases we have long-term leases that we view more akin to real estate investments than cinema leases. As of December31, 2015, we had approximately 155,000 square foot of space subject to such long-term leases as follows:PropertySquare Feet of Improvements(rental/entertainment)(1)Percentage Leased(2)Gross Book Value(3) (in USD)In United States1 Village East(4)4000 / 38000100%$9,899,556 2 Manville0 / 53000N/A$2,360,535 In Australia1 Waurn Ponds6000 / 38000100%$5,153,928 (1) Rental square footage refers to the amount of area available to be rented to third parties. A number of our real estate holdings include entertainment componentsrented to one or more of our subsidiaries at fair market rent. The rental area to such subsidiaries is noted under the entertainment square footage.(2) Represents the percentage of rental square footage currently leased to third parties.(3) Refers to the gross carrying cost of the land and buildings of the property.(4) The lease of the Village East provides for a call option pursuant to which Reading may purchase the cinema ground lease for $5.9 million at the end of the leaseterm in 2020. Additionally, the lease has a put option pursuant to which SHC may require Reading to purchase all or a portion of SHC's interest in the existingcinema lease and the cinema ground lease at any time between July 1, 2013 and December 4, 2019. See Note 18 - Related Parties and Transactions to our2015 consolidated financial statements.INVESTMENT AND DEVELOPMENT PROPERTYWe are engaged in several investment and development projects relative to our currently undeveloped parcels of land. In addition, weanticipate that redevelopment of one or more of our existing developed properties may also occur. The following table summarizes ourinvestment and development projects as of December 31, 2015:Property(1)AcreageGross BookValue(2)(in USD)StatusIn United States1 Union Square Theatre0.27$$11,818,622 We closed down the live theatre business and terminated other thirdparty retail tenants in order to actively pursue the development ofthis property.2 Coachella, CA202.00$$5,510,000 We continue to evaluate our options with regards to this property.In Australia1 Burwood, VIC50.60$$37,966,107 Property was contracted to sell in 2014. Currently classified as anAsset Held for Sale.2 Newmarket, QLD0.62$$4,257,504 We are actively pursuing the development of this property. We haveobtained approvals for the construction of an eight-screen cinema,10,297 square foot of additional retail and 142 car parks. It isanticipated that construction will commence later this year and becompleted by the fourth quarter 2017. In addition, we haveacquired an additional 23,000 square foot parcel of land locatedadjacent to the center, which is currently improved with a 22,000square foot office building. We intend, over time, to incorporatethis property into our center.3 Auburn, Sydney,NSW0.00$$1,902,000 We are actively pursuing the development of the next phase of thisproperty, and in 2015 entered into agreements to leaseapproximately 15,000 square feet of to-be-built retail space. It isanticipated that construction will commence later this year and becompleted by the first quarter 2017. The center still hasapproximately 108,000 square foot of land area available fordevelopment.23 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In New Zealand1 Manukau, Auckland64.0 acres zoned agricultural and 6.4acres zoned light industrial$$11,789,099 The bulk of the land is zoned for agriculture and is currently usedfor horticultural commercial purposes. A development plan hasbeen filed to rezone the property for warehouse, distribution andmanufacturing uses. We currently anticipate that this rezoning willbe approved. In 2010, we acquired an adjacent property that iszoned industrial, but is currently unimproved. That property linksour existing parcel with the existing road network.2 Courtenay Central,Wellington (includingWakefield andTaranaki)1.1$$6,375,555 We are actively pursuing the development of the next phase of thisproperty, having signed a lease agreement for a Countdownsupermarket to be developed on this site. The construction budgetshave been agreed between the parties, and we currently estimate thatconstruction will commence in the third quarter 2016, lookingtowards a completion date of the fourth quarter 2017. In addition,we are adding approximately 4,000 square feet of general retailspace.(1) A number of our real estate holdings include additional land held for development. In addition, we have acquired certain parcels for future development.(2) Includes, as applicable, the land, building, development costs, and capitalized interest of the property.Some of our income operating properties and our investment and development properties carry various debt encumbrances based on theirincome streams and geographic locations. For an explanation of our debt and the associated security collateral please see Note 10 – Debt toour 2015 consolidated financial statements.OTHER PROPERTY INTERESTS AND INVESTMENTSWe own the fee interest in 11 parcels comprising 195 acres in Pennsylvania and Delaware. These acres consist primarily of vacant land.With the exception of certain properties located in Philadelphia (including the raised railroad bed leading to the old Reading RailroadStation), the properties are principally located in rural areas of Pennsylvania and Delaware. These properties are unencumbered by any debt. Item 3 – Legal ProceedingsTAX AUDIT/LITIGATIONThe Internal Revenue Service (the “IRS”) examined the tax return of Craig Corporation (“CRG”) for its tax year ended June 30, 1997. CRGwas a stand-alone entity in the year of audit but is now a wholly-owned subsidiary of the Company. In Tax Court, CRG and the IRS agreedto compromise the claims made by the IRS against CRG, and the court order was entered on January 6, 2011. As of December 31, 2015, theremaining federal tax obligation was $2.5 million, reflecting additional interest accrued during the term of the four year installmentplan. For additional information, see Note 9 – Income Taxes.ENVIRONMENTAL AND ASBETOS CLAIMSCertain of our subsidiaries were historically involved in railroad operations, coal mining, and manufacturing. Also, certain of thesesubsidiaries appear in the chain-of-title of properties that may suffer from pollution. Accordingly, certain of these subsidiaries have, fromtime-to-time, been named in and may in the future be named in various actions brought under applicable environmental laws. Also, we arein the real estate development business and may encounter from time-to-time unanticipated environmental conditions at properties that wehave acquired for development. These environmental conditions can increase the cost of such projects and adversely affect the value andpotential for profit of such projects. We do not currently believe that our exposure under applicable environmental laws is material inamount.From time-to-time, we have claims brought against us relating to the exposure of former employees of our railroad operations to asbestosand coal dust. These are generally covered by an insurance settlement reached in September 1990 with our insurance carriers. However, thisinsurance settlement does not cover litigation by people who were not our employees and who may claim second-hand exposure toasbestos, coal dust and/or other chemicals or elements now recognized as potentially causing cancer in humans. Our known exposure tothese types of claims, asserted or probable of being asserted, is not material.24 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.DERIVATIVE LITIGATION AND JAMES J. COTTER, JR. ARBITRATIONOn June 12, 2015, the Board of Directors terminated James J. Cotter, Jr. as the President and Chief Executive Officer of our Company. Thatsame day, Mr. Cotter, Jr. filed a lawsuit, styled as both an individual and a derivative action, and titled “James J. Cotter, Jr., individuallyand derivatively on behalf of Reading International, Inc. vs. Margaret Cotter, et al.” Case No,: A-15-719860-V, Dept XI (the “Cotter Jr.Derivative Action” and the “Cotter, Jr. Complaint,” respectively) against the Company and each of our other than sitting Directors (EllenCotter, Margaret Cotter, Guy Adams, William Gould, Edward Kane, Douglas McEachern, and Tim Storey, the “Defendant Directors”) in theEighth Judicial District Court of the State of Nevada for Clark County (the “Nevada District Court”). On October 22, 2015, Mr. Cotter, Jr.,amended his complaint to drop his individual claims (the “Amended Cotter Jr. Derivative Complaint”). Accordingly, the Amended Cotter,Jr. Complaint presently purports to assert only purportedly derivative claims and to seek remedies only on behalf of the Company. Thelawsuit currently alleges, among other things, that the Defendant Directors breached their fiduciary duties to the Company byterminating Mr. Cotter, Jr. as President and Chief Executive Officer, continuing to make use of the Executive Committee that has been inplace for more than the past ten years, making allegedly potentially misleading statements in its press releases and filings with theSecurities and Exchange Commission (“SEC”), paying certain compensation to Ms. Ellen Cotter, and allowing the Cotter Estate to makeuse of Class A Common Stock to pay for the exercise of certain long outstanding stock options held of record by the Cotter Estate. Heseeks reinstatement as President and CEO and alleges as damages fluctuations in the price for our Company’s shares after the announcementof his termination as President and CEO and certain unspecified damages to our Company’s reputation.In a derivative action, the stockholder plaintiff seeks damages or other relief for the benefit of the Company, and not for the stockholderplaintiff’s individual benefit. Accordingly, the Company is, at least in theory, only a nominal defendant in such a derivativeaction. However, as a practical matter, because Mr. Cotter, Jr. is also seeking, among other things, an order that our Board’s determinationto terminate Mr. Cotter Jr. was ineffective and that he be reinstated as the President and CEO of the Company and also that our Board’sExecutive Committee be disbanded (an injunctive remedy that, if granted, would be binding on the Company), and as he asserts potentiallymisleading statements in certain press releases and filings with the SEC, the Company is incurring significant cost and expense defendingthe decision to terminate Mr. Cotter, Jr. as President and Chief Executive Officer, its board committee structure, and the adequacy of thosepress releases and filings. Also, the Company continues to incur costs promulgating and responding to discovery demands and satisfyingindemnity obligations to the Defendant Directors.Our directors and officers liability insurer is providing insurance coverage, subject to a $500,000 deductible (which has now beenexhausted) and its standard reservation of rights, with respect to the defense of the Director Defendants. Our new Directors, Dr. JudyCodding and Mr. Michael Wrotniak, are not named in the Cotter Jr. Derivative Action as they were not Directors at the time of the breachesof fiduciary duty alleged by Mr. Cotter, Jr.Pursuant to the terms of Mr. Cotter Jr.’s employment agreement with the Company, disputes relating to his employment are to bearbitrated. Accordingly, on July 14, 2015, the Company filed an arbitration demand with the American Arbitration Association against Mr.Cotter, Jr. The demand seeks declaratory relief, among other things, that Mr. Cotter, Jr.'s employment and employment agreement with theCompany have been validly terminated and that the Board of Directors validly removed him from his positions as Chief Executive Officerand President of the Company and positions with the Company’s subsidiaries.Mr. Cotter, Jr. has filed a counter-complaint in the arbitration, asserting claims for breach of his employment contract, declaratory relief, andcontractual indemnification. Mr. Cotter, Jr.’s counsel has advised that Mr. Cotter is seeking a variety of damages, including consequentialdamages, and that such claimed damages total not less than $1,000,000. On April 19, 2016, Mr. Cotter, Jr. filed an action in the DistrictCourt, Clark County, Nevada seeking to recover his costs of defending the Arbitration, plus compensatory damages and interest at themaximum legal rate. The Company intends to vigorously defend these claims.On August 6, 2015, the Company received notice that a Motion to Intervene in the Cotter Jr Derivative Action and a proposed derivativecomplaint had been filed in the Nevada District Court captioned T2 Partners Management, LP, a Delaware limited partnership, doingbusiness as Kase Capital Management; T2 Accredited Fund, LP, a Delaware limited partnership, doing business as Kase Fund; T2 QualifiedFund, LP, a Delaware limited partnership, doing business as Kase Qualified Fund; Tilson Offshore Fund, Ltd, a Cayman Islands exemptedcompany; T2 Partners Management I, LLC, a Delaware limited liability company, doing business as Kase Management: T2 PartnersManagement Group, LLC, a Delaware limited liability company, doing business as Kase Group; JMG Capital Management, LLC, aDelaware limited liability company, Pacific Capital Management, LLC, a Delaware limited liability company, derivatively on behalf ofReading International, Inc. vs. Margaret Cotter, Ellen Cotter, Guy Adams, Edward Kane, Douglas McEachern, Timothy Storey, WilliamGould and Does 1 through 100, inclusive, as defendants, and, Reading International, Inc., a Nevada corporation, as Nominal Defendant (the“T2 Derivative Action” ). On August 11, 2015, the Court granted the motion of T2 Partners Management, LP et. al. (the “T2 Plaintiffs”),allowing these plaintiffs to file their complaint (the “T2 Derivative Complaint”).25 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.On September 9, 2015, certain of the Defendant Directors filed a Motion to Dismiss the T2 Derivative Complaint. The Company joined thisMotion to Dismiss on September 14, 2015. The hearing on this Motion to Dismiss was vacated as the T2 Plaintiffs voluntarily withdrew theT2 Derivative Complaint, with the parties agreeing that T2 Plaintiffs would have leave to amend the Complaint. On February 12, 2016,The T2 plaintiff filed an amended T2 Derivative Complaint (the “Amended T2 Derivative Complaint”).The T2 Plaintiffs allege in their Amended T2 Derivative Complaint various violations of fiduciary duty, abuse of control, grossmismanagement and corporate waste by the Defendant Directors. More specifically the T2 Derivative Complaint seeks the reinstatement ofJames J. Cotter, Jr. as President and Chief Executive Officer and certain monetary damages, as well as equitable injunctive relief, attorneyfees and costs of suit. Once again, the Company has been named as a nominal defendant. However, because the T2 Derivative Complaintalso seeks the reinstatement of Mr. Cotter, Jr., as our President and CEO, it is being defended by the Company. In addition, the Companycontinues to incur costs promulgating and responding to discovery demands and satisfying indemnity obligations to the DefendantDirectors. The Defendant Directors are the same as named in the Cotter Jr. Derivative Action as well as our two new Directors Dr. JudyCodding and Michael Wrotniak and Company legal counsel, Craig Tompkins. The cost of the defense of Directors Codding and Wrotniakis likewise being covered by our Directors and officer’s liability insurance carrier with the same reservations of right as in the Cotter Jr.Derivative Action, but without any separate deductible. The cost of the defense of Mr. Tompkins is being covered by the Company underits indemnity agreement with him.The Amended T2 Derivative Complaint has deleted its request for an order disbanding our Executive Committee and for an order“collapsing the Class A and B stock structure into a single class of voting stock.” The Amended T2 Complaint has added a request for anorder setting aside the election results from the 2015 Annual Meeting of Stockholders, based on an allegation that Ellen Cotter andMargaret Cotter were not entitled to vote the shares of Class B Common Stock held of record by the Cotter Estate and the Cotter Trust. TheCompany and the other defendants contest the allegations of the T2 Plaintiffs. The Company followed applicable Nevada law inrecognizing that Ellen Cotter and Margaret Cotter had the legal right and power to vote the shares of Class B Common Stock held of recordby the Cotter Estate and the Cotter Trust, and the independent Inspector of Elections has certified the results of that election. Furthermore,even if the election results were to be overturned or voided, this would have no impact on the current composition of our Board or anyaction taken by our Board since our 2015 Annual Meeting of Stockholders, as all of the nominees were standing for re-election andaccordingly retain their directorships until their replacements are elected. The Company will vigorously contest any assertions by the T2Plaintiffs challenging the voting at the 2015 Annual Meeting of Stockholders and believes that the court will rule for the Company shouldthis issue ever reach the court. The case is currently set for trial in November, 2016. The T2 Plaintiffs have not sought any expeditedruling from the Court with respect to their assertions that Ellen Cotter and Margaret Cotter did not have the right and power to vote theshares of Class B Common Stock held of record by the Cotter Estate and the Cotter Trust.The Company believes that the claims set forth in the Amended Cotter Jr. Derivative Complaint and the Amended T2 Derivative Complaintare entirely without merit and seek equitable remedies for which no relief can be given. The Company intends to defend vigorously againstany claims against our officers and directors and against any attempt to reinstate Mr. Cotter, Jr. as President and Chief Executive Officer orto effect any changes in the rights of our Company’s stockholders. THE STOMP ARBITRATIONIn April 2015, Liberty Theatres, LLC (“Liberty”), a wholly owned subsidiary of the Company, commenced an American ArbitrationAssociation arbitration proceeding (Case No.:01-15-0003-3728) against The Stomp Company Limited Partnership (the “Producer”) inresponse to the Producer’s purported termination of their license agreement with Liberty relating to the long playing show STOMP. Libertysought specific performance, injunctive and declaratory relief and damages. The Producer counterclaimed for unspecified damages,alleging that Liberty has interfered with the Producer’s endeavors to move the show to another Off-Broadway theater. The Producer basedits purported termination of the license agreement upon the alleged deficient condition of the Orpheum Theater, in which STOMP has beenplaying for more than the past 20 years.On December 18, 2015, the Arbitrator issued his Partial Final Award of Arbitration, providing for, among other things (i) the issuance of apermanent injunction prohibiting the Producer from “transferring or taking actions to market, promote, or otherwise facilitate any transferof, STOMP to another theatre in New York City having fewer than 500 seats without Liberty’s prior written consent”, (ii) the Producer’sNotice of Termination purportedly terminating the parties’ license agreement was invalid, null and void and the License Agreementremains in full force and effect, and (iii) the award to Liberty of its reasonable attorneys’ fees in an amount to be determined by theArbitrator. The Company expects the final award of attorneys’ fees to be decided during the second quarter of 2016.In explaining his decision to award Liberty its reasonable attorneys’ fees, the Arbitrator stated as follows: “Liberty is entitled to such anaward [of attorneys’ fees] not only because it is the prevailing party in this proceeding, but because [the Producer] unfairly disparaged theOrpheum and caused Liberty to incur attorneys’ fees in order to address and resolve [the Producer’s] groundless and26 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.frivolous allegations with respect to the Orpheum’s condition, Liberty’s performance under the License Agreement, and Stomp’s reasons forseeking to transfer STOMP to a larger theatre.”27 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART II Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMARKET INFORMATIONThe following table sets forth the high and low closing prices of the RDI and RDIB common stock for each of the quarters in 2015 and 2014as reported by NASDAQ:Class A StockClass B Stock​HighLowHighLow2015 4th Quarter$16.21 $13.11 $17.81 $11.15 3rd Quarter14.15 11.78 15.50 13.00 2nd Quarter14.06 13.07 15.20 13.00 1st Quarter13.65 11.97 13.79 12.16 2014(1) 4th Quarter$13.26 $8.31 $13.00 $9.50 3rd Quarter8.84 8.00 11.50 9.70 2nd Quarter8.92 6.96 10.87 8.11 1st Quarter7.60 7.15 10.23 9.00 As of December 31, 2015, the approximate number of common stockholders of record was 2,200 for Class A stock and 350, for Class Bstock. On April 25, 2016, the closing price per share of our Class A Stock and Class B stock was $12.79 and $11.65, respectively.We have never declared a cash dividend on our common stock and we have no current plans to declare a dividend; however, we review thismatter on an ongoing basis.The following table summarizes the securities authorized for issuance under our equity compensation plans:Number of securities to be issuedupon exercise of outstanding options,warrants, and rightsWeighted-averageexercise price ofoutstanding options,warrants, and rightsNumber of securities remainingavailable for future issuance underequity compensation plansEquity compensation plans approved bysecurity holders486,565 $8.68 551,800 28 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Performance GraphThe following line graph compares the cumulative total stockholder return on Reading International, Inc.’s common stock for the five-yearperiod ended December 31, 2015 against the cumulative total return as calculated by the NASDAQ composite, a peer group of publiccompanies engaged in the motion picture theater operator industry and a peer group of public companies engaged in the real estate operatorindustry. Measurement points are the last trading day for each of the five years ended December 31, 2015. The graph assumes that $100 wasinvested on December 31, 2010 in our common stock, the NASDAQ composite and the noted peer groups, and assumes reinvestment of anydividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED SECURITIESNone.PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSIn May 2014, our Board of Directors authorized a stock buy-back program to spend up to an aggregate of $10.0 million to acquire shares ofthe Company’s common stock. As part of this program, during 2015, we purchased 240,102 Class A Non-voting shares on the open marketfor $3.1 million for a weighted average price of $12.95 per share. As of December 31, 2015, approximately $2.8 million may yet bepurchased under the program.Also in 2015, a number of executives chose to net settle their share options with the Company, as allowed by our share option plan. Thisresulted in the Company issuing 52,777 Class A Non-voting shares. As part of this transaction the Company also remitted $201,000 oftaxes on their behalf. The Company also acquired an additional 141,288 Class A Non-voting shares as payment on the excise of 185,100class B voting stock options that had a combined exercise price of $1.8 million.29 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 6 – Selected Financial DataThe table below sets forth certain historical financial data regarding our Company. This information is derived in part from, and should beread in conjunction with, our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for the year endedDecember 31, 2015 (the “2015 Annual Report”), and the related notes to the consolidated financial statements.($ in thousands, except per share data)20152014201320122011Statement of operationsRevenue$257,323 $254,748 $258,221 $254,430 $244,979 Operating income23,154 22,173 20,935 19,127 18,178 Income (loss) from discontinued operations------(405)1,888 Net income (loss) attributable to RDI22,773 25,701 9,041 (914)9,956 Per common share Net income/(loss) attributed to RDI Basic EPS$0.98 $1.10 $0.39 $(0.04)$0.44 Diluted EPS0.97 1.08 0.38 (0.04)0.43 Balance sheetTotal assets$375,091 $401,586 $386,807 $428,588 $430,764 Total debt130,941 164,036 168,460 196,597 209,614 Working capital (deficit)(38,514)(15,119)(75,067)(25,074)(14,829)Stockholders’ equity137,196 132,298 121,747 130,954 124,987 Statement of cash flowsCash provided by (used): Operating activities$28,574 $28,343 $25,183 $25,496 $24,253 Investing activities(29,710)(9,898)(6,142)(6,095)(3,768) Financing activities(27,961)(3,275)(17,775)(12,719)(23,411)Other InformationEBIT$35,020 $24,916 $24,020 $20,416 $18,664 Depreciation and amortization$14,562 $15,468 $15,197 $16,049 $16,595 Add: Adjustments for discontinued operations$--$--$--$335 $365 EBITDA49,582 40,384 39,217 36,800 35,624 Debt to EBITDA2.64 4.06 4.30 5.34 5.88 Capital expenditure (including acquisitions)53,119 14,914 20,082 13,723 9,376 Shares outstanding23,334,892 23,237,076 23,385,519 23,083,265 22,806,838 Weighted average - basic23,293,696 23,431,855 23,348,003 23,028,596 22,764,666 Weighted average - diluted23,495,618 23,749,221 23,520,271 23,028,596 22,993,135 Number of employees at 12/312,712 2,596 2,494 2,412 2,263 Both EBIT and EBITDA are non-US GAAP measures and are presented for informational purposes. They should not be construed as analternative to net earnings (loss), as an indicator of operating performance or as an alternative to cash flow provided by operating activitiesas a measure of liquidity (as determined in accordance with US GAAP). These measures should be reviewed in conjunction with therelevant US GAAP financial measures. EBIT and EBITDA as we have calculated them may not be comparable to similarly titled measuresreported by other companies.EBIT presented above represents net income (loss) adjusted for interest expense (net of interest income), income tax expense and anadjustment of interest expense for discontinued operations, if any. EBIT is useful in evaluating our operating results for the followingreasons:·EBIT removes the impact of the varying tax rates and tax regimes in the jurisdictions where we operate and the impact of taxtiming differences that may vary from time-to-time and from jurisdiction-to-jurisdiction30 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.·EBIT removes the impact from our effective tax rate of factors not directly related to our business operations, such as whether wehave acquired operating assets by purchasing those assets directly, or indirectly by purchasing the stock of a company that holdssuch operating assets.·EBIT removes the impact of our historically significant net loss carry-forwards.·EBIT allows a better performance comparison between RDI and other companies. For example, it allows us to compare ourselveswith other companies that may have more or less debt than we do.We define EBITDA as net income adjusted for interest expense (net of interest income), income tax expense, depreciation and amortizationexpense, and an adjustment of interest expense, depreciation, and amortization for discontinued operations, if any. EBITDA is usefulprincipally for the following reasons:·EBITDA is an industry comparative measure of financial performance. Analysts and financial commentators who report on thecinema exhibition and real estate industries often use EBITDA to determine the valuation of a company in such industries. ·EBITDA is a measure used by financial institutions to determine the credit rating of companies in cinema exhibition and realestate industries. Reconciliation of EBIT and EBITDA to net income is presented below:($ in thousands)20152014201320122011Net income (loss) attributable to RDI$22,773 $25,701 $9,041 $(914)$9,956 Add: Interest expense, net7,304 9,000 10,037 16,426 21,038 Add: Income tax (benefit) expense4,943 (9,785)4,942 4,904 (12,330)EBIT$35,020 $24,916 $24,020 $20,416 $18,664 Add: Depreciation and amortization14,562 15,468 15,197 16,049 16,595 Adjustments for discontinued operations------335 365 EBITDA$49,582 $40,384 $39,217 $36,800 $35,624 31 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 7 – Management’s Discussions and Analysis of Financial Condition and Results of OperationsOrganization of InformationManagement’s Discussion and Analysis provides a narrative on the Company’s financial performance and condition that should be read inconjunction with the accompanying financial statements. It includes the following sections:·Forward-Looking Statements·Company Overview·Cinema Activities·Consolidated Results and Non-Segment Results·Business Segment Results·Business Plan, Liquidity and Capital Resources·Contractual Obligations, Commitments and Contingencies·Financial Risk Management·Critical Accounting Policies and EstimatesFORWARD LOOKING STATEMENTSOur statements in this annual report, including the documents incorporated herein by reference, contain a variety of forward-lookingstatements as defined by the Securities Litigation Reform Act of 1995. Forward-looking statements reflect only our expectations regardingfuture events and operating performance and necessarily speak only as of the date the information was prepared. No guarantees can begiven that our expectation will in fact be realized, in whole or in part. You can recognize these statements by our use of words such as, byway of example, “may,” “will,” “expect,” “believe,” and “anticipate” or other similar terminology.These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on ourcurrent beliefs, expectations and assumptions regarding the future of our business, future plans and strategies after having considered avariety of risks and uncertainties. Forward-looking statements are necessarily the product of internal discussion and do not necessarilycompletely reflect the views of individual members of our Board of Directors or of our management team. Individual Board members andindividual members of our management team may have a different view as to the risks and uncertainties involved, and may have differentviews as to future events or our operating performance.Among the factors that could cause actual results and our financial condition to differ materially from those expressed in or underlying ourforward-looking statements are the following:·with respect to our cinema operations:othe number and attractiveness to movie goers of the films released in future periods;othe amount of money spent by film distributors to promote their motion pictures;othe licensing fees and terms required by film distributors from motion picture exhibitors in order to exhibit their films;othe comparative attractiveness of motion pictures as a source of entertainment and willingness and/or ability of consumers(i) to spend their dollars on entertainment and (ii) to spend their entertainment dollars on movies in an outside-the-homeenvironment;othe extent to which we encounter competition from other cinema exhibitors, from other sources of outside-the-homeentertainment, and from inside-the-home entertainment options, such as “home theaters” and competitive film productdistribution technology, such as, by way of example, cable, satellite broadcast and Blu-ray/DVD rentals and sales, and socalled “movies on demand;” andothe extent to, and the efficiency with, which we are able to integrate acquisitions of cinema circuits with our existingoperations.·with respect to our real estate development and operation activities:othe rental rates and capitalization rates applicable to the markets in which we operate and the quality of properties that weown;othe extent to which we can obtain on a timely basis the various land use approvals and entitlements needed to developour properties;othe risks and uncertainties associated with real estate development;othe availability and cost of labor and materials;ocompetition for development sites and tenants;oenvironmental remediation issues;32 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.othe extent to which our cinemas can continue to serve as an anchor tenant that will, in turn, be influenced by the samefactors as will influence generally the results of our cinema operations; andocertain of our activities are in geologically active areas, creating a risk of damage and/or disruption of real estate and/orcinema businesses from earthquakes.·with respect to our operations generally as an international company involved in both the development and operation of cinemasand the development and operation of real estate; and previously engaged for many years in the railroad business in the UnitedStates:oour ongoing access to borrowed funds and capital and the interest that must be paid on that debt and the returns that mustbe paid on such capital;othe relative values of the currency used in the countries in which we operate;ochanges in government regulation, including by way of example, the costs resulting from the implementation of therequirements of Sarbanes-Oxley;oour labor relations and costs of labor (including future government requirements with respect to pension liabilities,disability insurance and health coverage, and vacations and leave);oour exposure from time-to-time to legal claims and to uninsurable risks, such as those related to our historic railroadoperations, including potential environmental claims and health-related claims relating to alleged exposure to asbestos orother substances now or in the future recognized as being possible causes of cancer or other health related problems;ochanges in future effective tax rates and the results of currently ongoing and future potential audits by taxing authoritieshaving jurisdiction over our various companies; andochanges in applicable accounting policies and practices.The above list is not necessarily exhaustive, as business is by definition unpredictable and risky, and it is subject to influence by numerousfactors outside of our control, such as changes in government regulation or policy, competition, interest rates, supply, technologicalinnovation, changes in consumer taste, the weather, and the extent to which consumers in our markets have the economic wherewithal tospend money on beyond-the-home entertainment.Given the variety and unpredictability of the factors that will ultimately influence our businesses and our results of operation, it naturallyfollows that no guarantees can be given that any of our forward-looking statements will ultimately prove to be correct. Actual results willundoubtedly vary and there is no guarantee as to how our securities will perform either when considered in isolation or when compared toother securities or investment opportunities.Finally, we undertake no obligation to update publicly or to revise any of our forward-looking statements, whether as a result of newinformation, future events or otherwise, except as may be required under applicable law. Accordingly, you should always note the date towhich our forward-looking statements speak.Additionally, certain of the presentations included in this annual report may contain “non-US GAAP financial measures.” In such case, areconciliation of this information to our US GAAP financial statements will be made available in connection with such statements.COMPANY OVERVIEWWe are an internationally diversified company principally focused on the development, ownership, and operation of entertainment and realestate assets in the United States, Australia, and New Zealand. Currently, we operate in two business segments:·Cinema exhibition, through our 58 multiplex cinemas; and·Real estate, including real estate development and the rental of retail, commercial and live theater assets.We believe that these two business segments can complement one another, as we can use the comparatively consistent cash flows generatedby our cinema operations to fund the front-end cash demands of our real estate development business.We manage our worldwide cinema exhibition businesses under various brands:·in the U.S., under the following brands: Reading Cinemas, Angelika Film Centers, Consolidated Theatres, and City Cinemas;·in Australia, under the Reading Cinemas brand; and·in New Zealand, under the Reading Cinemas and Rialto brands.33 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CINEMA ACTIVITIESWe believe the cinema business to be one that will likely continue to generate fairly consistent cash flows in the years ahead, even in arecessionary or inflationary environment. This is based on our belief that people will continue to spend some reasonable portion of theirentertainment dollar on entertainment outside of the home and that, when compared to other forms of outside-the-home entertainment,movies continue to be a popular and competitively priced option. Because we believe the cinema exhibition business to be a maturebusiness with most markets either adequately screened or over-screened, we see growth in our cinema business coming principally from (i)the enhancement of our existing cinemas (for example, by the addition of luxury seating and expanding our food and beverage offerings),(ii) the development in select markets of specialty cinemas, and (iii) the opportunistic acquisition of already existing cinemas, rather thanfrom the development of new conventional cinemas. From time-to-time, we invest in the securities of other companies, where we believe thebusiness or assets of those companies to be attractive or to offer synergies to our existing entertainment and real estate businesses. Wecontinue to focus on the development and redevelopment of our existing assets (particularly our New York assets and our Angelika FilmCenter chain), as well as to continue to be opportunistic in identifying and endeavoring to acquire undervalued assets, particularly assetswith proven cash flow and that we believe to be resistant to recessionary trends.We see ourselves principally as a geographically diversified real estate and cinema exhibition company and intend to add to stockholdervalue by building the value of our portfolio of tangible assets, including both entertainment and other types of land and “brick and mortar”assets. We endeavor to maintain a reasonable asset allocation between our domestic and international assets and operations, and betweenour cash-generating cinema operations and our cash-consuming real estate investment and development activities. We believe that, byblending the cash generating capabilities of a cinema operation with the investment and development opportunities of our real estateoperations, our business strategy is unique among public companies.Business ClimateCinema Exhibition - GeneralAlong with the majority of our industry, we have completed the conversion of all of our U.S., Australia, and New Zealand cinema operationsto digital exhibition. We anticipate that the cost of this conversion will be covered in substantial part by the receipt of “virtual print fees”paid by film distributors for the use of such digital projection equipment.The “in-home” entertainment industry has experienced significant leaps in recent periods in both the quality and affordability of in-homeentertainment systems and in the accessibility to and quality of entertainment programming through alternative film distribution channels,such as network, cable, satellite, internet distribution channels, and Blu-ray/DVD. The success of these alternative distribution channelsputs additional pressure on film distributors to reduce and/or eliminate the time period between theatrical and secondary release dates.These are issues common to both our U.S. and international cinema operations. Certain new entrants to the cinema exhibition market, as well as certain of our historic competitors, have begun to develop new, and toreposition existing, cinemas that offer a broader selection of premium seating and food and beverage choices. These include, in some cases,food service to the seat and the offering of alcoholic beverages. We have for some years offered premium seating, café food selections andalcoholic beverages in certain cinemas. Accordingly, we are experienced in, and believe that we can compete effectively with, thisemerging competition. We are currently reviewing the potential for further expanding our offerings at a variety of our cinemas.Cinema Exhibition – Australia / New ZealandThe film exhibition industry in Australia and New Zealand is highly concentrated in that Village, Event, and Hoyts (the “MajorExhibitors”) control approximately 65% of the cinema box office in Australia, while Event and Hoyts control approximately 56% of NewZealand’s cinema box office. The industry is also vertically integrated in that one of the Major Exhibitors, Roadshow Film Distributors(part of Village), also serves as a distributor of film in Australia and New Zealand for Warner Bros. Films produced or distributed by themajority of the local international independent producers are also distributed by Roadshow. Typically, the Major Exhibitors own the newermultiplex and megaplex cinemas, while the independent exhibitors typically have older and smaller cinemas. In addition, the MajorExhibitors have in recent periods built a number of new multiplexes as joint venture partners or under shared facility arrangements, andhave historically not engaged in head-to-head competition. Cinema Exhibition – North AmericaIn North America, distributors may find it more commercially appealing to deal with major exhibitors, rather than to deal with independentslike us, which tends to compress the supply of screens in a very limited number of markets. This competitive disadvantage has increasedsignificantly in recent periods, with the development of mega-circuits like Regal and AMC, who are able34 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.to offer distributors access to screens on a truly nationwide basis, or, on the other hand, to deny access if their desires with respect to filmsupply are not satisfied. These consolidations can adversely affect our ability to get film in certain U.S. markets where we compete against major exhibitors. Withthe restructuring and consolidation undertaken in the industry, and the emergence of increasingly attractive “in-home” entertainmentalternatives, strategic cinema acquisitions by our U.S. operation have and can continue to be a way to combat such a competitivedisadvantage. Real Estate – Australia and New ZealandOver the past few years, there has been a noted stabilization in real estate market activity resulting in some increases to commercial andretail property values in Australia and to a lesser extent in New Zealand. Both countries have relatively stable economies with varyingdegrees of economic growth that are mostly influenced by global trends. Also, we have noted that our Australian and New Zealanddeveloped properties have had consistent growth in rentals and values, and we have a number of projects commencing. Once developed, weremain confident that our Australian and New Zealand holdings will continue to provide value and cash flows to our operations.Real Estate – North AmericaThe commercial real estate market has improved significantly over the past three years, and we have noted strengthening rental incomeassociated with our real estate located in large urban environments.Business SegmentsAs indicated above, our two primary business segments are cinema exhibition and real estate. These segments are summarized as follows:Cinema ExhibitionOne of our primary businesses consists of the ownership and operation of cinemas. For a breakdown of our current cinema assets that weown and/or manage please see Item 1 – Our Business of this 2015 Annual Report under the subheading “Operating Information – CinemaExhibition.”In September 2015, we reopened a completely refurbished state-of-the-art cinema complex in Harbourtown, Australia. In October 2015, wereopened the twelve-screen Angelika Film Center & Cafe, a state-of-the-art luxury cinema, located at Carmel Mountain Plaza in SanDiego. Finally, in November 2015, we opened the new state-of-the-art eight-screen Reading Cinemas LynnMall, our first Reading brandedAuckland cinema complex, in New Lynn, New Zealand.In October 2015, at the end of our lease period, we closed our Redbank cinema, in Queensland Australia.During 2014, we opened a three-screen Angelika Pop-Up! at Union Market in Washington, D.C., as well as a six-screen complex inDunedin, New Zealand.In December 2013, we acquired a five-screen cinema in Plano, Texas that we previously had managed since 2003. Our cinema revenue consists primarily of admissions, concessions, advertising and theater rentals. The cinema operating expense consistsof the costs directly attributable to the operation of the cinemas, including film rent expense, operating costs, and occupancy costs. Cinemarevenue and expense fluctuate with the availability of quality first-run films and the numbers of weeks the first–run films stay in the market.Real EstateFor 2015, our income operating property consisted of the following:·our Belmont, Western Australia ETC, our Auburn, New South Wales ETC and our Wellington, New Zealand ETC;·our Newmarket shopping center in Newmarket, Queensland, a suburb of Brisbane;·three single-auditorium live theaters in Manhattan (Minetta Lane, Orpheum, and Union Square) and a four-auditorium live theatercomplex in Chicago (The Royal George) and, in the case of the Union Square and the Royal George, their accompanying ancillaryretail and commercial tenants; at the end of December 2015, the Union Square building was closed in connection with theproposed redevelopment of the building; ·Australian commercial properties rented to unrelated third parties, to be held for current income and long-term appreciation; and35 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.·the ancillary retail and commercial tenants at some of our non-ETC cinema properties.In addition, we had various parcels of unimproved real estate held for development in Australia and New Zealand and certain unimprovedland in the United States including some that was used in our historic activities. We also own an 8,100 square foot commercial building inMelbourne, which serves as our administrative headquarters for Australia and New Zealand, approximately 36% of which is leased to anunrelated third party.AcquisitionsOperating AssetsCannon Park, AustraliaIn December 2015, we acquired two adjoining entertainment themed centers in Townsville, Queensland, Australia for a total of $24.3million (AU$33.6 million). The total gross leasable area of the two adjoining properties, the Cannon Park City Centre and the Cannon ParkDiscount Centre, is 133,000 square feet. The Cannon Park City Centre is anchored by a Reading Cinema, which is owned by ReadingInternational’s 75% owned subsidiary, Australia Country Cinemas, and has three mini-major tenants and ten specialty family orientedrestaurant tenants. The Cannon Park Discount Centre is anchored by Kingpin Bowling and supported by four other retailers. The propertiesare located approximately 0.6 miles from downtown Townsville, the second largest city in Queensland, Australia. For additionalinformation, see Note 4 – Acquisitions, Disposals, and Assets Held for Sale – 2015 Transactions – Cannon Park, Queensland, Australia. Newmarket, AustraliaIn November 2015, we acquired a commercial building in Newmarket adjacent to our Newmarket shopping complex currently improvedwith an office building. The total cost of the acquisition was $5.5 million (AU$7.6 million). Our intention is that this parcel will ultimatelybe integrated into our Newmarket Shopping Center. See Note 4 – Acquisitions, Disposals, and Assets Held for Sale – 2015 Transactions –Cannon Park, Queensland, Australia.Plano, TexasIn December 2013, we settled a management fee claim that we had against the owner of the Plano, Texas cinema that we had managed since2003 for a cash receipt of $1.9 million. As part of the settlement, we acquired that entity, and through the purchase of that entity acquiredthe underlying cinema’s lease and the associated personal property, equipment, and trade fixtures. Because the fair value of the lease, inlight of anticipated rent payments, resulted in a lease liability of $320,000 and the acquired net assets, including cash received inconnection with the settlement, were valued at $1.7 million, we recorded a net gain on acquisition and settlement of $1.4 million which isincluded as “other income” in our consolidated statement of operations for the year ended December 31, 2013. We also acquired in 2013the 50% interest we did not own in Angelika Film Centers, LLC.DisposalsLand Held for Sale – BurwoodOn May 12, 2014, we entered into a contract to sell our undeveloped 50.6-acre parcel in Burwood, Victoria, Australia, to an affiliate ofAustraland Holdings Limited for a purchase price of $47.5 million (AU$65.0 million). Reading received $5.5 million (AU$6.5 million) onMay 23, 2014 closing. The balance of the purchase price is due on December 31, 2017.TaupoOn March 31, 2015, we entered into sale agreements to sell both of our Lake Taupo properties to the same purchaser. 138 Lake Terrace, animproved 20 unit motor inn, settled on May 6, 2015 for $1.7 million (NZ$2.2 million). Settlement of $821,000 (NZ$1.2 million) wasreceived on March 31, 2016 for 142 Lake Terrace, an unimproved vacant parcel of land.Moonee Ponds PropertyIn 2013, we entered into a purchase and sale agreement to sell our 3.3-acre properties in Moonee Ponds for $21.4 million (AU$23.0 million)which closed on April 16, 2015.Investment and Development PropertyWe are engaged in several real estate development projects. For a complete list of these properties with their size, status, and gross bookvalues see Item 2 – Properties under the heading of “Investment and Development Property.”36 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CONSOLIDATED RESULTS AND NON-SEGMENT RESULTS% ChangeFav/(Unfav)(Dollars in thousands)2015201420132015 vs. 20142014 vs. 2013SEGMENT RESULTSCinema exhibition operating income$31,576 $27,343 $24,545 15 %11 %Real estate operating income6,796 9,475 10,959 (28)%(14)%NON-SEGMENT RESULTSDepreciation and amortization expense(294)(360)(433)18 %17 %General and administrative expense(14,924)(14,285)(14,136)(4)%(1)%Interest expense, net(7,304)(9,000)(10,037)19 %10 %Equity earnings of unconsolidated joint ventures andentities1,204 1,015 1,369 19 %(26)%Gain on sale of assets11,023 25 (56)> 100%(> 100)%Other income (expense)(440)1,646 1,876 (> 100)%(12)%Income before income taxes27,637 15,859 14,087 74 %13 %Income tax benefit (expense)(4,943)9,785 (4,942)(> 100)%(> 100)%Net income22,694 25,644 9,145 (12)%> 100%Less: Net income (loss) attributable to noncontrollinginterests(79)(57)104 39 %> 100%Net income attributable to RDI common stockholders$22,773 $25,701 $9,041 (11)%> 100%Basic EPS$0.98 $1.10 $0.39 (11)%> 100%Consolidated Results - 2015 vs. 2014Net income attributable to RDI common stockholders was lower by $2.9 million or 11% to $22.8 million. This reduction was mainly due toa $14.7 million increase in income tax expense, a $2.7 million decrease in Real Estate segment income, a $2.1 million reduction in otherincome and a $638,000 increase in non-segment general and administrative expense. These were offset by an $11.0 million gain on sale, a$4.2 million increase in Cinema segment income and a $1.7 million reduction in net interest expense. These are discussed in more detailbelow.Non-Segment Results - 2015 vs. 2014General and administrative expenseGeneral and administrative expense for 2015 increased by $639,000 or 4%, mainly due to higher legal, consulting and Board of Directorsfees in the U.S., offset by lower payroll expenses and foreign exchange rate movements resulting in lower Australia and New Zealandgeneral and administration expense in U.S. dollars. For more information about legal expenses, please refer to Item 3- Legal Proceedings.Interest expense, netInterest expense, net for 2015, decreased by $1.7 million or 19%, mainly due to a reduction in interest rates, lower net borrowing, favorablerevaluations of interest rate swaps, as well as foreign exchange rate movements.Gain on sale of assetsNet gain on sale of assets for 2015 increased by $11.0 million, primarily due to the finalization of the sale of our Moonee Ponds site inAustralia, our Los Angeles condominium and our Lake Taupo Motel in New Zealand.Other income (expense)Other income and expense changed by $2.1 million or 127%, mainly due to a $1.6 million (NZ$2.0 million) reduction in businessinterruption income from the Courtenay Central carpark building, as well as a $495,000 (AU$700,000) settlement relating to a historicalaccident at one of our Australian sites.37 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Equity earningsEquity earnings from unconsolidated investments increased by $189,000 or 19%, primarily related to a increase in income from our Mt.Gravatt investment.Income tax benefit (expense)Income tax expense changed by $14.7 million compared to 2014, mainly due to the reversal in 2014 of the U.S. valuation allowance thathad been recorded against deferred tax assets.Consolidated Results 2014 vs. 2013Net income attributable to RDI common stockholders increased by $16.7 million or 185% to $25.7 million. This increase was mainly dueto a $14.7 million change in income tax expense, a $1.3 million increase in segment operating income, as well as a $1.0 million reductionin net interest expense. These are discussed in more detail below.Non-Segment Results - 2014 vs. 2013General and administrative expenseGeneral and administrative expenses for 2014 increased marginally by $149,000 or 1.1% from 2013.Interest expense, netNet interest expense decreased by $1.0 million compared to 2013. The decrease in interest expense during 2014 resulted from our ability torefinance certain debt obligations at favorable rates in comparison to the existing rates. Additionally, our interest expense was lower in the2014 due to a decrease in the fair value of our interest rate swap liabilities in 2014 compared to 2013.Other income (expense)The $1.6 million in other income during 2014 was primarily related to the receipt of insurance proceeds received during 2014 for theCourtenay Central parking structure business interruption recovery claim. The $1.9 million in other income during 2013 was primarilyrelated to a $1.4 million gain on the acquisition of a cinema and the receipt of insurance proceeds from our business interruption claim forthe temporary closure of our cinema in Christchurch, New Zealand due to the February 22, 2011 earthquake (see Note 19 – Casualty Loss toour consolidated financial statements).Equity earningsEquity earnings from unconsolidated investments decreased by $354,000 or 26% primarily related to a decrease in income from our Mt.Gravatt investment.Income tax benefit (expense)Income tax benefit of $9.8 million in 2014 compared to a $4.9 million expense in 2013 was a result of the reversal of the valuationallowance in the United States. The valuation allowance reversal is a result of the tax benefit that we now expect to realize.BUSINESS SEGMENT RESULTSAt December 31, 2015, we wholly owned and operated 54 cinemas with 443 screens, had interests in certain unconsolidated joint venturesand entities that own an additional 3 cinemas with 29 screens and managed 1 cinema with 4 screens. During the period, we also (i) ownedand operated five ETCs that we developed in Australia and New Zealand, (ii) owned the fee interests in three developed commercialproperties in Manhattan and Chicago improved with live theaters, which have six stages and ancillary retail and commercial space, (iii)owned the fee interests in the Union Square building in Manhattan that we are redeveloping, which had, until the end of this fiscal year,operated as a live theater and rental property, (iv) owned the fee interests underlying one of our Manhattan cinemas, (v) held fordevelopment an additional four parcels aggregating approximately 74 acres located principally in urbanized areas of Australia and NewZealand (calculated net of our Lake Taupo and Burwood Properties), and (vi) owned 50% of a 202-acre property that is zoned for thedevelopment of approximately 550 single-family residential units in the U.S. In addition, we continue to hold various properties that hadbeen previously used in our historic railroad operations.The Company transacts business in Australia and New Zealand and is subject to risks associated with changing foreign currency exchangerates. During the current year, compared to the prior-year, the Australian dollar and New Zealand dollar weakened against the U.S. dollarsby 11% and 12%, respectively.38 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Business Segment Results - 2015 vs. 201420152014% Change Better/(Worse)(Dollars in thousands)CinemaReal EstateCinemaReal EstateCinemaReal EstateSegment Revenue$242,281 $21,579 $237,861 $24,348 2 %(11)%Segment expensesCost of services and products (excludingdepreciation and amortization)(196,544)(10,948)(195,896)(9,770)--%(12)%Depreciation and amortization(11,161)(3,107)(11,047)(4,061)(1)%23 %General and administrative expense(3,000)(728)(3,575)(1,042)16 %30 %Total segment expenses(210,705)(14,783)(210,518)(14,873) -%1 %Segment operating income$31,576 $6,796 $27,343 $9,475 15 %(28)%39 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cinema Exhibition - 2015 vs. 2014(Dollars in thousands)2015% ofRevenue2014% ofRevenue2015 vs. 2014Fav / (Unfav)REVENUEUnited StatesAdmission revenue$86,377 65 %$83,197 66 %4 %Concession revenue38,267 29 %35,580 28 %8 %Advertising and other revenue8,239 6 %6,942 6 %19 %$132,883 100 %$125,719 100 %6 %AustraliaAdmission revenue54,814 64 %58,148 66 %(6) %Concession revenue24,549 28 %24,278 27 %1 %Advertising and other revenue6,872 8 %6,068 7 %13 %$86,235 100 %$88,494 100 %(3) %New ZealandAdmission revenue15,489 67 %15,908 67 %(3) %Concession revenue6,368 27 %6,475 27 %(2) %Advertising and other revenue1,306 6 %1,265 5 %3 %$23,163 100 %$23,648 100 %(2) %Total revenue$242,281 100 %$237,861 100 %2 %OPERATING EXPENSECost of services and products (excl. depreciation andamortization)United StatesFilm rent and advertising cost$(46,175)(35)%$(43,511)(35)%(6) %Concession cost(6,448)(5)%(6,145)(5)%(5) %Occupancy expense(26,886)(20)%(25,701)(20)%(5) %Other expense(35,970)(27)%(34,073)(27)%(6) %$(115,479)(87)%$(109,430)(87)%(6) %AustraliaFilm rent and advertising cost(25,491)(30)%(26,677)(30)%4 %Concession cost(4,938)(6)%(4,781)(5)%(3) %Occupancy expense(14,383)(17)%(16,995)(19)%15 %Other expense(18,328)(21)%(19,026)(21)%4 %$(63,140)(73)%$(67,479)(76)%6 %New ZealandFilm rent and advertising cost(7,161)(31)%(7,355)(31)%3 %Concession cost(1,470)(6)%(1,661)(7)%11 %Occupancy expense(4,107)(18)%(4,459)(19)%8 %Other expense(5,187)(22)%(5,512)(23)%6 %$(17,925)(77)%$(18,987)(80)%6 %Total cost of services and products (excl. depreciation andamortization)$(196,544)(81)%$(195,896)(82)% - %Depreciation, amortization, and general and administrativeexpenseUnited StatesDepreciation and amortization$(5,531)(4)%$(5,118)(4)%(8) %General and administrative expense(2,225)(2)%(2,474)(2)%10 %$(7,756)(6)%$(7,592)(6)%(2) %AustraliaDepreciation and amortization(4,325)(5)%(4,669)(5)%7 %General and administrative expense(782)(1)%(1,054)(1)%26 %$(5,107)(6)%$(5,723)(6)%11 %New ZealandDepreciation and amortization(1,304)(6)%(1,260)(5)%(3) %General and administrative expense6 0 %(47)(0)%113 %40 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.$(1,298)(6)%$(1,307)(6)%1 %Total depreciation, amortization, and general andadministrative expense$(14,161)(6)%$(14,622)(6)%3 %Total expenses$(210,705)(87)%$(210,518)(89)% - %OPERATING INCOMEUnited States$9,648 7 %$8,697 7 %11 %Australia17,988 21 %15,292 17 %18 %New Zealand3,940 17 %3,354 14 %17 %Total operating income$31,576 13 %$27,343 11 %15 % Cinema segment operating incomeCinema segment operating income increased by 15%, or $4.2 million, to $31.6 million for the year ended December 31, 2015 compared toDecember 31, 2014, primarily driven by increased admissions, offset by unfavorable foreign currency movements. Refer below for furtherexplanations.RevenueThe revenue in the United States for 2015 increased by $7.2 million or 6%, primarily driven by a higher average admission price. Australiancinema revenue decreased by $2.3 million, or 3%, primarily due to higher admission revenue and higher concession revenue in localcurrencies as result of higher attendance, more than offset by unfavorable foreign exchange movements. In New Zealand, cinema revenuedecreased by $485,000 or 2%, mainly due to higher admission revenue and higher concession revenue in local currencies as a result ofhigher attendance and the opening of our Dunedin cinema in the last week of June 2014 and our LynnMall cinema in November2015, more than offset by unfavorable foreign exchange movements.Cost of services and products (excluding depreciation and amortization)Cost of services and products for 2015 increased by $648,000, which was mainly attributable to increased costs due to increasedadmissions, which included higher film rental, payroll, occupancy and other costs. We also had additional costs associated with therefurbishment of our Angelika Film Center Carmel Mountain Plaza, the opening of our new theater, LynnMall in Auckland, NewZealand, and cost relating to the preparation for closing our Gaslamp Theater; these increased costs were mostly offset by movements inforeign currency.U.S. cost of services and products increased by $6.0 million or 6%, primarily driven by higher film rent associated with increased box officesales. Australia and New Zealand cinema cost of services and products both decreased by 6%, primarily due to the favorable impact offoreign exchange rate movements.Cost of services and products as a percentage of gross revenue improved by 1% down to 81%, mainly attributable to the percentage of fixedcosts compared to the increases in our revenue streams.Depreciation, amortization, general and administrative expenseDepreciation, amortization, general and administrative expense for 2015 decreased by $461,000, or 3%, with lower general andadministrative expense being the main driver. General and administrative expense decreased by $574,000, or 16%, mainly driven by costreductions from a favorable currency effect for expenses in Australia and New Zealand, and some cost savings in the U.S. 41 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Real Estate- 2015 vs. 2014(Dollars in thousands)2015% ofRevenue2014% ofRevenue2015 vs. 2014Fav / (Unfav)REVENUEUnited StatesLive theater rental and ancillary income$3,844 72 %$3,343 65 %15 %Property rental income1,496 28 %1,786 35 %(16) %$5,340 100 %$5,129 100 %4 %AustraliaProperty rental income$11,374 100 %$13,702 100 %(17) %New ZealandProperty rental income$4,865 100 %$5,517 100 %(12) %Total revenue$21,579 100 %$24,348 100 %(11) %OPERATING EXPENSECost of services and products (excl. depreciation andamortization)United StatesLive theater cost$(4,263)(80)%$(1,592)(31)%(168) %Property cost(224)(4)%2 0 %11,300 %Occupancy expense(1,016)(19)%(974)(19)%(4) %$(5,503)(103)%$(2,564)(50)%(115) %AustraliaProperty cost(1,675)(15)%(2,229)(16)%25 %Occupancy expense(1,726)(15)%(2,532)(18)%32 %$(3,401)(30)%$(4,761)(35)%29 %New ZealandProperty cost(1,344)(28)%(1,599)(29)%16 %Occupancy expense(700)(14)%(846)(15)%17 %$(2,044)(42)%$(2,445)(44)%16 %Total cost of services and products (excl. depreciation andamortization)$(10,948)(51)%$(9,770)(40)%(12) %Depreciation, amortization, and general and administrativeexpenseUnited StatesDepreciation and amortization$(330)(6)%$(327)(6)%(1) %General and administrative expense41 1 %(14)(0)%393 %$(289)(5)%$(341)(7)%15 %AustraliaDepreciation and amortization(1,854)(16)%(2,785)(20)%33 %General and administrative expense(719)(6)%(973)(7)%26 %$(2,573)(23)%$(3,758)(27)%32 %New ZealandDepreciation and amortization(923)(19)%(949)(17)%3 %General and administrative expense(50)(1)%(55)(1)%9 %$(973)(20)%$(1,004)(18)%3 %Total depreciation, amortization, and general andadministrative expense$(3,835)(18)%$(5,103)(21)%25 %Total operating expenses$(14,783)(69)%$(14,873)(61)%1 %OPERATING INCOMEUnited States$(452)(8)%$2,224 43 %(120) %Australia5,400 47 %5,183 38 %4 %New Zealand1,848 38 %2,068 37 %(11) %Total operating income$6,796 31 %$9,475 39 %(28) %42 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Real Estate segment operating incomeReal estate segment operating income decreased by $2.7 million or 28%, to $6.8 million for 2015 compared to 2014, the decrease wasprimarily attributable to 11% lower revenue, which was primarily caused by unfavorable currency fluctuations. Total operating costsdecreased by $90,000, mainly due to savings caused by foreign currency exchange fluctuations, partially offset by increased legal costs dueto the "STOMP" arbitration. See, "Item 3 – Legal Proceedings".RevenueReal estate revenue for 2015 decreased by 11%, or $2.8 million, mainly due to an unfavorable currency fluctuations in our foreignoperations.Cost of services and products (excluding depreciation and amortization) Cost of services and products for 2015 increased by 12%, or $1.2 million. We had lower operating costs after the sale of our Burwood andMoonee Ponds properties, and costs also benefited from the appreciation of the U.S. dollar against the New Zealand and the Australiandollars. However, these lower costs were more than offset by higher legal costs in our live theater business. The legal expenses relate to thecosts (litigation and arbitration) associated with the prosecution of certain claims against the producers of STOMP, which is playing at ourOrpheum theater. See, "Item 3 – Legal Proceedings".Depreciation, amortization, general and administrative expenseDepreciation, amortization, general and administrative expense for 2015 decreased by 25%, or $1.3 million. Depreciation and amortizationexpense for the twelve-month period decreased by 23%, or $954,000, mainly due to the appreciation of the U.S. dollar against the NewZealand and Australian dollars. General and administrative expense for 2015 decreased by 30%, or $315,000, mainly attributable to lowerconsulting fees in 2015, and the favorable impact from foreign exchange rate movements.Business Segment Results - 2014 vs. 201320142013% Change Better/(Worse)(Dollars in thousands)CinemaReal EstateCinemaReal EstateCinemaReal EstateRevenue$237,861 $24,348 $239,418 $26,456 (1)%(8)%Segment expensesCost of services and products (excludingdepreciation and amortization)(195,896)(9,770)(200,859)(10,830)2 %10 %Depreciation and amortization(11,047)(4,061)(10,741)(4,023)(3)%(1)%General and administrative expense(3,575)(1,042)(3,273)(644)(9)%(62)%Total segment expenses(210,518)(14,873)(214,873)(15,497)2 %4 %Segment operating income$27,343 $9,475 $24,545 $10,959 11 %(14)%Cinema Exhibition- 2014 vs. 2013(Dollars in thousands)2014% ofRevenue2013% ofRevenue2014 vs. 2013Fav / (Unfav)REVENUEUnited StatesAdmission revenue$83,197 66 %$84,725 67 %(2) %Concession revenue35,580 28 %35,056 28 %1 %Advertising and other revenue6,942 6 %6,539 5 %6 %$125,719 100 %$126,320 100 % - %AustraliaAdmission revenue58,148 66 %61,741 68 %(6) %Concession revenue24,278 27 %24,025 26 %1 %Advertising and other revenue6,068 7 %5,655 6 %7 %43 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.$88,494 100 %$91,421 100 %(3) %New ZealandAdmission revenue15,908 67 %15,039 69 %6 %Concession revenue6,475 27 %5,596 26 %16 %Advertising and other revenue1,265 5 %1,041 5 %22 %$23,648 100 %$21,676 100 %9 %Total revenue$237,861 100 %$239,417 100 %(1) %OPERATING EXPENSECost of services and products (excl. depreciation andamortization)United StatesFilm rent and advertising cost$(43,511)(35)%$(44,284)(35)%2 %Concession cost(6,145)(5)%(5,924)(5)%(4) %Occupancy expense(25,701)(20)%(25,981)(21)%1 %Other operating expense(34,073)(27)%(31,929)(25)%(7) %$(109,430)(87)%$(108,118)(86)%(1) %AustraliaFilm rent and advertising cost(26,677)(30)%(29,060)(32)%8 %Concession cost(4,781)(5)%(4,847)(5)%1 %Occupancy expense(16,995)(19)%(18,371)(20)%7 %Other operating expense(19,026)(21)%(22,218)(24)%14 %$(67,479)(76)%$(74,496)(81)%9 %New ZealandFilm rent and advertising cost(7,355)(31)%(7,116)(33)%(3) %Concession cost(1,661)(7)%(1,438)(7)%(16) %Occupancy expense(4,459)(19)%(3,943)(18)%(13) %Other operating expense(5,512)(23)%(5,747)(27)%4 %$(18,987)(80)%$(18,244)(84)%(4) %Total cost of services and products (excl. depreciation andamortization)$(195,896)(82)%$(200,858)(84)%2 %Depreciation, amortization, and general and administrativeexpenseUnited StatesDepreciation and amortization$(5,118)(4)%$(6,181)(5)%17 %General and administrative expense(2,474)(2)%(2,347)(2)%(5) %$(7,592)(6)%$(8,528)(7)%11 %AustraliaDepreciation and amortization(4,669)(5)%(3,603)(4)%(30) %General and administrative expense(1,054)(1)%(926)(1)%(14) %$(5,723)(6)%$(4,529)(5)%(26) %New ZealandDepreciation and amortization(1,260)(5)%(957)(4)%(32) %General and administrative expense(47)(0)% - -% - %$(1,307)(6)%$(957)(4)%(37) %Total depreciation, amortization, and general andadministrative expense$(14,622)(6)%$(14,014)(6)%(4) %Total operating expense$(210,518)(89)%$(214,872)(90)%2 %OPERATING INCOMEUnited States$8,697 7 %$9,674 8 %(10) %Australia15,292 17 %12,396 14 %23 %New Zealand3,354 14 %2,475 11 %36 %Total operating income$27,343 11 %$24,545 10 %11 %44 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cinema segment operating incomeCinema segment operating income increased by 11%, or $2.8 million, to $27.3 million for 2014 compared to 2013, primarily driven by 2%lower operating expense. Refer below for further detailed explanation.RevenueCinema revenue for 2014 decreased by $1.6 million or 0.7% when compared to 2013, primarily attributable to higher attendances inAustralia and New Zealand, more than offset by the unfavorable impact from foreign exchange movements. Comparing the twelve monthsof 2014 to the twelve months of 2013, the Australian dollar weakened by 6.8% in 2014 from 2013 while the New Zealand dollarstrengthened against the U.S. dollar by 1.2%. The revenue in the United States for 2014 decreased $602,000, or 0%. This decrease was partially driven by a reduction in box officerevenue of $1.5 million, in turn driven by an 82,000 admissions reduction, together with a 1.0% reduction in average ticket price, offset byincreased concession and café revenues of approximately $524,000. Revenue in Australia decreased by $2.9 million or 3.2%. This decreasewas primarily due to the strengthening of the U.S. dollar against the Australian dollar in 2014. Local currency box office was consistentwith 2013, with a decrease in average ticket price of 4.5% being offset by increased ticket sales of 4.9%. Excluding currency effects,concession revenue was up 7.0%, reflecting increased admission volume and spend per admit. Revenue in New Zealand increased by $2.0million or 9.1%. Attendance increased by 88,000 or 5.1%. The majority of this increase was achieved through the opening of our Dunedincinema. The attendance increase more than offset the local currency reduction in average ticket price of 1.8%. Concession revenueincreased by $879,000 due to the combined positive effect of increased admission volumes, improved spend per patron, and a positive U.S.dollar to N.Z. dollar exchange rate movementCost of services and products (excluding depreciation and amortization)Cost of services and products for 2014 decreased by $5.0 million or 2%, mainly attributable to foreign currency movements. Cost ofservices and products in the United States increased by $1.3 million or 1.2%, primarily related to a $773,000 decrease in film rent andadvertising, together with a decrease of $280,000 in occupancy related costs, offset by an increase of $2.1 million in other operatingexpense, which includes not only increases in labor related costs but also increases in insurance and utilities. Cost of services and productsin Australia decreased by $7.0 million or 9.4%. As with revenue, a significant contributor to the decrease was the strengthening of the U.S.dollar against the Australian dollar in 2014. Film rental costs were also lower due to a lower film rental percentage being achieved. Otheroperating costs were reduced by $3.2 million or 14.4%, with many incremental cost improvements, most notably a reduction in marketingcosts. Cost of services and products in New Zealand increased by $743,000 or 4.1%. This increase was in line with the above-mentionedincrease in cinema revenue, which directly affects film rental costs and with the above-mentioned year-over-year increase in the value of theNew Zealand dollar compared to the U.S. dollar Cost of services and products as a percentage of gross revenue improved by 2% to 82%, mainly attributable to the percentage of fixed costscompared to the increases in our revenue streams.Depreciation, amortization, general and administrative expenseDepreciation expense increased in 2014 by $306,000 or 2.8% compared to 2013. This primarily related to digital projection assetsreceiving their first full year of depreciation in 2014 in Australia and New Zealand.45 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Real Estate- 2014 vs. 2013(Dollars in thousands)2014% ofRevenue2013% ofRevenue2014 vs. 2013Fav / (Unfav)REVENUEUnited StatesLive theater rental and ancillary income$3,343 65 %$3,500 67 %(4) %Property rental income1,786 35 %1,692 33 %6 %$5,129 100 %$5,192 100 %(1) %AustraliaProperty rental income$13,702 100 %$14,424 100 %(5) %New ZealandProperty rental income$5,517 100 %$6,840 100 %(19) %Total revenue$24,348 100 %$26,456 100 %(8) %OPERATING EXPENSECost of services and products (excl. depreciation andamortization)United StatesLive theater cost$(1,592)(31)%$(1,574)(30)%(1) %Property cost2 0 %(316)(6)%101 %Occupancy expense(974)(19)%(946)(18)%(3) %$(2,564)(50)%$(2,836)(55)%10 %AustraliaProperty cost(2,229)(16)%(2,362)(16)%6 %Occupancy expense(2,532)(18)%(3,139)(22)%19 %$(4,761)(35)%$(5,501)(38)%13 %New ZealandProperty cost$(1,599)(29)%(1,684)(25)%5 %Occupancy expense(846)(15)%(809)(12)%(5) %$(2,445)(44)%$(2,493)(36)%2 %Total cost of services and products (excl. depreciation andamortization)$(9,770)(40)%$(10,830)(41)%10 %Depreciation, amortization, and general and administrativeexpenseUnited StatesDepreciation and amortization$(327)(6)%$(314)(6)%(4) %General and administrative expense(14)(0)%(67)(1)%79 %$(341)(7)%$(381)(7)%10 %AustraliaDepreciation and amortization(2,785)(20)%(2,635)(18)%(6) %General and administrative expense(973)(7)%(527)(4)%(85) %$(3,758)(27)%$(3,162)(22)%(19) %New ZealandDepreciation and amortization(949)(17)%(1,074)(16)%12 %General and administrative expense(55)(1)%(50)(1)%(10) %$(1,004)(18)%$(1,124)(16)%11 %Total depreciation, amortization, and general andadministrative expense$(5,103)(21)%$(4,667)(18)%(9) %Total operating expenses$(14,873)(61)%$(15,497)(59)%4 %OPERATING INCOMEUnited States$2,224 43 %$1,975 38 %13 %Australia5,183 38 %5,761 40 %(10) %New Zealand2,068 37 %3,223 47 %(36) %Total operating income$9,475 39 %$10,959 41 %(14) %46 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Real Estate segment operating incomeReal estate segment operating income decreased by $1.5 million or 14%, to $9.5 million for 2014 compared to 2013, primarily attributableto 8% lower revenue, partially offset by 4% lower operating expense. Refer below for further explanation.RevenueReal estate revenue decreased by $2.1 million or 8.0%, compared to 2013, this primarily due to the closure of the Courtney Central car parkbuilding in Wellington, New Zealand. The car park building re-opened in November 2014.Cost of services and productsCost of services and products for the real estate segment decreased by $1.1 million or 10%, compared to 2013. The main reduction in realestate operating expense was achieved in Australia and was as a result of the sale of our Burwood property, which led to significantlyreduced property taxes compared to 2013.Depreciation, amortization, general and administrative expenseDepreciation, amortization, general and administrative expense for 2014 increased by $436,000 or 9%. This was primarily driven bygeneral and administrative costs increasing by $446,000 in Australia, due mainly to personnel changes in the Australian real estatedepartment. BUSINESS PLAN, LIQUIDITY AND CAPITAL RESOURCESBusiness planOur cinema exhibition business plan is to enhance our current cinemas where it is financially viable to do so; develop our specialtycinemas in select markets; expand our food and beverage offering and; continue on an opportunistic basis, to identify, develop, and acquirecinema properties that allow us to leverage our cinema expertise and technology over a larger operating base. Our real estate business plan, given the substantial increase in Manhattan rents and commercial real estate values in recent periods, is toprogress the redevelopment of our Union Square and Cinemas 1,2,3 properties in the US; to build-out our Newmarket and Auburn sites inAustralia as well as our Courtenay Central site in New Zealand; and to continue to be sensitive to opportunities to convert ourentertainment assets to higher and better uses, or, where appropriate, to dispose of such assets. We will also continue to investigate potential synergistic acquisitions that may not readily fall into either our cinema or real estatesegment.Liquidity and capital resourcesLiquidity risk is the risk relating to our ability to meet our financial obligations when they come due. In today’s environment, our financialobligations arise mainly from capital expenditure needs, working capital requirements, and debt servicing requirements. We manage theliquidity risk by ensuring our ability to generate sufficient cash flows from operating activities and to obtain adequate, reasonablefinancing and/or to convert non-performing or non-strategic assets into cash. The change in cash and cash equivalents is as follows:% Change(Dollars in thousands)2015201420132015 vs. 20142014 vs. 2013Net cash provided by operating activities$28,574 $28,343 25,183 1 %13 %Net cash used in investing activities(29,710)(9,898)(6,142)> 100%61 %Net cash used in financing activities(27,961)(3,275)(17,775)> 100%(82)%Impact of exchange rate on cash(1,449)(2,618)(2,101)(45)%25 %Increase (decrease) in cash and cash equivalents$(30,546)$12,552 $(835)(> 100)%(> 100)%47 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Operating activities2015 vs. 2014: Cash provided by operating activities for 2015 increased by $231,000 or 1%, to $28.6 million, primarily driven by a $6.2million change in operating assets and liabilities, partially offset by a $6.0 million decrease in operational cash flows.2014 vs. 2013: Cash provided by operating activities for 2014 increased by $3.2 million or 13%, to $28.3 million, primarily driven by anincrease of $2.3 million increase in operational cash flows and a $900,000 change in operating assets and liabilities. Investing activitiesIn 2015, the $29.7 million of cash used by investing activities was mainly related to the $53.1 million spent on fixed assets, which includedthe $24.3 million (AU$33.6 million) purchase of the two Cannon Park centers in Queensland, Australia, as well as enhancements to ourexisting properties, offset by $21.9 million dollars received from the sale of the Moonee Ponds properties, the Los Angeles condo and theLake Taupo sites.The $9.9 million of cash used by investing activities in 2014 was primarily related to $14.9 million in property enhancements to ourexisting properties, partially offset by the $5.4 million deposit from the sale of our Burwood property.Financing activitiesThe $28.0 million of cash used in financing activities in 2015 was primarily due to a repayment of debt in the amount of $24.7 million, aswell as $3.1 million used in our stock buyback program and $201,000 as part of share option transactions.In 2014, the $3.2 million cash used in financing activities was primarily due to a $4.1 million used in our stock buyback program, offset by$1.0 million of proceeds from the exercising of employee stock options.Future liquidity and capital resourcesWe manage our cash, investments and capital structure so we are able to meet the short-term and long-term obligations of our business,while maintaining financial flexibility and liquidity. We forecast, analyze and monitor our cash flows to enable investment and financingwithin the overall constraints of our financial strategy.At December 31, 2015, our consolidated cash and cash equivalents totaled $19.7 million. Of this amount, $6.8 million and $3.6 millionwere held by our Australian and New Zealand subsidiaries, respectively. Our intention is to reinvest indefinitely Australian earnings but notreinvest indefinitely New Zealand earnings. If the Australian earnings were used to fund U.S. operations, they would be subject toadditional income taxes upon repatriation.Our working capital deficiency increased from $15.1 million at December 2014 to $38.5 million at December 2015. This was due to a $30.5million reduction in cash primarily due to surplus cash being used to pay down long term debt. This was partially offset by a reduction inshort term debt due to the refinancing of the Westpac Corporate Credit facility and the Union Square loan, which is no longer current.We have historically funded our working capital requirements, capital expenditures and investments in individual properties primarily froma combination of internally generated cash flows and debt. The Company had $59.9 million unused capacity of available corporate creditfacilities at December 31, 2015. In addition, we have $6.0 million and $10.3 million unused capacity for certain Cinema 1,2,3 uses andconstruction funding for New Zealand, respectively. We expect to refinance the $15.0 million Cinema 1,2,3 Term Loan prior to its maturity date of July 1, 2016.48 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGENCIESThe following table provides information with respect to the maturities and scheduled principal repayments of our recorded contractualobligations as of December 31, 2015:(Dollars in thousands)20162017201820192020ThereafterTotalNotes payable$15,000 $10,500 $21,184 $56,344 $--$--$103,028 Subordinated debt----------27,913 27,913 Pension liability1,539 684 684 684 684 3,500 7,775 Lease obligations30,117 29,998 26,087 23,374 16,712 122,129 248,417 Estimated interest on debt(1)4,511 4,230 3,629 2,642 1,196 7,775 23,984 Total$51,167 $45,412 $51,584 $83,044 $18,592 $161,317 $411,117 (1)Estimated interest on debt is based on the anticipated loan balances for future periods and current applicable interest rates.LitigationWe are currently involved in certain legal proceedings and, as required, have accrued estimates of probable and estimable losses for theresolution of these claims. Where we are the plaintiffs, we expense all legal fees on an on-going basis and make no provision for any potential settlement amountsuntil received. In Australia, the prevailing party is usually entitled to recover its attorneys’ fees, which recoveries typically work out to beapproximately 60% of the amounts actually spent where first-class legal counsel is engaged at customary rates. Where we are a plaintiff, wehave likewise made no provision for the liability for the defendant’s attorneys' fees in the event we are determined not to be the prevailingparty.Where we are the defendants, we accrue for probable damages that insurance may not cover as they become known and can be reasonablyestimated. In our opinion, any claims and litigation in which we are currently involved are not reasonably likely to have a material adverseeffect on our business, results of operations, financial position, or liquidity. It is possible, however, that future results of the operations forany particular quarterly or annual period could be materially affected by the ultimate outcome of the legal proceedings. Please refer to Item3 – Legal Proceedings in this report for more information. Off-Balance Sheet ArrangementsThere are no off-balance sheet arrangements or obligations (including contingent obligations) that have, or are reasonably likely to have, acurrent or future material effect on our financial condition, changes in the financial condition, revenue or expense, results of operations,liquidity, capital expenditures or capital resources.FINANCIAL RISK MANAGEMENTCurrency and interest rate riskThe Company’s objective in managing exposure to foreign currency and interest rate fluctuations is to reduce volatility of earnings andcash flows in order to allow management to focus on core business issues and challenges.We currently manage our currency exposure by creating, whenever possible, natural hedges in Australia and New Zealand. This involveslocal country sourcing of goods and services, as well as borrowing in local currencies to match revenues and expenses. Since we intend toconduct business on a self-funding basis, (except for funds used to pay an appropriate share of our U.S. corporate overhead), we do notbelieve the currency fluctuations present a material risk to the Company. As such, we do not use derivative financial instruments to hedgeagainst the risk of foreign currency exposure.Our U.S. operations are funded in part by the operational results of Australia and New Zealand, and fluctuations in these foreign currenciesaffect such funding. As we continue to progress with our acquisition and development activities in Australia and New Zealand, the effect ofvariations in currency values will likely increase. 49 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our exposure to interest rate risk arises out of our long-term floating-rate borrowings. To manage the risk, we utilize interest rate derivativecontracts to convert certain floating-rate borrowings into fixed-rate borrowings. It is the Company’s policy to enter into interest ratederivative transactions only to the extent considered necessary to meet its objectives as stated above. The Company does not enter intothese transactions or any other hedging transactions for speculative purposes.InflationWe continually monitor inflation and the effects of changing prices. Inflation increases the cost of goods and services used. Competitiveconditions in many of our markets restrict our ability to recover fully the higher costs of acquired goods and services through priceincreases. We attempt to mitigate the impact of inflation by implementing continuous process improvement solutions to enhanceproductivity and efficiency and, as a result, lower costs and operating expenses. In our opinion, we have managed the effects of inflationappropriately, and, as a result, it has not had a material impact on our operations and the resulting financial position or liquidity.Accounting Pronouncements Adopted and Issued During 2015Please see Note 2 – Summary of Significant Accounting Policies – Accounting Pronouncements Adopted and Issued During 2015 to ourconsolidated financial statements for information regarding new accounting pronouncements adopted and issued in 2015. CRITICAL ACCOUNTING POLICIES AND ESTIMATESWe believe that the application of the following accounting policies, which are important to our financial position and results ofoperations, require significant judgments and estimates on the part of management. For a summary of our significant accounting policies,including the accounting policies discussed below, see Note 2 to the consolidated financial statements. Impairment of long-lived assets, including goodwill and intangible assetsWe review long-lived assets, including goodwill and intangibles, for impairment as part of our annual budgeting process, at the beginningof the fourth quarter, and whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fullyrecoverable. Pursuant to US GAAP, we review internal management reports on a monthly basis as well as monitoring current and potential futurecompetition in film markets for indications of potential impairment. We evaluate our long-lived assets using historical and projected dataof cash flow as our primary indicator of potential impairment, and we also take into consideration the seasonality of our business. If the sumof the estimated, undiscounted future cash flows is less than the carrying amount of the asset, then impairment is recognized for the amountby which the carrying value of the asset exceeds its estimated fair value based on an appraisal or a discounted cash flow calculation.For certain non-income producing properties, we obtain appraisals or other evidence to evaluate whether there are impairment indicators forthese assets. No impairment losses were recorded for the years ended December 31, 2015, 2014 or 2013.Pursuant to US GAAP, goodwill and intangible assets are evaluated annually on a reporting unit basis. The impairment evaluation is basedon the present value of estimated future cash flows of the segment plus the expected terminal value. There are significant assumptions andestimates used in determining the present value. The most significant assumptions include our estimated future cash flow, cost of debt andcost of equity assumptions that comprise the weighted average cost of capital for each reporting unit. Accordingly, actual results could varymaterially from such estimates. There was no impairment for the goodwill and intangible assets for the years ended December 31,2015, 2014, and 2013. Tax valuation allowance and obligations We record our estimated future tax benefits and liabilities arising from the temporary differences between the tax bases of assets andliabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating loss carry-forwards. We estimate therecoverability of any tax assets recorded on the balance sheet and provide any necessary allowances as required. As of December 31, 2015,we had recorded approximately $37.1 million of deferred tax assets (net of $13.4 million deferred tax liabilities) related to the temporarydifferences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well asoperating loss carry-forwards and tax credit carry-forwards. These deferred tax assets were offset by a valuation allowance of $11.5 millionresulting in a net deferred tax asset of $25.6 million. The recoverability of deferred tax assets is dependent upon our ability to generatefuture taxable income. There is no assurance that sufficient future taxable income will be generated to benefit from our tax loss carry-forwards and tax credit carry-forwards.50 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Legal and environmental obligationsCertain of our subsidiaries were historically involved in railroad operations, coal mining, and manufacturing. Also, certain of thesesubsidiaries appear in the chain of title of properties that may suffer from contamination. Accordingly, certain of these subsidiaries have,from time-to-time, been named in, and may in the future be named in, various actions brought under applicable environmental laws. Also,we are in the real estate development business and may encounter from time-to-time unanticipated environmental conditions at propertiesthat we have acquired for development. These environmental conditions can increase the cost of such projects and adversely affect thevalue and potential for profit of such projects. We do not currently believe that our exposure under applicable environmental laws ismaterial in amount.From time-to-time, we have claims brought against us relating to the exposure of former employees of our railroad operations to asbestosand coal dust. These are generally covered by an insurance settlement reached in September 1990 with our insurance carriers. However, thisinsurance settlement does not cover litigation by people who were not our employees and who may claim second-hand exposure toasbestos, coal dust, and/or other chemicals or elements now recognized as potentially causing cancer in humans. Our known exposure tothese types of claims, asserted or probable of being asserted, is not material.From time-to-time, we are involved with claims and lawsuits arising in the ordinary course of our business that may include contractualobligations, insurance claims, tax claims, employment matters, and anti-trust issues, among other matters. All of these matters require that we make judgments based on the facts known to us. These judgments are inherently uncertain and canchange significantly when additional facts become known. We provide accruals for matters that are either probably or reasonably possibleand can be properly estimated as to their expected negative outcome. We do not record expected gains until the proceeds are received byus.51 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 7A – Quantitative and Qualitative Disclosure about Market RiskThe Securities and Exchange Commission requires that registrants include information about potential effects of changes in currencyexchange and interest rates in their Form 10-K filings. Several alternatives, all with some limitations, have been offered. The followingdiscussion is based on a sensitivity analysis, which models the effects of fluctuations in currency exchange rates and interest rates. Thisanalysis is constrained by several factors, including the following:·it is based on a single point in time; and·it does not include the effects of other complex market reactions that would arise from the changes modeled.Although the results of such an analysis may be useful as a benchmark, they should not be viewed as forecasts. At December 31, 2015, approximately 46% and 19% of our assets were invested in assets denominated in Australian dollars (ReadingAustralia) and New Zealand dollars (Reading New Zealand), respectively, including approximately $10.4 million in cash and cashequivalents. At December 31, 2014, approximately 44% and 21% of our assets were invested in assets denominated in Australian and NewZealand dollars, respectively, including approximately $40.1 million in cash and cash equivalents. Our policy in Australia and New Zealand is to match revenues and expenses, whenever possible, in local currencies. As a result, we haveprocured in local currencies a majority of our expenses in Australia and New Zealand. Due to the developing nature of our operations inAustralia and New Zealand, our revenue is not yet significantly greater than our operating and interest expenses. Despite this naturalhedge, recent movements in foreign currencies have had an effect on our current earnings. Although foreign currency has had an effect onour current earnings, the effect of the translation adjustment on our assets and liabilities noted in our other comprehensive income was adecrease of $16.5 million for the year ended December 31, 2015. As we continue to progress our acquisition and development activities inAustralia and New Zealand, we cannot assure you that the foreign currency effect on our earnings will be negligible in the future.Historically, our policy has been to borrow in local currencies to finance the development and construction of our long-term assets inAustralia and New Zealand whenever possible. As a result, the borrowings in local currencies have provided somewhat of a natural hedgeagainst the foreign currency exchange exposure. Even so, and as a result of our issuance of fully subordinated Trust Preferred Securities in2007, and their subsequent partial repayment, approximately 75% and 52% of our Australian and New Zealand assets, respectively, remainsubject to such exposure, unless we elect to hedge our foreign currency exchange between the U.S. and Australian and New Zealanddollars. If the foreign currency rates were to fluctuate by 10%, the resulting change in Australian and New Zealand assets would be $13.0million and $3.7 million, respectively, and the change in our net income for the year would be $1.9 million and $102,000,respectively. Presently, we have no plan to hedge such exposure.We record unrealized foreign currency translation gains or losses that could materially affect our financial position. We have accumulatedunrealized foreign currency translation gains of approximately $14.6 million and $31.1 million as of December 31, 2015 and 2014,respectively.Historically, we maintained most of our cash and cash equivalent balances in short-term money market instruments with original maturitiesof six months or less. Some of our money market investments may decline in value if interest rates increase. Due to the short-term nature ofsuch investments, a change of 1% in short-term interest rates would not have a material effect on our financial condition.We have a combination of fixed and variable interest rate loans. In connection with our variable interest rate loans, a change ofapproximately 1% in short-term interest rates would have resulted in approximately $658,000 increase or decrease in our 2015 interestexpense.52 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 8 – Financial Statements and Supplementary DataTABLE OF CONTENTS​Report of Independent Registered Public Accounting Firm54​Consolidated Balance Sheets as of December 31, 2015 and 201455​Consolidated Statements of Operations for the Three Years Ended December 31, 201557​Consolidated Statements of Comprehensive Income (Loss) for the Three Years Ended December 31, 201558​Consolidated Statements of Stockholders’ Equity for the Three Years Ended December 31, 201559​Consolidated Statements of Cash Flows for the Three Years Ended December 31, 201560​Notes to Consolidated Financial Statements61​Schedule II – Valuation and Qualifying Accounts9653 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard of Directors and StockholdersReading International, Inc.We have audited the accompanying consolidated balance sheets of Reading International, Inc. and subsidiaries (the “Company”) as ofDecember 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity,and cash flows for each of the three years in the period ended December 31, 2015. Our audits of the basic consolidated financial statementsincluded the financial statement schedule listed in the index appearing under Schedule II. These financial statements and financialstatement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements and financial statement schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position ofReading International, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows foreach of the three years in the period ended December 31, 2015 in conformity with accounting principles generally accepted in the UnitedStates of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidatedfinancial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), theCompany’s internal control over financial reporting as of December 31, 2015, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our reportdated April 29, 2016 expressed an adverse opinion./s/ GRANT THORNTON LLPLos Angeles, CaliforniaApril 29, 2016 54 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Reading International, Inc. and SubsidiariesConsolidated Balance Sheets as of December 31, 2015 and 2014(U.S. dollars in thousands, except share data)December 31,December 31,20152014(1)ASSETSCurrent Assets:Cash and cash equivalents$19,702 $50,248 Receivables10,036 11,348 Inventory1,122 1,010 Investment in marketable securities51 54 Restricted cash160 1,433 Prepaid and other current assets5,429 3,426 Land held for sale-current421 10,112 Total current assets36,921 77,631 Operating property, net210,298 186,889 Land held for sale-non current37,966 42,588 Investment and development property, net23,002 26,124 Investment in unconsolidated joint ventures and entities5,370 6,169 Investment in Reading International Trust I838 838 Goodwill19,715 21,281 Intangible assets, net9,889 11,486 Deferred tax asset, net25,649 22,267 Other assets5,443 6,313 Total assets$375,091 $401,586 LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:Accounts payable and accrued liabilities$23,638 $19,517 Film rent payable9,291 9,328 Debt – current portion15,000 38,104 Taxes payable5,275 4,593 Deferred current revenue14,591 14,239 Other current liabilities7,640 6,969 Total current liabilities75,435 92,750 Debt – long-term portion88,028 98,019 Subordinated debt27,913 27,913 Noncurrent tax liabilities16,457 17,045 Other liabilities30,062 33,561 Total liabilities237,895 269,288 Commitments and contingencies (Note 12)Stockholders’ equity:Class A non-voting common stock, par value $0.01, 100,000,000 shares authorized,32,831,113 issued and 21,654,302 outstanding at December 31, 2015 and 32,537,008issued and 21,741,586 outstanding at December 31, 2014229 228 Class B voting common stock, par value $0.01, 20,000,000 shares authorized and1,680,590 issued and outstanding at December 31, 2015 and 1,495,490 issued andoutstanding at December 31, 201417 15 Nonvoting preferred stock, par value $0.01, 12,000 shares authorized and no issuedor outstanding shares at December 31, 2015 and 2014----55 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Additional paid-in capital143,815 140,237 Accumulated deficit(9,478)(32,251)Treasury shares(13,524)(8,582)Accumulated other comprehensive income11,806 28,039 Total Reading International, Inc. stockholders’ equity132,865 127,686 Noncontrolling interests4,331 4,612 Total stockholders’ equity137,196 132,298 Total liabilities and stockholders’ equity$375,091 $401,586 See accompanying notes to consolidated financial statements.(1) Certain prior period amounts have been reclassified to conform to the current period presentation (see Note 2 – Significant Accounting Policies –Reclassifications).56 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Reading International, Inc. and SubsidiariesConsolidated Statements of Operations for the Three Years Ended December 31, 2015(U.S. dollars in thousands, except share and per share data)20152014(1)2013(1)RevenueCinema$242,281 $237,861 $239,418 Real estate15,042 16,887 18,803 Total revenue257,323 254,748 258,221 Costs and expensesCinema(190,007)(188,435)(193,206)Real estate(10,948)(9,770)(10,830)Depreciation and amortization(14,562)(15,468)(15,197)General and administrative(18,652)(18,902)(18,053)Total costs and expenses(234,169)(232,575)(237,286)Operating income23,154 22,173 20,935 Interest income1,268 662 407 Interest expense(8,572)(9,662)(10,444)Net gain (loss) on sale of assets11,023 25 (56)Other income (expense)(440)1,646 1,876 Income before income taxes and equity earnings of unconsolidated jointventures and entities26,433 14,844 12,718 Equity earnings of unconsolidated joint ventures and entities1,204 1,015 1,369 Income before income taxes27,637 15,859 14,087 Income tax benefit (expense)(4,943)9,785 (4,942)Net income$22,694 $25,644 $9,145 Less: Net income (loss) attributable to noncontrolling interests(79)(57)104 Net income attributable to Reading International, Inc. common shareholders$22,773 $25,701 $9,041 Basic income per share attributable to Reading International, Inc. shareholders$0.98 $1.10 $0.39 Diluted income per share attributable to Reading International, Inc.shareholders$0.97 $1.08 $0.38 Weighted average number of shares outstanding–basic23,293,696 23,431,855 23,348,003 Weighted average number of shares outstanding–diluted23,495,618 23,749,221 23,520,271 See accompanying notes to consolidated financial statements.(1) Certain prior period amounts have been reclassified to conform to the current period presentation (see Note 2 – Significant Accounting Policies –Reclassifications). 57 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Reading International, Inc. and SubsidiariesConsolidated Statements of Comprehensive Income (Loss) for the Three Years Ended December 31, 2015(U.S. dollars in thousands)20152014(1)2013Net income$22,694 $25,644 $9,145 Cumulative foreign currency adjustment(16,488)(14,255)(19,368)Unrealized income on available for sale investments2 ----Accrued pension service benefit (costs)207 738 (593)Comprehensive income (loss)$6,415 $12,127 $(10,816)Less: Net income (loss) attributable to noncontrolling interests(79)(57)104 Less: Comprehensive loss attributable to noncontrolling interests(46)(41)(107)Comprehensive income (loss) attributable to Reading International, Inc.$6,540 $12,225 $(10,813)See accompanying notes to consolidated financial statements.(1) Certain prior period amounts have been reclassified to conform to the current period presentation (see Note 2 – Significant Accounting Policies –Reclassifications).​ 58 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Reading International, Inc. and SubsidiariesConsolidated Statements of Stockholders’ Equity for the Three Years Ended December 31, 2015(In thousands)Common StockAccumulatedReadingClass AClass BAdditionalOtherInternationalInc.TotalClass AParClass BParPaid-InAccumulatedTreasuryComprehensiveStockholders’NoncontrollingStockholders’SharesValueSharesValueCapitalDeficitStockIncome/(Loss)EquityInterestsEquityAt January 1, 201321,588 $223 1,495 $15 $136,754 $(66,993)$(4,512)$61,369 $126,856 $4,098 $130,954 Net income----------9,041 ----9,041 104 9,145 Other comprehensive loss--------------(19,854)(19,854)(107)(19,961)Stock option and restricted stockcompensation expense--2 ----948 ------950 --950 In-kind exchange of stock for the exerciseof options, net issued22 --------------------Class A common stock issued for stockbonuses and options exercised280 ------248 ------248 --248 Conversion of noncontrolling interest toequity--------(101)------(101)101 --Contributions from noncontrollingshareholders------------------2,513 2,513 Distributions to noncontrollingshareholders------------------(2,102)(2,102)At December 31, 201321,890 $225 1,495 $15 $137,849 $(57,952)$(4,512)$41,515 $117,140 $4,607 $121,747 Net income (loss)----------25,701 ----25,701 (57)25,644 Other comprehensive loss--------------(13,476)(13,476)(41)(13,517)Stock option and restricted stockcompensation expense--3 ----1,410 ------1,413 --1,413 Stock repurchase plan(432)----------(4,070)--(4,070)--(4,070)Class A common stock issued for stockbonuses and options exercised283 ------978 ------978 --978 Contributions from noncontrollingshareholders------------------327 327 Distributions to noncontrollingshareholders------------------(224)(224)At December 31, 201421,741 $228 1,495 $15 $140,237 $(32,251)$(8,582)$28,039 $127,686 $4,612 $132,298 Net income (loss)----------22,773 ----22,773 (79)22,694 Other comprehensive loss--------------(16,233)(16,233)(46)(16,279)Stock option and restricted stockcompensation expense7 ------1,458 ------1,458 --1,458 Stock repurchase plan(240)----------(3,110)--(3,110)--(3,110)Class A common stock issued for stockbonuses and options exercised235 2 ---490 ------492 --492 In-kind exchange of stock for the exerciseof options, net issued(89)(1)185 2 1,630 --(1,832)--(201)--(201)Contributions from noncontrollingshareholders------------------17 17 Distributions to noncontrollingshareholders------------------(173)(173)At December 31, 201521,654 $229 1,680 $17 $143,815 $(9,478)$(13,524)$11,806 $132,865 $4,331 $137,196 See accompanying notes to consolidated financial statements.59 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. XReading International, Inc. and SubsidiariesConsolidated Statements of Cash Flows for the Three Years Ended December 31, 2015(U.S. dollars in thousands)20152014(1)2013(1)Operating Activities Net income$22,694 $25,644 $9,145 Adjustments to reconcile net income to net cash provided by operating activities: Foreign currency transactions -- -- (415)Equity earnings of unconsolidated joint ventures and entities (1,204) (1,015) (1,369)Distributions of earnings from unconsolidated joint ventures and entities 1,074 857 1,095 (Gain) loss on sale of assets (11,023) (25) 56 Gain on cinema acquisition and settlement -- -- (1,359)Change in net deferred tax assets (4,067) (14,029) 2,198 Depreciation and amortization 14,562 15,468 15,197 Other amortization 919 2,077 2,601 Stock based compensation expense 1,458 1,413 950 Net change in: Receivables 620 (2,753) 281 Prepaid and other assets (2,386) (493) (16)Accounts payable and accrued expenses 6,479 148 556 Film rent payable 282 3,117 133 Taxes payable (631) (4,743) (3,294)Deferred revenue and other liabilities (203) 2,677 (576)Net cash provided by operating activities 28,574 28,343 25,183 Investing Activities Cash received from cinema acquisition -- -- 1,936 Purchases of and additions to operating property (53,119) (14,914) (20,082)Change in restricted cash 1,292 (614) 1,609 Proceeds from notes receivable -- -- 2,000 Distributions of investment in unconsolidated joint ventures and entities 228 208 395 Proceeds from sale of property 21,889 5,422 --Proceeds from time deposits -- -- 8,000 Net cash used in investing activities (29,710) (9,898) (6,142)Financing Activities Repayment of long-term borrowings (35,239) (7,140) (28,121)Proceeds from borrowings 10,500 8,173 12,500 Capitalized borrowing costs (248) (1,320) (563)Repurchase of Class A Nonvoting Common Stock (3,310) (4,070) --Proceeds from the exercise of stock options 492 978 248 Noncontrolling interest contributions 17 327 263 Noncontrolling interest distributions (173) (223) (2,102)Net cash used in financing activities (27,961) (3,275) (17,775)Effect of exchange rate on cash (1,449) (2,618) (2,101)Increase (decrease) in cash and cash equivalents (30,546) 12,552 (835)Cash and cash equivalents at the beginning of the period 50,248 37,696 38,531 Cash and cash equivalents at the end of the period$19,702 $50,248 $37,696 Supplemental Disclosures Interest paid$9,023 $9,504 $6,953 Income taxes paid, net8,553 6,407 5,903 Non-Cash TransactionsLease make-good accrual$1,314 $4,385 $--Contribution from noncontrolling shareholder in exchange for debt reduction - relatedparty -- -- 2,250 Conversion of noncontrolling interest to equity -- -- 101 In-kind exchange of stock for the exercise of options, net 1,833 -- 301 See accompanying notes to consolidated financial statements.(1) Certain prior period amounts have been reclassified to conform to the current period presentation (see Note 2 – Significant Accounting Policies –Reclassifications). 60 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Reading International, Inc. and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2015_____________________________________________________________________________________________________________________________________NOTE 1 – Description of Business and Segment ReportingReading International, Inc., a Nevada corporation (“RDI” and collectively with our consolidated subsidiaries and corporate predecessors,the “Company,” “Reading” and “we,” “us,” or “our”), was incorporated in 1999, and, following the consummation of a consolidationtransaction on December 31, 2001, is now the owner of the consolidated businesses and assets of Reading Entertainment, Inc. (“RDGE”),Craig Corporation (“CRG”), and Citadel Holding Corporation (“CDL”). Our businesses consist primarily of:·Development, ownership and operation of multiplex cinemas in the United States, Australia, and New Zealand; and·Development, ownership, and operation of retail and commercial real estate in Australia, New Zealand, and the United StatesReported below are the operating segments of the Company for which separate financial information is available and for which segmentresults are evaluated regularly by the Chief Executive Officer. In addition to the cinema exhibition and real estate activities, we haveacquired, and continue to hold, raw land in urban and suburban centers in Australia, New Zealand, and the United States as part of our realestate activities.The tables below summarize the results of operations for each of our business segments. Operating expense includes costs associated withthe day-to-day operations of the cinemas and the management of rental properties, including our live theater assets.201520142013(Dollars in thousands)CinemaReal EstateTotalCinemaReal EstateTotalCinemaReal EstateTotalRevenue$242,281 $21,579 $263,860 $237,861 $24,348 $262,209 $239,418 $26,456 $265,874 Inter-segment elimination(1)-- -(6,537)-- -(7,461)----(7,653)Total revenue242,281 21,579 257,323 237,861 24,348 254,748 239,418 26,456 258,221 Operating expenseCost of services and products(excluding depreciation andamortization)(196,544)(10,948)(207,492)(195,896)(9,770)(205,666)(200,859)(10,830)(211,689)Inter-segment elimination(1) ---6,537 ---7,461 ---7,653 Total cost of services andproducts(196,544)(10,948)(200,955)(195,896)(9,770)(198,205)(200,859)(10,830)(204,036)Depreciation andamortization(11,161)(3,107)(14,268)(11,047)(4,061)(15,108)(10,741)(4,023)(14,764)General and administrativeexpense(3,000)(728)(3,728)(3,575)(1,042)(4,617)(3,273)(644)(3,917)Total operating expense(210,705)(14,783)(218,951)(210,518)(14,873)(217,930)(214,873)(15,497)(222,717)Segment operating income$31,576 $6,796 $38,372 $27,343 $9,475 $36,818 $24,545 $10,959 $35,504 (1) Inter-segment eliminations relates to the internal charge between the two segments where the cinema operates within real estate ownedwithin the group. 61 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. A reconciliation of segment operating income to income before income taxes is as follows:(Dollars in thousands)201520142013Segment operating income$38,372 $36,818 $35,504 Unallocated corporate expense:Depreciation and amortization expense(294)(360)(433)General and administrative expense(14,924)(14,285)(14,136)Interest expense, net(7,304)(9,000)(10,037)Equity earnings of unconsolidated joint ventures and entities1,204 1,015 1,369 Gain (loss) on sale of assets11,023 25 (56)Other income (expense)(440)1,646 1,876 Income before income taxes$27,637 $15,859 $14,087 Assuming cash and cash equivalents are accounted for as corporate assets, total assets by business segment and by country are presented asfollows:(Dollars in thousands)December 31, 2015December 31, 2014December 31, 2013By segment:Cinema$107,808 $107,695 $120,709 Real estate219,813 219,737 226,926 Corporate (1)47,470 74,154 39,172 Total assets$375,091 $401,586 $386,807 By country:United States$131,965 $141,768 $110,677 Australia173,227 178,202 196,050 New Zealand69,899 81,616 80,080 Total assets$375,091 $401,586 $386,807 (1) Includes cash and cash equivalents of $19.7million, $50.2 million, and $37.7 million for the years ended December 31, 2015, 2014, and 2013, respectively.The following table sets forth our operating properties by country:(Dollars in thousands)December 31, 2015December 31, 2014December 31, 2013Australia$106,985 $87,536 $97,240 New Zealand36,526 39,800 36,319 United States66,787 59,553 58,101 Total operating property$210,298 $186,889 $191,660 The table below summarizes capital expenditures for the three years ended December 31, 2015:(Dollars in thousands)201520142013Segment capital expenditures$52,989 $14,310 $19,910 Corporate capital expenditures130 604 172 Total capital expenditures$53,119 $14,914 $20,082 62 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 2 – Summary of Significant Accounting PoliciesSignificant Accounting PoliciesBasis of ConsolidationThe consolidated financial statements of RDI and its wholly-owned subsidiaries include the accounts of RDGE, CRG, and CDL. Alsoconsolidated are Australia Country Cinemas Pty, Limited, a company in which we own a 75% interest and whose only assets are ourleasehold cinemas in Townsville and Dubbo, Australia, Sutton Hill Properties, LLC, a company in which we own a 75% interest and whoseonly asset is the fee interest in the Cinemas 1,2,3, and Shadow View Land and Farming, LLC in which we own a 50% controllingmembership interest and whose only asset is a 202-acre land parcel in Coachella, California.Our investment interests are accounted for as unconsolidated joint ventures and entities, and accordingly, our unconsolidated jointventures and entities in 20% to 50% owned companies are accounted for on the equity method. These investment interests include our:·25% undivided interest in the unincorporated joint venture that owns 205-209 East 57th Street Associates, LLC a limited liabilitycompany formed to redevelop our former cinema site at 205 East 57th Street in Manhattan;·33.3% undivided interest in the unincorporated joint venture that owns the Mt. Gravatt cinema in a suburb of Brisbane, Australia;·33.3% undivided interest in Rialto Distribution, an unincorporated joint venture engaged in the business of distributing art film inNew Zealand and Australia; and·50% undivided interest in the unincorporated joint venture that owns Rialto Cinemas.Accounting PrinciplesOur consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Statesof America (“US GAAP”).ReclassificationsCertain reclassifications have been made in the 2014 and 2013 financial statements and notes to conform to the 2015 presentation. Thesechanges include combining certain long-term debt items in the 2014 consolidated balance sheet, changing the line item presentation of“Equity earnings of unconsolidated joint ventures and entities” in the 2014 and 2013 consolidated statements of operations, reclassifyingcertain amounts in the 2014 consolidated statement of comprehensive income, reclassifying certain current deferred tax balances (seeAccounting Pronouncements Adopted and Issued During 2015) and combining certain amortization items in the 2014 and 2013consolidated statements of cash flows. These changes had no impact on our 2014 financial position, or our 2014 and 2013 results ofoperations and cash flows as previously reported.Use of EstimatesThe preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptionsthat affect the amounts reported in the consolidated financial statements and footnotes thereto. Significant estimates include projections wemake regarding the recoverability of our assets, valuations of our interest swaps and the recoverability of our deferred tax assets. Actualresults may differ from those estimates.Cash and Cash EquivalentsWe consider all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents for whichcost approximates fair value.ReceivablesOur receivables balance is composed primarily of credit card receivables, representing the purchase price of tickets, concessions, or couponbooks sold at our various businesses. Sales charged on customer credit cards are collected when the credit card transactions areprocessed. The remaining receivables balance is primarily made up of the goods and services tax refund receivable from our Australiantaxing authorities and the management fee receivable from the managed cinemas and property damage insurance recovery proceeds. Wehave no history of significant bad debt losses and we have established an allowance for accounts that we deem uncollectible.Investment in Marketable SecuritiesOur investment in Marketable Securities includes equity instruments that are classified as available for sale and are recorded at marketusing the specific identification method. Available for sale securities are carried at their fair market value and any difference between costand market value is recorded as unrealized gain or loss, net of income taxes, and is reported as accumulated other comprehensive income inthe consolidated statement of stockholders’ equity. Premiums and discounts of any debt instruments are recognized in interest incomeusing the effective interest method. Realized gains and losses and declines in value expected to be other-than-temporary on available forsale securities are included in other expense. We evaluate our available for sale securities for other than63 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. temporary impairments at the end of each reporting period. These investments have a cumulative unrealized gain of $12,000 included inother comprehensive income at December 31, 2015. For the years ended December 31, 2015, 2014, and 2013, our net unrealized losses were$2,000, $1,000, and $0, respectively. The cost of securities sold is based on the specific identification method. Interest and dividends onsecurities classified as available for sale are included in interest income.InventoryInventory is composed of concession goods used in theater operations and is stated at the lower of cost (first-in, first-out method) or netrealizable value.Restricted CashWe classify restricted cash as those cash accounts for which the use of funds is restricted by contract or bank covenant. At December 31,2015 and 2014, our restricted cash balance was $160,000 and $1,433,000, respectively. Fair Value MeasurementsFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. If quoted prices in an active market are available, fair value is determined by reference to theseprices. If quoted prices are not available, fair value is determined by valuation models that primarily use, as inputs, market-based orindependently sourced parameters, including but not limited to interest rates, volatilities, and credit curves. Additionally, we may referenceprices for similar instruments, quoted prices or recent transactions in less active markets. We use prices and inputs that are current as of themeasurement date.Level 1: Quoted (unadjusted) prices in active markets that are accessible at the measurement date for identical, unrestricted assets orliabilities.Level 2: Quoted prices in active markets for similar assets and liabilities, or inputs that are observable, either directly or indirectly,for substantially the full term of the asset or liability.Level 3: Unobservable inputs that are supported by little or no market activity may require significant judgment in order todetermine the fair value of the assets and liabilities.The use of observable and unobservable inputs is reflected in the fair value hierarchy assessment disclosed in the tables within thisdocument.Recurring Fair Value MeasurementsCash EquivalentsOur cash equivalents mainly include money market funds and term deposits.Investments in Marketable SecuritiesInvestments in marketable securities primarily consist of investments associated with the ownership of marketable securities in U.S. andNew Zealand. These investments are valued based on observable market quotes on the last trading date of the reporting period.DerivativesDerivative financial instruments are valued based on discounted cash flow models that incorporate observable inputs such as interest ratesand yield curves from the derivative counterparties. The credit valuation adjustments associated with our non-performance risk andcounterparty credit risk are incorporated in the fair value estimates of our derivatives. Nonrecurring Fair Value MeasurementsGoodwill, Other Intangible Assets, and Long-Lived AssetsRefer to the “Goodwill, Other Intangible Assets and Long-Lived Assets” below for a description of valuation methodology used for fairvalue measurements of goodwill, intangible assets and long-lived assets.DebtDebt includes our secured and unsecured notes payable, trust preferred securities and other debt instruments. The borrowings are valuedbased on discounted cash flow models that incorporate appropriate market discount rates. We calculated the market discount rate byobtaining period-end treasury rates for fixed-rate debt, or LIBOR for variable-rate debt, for maturities that correspond to the maturities ofour debt, adding appropriate credit spreads derived from information obtained from third-party financial institutions. These credit spreadstake into account factors such as our credit rate, debt maturity, types of borrowings, and the loan-to-value ratios of the debt.64 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Fair Value of Financial InstrumentsThe carrying amounts of our cash equivalents, accounts receivable, accounts payable and film rent payable approximate fair value due totheir short-term maturities.Derivative Financial InstrumentsWe carry all derivative financial instruments on our consolidated balance sheets at fair value. Derivatives are generally executed forinterest rate management purposes but are not designated as hedges. Therefore, changes in market values are recognized in currentearnings.Operating propertyOperating property consists of land, buildings and improvements, leasehold improvements, fixtures and equipment which we use to deriveoperating income associated with our two business segments, cinema exhibition and real estate. Buildings and improvements, leaseholdimprovements, fixtures and equipment are initially recorded at the lower of cost or fair market value and depreciated over the useful lives ofthe related assets. Land is not depreciated.Investment and Development PropertyInvestment and development property consists of land, new buildings and improvements under development, and their associatedcapitalized interest and other development costs that we are either holding for development, currently developing, or holding forinvestment appreciation purposes. These properties are initially recorded at the lower of cost or fair market value. Within investment anddevelopment property are building and improvement costs directly associated with the development of potential cinemas (whether for saleor lease), the development of entertainment-themed centers (“ETCs”), or other improvements to real property. As incurred, we expense start-up costs (such as pre-opening cinema advertising and training expense) and other costs not directly related to the acquisition anddevelopment of long-term assets. We cease capitalization on a development property when the property is complete and ready for itsintended use, or if activities necessary to get the property ready for its intended use have been substantially curtailed. Goodwill, Other Intangible Assets and Long-Lived AssetsWe review long-lived assets, including goodwill and intangibles, for impairment as part of our annual budgeting process, at the beginningof the fourth quarter, and whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fullyrecoverable. We review internal management reports on a monthly basis as well as monitor current and potential future competition in film markets forindications of potential impairment. We evaluate our long-lived assets and finite lived intangible assets using historical and projected dataof cash flow as our primary indicator of potential impairment and we take into consideration the seasonality of our business. If the sum ofthe estimated, undiscounted future cash flows is less than the carrying amount of the asset, then an impairment is recognized for the amountby which the carrying value of the asset exceeds its estimated fair value based on an appraisal or a discounted cash flow calculation. For certain non-income producing properties, we obtain appraisals or other evidence to evaluate whether there are impairment indicators forthese assets. No impairment losses were recorded for long-lived and finite lived intangible assets for the years ended December 31, 2015,2014 or 2013.Goodwill and intangible assets with indefinite useful lives are not amortized, but instead, tested for impairment at least annually on areporting unit basis. The impairment evaluation is based on the present value of estimated future cash flows of the segment plus theexpected terminal value. There are significant assumptions and estimates used in determining the future cash flows and terminalvalue. The most significant assumptions include our cost of debt and cost of equity assumptions that comprise the weighted average cost ofcapital for each reporting unit. Accordingly, actual results could vary materially from such estimates. No impairment losses were recordedfor goodwill and indefinite lived intangible assets for the years ended December 31, 2015, 2014, and 2013.Variable Interest EntityThe Company enters into relationships or investments with other entities that may be a variable interest entity (“VIE”). A VIE isconsolidated in the financial statements if the Company has the power to direct activities that most significantly impact the economicperformance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially besignificant to the VIE.Reading International Trust I is a VIE. It is not consolidated in our financial statements but instead accounted for under the equity methodof accounting because we are not the primary beneficiary. We carry our investment in the Reading International Trust I using the equitymethod of accounting because we have the ability to exercise significant influence (but not control) over operating and financial policiesof the entity. We eliminate transactions with an equity method entity to the extent of our ownership in such an entity. Accordingly, ourshare of net income/(loss) of this equity method entity is included in consolidated net income/(loss). We have no implicit or explicitobligation to further fund our investment in Reading International Trust I.65 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Properties Held for SaleWhen a property is classified as held for sale, we present the respective assets and liabilities related to the property held for sale separatelyon the balance sheet and cease to record depreciation and amortization expense. Properties held for sale are reported at the lower of theircarrying value or their estimated fair value less the estimated costs to sell.Revenue RecognitionRevenue from cinema ticket sales and concession sales are recognized when sold. Revenue from gift certificate sales is deferred andrecognized when the certificates are redeemed. Rental revenue is recognized on a straight-line basis. Deferred Leasing/Financing CostsDirect costs incurred in connection with obtaining tenants and/or financing are amortized over the respective term of the lease or loan on astraight-line basis. Direct costs incurred in connection with financing are amortized over the respective term of the loan utilizing theeffective interest method, or straight-line method if the result is not materially different. In addition, interest on loans with increasinginterest rates and scheduled principal pre-payments are also recognized on the effective interest method. Net deferred financing costs areincluded in prepaid and other assets (see Note 8 – Prepaid and Other Assets)Advertising ExpenseWe expense our advertising as incurred. The amount of our advertising expense was $2.3 million, $2.1 million, and $3.4 million for theyears ended December 2015, 2014, and 2013, respectively.Legal Settlement Income/ExpenseFor the years ended December 31, 2015, 2014, and 2013, we recorded gains/(losses) on the settlement of litigation of ($495,000), ($83,000), and ($285,000), respectively, included in other income/(expense). Also included in other income/(expense) for the year endedDecember 31, 2013, was a $1.4 million net gain on acquisition and settlement (see Note 4 – Acquisitions, Disposals, and Assets Held forSale).Depreciation and AmortizationDepreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. The estimateduseful lives are generally as follows:Building and improvements15-40 yearsLeasehold improvementsShorter of the life of the lease or useful life of the improvementTheater equipment7 yearsFurniture and fixtures5 – 10 yearsTranslation PolicyThe financial statements and transactions of our Australian and New Zealand cinema and real estate operations are reported in theirfunctional currencies, namely Australian and New Zealand dollars, respectively, and are then translated into U.S. dollars. Assets andliabilities of these operations are denominated in their functional currencies and are then translated at exchange rates in effect at thebalance sheet date. Revenue and expenses are translated at the average exchange rate for the reporting period. Translation adjustments arereported in “Accumulated Other Comprehensive Income,” a component of Stockholders’ Equity.The carrying value of our Australian and New Zealand assets fluctuates due to changes in the exchange rate between the U.S. dollar and theAustralian and New Zealand dollars. The exchange rates of the Australian dollar to the U.S. dollar were $0.7286, $0.8173 and $0.8929 asof December 31, 2015, 2014 and 2013 respectively. The exchange rates of the New Zealand dollar to the U.S. dollar were $0.6842, $0.7796 and $0.8229 as of December 31, 2015, 2014 and 2013 respectively.Income TaxesWe account for income taxes under an asset and liability approach. Under the asset and liability method, deferred tax assets and liabilitiesare recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts ofexisting assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expectedto apply to taxable income in the years in which those temporary differences are expected to be recovered or settled, and are classified asnoncurrent on the balance sheets in accordance with current US GAAP (see Accounting Pronouncements Adopted and Issued During 2015below). Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Incometax expense (benefit) is the tax payable (refundable) for the period and the change during the period in deferred tax assets and liabilities.In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positiveand negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategiesand recent financial operations. In projecting future taxable income, we begin with historical results adjusted for the results66 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. of discontinued operations and changes in accounting policies. We then include assumptions about the amount of projected future state,federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent taxplanning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with theplans and estimates we use to manage the underlying businesses. In evaluating the objective evidence that historical results provide, weconsider three years of cumulative operating income/(loss). In the event we were to determine that we would be able to realize our deferredincome tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, whichwould reduce the provision for income taxes.A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained uponexamination, including resolutions of any related appeals or litigation processes, based on the technical merits.We recognize tax liabilities for uncertain tax positions and adjust these liabilities when our judgment changes as a result of the evaluationof new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in apayment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases ordecreases to income tax expense in the period in which they are determined.Earnings Per ShareThe Company presents both basic and diluted earnings per share amounts. Basic EPS is calculated by dividing net income attributable tothe Company by the weighted average number of common shares outstanding during the year. Diluted EPS is based upon the weightedaverage number of common and common equivalent shares outstanding during the year, which is calculated using the treasury-stockmethod for equity-based awards. Common equivalent shares are excluded from the computation of diluted EPS in periods for which theyhave an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutiveand, accordingly, are excluded from the calculationReal Estate Purchase Price AllocationWe allocate the purchase price to tangible assets of an acquired property (which includes land, building and tenant improvements) based onthe estimated fair values of those tangible assets assuming the building was vacant. Estimates of fair value for land are based on factorssuch as comparisons to other properties sold in the same geographic area adjusted for unique characteristics. Estimates of fair values ofbuildings and tenant improvements are based on present values determined based upon the application of hypothetical leases with marketrates and terms.We record above-market and below-market in-place lease values for acquired properties based on the present value (using an interest ratewhich reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to thein-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equalto the remaining non-cancelable term of the lease. We amortize any capitalized above-market lease values as a reduction of rental incomeover the remaining non-cancelable terms of the respective leases. We amortize any capitalized below-market lease values as an increase torental income over the initial term and any fixed-rate renewal periods in the respective leases.We measure the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are made usingmethods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors considered by management in itsanalysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, andcosts to execute similar leases. We also consider information obtained about each property as a result of our pre-acquisition due diligence,marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs,management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during theexpected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions, legal, and otherrelated expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship intangible valuesbased on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respectivetenant. Characteristics considered by management in allocating these values include the nature and extent of our existing businessrelationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations oflease renewals (including those existing under the terms of the lease agreement), among other factors.We amortize the value of in-place leases to expense over the initial term of the respective leases. The value of customer relationshipintangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event may theamortization period for intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, theunamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense.67 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. These assessments have a direct impact on revenue and net income. If we assign more fair value to the in-place leases versus buildings andtenant improvements, assigned costs would generally be depreciated over a shorter period, resulting in more depreciation expense and alower net income on an annual basis. Likewise, if we estimate that more of our leases in-place at acquisition are on terms believed to beabove the current market rates for similar properties, the calculated present value of the amount above-market would be amortized monthlyas a direct reduction to rental revenue and ultimately reduce the amount of net income.Business Acquisition ValuationsThe assets and liabilities of businesses acquired are recorded at their respective preliminary fair values as of the acquisition date. Upon theacquisition of real properties, we allocate the purchase price of such properties to acquired tangible assets, consisting of land and building,and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-placeleases, based in each case on their fair values. We use independent appraisals to assist in the determination of the fair values of the tangibleassets of an acquired property (which includes land and building). We also perform valuations and physical counts of property, plant andequipment, valuations of investments and the involuntary termination of employees, as necessary. Costs in excess of the net fair values ofassets and liabilities acquired are recorded as goodwill.We record and amortize above-market and below-market operating leases assumed in the acquisition of a business in the same way as thoseunder real estate acquisitions.The fair values of any other intangible assets acquired are based on the expected discounted cash flows of the identified intangible assets.Finite lived intangible assets are amortized using the straight-line method of amortization over the expected period in which those assetsare expected to contribute to our future cash flows. We do not amortize indefinite lived intangibles and goodwill.Out-of-Period AdjustmentIn the fourth quarter of fiscal year 2015, we recorded out-of-period adjustments of $514,000 to decrease our income tax expenses in ourconsolidated statements of operations. The adjustments, which increased deferred tax asset by $2,116,000, increased additional paid incapital by $793,000, increased other comprehensive income by $1,859,000 and decreased other non-current liabilities by $1,050,000, weremade to correct our income tax and related equity and liability accounts. Of the $514,000 adjustment to decrease the income tax expensein 2015, $1,286,000 relates to the adjustment that should have been recorded in 2014, thus reducing our income tax benefit by thisamount. The remaining $1,800,000 relates to income taxes pertaining to years prior to 2014 cumulatively, that would have increased ourdeferred tax asset by such amount. We determined that the adjustments did not have a material impact to our current or prior periodconsolidated financial statements.Accounting Pronouncements Adopted and Issued During 2015Adopted:On January 1, 2015, the Company adopted changes issued by the Financial Accounting Standards Board’s (“FASB”) to reportingdiscontinued operations and disclosures of disposals of components of an entity. These changes require a disposal of a component to meet ahigher threshold in order to be reported as a discontinued operation in an entity’s financial statements. The threshold is defined as astrategic shift that has, or will have, a major effect on an entity’s operations and financial results such as a disposal of a major geographicalarea or a major line of business. In addition, the following two criteria have been removed from consideration of whether a componentmeets the requirements for discontinued operations presentation: (i) the operations and cash flows of a disposal component have been orwill be eliminated from the ongoing operations of an entity as a result of the disposal transaction, and (ii) an entity will not have anysignificant continuing involvement in the operations of the disposal component after the disposal transaction. Furthermore, equity methodinvestments now may qualify for discontinued operations presentation. The guidance applies prospectively to new disposals and newclassifications of disposal groups as held for sale after the effective date. The adoption of these changes had no material impact on theconsolidated financial statements.In November 2015, the FASB issued Accounting Standards Update ("ASU") 2015-17, Income Taxes (Topic 740) -Balance SheetClassification of Deferred Taxes, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilitiesbe classified as noncurrent on the balance sheets. The amendments in this ASU are effective for financial statements issued for annualperiods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and theamendments may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Weearly adopted this ASU as of December 31, 2015 on a retrospective basis and included the current portion of deferred tax assets within thenoncurrent portion of deferred tax assets within our consolidated balance sheets as of December 31, 2015 and 2014. There was no impact onour results of operations as a result of the adoption of this ASU.Issued:On February 25, the FASB released ASU 2016-02, Leases, completing its project to overhaul lease accounting. The ASU codifies ASC 842,Leases, which will replace the guidance in ASC 840. The new guidance is effective for public business entities in fiscal68 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. years beginning after December 15, 2018. Early adoption is permitted for all entities. The Company is evaluating the impact of adoptingthis new accounting guidance on the consolidated financial statements.In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement ofFinancial Assets and Financial Liabilities, effective for the Company on January 1, 2018. The ASU mainly relates to accounting for equityinvestments (except those accounted for under the equity method or those that result in consolidation of the investee), financial liabilitiesunder the fair value option, and the presentation and disclosure requirements for certain financial instruments. In addition, the FASBclarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses onavailable-for-sale debt securities. The Company is evaluating the impact of adopting this new accounting guidance on the consolidatedfinancial statements.In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, effective for theCompany on January 1, 2016. Under the ASU, an acquirer in a business combination transaction must recognize adjustments to provisionalamounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Theeffect on earnings of changes in depreciation or amortization, or other income effects, if any, as a result of the change to the provisionalamounts, calculated as if the accounting had been completed as of the acquisition date, must be recorded in the reporting period in whichthe adjustment amounts are determined rather than retrospectively. The ASU also requires that the acquirer present separately on the face ofthe income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would havebeen recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisitiondate. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-03) - Simplifying the Presentation of DebtIssuance Costs which requires unamortized debt issuance costs to be presented as a reduction of the corresponding debt liability rather thana separate asset. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance CostsAssociated with Line-of-Credit Arrangements. This ASU states that the Securities and Exchange Commission (“SEC”) staff would notobject to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing deferred debt issuance costs ratablyover the term of the line-of-credit arrangement, regardless of whether there are outstanding borrowings under the line-of-credit arrangement.These changes become effective for the Company on January 1, 2016. The adoption of these standards is not expected to have a materialimpact on the Company's consolidated financial statements.In May 2014, the FASB issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in asingle revenue model to be applied by reporting companies under US GAAP. Under the new model, recognition of revenues occurs when acustomer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to beentitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature,amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The new standard becomes effective forthe Company on January 1, 2018. Early adoption is permitted but cannot be earlier than January 1, 2017. The new standard is required to beapplied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying itrecognized at the date of initial application. We have not yet selected a transition method nor have we determined the impact of the newstandard on our consolidated financial statements. While we believe the proposed guidance will not have a material impact on our businessbecause our revenue predominantly comes from movie ticket sales and concession purchases, we plan to complete the analysis to ensurethat we are in compliance prior to the effective date.69 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 3 – Earnings Per ShareThe following table sets forth the computation of basic and diluted EPS and a reconciliation of the weighted average number of commonand common equivalent shares outstanding for the three years ended December 31, 2015(Dollars in thousands, except share and per share data)201520142013Numerator:Net income attributable to RDI common stockholders$22,773 $25,701 $9,041 Denominator:Weighted average shares of common stock – basic23,293,696 23,431,855 23,348,003 Weighted average dilutive impact of stock-based awards201,922 317,366 172,268 Weighted average shares of common stock – diluted23,495,618 23,749,221 23,520,271 Basic EPS attributable to RDI common stockholders$0.98 $1.10 $0.39 Diluted EPS attributable to RDI common stockholders$0.97 $1.08 $0.38 Awards excluded from diluted EPS -248,750 528,850 NOTE 4 – Acquisitions, Disposals, and Assets Held for Sale2015 TransactionsDoheny Condo, Los AngelesOn February 25, 2015 we sold our Los Angeles Condo for $3.0 million resulting in a $2.8 million gain on sale.Taupo, New ZealandOn April 1, 2015, we entered into two definitive purchase and sale agreements to sell our properties in Taupo, New Zealand for a combinedsales price of $2.3 million (NZ$3.4 million). The first agreement relates to a property with a sales price of $1.6 million (NZ$2.2 million)and a book value of $1.3 million (NZ$1.8 million), which closed on April 30, 2015 when we received the sales price in full. The otheragreement relates to a property with a sales price of $821,000 (NZ$1.2 million) and a book value of $421,000 (NZ$615,000) with aclosing date of March 31, 2016. This property is classified as held for sale as of December 31, 2015. Only the first transaction qualifies as asale under US GAAP and New Zealand tax.Newmarket, AustraliaOn November 30, 2015, we completed the purchase of an approximately 23,000 square foot parcel adjacent to our existing Newmarketshopping center in Brisbane, Australia for a total consideration of $5.5 million (AU$7.6 million). The acquired land has an existing officebuilding which was vacant at the time of purchase completion. We intend, over time, to integrate this property into our Newmarketdevelopment thereby increasing our footprint from approximately 204,000 to 227,000 square feet. The terms and circumstances of thisacquisition were not considered to meet the definition of a business combination in accordance with US GAAP.Cannon Park, Queensland, AustraliaOn December 23, 2015, we completed a 100% acquisition of two adjoining ETCs in Townsville, Queensland, Australia for a total of $24.3million (AU$33.6 million) in cash. The total gross leasable area of the two adjoining properties, the Cannon Park City Centre and theCannon Park Discount Centre, is 133,000 square feet. The Cannon Park City Centre is anchored by a Reading Cinema, which is operated byReading International’s 75% owned subsidiary, Australia Country Cinemas, in which we have a 75% interest, and has three mini-majortenants and ten specialty family oriented restaurant tenants. The Cannon Park Discount Centre is anchored by Kingpin Bowling andsupported by four other retailers. The properties are located approximately 6 miles from downtown Townsville, the second largest city inQueensland, Australia. This acquisition is consistent with our business plan to own, where practical, the land underlying our entertainmentassets.The acquired assets consist primarily of the land and buildings, which is approximately 98% leased to existing tenants. Tenancies rangefrom having 9 months to 8 years left to run on their leases.70 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of theirfair values on the acquisition date. The Company is in the process of finalizing its allocation and this may result in potential adjustmentswithin the 1-year measurement period from acquisition date. These fair value estimates of the land and building assets acquired have beenallocated to the acquired tangible assets. We did not identify any intangible assets or liabilities (above and below-market leases) at the dateof acquisition. There was no goodwill recorded as the purchase price did not exceed the fair value estimates of the net acquired assets. Ourpreliminary purchase price allocation is as follows:(Dollars in thousands)US DollarsAU dollarsPrepaid assets$28 38 Property & Equipment:Land7,609 10,500 Building16,712 23,060 Total purchase price$24,349 33,598 The revenue and earnings from this acquisition, since the acquisition date as included in the consolidated statement of operations for theyear ended December 31, 2015, were not significant. Based on the available information provided to us and after exhausting significantefforts to satisfy the pro-forma disclosure requirements assuming the business acquisition happened at the beginning of the year, theCompany concluded it to be impracticable to determine and disclose the full-year pro forma combined revenue and earnings for 2015 and2014.2014 TransactionsBurwood, AustraliaOn May 12, 2014, we entered into a contract to sell our undeveloped 50.6 acre parcel in Burwood, Victoria, Australia, to an affiliate ofAustraland Holdings Limited (now known as Frasers Property Australia) for a purchase price of $47.5 million (AU$65.0 million). We received $5.9 million (AU$6.5 million) on May 23, 2014. The remaining purchase price of $42.6 million (AU$58.5 million) is due onDecember 31, 2017. The agreement provides for mandatory pre-payments in the event that any of the land is sold by the buyer, any suchprepayment being in an amount equal to the greater of (a) 90% of the net sales price or (b) the balance of the purchase price multiplied by afraction the numerator of which is the square footage of property being sold by the buyer and the denominator of which is the originalsquare footage of the property being sold to the buyer. The agreement does not provide for the payment of interest on the balance owed.Our book value in the property is $38.0 million (AU$52.1 million) and while the transaction was treated as a current sale for tax purposes in2014, it does not qualify as a sale under US GAAP until the receipt of the payment of the balance of the purchase price due on December 31,2017 (or earlier depending upon whether any prepayment obligation is triggered). The asset is classified as long-term land held for sale onthe consolidated balance sheets as of December 31, 2015 and 2014.2013 TransactionsPlano CinemaOn December 31, 2013, we settled a management fee claim that we had against the owner of the Plano, Texas cinema that we had managedsince 2003 for a cash receipt of $1.9 million. As part of the settlement, we acquired that entity, and through the purchase of that entityacquired the underlying cinema’s lease and the associated personal property, equipment, and trade fixtures. Because the fair value of thelease, in light of anticipated rent payments, resulted in a lease liability of $320,000 and the acquired net assets, including cash received inconnection with the settlement, were valued at $1.7 million, we recorded a net gain on acquisition and settlement of $1.4 million.Moonee Ponds, AustraliaOn October 15, 2013, we entered into a definitive purchase and sale agreement to sell this property for a sales price of $17.5 million(AU$23.0 million) payable in full upon closing of the transaction on April 16, 2015. In accordance with the requirements under US GAAP,we recognized a gain of $8.0 million (AU$10.3 million) in the second quarter of 2015 upon the receipt of sale proceeds on April 16, 2015.71 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 5 – Property and EquipmentOperating Property, NetProperty associated with our operating activities is summarized as follows:(Dollars in thousands)December 31, 2015December 31, 2014Land$70,063 $62,024 Building and improvements126,622 120,913 Leasehold improvements46,874 46,813 Fixtures and equipment112,423 107,286 Construction-in-progress7,825 4,681 Total cost363,807 341,717 Less: accumulated depreciation(153,509)(154,828)Operating property, net$210,298 $186,889 Depreciation expense for operating property was $13.6 million, $14.4 million, and $14.0 million for 2015, 2014, and 2013, respectively.Investment and Development PropertyInvestment and development property is summarized as follows:(Dollars in thousands)December 31, 2015December 31, 2014Land$21,434 $23,833 Construction-in-progress (including capitalized interest)1,568 2,291 Investment and development property, net$23,002 $26,124 NOTE 6 – Investments in and Advances to Unconsolidated Joint Ventures and EntitiesInvestments in and advances to unconsolidated joint ventures and entities are accounted for under the equity method of accounting, exceptfor Rialto Distribution as described below. The table below summarizes our investments in unconsolidated joint ventures and entities:(Dollars in thousands)InterestDecember 31, 2015December 31, 2014Rialto Distribution33.3%$--$--Rialto Cinemas50.0%1,276 1,564 Mt. Gravatt33.3%4,094 4,605 Total investments$5,370 $6,169 We recorded our share of equity earnings from our investments in unconsolidated joint ventures and entities as follows:(Dollars in thousands)201520142013Rialto Distribution$22 $120 $159 Rialto Cinemas136 297 221 205-209 East 57th Street Associates, LLC----(1)Mt. Gravatt1,046 598 990 Total equity earnings$1,204 $1,015 $1,369 72 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Rialto DistributionDue to significant losses in years past, we determined that the goodwill associated with Rialto Distribution’s investment in the filmdistribution business was fully impaired. As a result of these losses, as of January 1, 2010, we treat our interest as a cost method interest inan unconsolidated joint venture, and record income based on the distributions we receive. We have also fully provided for any losses thatmay result from the bank guarantee that has been given to Rialto Distribution.Rialto CinemasWe own an undivided 50.0% interest in the assets and liabilities of the Rialto Entertainment joint venture that owns and operates 2 movietheaters, with 13 screens in New Zealand.Mt. GravattWe own an undivided 33.3% interest in Mt. Gravatt, an unincorporated joint venture that owns and operates a sixteen-screen multiplexcinema in Australia.Malulani Investments, LimitedOn June 26, 2006, we acquired for $1.8 million, an 18.4% interest in a private real estate company. On July 2, 2009, Magoon Acquisitionand Development, LLC (“Magoon LLC”) and we entered into a settlement agreement (the “Settlement Terms”) with respect to a lawsuitagainst certain officers and directors of Malulani Investments, Limited (“MIL”). Under the Settlement Terms, Magoon LLC and we received$2.5 million in cash, a $6.8 million three-year 6.25% secured promissory note issued by The Malulani Group (“TMG”), and a ten-year “tailinterest” in MIL and TMG in exchange for the transfer of all ownership interests in MIL and TMG held by both Magoon, LLC and RDI andfor the release of all claims against the defendants in this matter. A gain on the transfer of our ownership interest in MIL of $268,000 wasrecognized during 2009 as a result of this transaction. The tail interest allows us to participate in certain distributions made or received byMIL, TMG, and in certain cases, the shareholders of TMG. The tail interest, however, continues only for a period of ten years and we cannotassure that we will receive any distributions from this tail interest. During 2013, we received $191,000 in interest on the promissory note,and, on June 14, 2011, we received $6.8 million of principal and interest owed on this note. We believe that further amounts are owed underthe note and we have begun litigation to collect such amounts. Any further collections will be recognized when received.NOTE 7 – Goodwill and Intangible AssetsThe table below summarizes goodwill by business segment:(Dollars in thousands)CinemaReal EstateTotalBalance at January 1, 2014$16,935 $5,224 $22,159 Foreign currency translation adjustment(878)--(878)Balance at December 31, 2014$16,057 $5,224 $21,281 Foreign currency translation adjustment(1,566)--(1,566)Balance at December 31, 2015$14,491 $5,224 $19,715 The Company is required to test goodwill and other intangible assets for impairment on an annual basis and, if current events orcircumstances require, on an interim basis. To test the impairment of goodwill, the Company compares the fair value of each reporting unitto its carrying amount, including the goodwill, to determine if there is potential goodwill impairment. A reporting unit is generally onelevel below the operating segment. The most recent annual assessment occurred in the fourth quarter of 2015. The assessment resultsindicated that there is no impairment to our goodwill as of December 31, 2015.The tables below summarize intangible assets other than goodwill:December 31, 2015(Dollars in thousands)Beneficial LeasesTrade NameOther IntangibleAssetsTotalGross carrying amount$26,793 $7,254 $696 $34,743 Less: Accumulated amortization(20,108)(4,300)(446)(24,854)Net intangible assets other than goodwill$6,685 $2,954 $250 $9,889 73 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. December 31, 2014(Dollars in thousands)Beneficial LeasesTrade NameOther IntangibleAssetsTotalGross carrying amount$24,150 $7,254 $423 $31,827 Less: Accumulated amortization(15,989)(3,929)(423)(20,341)Net intangible assets other than goodwill$8,161 $3,325 $--$11,486 We amortize our beneficial leases over the lease period, the longest of which is approximately 24 years; our trade name using an acceleratedamortization method over its estimated useful life of 45 years; and our option fee and other intangible assets over 10 years. For the yearsended December 31, 2015, 2014, and 2013, our amortization expense was $1.7 million, $2.0 million, and $2.2 million, respectively. As ofDecember 31, 2015, the estimated amortization expense in the five succeeding years and thereafter is as follows:(Dollars in thousands)Estimated Future Amortization Expense2016$1,657 20171,263 20181,148 2019815 2020813 Thereafter4,193 Total future amortization expense$9,889 NOTE 8 – Prepaid and Other AssetsPrepaid and other assets are summarized as follows:(Dollars in thousands)December 31, 2015December 31, 2014Prepaid and other current assetsPrepaid expenses$879 $1,166 Prepaid taxes1,023 855 Income taxes receivable2,137 --Prepaid rent1,021 1,033 Deposits369 369 Other--3 Total prepaid and other current assets$5,429 $3,426 Other non-current assetsOther non-cinema and non-rental real estate assets$1,134 $1,134 Deferred financing costs, net1,828 2,515 Interest rate cap at fair value1 --Straight-line rent asset2,417 2,547 Long-term deposits63 97 Other--20 Total non-current assets$5,443 $6,313 74 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 9 - Income TaxesIncome before income tax expense includes the following:(Dollars in thousands)201520142013United States$3,284 $2,778 $8,745 Foreign23,149 12,066 3,973 Income before income tax expense and equity earnings of unconsolidated jointventures and entities$26,433 $14,844 $12,718 Net (income) expense attributable to noncontrolling interests:United States206 200 24 Foreign(127)(143)(128)Equity earnings and gain on sale of unconsolidated subsidiary:United States----(1)Foreign1,204 1,015 1,370 Income before income tax expense, net of non-controlling interests$27,716 $15,916 $13,983 Significant components of the provision for income taxes are as follows:(Dollars in thousands)201520142013Current income tax expenseFederal$481 $827 $1,121 State516 511 432 Foreign3,120 1,251 1,283 Total4,117 2,589 2,836 Deferred income tax expense (benefit)Federal438 (14,341)--State(971)(1,234)--Foreign1,359 3,201 2,106 Total826 (12,374)2,106 Total income tax expense (benefit)$4,943 $(9,785)$4,942 Deferred income taxes reflect the “temporary differences” between the financial statement carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes, adjusted by the relevant tax rate. The components of thedeferred tax assets and liabilities are as follows:(Dollars in thousands)December 31, 2015December 31, 2014Deferred Tax Assets:Net operating loss carry-forwards$13,286 $9,218 Alternative minimum tax credit carry-forwards540 3,540 Compensation and employee benefits5,531 6,625 Deferred revenue 7,657 8,564 Accrued expenses7,971 7,409 Accrued taxes3,285 4,264 Land and property11,264 12,797 Other1,058 924 Total Deferred Tax Assets50,592 53,341 Deferred Tax Liabilities:Intangibles(2,321)(3,217)Cancellation of indebtedness(2,396)(3,824)Notes receivable(8,696)(8,097)Total Deferred Tax Liabilities(13,413)(15,138)Net deferred tax assets before valuation allowance37,179 38,203 Valuation allowance(11,530)(15,936)Net deferred tax asset$25,649 $22,267 75 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination,we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxableincome, tax planning strategies and recent financial performance. US GAAP presumes that a valuation allowance is required when there issubstantial negative evidence about the realization of deferred tax assets, such as a pattern of comprehensive losses in recent years, coupledwith facts that suggest such losses may continue. Because such negative evidence is available for our Puerto Rico, New Zealand and USstate operations as of December 31, 2015, we recorded a valuation allowance of $11.5 million.As of December 31, 2015, we had the following carry-forwards:·approximately $1.1 million in U.S. alternative minimum tax credit carry-forwards with no expiration date; ·approximately $17.5 million in available New Zealand loss carry-forwards with no expiration date;·approximately $45 million in New York loss carryforwards expiring in 2034; and,·approximately $40 million in New York city loss carryforwards expiring in 2034.We disposed of our Puerto Rico operations during 2005 and plan no further investment in Puerto Rico for the foreseeable future. We haveapproximately $14.1 million in Puerto Rico loss carry-forwards expiring no later than 2018. No material future tax benefits from PuertoRico loss carry-forwards can be recognized by the Company unless it re-enters the Puerto Rico market for which the Company has nocurrent plans. We expect no other substantial limitations on the future use of U.S. or foreign loss carry-forwards except as described above.The provision for income taxes is different from amounts computed by applying U.S. statutory rates to consolidated losses before taxes. Thesignificant reason for these differences is as follows:(Dollars in thousands)201520142013Expected tax provision$9,397 $5,571 $4,894 Increase (decrease) in tax expense resulting from:Foreign tax rate differential(654)1,252 3,095 Change in valuation allowance1,531 (17,187)(3,882)Indefinite reinvestment assertion(3,089)----State and local tax provision1,113 375 296 State rate and law change(3,635)----Prior year adjustments(514)----Unrecognized tax benefits946 700 1,140 Other(152)(496)(601)Actual tax provision (benefit)$4,943 $(9,785)$4,942 The undistributed earnings of the Company's Australian subsidiaries are considered to be indefinitely reinvested. Accordingly, noprovision for U.S. federal and state income taxes or foreign withholding taxes has been provided on such undistributed earnings.Determination of the potential amount of unrecognized deferred U.S. income tax liability and foreign withholding taxes is not practicablebecause of the complexities associated with a hypothetical calculation. As part of current taxes payable, we have accrued $2.5 million in connection with federal and state liabilities arising from the “TaxAudit/Litigation” matter which has now been settled (see Note 12 – Commitments and Contingencies).The following table is a summary of the activity related to unrecognized tax benefits, excluding interest and penalties, for the years endedDecember 31, 2015, 2014, and 2013:(Dollars in thousands)201520142013Unrecognized tax benefits – gross beginning balance$3,760 $2,160 $2,171 Gross increases – prior period tax provisions6,679 1,600 (11)Gross increases – current period tax positions583 ----Unrecognized tax benefits – gross ending balance$11,022 $3,760 $2,160 We record interest and penalties related to income tax matters as part of income tax expense.76 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We had approximately $10.8 million and $11.4 million of gross tax benefits as of the adoption date and December 31, 2007, respectively,plus $1.7 million and $2.3 million of tax interest unrecognized on the financial statements as of each date, respectively. The gross taxbenefits mostly reflect operating loss carry-forwards and the IRS “Tax Audit/Litigation” case described below in Note 12 – Commitmentsand Contingencies.During the period January 1, 2013 to December 31, 2013 we recorded a decrease to tax interest of approximately $1.4 million, resulting in atotal balance of $1.8 million in interest. During the period January 1, 2014 to December 31, 2014, we recorded an increase to tax interest of$3.6 million, resulting in a total balance of $5.4 million in interest. During the period January 1, 2015 to December 31, 2015, we recordedan increase to tax interest of $0.5 million, resulting in a total $5.9 million in interest.It is difficult to predict the timing and resolution of uncertain tax positions. Based upon the Company’s assessment of many factors,including past experience and judgments about future events, it is probable that within the next 12 months the reserve for uncertain taxpositions will increase within a range of $500,000 to $1.5 million. The reasons for such change include but are not limited to tax positionsexpected to be taken during 2016, revaluation of current uncertain tax positions, and expiring statutes of limitations.Generally, changes to our federal and most state income tax returns for the calendar year 2010 and earlier are barred by statutes oflimitations. Certain U.S. subsidiaries filed federal and state tax returns for periods before these entities became consolidated with us. Thesesubsidiaries were examined by IRS for the years 1996 to 1999 and significant tax deficiencies were assessed for those years. Thosedeficiencies have been settled, as discussed in “Tax Audit/Litigation,” Note 12 – Commitments and Contingencies. New Zealand tax returnsfor the Reading New Zealand tax consolidated group for 2009 and later are under examination as of December 31, 2015. The income taxreturns filed in Australia and Puerto Rico for calendar year 2011 and afterward generally remain open for examination as of December 31,2015.77 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 10 - DebtThe Company’s borrowings, including the impact of interest rate swaps, are summarized below:​December 31, 2015(Dollars in thousands)Maturity DateContractualFacilityBalanceStated InterestRateEffective InterestRate (1)Denominated in USDTrust Preferred Securities (USA)April 30, 2027$27,913 $27,913 4.32%5.20%Bank of America Credit Facility (USA)November 28, 201955,000 29,750 2.92%3.65%Bank of America Line of Credit (USA)October 31, 20175,000 2,500 3.42%3.42%Cinema 1, 2, 3 Term Loan (USA)July 1, 201615,000 15,000 3.75%3.75%Cinema 1, 2, 3 Line of Credit (USA)July 1, 20166,000 --3.75%3.75%Minetta & Orpheum Theatres Loan (USA)June 1, 20187,500 7,500 3.00%3.00%Union Square Line of Credit (USA)June 2, 20178,000 8,000 3.65%3.65%Denominated in FC (2)NAB Corporate Term Loan (AU)June 30, 201948,452 26,594 3.06%3.06%Westpac Corporate Credit Facility (NZ)March 31, 201834,210 13,684 4.45%4.45%Total$207,075 $130,941 (1) Effective interest rate includes the impact of interest rate derivatives hedging the interest rate risk associated with Trust Preferred Securities and Bank of America Credit Facility that wereoutstanding as of December 31, 2015.(2) The contractual facilities and outstanding balances of the FC-denominated borrowings were translated into U.S. dollars based on the applicable exchange rates as of December 31, 2015.December 31, 2014(Dollars in thousands)Maturity DateContractualFacilityBalanceStated InterestRateEffective InterestRate (1)Denominated in USDTrust Preferred Securities (USA)April 30, 2027$27,913 $27,913 4.23%5.20%Bank of America Credit Facility (USA)November 28, 201955,000 29,750 2.67%3.65%Bank of America Line of Credit (USA)October 31, 20175,000 --3.17%3.17%Cinema 1, 2, 3 Term Loan (USA)July 1, 201615,000 15,000 3.69%3.69%Cinema 1, 2, 3 Line of Credit (USA)July 1, 20166,000 --3.69%3.69%Minetta & Orpheum Theatres Loan (USA)June 1, 20187,500 7,500 2.94%2.94%Union Square Theatre Term Loan (USA)May 1, 20157,500 6,468 5.92%5.92%Denominated in FC (2)NAB Corporate Term Loan (AU)June 30, 201947,403 47,403 5.04%7.85%NAB Corporate Credit Facility (AU)June 30, 20198,173 8,173 5.04%5.04%Westpac Corporate Credit Facility (NZ)March 31, 201521,829 21,829 5.80%5.80%Total$201,318 $164,036 (1) Effective interest rate includes the impact of interest rate derivatives hedging interest rate risk associated with Trust Preferred Securities, Bank of America Credit Facility and NAB CorporateTerm Loan.(2) The contractual facilities and outstanding balances of the FC-denominated borrowings were translated into U.S. dollar based on the applicable exchange rates as of December 31, 2014.78 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Debt denominated in USDTrust Preferred Securities (“TPS”)On February 5, 2007, we issued $51.5 million in 20-year fully subordinated notes to a trust that we control, which in turn issued $51.5million in securities. Of the $51.5 million, $50.0 million in TPS were issued to unrelated investors in a private placement and $1.5 millionof common trust securities were issued by the trust to Reading called “Investment in Reading International Trust I” on our balancesheets. Effective May 1, 2012, the interest rate on our Trust Preferred Securities changed from a fixed rate of 9.22%, which was in effect forfive years, to a variable rate of three month LIBOR plus 4.00%, which will reset each quarter through the end of the loan unless we exerciseour right to re-fix the rate at the current market rate at that time. Effective October 28, 2013, we entered into a fixed interest rate swap of$27.9 million at 1.20% plus the 4.00% margin, expiring on October 31, 2017, see Note 15 – Derivative Instruments. There are no principalpayments due until maturity in 2027 when the notes and the trust securities are scheduled to be paid in full. We may pay off the debt afterthe first five years at 100% of the principal amount without any penalty. The trust is essentially a pass through, and the transaction isaccounted for on our books as the issuance of fully subordinated notes. The credit facility includes a number of affirmative and negativecovenants designed to monitor our ability to service the debt. The most restrictive covenant of the facility requires that we must maintain afixed charge coverage ratio at a certain level. However, on December 31, 2008, we secured a waiver of all financial covenants with respectto our TPS for a period of nine years (through December 31, 2017), in consideration of the payment of $1.6 million, consisting of an initialpayment of $1.1 million, a payment of $270,000 made in December 2011, and a payment of $270,000 in December 2014.During the first quarter of 2009, we took advantage of the then current market illiquidity for securities such as our TPS to repurchase $22.9million in face value of those securities through an exchange of $11.5 million worth of marketable securities purchased during the periodfor the express purpose of executing this exchange transaction with the third party holder of these TPS. During the twelve months ended2009, we amortized $106,000 of discount to interest income associated with the holding of these securities prior to their extinguishment.On April 30, 2009, we extinguished $22.9 million of these TPS, which resulted in a gain on retirement of subordinated debt (TPS) of $10.7million net of loss on the associated write-off of deferred loan costs of $749,000 and a reduction in our Investment in Reading InternationalTrust I from $1.5 million to $838,000.During 2015, 2014, and 2013, we paid $1.4 million, $1.4 million, and $1.2 million, respectively, in preferred dividends to the unrelatedinvestors that are included in interest expense. At December 31, 2015 and 2014, we had preferred dividends payable of $198,000 and$194,000, respectively. Interest payments for this loan are required every three months.Bank of America Credit FacilityIn November 2014, our Bank of America Credit Facility was refinanced from $35.0 million to $55.0 million, bearing an interest rate ofLIBOR plus an applicable margin rate (ranging from 3.0% to 2.5%) adjusted quarterly and maturing on November 28, 2019.Bank of America Line of CreditIn October 2012, Bank of America renewed and increased our existing $3.0 million line of credit (“LOC”) to $5.0 million. The LOC bearsan interest rate of 3.0% above LIBOR plus a 0.03% unused line fee and will mature on October 31, 2017.Cinemas 1,2,3 Term Loan and Line of CreditIn June 2014, our controlled subsidiary Sutton Hill Properties, LLC, refinanced its existing $15.0 million term loan with Sovereign Bankand obtained an additional $6.0 million LOC for the potential acquisition of air rights to add additional density to any redevelopment ofthe property (collectively, “New Loan”). The New Loan is collateralized by our Cinema 1,2,3 property and any air rights that we mayacquire. The New Loan bears an interest rate of 3.5% above LIBOR and matures on July 1, 2016.Minetta and Orpheum Theatres LoanIn May 2013, we refinanced our Liberty Theaters loan with a $7.5 million loan, secured by our Minetta and Orpheum theatres, thusreleasing the Royal George from the security and leaving it unencumbered. This new loan has a maturity date of June 1, 2018, and aninterest rate of 2.75% above LIBOR. We have an interest rate cap in place to limit the interest rate on the debt at 6.75%. See Note 15 –Derivative Instruments.Union Square Theatre Line of CreditOn June 2, 2015, we replaced our Union Square Term Loan with an $8.0 million "non-revolving" LOC with East West Bank, collateralizedby our Union Square property. The LOC bears an interest rate of 2.95% above the 90-day LIBOR and matures on June 2, 2017, with anoption to extend for one additional year.Debt denominated in foreign currenciesAustralian NAB Corporate Term Loan and RevolverOn December 23, 2015, we amended our Reading Entertainment Australia Term Loan and Corporate Credit Facility with NAB, from a three-tiered facility comprised of (1) the Bank Bill Discount Facility with a facility limit of AU$61.3 million, an interest rate of79 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2.35% above the BBSY, and amortization at AU$2.0 million per year; (2) the Bill Discount Facility – Revolving with a facility limit ofAU$10.0 million and an interest rate of 1.50% above the BBSY on any undrawn portion; and (3) the Bank Guarantee Facility with a facilitylimit of AU$5.0 million, into a corresponding $48.5 million (AU$66.5 million) Revolving Corporate Markets Loan facility. The newfacility has an interest rate of 0.95% above BBSY on any outstanding borrowings and an unchanged maturity date of June 30, 2019. Inaddition, we will incur a facility fee of 0.95% per annum. We also have a $3.6 million (AU$5.0 million) Bank Guarantee facility at a rate of1.90% per annum. The modifications of this particular term loan were not considered to be substantial in accordance with US GAAP.On June 27, 2014, we refinanced our then existing three-tiered credit facility with NAB. It comprised of (1) the Bank Bill Discount Facilitywith a facility limit of AU$61.3 million, an interest rate of 2.35% above the BBSY, and amortization at AU$2.0 million per year; (2) the BillDiscount Facility – Revolving with a facility limit of AU$10.0 million and an interest rate of 1.50% above the BBSY on any undrawnportion; and (3) the Bank Guarantee Facility with a facility limit of AU$5.0 million. All three had an expiry date of June 30, 2019.New Zealand Corporate Credit FacilityOn May 21, 2015, we refinanced our existing New Zealand Corporate Credit Facility with a $34.2 million (NZ$50.0 million) facility withthe same bank (Westpac Bank), bearing an interest rate of 1.75% above Bank Bill Bid Rate and maturing on March 31, 2018. The facility isbroken into two tranches, one a $23.9 million (NZ$35.0 million) credit facility and the second tranche for a $10.3 million (NZ$15.0million) facility to be used for construction funding. No amounts have been drawn under the second tranche to be used for constructionfunding.As of December 31, 2015, our aggregate amount of future principal debt payments is estimated as follows:(Dollars in thousands)Future Principal Debt Payments2016 $15,000 2017 10,500 2018 21,184 2019 56,344 2020 --Thereafter 27,913 Total future principal loan payments $130,941 The estimated amount of future principal payments in U.S. dollars is subject to change because the payments in U.S. dollars on the debtdenominated in foreign currencies, which represents a significant portion of our total outstanding debt balance, will fluctuate based on theapplicable foreign currency exchange rates.NOTE 11 – Pension and Other LiabilitiesOther liabilities including pension are summarized as follows:(Dollars in thousands)December 31, 2015December 31, 2014Current liabilities Lease liability(1) $5,900 $5,900 Accrued pension(2) 1,539 855 Security deposit payable 180 202 Other 21 12 Other current liabilities $7,640 $6,969 Other liabilities Straight-line rent liability $10,823 $9,246 Accrued pension(2) 6,236 6,740 Lease make-good provision 5,228 4,385 Environmental reserve 1,656 1,656 Interest rate swap 156 2,177 Deferred Revenue - Real Estate 4,596 5,083 Acquired leases 866 1,265 Other 501 3,009 Other liabilities $30,062 $33,561 (1) Represents the lease liability of the option associated with the ground lease purchase of the Village East Cinema. See below for more information.(2) Represents the pension liability associated with the Supplemental Executive Retirement Plan explained below.80 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Lease Liability - Village East Purchase OptionOn June 29, 2010, we agreed to extend our existing lease from SHC of the Village East Cinema in New York City by 10 years, with a newtermination date of June 30, 2020. The Village East lease includes a sub-lease of the ground underlying the cinema that is subject to alonger-term ground lease between SHC and an unrelated third party that expires June 1, 2031 (the “cinema ground lease”). The extendedlease provides for a call option pursuant to which Reading may purchase the cinema ground lease for $5.9 million at the end of the leaseterm. Additionally, the lease has a put option pursuant to which SHC may require Reading to purchase all or a portion of SHC’s interest inthe existing cinema lease and the cinema ground lease at any time between July 1, 2013 and December 4, 2019. SHC’s put option may beexercised on one or more occasions in increments of not less than $100,000 each. Because our late Chairman, Chief Executive Officer, andcontrolling shareholder, Mr. James J. Cotter, Sr. was also the managing member of SHC, RDI and SHC are considered entities undercommon control. As a result, we have recorded the Village East Cinema building as a property asset of $4.7 million on our balance sheetbased on the cost carry-over basis from an entity under common control with a corresponding lease liability of $5.9 million presented underother liabilities which accreted up to the $5.9 million liability till July 1, 2013 (see Note 18 – Related Parties and Transactions). As theoption is able to be exercised by SHC starting on July 1, 2013, the lease liability has been classified as part of other current liabilities.Pension Liability - Supplemental Executive Retirement PlanOn August 29, 2014, the Supplemental Executive Retirement Plan (“SERP”) that was effective since March 1, 2007, was ended andreplaced with a new pension annuity. As a result of the termination of the SERP program, the accrued pension liability of $7.6 million wasreversed and replaced with a new pension annuity liability of $7.5 million. The valuation of the liability is based on the present value of$10.3 million discounted at 4.25% over a 15-year term, resulting in a monthly payment of $56,944 payable to the estate of Mr. Jim CotterSr. The discount rate of 4.25% has been applied since 2014 to determine the net periodic benefit cost and plan benefit obligation and isexpected to be used in future years. The discounted value of $2.5 million (which is the difference between the estimated payout of $10.3million and the present value of $7.8 million) will be amortized and expensed based on the 15-year term. In addition, the accumulatedactuarial loss of $3.1 million recorded, as part of other comprehensive income, will also be amortized based on the 15-year term.As a result of the above, included in our other current and non-current liabilities are accrued pension costs of $7.8 million and $7.6 millionas of December 31, 2015 and 2014, respectively. The benefits of our pension plans are fully vested and therefore no service costs wererecognized 2015 and 2014. Our pension plans are unfunded. The change in the SERP pension benefit obligation and the funded status are as follows:(Dollars in thousands)December 31, 2015December 31, 2014Benefit obligation at January 1$7,595 $7,398 Interest cost180 255 Actuarial gain--(58)Benefit obligation at December 31$7,775 $7,595 Funded status at December 31$(7,775)$(7,595)Amounts recognized in the balance sheet consists of:(Dollars in thousands)December 31, 2015December 31, 2014Current liabilities$1,539 $855 Other liabilities - Non current6,236 6,740 $7,775 $7,595 81 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The components of the net periodic benefit cost and other amounts recognized in other comprehensive income are as follows:(Dollars in thousands)December 31, 2015December 31, 2014Net periodic benefit costInterest cost$180 $209 Amortization of prior service costs--254 Amortization of net actuarial gain207 426 Net periodic benefit cost$387 $889 Items recognized in other comprehensive incomeNet loss$--$(58)Amortization of prior service cost--(254)Amortization of net loss(207)(426)Total recognized in other comprehensive income$(207)$(738)Total recognized in net periodic benefit cost and other comprehensiveincome$180 $151 Items not yet recognized as a component of net periodic pension cost consist of the following:(Dollars in thousands)December 31, 2015December 31, 2014Unamortized actuarial loss$2,848 $3,055 Accumulated other comprehensive loss$2,848 $3,055 The estimated unamortized actuarial loss for the defined benefit pension plan that will be amortized from accumulated other comprehensiveincome into net periodic benefit cost over the next fiscal year will be $207,000.The following table presents estimated future benefit payments for the next five years and thereafter as of December 31, 2015:(Dollars in thousands)Estimated Future Pension Payments2016$1,539 2017684 2018684 2019684 2020684 Thereafter3,500 Total pension payments$7,775 Lease Make-Good ProvisionThe Company recognizes obligations for future make-good costs relating to its leased premises. Each lease is unique to the negotiatedconditions with the lessor, but in general most leases require for the removal of cinema-related assets and improvements. There are no assetsspecifically restricted to settle this obligation.82 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. A reconciliation of the beginning and ending carrying amounts of the lease make-good provision is presented in the table:(Dollars in thousands)As of and for the year endedDecember 31, 2015As of and for the year endedDecember 31, 2014Opening balance$4,385 $- Liabilities incurred during the year1,314 4,385 Liabilities settled during the year(381)- Accretion expense212 - Effect of changes in foreign currency(302)- Ending balance$5,228 $4,385 NOTE 12 - Commitments and ContingenciesLEASE COMMITMENTSThe Company has entered into various leases for our cinema exhibition segment because most of our cinemas operate in leasedfacilities. We also lease office space and equipment under non-cancelable operating leases. As of December 31, 2015, the remaining termsof these leases, inclusive of options, range from 1 to 35 years. All of our leases are accounted for as operating leases and we do not have anycapital leases as of December 31, 2015.We determine the annual base rent expense of our cinemas by amortizing total minimum lease obligations on a straight-line basis over thelease terms. Certain of our cinema leases provide for contingent rentals based upon a specified percentage of cinema revenue with aguaranteed minimum. Substantially all of our leases require the payment of property taxes, insurance, and other costs applicable to theproperty. The base rent and contingent rental expenses are summarized as follows:(Dollars in thousands)201520142013Base rent expense$30,565 $30,914 $32,054 Contingent rental expense1,848 1,223 1,302 Total cinema rent expense$32,413 $32,137 $33,356 Future minimum lease payments by year and, in the aggregate, under non-cancelable operating leases consisted of the following:Minimum Lease Payments at December 31, 2015(Dollars in thousands)Ground LeasePremises LeaseEquipment LeaseTotal2016$3,529 $23,894 $2,694 $30,117 20173,621 23,712 2,665 29,998 20183,629 22,458 --26,087 20193,691 19,683 --23,374 20201,388 15,324 --16,712 Thereafter11,339 110,790 --122,129 Total$27,197 $215,861 $5,359 $248,417 We expect the amount of minimum lease payments will fluctuate depending on the foreign currency exchange rates of the Australian dollarto the U.S. dollar and the New Zealand dollar to the U.S. dollar, mainly because a significant portion of our cinema exhibition business isconducted in Australia and New Zealand. See Note 18 – Related Parties and Transactions for the amount of leases associated with anyrelated party leases.83 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. LITIGATION We are currently involved in certain legal proceedings and, as required, have accrued estimates of probable and estimable losses for theresolution of these claims.Where we are the plaintiffs, we expense all legal fees on an on-going basis and make no provision for any potential settlement amountsuntil received. In Australia, the prevailing party is usually entitled to recover its attorneys’ fees, which recoveries typically work out to beapproximately 60% of the amounts actually spent where first-class legal counsel is engaged at customary rates. Where we are a plaintiff, wehave likewise made no provision for the liability for the defendant’s attorneys' fees in the event we are determined not to be the prevailingparty.Where we are the defendants, we accrue for probable damages that insurance may not cover as they become known and can be reasonablyestimated. In our opinion, any claims and litigation in which we are currently involved are not reasonably likely to have a material adverseeffect on our business, results of operations, financial position, or liquidity. It is possible, however, that future results of the operations forany particular quarterly or annual period could be materially affected by the ultimate outcome of the legal proceedings.From time-to-time, we are involved with claims and lawsuits arising in the ordinary course of our business that may include contractualobligations, insurance claims, tax claims, employment matters, and anti-trust issues, among other matters. All of these matters require that we make judgments based on the facts known to us. These judgments are inherently uncertain and canchange significantly when additional facts become known. We provide accruals for matters that are either probably or reasonably possibleand can be properly estimated as to their expected negative outcome. We do not record expected gains until the proceeds are received by usTAX AUDIT/LITIGATIONThe Internal Revenue Service (the “IRS”) examined the tax return of Craig Corporation (“CRG”) for its tax year ended June 30, 1997. CRGwas a stand-alone entity in the year of audit but is now a wholly-owned subsidiary of the Company. In Tax Court, CRG and the IRS agreedto compromise the claims made by the IRS against CRG, and the court order was entered on January 6, 2011. As of December 31, 2015, theremaining federal tax obligation was $2.5 million, reflecting additional interest accrued during the term of the four year installment plan.For additional information, see Note 9 – Income Taxes.ENVIRONMENTAL AND ASBETOS CLAIMSCertain of our subsidiaries were historically involved in railroad operations, coal mining, and manufacturing. Also, certain of thesesubsidiaries appear in the chain-of-title of properties that may suffer from pollution. Accordingly, certain of these subsidiaries have, fromtime-to-time, been named in and may in the future be named in various actions brought under applicable environmental laws. Also, we arein the real estate development business and may encounter from time-to-time unanticipated environmental conditions at properties that wehave acquired for development. These environmental conditions can increase the cost of such projects and adversely affect the value andpotential for profit of such projects. We do not currently believe that our exposure under applicable environmental laws is material inamount.From time-to-time, we have claims brought against us relating to the exposure of former employees of our railroad operations to asbestosand coal dust. These are generally covered by an insurance settlement reached in September 1990 with our insurance carriers. However, thisinsurance settlement does not cover litigation by people who were not our employees and who may claim second-hand exposure toasbestos, coal dust and/or other chemicals or elements now recognized as potentially causing cancer in humans. Our known exposure tothese types of claims, asserted or probable of being asserted, is not material.DERIVATIVE LITIGATION AND JAMES J. COTTER, JR. ARBITRATIONOn June 12, 2015, the Board of Directors terminated James J. Cotter, Jr. as the President and Chief Executive Officer of our Company. Thatsame day, Mr. Cotter, Jr. filed a lawsuit, styled as both an individual and a derivative action, and titled “James J. Cotter, Jr., individuallyand derivatively on behalf of Reading International, Inc. vs. Margaret Cotter, et al.” Case No,: A-15-719860-V, Dept XI (the “Cotter Jr.Derivative Action” and the “Cotter, Jr. Complaint,” respectively) against the Company and each of our other then sitting Directors (EllenCotter, Margaret Cotter, Guy Adams, William Gould, Edward Kane, Douglas McEachern, and Tim Storey, the “Defendant Directors”) in theEighth Judicial District Court of the State of Nevada for Clark County (the “Nevada District Court”). On October 22, 2015, Mr. Cotter, Jr.,amended his complaint to drop his individual claims (the “Amended Cotter Jr. Derivative Complaint”). Accordingly, the Amended Cotter,Jr. Complaint presently purports to assert only purportedly derivative claims and to seek remedies only on behalf of the Company. Thelawsuit currently alleges, among other things, that the Defendant Directors breached their fiduciary duties to the Company byterminating Mr. Cotter, Jr. as President and Chief Executive Officer, 84 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. continuing to make use of the Executive Committee that has been in place for more than the past ten years, making allegedly potentiallymisleading statements in its press releases and filings with the Securities and Exchange Commission (“SEC”), paying certain compensationto Ms. Ellen Cotter, and allowing the Cotter Estate to make use of Class A Common Stock to pay for the exercise of certain longoutstanding stock options held of record by the Cotter Estate. He seeks reinstatement as President and CEO and alleges as damagesfluctuations in the price for our Company’s shares after the announcement of his termination as President and CEO and certain unspecifieddamages to our Company’s reputation.In a derivative action, the stockholder plaintiff seeks damages or other relief for the benefit of the Company, and not for the stockholderplaintiff’s individual benefit. Accordingly, the Company is, at least in theory, only a nominal defendant in such a derivativeaction. However, as a practical matter, because Mr. Cotter, Jr. is also seeking, among other things, an order that our Board’s determinationto terminate Mr. Cotter Jr. was ineffective and that he be reinstated as the President and CEO of the Company and also disbanding ourBoard’s Executive Committee (an injunctive remedy that, if granted, would be binding on the Company), and as he asserts potentiallymisleading statements in certain press releases and filings with the SEC, the Company is incurring significant cost and expense defendingthe decision to terminate Mr. Cotter, Jr. as President and Chief Executive Officer, its board committee structure, and the adequacy of thosepress releases and filings. Also, the Company continues to incur costs promulgating and responding to discovery demands and satisfyingindemnity obligations to the Defendant Directors.Our directors and officers liability insurer is providing insurance coverage, subject to a $500,000 deductible (which has now beenexhausted) and its standard reservation of rights, with respect to the defense of the Director Defendants. Our new Directors, Dr. JudyCodding and Mr. Michael Wrotniak, are not named in the Cotter Jr. Derivative Action as they were not Directors at the time of the breachesof fiduciary duty alleged by Mr. Cotter, Jr.Pursuant to the terms of Mr. Cotter Jr.’s employment agreement with the Company, disputes relating to his employment are to bearbitrated. Accordingly, on July 14, 2015, the Company filed an arbitration demand with the American Arbitration Association against Mr.Cotter, Jr. The demand seeks declaratory relief, among other things, that Mr. Cotter, Jr.'s employment and employment agreement with theCompany have been validly terminated and that the Board of Directors validly removed him from his positions as Chief Executive Officerand President of the Company and positions with the Company’s subsidiaries.Mr. Cotter, Jr. has filed a counter-complaint in the arbitration, asserting claims for breach of his employment contract, declaratory relief, andcontractual indemnification. Mr. Cotter, Jr.’s counsel has advised that Mr. Cotter is seeking a variety of damages, including consequentialdamages, and that such claimed damages total not less than $1,000,000. On April 19, 2016, Mr. Cotter, Jr. filed an action in the DistrictCourt, Clark County, Nevada seeking to recover his costs of defending the Arbitration, plus compensatory damages and interest at themaximum legal rate. On August 6, 2015, the Company received notice that a Motion to Intervene in the Cotter Jr Derivative Action and that a proposedderivative complaint had been filed in the Nevada District Court captioned T2 Partners Management, LP, a Delaware limited partnership,doing business as Kase Capital Management; T2 Accredited Fund, LP, a Delaware limited partnership, doing business as Kase Fund; T2Qualified Fund, LP, a Delaware limited partnership, doing business as Kase Qualified Fund; Tilson Offshore Fund, Ltd, a Cayman Islandsexempted company; T2 Partners Management I, LLC, a Delaware limited liability company, doing business as Kase Management: T2Partners Management Group, LLC, a Delaware limited liability company, doing business as Kase Group; JMG Capital Management, LLC, aDelaware limited liability company, Pacific Capital Management, LLC, a Delaware limited liability company, derivatively on behalf ofReading International, Inc. vs. Margaret Cotter, Ellen Cotter, Guy Adams, Edward Kane, Douglas McEachern, Timothy Storey, WilliamGould and Does 1 through 100, inclusive, as defendants, and, Reading International, Inc., a Nevada corporation, as Nominal Defendant (the“T2 Derivative Action” ). On August 11, 2015, the Court granted the motion of T2 Partners Management, LP et. al. (the “T2 Plaintiffs”),allowing these plaintiffs to file their complaint (the “T2 Derivative Complaint”).On September 9, 2015, certain of the Defendant Directors filed a Motion to Dismiss the T2 Derivative Complaint. The Company joined thisMotion to Dismiss on September 14, 2015. The hearing on this Motion to Dismiss was vacated as the T2 Plaintiffs voluntarily withdrew theT2 Derivative Complaint, with the parties agreeing that T2 Plaintiffs would have leave to amend the Complaint. On February 12, 2016,The T2 plaintiff filed an amended T2 Derivative Complaint (the “Amended T2 Derivative Complaint”).85 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The T2 Plaintiffs allege in their Amended T2 Derivative Complaint various violations of fiduciary duty, abuse of control, grossmismanagement and corporate waste by the Defendant Directors. More specifically the T2 Derivative Complaint seeks the reinstatement ofJames J. Cotter, Jr. as President and Chief Executive Officer and certain monetary damages, as well as equitable injunctive relief, attorneyfees and costs of suit. Once again, the Company has been named as a nominal defendant. However, because the T2 Derivative Complaintalso seeks the reinstatement of Mr. Cotter, Jr., as our President and CEO, it is being defended by the Company. In addition, the Companycontinues to incur costs promulgating and responding to discovery demands and satisfying indemnity obligations to the DefendantDirectors. The Defendant Directors are the same as named in the Cotter Jr. Derivative Action as well as our two new Directors Dr. JudyCodding and Michael Wrotniak and Company legal counsel, Craig Tompkins. The cost of the defense of Directors Codding and Wrotniakis likewise being covered by our Directors and officer’s liability insurance carrier with the same reservations of right as in the Cotter Jr.Derivative Action, but without any separate deductible. The cost of the defense of Mr. Tompkins is being covered by the Company underits indemnity agreement with him.The Amended T2 Derivative Complaint has deleted its request for an order disbanding our Executive Committee and for an order“collapsing the Class A and B stock structure into a single class of voting stock.” The Amended T2 Complaint has added a request for anorder setting aside the election results from the 2015 Annual Meeting of Stockholders, based on an allegation that Ellen Cotter andMargaret Cotter were not entitled to vote the shares of Class B Common Stock held by the Cotter Estate and the Cotter Trust. The Companyand the other defendants contest the allegations of the T2 Plaintiffs. The Company followed applicable Nevada law in recognizing thatEllen Cotter and Margaret Cotter had the legal right and power to vote the shares of Class B Common Stock held of record by the CotterEstate and the Cotter Trust, and the independent Inspector of Elections has certified the results of that election.. Furthermore, even if theelection results were to be overturned or voided, this would have no impact on the current composition of our Board or any action taken byour Board since our 2015 Annual Meeting of Stockholders, as all of the nominees were standing for re-election and accordingly retain theirdirectorships until their replacements are elected. The Company will vigorously contest any assertions by the T2 Plaintiffs challenging thevoting at the 2015 Annual Meeting of Stockholders and believes that the court will rule for the Company should this issue ever reach thecourt. The case is current set for trial in November, 2016. The T2 Plaintiffs have not sought any expedited ruling from the Court withrespect to their assertions that Ellen Cotter and Margaret Cotter did not have the right and power to vote the shares of Class B CommonStock held of record by the Cotter Estate and the Cotter Trust.The Company believes that the claims set forth in the Amended Cotter Jr. Derivative Complaint and the Amended T2 Derivative Complaintare entirely without merit and seek equitable remedies for which no relief can be given. The Company intends to defend vigorously againstany claims against our officers and directors and against any attempt to reinstate Mr. Cotter, Jr. as President and Chief Executive Officer orto effect any changes in the rights of our Company’s stockholders. THE STOMP ARBITRATION In April 2015, Liberty Theatres, LLC (“Liberty”), a wholly owned subsidiary of the Company, commenced an American ArbitrationAssociation arbitration proceeding (Case No.:01-15-0003-3728) against The Stomp Company Limited Partnership (the “Producer”) inresponse to the Producer’s purported termination of their license agreement with Liberty relating to the long playing show STOMP. Libertysought specific performance, injunctive and declaratory relief and damages. The Producer counterclaimed for unspecified damages,alleging that Liberty has interfered with the Producer’s endeavors to move the show to another Off-Broadway theater. The Producer basedits purported termination of the license agreement upon the alleged deficient condition of the Orpheum Theater, in which STOMP has beenplaying for more than the past 20 years.On December 18, 2015, the Arbitrator issued his Partial Final Award of Arbitration, providing for, among other things (i) the issuance of apermanent injunction prohibiting the Producer from “transferring or taking actions to market, promote, or otherwise facilitate any transferof, STOMP to another theatre in New York City having fewer than 500 seats without Liberty’s prior written consent”, (ii) the Producer’sNotice of Termination purportedly terminating the parties’ license agreement was invalid, null and void and the License Agreementremains in full force and effect, and (iii) the award to Liberty of its reasonable attorneys’ fees in an amount to be determined by theArbitrator. The Company expects the final award of attorneys’ fees to be decided during the second quarter of 2016.In explaining his decision to award Liberty its reasonable attorneys’ fees, the Arbitrator stated as follows: “Liberty is entitled to such anaward [of attorneys’ fees] not only because it is the prevailing party in this proceeding, but because [the Producer] unfairly disparaged theOrpheum and caused Liberty to incur attorneys’ fees in order to address and resolve [the Producer’s] groundless and frivolous allegationswith respect to the Orpheum’s condition, Liberty’s performance under the License Agreement, and Stomp’s reasons for seeking to transferSTOMP to a larger theatre.”86 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 13 – Noncontrolling interestsAs of December 31, 2015, the noncontrolling interests in our consolidated subsidiaries are comprised of the following:·Australia Country Cinemas Pty Ltd. -- 25% noncontrolling interest owned by Panorama Cinemas for the 21st Century Pty Ltd.;·Shadow View Land and Farming, LLC -- 50% noncontrolling membership interest owned by the estate of Mr. James J. Cotter, Sr.;and·Sutton Hill Properties, LLC -- 25% noncontrolling interest owned by Sutton Hill Capital, LLC.The components of noncontrolling interest are as follows:(Dollars in thousands)December 31, 2015December 31, 2014AFC LLC$--$--Australian Country Cinemas, Pty Ltd318 410 Shadow View Land and Farming, LLC1,940 2,000 Sutton Hill Properties, LLC2,073 2,202 Noncontrolling interests in consolidated subsidiaries$4,331 $4,612 The components of income/(loss) attributable to noncontrolling interests are as follows:(Dollars in thousands)201520142013AFC LLC$--$--$173 Australian Country Cinemas, Pty Ltd126 143 129 Shadow View Land and Farming, LLC(77)(64)(50)Sutton Hill Properties, LLC(128)(136)(148)Noncontrolling interests in consolidated subsidiaries$(79)$(57)$104 AFC LLC Acquisition of Noncontrolling InterestOn June 28, 2013, we acquired the interest in AFC LLC that we did not already own in consideration of the release of certain claims we heldagainst the owner of that interest under a guaranty agreement. The removal of the AFC LLC noncontrolling interest balance at December31, 2013 was reflected as a change in our additional paid in capital.Shadow View Land and Farming, LLC This land is held in Shadow View Land and Farming, LLC, in which the Cotter Estate or the Cotter Trust now owns a 50% interest. We arethe managing member of Shadow View Land and Farming, LLC. We consolidate the Cotter Estate’s and/or the Cotter Trust’s interest in theproperty and its expenses with that of our interest and show their interest as a noncontrolling interest. Note 4 – Acquisitions, Disposals, andAssets Held for Sale.Sutton Hill PropertiesOn June 18, 2013, our co-investor, having a 25% interest in our Sutton Hill Properties subsidiary, contributed $2.25 million toward thepayoff of our SHC Note 2 for $9.0 million, resulting in a $2.25 million contribution of capital to Sutton Hill Properties (See Note 10 –Debt).87 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 14 – Equity and Stock-Based CompensationFormer Executive Stock Based CompensationAs part of his compensation package, Mr. James J. Cotter, Sr., our now deceased former Chairman of the Board and Chief Executive Officer,was granted restricted Class A Non-voting Common Stock (“Class A Stock”) for 2014 and 2013. Mr. Cotter, Sr.’s stock compensation wasgranted fully vested with a five-year restriction on sale and the applicable compensation expense was recorded in the year of grant. The2014 stock grants were issued in the first quarter of 2015. The table below summarizes the fair value on grant date recognized ascompensation, the number of shares granted, and the fair value of stock per share for the years ended December 31, 2014 and 2013: Fair Value Number of Shares Fair Value Per Share2014 $1,200,000 160,643 $7.47 2013 750,000 125,209 5.99 Employee and Director Stock Option PlanThe Company may grant stock options and other share-based payment awards of our Class A Stock to eligible employees, Directors, andconsultants under the 2010 Stock Incentive Plan. The aggregate total number of shares of the Class A Nonvoting Common Stockauthorized for issuance under our 2010 Stock Incentive Plan is 1,250,000. As of December 31, 2015, we had 551,800 shares remaining forfuture issuances.Stock options are generally granted at exercise prices equal to the grant-date market prices and expire no later than ten years from the grantdate. In recent periods, we have typically limited the exercise period of granted options to five years. At the discretion of ourCompensation and Stock Options Committee, the vesting period of stock options ranges from zero to four years. At the time that options areexercised, at the discretion of management, we will either issue treasury shares or make a new issuance of shares to the option holder.We estimate the grant-date fair value of our options using the Black-Scholes option-valuation model, which takes into account assumptionssuch as the dividend yield, the risk-free interest rate, the expected stock price volatility, and the expected life of the options. We expensethe estimated grant-date fair values of options over the vesting period on a straight-line basis. Based on our historical experience and therelative market price to strike price of the options, we have not hereto estimated any forfeitures of vested or unvested options.The weighted average assumptions used in the option-valuation model were as follows:201520142013Stock option exercise price$13.30 $8.56 $6.19 Risk-free interest rate2.23% 2.51% 2.25% Expected dividend yield------Expected option life in years4 5 5 Expected volatility31.86% 31.33% 31.80% Weighted average fair value$3.82 $2.76 $1.98 We recorded compensation expense of $282,308, $146,000, and $199,000 for 2015, 2014, and 2013, respectively. At December 31, 2015,the total unrecognized estimated compensation cost related to non-vested stock options was $576,248 which is expected to be recognizedover a weighted average vesting period of 1.83 years. Cash and other consideration received from option exercises during 2015, 2014, and2013 totaled $3.0 million, $978,000, and $248,000, respectively. 88 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The following is a summary of the status of RDI’s outstanding stock options: Outstanding Stock OptionsNumber of OptionsWeighted Average ExercisePriceWeighted AverageRemaining Years ofContractual LifeAggregateIntrinsic ValueClass AClass BClass AClass BClass A&BClass A&BOutstanding - January 1, 2013672,350 185,100 $6.24 $9.90 Granted175,000 --6.19 --Exercised(137,500)--4.00 --$133,000 Outstanding - December 31, 2013709,850 185,100 $6.66 $9.90 4.70 $938,503 Granted80,000 --8.56 --Exercised(157,600)--6.21 --$374,022 Expired(64,000)--6.83 --Outstanding - December 31, 2014568,250 185,100 $6.88 $9.90 2.40 $4,197,000 Granted112,000 --13.30 --Exercised(185,685)(185,100)6.09 9.90 $327,170 Expired(8,000)--6.23 --Outstanding - December 31, 2015486,565 --$8.68 $--2.89 $2,188,011 The following is a summary of the status of RDI’s vested stock options:Vested Stock OptionsNumber of OptionsWeighted Average Exercise PriceWeighted AverageRemaining Years ofContractual LifeAggregateIntrinsic ValueClass AClass BClass AClass BClass A&BClass A&BDecember 31, 2015256,065 --$7.64 $--2.14 $1,401,321 December 31, 2014348,000 185,100 6.82 9.90 3.63 2,476,230 December 31, 2013490,350 185,100 6.85 9.90 3.11 646,032 Common Stock RepurchaseOn May 16, 2014, the Company's Board of Directors authorized management, at its discretion, to spend up to an aggregate of $10.0 millionto acquire shares of the Company’s common stock. This approved stock repurchase plan supersedes and effectively cancels the programthat was approved by the Board of Directors on May 14, 2004, which allowed management to purchase up to 350,000 shares of Reading’scommon stock.The repurchase program allows Reading to repurchase its shares in accordance with the requirements of the SEC on the open market, inblock trades and in privately negotiated transactions, depending on market conditions and other factors. All purchases are subject to theavailability of shares at prices that are acceptable to Reading, and accordingly, no assurances can be given as to the timing or number ofshares that may ultimately be acquired pursuant to this authorization.The Company repurchased its common stock as follows: Shares AcquiredShare PriceTotal Paid (in thousands)2015240,102 $12.95 $3,109 2014432,252 9.42 4,070 Total672,354 $10.68 $7,178 89 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Accumulated Other Comprehensive IncomeThe following table summarizes the changes in each component of accumulated other comprehensive income attributable to RDI:(Dollars in thousands)Foreign CurrencyItemsUnrealized Gain(Losses) on Available-for-Sale InvestmentsAccrued PensionService CostsTotalBalance at January 1, 2015$31,084 $10 $(3,055)$28,039 Net current-period other comprehensiveincome(16,442)2 207 (16,233)Balance at December 31, 2015$14,642 $12 $(2,848)$11,806 NOTE 15 – Derivative InstrumentsWe enter into interest rate derivative instruments to hedge the interest rate risk that results from the characteristics of our floating-rateborrowings. Our use of derivative transactions is intended to reduce long-term fluctuations in cash flows caused by market movements. Allderivative instruments are recorded on the balance sheets at fair value with changes in fair value recorded to interest expense in theconsolidated statements of operations. As of December 31, 2015, we have not designated any of our derivatives as accounting hedges.The Company’s derivative positions measured at fair value are summarized in the following tables:December 31, 2015(Dollars in thousands)NotionalCurrent AssetsOther AssetsOther CurrentLiabilitiesOther Long-TermLiabilitiesInterest rate swap$52,413 $--$--$156 $--Interest rate cap7,500 --1 ----December 31, 2014(Dollars in thousands)NotionalCurrent AssetsOther AssetsOther CurrentLiabilitiesOther Long-TermLiabilitiesInterest rate swap$105,360 $--$--$2,153 $--Interest rate cap7,500 ----24 --The following table summarizes the unrealized gains or losses due to changes in fair values of the derivatives that are recorded in interestexpense in the consolidated statements of operations, for 2015, 2014, and 2013: (Dollars in thousands)201520142013Net unrealized gains on interest rate derivatives$2,021 $1,036 $2,642 90 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 16 – Fair Value MeasurementRecurring Fair Value MeasurementThe following tables summarize our financial assets and financial liabilities measured at fair value on a recurring basis by level within thefair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that issignificant to the fair value measurement.Recurring Fair Value Measurement at December 31, 2015(Dollars in thousands)Level 1Level 2Level 3TotalAssets Investments$51 $--$--$51 Derivatives--1 --1 Liabilities Derivatives--(156)--(156)Total recorded at fair value$51 $(155)$--$(104)Recurring Fair Value Measurement at December 31, 2014(Dollars in thousands)Level 1Level 2Level 3TotalAssets Investments$54 $--$--$54 Derivatives--------Liabilities Derivatives--(2,177)--(2,177)Total recorded at fair value$54 $(2,177)$--$(2,123)Nonrecurring Fair Value Measurement The following tables provide information about financial assets and liabilities not carried at fair value on a nonrecurring basis in ourconsolidated balance sheets: Fair Value Measurement at December 31, 2015(Dollars in thousands)Carrying ValueLevel 1Level 2Level 3TotalFinancial assets Cash and Cash equivalents$19,702 $19,702 $--$--$19,702 Accounts receivables10,036 10,036 ----10,036 Restricted Cash160 160 ----160 Financial liabilities Accounts and film rent payable$32,929 $32,929 $--$--$32,929 Notes payable103,028 ----99,554 99,554 Subordinated debt27,913 ----13,338 13,338 91 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Fair Value Measurement at December 31, 2014(Dollars in thousands)Carrying ValueLevel 1Level 2Level 3TotalFinancial assets Cash and Cash equivalents$50,248 $50,248 $--$--$50,248 Accounts receivables11,348 11,348 ----11,348 Restricted Cash1,433 1,433 ----1,433 Financial liabilities Accounts and film rent payable$28,845 $28,845 $--$--$28,845 Notes payable136,123 ----116,115 116,115 Subordinated debt27,913 ----10,096 10,096 NOTE 17 - Future Minimum Rental IncomeReal estate revenue amounted to $15.0 million, $16.9 million, and $18.8 million, for the years ended December 31, 2015, 2014, and 2013,respectively. As of December 31, 2015, future minimum rental income under all contractual operating leases is summarized as follows: (Dollars in thousands)Future Minimum Rental Income2016$7,919 20176,781 20185,889 20194,938 20203,913 Thereafter16,380 Total$45,820 NOTE 18 – Related Parties and TransactionsSutton Hill CapitalIn 2001, we entered into a transaction with Sutton Hill Capital, LLC (“SHC”) regarding the master leasing, with an option to purchase, ofcertain cinemas located in Manhattan including our Village East and Cinemas 1,2,3 theaters. In connection with that transaction, we alsoagreed (i) to lend certain amounts to SHC, to provide liquidity in its investment, pending our determination whether or not to exercise ouroption to purchase and (ii) to manage the 86th Street Cinema on a fee basis. SHC is a limited liability company owned in equal shares bythe Cotter Estate or the Cotter Trust and a third party.As previously reported, over the years, two of the cinemas subject to the master leasing agreement have been redeveloped and one (theCinemas 1, 2 & 3 discussed below) has been acquired. The Village East is the only cinema that remains subject to this master lease. Wepaid an annual rent of $590,000 for this cinema to SHC in each of 2015, 2014, and 2013. During this same period, we receivedmanagement fees from the 86th Street Cinema of $151,000, $123,000 and $183,000.In 2005, we acquired (i) from a third party the fee interest underlying the Cinemas 1,2,3 and (ii) from SHC its interest in the ground leaseestate underlying and the improvements constituting the Cinemas 1,2,3. The ground lease estate and the improvements acquired from SHCwere originally a part of the master lease transaction, discussed above. In connection with that transaction, we granted to SHC an option toacquire at cost a 25% interest in the special purpose entity (Sutton Hill Properties, LLC) formed to acquire these fee, leasehold andimprovements interests. On June 28, 2007, SHC exercised this option, paying $3.0 million and assuming a proportionate share of SHP’sliabilities. At the time of the option exercise and the closing of the acquisition of the 25% interest, SHP had debt of $26.9 million,including a $2.9 million, non-interest bearing intercompany loan from the Company. As of December 31, 2015, SHP had debt of $19.4million (again, including the intercompany loan). Since the acquisition by SHC of its 25% interest, SHP has covered its operating costs anddebt service through cash flow from the Cinema 1,2,3, (ii) borrowings from third parties, and (iii) pro-92 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. rata contributions from the members. We receive an annual management fee equal to 5% of SHP’s gross income for managing the cinemaand the property, amounting to $153,000, $123,000 and $183,000 in 2015, 2014 and 2013 respectively. This management fee wasmodified in 2015, as discussed below, retroactive to December 1, 2014.On June 29, 2010, we agreed to extend our existing lease from SHC of the Village East Cinema by 10 years, with a new termination date ofJune 30, 2020. This amendment was reviewed and approved by our Audit and Conflicts Committee. The Village East lease includes a sub-lease of the ground underlying the cinema that is subject to a longer-term ground lease between SHC and an unrelated third party thatexpires in June 2031 (the “cinema ground lease”). The extended lease provides for a call option pursuant to which Reading may purchasethe cinema ground lease for $5.9 million at the end of the lease term. Additionally, the lease has a put option pursuant to which SHC mayrequire Reading to purchase all or a portion of SHC’s interest in the existing cinema lease and the cinema ground lease at any time betweenJuly 1, 2013 and December 4, 2019. SHC’s put option may be exercised on one or more occasions in increments of not less than $100,000each. We recorded the Village East Cinema building as a property asset of $4.7 million on our balance sheet based on the cost carry-overbasis from an entity under common control with a corresponding capital lease liability of $5.9 million presented under other liabilities (seeNote 11 – Pension and Other Liabilities).In February 2015, we and SHP entered into an amendment to the management agreement dated as of June 27, 2007 between us andSHP. The amendment, which was retroactive to December 1, 2014, memorialized our undertaking to SHP with respect to $750,000 (the“Renovation Funding Amount”) of renovations to Cinemas 1, 2 & 3 funded or to be funded by us. In consideration of our funding of therenovations, our annual management fee under the management agreement was increased commencing January 1, 2015 by an amountequivalent to 100% of any incremental positive cash flow of Cinemas 1, 2, 3 over the average annual positive cash flow of the Cinemas1,2,3 over the three-year period ended December 31, 2014 (not to exceed a cumulative aggregate amount equal to the Renovation FundingAmount), plus a 15% annual cash-on-cash return on the balance outstanding from time to time of the Renovation Funding Amount, payableat the time of the payment of the annual management fee. Under the amended management agreement, we are entitled to retain ownership of(and any right to depreciate) any furniture, fixtures and equipment purchased by us in connection with such renovation and have the right(but not the obligation) to remove all such furniture, fixtures and equipment (at our own cost and expense) from the Cinemas upon thetermination of the management agreement. The amendment also provides that, during the term of the management agreement, SHP will beresponsible for the cost of repair and maintenance of the renovations. In 2015, we received a management fee of $153,000. Thisamendment was approved by SHC and by the Audit and Conflicts Committee of our Board of Directors.OBI Management AgreementPursuant to a Theater Management Agreement (the “Management Agreement”), our live theater operations were, until recently, managed byOff-Broadway Investments, LLC (“OBI Management”), which is wholly owned by Ms. Margaret Cotter who is the daughter of the late Mr.James J. Cotter, Sr., the sister of Ellen Cotter and James Cotter, Jr., and a member of our Board of Directors. That Management Agreementwas terminated effective March 10, 2016 in connection with the retention by our Company of Margaret Cotter as a full time employee.The Theater Management Agreement generally provided for the payment of a combination of fixed and incentive fees for the managementof our four live theaters. Historically, these fees have equated to approximately 21% of the net cash flow generated by these properties. Wecurrently estimate that fees to be paid to OBI for 2015 will be approximately $589,000. We paid $397,000 and $401,000 in fees withrespect to 2014, and 2013, respectively. We also reimbursed OBI for certain travel expenses, shared the cost of an administrative assistantand provided office space at our New York offices. The increase in the payment to OBI for 2015 was attributable to work done by MargaretCotter, working through OBI with respect to the development of our Union Square and Cinemas 1,2&3 properties.OBI Management historically conducted its operations from our office facilities on a rent-free basis, and we shared the cost of oneadministrative employee of OBI Management. We reimbursed travel related expenses for OBI Management personnel with respect to travelbetween New York City and Chicago in connection with the management of the Royal George complex. Other than these expenses, OBIManagement was responsible for all of its costs and expenses related to the performance of its management functions. The ManagementAgreement renewed automatically each year unless either party gives at least six months’ prior notice of its determination to allow theManagement Agreement to expire. In addition, we could terminate the Management Agreement at any time for cause.Effective March 10, 2016, Margaret Cotter became a full time employee of the Company and the Management Agreement wasterminated. As Executive Vice-President Real Estate Management and Development - NYC, Ms. Cotter will continue to be responsible forthe management of our live theater assets, will continue her role heading up the pre-redevelopment of our New York Properties and willbecome our senior executive responsible for the actual redevelopment of our New York properties. Pursuant to the termination agreement(which is currently being finalized as of the date of the audit report), Ms. Cotter will be giving up any right she might otherwise have,through OBI, to income from STOMP.93 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Ms. Cotter's compensation as Executive Vice-President was set as part of an extensive executive compensation process. For 2016, Ms.Cotter's base salary will be $350,000, she will have a short term incentive target bonus opportunity of $105,000 (30% of her base salary),and she was granted a long term incentive of a stock option for 19,921 shares of Class A common stock and 4,184 restricted stock unitsunder the Company's 2010 Stock Incentive Plan, as amended, which long term incentives vest over a four year period.Live Theater Play InvestmentFrom time to time, our officers and Directors may invest in plays that lease our live theaters. The play STOMP has been playing in ourOrpheum Theatre since prior to the time we acquired the theater in 2001. The Cotter Estate or the Cotter Trust and Mr. Michael Forman ownan approximately 5% interest in that play, an interest that they have held since prior to our acquisition of the theater. Refer to Item 3 –Legal Proceedings for more information about the show STOMP.Shadow View Land and Farming LLC During 2012, Mr. James J. Cotter, Sr., our then Chairman, Chief Executive Officer and controlling shareholder, contributed $2.5 millioncash and $255,000 of his 2011 bonus as his 50% share of the purchase price of a land parcel in Coachella, California and to cover his 50%share of certain costs associated with that acquisition. This land is held in Shadow View Land and Farming, LLC, in which the CotterEstate or the Cotter Trust owns a 50% interest. We are the managing member of Shadow View Land and Farming, LLC (see Note 13 –Noncontrolling Interests). The property is held debt free, and operating and holding costs are covered by member contributions. The Auditand Conflicts Committee of the Board of Directors is charged with responsibility for oversight of our management of the management ofShadow View.Document Storage AgreementIn consideration of the payment of $100 per month, our Company has agreed to allow Ellen Cotter and Margaret Cotter to keep certain filesrelated to the Cotter Estate and/or the Cotter Trust at our Los Angeles Corporate Headquarters.NOTE 19 – Casualty Loss On July 21, 2013, Wellington, New Zealand experienced a strong earthquake that damaged our parking structure adjacent to our CourtenayCentral ETC. The parking structure reopened in November 2014. As of December 31, 2015, the car park has been repaired andstrengthened to its pre-earthquake strength of 35% of code and work continues to bring this up to 70% of code.NOTE 20 – Unaudited Quarterly Financial Information(Dollars in thousands, except per share data)FirstQuarterSecondQuarterThird QuarterFourthQuarter2015 Revenue$60,584 $72,802 $57,788 $66,149 Net income3,102 16,006 328 3,258 Net income attributable to RDI shareholders3,118 15,997 381 3,277 Basic earnings per share0.13 0.69 0.02 0.14 Diluted earnings per share0.13 0.68 0.02 0.14 2014 Revenue$58,053 $69,922 $65,031 $61,742 Net income (loss)(254)4,773 3,939 17,186 Net income (loss) attributable to RDI shareholders(215)4,757 3,939 17,220 Basic earnings (loss) per share(0.01)0.20 0.17 0.74 Diluted earnings (loss) per share(0.01)0.20 0.17 0.72 94 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 21 – Subsequent EventsBank of America Credit FacilityOn March 3, 2016, we amended our $55,000,000 Bank of America credit facility to permit real property acquisition loans subject to theproviso that the consolidated leverage ratio would be reduced by 0.25 from the established levels in the credit facility during the period ofsuch borrowing subject further to a repayment of such borrowings on the earlier of the eighteen months from the date of such borrowing orthe maturity date of the credit agreement. Such modification is not considered to be substantial in accordance with US GAAP.Acquisition of New Corporate Headquarters in Los AngelesOn April 11, 2016, we purchased for $11.2 million a 24,000 square foot Class B office building with 72 parking spaces located at 5995Sepulveda Boulevard in Culver City, California. We intend to use approximately 50% of the leasable area for our headquarters offices andto lease the remainder to unaffiliated third parties. We anticipate, when the move is complete and the excess space is leased, we will be ableto reduce our headquarters occupancy cost by approximately $350,000 per annum. The Company is in the process of obtaining a mortgageon this office building.Updates to the Redevelopment Project of Union Square New YorkOn March 22, 2016, we received the unanimous approval of the Board of Standards and Appeals of our application for the variances neededto redevelop our Union Square property for retail and office uses. This is the last major regulatory hurdle to commencement of construction.While our plans still must be approved by the New York City Department of Buildings, we do not currently anticipate encountering anymaterial issues. On March 28, 2016, we entered into a construction management agreement for preconstruction services with an affiliate ofCNY.95 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule II – Valuation and Qualifying Accounts​Balance atJanuary 1AdditionsDeductionsBalance atDecember 31Allowance for doubtful accounts2015$586 $786 $946 $426 2014$375 $297 $86 $586 2013$209 $505 $339 $375 Tax valuation allowance2015$15,936 $--$4,406 $11,530 2014$34,022 $--$18,086 $15,936 2013$37,903 $--$3,881 $34,022 96 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 9 – Change in and Disagreements with Accountants on Accounting and Financial DisclosureNone.97 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 9A — Controls and ProceduresManagement’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is definedin Securities Exchange Act Rules 13a-15(f) and 15d-15(f), including maintenance of (i) records that in reasonable detail accurately andfairly reflect the transactions and dispositions of our assets, and (ii) policies and procedures that provide reasonable assurance that (a)transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generallyaccepted in the United States of America, (b) our receipts and expenditures are being made only in accordance with authorizations ofmanagement and our Board of Directors and (c) we will prevent or timely detect unauthorized acquisition, use, or disposition of our assetsthat could have a material effect on the financial statements.Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of theinherent limitations of any system of internal control. Internal control over financial reporting is a process that involves human diligenceand compliance and is subject to lapses of judgment and breakdowns resulting from human failures. Internal control over financialreporting also can be circumvented by collusion or improper overriding of controls. As a result of such limitations, there is risk that materialmisstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherentlimitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce,though not eliminate, this risk.Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, weconducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in 2013Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Asreported in our September 30, 2014 10-Q filing and further noted in our December 31, 2014 10-K filing, our management identified amaterial weakness in our internal control over financial reporting in the area of income taxes based on our discovery that our auditedconsolidated financial statements for the fiscal year ended December 31, 2013 erroneously omitted a $1.4 million tax effect of a 2013 year-end transaction by one of our Reading Australia subsidiaries. As a means of remediating the material weakness in 2014 and improving ourcontrols and procedures, we engaged tax advisors from a Big 4 international public accounting firm in 2015 to provide technical guidanceand to provide tax accounting advisory services as of December 31, 2015, which we considered as part of our an annual controls related toincome taxes. We, together with our tax advisors, have an extensive background in tax accounting & international tax and are assisted bysenior team members in the U.S., Australia & New Zealand. Our management believes that we have not yet fully remediated the materialweakness in our internal control over financial reporting for income taxes (relating to certain book-tax basis differences mostly originatingin prior years). As a result of our review, we noted adjustments to our 2014 results as follows: Decrease in Tax Expenses of $514,000,Increase in Deferred Tax Assets of $ 2,116,000, Increase in Adjusted Paid-in Capital of $793,000, Increase in Other Comprehensive Incomeof $1,859,000 and a Decrease in Other Non-Current Liabilities of $1,050,000. Of the $514,000 adjustment to decrease the income taxexpense in 2015, $1,286,000 relates to the adjustment that should have been recorded in 2014, thus reducing our income tax benefit by thisamount. The remaining $1,800,000 relates to income taxes pertaining to years prior to 2014 cumulatively, that would have increased ourdeferred tax assets by such amount. These adjustments have been incorporated into our 2015 financial statements as they did not have amaterial effect on our financial position or results of operations as reflected in our 2014 financial statements. In light of the foregoing, our management concluded that our internal controls over financial reporting were not effective as of December31, 2015. As a means of fully remediating the material weaknesses identified in 2014 and 2015 and improve our controls and proceduresaround the income taxes area, we will add personnel, technology, and technical resources to our tax department specifically in the taxprovisioning process and we will continue to engage qualified tax advisors to provide timely technical guidance and oversight in theincome tax area. As the remediation efforts are ongoing, the material weakness disclosure remains in place until we have sufficient efficacyof such remediation.The effectiveness of our internal control over financial reporting as of December 31, 2015 has been audited by Grant Thornton LLP, anindependent registered public accounting firm, as stated in their report, which is included herein.Disclosure Controls and ProceduresWe have formally adopted a policy for disclosure controls and procedures that provides guidance on the evaluation of disclosure controlsand procedures and is designed to ensure that all corporate disclosure is complete and accurate in all material respects and that allinformation required to be disclosed in the periodic reports submitted by us under the Securities Exchange Act of 1934 is recorded,processed, summarized and reported within the time periods and in the manner specified in the Securities and Exchange Commission’s rulesand forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to98 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated andcommunicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similarfunctions, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, wecarried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of theeffectiveness of our disclosure controls and procedures. A disclosure committee consisting of the principal accounting officer, and seniorofficers of each significant business line and other select employees assisted the Chief Executive Officer and the Chief Financial Officer inthis evaluation. Based upon our evaluation that the controls over income taxes need to be further enhanced during 2016, our ChiefExecutive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as required by theSecurities Exchange Act Rule 13a-15(e) and 15d – 15(e) as of the end of the period covered by this report.Changes in Internal Controls Over Financial ReportingThe continuing enhancements, described above, to controls relating to tax provisioning as part of the remediation of the material weaknessexisting at December 31, 2015, are the only changes in internal control over financial reporting that have occurred during the quarter endedDecember 31, 2015 that have materially affected, or are likely to materially affect, our internal control over financial reporting.99 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard of Directors and StockholdersReading International, Inc. We have audited the internal control over financial reporting of Reading International, Inc. and subsidiaries (the “Company”) as ofDecember 31, 2015, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effectiveinternal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included inthe accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on theCompany’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financialreporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financialreporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe thatour audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenanceof records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections ofany evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate.A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is areasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented ordetected on a timely basis. The following material weakness has been identified and included in management’s assessment.The Company identified a material weakness related to the internal controls over the accounting and reporting for income taxes. In ouropinion, because of the effect of the material weakness described on the achievement of the objectives of the control criteria, the Companyhas not maintained effective internal control over financial reporting as of December 31, 2015, based on criteria established in the 2013Internal Control—Integrated Framework issued by COSO.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), theconsolidated financial statements of the Company as of and for the year ended December 31, 2015. The material weakness identified abovewas considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2015 consolidated financialstatements, and this report does not affect our report dated April 29, 2016 which expressed an unqualified opinion on those financialstatements.We do not express an opinion or any other form of assurance on management’s plan for remediation of the above mentioned materialweakness./s/ GRANT THORNTON LLPLos Angeles, CaliforniaApril 29, 2016100 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART III Item 10 – Directors, Executive Officers and Corporate GovernanceDirectorsWe have nine Directors. The names of our Directors, together with certain information regarding them, are as follows:NameAgePositionEllen M. Cotter.........................................50Chairperson of the Board and Chief Executive Officer andPresident (1)Guy W. Adams.........................................65Director (1) (2)Judy Codding...........................................71Director (2)James J. Cotter, Jr. ...................................46Director (3)Margaret Cotter.........................................48Vice Chairperson of the Board and Executive Vice President-Real Estate Management and Development-NYC (1)William D. Gould.......................................77Director (4)Edward L. Kane.......................................78Director (1) (2) (3) (5)Douglas J. McEachern...............................64Director (5)Michael Wrotniak.......................................49Director (5)(1)Member of the Executive Committee.(2)Member of the Compensation and Stock Options Committee.(3)Member of the Tax Oversight Committee.(4)Lead independent Director.(5)Member of the Audit and Conflicts Committee.Ellen M. Cotter. Ellen M. Cotter has been a member of our Board of Directors since March 13, 2013, and currently serves as amember of our Executive Committee. Ms. Cotter was appointed Chairperson of our Board on August 7, 2014 and served as our interimPresident and Chief Executive Officer from June 12, 2015 until January 8, 2016, when she was appointed our permanent President andChief Executive Officer and President. She joined the Company in March 1998. Ms. Cotter is a graduate of Smith College and holds aJuris Doctor from Georgetown Law School. Prior to joining the Company, Ms. Cotter spent four years in private practice as a corporateattorney with the law firm of White & Case in New York City. Ms. Cotter is the sister of Margaret Cotter and James J. Cotter, Jr. For morethan the past ten years, Ms. Cotter served as the Chief Operating Officer (“COO”) of our domestic cinema operations, in which capacity shehad, among other things, responsibility for the acquisition and development, marketing and operation of our cinemas in the UnitedStates. Prior to her appointment as COO of Domestic Cinemas, she spent a year in Australia and New Zealand, working to develop ourcinema and real estate assets in those countries. Ms. Cotter is the Co-Executor of her father’s estate, which is the record owner of 427,808shares of our Class B Stock (representing 25.5% of such Class B Stock). Ms. Cotter is also a Co-Trustee of the James J. Cotter, Sr. Trust,which is the record owner of 696,080 shares of Class B Stock (representing an additional 44.0% of such Class B Stock).Ms. Cotter brings to our Board her 18 years of experience working in our Company’s cinema operations, both in the United Statesand Australia. She has also served as the Chief Executive Officer of Reading’s subsidiary, Consolidated Entertainment, LLC, whichoperates substantially all of our cinemas in Hawaii and California. In addition, with her direct ownership of 799,765 shares of Class AStock and 50,000 shares of Class B Stock and her positions as Co-Executor of her father’s (James J. Cotter, Sr.) estate and Co-Trustee of theJames J. Cotter, Sr. Trust, Ms. Cotter is a significant stakeholder in our Company. Ms. Cotter is well recognized in and a valuable liaison tothe film industry. In recognition of her contributions to the independent film industry, Ms. Cotter was awarded the first GothamAppreciation Award at the 2015 Gotham Independent Film Awards. She was also inducted that same year into the ShowEast Hall of Fame.Guy W. Adams. Guy W. Adams has been a Director of the Company since January 14, 2014, and currently serves as the chair ofour Executive Committee and is a member of our Compensation and Stock Options Committee (the “Compensation Committee”). For morethan the past ten years, he has been a Managing Member of GWA Capital Partners, LLC, a registered investment adviser managing GWAInvestments, LLC, a fund investing in various publicly traded securities. Over the past fifteen years, Mr. Adams has served as anindependent director on the boards of directors of Lone Star Steakhouse & Saloon, Mercer International, Exar Corporation and VitesseSemiconductor. At these companies, he has held a variety of board positions, including lead director, audit committee chair andcompensation committee chair. . He has spoken on corporate governance topics before such groups as the Council of InstitutionalInvestors, the USC Corporate Governance Summit and the University of Delaware Distinguished Speakers Program. Mr. Adams providesinvestment advice to private clients and currently invests his own capital in101 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. public and private equity transactions. He has served as an advisor to James J. Cotter, Sr. and continues to provide professional advisoryservices to various enterprises now owned by either the James J. Cotter, Sr. Estate or the James J. Cotter, Sr. Trust. Mr. Adams received hisBachelor of Science degree in Petroleum Engineering from Louisiana State University and his Masters of Business Administration fromHarvard Graduate School of Business Administration.Mr. Adams brings many years of experience serving as an independent director on public company boards, and in investing andproviding financial advice with respect to investments in public companies.Dr. Judy Codding. Dr. Judy Codding has been a Director of our Company since October 5, 2015, and currently serves as a memberof our Compensation Committee. Dr. Codding has been a Director of our Company since October 5, 2015. Dr. Codding is a globallyrespected education leader. From October 2010 until October 2015 she served as the Managing Director of “The System of Courses,” adivision of Pearson, PLC (NYSE: PSO), the largest education company in the world that provides education products and services toinstitutions, governments and direct to individual learners. Prior to that time, Dr. Codding served as the Chief Executive Officer andPresident of America’s Choice, Inc., which she founded in 1998, and which was acquired by Pearson in 2010. America’s Choice, Inc. was aleading education company offering comprehensive, proven solutions to the complex problems educators face in the era of accountability. Dr. Codding has a Doctorate in Education from University of Massachusetts at Amherst, and completed postdoctoral work and served as ateaching associate in Education at Harvard University where she taught graduate level courses focused on moral leadership. Dr. Coddinghas served on various boards, including the Board of Trustees of Curtis School, Los Angeles, CA (2011 to present) and the Board ofTrustees of Educational Development Center, Inc. (EDC) since 2012. Through family entities, Dr. Codding has been and continues to beinvolved in the real estate business, through the ownership of hotels, shopping centers and buildings in Florida and the exploration ofmineral, oil and gas rights in Maryland and Kentucky.Dr. Codding brings to our Board her experience as an entrepreneur, as an author, advisor and researcher in the areas of leadershiptraining and decision-making as well as her experience in the real estate business.James J. Cotter, Jr. James J. Cotter, Jr. has been a Director of our Company since March 21, 2002, and currently serves as a memberof our Tax Oversight Committee. The Tax Oversight Committee has been inactive since November 2, 2015, in anticipation that itsfunctions will move to the Audit and Conflicts Committee (the “Audit Committee”) under its new charter. Mr. Cotter, Jr. served as our ViceChairperson from June 2007 until August 7, 2014. Mr. Cotter, Jr. served as our President from June 1, 2013 through June 12, 2015 and asour Chief Executive Officer from August 7, 2014 through June 12, 2015. He is currently the lead director of Cecelia Packing Corporation (aCotter family‑owned citrus grower, packer and marketer) and served as the Chief Executive Officer of that company from July 2004 until2013. Mr. Cotter, Jr. served as a Director of Cecelia Packing Corporation from February 1996 to September 1997 and as a Director of GishBiomedical from September 1999 to March 2002. He was an attorney in the law firm of Winston & Strawn (and its predecessor),specializing in corporate law, from September 1997 to May 2004. Mr. Cotter, Jr. is the brother of Margaret Cotter and Ellen M.Cotter. Mr. Cotter, Jr. has advised the Company that he is a Co-Trustee of the James J. Cotter, Sr. Trust, which is the record owner of696,080 shares of Class B Stock (representing 44.0% of such Class B Stock). The Company understands that Mr. Cotter’s status as a trusteeof the James J. Cotter, Sr. Trust is disputed by his sisters, Ellen M. Cotter and Margaret Cotter. See Item3 – Legal Proceedings for additionalinformation.James J. Cotter, Jr. brings to our Board his experience as a business professional and corporate attorney, as well as his many yearsof experience in, and knowledge of, the Company’s business and affairs. In addition, with his direct ownership of 859,286 shares of ourCompany’s Class A Common Stock and his position as Co-Trustee of the James J. Cotter, Sr. Trust, Mr. Cotter, Jr. is a significantstakeholder in our Company. Further, depending on the outcome of ongoing Trust Litigation, in the future Mr. Cotter, Jr. may be acontrolling stockholder in the Company. Margaret Cotter. Margaret Cotter has been a Director of our Company since September 27, 2002, and on August 7, 2014 wasappointed Vice Chairperson of our Board and currently serves as a member of our Executive Committee. On March 10, 2016, our Boardappointed Ms. Cotter as Executive Vice President-Real Estate Management and Development-NYC. In this position, Ms. Cotter isresponsible for the management of our live theater properties and operations, including oversight of the development of our Union Squareand Cinemas 1, 2, 3 properties. Ms. Cotter is the owner and President of OBI, LLC (“OBI”), which, from 2002 until her appointment asExecutive Vice President – Real Estate Management and Development, NYC, managed our live-theater operations under a managementagreement. Pursuant to the OBI management agreement, Ms. Cotter also served as the President of Liberty Theaters, LLC, the subsidiarythrough which we own our live theaters. The OBI management agreement was terminated with Ms. Cotter’s appointment as Executive VicePresident-Real Estate Management and Development-NYC. Ms. Cotter is also a theatrical producer who has produced shows in Chicagoand New York and is a board member of the League of Off-Broadway Theaters and Producers. Ms. Cotter, a former Assistant DistrictAttorney for King’s County in Brooklyn, New York, graduated from Georgetown University and Georgetown University Law Center. She isthe sister of Ellen M. Cotter and James J. Cotter, Jr. Ms. Margaret Cotter is a Co-Executor of her father’s estate, which is the record owner of427,808 shares of our Class B Stock (representing 25.5% of such Class B Stock). Ms. Margaret Cotter is also a Co-Trustee of the James J.Cotter, Sr. Trust, which is the record owner of 696,080 shares of Class B Voting Common Stock (representing an additional 41.4% of suchClass B Stock).102 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Ms. Cotter brings to the Board her experience as a live theater producer, theater operator and an active member of the New Yorktheatre community, which gives her insight into live theater business trends that affect our business in this sector. Operating andoverseeing these properties for over 17 years, Ms. Cotter contributes to the strategic direction for our developments. In addition, with herdirect ownership of 804,173 shares of Class A Stock and 35,100 shares of Class B Stock and her positions as Co-Executor of her father’sestate and Co-Trustee of the James J. Cotter, Sr. Trust, Ms. Cotter is a significant stakeholder in our Company.William D. Gould. William D. Gould has been a Director of our Company since October 15, 2004, and currently serves as our LeadIndependent Director. Mr. Gould has been a member of the law firm of TroyGould PC since 1986. Previously, he was a partner of the lawfirm of O’Melveny & Myers. We have from time to time retained TroyGould PC for legal advice. Total fees payable to Mr. Gould’s lawfirm for [calendar year] 2015 were $61,000.84. Mr. Gould is an author and lecturer on the subjects of corporate governance and mergers andacquisitions. Mr. Gould brings to our Board more than fifty years of experience as a corporate lawyer and advisor focusing on corporategovernance, mergers and acquisitions.Edward L. Kane. Edward L. Kane has been a Director of our Company since October 15, 2004. Mr. Kane was also a Director of ourCompany from 1985 to 1998, and served as President from 1987 to 1988. Mr. Kane currently serves as the chair of our CompensationCommittee, and until its disbandment in January 2016, as chair of our Tax Oversight Committee. He also serves as a member of ourExecutive Committee and our Audit Committee. The Tax Oversight Committee has been inactive since November 2, 2015, in anticipationthat its functions will move to the Audit Committee under its new charter. Mr. Kane practiced as a tax attorney for many years in SanDiego, California. Since 1996, Mr. Kane has acted as a consultant and advisor to the health care industry, serving as the President and soleshareholder of High Avenue Consulting, a healthcare consulting firm, and as the head of its successor proprietorship. During the 1990s, Mr.Kane also served as the Chairman and CEO of ASMG Outpatient Surgical Centers in southern California, and he served as a director of BDIInvestment Corp., which was a regulated investment company, based in San Diego. For over a decade, he was the Chairman of Kane MillerBooks, an award-winning publisher of children’s books. At various times during the past three decades, Mr. Kane has been AdjunctProfessor of Law at two of San Diego’s law schools, most recently in 2008 and 2009 at Thomas Jefferson School of Law, and prior thereto atCalifornia Western School of Law.In addition to his varied business experience, Mr. Kane brings to our Board his many years as a tax attorney and lawprofessor. Mr. Kane also brings his experience as a past President of Craig Corporation and of Reading Company, two of our corporatepredecessors, as well as his experience as a former member of the boards of directors of several publicly held corporations.Douglas J. McEachern. Douglas J. McEachern has been a Director of our Company since May 17, 2012 and Chair of our AuditCommittee since August 1, 2012. He has served as a member of the board and of the audit and compensation committee for Willdan Group,a NASDAQ listed engineering company, since 2009. From June 2011 until October 2015, Mr. McEachern was a director of CommunityBank in Pasadena, California and a member of its audit committee. Mr. McEachern served as the chair of the board of Community Bankfrom October 2013 until October 2015. He also is a member of the finance committee of the Methodist Hospital of Arcadia. FromSeptember 2009 to December 2015, Mr. McEachern served as an instructor of auditing and accountancy at Claremont McKenna College. Mr. McEachern was an audit partner from July 1985 to May 2009 with the audit firm of Deloitte and Touche, LLP, with clientconcentrations in financial institutions and real estate. Mr. McEachern was also a Professional Accounting Fellow with the Federal HomeLoan Bank board in Washington DC, from June 1983 to July 1985. From June 1976 to June 1983, Mr. McEachern was a staff member andsubsequently a manager with the audit firm of Touche Ross & Co. (predecessor to Deloitte & Touche, LLP). Mr. McEachern received a B.S.in Business Administration in 1974 from the University of California, Berkeley, and an M.B.A. in 1976 from the University of SouthernCalifornia.Mr. McEachern brings to our Board his more than 38 years’ experience meeting the accounting and auditing needs of financialinstitutions and real estate clients, including our Company. Mr. McEachern also brings his experience reporting as an independent auditorto the boards of directors of a variety of public reporting companies and as a board member himself for various companies and not-for-profitorganizations.Michael Wrotniak. Michael Wrotniak has been a Director of our Company since October 12, 2015, and has served as a member ofour Audit Committee since October 25, 2015. Since 2009, Mr. Wrotniak has been the Chief Executive Officer of Aminco Resources, LLC(“Aminco”), a privately held international commodities trading firm. Mr. Wrotniak joined Aminco in 1991 and is credited with expandingAminco’s activities in Europe and Asia. By establishing a joint venture with a Swiss engineering company, as well as creating partnershipswith Asia-based businesses, Mr. Wrotniak successfully diversified Aminco’s product portfolio. Mr. Wrotniak became a partner of Amincoin 2002. Mr. Wrotniak has been for more than the past six years, a trustee of St. Joseph’s Church in Bronxville, New York, and is a memberof the Board of Advisors of the Little Sisters of the Poor at their nursing home in the Bronx, New York since approximately2004. Mr. Wrotniak graduated from Georgetown University in 1989 with a B.S. in Business Administration (cum laude).Mr. Wrotniak is a specialist in foreign trade, and brings to our Board his considerable experience in international business,including foreign exchange risk mitigation.103 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. James J. Cotter, Sr. Trust. Please see footnote 12 of the Beneficial Ownership of Securities table for information regarding theelection of Ellen M. Cotter, Margaret Cotter and James J. Cotter, Jr. to the Board.Executive OfficersThe following table sets forth information regarding our executive officers, other than Ellen M. Cotter and Margaret Cotter, whoseinformation is set forth above under “Directors.”NameAgeTitleDev Ghose62Executive Vice President, Chief Financial Officer, Treasurer and CorporateSecretaryRobert F. Smerling81President - Domestic CinemasWayne D. Smith58Managing Director – Australia and New ZealandAndrzej J. Matyczynski63Executive Vice President – Global OperationsDevasis (“Dev”) Ghose. Dev Ghose was appointed Chief Financial Officer and Treasurer on May 11, 2015, Executive VicePresident on March 10, 2016 and Corporate Secretary on April 28, 2016. Over the past 25 years, Mr. Ghose served as Executive VicePresident and Chief Financial Officer in a number of senior finance roles with three NYSE-listed companies: Skilled Healthcare Group (ahealth services company, now part of Genesis HealthCare) from 2008 to 2013, Shurgard Storage Centers, Inc. (an international companyfocused on the acquisition, development and operation of self-storage centers in the US and Europe; now part of Public Storage) from 2004to 2006, and HCP, Inc., (which invests primarily in real estate serving the healthcare industry) from 1986 to 2003, and as ManagingDirector-International for Green Street Advisors (an independent research and trading firm concentrating on publicly traded real estatecorporate securities in the US & Europe) from 2006 to 2007. Prior thereto, Mr. Ghose worked for 10 years for PricewaterhouseCoopers inthe U.S. from 1975 to 1985, and KPMG in the UK. He qualified as a Certified Public Accountant in the U.S. and a Chartered Accountant inthe U.K., and holds an Honors Degree in Physics from the University of Delhi, India and an Executive M.B.A. from the University ofCalifornia, Los Angeles.Robert F. Smerling. Robert F. Smerling has served as President of our domestic cinema operations since 1994. Mr. Smerling hasbeen in the cinema industry for 58 years and, immediately before joining our Company, served as the President of Loews TheatresManagement Corporation.Wayne D. Smith. Wayne D. Smith joined our Company in April 2004 as our Managing Director - Australia and New Zealand, after23 years with Hoyts Cinemas. During his time with Hoyts, he was a key driver, as Head of Property, in growing that company’s Australianand New Zealand operations via an AUD$250 million expansion to more than 50 sites and 400 screens. While at Hoyts, his career includedheading up the group’s car parking company, cinema operations, representing Hoyts as a director on various joint venture interests, andcoordinating many asset acquisitions and disposals the company made.Andrzej J. Matyczynski. On March 10, 2016, Mr. Matyczynski was appointed as our Executive Vice President—GlobalOperations. From May 11, 2015 until March 10, 2016, Andrzej J. Matyczynski acted as the Strategic Corporate Advisor to theCompany. Mr. Matyczynski served as our Chief Financial Officer and Treasurer from November 1999 until May 11, 2015 and as CorporateSecretary from May 10, 2011 to October 20, 2014. Prior to joining our Company, he spent 20 years in various senior roles throughout theworld at Beckman Coulter Inc., a U.S. based multi-national. Mr. Matyczynski earned a Master’s Degree in Business Administration fromthe University of Southern California.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our executive officers and Directors, and persons who own more than 10% of ourcommon stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission (the“SEC”) and to provide us with copies of those filings. Based solely on our review of the copies received by us and on the writtenrepresentations of certain reporting persons, we believe that the following Forms 3 and 4 for transactions that occurred in 2015 were notfiled or filed later than is required under Section 16(a) of the Securities Exchange Act of 1934:FilerFormTransaction DateDate of FilingAndrzej J. Matyczynski4December 31, 2015Not filed (1)Andrzej J. Matyczynski4December 31, 2014Not filed (2)Andrzej J. Matyczynski4December 31, 2013Not filed (3)Mark Cuban4November 11, 2015Not filed (4)Estate of James J. Cotter4December 31, 2014October 9, 2015James J. Cotter Living Trust3September 13, 2014October 9, 2015104 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Ellen M. Cotter4April 16, 2015October 9, 2015Margaret Cotter4April 8, 2015October 9, 2015William Gould4April 6, 2015October 8, 2015James J. Cotter Jr.(5)4March 10, 2016March 15, 2016James J. Cotter Jr.4November 25, 2015December 1, 2015James J. Cotter Jr.4August 17, 2015August 24, 2015James J. Cotter Jr.4July 16, 2015July 31, 2015James J. Cotter Jr.4June 30, 2015(6)July 16, 2015James J. Cotter, Jr.4June 4, 2016(7)July 16, 2015Wayne Smith4July 16, 2015July 31, 2015(1)This transaction was reported on Form 5 on April 22, 2016, which is later than required under Section 16(a) of the Securities Exchange Act of 1934.(2)This transaction was reported on Form 5 on March 17, 2015, which is later than required under Section 16(a) of the Securities Exchange Act of 1934.(3)This transaction was reported on Form 5 on March 12, 2014, which is later than required under Section 16(a) of the Securities Exchange Act of 1934.(4)This transaction was reported on Form 5 on February 19, 2016, which is later than required under Section 16(a) of the Securities Exchange Act of 1934.(5)An additional Form 4 for Mr. Cotter Jr. was reported with a typographical error in the transaction date. The transaction date was reported as December 1,2012, but should have been reported as December 1, 2015. This Form 4 was timely filed on December 3, 2015.(6)Pursuant to Form 4/A filed August 24, 2015, the earliest transaction date was changed from July 1, 2015 to June 30, 2015.(7)Pursuant to Form 4/A filed November 17, 2015, the earliest transaction date was changed from July 1, 2015 to June 4, 2015.In addition to the above, the following Forms 5 for transactions that occurred in 2013, 2014 and 2015 were filed later than isrequired under Section 16(a) of the Securities Exchange Act of 1934.FilerFormTransaction DateDate of FilingAndrzej J. Matyczynski5December 31, 2015April 22, 2016Andrzej J. Matyczynski5December 31, 2014March 17, 2015Andrzej J. Matyczynski5December 31, 2013March 12, 2014Mark Cuban5November 11, 2015February 19, 2016Insofar as we are aware, all required filings have now been made.Code of EthicsWe have adopted a Code of Ethics designed to help our Directors and employees resolve ethical issues. Our Code of Ethicsapplies to all Directors and employees, including the Chief Executive Officer, the Chief Financial Officer, principal accounting officer,controller and persons performing similar functions. Our Code of Ethics is posted on our website athttp://www.readingrdi.com/Governance-Documents.The Board has established a means for employees to report a violation or suspected violation of the Code of Ethicsanonymously. In addition, we have adopted a “Whistleblower Policy,” which is posted on our website, athttp://www.readingrdi.com/Governance-Documents, that establishes a process by which employees may anonymously disclose to the AuditCommittee alleged fraud or violations of accounting, internal accounting controls or auditing matters.Audit CommitteeThe Audit Committee operates pursuant to Charter adopted by our Board that is available on our website athttp://www.readingrdi.com/Committee-Charters. The Audit Committee reviews, considers, negotiates and approves or disapproves relatedparty transactions (see the discussion in the section entitled “Certain Relationships and Related Party Transactions” below). In addition,the Audit Committee is responsible for, among other things, (i) reviewing and discussing with management the Company’s financialstatements, earnings press releases and all internal controls reports, (ii) appointing, compensating and overseeing the work performed by theCompany’s independent auditors, and (iii) reviewing with the independent auditors the findings of their audits. Item 11 – Executive CompensationCompensation Discussion and AnalysisRole and Authority of the Compensation CommitteeOur Board has established a standing Compensation Committee consisting of three of our non-employee Directors. As aControlled Company, we are exempt from the NASDAQ Listing Rules regarding the determination of executive compensation solely byindependent directors. Notwithstanding such exemption, we adopted a Compensation Committee charter on March 10, 2016105 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. requiring our Compensation Committee members to meet the independence rules and regulations of the Securities Exchange Commissionand the Nasdaq Stock Market.Prior to the adoption of our Compensation Committee Charter on March 10, 2016, it was our practice that the CompensationCommittee would recommend to the full Board the compensation of our Chief Executive Officer and of the other Cotter family memberswho serve as officers of our Company. Our Board, with the Cotter family Directors abstaining, typically accepted without modification thecompensation recommendations of the Compensation Committee, but reserved the right to modify the recommendations or take othercompensation actions of its own. Prior to his resignation as our Chief Executive Officer, Mr. James J. Cotter, Sr. was delegatedresponsibility by our Board for determining the compensation of our executive officers other than himself and his family members. TheBoard exercised oversight of Mr. Cotter, Sr.’s executive compensation decisions as a part of his performance as our former Chief ExecutiveOfficer.Earlier this year, our Board adopted a number of actions intended to bring certain of our governance practices into line with bestpractices, including substantial steps in the area of Executive Compensation, which are discussed below under "2016 and FutureCompensation Structure." First, this discussion will address our executive compensation for 2015.2015 EXECUTIVE COMPENSATIONThe individuals named in the Summary Compensation Table, below, are referred to as the “named executive officers.”CEO CompensationAs a matter of general practice prior to 2016, the Compensation Committee recommended to our Board the annual compensationof our Chief Executive Officer, based primarily upon the Compensation Committee’s annual review of peer group practices and the adviceof an independent third-party compensation consultant engaged annually to assist the Compensation Committee. The CompensationCommittee had established three components of our Chief Executive Officer’s compensation—a base cash salary, a discretionary annualcash bonus, and a fixed stock grant. The objective of each element was to reasonably reward our Chief Executive Officer for his or herperformance and leadership.The Compensation Committee engaged executive compensation consultants Willis Towers Watson (now known as Willis TowersWatson) in 2012 to analyze our Chief Executive Officer’s total direct compensation compared to a peer group of companies. In preparingthat analysis, Willis Towers Watson, in consultation with our management, including James J. Cotter, Sr., identified a peer group ofcompanies in the real estate and cinema exhibition industries, our two business segments, based on market value, industry, and businessdescription.Prior to the work commenced in early 2016, Willis Towers Watson had most recently updated its analysis of our Chief ExecutiveOfficer’s compensation in 2014, when Mr. Cotter, Sr. held that position. The Willis Towers Watson analysis focused on thecompetitiveness of Mr. Cotter, Sr.’s annual base salary, total cash compensation and total direct compensation (i.e., total cash compensationplus expected value of long-term compensation) relative to a peer group of 17 United States and Australian companies and publishedcompensation survey data, and to our Company’s compensation philosophy, which was to target Mr. Cotter, Sr.’s total direct compensationto the 66th percentile of the peer group. The peer group consisted of the following 17 companies:Acadia Realty TrustInland Real Estate Corp.Amalgamated Holdings Ltd.Kite Realty Group TrustAssociated Estates Realty Corp.LTC Properties Inc.Carmike Cinemas Inc.Ramco-Gershenson Properties TrustCedar Shopping Centers Inc.Regal Entertainment GroupCinemark Holdings Inc.The Marcus CorporationEntertainment Properties TrustUrstadt Biddle Properties Inc.Glimcher Realty TrustVillage Roadshow Ltd.IMAX Corporation Following his appointment on August 7, 2014 as our Chief Executive Officer and until his termination from that position onJune 12, 2015, James J. Cotter, Jr. continued to receive the same base salary of $335,000 that he had previously been receiving in hiscapacity as our President. Mr. Cotter, Jr. was not awarded a discretionary cash bonus for 2014 or 2015. On June 12, 2015, our Board appointed Ellen M. Cotter as our interim President and Chief Executive Officer. No newcompensatory arrangements were entered into with Ms. Cotter in connection with her appointment as interim President and Chief ExecutiveOfficer, and she continued to receive the same base salary of $402,000 that she received at the time of her appointment.106 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In early 2016, the Compensation Committee, with the assistance of Willis Towers Watson and Ms. Cotter, adopted new proceduresregarding officer compensation. As a part thereof, unlike prior years, the Compensation Committee evaluated the performance of our ChiefExecutive Officer and our named executive officers and determined their 2015 cash bonus awards. Having had the benefit of furtheranalysis of the Company’s executive compensation and revisions of the Company’s compensation philosophy, the CompensationCommittee approved a $250,000 bonus for Ellen M. Cotter for her 2015 performance as interim President and Chief Executive Officer. Total Direct CompensationIn 2015, we and our Compensation Committee had no policy regarding the amount of salary and cash bonus paid to our ChiefExecutive Officer or other named executive officers in proportion to their total direct compensation.Compensation of Other Named Executive OfficersUntil the reassessment of compensation practices in early 2016, the compensation of the Cotter family members as executiveofficers of our Company was determined by the Compensation Committee based on the same compensation philosophy used to determinedMr. Cotter, Sr.’s compensation prior to his retirement. The Cotter family members’ respective compensation packages each consisted of abase cash salary, discretionary cash bonus and, on occasion, discretionary grants of stock options.Historically, our Chief Executive Officer determined the base salaries of our executive officers other than himself and members ofhis family. Our Chief Executive Officer considered the following guidelines in setting the type and amount of executive compensation:1.Executive compensation should primarily be used to:·attract and retain talented executives;·reward executives appropriately for their individual efforts and job performance; and·afford executives appropriate incentives to achieve the short-term and long-term business objectives established bymanagement and our Board.2.In support of the foregoing, the total compensation paid to our named executive officers should be:·fair, both to our Company and to the named executive officers;·reasonable in nature and amount; and·competitive with market compensation rates.Personal and Company performances were just two factors historically considered in establishing base salaries. We had no pre-established policy or target for allocating total executive compensation between base and discretionary or incentive compensation, orbetween cash and stock-based incentive compensation. Historically, including in 2015, a majority of total compensation to our namedexecutive officers has been in the form of annual base salaries and discretionary cash bonuses, although stock bonuses have been grantedfrom time to time under special circumstances.These elements of our executive compensation are discussed further below.Salary: Annual base salary was intended to compensate named executive officers for services rendered during the fiscal year in theordinary course of performing their job responsibilities. Factors considered in setting the base salaries prior to 2015 included (i) thenegotiated terms of each executive’s employment agreement or the original terms of employment, (ii) the individual’s position and level ofresponsibility with our Company, (iii) periodic review of the executive’s compensation, both individually and relative to our other namedexecutive officers, and (iv) a subjective evaluation of individual job performance of the executive.Cash Bonus: Historically, we had awarded annual cash bonuses to supplement the base salaries of our named executive officers,and our Board delegated to our former Chief Executive Officer, Mr. Cotter, Sr., the authority to determine in his discretion the annual cashbonuses, if any, to be paid to our executive officers other than the Cotter family executives.In early 2016, following the reassessment of the Company’s compensation structure discussed below, the CompensationCommittee, meeting in executive session, approved a 2015 performance bonus for the Chief Executive Officer as well as our other namedexecutive officers.Stock Bonus: Equity incentive bonuses were available for award to align our executives’ long-term compensation to appreciationin stockholder value over time. Historically awards have not been granted on any fixed schedule, but instead were granted from time totime to new hires and for the recognition and retention of executives.107 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. If awarded, it has generally been our policy to value stock options and restricted stock at the closing price of our common stock asreported on the NASDAQ Stock Market on the date the award was approved or on the date of hire, if the stock is granted as a recruitmentincentive. When stock was granted as bonus compensation for a particular transaction, the award may have been based on the market priceon a date calculated from the closing date of the relevant transaction. Stock options granted to our employees generally have a five yearterm and vest over four years in equal installments upon the annual anniversaries of the date of the grant, subject to continued employmentupon each vesting date. Awards may also have been subject to vesting and limitations on voting or other rights.As discussed below, our Board substantially changed these practices for 2016 and future years.Other than James Cotter, Jr.'s role as Chief Executive Officer and thereafter, Ms. Ellen M. Cotter’s role as Chief Executive Officer,none of our executive officers played a role in determining the compensation of our named executive officers during 2015.2015 Base Salaries and BonusesWe have historically established base salaries and target discretionary cash bonuses for our named executive officers throughnegotiations with the individual named executive officer, generally at the time the named executive officer commenced employment withus, subject to additional increases from time to time based on performance and tenure, with the intent of providing annual cashcompensation at a level sufficient to attract and retain talented and experienced individuals. Our Compensation Committee recommended and our Board approved the following base salaries for Mr. Cotter, Jr. and Ellen M.Cotter for 2015:Name2014 Base Salary($)2015 Base Salary($)Ellen M. Cotter (1)335,000402,000James J. Cotter, Jr (2) 335,000335,000(2)(1)Ellen M. Cotter was appointed Interim President and Chief Executive Officer on June 12, 2015 and President and Chief Executive Officer on January 8,2016.(2)James J. Cotter, Jr. served as President from June 1, 2013 through June 12, 2015, and Chief Executive Officer from August 7, 2014 through June 12,2015. Mr. Cotter, Jr. had an annual base salary of $335,000 for 2015. When his employment ended, Mr. Cotter, Jr. earned a prorated base salary of$195,417 for 2015, which includes his severance payment paid through the end of July 2015.With the exception of Mr. Ghose, who was appointed Chief Financial Officer on May 11, 2015, Mr. Matyczynski, whose basesalary was $324,000 in 2015, and Mr. Smith, whose base salary was $274,897, the base salaries of our other named executive officersgenerally remained at the levels established for 2014, as shown in the following table:Name2014 Base Salary($)2015 Base Salary($)Dev Ghose (1)--400,000(1)Andrzej J. Matyczynski (2)309,000324,000William Ellis(3)350,000(3)350,000Robert F. Smerling350,000350,000Wayne Smith324,295(4)274,897(4)(1)Devasis Ghose was appointed Chief Financial Officer and Treasurer on May 11, 2015. For 2015, Mr. Ghose earned a prorated base salary of $257,692.(2)Andrzej J. Matyczynski, our former Chief Financial Officer, Treasurer and Corporate Secretary, has a written agreement with our Company thatprovides certain severance and deferred compensation benefits. Mr. Matyczynski resigned as Corporate Secretary on October 20, 2014 and as ourChief Financial Officer and Treasurer effective May 11, 2015, however he continued as an employee to assist in the transition of our new ChiefFinancial Officer, and was appointed Executive Vice President-- Global Operations on March 10, 2016. Under Mr. Matyczynski’s employmentcontract, upon his retirement and provided there has been no termination for cause, he will become entitled under his agreement to a lump-sumseverance payment of $50,000, subject to certain offsets, and to the payment of his vested benefit under his deferred compensation plan discussedbelow in this section.(3)William Ellis submitted his resignation on February 18, 2016, effective March 11, 2016. For 2014, Mr. Ellis earned a prorated base salary of $71,795.(4)Mr. Smith’s salary was paid in Australian Dollars in the amounts of AUD$359,250 in 2014 (shown in the table in U.S. Dollars using exchange rate0.9027), and AUD$365,360 in 2015 (shown in the table in U.S. Dollars using exchange rate 0.7524).Prior to 2016, all named executive officers were eligible to receive a discretionary annual cash bonus. Cash bonuses are typicallyprorated to reflect a partial year of service.108 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In connection with consideration of 2015 performance bonuses for members of management, the Chief Executive Officer preparedand submitted recommendations for each of the executive and management team members, other than herself. In considering theserecommendations, the Compensation Committee had the benefit of its extensive deliberations as well as the data provided by Willis TowersWatson. In executive session, the Compensation Committee considered and approved a 2015 performance bonus for the Chief ExecutiveOfficer. The proposed bonus amounts were reviewed and approved by the Board in February 2016. The Board approval covered the namedexecutive officers set forth below, as well as select other officers and executives.The following are the 2015 Performance Bonuses approved pursuant to the above process:Name2015 Performance Bonus ($)Ellen M. Cotter250,000Dev Ghose 75,000Andrzej J. Matyczynski0William Ellis 0(1)James J. Cotter, Jr.0Robert F. Smerling 75,000Wayne Smith 71,478(2)(1)Pursuant to his employment agreement, in 2015 Mr. Ellis received a guaranteed bonus of $60,000, and as such, it was not subject to the processabove. Mr. Ellis submitted his resignation on February 18, 2016.(2)Mr. Smith’s bonus was paid in Australian Dollars in the amount of AUD$95,000 (shown in the table in U.S. Dollars using exchange rate 0.7524).In the past, we have offered stock options and stock awards to our employees, including named executive officers, as the long-termincentive component of our compensation program. We sometimes granted equity awards to new hires upon their commencingemployment with us and from time to time thereafter. Our stock options allow employees to purchase shares of our common stock at a priceper share equal to the fair market value of our common stock on the date of grant and may or may not be intended to qualify as “incentivestock options” for U.S. federal income tax purposes. Generally, the stock options we granted to our employees vest over four years in equalinstallments upon the annual anniversaries of the date of grant, subject to their continued employment with us on each vesting date.Employment AgreementsJames J. Cotter, Jr. On June 12, 2015, the Board terminated the employment of James J. Cotter, Jr. as our President and ChiefExecutive Officer. Under Mr. Cotter, Jr.’s employment agreement with the Company, he is entitled to the compensation and benefits he wasreceiving at the time of a termination without cause for a period of twelve months from notice of termination. At the time of termination,Mr. Cotter Jr.’s annual salary was $335,000, and the Company paid Mr. Cotter Jr. severance payments in the amount of $43,750. A disputehas arisen between the Company and Mr. Cotter as to whether the Company is required to continue to make these payments, which disputeis currently subject to arbitration.Dev Ghose. On April 20, 2015, we entered into an employment agreement with Mr. Dev Ghose, pursuant to which he agreed toserve as our Chief Financial Officer for a one-year term commencing on May 11, 2015. The employment agreement provides thatMr. Ghose is to receive an annual base salary of $400,000, with an annual target bonus of $200,000, and employee benefits in line withthose received by our other senior executives. Mr. Ghose was also granted stock options to purchase 100,000 shares of Class A Stock at anexercise price equal to the closing price of our Class A Stock on the date of grant and which will vest in equal annual increments over afour-year period, subject to his remaining in our continuous employ through each annual vesting date.Under his employment agreement, we may terminate Mr. Ghose’s employment with or without cause (as defined) at any time. If weterminate his employment without cause or fail to renew his employment agreement upon expiration without cause, Mr. Ghose will beentitled to receive severance in an amount equal to the salary and benefits he was receiving for a period of 12 months following suchtermination or non-renewal. If the termination is in connection with a “change of control” (as defined), Mr. Ghose would be entitled toseverance in an amount equal to the compensation he would have received for a period two years from such termination.William D. Ellis. On October 20, 2014, we entered into an employment agreement with Mr. William D. Ellis, which was amendedin September 2015, pursuant to which he agreed to serve as our General Counsel for a term of three years. The employment agreementprovided that Mr. Ellis was to receive an annual base salary of $350,000, with an annual guaranteed bonus of at least $60,000. In addition,Mr. Ellis was granted stock options to purchase 60,000 shares of Class A Stock at an exercise price equal to the closing price of our Class AStock on the date of grant and which will vest in equal annual increments over a three-year period, subject to his remaining in ourcontinuous employ through each annual vesting date.109 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. On February 18, 2016, William D. Ellis submitted his resignation as our General Counsel and Corporate Secretary. On March 11,2016, we entered into an agreement with Mr. William D. Ellis, pursuant to which, in consideration of the payment to Mr. Ellis of $205,010(to be paid in 19 equal semi-monthly installments of $10,790) and the vesting of options to acquire 20,000 shares of our Class A CommonStock on October 15, 2016, Mr. Ellis has agreed to be available to advise us on matters on which he previously worked until December 31,2016. Mr. Ellis' last day of employment was March 11, 2016. Andrzej J. Matyczynski. Mr. Matyczynski, our former Chief Financial Officer, Treasurer and Corporate Secretary, has a writtenagreement with our Company that provides for a lump-sum severance payment of $50,000, provided there has been no termination forcause and subject to certain offsets, and to the payment of his vested benefit under his deferred compensation plan discussed below in thesection entitled “Other Elements of Compensation.” Mr. Matyczynski resigned as our Corporate Secretary on October 20, 2014 and as ourChief Financial Officer and Treasurer effective May 11, 2015, but continued as an employee in order to assist in the transition of our newChief Financial Officer. He was appointed EVP-Global Operations in March 2016.2016 AND FUTURE COMPENSATION STRUCTUREBackgroundIn early 2016, our Compensation Committee conducted a thorough evaluation of our compensation policy for executive officersand outside directors to establish a plan that encompasses best corporate practices consistent with our best interests. Our CompensationCommittee undertook to review, evaluate, revise and recommend the adoption of new compensation arrangements for our executive andmanagement officers and outside directors. In January 2016, our Compensation Committee retained the international compensationconsulting firm of Willis Towers Watson as its advisor in this process and also relied on the advice of our legal counsel, Greenberg Traurig,LLP.Compensation Committee CharterOn February 29, 2016, our Board adopted the Charter of the Compensation Committee, or the Compensation CommitteeCharter. In keeping with our intent to implement best practices, the Compensation Committee Charter delegated the followingresponsibilities to our Compensation Committee:·in consultation with our senior management, to establish our compensation philosophy and objectives;·to review and approve all compensation, including salary, bonus, incentive and equity compensation, for our CEO and ourexecutive officers, provided that our CEO may not be present during voting or deliberations on his or her compensation;·to approve all employment agreements, severance arrangements, change in control provisions and agreements and any specialor supplemental benefits applicable to our CEO and other executive officers;·to approve and adopt, on behalf of our Board, incentive compensation and equity-based compensation plans, or, in the case ofplans requiring stockholder approval, to review and recommend such plan to the stockholders;·to review and discuss with our management and our counsel and auditors, the disclosures made in Compensation Discussionand Analysis and advise our Board whether, in the view of the Committee, the Compensation Discussion and Analysis is, inform and substance, satisfactory for inclusion in our annual report on Form 10-K and proxy statement for the annual meetingof stockholders;·to prepare an annual compensation committee report for inclusion in our proxy statement for the annual meeting ofstockholders in accordance with the applicable rules of the Securities and Exchange Commission (“SEC”); ·to periodically review and reassess the adequacy of this charter and recommend any proposed changes to the Board forapproval;·to administer our equity-based compensation plans, including the grant of stock options and other equity awards under suchplans, the exercise of any discretion accorded to the administrator of all such plans and the interpretation of the provisions ofsuch plans and the terms of any awards made under the plans; and·to consider the results of the most recent stockholder advisory vote on executive compensation required by Section 14A ofthe Securities Exchange Act of 1934 when determining compensation policies and making decisions on executivecompensation.Under the Compensation Committee Charter, "executive officer" is defined to mean the chief executive officer, president, chieffinancial officer, chief operating officer, general counsel, principal accounting officer, any executive vice president of the Company andany Managing Director of Reading Entertainment Australia Pty Ltd and/or Reading New Zealand, Ltd.; provided that any compensationdeterminations pertaining to Ellen M. Cotter and Margaret Cotter will be subject to review and approval by our Board.As noted above, the Compensation Committee Charter was adopted as part of our Board's implementation of additional corporatebest practices measures. The Compensation Committee Charter will apply for the remainder of 2016 and the future, subject110 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. to further amendments and modifications by our Board. The Compensation Committee charter is available on our website athttp://www.readingrdi.com/Committee-Charters.The Compensation Committee reviews compensation policies and practices effecting employees in addition to those applicable toexecutive officers. The Compensation Committee has determined that it is not reasonably likely that our compensation policies andpractices for its employees would have a material adverse effect on our Company.Executive CompensationIn early 2016, our Compensation Committee met with Willis Towers Watson, our Chief Executive Officer, and our legal counsel,to review the Company’s compensation levels, programs and practices. As part of its engagement, Willis Towers Watson reviewed ourcompensation paid to executive and management officers by position, in light of each person’s duties and responsibilities. Willis TowersWatson then compared our top executive and management positions to (i) executive compensation paid by a peer group and (ii) twosurveys, the 2015 Willis Towers Watson Data Services Top Management Survey Report and the 2015 Mercer MBD ExecutiveCompensation Survey, in each case, identified by office position and duties performed by the officer. The peer group utilized by WillisTowers Watson included the following 15 companies:Arcadia Realty Trust Inland Real Estate Corp.Associated Estates Realty Corp. Kite Realty Group TrustCarmike Cinemas Inc.Marcus CorporationCedar Realty Trust Inc. Pennsylvania Real Estate Investment Trust Charter Hall GroupRamco-Gershenson Properties TrustEPR Properties Urstadt Biddle Properties Inc. Vicinity CentresVillage Roadshow Ltd.IMAX Corporation Willis Towers Watson selected the above peer group because (i) the companies included were based in the U.S. and Australia,reflecting our geographic operations and (ii) the companies were comparable to us based on revenue. The executive pay assessment prepared by Willis Towers Watson measured our executive and management compensation againstcompensation paid by peer group companies and the companies listed in the two surveys based on the 25th, 50th and 75th percentile ofsuch peer group and surveyed companies. The 50th percentile was the median compensation paid by such peer group and surveyedcompanies to executives performing similar responsibilities and duties.The Willis Towers Watson assessment compared the base salary, the short term incentive (cash bonus) and long term incentive(equity awards) of the peer and surveyed companies to the base salary, short term incentive and long term incentive provided to ourexecutives. The assessment concluded that, except in a few positions, we were generally competitive in base salary, however, we were notcompetitive when short-term incentives and long term incentives were included in the total compensation paid to our executives andmanagement.As a result of the foregoing factors, Willis Towers Watson recommended that we:·Implement a formal annual incentive opportunity for all executives; and·Implement a regular annual grant program for long-term incentives.Our Compensation Committee recommended, and our Board subsequently adopted, a compensation philosophy forour management team members to:·Attract and retain talented and dedicated management team members;·Provide overall compensation that is competitive in its industry;·Correlate annual cash incentives to the achievement of its business and financial objectives; and·Provide management team members with appropriate long-term incentives aligned with stockholder value.As part of the compensation philosophy, our compensation focus will be to (1) drive our strategic plan on growth, (2) align officerand management performance with the interests of our stockholders, and (3) encourage retention of our officers and management teammembers. In furtherance of the compensation policy and as a result of the extensive deliberations, including consideration of the WillisTowers Watson recommendations, our Compensation Committee adopted an executive and management officer compensation structure for2016 consisting of:·A base salary comparable with job description and industry standard.111 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·A short-term incentive plan based on a combination of factors including overall corporate and division performance aswell as individual performance with a target bonus opportunity to be denominated as a percent of base salary withspecific goals weightings and pay-out ranges; and·A long-term incentive or equity awards in line with job description, performance, and industry standards.Our Compensation Committee's intention is that the compensation structure approved for 2016 will remain in place indefinitely.However, it will review performance and results after the first year and thereafter and evaluate from time to time whether enhancements,changes or other compensation structures are in our and our stockholders best interests.Reflecting the new approach, our Compensation Committee established (i) 2016 annual base salaries at levels that it believed(based heavily on the data provided by Willis Towers Watson) are generally competitive with executives in our peer group and in othercomparable publicly-held companies as described in the executive pay assessment prepared by Willis Towers Watson, (ii) short termincentives in the form of discretionary annual cash bonuses based on the achievement of identified goals and benchmarks, and (iii) long-term incentives in the form of employee stock options and restricted stock units will be used as a retention tool and as a means to furtheralign an executive’s long-term interests with those of our stockholders, with the ultimate objective of affording our executives anappropriate incentive to help drive increases in stockholder value.Our Compensation Committee will evaluate both executive performance and compensation to maintain our ability to attract andretain highly-qualified executives in key positions and to assure that compensation provided to executives remains competitive whencompared to the compensation paid to similarly situated executives of companies with whom we compete for executive talent or that weconsider comparable to our company.Role of Chief Executive Officer in Compensation DecisionsIn connection with the implementation of the new compensation structure, our Compensation Committee conducted the thoroughreview of executive compensation discussed above. Our Compensation Committee engaged in extensive discussions with and consideredwith great weight the recommendations of the Chief Executive Officer as to compensation for executive and management team membersother than for the Chief Executive Officer.Our Compensation Committee expects to perform an annual review of executive compensation, generally in the first quarter of theyear following the year in review, with a presentation by the Chief Executive Officer regarding each element of the executive compensationarrangements. At our Compensation Committee’s direction, our Chief Executive Officer prepared an executive compensation review foreach executive officer (other than the Chief Executive Officer), as well as the full executive team, which included recommendations for:·2016 Base Salary·A proposed year-end short -term incentive in the form of a target cash bonus based on the achievement of certainobjectives; and·A long-term incentive in the form of stock options and restricted stock units for the year under review.As part of the compensation review, our Chief Executive Officer may also recommend other changes to an executive’scompensation arrangements such as a change in the executive’s responsibilities. Our Compensation Committee will evaluate the ChiefExecutive Officer’s recommendations and, in its discretion, may accept or reject the recommendations, subject to the terms of any writtenemployment agreements.Our Compensation Committee met in executive session without our Chief Executive Officer to consider the Chief ExecutiveOfficer’s compensation, including base salary, cash bonus and equity award, if any. Prior to such executive sessions, our CompensationCommittee interviewed our Chief Executive Officer to obtain a better understanding of factors contributing to the Chief Executive Officer'scompensation. With the exception of these executive sessions of our Compensation Committee, as a rule, our Chief Executive Officerparticipated in all deliberations of the Compensation Committee relating to executive compensation. However, our CompensationCommittee also asked our Chief Executive Officer to be excused for certain deliberations with respect to the compensation recommendedfor Margaret Cotter, the sister of our Chief Executive Officer.In conjunction with the year-end annual compensation review, or as soon as practicable after the year-end, our Chief ExecutiveOfficer will recommend to our Compensation Committee our objectives and other criteria to be utilized for purposes of determining cashbonuses for certain senior executive officers. Our Compensation Committee, in its discretion, may revise the Chief Executive Officer’srecommendations. At the end of the year, our Compensation Committee, in consultation with our Chief Executive Officer, will review eachperformance goal and determine the extent to which the officer achieved such goals. In establishing performance goals, our CompensationCommittee expects to consider whether the goals could possibly result in an incentive for any executives to take unwarranted risks in ourCompany’s business and intend to seek to avoid creating any such incentives.112 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Base SalariesOur Compensation Committee reviewed the executive pay assessment prepared by Willis Towers Watson and other factors andengaged in extensive deliberation and then recommended the following 2016 base salaries (the 2015 base salaries are shown forcomparison purposes) for the following officers. Our Board approved the recommendations of our Compensation Committee on March 10,2016 for the President and Chief Executive Officer, Chief Financial Officer and our named executive officers other than William D. Ellisand our prior Chief Executive Officers James J. Cotter, Sr. and James J. Cotter, Jr.Name Title 2015 Base Salary(4)2016 Base Salary(4)Ellen Cotter (1) President and ChiefExecutive Officer $402,000 $450,000 Dev Ghose (2) EVP, Chief Financial Officer,Treasurer and CorporateSecretary 400,000 400,000 Andrzej J. Matyczynski(3) EVP-Global Operations 324,000 336,000 Robert F. Smerling President, US Cinemas 350,000 375,000 Wayne Smith Managing Director, Australiaand New Zealand 274,897(4)282,491(4)______________________________(1)Ellen M. Cotter was appointed Interim President and Chief Executive Officer on June 12, 2015 and President and Chief Executive Officer on January 8,2016. (2)Devasis Ghose was appointed Chief Financial Officer and Treasurer on May 11, 2015. For 2015, Mr. Ghose earned a prorated base salary of $257,692.Andrzej J. Matyczynski was the Company’s Chief Financial Officer and Treasurer until May 11, 2015 and thereafter he acted as Strategic CorporateAdvisor to the Company. He was appointed EVP-Global Operations on March 10, 2016.In 2015, Mr. Smith was paid in Australian dollars in the amount ofAUD$365,360 (shown in U.S. Dollars in the table above, using the conversion rate of 0.7524). In 2016, Mr. Smith will be paid in Australian dollars in theamount of AUD$370,000 (shown above in U.S. Dollars using the exchange rate of 0.76349).Short Term Incentives The Short Term Incentives authorized by our Compensation Committee and our Board provides our executive officers and othermanagement team members, who are selected to participate, with an opportunity to earn an annual cash bonus based upon the achievementof certain company financial goals, division goals and individual goals, established by our Chief Executive Officer and approved by ourCompensation Committee and our Board (in future years, under the Compensation Committee Charter approved by our Board on March 10,2016, our Compensation Committee will have full authority to approve these matters). Specifically, a participant in the short-term incentiveplan will be advised of his or her annual potential target bonus expressed as a percentage of the participant’s base salary and by dollaramount. The participant will be eligible for a short-term incentive bonus once the participant achieves goals identified at the beginning ofthe year for a threshold target, the potential target or potential maximum target bonus opportunity. The bonus will vary depending uponthe achievements made by the individual participants, the division and the corporation. Corporate goals for 2016 will include levels ofearnings before interest, depreciation, taxes and amortization (“non-GAAP Operating Income”) and property developmentmilestones. Division goals for 2016 will include levels of division cash flow and division milestones and individual goals will includespecific unique performance goals specific to the individual’s position with us. Each of the corporate, division and individual goals carriesa different percentage weight in determining the officer’s or other team member’s bonus for the year.Ms. Ellen M. Cotter, our President and Chief Executive Officer, has a potential target bonus opportunity of 95% of Base Salary, or$427,500 at target based on Ms. Cotter’s achievement of her performance goals and over achievement of corporate goals discussedabove. Of that potential target bonus opportunity, a threshold bonus of $213,750 may be achieved based upon Ms. Cotter’s achievement ofcertain performance goals and our achievement of certain corporate goals, and a potential maximum target of $641,250 is based onachieving additional performance goals. Ms. Cotter’s aggregate annual bonus opportunity can range from $0 to $641,250. Mr. Dev Ghose,our EVP, Chief Financial Officer, Treasurer and Corporate Secretary, has a potential target bonus opportunity of 50% of Base Salary, or$200,000 at target, which is based on achievement of his performance goals and our achievement of corporate goals, as discussed above.Mr. Ghose’s aggregate annual bonus opportunity can range from $0 to $300,000 (the maximum potential target if additional performancegoals are met by Mr. Ghose). Mr. Andrzej J. Matyczynski, our EVP - Global Operations, has a target bonus opportunity of 50% of BaseSalary, or $168,000 at target, which is based on achievement of his performance goals, our achievement of corporate goals and certaindivisional goals. Mr. Matyczynski’s aggregate annual bonus opportunity can range from $0 to $252,000 (the maximum potential target ifadditional performance goals are met by Mr. Matyczynski). Mr. Robert Smerling, President, US Cinemas, has a target bonus opportunity of30% of base pay, or $112,500 at target,113 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. which is based on achievement of his performance goals, our achievement of corporate goals and certain divisional goals. Mr. Smerling’saggregate annual bonus opportunity can range from $0 to $168,750 (the maximum potential target if additional performance goals are metby Mr. Smerling). Mr. Wayne Smith, Managing Director, Australia New Zealand, has a target bonus opportunity of 40% of Base Salary, orA$148,000 at target, which is based on achievement of his performance goals, our achievement of corporate goals and certain divisionalgoals. Mr. Smith’s aggregate annual bonus opportunity can range from A$0 to A$222,000 (the maximum potential target if additionalperformance goals are met by Mr. Smith). The positions of other management team members have target bonus opportunities ranging from20% to 30% of Base Salary based on achievement certain goals. The highest level of achievement, participants may be eligible to receiveup to a maximum of 150% of his or her target bonus amount.Long-Term IncentivesLong-Term incentives will utilize the equity-based plan under our 2010 Incentive Stock Plan, as amended (the “2010 Plan”). For2016, executive and management team participants will receive awards in the following forms: 50% time-based restricted stock units and50% non-statutory stock options. The grants of restricted stock units and options will vest ratably over a four (4) year period with 1/4thvesting on each anniversary date of the grant date.On March 10, 2016, the following grants were made:Name Title Dollar Amount ofRestricted Stock Units Dollar Amount of Non-Statutory Stock Options (1)Ellen M. Cotter President and Chief ExecutiveOfficer $150,000 $150,000 Devasis Ghose (2) EVP, Chief Financial Officer,Treasurer and CorporateSecretary 0 0 Andrzej J. Matyczynski EVP-Global Operations 37,500 37,500 Robert F. Smerling President, US Cinemas 50,000 50,000 Wayne Smith Managing Director, Australiaand New Zealand 27,000 (3) 27,000(3)(1)The number of shares of stock to be issued will be calculated using the Black Scholes pricing model as of the date of grant of the award.(2)Mr. Devasis Ghose was awarded 100,000 non-statutory stock options vesting over a 4-year period on commencing on Mr. Ghose’s first day of employmenton May 11, 2015.(3)Although Mr. Smith was paid 50% of $75,000 in Australian Dollars, the amount shown above is quoted in U.S. Dollars.All long-term incentive awards will be subject to other terms and conditions set forth in the 2010 Plan and award grant.Other Elements of CompensationRetirement PlansWe maintain a 401(k) retirement savings plan that allows eligible employees to defer a portion of their compensation, within limitsprescribed by the Internal Revenue Code, on a pre-tax basis through contributions to the plan. Our named executive officers other thanMr. Smith, who is a non-resident of the U.S., are eligible to participate in the 401(k) plan on the same terms as other full-time employeesgenerally. Currently, we match contributions made by participants in the 401(k) plan up to a specified percentage, and these matchingcontributions are fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferredretirement savings though our 401(k) plan, and making fully vested matching contributions, adds to the overall desirability of ourexecutive compensation package and further incentivizes our employees, including our named executive officers, in accordance with ourcompensation policies.Other Retirement PlansDuring 2012, Mr. Matyczynski was granted an unfunded, nonqualified deferred compensation plan (“DCP”) that was partiallyvested and was to vest further so long as he remained in our continuous employ. The DCP allowed Mr. Matyczynski to defer part of thecash portion of his compensation, subject to annual limits set forth in the DCP. The funds held pursuant to the DCP are not segregated anddo not accrue interest or other earnings. If Mr. Matyczynski were to be terminated for cause, then the total vested amount would be reducedto zero. The incremental amount vested each year was made subject to review and approval by our Board. Please see the “NonqualifiedDeferred Compensation” table for additional information. In addition, Mr. Matyczynski is entitled to a114 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. lump-sum severance payment of $50,000, provided there has been no termination for cause and subject to certain offsets, upon hisretirement.Upon the termination of Mr. Matyczynski’s employment, he will also be entitled under the DCP agreement to payment of thevested benefits under his DCP in annual installments following the later of (a) 30 days following Mr. Matyczynski’s 65th birthday or (b) sixmonths after his separation from service for reasons other than his death or termination for cause. The DCP was to vest over 7 years and withfull vesting to occur in 2019 at $1,000,000 in deferred compensation. However, in connection with his changed employment to EVP -Global Operations, the Company and Mr. Matyczynski agreed that the Company would cease making contributions to the DCP on April15, 2016 and that the final contributions by the Company to the DCP would be $150,000 for 2015, and $21,875 for 2016, satisfying theCompany’s total contribution obligations under the DCP at an amount of $621,875.The DCP is an unfunded contractual obligation of the Company. DCP benefits are paid from the general assets of theCompany. However, the Company reserves the right to establish a grantor trust from which DCP benefits may be paid.In March 2016, the Compensation Committee approved a one-time retirement benefit for Robert Smerling, President, CinemaOperations, due to his significant long term service to the Company. The retirement benefit an amount equal to the average of the twohighest total cash compensation (base salary plus cash bonus) years paid to Mr. Smerling in the then most recently completed five yearperiod. We currently maintain no other retirement plan for our named executive officers.Key Person InsuranceWe maintain life insurance on certain individuals who we believe to be key to our management. In 2015, these individualsincluded James J. Cotter, Jr. (through September 13, 2015), Ellen M. Cotter, Margaret Cotter, William Ellis, Dev Ghose, AndrzejMatyczynski, Robert Smerling, Craig Tompkins and Wayne Smith. If such individual ceases to be our employee, Director or independentcontractor, as the case may be, she or he is permitted, by assuming responsibility for all future premium payments, to replace our Companyas the beneficiary under such policy. These policies allow each such individual to purchase up to an equal amount of insurance for suchindividual’s own benefit. In the case of our employees, the premium for both the insurance as to which we are the beneficiary and theinsurance as to which our employee is the beneficiary, is paid by us. In the case of named executive officers, the premium paid by us for thebenefit of such individual is reflected in the Compensation Table in the column captioned “All Other Compensation.”Employee Benefits and PerquisitesOur named executive officers are eligible to participate in our health and welfare plans to the same extent as all full-timeemployees generally. We do not generally provide our named executive officers with perquisites or other personal benefits. Historically,many of our other named executive officers also received an automobile allowance. The table below shows car allowances granted tocertain officers under their employment agreements or arrangements. From time to time, we may provide other perquisites to one or more ofour other named executive officers.OfficerAnnual Allowance ($)Dev Ghose12,000William Ellis (1)15,000Andrzej J. Matyczynski12,000Ellen M. Cotter13,800James J. Cotter, Jr. (1)15,000Robert F. Smerling18,000(1)Mr. Ellis and Mr. Cotter, Jr. are no longer employees of the Company.Tax and Accounting Considerations Deductibility of Executive CompensationSubject to an exception for “performance-based compensation,” Section 162(m) of the Internal Revenue Code generally prohibitspublicly held corporations from deducting for federal income tax purposes annual compensation paid to any senior executive officer to theextent that such annual compensation exceeds $1.0 million. Our Compensation Committee and our Board consider the115 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. limits on deductibility under Section 162(m) in establishing executive compensation, but retain the discretion to authorize the payment ofcompensation that exceeds the limit on deductibility under this Section.Nonqualified Deferred CompensationWe believe we are operating, where applicable, in compliance with the tax rules applicable to nonqualified deferred compensationarrangements.Say on PayAt our Annual Meeting of Stockholders held on May 15, 2014, we held an advisory vote on executive compensation. Ourstockholders voted in favor of our Company’s executive compensation. The Compensation Committee reviewed the results of the advisoryvote on executive compensation in 2014 and did not make any changes to our compensation based on the results of the vote. We expectthat our next advisory vote of our stockholders on executive compensation will be at our 2017 Annual Meeting of Stockholders.Executive CompensationThis section discusses the material components of the compensation program for our executive officers named in the 2015Summary Compensation Table below. In 2015, our named executive officers and their positions were as follows:·Ellen M. Cotter, Chairperson of the Board, President and Chief Executive Officer, interim President and Chief ExecutiveOfficer, Chief Operating Officer – Domestic Cinemas and Chief Executive Officer of Consolidated Entertainment, LLC.·Dev Ghose, EVP, Chief Financial Officer and Treasurer.·William Ellis, General Counsel and Corporate Secretary·Robert F. Smerling, President – Domestic Cinema Operations.·Wayne Smith, Managing Director – Australia and New Zealand.·James J. Cotter, Jr., former Vice Chairman, President and Chief Executive Officer.·Andrzej J. Matyczynski, former Chief Financial Officer, Treasurer and Corporate Secretary.Summary Compensation TableThe following table shows the compensation paid or accrued during the last three fiscal years ended December 31, 2015 to (i)Mr. James J. Cotter, Jr., who served as our principal executive officer until June 12, 2015, (ii) Ellen M. Cotter, who served as our interimprincipal executive officer from June 12, 2015 through December 31, 2015, (iii) Mr. Andrzej J. Matyczynski, who served as our ChiefFinancial Officer and Treasurer until May 11, 2015, (iv) Mr. Dev Ghose, who served as our Chief Financial Officer starting May 11, 2015,and (v) the other three most highly compensated persons who served as executive officers in 2015. The following executives are hereinreferred to as our “named executive officers.”YearSalary ($)Bonus ($)StockAwards($)(1)OptionAwards($)(1)Change in PensionValue andNonqualifiedDeferredCompensationEarning ($)All OtherCompensation ($)Total ($)Ellen M. Cotter (2)Interim Presidentand ChiefExecutive Officer,Chief OperatingOfficer -DomesticCinemas2015 402,000 250,000 ------ 25,465 (3)677,465 2014 335,000 -------- 75,190 (3)(4)410,190 2013 335,000 -------- 24,915 (3)359,915 James J. Cotter, Jr. (5)(9)Former Presidentand ChiefExecutive Officer2015 195,417 ----50,027---- 16,161 (3)261,605 2014 335,000 ----50,027---- 26,051 (3)411,078 2013 195,417 ----29,182---- 9,346 (3)233,945 Devasis Ghose (6)Chief FinancialOfficer andTreasurer2015 257,692 75,000 382,334 -- 15,730 (3)407,005 2014 -------------- --2013 -------------- --Andrzej J.Matyczynski (7)Former ChiefFinancial Officerand Treasurer2015 324,000 33,010 150,000 (8)27,140 (3)534,150 2014 308,640 33,010 150,000 (8)26,380 (3)518,030 2013 308,640 35,000 --33,010 50,000 (8)25,755 (3)452,405 116 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. William EllisGeneral Counsel (10)2015 350,000 60,000 57,194 28,330 (3)495,524 2014 71,795 10,000 9,532 2,500 (3)93,827 2013 --------------Robert F. Smerling President – DomesticCinema Operations2015 350,000 75,000 ------ 22,899 (3)447,899 2014 350,000 65,000 ------ 22,421 (3)437,421 2013 350,000 25,000 ------ 21,981 (3)396,981 Wayne Smith (11)Managing Director -Australia and NewZealand2015 274,897 71,478 ------ 2,600 (3)348,975 2014 324,295 72,216 ------ 2,340 (3)398,851 2013 340,393 48,420 ------ 2,075 (3)390,888 (1)Amounts represent the aggregate grant date fair value of awards computed in accordance with ASC Topic 718, excluding the effects of any estimatedforfeitures. The assumptions used in the valuation of these awards are discussed in[ Note 3] to our consolidated financial statements. Amounts do not includethe value of restricted stock units that will not vest within 60 days following the date of which this information is provided.(2)Ms. Ellen M. Cotter was appointed our interim President and Chief Executive Officer on June 12, 2015.(3)Includes our matching employer contributions under our 401(k) plan, the imputed tax of key person insurance, and any automobile allowances. Aside fromthe car allowances only the employer contributions for the 401(k) plan exceeded $10,000, see table below. See the table in the section entitled EmployeeBenefits and Perquisites for the amount of each individual’s car allowance.Employer Contribution for 401(k) PlanName201520142013Ellen M. Cotter$10,600$10,400$10,200James J. Cotter, Jr.6,70010,4000Dev Ghose4,00000Andrzej J. Matyczynski10,60010,40010,200William Ellis10,50000Robert F. Smerling000Wayne Smith000(4)Includes a $50,000 tax gross-up for taxes incurred as a result of the exercise of nonqualified stock options that were intended to be issued as incentive stockoptions.(5)Mr. Cotter, Jr., served as our Chief Executive Officer until June 12, 2015. In the case of Mr. Cotter Jr., the “All Other Compensation” column includes$43,750 in severance payments paid pursuant to Mr. Cotter Jr.’s employment agreement. Of this amount, the Company has a claim against Mr. Cotter Jr. forapproximately $18,000, which, if the Company is successful in this claim, may be recovered from Mr. Cotter Jr. For additional information, see theinformation set forth in Item 3, Legal Proceedings. (6)Mr. Ghose became Chief Financial Officer and Treasurer on May 11, 2015, as such, he was paid a prorated amount of his $400,000 salary for 2015.(7)Mr. Matyczynski resigned as our Chief Financial Officer and Treasurer on May 11, 2015, and acted as our Strategic Corporate Advisor until March 10,2016.(8)Represents the increase in the vested benefit of the DCP for Mr. Matyczynski. Payment of the vested benefit under his DCP will be made in accordance withthe terms of the DCP.(9)Mr. Cotter, Jr. had an annual base salary of $335,000 for 2015. As his employment ended in June 2015, Mr. Cotter, Jr. earned a prorated base salary of$195,417 for 2015, which includes his severance payment paid through the end of July 2015.(10)Mr. Ellis became General Counsel and Corporate Secretary on October 20, 2014 as such he was paid a prorated amount of his $350,000 salary in2014. Mr. Ellis submitted his resignation on February 18, 206.(11)Mr. Smith is paid in Australian Dollars. Amounts in the table above are shown in U.S. Dollars, using the conversion rates of 0.9684 for 2013, 0.9027 for2014and 0.7524 for 2015.Grants of Plan-Based AwardsThe following table contains information concerning the stock grants made to our named executive officers for the year endedDecember 31, 2015: 117 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Estimated Future Payouts Under Non-Equity Incentive Plan Awards Estimated Futures PayoutsUnder Equity Incentive Plan Awards All OtherStockAwards:Number ofShares ofStock orUnits (#)(1)All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions (#)(2) Exercise orBase Price ofOption Award($/share) (3)Grant Date FairValue of Stockand OptionAwards ($)(4) Name Grant DateThreshold ($) Target ($) Maximum ($) Threshold (#)Target (#)Maximum (#) Ellen M. Cotter James J. Cotter,Jr. Devasis Ghose5-11-2015 100,000 13.42 $382,334 Andrzej J.Matyczynski William Ellis Robert F.Smerling Wayne Smith (1)7-16-2015 6,000 $84,000 (1)Mr. Wayne Smith was issued an award of restricted Class A Common Stock, which vests in equal installments on May 13, 2015 and May 13, 2016. Theclosing price per share for the Class A Common Stock on the date of grant was $14.00. The awards issued to Mr. Wayne Smith are related to his prior-yearperformance.(2)Mr. Dev Ghose was issued an option to purchase 100,000 shares of Class A Common Stock at the commencement of his employment, which award vests infour equal installments.(3)Options are granted with an exercise price equal to the closing price per share on the date of grant.(4)Represents the total option value estimated as per ASC 718.Nonqualified Deferred CompensationNameExecutivecontributions in2015($)Registrantcontributions in2015($)Aggregateearnings in 2015($)Aggregatewithdrawals/distributions($)Aggregate balance at December31, 2015($)Andrzej J. Matyczynski0150,00000600,000See Item 11 - Other Retirement Plans for a description of the DCP.2010 Equity Incentive PlanOn May 13, 2010, our stockholders approved the Plan at the annual meeting of stockholders in accordance with therecommendation of the Board of Directors of the Company. The Plan provides for awards of stock options, restricted stock, bonus stock,and stock appreciation rights to eligible employees, Directors, and consultants. The Board of Directors approved an amendment to the Planto permit the award of restricted stock units on March 10, 2016. The Plan permits issuance of a maximum of 1,250,000 shares of Class AStock. The Plan expires automatically on March 11, 2020.Equity incentive bonuses may be awarded to align our executives’ long-term compensation to appreciation in stockholder valueover time and, so long as such grants are within the parameters of the Plan, historically were entirely discretionary on the part of Mr. Cotter,Sr. Other stock grants are subject to Board approval. Equity awards may include stock options, restricted stock, bonus stock, or stockappreciation rights.If awarded, it is generally our policy to value stock options and restricted stock at the closing price of our common stock asreported on the NASDAQ Stock Market on the date the award is approved or on the date of hire, if the stock is granted as a recruitmentincentive. When stock is granted as bonus compensation for a particular transaction, the award may be based on the market price on a datecalculated from the closing date of the relevant transaction. Awards may also be subject to vesting and limitations on voting or otherrights.Outstanding Equity AwardsThe following table sets forth outstanding equity awards held by our named executive officers as of December 31, 2015 under thePlan:Outstanding Equity Awards at Year EndedDecember 31, 2015118 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Option AwardsStock AwardsClassNumber ofSharesUnderlyingUnexercisedOptionsExercisableNumber ofSharesUnderlyingUnexercisedOptionsUnexercisableOptionExercise Price($)OptionExpirationDateNumber ofShares orUnits ofStock thatHave NotVestedMarket Value ofShares or Unitsthat Have NotVested ($)James J. Cotter, Jr. (1)A25,000 20,000 6.31 06/02/20180 0 Ellen M. CotterA20,000 --5.55 03/06/20180 0 William Ellis(2)A8,815 40,000 8.94 12/31/20160 0 Devasis GhoseA25,000(3)75,000 13.42 05/10/2020 Andrzej J.MatyczynskiA25,000 --6.02 08/22/20220 0 Robert F. SmerlingA43,750 --10.24 05/08/20170 0 Wayne SmithA--------3,000(4)42,000 (1)Mr. Cotter, Jr. has stated that he has unvested options to acquire 50,000 shares of Class A Stock at an exercise price of $6.31 per share, expiringFebruary 6, 2018, of an original stock option grant of 100,000 Class A Stock. Mr. Cotter, Jr. exercised 50,000 stock options in June 2015. TheCompany’s position is that all unvested options expired upon the termination of Mr. Cotter, Jr.’s employment. The matter is under review by theCompany.(2)Mr. Ellis resigned effective March 11, 2106. As part of his separation agreement, 20,000 of the 40,000 remaining unvested shares will vest on October20, 2016. Thereafter, no additional options will vest.(3)25,000 of Mr. Ghose’s options will vest on May 11, 2016.(4)Mr. Smith was granted 6,000 restricted shares of Class A stock on July 16, 2015, which vest over two years in annual installments.Option Exercises and Stock VestedThe following table contains information for our named executive officers concerning the option awards that were exercised andstock awards that vested during the year ended December 31, 2015: Option AwardsStock AwardsNameClassNumber ofSharesAcquired onExerciseValue Realizedon Exercise ($)Number ofSharesAcquired onVestingValue Realizedon Vesting ($) James J. Cotter, Sr.B100,000 1,024,000 ----James J. Cotter, Jr. (1)A50,000 315,500 James J. Cotter, Jr.A12,500 48,375 ----James J. Cotter, Jr.A10,000 83,500 ----Ellen M. CotterB50,000 512,000 ----Andrzej J. MatyczynskiA35,100 180,063 ---- (1)Mr. Cotter, Jr. has stated that he has unvested options to acquire 50,000 shares of Class A Stock at an exercise price of $6.31 per share, expiringFebruary 6, 2018, of an original stock option grant of 100,000 Class A Stock. Mr. Cotter, Jr. exercised 50,000 stock options in June 2015. TheCompany’s position is that all unvested options expired upon the termination of Mr. Cotter, Jr.’s employment. The matter is under review by theCompany.Pension BenefitsThe following table contains information concerning pension plans for each of the named executive officers for the year endedDecember 31, 2015:NamePlan NameNumber of Years ofCredited ServicePresent Value ofAccumulated Benefit asof 12/31/2015 ($)Payments During LastFiscal Year ($) Andrzej J. MatyczynskiDCP6 600,000$--119 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Potential Payments upon Termination of Employment or Change in ControlThe following paragraphs provide information regarding potential payments to each of our named executive officers in connectionwith certain termination events, including a termination related to a change of control of the Company, as of December 31, 2015:Mr. Dev Ghose – Termination without Cause. Under his employment agreement, we may terminate Mr. Ghose’s employment withor without cause (as defined) at any time. If we terminate his employment without cause or fail to renew his employment agreement uponexpiration without cause, Mr. Ghose will be entitled to receive severance in an amount equal to the salary and benefits he was receiving fora period of 12 months following such termination or non-renewal. If the termination is in connection with a “change of control” (asdefined), Mr. Ghose would be entitled to severance in an amount equal to the compensation he would have received for a period two yearsfrom such termination. Mr. William Ellis – Termination without Cause. . Mr. Ellis resigned his employment effective March 11, 2016. We have enteredinto a separation agreement with Mr. Ellis which provides, among other things, that, in consideration of the payment to Mr. Ellis of$205,010 (to be paid in 19 equal semi-monthly installments of $10,790) and the vesting of options to acquire 20,000 shares of our Class ACommon Stock on October 15, 2016, Mr. Ellis has agreed to be available to advise us on matters on which he previously worked untilDecember 31, 2016. Mr. Ellis’ employment agreement contained a noncompetition clause that did not extend beyond his termination.Mr. Wayne Smith — Termination of Employment for Failing to Meet Performance Standards. If Mr. Smith’s employment isterminated by the Board for failing to meet the standards of his anticipated performance, Mr. Smith will be entitled to a severance paymentof six months’ base salary.Mr. Andrzej J. Matyczynski – Deferred Compensation Benefits. During 2012, Mr. Matyczynski was granted an unfunded,nonqualified deferred compensation plan (“DCP”) that was partially vested and was to vest further so long as he remained in our continuousemploy. If Mr. Matyczynski were to be terminated for cause, then the total vested amount would be reduced to zero. The incrementalamount vested each year was made subject to review and approval by our Board. Please see the “Nonqualified Deferred Compensation”table for additional information.Upon the termination of Mr. Matyczynski’s employment, he will be entitled under the DCP agreement to payment of the vested benefitsunder his DCP in annual installments following the later of (a) 30 days following Mr. Matyczynski’s 65th birthday or (b) six months afterhis separation from service for reasons other than his death or termination for cause. The DCP was to vest over 7 years and with full vestingto occur in 2019 at $1,000,000 in deferred compensation. However, in connection with his employment as EVP Global Operations, theCompany and Mr. Matyczynski agreed that the Company would cease making contributions to the DCP on April 15, 2016 and that thefinal contributions by the Company to the DCP would be $150,000 for 2015 and $21,875 for 2016, satisfying the Company’s obligationsunder the DCP. Mr. Matyczynski’s agreement contains nonsolicitation provisions that extend for one year after his retirement.Under Mr. Matyczynski’s agreement, on his retirement date and provided there has not been a termination for cause, Mr.Matyczynski will be entitled to a lump sum severance payment in an amount equal to $50,000, less certain offsets.Robert F. Smerling – Retirement Benefit. In March 2016, the Compensation Committee approved a one-time retirement benefit forRobert Smerling, President, Cinema Operations, due to his significant long-term service to the Company. The retirement benefit is theaverage of the two highest total cash compensation (base salary plus cash bonus) years paid to Mr. Smerling in the then most recentlycompleted five year period.No other named executive officers currently have employment agreements or other arrangements providing benefits upontermination or a change of control. The table below shows the maximum benefits that would be payable to each person listed above in theevent of such person’s termination without cause or termination in connection with a change in control, if such events occurred onDecember 31, 2015, assuming the transaction took place on December 31, 2015 at price equal to the closing price of the Class A stock,which was of $13.11.Mr. Ellis’ agreement terminated when his employment ended as of March 11, 2016. As such, his information is excluded from thetable below.120 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Payable on upon Termination without Cause ($) Payable upon Termination in Connection witha Change in Control ($) Payable uponRetirement ($)SeverancePaymentsValue ofVested StockOptionsValue ofHealth Benefits SeverancePaymentsValue ofVestedStockOptionsValue ofUnvestedStockOptionsAccelerated BenefitsPayable underRetirementPlans or theDCPEllen Cotter0151,2000 0151,2000 0Dev Ghose400,000023,040 800,0000 0Wayne Smith175,000(3)39,330-- 039,33039,330 0Andrzej J.Matyczynski50,000(1)177,2500 0177,2500 600,000Robert F.Smerling0125,5620 0125,5620 415,000 (2)(1)Mr. Matyczynski’s severance payment is payable upon his retirement, and is subject to certain offsets as set forth in his agreement, and is subject to certainoffsets.(2)Mr. Smerling’s one-time retirement benefit is based on the average of the two highest total cash compensation years paid to Mr. Smerling in the mostrecently completed five-year period. The figure quoted in the table represents the average of total compensation paid for years 2015 and 2014.(3)Represents value of stock grants.Director Compensation TableThe following table sets forth information concerning the compensation to persons who served as our non‑employee Directorsduring 2015 for their services as Directors.NameFees Earned orPaid in Cash ($)Option Awards($)(1)All Other Compensation($)Total ($)Judy Codding11,957 0 0 11,957 Margaret Cotter (2)35,000 7,656 0 42,656 Guy W. Adams (3)75,000 7,656 0 82,656 William D. Gould80,000 7,656 0 87,656 Edward L. Kane98,000 7,656 0 105,656 Douglas J. McEachern82,000 7,656 0 89,656 Tim Storey (3)112,500 7,656 21,136(4)140,292 Michael Wrotniak11,005 0 0 11,005 Total (1)Fair value of the award computed in accordance with FASB ASC Topic 718.(2)Until March 10, 2016, in addition to her Director’s fees, Ms. Margaret Cotter received a combination of fixed and incentive management fees under the OBImanagement agreement described under the caption “Certain Transactions and Related Party Transactions - OBI Management Agreement,” below.(3)Mr. Storey served on our Board and Compensation Committee through October 11, 2015.(4)Represents fees paid to Mr. Storey as the sole independent Director of our Company’s wholly owned New Zealand subsidiary.Compensation Committee Interlocks and Insider ParticipationOur Compensation Committee is currently composed of Mr. Kane, who serves as Chair, Mr. Adams and Dr. Codding. Mr. Storey,who served on our Board until October 11, 2015, served on our Compensation Committee until that date. None of the members of theCompensation Committee was an officer or employee of the Company at any time during 2015. None of our executive officers serves as amember of the board of directors or compensation committee of any entity that has or had one or more executive officers serving as amember of our Board of Directors or Compensation Committee.121 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. REPORT OF THE COMPENSATION COMMITTEEThe Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis”required by Item 401(b) of Regulation S-K and, based on such review and discussions, has recommended to our Board that the foregoing“Compensation Discussion and Analysis” be included in this Form 10-K.Respectfully submitted,Edward L. Kane, ChairGuy W. AdamsJudy Codding Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersEquity Compensation Plan InformationThe following table sets forth, as of December 31, 2015, a summary of certain information related to our equity incentive plansunder which our equity securities are authorized for issuance:Plan CategoryNumber of securities to beissued upon exercise ofoutstanding options,warrants and rights (a)Weighted averageexercise price ofoutstanding options,warrants and rights (b)Number of securities remainingavailable for future issuanceunder equity compensationplans(excluding securities reflected incolumn (a))(c)Equity compensation plansapproved by securityholders (1)486,565 (2)$8.68551,800 Equity compensation plansnot approved by securityholders Total486,565 (1)These plans are the Company’s 1999 Stock Option Plan and 2010 Stock Incentive Plan.(2)Represents outstanding options only.BENEFICIAL OWNERSHIP OF SECURITIESExcept as described below, the following table sets forth the shares of Class A Stock and Class B Stock beneficially owned onApril 22, 2016 by:·each of our incumbent Directors and Director nominees;·each of our incumbent executive officers and named executive officers set forth in the Summary Compensation Table ofthis Form 10-K;·each person known to us to be the beneficial owner of more than 5% of our Class B Stock; and·all of our incumbent Directors and incumbent executive officers as a group.Except as noted, and except pursuant to applicable community property laws, we believe that each beneficial owner has solevoting power and sole investment power with respect to the shares shown. An asterisk (*) denotes beneficial ownership of less than 1%.Amount and Nature of Beneficial Ownership (1)Class A StockClass B StockName and Address ofBeneficial OwnerNumber of SharesPercentage ofStockNumber ofSharesPercentage ofStockDirectors and Named Executive Officers Ellen M. Cotter (2)(12)3,146,965 14.5 1,173,888 69.8 James J. Cotter, Jr. (12)(13)3,084,976 14.2 696,080 41.4 Margaret Cotter (3)(12)3,335,012 15.4 1,158,988 66.9 122 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Guy W. Adams (8)2,000 *----Judy Codding (9)2,000 *----William D. Gould (4)56,340 *----Edward L. Kane (5)21,500 *100 *Andrzej J. Matyczynski (16)50,880 *----Douglas J. McEachern (6)39,300 *----Michael Wrotniak (10)2,000 ------Robert F. Smerling (7)43,750 *----Wayne Smith (11)3,000 *----William Ellis (17)20,000 *----Dev Ghose (18)25,000 ------5% or Greater Stockholders James J. Cotter Living Trust (12)1,897,649 8.8 696,080 41.4 Estate of James J. Cotter, Sr. (Deceased) (12)326,800 1.5 427,808 25.5 Mark Cuban (14)5424 Deloache AvenueDallas, Texas 7522072,164 *207,913 12.4 PICO Holdings, Inc. and PICO Deferred Holdings,LLC (15)875 Prospect Street, Suite 301La Jolla, California 92037----117,500 7.0 James J. Cotter Foundation102,751 * Cotter 2005 Grandchildren’s Trust289,390 1.3 All Directors and executive officers as a group (14persons) (18)5,007,094 22.9 1,209,088 71.9 (1)Percentage ownership is determined based on 21,654,302 shares of Class A Stock and 1,680,590 shares of Class B Stock outstanding on March 31,2016. Beneficial ownership has been determined in accordance with SEC rules. Shares subject to options that are currently exercisable, or exercisable within60 days following the date as of which this information is provided, and not subject to repurchase as of that date, which are indicated by footnote, aredeemed to be beneficially owned by the person holding the options and are deemed to be outstanding in computing the percentage ownership of that person,but not in computing the percentage ownership of any other person.(2)The Class A Stock shown includes 20,000 shares subject to stock options as well as 799,765 shares held directly. The Class A Stock shown also includes102,751 shares held by the James J. Cotter Foundation (the “Cotter Foundation”). Ellen M. Cotter is Co-Trustee of the Cotter Foundation and, as such, isdeemed to beneficially own such shares. Ms. Cotter disclaims beneficial ownership of such shares except to the extent of her pecuniary interest, if any, insuch shares. The Class A Stock shown also includes 297,070 shares that are part of the Estate of James J. Cotter, Deceased (the “Cotter Estate”) that is beingadministered in the State of Nevada and 29,730 shares from the Cotter Profit Sharing Plan. On December 22, 2014, the District Court of Clark County,Nevada, appointed Ellen M. Cotter and Margaret Cotter as co-executors of the Cotter Estate. As such, Ellen M. Cotter would be deemed to beneficially ownsuch shares. The shares of Class A Stock shown also include 1,897,649 shares held by the James J. Cotter Living Trust (the “Living Trust”). See footnotes(12) to this table for information regarding beneficial ownership of the shares held by the Living Trust. As Co-Trustees of the Living Trust, the three Cotterfamily members would be deemed to beneficially own such shares depending upon the outcome of the matters described in footnote (12). TogetherMargaret Cotter and Ellen M. Cotter beneficially own 1,208,988 shares of Class B Stock.(3)The Class A Stock shown includes 17,000 shares subject to stock options as well as 804,173 shares held directly. The Class A Stock shown also includes289,390 shares held by the Cotter 2005 Grandchildren’s Trust and 29,730 shares from the Cotter Profit Sharing Plan. Margaret Cotter is Co-Trustee of theCotter 2005 Grandchildren’s Trust and, as such, is deemed to beneficially own such shares. Ms. Cotter disclaims beneficial ownership of such shares exceptto the extent of her pecuniary interest, if any, in such shares. The Class A Stock shown includes 297,070 shares of Class A Stock that are part of the CotterEstate. As Co-Executor of the Cotter Estate, Ms. Cotter would be deemed to beneficially own such shares. The shares of Class A Stock shown also include1,897,649 shares held by the Living Trust. See footnotes (12) for information regarding beneficial ownership of the shares held by the Living Trust. As Co-Trustees of the Living Trust, the three Cotter family members would be deemed to beneficially own such shares depending upon the outcome of the mattersdescribed in footnote (12). Together Margaret Cotter and Ellen M. Cotter beneficially own 1,208,988 shares of Class B Stock.(4)The Class A Stock shown includes 19,000 shares subject to stock options.(5)The Class A Stock shown includes 4,000 shares subject to stock options.(6)The Class A Stock shown includes 29,000 shares subject to stock options.(7)The Class A Stock shown consists 43,750 shares subject to stock options.(8)The Class A Stock shown consists of 2,000 shares subject to stock options.(9) The Class A Stock shown consists of 2,000 shares subject to stock options.(10) The Class A Stock shown consists of 2,000 shares subject to stock options.(11) The Class A Stock shown consists of 3,000 restricted stock grants.(12)On June 5, 2013, the Declaration of Trust establishing the Living Trust was amended and restated (the “2013 Restatement”) to provide that, upon the deathof James J. Cotter, Sr., the Trust’s shares of Class B Stock were to be held in a separate trust, to be known as the “Reading Voting Trust,” for the benefit of the123 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. grandchildren of Mr. Cotter, Sr. Mr. Cotter, Sr. passed away on September 13, 2014. The 2013 Restatement also names Margaret Cotter the sole trustee ofthe Reading Voting Trust and names James J. Cotter, Jr. as the first alternate trustee in the event that Ms. Cotter is unable or unwilling to act as trustee. Thetrustees of the Living Trust, as of the 2013 Restatement, were Ellen M. Cotter and Margaret Cotter. On June 19, 2014, Mr. Cotter, Sr. signed a 2014 PartialAmendment to Declaration of Trust (the “2014 Amendment”) that names Margaret Cotter and James J. Cotter, Jr. as the co-trustees of the Reading VotingTrust and provides that, in the event they are unable to agree upon an important trust decision, they shall rotate the trusteeship between them annually oneach January 1st. It further directs the trustees of the Reading Voting Trust to, among other things, vote the Class B Stock held by the Reading Voting Trustin favor of the appointment of Ellen M. Cotter, Margaret Cotter and James J. Cotter, Jr. to our Board and to take all actions to rotate the chairmanship of ourBoard among the three of them. The 2014 Amendment states that James J. Cotter, Jr., Ellen M. Cotter and Margaret Cotter are Co‑Trustees of the LivingTrust. On February 6, 2015, Ellen M. Cotter and Margaret Cotter filed a Petition in the Superior Court of the State of California, County of Los Angeles,captioned In re James J. Cotter Living Trust dated August 1, 2000 (Case No. BP159755). The Petition, among other things, seeks relief that could determinethe validity of the 2014 Amendment and who between Margaret Cotter and James J. Cotter Jr. will have authority as trustee or co-trustees of the ReadingVoting Trust to vote the shares of Class B Stock shown (in whole or in part) and the scope and extent of such authority. Mr. Cotter, Jr. has filed anopposition to the Petition. The [696,080] shares of Class B Stock shown in the table as being beneficially owned by the Living Trust are reflected on theCompany’s stock register as being held by the Living Trust and not by the Reading Voting Trust. The information in the table reflects direct ownership ofthe [696,080] shares of Class B Stock by the Living Trust in accordance with the Company’s stock register and beneficial ownership of such shares as beingheld by each of the three potential Co-Trustees, Mr. Cotter, Jr., Ellen M. Cotter and Margaret Cotter, who, unless a court determines otherwise, are deemed toshare voting and investment power of the shares held by the Living Trust.(13)The Class A Stock shown includes 25,000 shares subject to stock options as well as 770,186 shares held directly The Class A Stock shown also includes289,390 shares held by the Cotter 2005 Grandchildren’s Trust and 102,751 held by the Cotter Foundation. Mr. Cotter, Jr. is Co-Trustee of the Cotter 2005Grandchildren’s Trust and of the Cotter Foundation and, as such, is deemed to beneficially own such shares. Mr. Cotter, Jr. disclaims beneficial ownership ofsuch shares except to the extent of his pecuniary interest, if any, in such shares. The Class A Stock shown also includes 1,897,649 shares held by the LivingTrust, which became irrevocable upon Mr. Cotter, Sr.’s death on September 13, 2014. See footnote (12) above for information regarding beneficialownership of the shares held by the Living Trust. As Co-Trustees of the Living Trust, the three Cotter family members would be deemed to beneficially ownsuch shares depending upon the outcome of the matters described in footnote (12). The Class A Stock shown includes 770,186 shares pledged as security fora margin loan.(14)Based on Mr. Cuban’s Form 5 filed with the SEC on February 19, 2016 and Schedule 13D/A filed on February 22, 2016.(15)Based on the PICO Holdings, Inc. and PICO Deferred Holdings, LLC Schedule 13G filed with the SEC on January 14, 2009.(16)The Class A Stock shown includes 25,000 shares subject to stock options.(17)The Class A Stock shown includes 8,815 shares subject to stock options.(18)The Class A Stock shown includes 222,565 shares subject to options not exerciseable. Item 13 – Certain Relationships and Related Transactions, and Director IndependenceCERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONSThe members of our Audit Committee are Douglas McEachern, who serves as Chair, Edward Kane and MichaelWrotniak. Management presents all potential related party transactions to the Audit Committee for review. Our Audit Committee reviewswhether a given related party transaction is beneficial to our Company, and approves or bars the transaction after a thorough analysis. OnlyCommittee members disinterested in the transaction in question participate in the determination of whether the transaction mayproceed. See the discussion entitled “Review, Approval or Ratification of Transactions with Related Persons” on page [11] for additionalinformation regarding the review process.Sutton Hill CapitalIn 2001, we entered into a transaction with Sutton Hill Capital, LLC (“SHC”) regarding the master leasing, with an option topurchase, of certain cinemas located in Manhattan including our Village East and Cinemas 1, 2, 3 theaters. In connection with thattransaction, we also agreed (i) to lend certain amounts to SHC, to provide liquidity in its investment, pending our determination whether ornot to exercise our option to purchase and (ii) to manage the 86th Street Cinema on a fee basis. SHC is a limited liability company ownedin equal shares by the Cotter Estate and a third party.As previously reported, over the years, two of the cinemas subject to the master leasing agreement have been redeveloped and one(the Cinemas 1, 2, 3 discussed below) has been acquired. The Village East is the only cinema that remains subject to this master lease. Wepaid an annual rent of $590,000 for this cinema to SHC in each of 2015, 2014, and 2013. During this same period, we receivedmanagement fees from the 86th Street Cinema of $151,000, $123,000 and $183,000.In 2005, we acquired (i) from a third party the fee interest underlying the Cinemas 1, 2, 3 and (ii) from SHC its interest in theground lease estate underlying and the improvements constituting the Cinemas 1, 2, 3 . The ground lease estate and the improvementsacquired from SHC were originally a part of the master lease transaction, discussed above. In connection with that transaction, we grantedto SHC an option to acquire at cost a 25% interest in the special purpose entity (Sutton Hill Properties, LLC (“SHP”) formed to acquirethese fee, leasehold and improvements interests. On June 28, 2007, SHC exercised this option, paying $3.0 million and assuming aproportionate share of SHP’s liabilities. At the time of the option exercise and the closing of the acquisition of the 25% interest, SHP haddebt of $26.9 million, including a $2.9 million, non-interest bearing intercompany loan from the Company. As of December 31, 2015, SHPhad debt of $19.4 million (again, including the intercompany loan). Since the acquisition by SHC of its 25% interest, SHP has covered itsoperating costs and debt service through cash flow from the Cinemas 1, 2, 3 , (ii) borrowings from third parties, and (iii) pro-ratacontributions from the members. We receive an annual management fee equal to 5% of SHP’s gross124 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. income for managing the cinema and the property, amounting to $153,000, $123,000 and $183,000 in 2015, 2014 and 2013respectively. This management fee was modified in 2015, as discussed below, retroactive to December 1, 2014.On June 29, 2010, we agreed to extend our existing lease from SHC of the Village East Cinema by 10 years, with a new terminationdate of June 30, 2020. This amendment was reviewed and approved by our Audit Committee. The Village East lease includes a sub-leaseof the ground underlying the cinema that is subject to a longer-term ground lease between SHC and an unrelated third party that expires inJune 2031 (the “cinema ground lease”). The extended lease provides for a call option pursuant to which Reading may purchase the cinemaground lease for $5.9 million at the end of the lease term. Additionally, the lease has a put option pursuant to which SHC may requireReading to purchase all or a portion of SHC’s interest in the existing cinema lease and the cinema ground lease at any time between July 1,2013 and December 4, 2019. SHC’s put option may be exercised on one or more occasions in increments of not less than $100,000each. We recorded the Village East Cinema building as a property asset of $4.7 million on our balance sheet based on the cost carry-overbasis from an entity under common control with a corresponding capital lease liability of $5.9 million presented under other liabilities (seeNote 11 – Pension and Other Liabilities).In February 2015, SHP and we entered into an amendment to the management agreement dated as of June 27, 2007 between SHPand us. The amendment, which was retroactive to December 1, 2014, memorialized our undertaking to SHP with respect to $750,000 (the“Renovation Funding Amount”) of renovations to Cinemas 1, 2, 3 funded or to be funded by us. In consideration of our funding of therenovations, our annual management fee under the management agreement was increased commencing January 1, 2015 by an amountequivalent to 100% of any incremental positive cash flow of Cinemas 1, 2, 3 over the average annual positive cash flow of the Cinemas 1,2, 3 over the three-year period ended December 31, 2014 (not to exceed a cumulative aggregate amount equal to the Renovation FundingAmount), plus a 15% annual cash-on-cash return on the balance outstanding from time to time of the Renovation Funding Amount, payableat the time of the payment of the annual management fee. Under the amended management agreement, we are entitled to retain ownership of(and any right to depreciate) any furniture, fixtures and equipment purchased by us in connection with such renovation and have the right(but not the obligation) to remove all such furniture, fixtures and equipment (at our own cost and expense) from the Cinemas upon thetermination of the management agreement. The amendment also provides that, during the term of the management agreement, SHP will beresponsible for the cost of repair and maintenance of the renovations. In 2015, we received a management fee of $153,000. Thisamendment was approved by SHC and by the Audit Committee of our Board of Directors.OBI Management AgreementPursuant to a Theater Management Agreement (the “Management Agreement”), our live theater operations were, until recently,managed by Off-Broadway Investments, LLC (“OBI Management”), which is wholly owned by Ms. Margaret Cotter who is the daughter ofthe late Mr. James J. Cotter, Sr., the sister of Ellen M. Cotter and James Cotter, Jr., and a member of our Board of Directors. TheManagement Agreement was terminated effective March 10, 2016 in connection with the retention by our Company of Margaret Cotter as afull time employee.The Theater Management Agreement generally provided for the payment of a combination of fixed and incentive fees for the managementof our four live theaters. Historically, these fees have equated to approximately 21% of the net cash flow generated by these properties. Wecurrently estimate that fees to be paid to OBI for 2015 will be approximately $389,000. We paid $397,000 and $401,000 in fees withrespect to 2014, and 2013, respectively. We also reimbursed OBI for certain travel expenses, shared the cost of an administrative assistantand provided office space at our New York offices. The fees payable to OBI for the period January 1, 2016 through and including March 9,2016, will be prorated.OBI Management historically conducted its operations from our office facilities on a rent-free basis, and we shared the cost of oneadministrative employee of OBI Management. We reimbursed travel related expenses for OBI Management personnel with respect to travelbetween New York City and Chicago in connection with the management of the Royal George complex. Other than these expenses, OBIManagement was responsible for all of its costs and expenses related to the performance of its management functions. The ManagementAgreement renewed automatically each year unless either party gives at least six months’ prior notice of its determination to allow theManagement Agreement to expire. In addition, we could terminate the Management Agreement at any time for cause.Effective March 10, 2016, Margaret Cotter became a full time employee of the Company and the Management Agreement wasterminated. As Executive Vice-President Real Estate Management and Development - NYC, Ms. Cotter will continue to be responsible forthe management of our live theater assets, will continue her role heading up the pre-redevelopment of our New York Properties and will beour senior executive responsible for the actual redevelopment of our New York properties. Pursuant to the termination agreement, Ms.Cotter has given up any right she might otherwise have, through OBI, to income from STOMP.Ms. Cotter's compensation as Executive Vice-President was set as part of an extensive executive compensation process. For 2016,Ms. Cotter's base salary will be $350,000, she will have a short term incentive target bonus opportunity of $105,000 (30% of her basesalary), and she was granted a long term incentive of a stock option for 19,921 shares of Class A common stock and 4,184125 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. restricted stock units under the Company’s 2010 Stock Incentive Plan, as amended, which long term incentives vest over a four year period.Live Theater Play InvestmentFrom time to time, our officers and Directors may invest in plays that lease our live theaters. The play STOMP has been playing inour Orpheum Theatre since prior to the time we acquired the theater in 2001. The Cotter Estate or the Cotter Trust and Mr. Michael Formanown an approximately 5% interest in that play, an interest that they have held since prior to our acquisition of the theater. Refer to Item 3 –Legal Proceedings for more information about the show STOMP.Shadow View Land and Farming, LLCDirector Guy Adams has performed consulting services for James J. Cotter, Sr., with respect to certain holdings that are nowcontrolled by the Cotter Estate and/or the Cotter Trust (collectively the “Cotter Interests”). These holdings include a 50% non-controllingmembership interest in Shadow View Land and Farming, LLC (the “Shadow View Investment” and “Shadow View” respectively), certainagricultural interests in Northern California (the “Cotter Farms”) and certain land interests in Texas (the “Texas Properties”). In addition,Mr. Adams is the CFO of certain captive insurance entities, owned by a certain trust for the benefit of Ellen M. Cotter, James J. Cotter, Jr.and Margaret Cotter (the “captive insurance entities”). Shadow View is a consolidated subsidiary of the Company. The Company has from time to time made capital contributions toShadow View. The Company has also, from time to time, as the managing member, funded on an interim basis certain costs incurred byShadow View, ultimately billing such costs through to the two members. The Company has never paid any remuneration to ShadowView. Mr. Adams’ consulting fees with respect to the Shadow View Interest were to have been measured by the profit, if any, derived by theCotter Interests from the Shadow View Investment. He has no beneficial interest in Shadow View or the Shadow View Investment. Hisconsulting fees with respect to Shadow View were equal to 5% of the profit, if any, derived by the Cotter Interests from the Shadow ViewInvestment after recoupment of its investment plus a return of 100%. To date, no profits have been generated by Shadow View and Mr.Adams has never received any compensation with respect to these consulting services. His consulting fee would have been calculated onlyafter the Cotter Interests had received back their costs and expenses and two times their investment in Shadow View. Mr. Adams’consulting fees would have been 2.5% of the then-profit, if any, recognized by Shadow View, considered as a whole.The Company and its subsidiaries (i) do not have any interest in, (ii) have never conducted any business with, and (iii) have notmade any payments to, the Cotter Family Farms, the Texas Properties and/or the captive insurance entities.Document Storage AgreementIn consideration of the payment of $100 per month, our Company has agreed to allow Ellen Cotter and Margaret Cotter to keepcertain files related to the Cotter Estate and/or the Cotter Trust at our Los Angeles Corporate Headquarters.Review, Approval or Ratification of Transactions with Related PersonsThe Audit Committee has adopted a written charter, which includes responsibility for approval of “Related PartyTransactions.” Under its charter, the Audit Committee performs the functions of the “Conflicts Committee” of the Board and is delegatedresponsibility and authority by the Board to review, consider and negotiate, and to approve or disapprove on behalf of the Company theterms and conditions of any and all Related Party Transactions (defined below) with the same effect as though such actions had been takenby the full Board. Any such matter requires no further action by the Board in order to be binding upon the Company, except in the case ofmatters that, under applicable Nevada Law, cannot be delegated to a committee of the Board and must be determined by the full Board. Inthose cases where the authority of the Board cannot be delegated, the Audit Committee nevertheless provides its recommendation to thefull Board.As used in the Audit Committee’s Charter, the term “Related Party Transaction” means any transaction or arrangement between theCompany on one hand, and on the other hand (i) any one or more directors, executive officers or stockholders holding more than 10% ofthe voting power of the Company (or any spouse, parent, sibling or heir of any such individual), or (ii) any one or more entities undercommon control with any one of such persons, or (iii) any entity in which one or more such persons holds more than a 10%interest. Related Party Transactions do not include matters related to employment or employee compensation related issues.The charter provides that the Audit Committee reviews transactions subject to the policy and determines whether or not to approveor ratify those transactions. In doing so, the Audit Committee takes into account, among other factors it deems appropriate:·the approximate dollar value of the amount involved in the transaction and whether the transaction is material to us;126 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·whether the terms are fair to us, have resulted from arm’s length negotiations and are on terms at least as favorable aswould apply if the transaction did not involve a Related Person;·the purpose of, and the potential benefits to us of, the transaction;·whether the transaction was undertaken in our ordinary course of business;·the Related Person’s interest in the transaction, including the approximate dollar value of the amount of the RelatedPerson’s interest in the transaction without regard to the amount of any profit or loss;·required public disclosure, if any; andany other information regarding the transaction or the Related Person in the context of the proposed transaction that would bematerial to investors in light of the circumstances of the particular transaction.Director IndependenceThe Company has elected to take the “controlled company” exception under applicable listing rules of The NASDAQ StockMarket (the “NASDAQ Listing Rules”). Accordingly, the Company is exempted from the requirement to have an independent nominatingcommittee and to have a board composed of at least a majority of independent directors. We are nevertheless nominating six independentdirectors for election to our Board. We have an Audit and Conflicts Committee (the “Audit Committee”) and a Compensation Committeecomposed entirely of independent directors. We have a four member Executive Committee composed of our Chairperson and Vice-Chairperson and two independent directors (Messrs. Guy W. Adams and Edward L. Kane). Due to this structure, the concurrence of at leastone independent member of the Executive Committee is required in order for the Executive Committee to take action.We believe that our Directors bring a broad range of leadership experience to our Company and regularly contribute to thethoughtful discussion involved in effectively overseeing the business and affairs of the Company. We believe that all Board members arewell engaged in their responsibilities and that all Board members express their views and consider the opinions expressed by otherDirectors. Six Directors on our Board are independent under the NASDAQ Listing Rules and SEC rules, and William D. Gould serves as thelead director among our Independent Directors. In that capacity, Mr. Gould chairs meetings of the Independent Directors and acts as liaisonbetween our Chairperson of the Board and interim Chief Executive Officer and our Independent Directors. Our Independent Directors areinvolved in the leadership structure of our Board by serving on our Audit Committee, the Compensation Committee and the Tax OversightCommittee, each of which has a separate independent chairperson. Nominations to our Board for the Annual Meeting were made by ourentire Board, consisting of a majority of Independent Directors.Audit Committee. Our Board has determined that the Audit Committee is composed entirely of independent Directors (as definedin section 5605(a)(2) of the NASDAQ Listing Rules), and that Mr. McEachern, the Chair of our Audit Committee, is qualified as an AuditCommittee Financial Expert. Our Audit Committee is currently composed of Mr. McEachern, who serves as Chairperson, Mr. Kane and Mr.Wrotniak. Mr. Storey, who served on our board through October 11, 2015, served on our Audit Committee through the same date. TheAudit Committee held four meetings during 2015. For additional information, see the Audit Committee section of Item 10 – Directors,Executive Officers and Corporate Governance, above.Compensation Committee. The Compensation Committee is currently composed of Mr. Kane, who serves as Chairperson,Mr. Adams and Dr. Codding. Mr. Storey served on our Compensation Committee through October 11, 2015. The CompensationCommittee’s charter is available on our website at http://www.readingrdi.com/compensation-stock-options-committee/. The CompensationCommittee evaluates and makes recommendations to the full Board regarding the compensation of our Chief Executive Officer and otherexecutive officers (including the Cotter family members). In addition, the Compensation Committee establishes the Company’s generalcompensation philosophy and objectives (in consultation with management), approves and adopts on behalf of the Board incentivecompensation and equity-based compensation plans, subject to stockholder approval as required, and performs other compensation relatedfunctions as delegated by our Board. The Compensation Committee held three meetings during 2015. Item 14 – Principal Accounting Fees and ServicesSummary of Principal Accounting Fees for Professional Services RenderedOur independent public accountants, Grant Thornton LLP, have audited our financial statements for the fiscal year endedDecember 31, 2015, and are expected to have a representative present at the Annual Meeting, who will have the opportunity to make astatement if he or she desires to do so and is expected to be available to respond to appropriate questions.Audit FeesThe aggregate fees for professional services for the audit of our financial statements, audit of internal controls related to theSarbanes-Oxley Act, and the reviews of the financial statements included in our Forms 10-K and 10-Q provided by Grant Thornton LLP for2015 and 2014 were approximately $931,500 and $661,700, respectively.127 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Audit-Related FeesGrant Thornton LLP did not provide us any audit related services for 2015 or 2014.Tax FeesGrant Thornton LLP did not provide us any products or any services for tax compliance, tax advice, or tax planning for 2015 or2014.All Other FeesGrant Thornton LLP did not provide us any services for 2015 or 2014, other than as set forth above.Pre-Approval Policies and ProceduresOur Audit Committee must pre-approve, to the extent required by applicable law, all audit services and permissible non-auditservices provided by our independent registered public accounting firm, except for any de minimis non-audit services. Non-audit servicesare considered de minimis if (i) the aggregate amount of all such non-audit services constitutes less than 5% of the total amount of revenueswe paid to our independent registered public accounting firm during the fiscal year in which they are provided; (ii) we did not recognizesuch services at the time of the engagement to be non-audit services; and (iii) such services are promptly submitted to our Audit Committeefor approval prior to the completion of the audit by our Audit Committee or any of its members who has authority to give suchapproval. Our Audit Committee pre-approved all services provided to us by Grant Thornton LLP for 2015 and 2014.128 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART IV Item 15 – Exhibits, Financial Statement Schedules(a) The following documents are filed as a part of this report:1.Financial StatementsThe following financial statements are filed as part of this report under Item 8 – Financial Statements and Supplementary Data.Description​Report of Independent Registered Public Accounting Firm​Consolidated Balance Sheets as of December 31, 2015 and 2014​Consolidated Statements of Operations for the Three Years Ended December 31, 2015​Consolidated Statements of Comprehensive Income (Loss) for the Three Years Ended December 31, 2015​Consolidated Statements of Stockholders’ Equity for the Three Years Ended December 31, 2015​Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2015​Notes to Consolidated Financial Statements2.Financial Statements and Schedules for the years ended December 31, 2015, 2014, and 2013​Schedule II – Valuation and Qualifying Accounts3.Exhibits(b) ExhibitsSee Item (a) 3. above.(c) Financial Statement ScheduleSee Item (a) 2. above. 129 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibits3.1+Amended and Restated Articles of Incorporation of Reading International, Inc., a Nevada corporation,effective as of August 6, 2014.3.2.1+Amended and Restated Bylaws of Reading International, Inc., a Nevada corporation, effective as ofOctober 5, 2015.4.1*1999 Stock Option Plan of Reading International, Inc., as amended on December 31, 2001 (filed asExhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on January 21, 2004, andincorporated herein by reference).4.2*2010 Stock Incentive Plan and related forms of (i) Stock Option Agreement, (ii) Stock Bonus Agreement,(iii) Restricted Stock Agreement, and (iv) Stock Appreciation Right Agreement (filed as Exhibits 4.1, 4.2,4.3, 4.4 and 4.5, respectively, to the Company’s report on Form S-8 on May 26, 2010, and incorporatedherein by reference).4.3*Amendment to the 2010 Stock Incentive Plan effective May 19, 2011 (filed as Appendix A of theCompany’s proxy statement on April 29, 2011, and incorporated here by reference).4.4*First Amendment to the 2010 Stock Incentive Plan dated as of March 10, 2016 (filed as Exhibit 10 theCompany’s report on Form 8-K filed on March 15, 2016, and incorporated herein by reference).4.5Form of Preferred Securities Certificate evidencing the preferred securities of Reading International Trust I(filed as Exhibit 4.1 to the Company’s report on Form 8-K filed on February 9, 2007, and incorporatedherein by reference).4.6Form of Common Securities Certificate evidencing common securities of Reading International Trust I(filed as Exhibit 4.2 to the Company’s report on Form 8-K filed on February 9, 2007, and incorporatedherein by reference).4.7Form of Reading International, Inc. and Reading New Zealand, Limited, Junior Subordinated Note due2027 (filed as Exhibit 4.3 to the Company’s report on Form 8-K filed on February 9, 2007, andincorporated herein by reference).4.8Form of Indenture (filed as Exhibit 4.4 to the Company’s report on Form S-3 on October 20, 2009, andincorporated herein by reference).10.1Amended and Restated Lease Agreement, dated as of July 28, 2000, as amended and restated as of January29, 2002, between Sutton Hill Capital, L.L.C. and Citadel Cinemas, Inc. (filed as Exhibit 10.40 to theCompany’s Annual Report on Form 10-K for the year ended December 31, 2002 and incorporated hereinby reference).10.2Second Amendment to Amended and Restated Master Operating Lease dated as of September 1, 2005(filed as exhibit 10.58 to the Company’s report on Form 8-K filed on September 21, 2005, andincorporated herein by reference).10.3Assignment and Assumption of Lease between Sutton Hill Capital L.L.C. and Sutton Hill Properties, LLCdated as of September 19, 2005 (filed as exhibit 10.56 to the Company’s report on Form 8-K filed onSeptember 21, 2005, and incorporated herein by reference).10.4Third Amendment to Amended and Restated Master Operating Lease Agreement, dated June 29, 2010,between Sutton Hill Capital, L.L.C. and Citadel Cinemas, Inc. (filed as Exhibit 10.21 to the Company’sreport on Form 10-K for the year ended December 31, 2010, and incorporated herein by reference). 10.5Omnibus Amendment Agreement, dated as of October 22, 2003, between Citadel Cinemas, Inc., SuttonHill Capital, L.L.C., Nationwide Theatres Corp., Sutton Hill Associates, and Reading International, Inc.(filed as Exhibit 10.49 to the Company’s report on Form 10-Q for the period ended September 30, 2003,and incorporated herein by reference).10.6Theater Management Agreement, effective as January 1, 2002, between Liberty Theaters, Inc. and OBILLC (filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the year ended December31, 2002 and incorporated herein by reference).10.7Amended and Restated Declaration of Trust, dated February 5, 2007, among Reading International Inc., assponsor, the Administrators named therein, and Wells Fargo Bank, N.A., as property trustee, and WellsFargo Delaware Trust Company as Delaware trustee (filed as Exhibit 10.2 to the Company’s report onForm 8-K dated February 5, 2007, and incorporated herein by reference). Indenture among Reading International, Inc., Reading New Zealand Limited, and Wells Fargo Bank, N.A.,as indenture trustee (filed as Exhibit 10.4 to the Company’s report on Form 8-K dated February 5, 2007,and incorporated herein by reference). 10.9+Amended and Restated Corporate Markets Loan & Bank Guarantee Facility Agreement dated December23, 2015, among Reading Entertainment Australia Pty Ltd and National Australia Bank Limited. 10.10+Wholesale Term Loan Facility dated May 21, 2015, among Reading Courtenay Central Limited andWestpac New Zealand Limited.130 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.11+Loan agreement dated June 26, 2014, between Santander Bank, N.A. and Sutton Hill Properties, LLC.10.13Master Lease Agreement dated October 26, 2012, between Consolidated Cinema Services LLC and Bancof America Leasing & Capital, LLC (filed as Exhibit 10.31 to the Company’s report on Form 10-K for theyear ended December 31, 2013, and incorporated herein by reference).10.14Amendment dated October 31, 2012 to the Master Lease Agreement dated October 26, 2012, betweenConsolidated Cinema Services LLC and Banc of America Leasing & Capital, LLC (filed as Exhibit 10.32to the Company’s report on Form 10-K for the year ended December 31, 2013, and incorporated herein byreference).10.15*Form of Indemnification Agreement, as routinely granted to the Company’s Officers and Directors (filed asExhibit 10.77 to the Company’s report on Form 10-Q for the period ended September 30, 2008, andincorporated herein by reference).10.16*Employment Agreement between Reading International, Inc. and Devasis Ghose, Chief Financial Officer(filed as Exhibit 10.1 to the Company’s report on Form 10-Q for the period ended March 31, 2015, andincorporated herein by reference).10.17*Employment Agreement between Reading International, Inc. and William D. Ellis, General Counsel (filedas Exhibit 10.1 to the Company’s report on Form 10-Q for the period ended September 30, 2015, andincorporated herein by reference).10.18*Separation and Release Agreement dated March 11, 2016 between Reading International, Inc. andWilliam D. Ellis (filed as Exhibit 12.1 to the Company’s report on Form 8-K filed on March 15, 2016, andincorporated herein by reference).10.19*+Separation and Release Agreement dated May 30, 2014 between Reading International, Inc. and AndrzejMatyczynski.10.20*+First Amendment to the Separation and Release Agreement between Reading International, Inc. andAndrzej Matyczynski, effective as of August 6, 2014.10.21*+Second Amendment to the Separation and Release Agreement between Reading International, Inc. andAndrzej Matyczynski, effective as of November 26, 2014.10.22*+Third Amendment to the Separation and Release Agreement between Reading International, Inc. andAndrzej Matyczynski, effective as of May 1, 2015.10.23*+Amended and Restated Compensatory Arrangements for Executive and Management Employees dated asof March 28, 2016.10.24+OBI Termination Agreement and Release21+List of Subsidiaries.23.1+Consent of Independent Registered Public Accounting Firm, Grant Thornton LLP.31.1+Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2+Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1+Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002.32.2+Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002.101.INSXBRL Instance Document101.SCHXBRL Taxonomy Extension Schema101.CALXBRL Taxonomy Extension Calculation101.DEFXBRL Taxonomy Extension Definition101.LABXBRL Taxonomy Extension Labels101.PREXBRL Taxonomy Extension Presentation*These exhibits constitute the executive compensation plans and arrangements of the Company.+These exhibits are filed herewith.131 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.READING INTERNATIONAL, INC.(Registrant)Date:April 29, 2016By:/s/ Devasis GhoseDevasis GhoseChief Financial Officer and Treasurer(Principal Financial Officer)Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons onbehalf of Registrant and in the capacities and on the dates indicated.SignatureTitle(s)Date/s/ Ellen M. CotterPresident, Chief Executive Officer and Chairman of the Board and DirectorApril 29, 2016Ellen M. Cotter(Principal Executive Officer)/s/ Devasis GhoseChief Financial Officer and TreasurerApril 29, 2016Devasis Ghose(Principal Financial Officer)/s/ Steve LucasVice President, Controller and Chief Accounting OfficerApril 29, 2016Steve Lucas(Principal Accounting Officer)/s/ Margaret CotterVice Chairman of the Board and DirectorApril 29, 2016Margaret CotterDirectorJames J. CotterDirectorGuy W. Adams/s/ William D. GouldDirectorApril 29, 2016William D. Gould/s/ Edward L. KaneDirectorApril 29, 2016Edward L Kane/s/ Douglas J. McEachernDirectorApril 29, 2016Douglas J. McEachern/s/ Dr. Judy CoddingDirectorApril 29, 2016Dr. Judy Codding/s/ Michael WrotniakDirectorApril 29, 2016Michael Wrotniak132 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Articles of Incorporation EXHIBIT 3.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amended and Restated Bylaws EXHIBIT 3.2.1 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.IntroductionWestpac NZ has agreed to provide the Borrower with a term loan of $50,000,000 on the terms and conditions of this Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Agreement.Agreement1.condition precedent1.1Pre-conditionThe obligations of Westpac NZ under this Agreement are subject to the condition precedent that it must have received all of thefollowing in form and substance satisfactory to it:a)the original of this Agreement duly executed by the Borrower;b)a certificate from a director of the Borrower in the form set out in the first schedule;c)the Security (where necessary duly registered), the other Bank Documents and any ancillary documentation as may have beennotified to the Borrower by Westpac NZ or its solicitors as being related to this Agreement, the Loan, the Security and/or the otherBank Documents;d)evidence of registration of any financing statement in respect of the Security; ande)any other documents or evidence (including legal opinions) as Westpac NZ or its solicitors may require.1.2Failure to Satisfy Pre-conditionIf the condition contained in clause 1.1 is not satisfied or waived before 30 June 2015 then Westpac NZ may terminate thisAgreement whereupon it shall have no further liability or obligation to the Borrower.2.availability of loan2.1LoanWestpac NZ will make the first Advance available to the Borrower during the Availability Period, and will then make the rest of theLoan available to the Borrower, provided that:a)the Borrower has complied with the relevant drawdown procedure;b)no Event of Default or Potential Event of Default has occurred and is continuing or will occur as a result of the making of the Loan;c)the First Tranche is utilised to repay the Borrower's existing indebtedness with Westpac NZ (account no. 03- 0104-0786183-91)and any surplus may be utilised for the Borrower's general requirements and CAPEX funding and the first drawdown must occurprior to 30 June 2015;d)the Second Tranche is utilised to assist the Borrower in completing the Development;e)prior to the first drawdown under the Second Tranche being made available, the special conditions contained in the Letter of Offerfor Advances of the Second Tranche must have been satisfied in Westpac NZ's absolute discretion.2.2Termination of LoanOn termination of the Loan:a)Westpac NZ's obligations to make the Loan available will terminate; andb)the Borrower must immediately pay or repay to Westpac NZ all Outstanding Moneys (notwithstanding that the due date forrepayment has not otherwise occurred); andc)Westpac NZ will have no further obligations to the Borrower.2.3Effect of TerminationTermination of the Loan will not affect any of the Borrower's obligations to Westpac NZ under this Agreement including obligationsunder the indemnities in clause 12 or the Borrower's obligations under the Security, which will remain binding upon it until allOutstanding Moneys have been repaid in full.3.procedure for drawdownNot later than 2 Banking Days prior to the Banking Day on which the Borrower requires to drawdown all or part of the Loan, theBorrower must deliver to Westpac NZ an unconditional and irrevocable drawdown notice in the form set out in the secondschedule signed by an authorised signatory of the Borrower. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.4.interest4.1Paymenta)Interest on the Loan will be calculated at the Floating Rate or at the Fixed Rate (if it applies) on the basis of the actual number ofdays elapsed and a 365 day year, and will accrue from day to day from the Commencement Date until the Loan is repaid in full,and must be paid by consecutive monthly payments on each Interest Payment Date.b)The first interest payment on the Loan will be due and payable on the Interest Payment Date which immediately follows theCommencement Date. Each interest payment will be for the period beginning on the Commencement Date or the previous InterestPayment Date (as the case may be) and ending on (but excluding) the next Interest Payment Date.4.2Telephone Communicationsa)validity of instructionsWestpac NZ will be under no obligation to enquire as to the validity of any telephone instructions or acceptance which itreceives or to require any evidence as to the authenticity, validity or legality of any telephone advice received or as to theauthority of the person giving the telephone advice to act on behalf of the Borrower.b)authority to tape callsThe Borrower acknowledges that Westpac NZ may from time to time keep tape recordings of telephone conversationsbetween Westpac NZ and the Borrower and consents to the recording of those telephone conversations.5.repayment and prepayment of loan5.1RepaymentThe Borrower must pay the Outstanding Moneys on the Termination Date.5.2Prepaymenta)notice and prepayment multiplesThe Borrower may prepay all or part of the Loan:i.after giving Westpac NZ not less than 5 Banking Days irrevocable notice in writing of its intention to do so and thenmaking payment on the specified date; andii.inmultiplesof$10,000.b)lossesOn any prepayment made other than at the end of a Floating Rate Period applying to the amount prepaid, the Borrowermust at the time of prepayment pay to Westpac NZ any losses, costs, penalties and expenses certified by Westpac NZ tohave been sustained or incurred as a consequence of the prepayment.c)interest ceasesInterest on any amount prepaid will cease to accrue from the date of the prepayment.d)redrawingAny amount prepaid will be available for redrawing.5.3PaymentThe Borrower must not later than 3.00 p.m. on the due date for payment of interest or any other Outstanding Moneys, pay toWestpac NZ an amount equal to the amount due in cleared funds in Dollars to the account and/or in the manner Westpac NZ mayfrom time to time advise.Amounts due and payable by the Borrower will be debited from the Westpac NZ account nominated by the Borrower. If theBorrower does not nominate an account, Westpac NZ may, at any time, debit from any account of the Borrower with Westpac NZany amounts due and payable by the Borrower.5.4Banking DaysIf any payment by the Borrower falls due on a day which is not a Banking Day it must be made on the following Banking Day.6.fees, charges, expenses and review entitlement6.1Fees, Charges and Expenses PayableThe Borrower must pay to Westpac NZ the following:a)establishment feeA non-refundable establishment fee of $75,000 payable in one sum on or before execution of this Agreement. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.b)line of credit chargeA line of credit charge payable in arrears with the first charge being in respect of the period from the Commencement Dateto the last Banking Day of the month in which that date occurs and thereafter monthly on the last Banking Day of eachmonth through to the Termination Date and calculated at 0.40% per annum on the amount of the Loan.c)expensesThe expenses of Westpac NZ and each Officer in relation to:i)theOutstandingMoneys;ii)the preparation, execution and completion of each Bank Document, and any subsequent consent, approval,waiver, amendment or release;iii)any contemplated, attempted or actual enforcement of any Bank Document or the actual or contemplated,attempted or actual exercise or defence of any Power; andiv)any enquiry by a Governmental Agency concerning the Borrower or related to a BankDocument.This includes expenses incurred in retaining consultants to evaluate matters of concern to Westpac NZ. It also includesadministrative time and costs including the time of Officers and other employees of Westpac NZ (whose time and costs areto be charged at reasonable rates).It will include, in each case, legal fees and expenses on a full indemnity basis plus goods and services tax on thoseamounts.All these expenses are payable on demand.d)government chargesAny government duties, taxes and charges on the Bank Documents and payments and receipts under them.6.2Review of marginWestpac NZ may, by 3 Banking Days' notice to the Borrower, increase or decrease the Margin provided no increase will takeeffect within 12 months of the Commencement Date.7.interest on arrears7.1Default Interest PayableIf the Borrower does not pay any sum payable on the due date, it must pay interest on that overdue sum at the Default Rate fromthe due date until the Borrower remedies the default and pays all default interest.7.2Default in Payment of InterestIf the Borrower does not pay any sum on or before 14 days after the date on which payment was due, then the following rulesapply:a)Interest on all amounts on which interest is payable will be calculated at the Default Rate;b)Interest at the Default Rate:i)will accrue during the period beginning on the date the last payment was due and paid by the Borrower and endingon the date the Borrower remedies the default and pays all default interest. Where no payments have been madeby the Borrower, the period begins on the date of drawdown;ii)will be calculated on a daily basis by reference to successive periods of durations selected by Westpac NZ fromtime to time. Each period will begin on the last day of the previous period except for the first period which will beginon the due date;iii)will be payable on the last day of each period and on the date of receipt of the overdue sum by Westpac NZ. Anyinterest which is not paid when due will be added to the overdue sum and will itself bear interest under this clause.8.undertakings8.1General undertakingsThe Borrower and the Charging Group (where applicable) undertake to Westpac NZ as follows, except to the extent that WestpacNZ agrees otherwise:a)Personal Property Securities Act 1999Whenever Westpac NZ asks it to do anything to better secure any property which secures or is intended to secure financialaccommodation from Westpac NZ (including, without limitation, the Loan), the Borrower must do it (or procure that it isdone) immediately at its own cost. This may include signing and delivering documents and anything else that Westpac NZrequires to ensure that Westpac NZ has perfected security interest(s) under the Personal Property Securities Act 1999("PPSA").The Borrower waives any rights to receive a copy of a verification statement under the PPSA and agrees, to the extentpermitted by law, that in respect of any arrangement between the Borrower and Westpac NZ:i)sections114(1)(a), 133and 134of thePPSAshall notapply;ii)the Borrower shall have none of the rights referred to in paragraphs (c) to (e) and (h) to (j) of section107(2) of the PPSA; and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.iii)where Westpac NZ has rights in addition to those in Part 9 of the PPSA, those rights shall continue to apply and, inparticular, shall not be limited by section 109 of the PPSA.The Borrower must, immediately upon request by Westpac NZ, procure from any person considered by Westpac NZ to berelevant to its security position such agreements and waivers (including as equivalent to those above) as Westpac NZ mayat any time require.b)project invoicesIt must ensure that, until such time as the Development has been completed, it promptly provides to Westpac NZ (and inany event within 7 days after being requested by Westpac NZ) copies of project invoices and the Quantity Surveyor'smonthly report, which are to be acceptable to Westpac NZ in its absolute discretion.c)valuationIt must ensure that, within 45 days of a written request being made by Westpac NZ, Westpac NZ is provided with up-to-datevaluations for all assets of the Group secured to Westpac NZ (including the leasehold interests in the cinemas). Thevaluations must be:i)addressedtoWestpacNZ;ii)providedby aregisteredvalueracceptabletoWestpacNZ;iii)in a formatacceptabletoWestpacNZ; andiv)satisfactoryto WestpacNZ in itsabsolutediscretionin allrespects.Westpac NZ will not request such valuations more than once per year unless, in Westpac NZ's reasonable opinion, therehas been a material change in the value of the Group's assets.d)reporting and informationIt must ensure that the Group provides to Westpac NZ:i)as soon as practicable (and in any event not later than 120 days) after the close of each financial year copies of theGroup's consolidated balance sheet and profit and loss account for that financial year all of which must be auditedunless Westpac NZ agrees otherwise;ii)as soon as practicable (and in any event not later than 45 days) after the close of each financial quarter copies ofthe Group's unaudited management accounts (showing performance against budget for each asset) for thatfinancial quarter;iii)prior to the start of each financial year, the Group's financial budget for that financial year, which is to show forecastexpenditure on capital items and repairs and maintenance for each asset secured to Westpac NZ together with abrief commentary on such expenditure;iv)at the same time the information required by paragraph 8.1(d)(i) is provided to Westpac NZ, a commentary on theGroup's capital expenditure and repairs and maintenance undertaken by the Group for that financial year inrespect of each asset secured to Westpac NZ; andv)promptly (and in any event within 7 days after request by Westpac NZ) any other information in relation to theGroup's assets, financial condition or business which Westpac NZ reasonably requests.e)accounting standardsIt must ensure that the financial statements of the Group, at any time delivered to Westpac NZ:i)areprepared inaccordancewith currentaccountingpractice;ii)give a true and fair view of the Group's financial position and operations as at the date, and for the period to whichthe financial statements relate;iii)together with the notes to them, disclose all liabilities (actual or contingent)of the Group; andiv)are prepared and delivered to all relevant persons within the period in which they are required by law or underany agreement to be delivered.f)insuranceIt must ensure that insurance is maintained in respect of the Land for full replacement value (or as agreed by Westpac NZ).It must also take out contractor's all risk insurance during the construction of any improvements. Westpac NZ's interest asmortgagee must be noted on all insurance policies. Copies of such policies are to be provided to Westpac NZ and are tobe satisfactory to Westpac NZ in all respects in its absolute discretion.g)acquisition of assetsIt must, if it uses any part of the Loan to finance the acquisition of an asset in New Zealand in excess of$5,000,000, provide to Westpac NZ details of such assets and any other documents or information in respect of such assetwhich Westpac NZ reasonably requests.h)consent required to structure/acquisitionNo member of the Charging Group can enter into a joint venture, make a material acquisition or provide advances outsidethe Charging Group (either to related or unrelated parties) without Westpac NZ's prior written consent.i)paymentsNo member of the Charging Group can make any payments (including but not limited to capital reductions, dividends,repayment of loans, interest payments and management fees) to associated or related parties unless Westpac NZ issatisfied that all covenants contained in the Agreement are and will continue to be met following such payment beingmade.Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.8.2Financial CovenantsThe Borrower undertakes to Westpac NZ as follows, except to the extent that Westpac NZ agrees otherwise:a)equity ratioIt must ensure that the Group maintains, at all times, Shareholders Funds of not less than 40% of Adjusted TangibleAssets. Shareholders Funds is the Group's Adjusted Tangible Assets less Adjusted Total Liabilities. Adjusted TangibleAssets is the aggregate of the consolidated book values of all of the Group's assets excluding assets of an intangiblenature, advances to shareholders, investments in related and associate companies and future asset revaluations (exceptas individually approved by Westpac NZ). Adjusted Total Liabilities is the aggregate of the consolidated book values of allof the Group's liabilities excluding only advances from shareholders. This covenant will be tested quarterly for complianceand will be determined by Westpac NZ in its absolute discretion.b)interest cover ratioIt must ensure that the Group's Earnings for each 12 month period are not less than 2.0 times its Funding Costs for that 12month period. Earnings is the Group's net profit before Funding Costs, income Tax, Extraordinaries and management costs(on the basis that management costs are accrued only and not paid externally) and amortisation of goodwill for therelevant financial quarter. Funding Costs comprise all interest, charges and fees related to all funding other than intereston shareholder/related party advances provided such interest is capitalised and not paid outside the Group.Extraordinaries are items that are not expected to occur frequently and are distinct from the Group's ordinary operations.9.deductions from payments9.1Gross-Up of Borrower's Withholding TaxThe Borrower must not make any payment subject to any condition, restriction or claim it may have against Westpac NZ. TheBorrower may only make a withholding or deduction from money it pays to Westpac NZ under this Agreement if that withholdingor deduction is required by law. If the law requires the Borrower to make a withholding or deduction then the following rules apply:a)the Borrower must make sure that the withholding or deduction is for not more than the minimum amount required by that law;b)the Borrower must make sure that the withholding or deduction is paid to the relevant revenue or Governmental Agency by thedue date for payment;c)the Borrower must send Westpac NZ, within 30 days of the withholding or deduction, a receipt showing that the withholding ordeduction has been paid to the relevant revenue or Governmental Agency;d)the Borrower must increase the amount it pays to Westpac NZ so that Westpac NZ receives the amount it would have received hadthere been no withholding or deduction.9.2Gross-Up for Westpac NZ's Withholding TaxIf the law requires Westpac NZ to make a deduction or withholding from any amount received or receivable by it under thisAgreement or any other Bank Document (including any sum received or receivable under this clause 9.2, and excluding any Taxon its overall net income) then the Borrower must increase the amount it pays to Westpac NZ so that Westpac NZ receives theamount it would have received had there been no withholding or deduction.9.3Indemnity for Tax on FundingIf:a)Westpac NZ (or any person on its behalf) is required by law to make a deduction or withholding for, or on account of, Tax or on anyother account from an amount paid or payable to a person from whom it has borrowed or obtained moneys to enable it to fund theLoan or any other payment by it under this Agreement or any other Bank Document; andb)as a result Westpac NZ is required to increase its payment, or makes an additional payment, to that person or to a taxationauthority,then the Borrower will indemnify and hold Westpac NZ harmless against that increased or additional payment and must, ondemand by Westpac NZ, pay to Westpac NZ the amount which, after receiving that amount and making that increased oradditional payment, will place Westpac NZ in the same position in which it would have been had no increased or additionalpayment been made.9.4Tax CreditIf Westpac NZ receives the benefit of a Tax credit, refund or allowance resulting from an increased amount paid by the Borrowerunder this clause then the following rules apply:a)Westpac NZ will provide the Borrower with that part of the Tax credit, refund or allowance that Westpac NZ determines wasobtained as a result of the increased amount the Borrower paid;b)the amount determined by Westpac NZ will be calculated so Westpac NZ is in no better or worse position than it would have beenhad no amount been paid by the Borrower under this clause;c)Westpac NZ is under no obligation to disclose any information relating to the calculation of its Tax liability or benefits;d)this clause does not interfere with Westpac NZ's right to arrange its Tax affairs as it wishes and, in particular, Westpac NZ mayapply Tax credits, refunds and allowances available to it as it likes. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.10.events of defaultAt any time after an Event of Default and without prejudice to any other remedies, Westpac NZ may immediately by notice to theBorrower terminate the Loan with the consequences set out in clause 2.2.11.change in circumstances11.1Increased CostsIf as a result of:a)Westpac NZ complying with any law; orb)any change in or introduction of any law or change in the interpretation or application of any law by any Governmental Agency orcourt which:i)imposes, modifies or deems applicable any reserve, capital adequacy, prudential deposit, liquidity or similarrequirement against assets of, or deposits with any branch of Westpac NZ;ii)imposes on Westpac NZ any other requirement with respect to this Agreement or any other Bank Document; oriii)changes the risk weighting for capital adequacy purposes of the Loan;any of the following occur:c)the cost to Westpac NZ of making, funding or maintaining the Loan is increased; ord)the moneys payable to Westpac NZ or the effective return to Westpac NZ under or in connection with this Agreement is reduced; ore)Westpac NZ makes any payment or foregoes any interest or other return on, or calculated by reference to, any sum received orreceivable by it under any Bank Document; orf)Westpac NZ is unable to obtain the rate of return on capital (including any notional return on capital calculated on a risk adjustedbasis) which it would have received at the date of this Agreement;then:g)Westpac NZ will use its best efforts promptly to notify the Borrower in writing of those events, provided that failure to do so will notaffect Westpac NZ's rights under this clause; andh)the Borrower must pay on demand, from time to time, for the account of Westpac NZ, the amount certified by an Officer which willcompensate Westpac NZ for its increased cost, reduction, payment or foregone interest or other return.11.2Survival of ObligationsThe obligations of the Borrower under clause 11.1 will survive termination of the Loan and payment or repayment of allOutstanding Moneys.11.3Re-negotiation of LoanIf an additional amount is required to be paid under clause 11.1 then, without limiting the Borrower's obligations under thisAgreement, Westpac NZ will, at the request of the Borrower given within 30 days of notice from Westpac NZ, consult with theBorrower with a view to renegotiating the terms of the Loan in order to mitigate or avoid any additional amounts payable underclause 11.1 provided that nothing in this clause will require Westpac NZ to act to its detriment.11.4IllegalityIf as a result of:a)the introduction or amendment of any law; orb)any other circumstance affecting any interbank market or any relevant foreign exchange market generally;it is unlawful, impracticable or impossible for Westpac NZ to make, fund or allow to remain outstanding the Loan or to comply withits obligations or exercise its rights under this Agreement, then Westpac NZ will as soon as practicable give written notice to theBorrower and Westpac NZ will be entitled, to terminate the Loan, with effect from the date Westpac NZ specifies and with theconsequences set out in clause 2.2.12.indemnity12.1General IndemnityThe Borrower agrees to indemnify Westpac NZ, every Officer and every employee of Westpac NZ upon demand from against anyloss, cost, expense, charge, damage, claim or liability which Westpac NZ, an Officer or an employee of Westpac NZ may suffer orincur as a direct or indirect consequence of:a)anEvent ofDefaultorPotentialEvent ofDefault;b)the exercise, contemplated exercise or attempted exercise of any Power or the failure to exercise any Power;c)the receipt of any amount to be paid under any Bank Document on a date other thanthe due date; or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.d)the Loan requested under clause 3 not being made for any reason (excluding default by Westpac NZ) on the date notified by theBorrower to Westpac NZ as the drawdown date.12.2ExamplesWithout limitation, the indemnity in clause 12.1 will extend to:a)any losses, costs, penalties and expenses incurred by reason of the liquidation or re-employment of deposits or other fundsacquired or contracted for by Westpac NZ (including loss of margin); andb)any losses, costs, penalties and expenses which may be incurred by Westpac NZ in:i)terminating any options or forward rate agreements or interest or currency swap contracts entered into inconnection with the Loan; orii)in entering into any new contracts which it deems appropriate to protect the return it would otherwise haveexpected under this Agreement.12.3Currency IndemnityIf for any reason:a)Westpac NZ receives or recovers an amount under a Bank Document in a currency other than the currency in which it should havebeen paid and, after Westpac NZ has converted that other currency to the correct currency there is not enough to pay off the fullamount then due under the Bank Document; orb)Westpac NZ obtains any judgment or court order against the Borrower in a currency other than the currency in which theOutstanding Moneys are due, and Westpac NZ incurs any loss from the conversion of any amount actually received by it from thatother currency to the correct currency,then, as a separate and independent indemnity obligation, the Borrower must pay Westpac NZ the full amount of any shortfall orof any such loss incurred by Westpac NZ.12.4Unconditional IndemnitiesThe indemnities in this clause 12 are unconditional and irrevocable and will survive termination of the Loan and payment of allOutstanding Moneys and the release of any Security and will not be discharged or impaired by any act, omission, matter or thingwhich might discharge them but for this provision.13.Set off and combination13.1Set OffIf the Borrower has any money in any account with Westpac NZ, then Westpac NZ can use it to pay amounts the Borrower owesunder this Agreement but need not do so. If the Borrower is in default, Westpac NZ can use money which has not yet matured dueand convert money in the account of the Borrower in foreign currencies. To the maximum extent allowed by law, the Borrowergives up any right to set off any amounts Westpac NZ owes it against the Outstanding Moneys.13.2Contingent AmountsIf at any time an amount is contingently due from the Borrower or an amount due is not quantified, Westpac NZ may retain andwithhold repayment of any money in any account of the Borrower and the payment of interest or other moneys pending thatamount becoming due and/or being quantified and may set off the maximum liability which may at any time be or become owingto Westpac NZ by the Borrower and in each case without prior notice or demand.13.3CombinationSubject to any applicable Bank Document, where the Borrower has two or more accounts with Westpac NZ:a)Westpac NZ may at any time combine any two or more of those accounts. It may do so without notice and whether or not it hasallowed a set-off for a calculation of interest between any of those accounts;b)Westpac NZ may at any time combine any two or more of those accounts even where one or more of the combined accounts are indifferent currencies and may effect currency exchanges appropriate to implement that combination; andc)if Westpac NZ combines two or more accounts, it may decline to pay cheques and it may otherwise act as if the combined accountshad always been one account.13.4Contractual RightsWestpac NZ's rights under this clause are contractual rights affecting the terms upon which a credit balance is held and thecreation of those rights does not constitute the creation of a security interest in respect of that credit balance.13.5Deposits with Westpac NZAny moneys which, pursuant to a Bank Document, are deposited at any time by the Borrower with Westpac NZ (or withheld byWestpac NZ from a payment to the Borrower and retained on deposit with it) must, unless otherwise provided, be held on thefollowing basis:a)each deposit and all rights of the Borrower relating to it must be incapable of assignment by the Borrower or of being the subject ofa security interest except:i)in favour of Westpac NZ; orii)with the prior written consent of Westpac NZ; andb)the Borrower must have no right to withdraw any moneys from a deposit until all obligations of the Borrower under the BankDocuments (present and future, direct and contingent) have been performed and complied with, except: Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.i)as expressly permitted by the terms of any Bank Documents under which that deposit was made;ii)for the purpose of complying with its obligations under the Bank Documents; oriii)with the prior written consent of Westpac NZ.13.6InterestEach amount deposited with Westpac NZ under clause 13.5 will (unless otherwise agreed) bear interest calculated by referenceto successive deposit periods of a duration agreed by Westpac NZ and the Borrower (or, in the absence of agreement, asWestpac NZ may nominate). The rate of interest applicable to a deposit period will be as agreed by Westpac NZ and the Borrower(or, in the absence of agreement, as Westpac NZ certifies as applicable to deposits of similar size and maturity placed with it bycustomers). As long as no Event of Default or Potential Event of Default has occurred (in which case interest is to be added to thedeposit) and subject to clause 13.1, that interest is to be paid to the Borrower as it may direct.14.protection of officersTo the extent permitted by law, neither Westpac NZ nor any Officer or Attorney will be liable in respect of any conduct, (includingbut not limited to the agreement to provide the Loan), omission, delay, negligence or breach of duty in the exercise or failure toexercise a Power or for any loss (including consequential loss) which results. However, Westpac NZ and any Officer or Attorneywill be liable where liability arises from its own fraud or wilful misconduct.15.no reliance on Westpac NZThe Borrower confirms that:a)it has not entered into any Bank Document in reliance on, or as a result of any conduct of any kind of or on behalf of Westpac NZor any Related Company of Westpac NZ (including any advice, warranty, representation or undertaking); andb)neither Westpac NZ nor any Related Company of Westpac NZ is obliged to do anything (including disclose anything or giveadvice),except as expressly set out in the Bank Documents or in writing signed by or on behalf of Westpac NZ or any Related Company ofWestpac NZ.16.assignment16.1Westpac NZ may assignWestpac NZ can transfer this Agreement and all or part of the Outstanding Moneys to someone else. If it does, this Agreement andany transferred Bank Document will apply to the transferee as if it was Westpac NZ. To the maximum extent allowed by law, anytransfer will be free of any set off, equity or cross claim which the Borrower would have had against Westpac NZ or the transfereeof any Bank Document but for this clause.16.2Borrower may not assignThe Borrower may not assign or otherwise transfer or grant any Security Interest over any of its rights and obligations under thisAgreement or any other Bank document.16.3disclosure of informationWestpac NZ may disclose to a Related Company, potential assignee or transferee of its rights or obligations under any BankDocument or any other relevant party any information about the Borrower as Westpac NZ considers appropriate. However, beforedisclosing to any potential assignee or transferee Westpac NZ will, in relation to information which is not publicly available:a)advisetheBorrowerof itsintention;andb)require an undertaking protecting the confidentiality of that information from any potential assignee or transferee or other relevantparty.17.counterpart executionThis Agreement may be executed in two or more counterparts, all of which will be deemed to constitute the same instrument.Westpac NZ may accept as an original a facsimile copy of this Agreement executed by the Borrower and a facsimile copy, whentaken with a counterpart executed by Westpac NZ, will be deemed to be one original copy of this Agreement. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.- 10 -- 10 -18.anti-money launderingThe Borrower agrees to provide all information to Westpac NZ which Westpac NZ requires in order to manage its anti-money-laundering and countering terrorism financing obligations, to manage its economic and trade sanctions risks or to comply withany laws, rules or regulations in New Zealand or any other country. The Borrower agrees that Westpac NZ may refuse to establisha business relationship with the Borrower, may be required to delay, defer, stop or refuse to process any transaction, or mayterminate its business relationship with the Borrower at any time and without notice, if the Borrower fails to provide this informationto Westpac NZ in the manner and timeframe specified by Westpac NZ. The Borrower agrees that Westpac NZ may delay, defer,stop or refuse to process any transaction without incurring any liability if Westpac NZ knows or suspects that:a)the transaction will or may breach any laws or regulations in New Zealandor any other country; orb)the transaction involves any person (natural, corporate or governmental) that is itself sanctioned, or is connected, directlyor indirectly, to any person (natural, corporate or governmental) that is sanctioned, under economic and trade sanctionsimposed by any country.Unless the Borrower has disclosed to Westpac NZ that the Borrower is acting in a trustee capacity or on behalf of another party,the Borrower warrants that the Borrower is acting solely on the Borrower’s own behalf in entering into this Agreement.For each transaction conducted under this Agreement, the Borrower represents and warrants to Westpac NZ that, to best of theBorrower’s knowledge, information and belief at the time the transaction takes place, the processing of that transaction byWestpac NZ in accordance with the Borrower’s instructions will not breach any laws or regulations in New Zealand or any othercountry relevant to the transaction.19.interpretation19.1DefinitionsThe following definitions apply, unless the context requires otherwise:Agreement means this agreement and any variations or additions to it agreed in writing between the parties;Attorney means a person appointed as attorney under any Bank Document;Availability Period means the period beginning on the date that Westpac NZ confirms to the Borrower that the condition precedentin this Agreement has been satisfied and expiring on 30 June 2015;Bank Document means a document or agreement:a)to which Westpac NZ and any one or more of the Borrower and/or any Guarantor are or become parties or purport to be or becomeparties; orb)under which obligations arise or are intended to arise from any one or more of the Borrower and/or any Guarantor to, or for thebenefit of, Westpac NZ;(in each case whether or not the parties are involved or it arises as a result of an assignment or transfer). It includes thisAgreement and any Security;Banking Day means any day (other than a Saturday or Sunday) on which registered banks are open for business of the naturerequired by this Agreement in Auckland and, if on that day a transfer of funds is to be made under this Agreement, the city towhich the funds are to be transferred;Commencement Date means the date the Loan is first drawn down;Default Rate means the aggregate of Westpac NZ's Indicator Lending Rate from time to time and 7% per annum;Development means the development to be carried out on the land at 200 Wakefield Street, Wellington;Dollar and $ means the lawful currency of New Zealand;Event of Default means any of the events described as such in the General Security Agreement, notwithstanding that the GeneralSecurity Agreement may be wholly or partially satisfied, released, discharged, avoided, replaced, lost or destroyed from time totime;First Tranche means $35,000,000;Floating Rate means, for each Floating Rate Period, the aggregate of the Margin and Westpac NZ's 90 day bank bill bid rate(rounded upwards to the nearest first decimal place) for bills of a comparable amount to the amount of the Loan at the relevanttime on the first day of that Floating Rate Period.Floating Rate Period means a period of 3 calendar months provided that:a)the first FloatingRate Period willbegin on theCommencementDate; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.- 11 -- 11 -b)each subsequent Floating Rate Period will begin at the end of the previous one;c)any Floating Rate Period which would otherwise end on a day which is not a Banking Day will be extended to the next BankingDay;d)if any Floating Rate Period would otherwise extend beyond the Termination Date it will end on the Termination Date;General Security Agreement means the general security agreement entered into by the Borrower and Westpac NZ and dated onor about the date of this Agreement;Governmental Agency means any government or any governmental, semi-governmental or judicial entity or authority includingany local government, statutory or self-regulatory organisation established, approved or authorised under law, and any stockexchange, in any case having jurisdiction in relation to the affairs of any party to a Bank Document or to whose control orjurisdiction any party to a Bank Document has consented;Group means Reading New Zealand Limited and its subsidiaries;Guarantee means any guarantee, indemnity, letter of credit, legally binding letter of comfort or suretyship. It includes anyobligation or irrevocable offer to be responsible for a debt (as defined below) or for the insolvency or financial condition of anotherperson. It also includes any other obligation or irrevocable offer to pay a debt or to purchase a debt, to provide funds for thepayment or discharge of a debt (whether by the advance of money, the purchase of or subscription for shares, stock or otherinterests issued by another person, the purchase of assets or services, or otherwise), or to indemnify against the consequences ofdefault in the payment of a debt. For the purposes of this definition debt includes any obligation or indebtedness of anotherperson, present or future, actual, prospective or contingent and any capital or premium on shares, stock or other interests issuedby another person;Guarantor means any person who creates or enters into a Guarantee in support of any Outstanding Moneys;Interest Calculation Date means the date falling on the day in each calendar month which numerically corresponds to theCommencement Date provided that where there is no numerically corresponding day in any calendar month then it will be thefirst day in the next calendar month;Interest Payment Date means, unless Westpac NZ shall determine otherwise, the date falling on the day after each InterestCalculation Date provided that:(a)where the Interest Calculation Date would otherwise fall on a non-Banking Day then the Interest Payment Date shall be theBanking Day after the next Banking Day; and(b)where the Interest Calculation Date would otherwise fall on a Banking Day which immediately precedes a non- Banking Day thenthe Interest Payment Date shall be the next Banking Day;Land means any land mortgaged or charged from time to time by any member of the Charging Group to Westpac NZ, togetherwith all buildings and improvements on such land;Letter of Offer means the letter of offer dated 13 April 2015 from Westpac NZ to the Borrower in relation to the Loan;Loan means the sum of $50,000,000 (being the aggregate of the First Tranche and the Second Tranche);Margin means, subject to clause 6.2, 1.75% per annum;Officer includes each employee of Westpac NZ whose title includes the word Manager or occupying an office whose title includesthe word Manager and any person (who need not be an employee) authorised by Westpac NZ;Outstanding Moneys means, at any time, the Loan outstanding and all other moneys payable, including contingently payable, bythe Borrower under this Agreement including accrued interest (including default interest), fees, costs and other expenses whetheror not those sums are then due and owing;Potential Event of Default means any event which, with the giving of notice, lapse of time or satisfaction of any condition orhappening of any event would constitute an Event of Default;Power means a power, right, authority, discretion or remedy which is conferred on Westpac NZ, an Officer or an Attorney by aBank Document or by law in relation to a Bank Document;Quantity Surveyor means any quantity surveyor approved in writing by Westpac NZ;Related Company has the meaning given to that term in the Companies Act 1993 but on the basis that Subsidiary has themeaning given to it in this Agreement and that body corporate includes any entity;Second Tranche means $15,000,000;Security means the General Security Agreement and any other security or undertaking provided by the Borrower or any of theGuarantors or procured by the Borrower to be provided to, or for the benefit of, Westpac NZ from time to time in respect of theBorrower's obligations under this Agreement;Subsidiary has the meaning given to it in the Financial Reporting Act 1993; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Tax includes any tax, levy, impost, deduction, charge, rate, duty or withholding which is levied or imposed by a GovernmentalAgency and is required by law to be paid and any related interest, penalty, charge, fee or other amount;Termination Date means 31 March 2018.19.2GeneralHeadings are for convenience only. They do not affect interpretation. The following rules apply unless the context requiresotherwise:a)Singular includes the plural and the converse;b)A gender includes all genders;c)Where a word or phrase is defined, its other grammatical forms have a corresponding meaning;d)Reference to a clause or schedule is a reference to a clause of, or a schedule to, this Agreement;e)An example does not limit what else might be included;f)Reference to a party to this Agreement or another agreement or document includes the party's successors and permittedsubstitutes or assigns;g)Reference to an agreement or document is to the agreement or document as amended, novated, supplemented or replaced fromtime to time, except to the extent prohibited by this Agreement;h)Reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provisionsubstituted for it and a regulation or statutory instrument issued under it;i)Reference to an asset includes any real or personal, present or future, tangible or intangible property, right or asset and any right,interest, revenue or benefit in, under or derived from any property right or asset;j)An Event of Default is continuing until it has been waived in writing by Westpac NZ;k)Reference to cleared funds means funds which are freely transferable and immediately available for disbursement;l)Reference to a law includes present or future common or customary law and any statute, statutory instrument, subordinatelegislation, regulation, by-law, order or other legislative measure or any judgment or judicial or administrative order ordetermination or decision, in any jurisdiction;m)Reference to a person includes a natural person, company, corporation, trust, partnership, firm, joint venture or GovernmentalAgency, in each case whether or not having separate legal personality, and any association of entities;n)Reference to a security interest includes a mortgage, charge (fixed or floating or otherwise), encumbrance, lien, pledge, trust,financial lease, sale and lease back, sale and repurchase, title retention (other than in respect of goods purchased in the ordinarycourse of trading), charge or similar interest imposed by law, and a preferential arrangement of any kind, the practical effect ofwhich is to secure a creditor;o)Reference to Tax on overall net income of Westpac NZ means tax imposed by the jurisdiction in which Westpac NZ's lendingbranch is located on all or part of its net income, profits or gains(whether worldwide, or only insofar as such net income, profits orgains are considered to arise in or relate to a particular jurisdiction, or otherwise);p)Reference to writing includes a facsimile transmission and any means of reproducing words in a tangible andpermanently visible form;q)References to the Guarantor are references to each of them severally as well as to any two or more of them jointly, and theobligations and agreements on their part in this Agreement will bind every two or more of them jointly and each of them severally. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 10.11Loan Agreement THIS LOAN AGREEMENT (the "Agreement") is made as of the 26th day of June, 2014, betweenSantander Bank, N A., with a place of business at 195 Montague Street, Brooklyn, New York 11201(hereinafter referred to as "Lender") and Sutton Hill Properties, LLC, a Nevada limited liabilitycompany, with a principal place of business at 6100 Center Drive, Suite 900, Los Angeles, California90045, Attention: Andrzej Matyczynski (hereinafter referred to as "Borrower").WI TN E S S E T H:WHEREAS, Lender is the holder of that certain Amended and Restated Mortgage, Assignment of Leasesand Rents, Security Agreement and Fixture Filing dated as of June 28, 2012, made by the Borrower, asborrower, in favor of lender, as Lender, in the principal amount of $15,000,000.00, and recorded on July20, 2012 in the Register's Office of the City and State of New York as CRFN 2012000288512 (togetherwith all extensions, renewals, modifications, substitutions and amendments thereof the "First Mortgage")which secures that certain Second Amended and Restated Promissory Note in the original principalamount of $15,000,000.00 made by Borrower to the order of Lender (together with all extensions,renewals, modifications, substitutions and amendments thereof, the "First Note"; the First Note, the FirstMortgage and any of the loan documents which secure and evidence the indebtedness pursuant to the FirstNote shall hereinafter be referred to as the "First Mortgage Loan Documents");WHEREAS, the Borrower desires to borrow and the Lender desires to lend to the Borrower, for Borrower's use, as more particularly set forth herein (the "Loan") in connection with its ownership of the realproperty located at 1001-1007 Third Avenue, New York, New York 10022 (the "Property"),the principal amount of Six Million and 001100 Dollars (US$6,000,000.00), subject and pursuant to the terms of this Agreement and of that certain Promissory Notein like amount of even date herewith executed and delivered by the Borrower (the "Note") ;WHEREAS, the Note will be secured by, among other things , a Mortgage, Assignment of Leases andRents, Security Agreement and Fixture Filing by and between Borrower and Lender (together with allextensions, renewals, modifications, substitutions and amendments thereof, the "SecurityInstrument") which upon recording will encumber the Property.Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in theNote.NOW, THEREFORE, the parties hereto agree as follows: ArticleI.THE ADVANCESection 1.01Advances. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The Lender agrees, upon the terms, and subject to the conditions hereof, to make a one​ time advance ofthe proceeds of the Loan (the "Advance") to the Borrower in an amount not to exceed the aggregateprincipal amount $6,000,000.00. The Loan (including principal and accrued and unpaid interest) shall bedue and payable on July 1, 2016 (the "Maturity Date"). Interest on the Advance shall accrue and bepayable in accordance with the terms of the Note.Section 1.02Manner of Borrowing.When the Borrower desires to obtain the Advance, it shall give the Lender at least thirty(30) days' prior written notice (a "Notice to Borrow Funds") in the manner hereinafter specified in thisAgreement, which Notice to Borrow Funds shall state that it is irrevocable and specify the proposed dateof borrowing and the amount thereof and shall constitute the Borrower's affirmation that all representationsand warranties contained herein are true and correct and that the Advance shall be subject to all of theConditions (as hereinafter defined and set forth in this Agreement). The Advance shallbe in a whole number and in the minimum amount of$200,000.00. The Notice to Borrow Funds to be given pursuant to this Section shall be acceptedonly from those persons authorized to execute same pursuant to a resolution or consent of the Borrower'sManager, a certified copy of which shall be delivered to Lender prior to any request for an Advance whichshall include specimen-signatures of all parties authorized to execute Notices to Borrow Funds.The failure of the Lender to make the Advance on the date set forth in the Notice to Borrower Funds shallnot subject the Lender to any damages whatsoever provided the Advance is made within a reasonable timeafter the later to occur of the date set forth in the Notice to Borrower Funds or the date all Conditions to theAdvance are satisfied; it being expressly acknowledged by the Borrower that such condition is deemed amaterial inducement to the Lender for entering into the arrangement manifested by this Loan Agreementand the Note.Article II. REPRESENTATIONS AND COVENANTSSection 2.01Representations.The Borrower represents and warrants to the Lender that on the date hereof:(a) The Borrower has the power and authority to execute, deliver and perform this Agreement, andeach of the other documents executed in connection therewith, to own its properties and to carry on itsbusiness as now conducted;(b)The execution, delivery and performance of the Nate and this Agreement(i) have been duly authorized by all requisite action of the Borrower; (ii) to Borrower's knowledge do notviolate any provision of law, (iii) do not violate the Borrower's Certificate of Formation or its OperatingAgreement; any order of any court or other agency, or any agreement to which the Borrower is a party orby which the Borrower is bound; and (iv) will not be in conflict with, result in a breach of or constitute(with due notice or lapse of time or both) a default under any such agreement; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(c) There are no actions, suits, or proceedings before or by any federal , state, municipal or othergovernmental department, commission , board, bureau, agency or instrumentality pending against theBorrower which if determined adversely to the Borrower, would have a material adverse effect on thebusiness, properties, operations or conditions , financial or otherwise, of the Borrower;(d) No Event of Default has occurred under this Agreement and no default has occurred under any ofthe other Loan Documents beyond the expiration of any applicable notice, grace or cure period ;(e) The Borrower makes no claim that the terms of the Note, including without limitation the interestrate thereon, is usurious nor that there exists any offset, deduction or defense with respect to theBorrower's obligations under the Loan Documents;(f) The Property is free and clear of any liens, charges or encumbrances other than the First Mortgage;(g) To Borrower's knowledge , there are no outstanding judgments against the Borrower which havenot been paid;(h) The most recent Financial Statements heretofore delivered to the Lender are complete and correctand since the date thereof there has not occurred any material adverse change in the financial condition oroperations of the Borrower, Guarantor or the Property from that shown on said Financial Statements;(i) Borrower has no knowledge of any impediments to the full and complete perfom1ance by theBorrower hereunder or under any of the Loan Documents ;G) Neither the Borrower nor any person or entity acting or purporting to act on the Borrower's behalfhas dealt with any broker in connection with the making of this loan, except as set forth in the,commitment letter of Santander Bank, N.A. addressed to Borrower and dated as of June 11, 2014, asamended by letter agreement, if any. Borrower hereby indemnifies Lender, and agrees to hold Lenderharmless, from and against all loss, liability, damage and expense, including reasonable attorneys' fees andexpenses, suffered or incurred by Lender by reason of a breach of this representation. This provision willsurvive the closing and the repayment of the Note;(k) The Borrower is a limited liability company duly organized and validly existing under the laws ofthe State of Nevada and duly authorized to do business in the State of New York pursuant to the laws ofthe State of New York; and(1) That the funds received by the Borrower from the Advance requested hereunder and pursuant tothe Note will be expended exclusively in connection with the acquisition of floor area rights and/or airrights related to future development of the Property as same will be more particularly described in theSecurity Instrument.Section 2.02Certain Covenants. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The Borrower covenants and agrees that so long as this Agreement shall remain in effect, Borrower shall:(a)Pay all sums due and owing under the Note pursuant to its terms;(b)Do or cause to be done all things necessary to preserve and keep in full force and effect its existenceunder the laws of its state of formation;(c)Give prompt notice to the Lender of (i) any proceedings of which the Borrower has notice institutedby or against the Borrower, and (ii) any other action, event or condition of any nature which in eithercase the management of the Borrower reasonably believes could have, lead to or result in a materialadverse effect upon the business, assets or​ financial condition of the Borrower;(d)Refrain from mortgaging , pledging, granting or permitting any security interest, lien orencumbrance of any nature in any amount to exist with respect to any of the Borrower's propertyincluding without limitation the Property, except where such security interest, lien or encumbrance isfor the benefit of the Lender or has otherwise been approved by the Lender;(e)Provide to Lender all of the deliverables as and when required pursuant to Section 2.04 herein(collectively, the "Financial Statements");(f)Perform all of the Borrower's obligations under the First Mortgage encumbering the Propertyincluding without limitation, payment of all sums due thereunder, in a timely manner. Upon thematurity (by acceleration or otherwise, or upon prepayment thereof) of the First Mortgage held byLender (or its assignee) covering the Property, or upon prepayment thereof, all amounts duehereunder shall simultaneously become due and payable;(g)Not incur any additional indebtedness except, in the ordinary course of business, with customarytime payment arrangements with vendors and suppliers; and(h)Pay all sums that may be necessary to be paid in order to enforce the Note and to enforce and/or torecord the Security Instrument and any agreement or any other documentation executed anddelivered in connection with this Agreement, whether such sums be in the nature of recording fees,mortgage tax or any other expense in connection with such recording.Section 2.03Negative Pledge Covenants.The Borrower pledges, covenants and agrees that so long as this Agreement shall remain in effect it shallnot, without the prior written consent of the Lender, do any of the following:(a) Except as otherwise permitted in the Security Instrument and the First Mortgage, sell, transfer orotherwise convey, either voluntarily or involuntarily, all or any portion of the Property or any interest orestate therein; or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(b) Grant or suffer to exist any mortgage, pledge, lien, secured interest, hypothecation or otherencumbrances upon the Property including any personal prope1iy owned by the Borrower now orhereafter placed in or attached to and necessarily used in connection with the Property except asmaybe approved by Lender; or(c) Except for the Master Lease, enter into any leasing arrangement of any kind in respect of all orsubstantially all of the Property;(d) Reduce the rent payable by the tenant pursuant to the Master Lease or enter into any amendmentsor modifications of the Master Lease;(e) Suffer or permit any mechanics' or other statutory lien which is filed against the Property toremain undischarged or not bonded for a period exceeding sixty (60) days beyond the filing datethereof; or(f) Grant or suffer to exist any indebtedness (secured or unsecured), other than indebtedness owingto Lender, or grant or suffer to exist any Lien on or with respect to any deposit accounts (other than anyLien in favor of the Lender), whether now owned or hereafter acquired by the Borrower, or pledge;assign or transfer any rights to any deposit accounts, except as may be approved in writing by Lender."Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,lien (statutory or other), or preference, priority of other security agreement or preferential arrangement ofany kind or nature whatsoever.Section 2.04Books and Records. 1(a)Borrower shall keep accurate books and records of account in accordance with generally acceptedaccounting principles in which full, true and correct entries shall be promptly made with respect toBorrower, the Property and the operation thereof, and will permit all such books and records(including without limitation all contracts, statements, invoices, bills and claims for labor, materialsand services supplied for the construction, repair or operation to Borrower of the Improvements) tobe inspected or audited and copies made by Lender and its representatives during normal businesshours and at any other reasonable times on at least forty​ eight (48) hours advance notice. Borrowerrepresents that its chief executive office is as set forth in the introductory paragraph of thisAgreement and that all books and records pertaining to the Property are maintained at the Propertyor at its chief executive office. Borrower will furnish, or cause to be furnished, to Lender on orbefore ninety (90) calendar days following the end of each calendar year the following items, eachcertified by Borrower as being true and correct, in such format and in such detail as Lender or itsservicer may reasonably request:(i)a written statement (rent roll) dated as of the last day of each such calendar yearidentifying each of the Leases by the term, space occupied, rental required to be paid(including percentage rents and tenant sales), security deposit paid, any rentalconcessions, all rent escalations, any rents paid more than one (1) month in advance,any special provisions or inducements granted to tenants, any2.04 same as Section 3.8 of the Mortgagetaxes, maintenance and other common charges paid by tenants, all vacancies and identifying anydefaults or payment delinquencies thereunder; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(ii)year-to-date operating statements prepared for each calendar quarter during each such reportingperiod detailing the total revenues received, total expenses incurred, total cost of all capitalimprovements, total debt service and total cash flow; and(iii)a current personal financial statement of each Guarantor, if applicable, in a form satisfactory toLender.(b) Within ninety (90) calendar days following the end of each calendar year,Borrower shall furnish a statement of the financial affairs and condition of the Borrower and theProperty including a statement of profit and loss for the Property in such format and in such detail asLender or its servicer may reasonably request, and setting forth the financial condition and the incomeand expenses for the Property for the immediately preceding calendar year prepared and audited by anindependent certified public accountant. Borrower shall deliver to Lender copies of all income taxreturns, requests for extension and other similar items contemporaneously with its delivery of same to theInternal Revenue Service.(c) Borrower will permit representatives appointed by Lender, includingindependent accountants, agents, attorneys, appraisers and any other persons, to visit and inspect on atleast twenty-four hours advance notice during its normal business hours and at any other reasonabletimes any of the Property or Borrower's chief executive office and to make photographs thereof, and towrite down and record any information such representatives obtain, and shall permit Lender or itsrepresentatives to investigate and verify the accuracy of the information furnished to Lender under or inconnection with this Agreement or any of the Loan Documents and to discuss all such matters with itsofficers, employees and representatives. Borrower will furnish to Lender at Borrower's expense allevidence which Lender may from time to time reasonably request as to the accuracy and validity of orcompliance with all representations and warranties made by Borrower in the Loan Documents andsatisfaction of all conditions contained therein. Any inspection or audit of the Property or the books andrecords of Borrower, or the procuring of documents and financial and other information, by or on behalfof Lender, shall be at Borrower's expense and shall be for Lender's protection only, and shall notconstitute any assumption of responsibility or liability by Lender to Borrower or anyone else withregard to the condition, construction, maintenance or operation of the Property, nor Lender's approvalof any certification given to Lender nor relieve Borrower of any of Borrower's obligations. Lendermay divulge to any Investor (as hereinafter defined) all such information, and furnish to such Investorcopies of any such reports, financial statements, certificates, and documents obtained under anyprovision of this Agreement, or related agreements and documents, provided that such informationshall be provided on a confidential basis.(d) Without limiting Lender's other rights and remedies under this Agreement andthe other Loan Documents, in the event that any statement or document required to be delivered toLender pursuant to this Section 2.04 is not delivered within thirty (30) days of the date when the same isdue "Delinquent Reports") upon fifteen (15) days notice to Borrower, the Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Interest Rate (as defined in the Note) shall be increased by adding one quarter percent (0.25%) perannum (i.e. 25 basis points) to the Interest Rate until such time as all Delinquent Reports, in form andsubstance reasonably satisfactory to Lender, have been delivered to Lender.Article III. CONDITIONS TO ADVANCESection 3.01ConditionsThe obligation of the Lender to make the Advance is subject to the satisfaction of all of thefollowing conditions precedent (the "Conditions") (each of which is deemed material and none of whichmay be waived except by an instrument executed by the Lender):(i) The Lender shall have received:(1)the irrevocable Notice to Borrow Funds;(2)a certified copy of the resolutions or consent adopted by the membersof Borrower, in form andsubstance reasonably satisfactory to Lender authorizing the execution, delivery and performance ofthe Security Instrument and all of the other related Loan Documents required at the time of theAdvance, including, but not limited to the Notice to Borrow Funds;(3)copies of the most recent year end Financial Statements;(4)a certificate from Borrower that all the representations and warranties set forth herein shall be trueand correct on and as of such time with the same effect as though such representations andwarranties have been made on and as of such time, except to the extent such representations andwarranties expressly relate to an earlier date; and(5)a certificate of Borrower, stating no proceedings exist affecting Borrower or the Property thatcould have a Material Adverse Effect on Borrower, the Loan, the First Mortgage or the Property,and (B) a Certificate from the Guarantors, to the effect that no proceedings exist affecting anyGuarantor which could have a material adverse effect on such Guarantor, in each case, whichhave not been disclosed to Lender in writing.(ii) Borrower shall be in compliance with all the terms and provisions set forthherein on its part to be observed or performed and no "Event of Default" (as hereinafter defined), norany event which upon notice or lapse of time or both would constitute an Event of Default, shall haveoccurred and be continuing either at the time of the Advance or as a result of such borrowing, includingbut not limited to compliance with all financial reporting requirements set forth herein(iii) Borrower shall be in compliance with all the terms and provisions set forth inthe First Mortgage Loan Documents on its part to be observed or performed and no Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results."Event of Default" (as defined in the First Mortgage Loan Documents), nor any event whichupon notice or lapse of time or both would constitute an Event of Default pursuant to the FirstMortgage Loan Documents, shall have occurred and be continuing either at the time of theAdvance or as a result of such borrowing, including but not limited to compliance with allfinancial reporting requirements set forth therein;(iv) Lender's computation that the Borrower shall maintain a Debt Yield of no lessthan 11% during the term of the Loan. In the event that Lender shall at any time determine that theDebt Yield is less than 11%, Borrower shall within thirty (30) days of notice and demand by Lender,either reduce the Loan amount (by the payment of principal) or pledge such additional collateral asmay be acceptable to Lender in order to maintain the required Debt Yield. Borrower's failure to eitherreduce the Loan balance as necessary or satisfy Lender's demand for additional collateral acceptable toit within thirty (30) days of notice having been given by Lender, shall be considered an Event ofDefault hereunder. "Debt Yield" shall mean, as of any date, the quotient (expressed as a percentage)obtained by dividing (i) the net operating income for the twelve (12) month period ending with themost recently completed calendar month by (b) the outstanding principal balance of the Note and theFirst Note as of such date. Lender's calculation of the Debt Yield, and all component calculations, shallbe conclusive and binding on Borrower absent manifest error;(v) Immediately prior to the Advance, Lender shall cause title company to file andrecord the Security Instrument substantially in form attached hereto as Exhibit A and relatedcertificates for the Property in the appropriate recording office in New York County. The Borrowershall (i) pay any and all expenses of the Lender incurred in connection with the foregoing matters,including, without limitation, the costs of any title insurance, recording fees, mortgage recording tax,survey, environmental reports and the reasonable fees and expenses of the Lender's counsel and (ii)deliver any documents reasonably requested by the Lender or the title company in connection witheffectuating the foregoing matters;(vi) Lender shall have received a NY ALTA (1992) loan policy of title insurance(the "Loan Title Policy") in the amount of the Advance, substantially in the form attached hereto asExhibit B issued by the title company to Lender, insuring the Security Instrument as a valid andsubsisting second mortgage lien on the Property subject only to standard and customary permittedexceptions, including the lien of the First Mortgage. The Loan Title Policy shall contain suchaffirmative insurance and endorsements as Lender shall reasonably require;(vii) opinion(s) of counsel as to the authority, due execution, and enforceability ofthe Security Instrument and related Loan Documents in form substantially similar to the opinion givenin connection with this Agreement or otherwise reasonably acceptable to the Bank;(viii) a certificate from Borrower and other evidence satisfactory to Lender in itsreasonable discretion, including but not limited to, an agreement of purchase and sale inconnection with the acquisition of floor area rights and/or air rights and/or other Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.development or zoning rights that will benefit the Property as same will be moreparticularly described in the Security Instrument;(ix) payment to Lender of a standby fee equal to one quarter of one percent(0.25%) of the Unused Portion on the first anniversary of the Loan and every anniversary thereafter untilthe Loan is paid in full, provided, however, Borrower shall pay Lender a pro rata portion of such standbyfee if the Loan is paid in full prior to any given one year anniversary of the Loan. The Unused Portionshall mean the difference, if any, between the maximum aggregate principal amount that may beadvanced under the Note and the Advance ; and(x) payment of all of Lender's expenses in connection with the review andBorrower's compliance with the Conditions including but not limited to Lender's reasonable attorneys'fees and expenses.Article IV.DEFAULTSection 4.01Events of Default.Each of the following shall constitute an "Event of Default" under this Agreement:(a) if any representation or warranty of Borrower or of its members, generalpartners, principals, affiliates, agents or employees, or of any Guarantor made herein or in theEnvironmental Indemnity or in any Loan Document, in any guaranty, or in any certificate, report,financial statement or other instrument or document furnished to Lender shall have been false ormisleading in any material respect when made;(b) The failure to make any payment of principal or interest under the Note on orbefore the tenth (101h) calendar day after the day on which the same is due (without regard to anyapplicable cure and/or notice period) or if the entire Debt is not paid on or before the Maturity Date,along with applicable prepayment premiums, if any(c) if Borrower, or its general partner, member or manager, if applicable, violatesor does not comply with any of the provisions of Section 3.3, Section 4.3, or Article 8 hereof, or Article19 of the Note, or fails to deliver any of the reports required by Section(d) if Borrower or any Guarantor shall make an assignment for the benefit ofcreditors or if Borrower or any Guarantor shall admit in writing its inability to pay, or Borrower's or anyGuarantor's failure to pay its debts as they become due;(e) if (i) Borrower or any member or manager of Borrower, or any Guarantor shallcommence any case, proceeding or other action (A) under any existing or future law of any jurisdiction,domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief ofdebtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankruptor insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,composition or other relief with respect to it orits debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.similar official for it or for all or any substantial part of its assets, or Borrower or any member or managerof Borrower, or any Guarantor shall make a general assignment for the benefit of its creditors; or (ii)there shall be commenced against Borrower or any member or manager of Borrower, or any Guarantorany case, proceeding or other action of a nature referred to in clause(i) above which (A) results in the entry of an order for relief or any such adjudication orappointment or (B) remains undismissed, undischarged or unbonded for a period of ninety (90) calendardays; or (iii) there shall be commenced against Borrower or any member or manager of Borrower or anyGuarantor any case, proceeding or other action seeking issuance of a warrant of attachment, execution,distraint or similar process against all or any substantial part of its assets which results in the entry of anyorder for any such relief which shall not have been vacated, discharged, or stayed or bonded pendingappeal within ninety (90) calendar days from the entry thereof; or (iv) Borrower or any member ormanager of Borrower, or any Guarantor shall take any action in furtherance of, or indicating its consentto, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or (v)Borrower or any member or manager of Borrower, or any Guarantor shall generally not, or shall beunable to, or shall admit in writing its inability to, pay its debts as they become due;(f) The occurrence of any materially adverse change in the financial condition of theBorrower or any Guarantor (for purposes of this Agreement, a "materially adverse change" shall meanone which in the determination of the Lender that, in its sole judgment, impairs the ability of theBorrower or any Guarantor with respect to (i) maintaining and/or operating the Property, (ii) paying allreal estate and, related taxes and charges and (iii) meeting all of its financial obligations to the Lenderand all other creditors);(g) The occurrence of any default beyond the expiration of any applicable notice,grace or cure period under (i) any mortgage(s) now or hereafter covering the Property, giving rise to aright to accelerate payment thereof regardless of whether such mortgage(s) is/are held by Lender or a thirdparty or (ii) any other agreement (loan or otherwise) between Lender and Borrower now existing orhereafter made;(h) The failure to perform any of the other covenants, terms or agreements on thepart of the Borrower to be performed hereunder or under any of the other Loan Documents beyond anyapplicable notice and cure period;(i) if any federal tax lien is filed against Borrower, any general partner, member ormanager of Borrower, any Guarantor or the Property and same is not discharged of record within forty-five (45) calendar days after Borrower becomes aware of such filing;; orU) Any "Event of Default" (as defined in the First Mortgage Loan Documents) orany event which upon notice or lapse of time or both would constitute an Event of Default occurspursuant to the First Mortgage Loan Documents.Section 4.02Effect of Default.(a) Upon the occurrence of an Event of Default, the Lender, in its sole and absolutediscretion, may (1) temporarily suspend the extension of credit and refuse to honor any request for anAdvance, (2) demand the prepayment of the Advance, (3) pursue any other rights Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.or remedies available to the Lender under this Agreement or the other Loan Documents, (4) terminatethis Agreement and any obligation hereunder to make the Advance by declaring the loan to beimmediately due and payable and/or exercising such of the other remedies provided for in the LoanDocuments as the Lender may elect. The costs and expenses of Lender incurred in carrying out any orall of the above and enforcing the terms of this Agreement or the Note, including reasonable attorneys'fees, shall be at Borrower's expense.(b) Without limiting any remedy otherwise available to the Lender, the Borrowershall pay a late charge, to the extent permitted by law, of five ($.05) cents per each dollar ($1.00) of eachpayment received and accepted by the Lender more than ten (10) days after the date it is due, to cover theextra expense involved in handling such delinquent payment.(c) Anything to the contrary herein notwithstanding, Lender shall give writtennotice to Borrower with respect to any non-monetary defaults hereunder and Borrower shall have a periodof thirty (30) days from the date of such notice to cure the default, if Borrower or any Guarantor, as thecase may be, shall continue to be in default under any other term, covenant or condition of this Agreementor any Loan Documents for thirty (30) calendar days after notice from Lender; provided that if suchdefault cannot reasonably be cured within such thirty (30) calendar day period and Borrower (or suchGuarantor as the case may be) shall have commenced to cure such default within suchthirty (30) calendar day period and thereafter diligently andexpeditiously proceeds to cure the same, such thirty (30) calendar day period shall be extended ·for so long as it shall require Borrower (or such Guarantor as the case may be) in the exercise of duediligence to cure such default, it being agreed that no such extension shall be for a period in excess ofsixty (60) calendar days after the notice from Lender referred to above.(d) If the Borrower fails to observe or perform any of the covenants or agreementson the part of the Borrower to be performed hereunder, then the Lender may, but shall not be obligated to,perform the same and all necessary and all reasonable costs incurred by the Lender in performing theBorrower's covenants and agreements, including reasonable counsel fees, shall be repaid by theBorrower upon demand, together with interest thereon at the default rate under the Note.Section 4.03No Waiver.(a) Any failure of the Lender to exercise its option to declare the loan immediately dueand payable, or any forbearance by the Lender before or after any exercise of such option, or anyforbearance to exercise any other remedy of the Lender, or any withdrawal or abandonment of theLender of any of its rights in any one circumstance, shall not be construed as a waiver of any option,power, remedy or right of the Lender hereunder except to the extent, if any, the action of the Lenderconstitutes an express waiver with respect to such one circumstance. The rights and remedies of theLender expressed and contained in this Agreement and in the Loan Documents are cumulative and noneof them shall be deemed to be exclusive of any other or of any right or remedy the Lender may not orhereafter have in law or in equity. The election of any one or more remedies shall not be deemed to be anelection of remedies under any statute, rule, regulation or other law. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(b) The obligations of the Borrower (and the rights and remedies of the Lender against theBorrower) hereunder shall in no way be modified, abrogated, terminated or adversely affected by (i) anyforbearance by the Lender in collecting any sums due, or (ii) the granting of any extension of time toperform any obligation hereunder or (iii) any impairment of the collateral, if any, which may now orhereafter be assigned or delivered to Lender to secure payment of the amounts due under the Note orhereunder, by reason of any act, failure to act or negligence of the Lender.Article V.MISCELLANEOUSSection 5.01Notices.All notices to be given hereunder shall be delivered by hand, or sent to the party to be notified viacertified mail, return receipt requested or sent by a nationally recognized overnight courier which providesevidence of receipt and shall be deemed given when delivered by hand or one (1) day after delivery tosuch nationally recognized overnight courier or three (3) days after being posted with the United StatesPostal Service addressed to the parties as follows:If to the Lender at:Santander Bank, N.A.195 Montague StreetBrooklyn, New York 11201 Attn:Elizabeth BaeWith a copy to:Windels Marx Lane & Mittendorf, LLP156 West 56th StreetNew York, New York 10019 Attention:Michele Arbeeny, Esq.If to the Borrower at:Sutton Hill Properties, LLC6100 Center DriveSuite 900Los Angeles, California 90045Attention: Andrzej MatyczynskiWith a copy to:Marcus Rosenberg & Diamond LLP 488 MadisonAvenueNew York, New York 10022 Attention:Jeffrey M. Diamond, Esq.Section 5.02Successors and Assigns.The terms Borrower and Lender, shall include the named Borrower and the named under and theirrespective legal representatives, successors and any permitted assigns. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Section 5.03Severability.If any one or more of the provisions contained in this Agreement or in any of the Loan Documentsshall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegalityor enforceability shall not affect any other provision of this Agreement or of the Note or any LoanDocument.Section 5.04Expenses of Lender.The Borrower shall pay all out-of-pocket expenses, including but not limited to, reasonable counselfees incurred by the Lender in connection with the preparation execution and delivery of this Agreementand the enforcement or amendment of any of its rights or provisions hereunder.Section 5.05Indemnity.The Borrower shall indemnify and hold harmless the Lender from and against any and all liabilities,obligations, losses, damages, penalties, claims, actions, suits, proceedings, judgments, costs, expenses anddisbursements, including but not limited to, counsel fees in any way relating to or arising out of the failureof the Borrower to perform in full its obligations under this Agreement or under any of the LoanDocuments.Section 5.06Applicable Law.This Agreement shall be governed by and construed in accordance with the laws of the State ofNew York without regard to conflict of laws principles.Section 5.07Jurisdiction.ANY ACTION ORPROCEEDING IN CONNECTION WITH THIS AGREEMENT MAY BEBROUGHT IN A COURT OF RECORD OF THE STATE OF NEW YORK, COUNTY OF NEW YORK,THE PARTIES HEREBY CONSENTING TO THE JURISDICTION THEREOF.Section 5.08Waiver of Certain Defenses.IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENT, OR ANYOTHER LOAN DOCUMENT, THE BORROWER WAIVES ANY CLAIM THAT NEW YORK IS ANINCONVENIENT FORUM AND FURTHER WAlVES THE RIGHT TO INTERPOSE ANY DEFENSEBASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF LACHES AND ANY SET-OFFOR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION EXCEPT FOR ANYCOUNTERCLAIMS DEEMED COMPULSORY UNDER APPLICABLE COURT RULES OR STATUTES.Section 5.09Waiver of Jury Trial and Waiver of Certain Damages. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENTOR ANY OTHER LOAN DOCUMENT, THE LENDER AND BORROWER MUTUALLYWAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY ANDBORROWER HEREBY WAlVES, TO THE FULLEST EXTENT PERMITTED BY LAW,ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.Section 5.10Joint and Several Liability.If this Agreement is executed by more than one person or entity, all representations, warranties,obligations and covenants made by the Borrower hereunder shall be deemed to have been made byeach of such persons and entities and the obligations and duties of such parties hereunder shall bedeemed to be joint and several in all respects.Section 5.11Origination Fee.This Agreement shall not become effective unless Lender has received, (a) payment ofBorrower to Lender of the origination fee to Lender and (b) payment by Borrower of legal fees andexpenses incurred by Lender to the Lender's counsel.Section 5.12Counterparts.This Agreement may be executed in any number of counterparts, each of which shall bedeemed to be an original, but all of which, when taken together, shall constitute one and the sameinstrument and shall become effective when copies hereof, when taken together, bear the signatures ofeach of the parties hereto and it shall not be necessary in making proof of this instrument to produce oraccount for more than one of such fully executed counterparts.Section 5.13Satisfaction of Note.At such time as the First Mortgage or any other mortgage(s) covering the Property, whetherheld by Lender or another lending institution, becomes due and payable, whether upon the maturitythereof or by acceleration or otherwise, or upon prepayment thereof, the Borrower shall also berequired to immediately repay to Lender all amounts outstanding under the Note and this Agreementand if the Advance is not outstanding at such time, no advance shall be available hereunder.Section 5.14Authorization.The execution and delivery of this Agreement and the Note referred to herein have been dulyauthorized by the members of Borrower.Section 5.15 Cooperation In the event Borrower determines that it would be beneficial to have the proceeds of theLoan in the form of multiple advances, Lender agrees to reasonably cooperate with Borrower with respectto the modification of the Loan Documents to provide for multiple advances subject to Borrowers paymentof all costs and expenses in connection with any such modification. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 10.19Separation and Release AgreementThis Separation and Release Agreement (this “Agreement”) dated as of May 30, 2014, will beeffective as of the lapse of the Revocation Period set forth in Section 9 hereof (the “Effective Date”),and is made and entered into by and between Andrzej Matyczynski (“Executive” or “you”) andReading International, Inc., a Nevada corporation (“Reading” or the “Company”).RECITALS:WHEREAS, Executive has been employed by Reading and certain affiliates as its ChiefFinancial Officer (“CFO”), Treasurer and Corporate Secretary pursuant to the terms of an employmentagreement dated October 28, 1999 (the “Employment Agreement”);WHEREAS, you and the Company desire an appropriate strategy for you to retire and amicablyend your career with the Company;NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the partieshereto agree as follows:1. Resignation as Chief Financial Officer. Effective immediately upon request of theCompany’s Chief Executive Officer (“CEO”) (the “Resignation Date”), you will resign as theCompany’s Chief Financial Officer, Treasurer and Corporate Secretary and from any and all otherpositions that you hold as an officer, director and/or manager of the Company and its various direct andindirect subsidiaries. Your status as a corporate officer, director, manager or any fiduciary position(including as a fiduciary of any employee benefit plans sponsored by the Company or any affiliate) withthe Company and all affiliates will end on the applicable Resignation Date and you hereby agree tosubmit your written resignation from any such offices and positions upon request on or after theResignation Date, effective as of the Resignation Date. You acknowledge and agree that yourResignation Date may differ from office to office and from position to position.2. Transition Period Services. Commencing on the date of this Agreement and continuingthrough the Retirement Date (defined below), Executive Agrees to continue to serve as the Company’sCFO and Principal Financial Officer for Securities Exchange Act reporting purposes until a successorCFO and/or Principal Financial Officer is appointed and to provide such advice and transition assistanceto the Company as the CEO of the Company may reasonably designate from time to time, including tocontinue to perform the duties of the CFO and Principal Financial Officer during the Transition Periodon an “at will” basis (hereinafter, the “Services”). Executive hereby agrees to execute as CFO andPrincipal Financial Officer all appropriate filings to be made by the Company under the SecuritiesExchange Act during the period prior to the effective date of the appointment of a successor CFO. Theperiod between the date of this Agreement and the Retirement Date is hereinafter referred to as the“Transition Period.” During the Transition Period, Executive’s duties will be substantially the same aspresent, but may be limited from time to time by the CEO. During the Transition Period, you agree tospend sufficient time on Company matters to perform the duties of the CFO and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Principal Financial Officer until a new CFO is appointed and to facilitate an orderly transition ofresponsibilities to the new CFO and, after a new CFO is appointed, to continue to make yourselfavailable as needed, up to a full time basis, to attend to Company matters as requested from timeto time. Unless otherwise specified by the CEO, services will be performed at the Company’sexecutive headquarters building, in space provided by the Company. The Company willprovide for parking during the Transition Period. It is anticipated that, unless otherwise agreed,Executive will be available at the Company’s executive headquarters building Monday throughThursday of each week. On each Friday during the Transition Period, Executive may provideServices remotely. In providing the Services during the Transition Period, you will continue tobe an employee of the Company but will not have the authority to speak on behalf of or bind theCompany except as authorized by the CEO of the Company or as required to discharge yourduties in connection with providing the Services and performing the duties of the CFO andPrincipal Financial Officer. All compensation under this Agreement, including anycompensation attributable to the Services, will be subject to tax withholding by theCompany. The Company may terminate this Agreement immediately and without prior notice ifExecutive refuses to or is unable to perform the Services or is in breach of any material provisionof this Agreement. Termination due to Executive’s wrongful refusal to perform any services,material breach of this Agreement or for criminal misconduct involving any felony, or anymisdemeanor involving moral turpitude or a criminal violation of federal or state securities lawsis referred to herein as “Termination for Cause”). Executive’s “Retirement Date” will be thelast day Services are provided during the period starting on the date of this Agreement andending on September 1, 2014, or such earlier termination date.3. Restrictive Covenants. Due to Executive’s position with and relationship to the Companyand its affiliates, Executive has had, and/or shall have, access to confidential or proprietary data orinformation of the Company and/or any affiliates of Company. This confidential information includes,but is not limited to, the Company’s human resources and Executive-related information, strategicbusiness plans, budgets, financial performance and financial statements, operational information,business and employment contracts, compensation information, and other information that the Companytreats as confidential or proprietary. Executive agrees he will not disclose or use the Company’sconfidential or proprietary information. Executive further agrees that the terms of any and all Companypolicies regarding trade secrets, confidential or proprietary information will continue to apply to himafter the Retirement Date. Executive understands that the Company may seek from a court ofcompetent jurisdiction an injunction to prohibit such disclosure. For so long as Executive is employedby the Company, and for a period of one year after the Retirement Date, Executive shall not directly orindirectly, either alone or in concert with others, solicit or entice any employee of the Company or anyof its affiliates, or any independent contractor of the Company or any of its affiliates, which independentcontractor is primarily engaged in business related to the Company or any of its affiliates, to leave orcease providing services to the Company or affiliate or to work for anyone in competition with theCompany or its affiliates, except for any individual whose employment or business relations with theCompany and/or any of its affiliates ceased at least six months prior to Executive’s solicitation orenticement of the individual. The provisions of this Section 3 and the Company policies that relate totrade secrets, confidential and proprietary information and non-solicitation of employees will survive thetermination of your employment and are incorporated in this Section 3 by reference (the “RestrictiveCovenants”). Payments to you under Section 4.1 and Section 4.2 will be conditioned on yourcontinued compliance with2 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.the provisions of the Restrictive Covenants and the provisions of this Agreement. In the event ofany violation by you of the Restrictive Covenants or the provisions of this Agreement, no furtherpayments will be made under Section 4.1 and no additional vesting will occur under Section4.2. Your right to any unpaid payments under Section 4.1 and any unvested equity awardsunder Section 4.2 will be forfeited.4. Compensation. In exchange for your Services, the restrictive covenant obligations describedabove, the Release provided below and satisfaction of all contractual obligations under the terms of theEmployment Agreement, you will receive the following compensation and benefit treatment:4.1 Payments. (a) Base Salary; Accrued Obligations. As consideration for your agreement toprovide Services under Section 2 and your agreement to the Restrictive Covenants under Section 3, youwill continue to receive your current base salary and employee benefits during the TransitionPeriod. You will continue be paid through the end of the Transition Period or earlier termination of theAgreement. On the Retirement Date, you will receive payment in respect of your accrued and unusedvacation, accrued but unpaid base salary through the Retirement Date and reimbursement ofunreimbursed business expenses for which substantiation has been submitted in accordance with theCompany’s policies and procedures (collectively, the “Accrued Obligations”). You acknowledge andagree that as of the date of this Agreement, you have 200 hours of accrued and unused vacation. Theamount of accrued and unused vacation will be adjusted for additional accruals and vacation time takenduring the Transition Period. You acknowledge and agree that you will consult with the CEOregarding scheduling any vacation time during the Transition Period to accommodate the Company’srequirements and to not unduly interfere with the performance of the Services.(b) COBRA. You will be offered the opportunity to receive continuationcoverage for yourself and your eligible dependents under the Company’s medical and dental planspursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, asamended (“COBRA”) following the Retirement Date, provided you timely elect and pay for suchcoverage. (c) Severance Pay. No later than the eighth (8th) day following the RetirementDate, provided that there has not been a Termination for Cause and that the executed ReaffirmationAgreement described in Section 7.6 has been delivered to the Company without revocation, you will beentitled to a lump sum payment of severance in an amount equal to $244,500.00, which is comprised ofa “leaving bonus” equivalent to six months of your annual base salary in the amount of $154,500, anadditional “leaving bonus” in the amount of $50,000 and an additional payment of $40,000(collectively, the “Severance Pay”). The Severance Pay will be subject to applicable tax withholdingand will be further reduced by $33,000, representing an offset for repayment of the outstanding loan(which loan was grandfathered under Section 13(k) of the Securities Exchange Act as amended by theSarbanes-Oxley Act of 2002) to Executive from the Company (the “Loan Offset”). Executiveacknowledges and agrees that payment of the Severance Pay, reduced by the Loan Offset, satisfies anyand all “leaving3 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.bonus” obligations under the Employment Agreement and is in excess of theamount Executive otherwise would be entitled to.(d) Deferred Compensation Plan. Reference is made to that certain Non-Qualified Deferred Compensation Plan between the Company and the Executive dated as of October19, 2012 (the “Deferred Compensation Plan”). Provided that there has not been a termination “ForCause” as defined in the Deferred Compensation Plan, Executive will continue to be eligible to receivethe benefits of the Deferred Compensation Plan according to its terms. If, in the determination of theBoard, Executive has satisfactorily performed the Services and all of Executive’s other obligations underthis Agreement, and provided that there has been no Termination for Cause under this Agreement andthat the executed Reaffirmation Agreement described in Section 7.6 has been delivered to the Companywithout revocation, the Board of Directors will authorize an allocation under the DeferredCompensation Plan for the 2014 plan year and will make a corresponding contribution to the grantortrust in the amount of $50,000 (representing a pro-rata amount of the annual allocation and contributionfor 2014 through the Retirement Date). The timing and the amount of the distribution under theDeferred Compensation Plan of Executive’s vested benefit will be determined according to the terms ofthe Deferred Compensation Plan.4.2 Equity Awards. All unvested stock options, restricted stock or other equitycompensation granted to Executive prior to the Resignation Date will continue to vest through theRetirement Date. 4.3 Other Compensation Matters. Notwithstanding anything to the contrary containedin this Agreement (including the Release set forth in Section 7 hereof), you hereby acknowledge that, inconnection with your Resignation and Retirement when you cease to be an employee of the Company,you will not be entitled to receive from the Company or an affiliate (i) any additional severance pay orbenefits except as provided in Section 4.1 and Section 4.2, or (ii) any retiree termination welfare benefits(other than health care continuation coverage that you may be entitled to elect pursuant toSection 4980B of the Code), in each case including, but not limited to any severance pay or benefitspursuant to the Employment Agreement. Your participation in all Company perquisites will cease as ofthe Retirement Date. 5. Nondisparagement. The Executive agrees to refrain from making any false or misleadingstatements or comments about the Company and any of its respective affiliates, their officers, directors,personnel, or any of their products and services. The Executive agrees to refrain from making anydisparaging remarks to any person (other than comments to Executive’s immediate family members oradvisers that are made on a confidential basis and are not repeated or published by such persons) aboutthe Company and any of its respective affiliates, their officers, directors, their respective personnel, andtheir respective products and services; except to the extent otherwise required by applicable law. 4 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.6. Cooperation. In order to ensure a smooth transition from Executive’s employment withCompany, Executive agrees to provide reasonable assistance to and cooperation with Companyfollowing the Retirement Date in connection with any Company matters for which Executive hadknowledge or responsibility while employed by Company. If Company is involved in any legal actionor investigation after Executive’s Retirement Date relating to events which occurred during Executive’semployment (including without limitation, the Malulani Investments Limited, Starn O’Toole, theBlumenfeld Enterprises Inc. and the Urquhart matters) Executive will cooperate with the Company tothe fullest extent reasonably possible (taking into consideration Executive’s schedule and othercommitments) in the preparation, prosecution, or defense of the Company’s case, including, but notlimited to, required travel, appearances and testimony, the execution of affidavits or documents orproviding information requested by the Company. Company will reimburse Executive for reasonablepre-approved out-of-pocket expenses and reasonable pre-approved compensation (if Executive is nolonger receiving Base Salary or severance payments), based on an hourly rate of $200 per hour, for timerelated to such assistance.7. Release. You hereby acknowledge that the Company’s obligations under Section 4 hereofare in excess of any payments or benefits to which you are entitled under law, contract or otherwise andare contingent upon your timely execution of, and failure to revoke this Agreement, including therelease of claims set forth in this Section 7 (the “Release”). In the event that you do not timely executethe Agreement or if you timely revoke the Agreement as described below, the Company will have noobligations to you under this Agreement. For purposes of this Section 7, “Released Parties” includethe Company and its affiliated companies and their officers, directors, shareholders, employees, agents,representatives, plans, trusts, administrators, fiduciaries, insurance companies, successors, and assigns. 7.1 You, on behalf of yourself and your personal and legal representatives, heirs,executors, successors and assigns, hereby acknowledge full and complete satisfaction of, and fully andforever waive, release, and discharge the Released Parties from any and all claims, causes of action,demands, liabilities, damages, obligations, and debts (collectively referenced as “Claims”), of everykind and nature, whether known or unknown, suspected or unsuspected, that you hold as of the dateyou sign this Agreement, or at any time previously held against any Released Party, arising out of anymatter whatsoever (with the exception of breach of this Agreement). This release specifically includes,but is not limited to, any and all Claims:(a) Arising out of or in any way related to your employment with or separation ofemployment from the Company, or any contract or agreement between you and the Company or thetermination thereof;(b) Arising out of or in any way related to any treatment of Executive by any ofthe Released Parties, which shall include, without limitation, any treatment or decisions with respect tohiring, placement, promotion, discipline, work hours, demotion, transfer, termination, compensation,performance review, or training; (iv) any statements or alleged statements by the Company or any of theReleased Parties regarding Executive, whether oral or in writing; (v) any damages or injury thatExecutive may have suffered, including without limitation, emotional or physical injury, compensatorydamages, or lost wages; or (vi) employment discrimination, which shall include, without limitation, anyindividual or class5 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.claims of discrimination on the basis of age, disability, sex, race, religion, nationalorigin, citizenship status, marital status, sexual preference, or any other basiswhatsoever.(c) Arising under or based on the Equal Pay Act of 1963 (EPA); Title VII of theCivil Rights Act of 1964, as amended (Title VII); Section 1981 of the Civil Rights Act of 1866 (42U.S.C. §1981); the Civil Rights Act of 1991 (42 U.S.C. §1981a); the Americans with Disabilities Actof 1990, as amended (ADA); the Family and Medical Leave Act of 1993, as amended (FMLA); theGenetic Information Nondiscrimination Act of 2008 (GINA); the National Labor Relations Act(NLRA); the Worker Adjustment and Retraining Notification Act of 1988 (WARN); the UniformServices Employment and Reemployment Rights Act (USERRA); the Rehabilitation Act of 1973; theOccupational Safety and Health Act (OSHA); the Employee Retirement Income Security Act of 1974(ERISA) (except claims for vested benefits, if any, to which you are legally entitled); the False ClaimsAct; Title VIII of the Corporate and Criminal Fraud and Accountability Act, as amended (18 U.S.C.§1514A) (Sarbanes-Oxley Act); the federal Whistleblower Protection Act and any state whistleblowerprotection statute(s); the California Fair Employment and Housing Act or any other federal, state or locallaw relating to employment or discrimination in employment or any other fair employment practicesstatute(s) of any state, in all cases arising out of or relating to your employment by Reading orinvestment in Reading or your services as an officer or employee of Reading or its subsidiaries, orotherwise relating to the termination of such employment or services.(d) Arising under or based on any other federal, state, county or local law, statute,ordinance, decision, order, policy or regulation prohibiting employment discrimination; providing for thepayment of wages or benefits (including overtime and workers’ compensation); or otherwise creatingrights or claims for employees, including, but not limited to, any and all claims alleging breach of publicpolicy; the implied obligation of good faith and fair dealing; or any express, implied, oral or writtencontract, handbook, manual, policy statement or employment practice, including, but not limited to, theEmployment Agreement; or alleging misrepresentation; defamation; libel; slander; interference withcontractual relations; intentional or negligent infliction of emotional distress; invasion of privacy; assault;battery; fraud; negligence; harassment; retaliation; or wrongful discharge; and(e) Arising under or based on the Age Discrimination in Employment Act of1967 (“ADEA”), as amended by the Older Workers Benefit Protection Act (“OWBPA”), and alleginga violation thereof by any Released Party, at any time prior to the date you sign this Agreement.7.2 You agree that, except as set forth in this Agreement, you are not entitled to anypayment or benefits from any of the Released Parties, including, but not limited to, any payments orbenefits under any plan, program or agreement with any Released Party, including, but not limited to,the Employment Agreement.7.3 You agree that, this Agreement extinguishes all claims and charges that you couldhave raised against any of the Released Parties, whether known to you or not. You expressly waive allrights and benefits under Section 1542 of the California Civil Code and any6 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.similar law of any state or territory of the United States. Section 1542 of the CaliforniaCivil Code provides as follows:“A general release does not extend to claims which the creditor doesnot know or suspect to exist in his or her favor at the time of executingthe release, which if known by him or her must have materiallyaffected his or her settlement with the debtor.”7.4 You hereby represent that you know of no claim that you have that has not beenreleased by this Section 7. 7.5 Nothing contained in this Release will (i) release any claim that cannot be waivedunder applicable law, (ii) release your rights to any benefits under any employee welfare benefit plan ofthe Company, the 401(k) Plan or with respect to the right to elect health care continuation underCOBRA, (iii) release any entitlement to or with respect to indemnification which you may havepursuant to agreement, the Company’s bylaws, any policy of insurance maintained by the Company orotherwise under law, or (iv) be construed to release your rights under this Agreement or be construed toprohibit or restrict you in any manner from bringing appropriate proceedings to enforce thisAgreement. You acknowledge that your execution of this Agreement terminates any claims youpreviously held to any and all compensation and employee benefits, other than those specificallyidentified in this Agreement.7.6 By signing this Agreement, you represent that you have not commenced or joined inany claim, charge, action or proceeding whatsoever against any of the Released Parties arising out of orrelating to any of the matters set forth in this Section 7. You further represent that you will not beentitled to any personal recovery in any action or proceeding that may be commenced on your behalfarising out of the matters released hereby. As a condition to continued receipt of payments underSection 4 after the Retirement Date, you hereby agree to reaffirm the release terms of this Section 7applicable to the period between execution of this Agreement and the Retirement Date by executing areaffirmation agreement (the “Reaffirmation Agreement”) substantially in the form attached hereto asSchedule A.8. General Provisions. 8.1 Severability. It is the desire and intent of the parties that the provisions of thisAgreement will be enforced to the fullest extent permissible. In the event that any one or more of theprovisions of this Agreement will be held to be invalid, illegal or unenforceable, the validity, legality andenforceability of the remainder of this Agreement will remain valid and enforceable and continue in fullforce and effect to the fullest extent consistent with law. Moreover, if any one or more of the provisionscontained in this Agreement is held to be excessively broad as to duration, scope, activity or subject,such provisions will be construed by limiting and reducing them so as to be enforceable to the maximumextent compatible with applicable law.8.2 No Admission. By entering into this Agreement, the parties do not admit to, andexpressly deny, any wrongdoing.7 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.8.3 Return of Property. You agree to return to the Company, on or prior to theRetirement Date, all files, records, documents, reports, computers and other property of the Company inyour possession or control, including, but not limited to, any documents or other materials containingConfidential Information, and you further agree that you will not keep, transfer or use any copies orexcerpts of the foregoing items. Executive will be permitted to copy and remove any electronic files onthe computer or cell phone that contain his personal information (but not any Confidential Informationor proprietary Company information or data), including contact information.8.4 Notices. Any and all notices, requests, demands and other communications providedfor by this Agreement will be in writing and will be effective when delivered in person, consigned to areputable national or international courier service (including Federal Express), and addressed to you atyour last known address on the books of the Company or, in the case of the Company, at theCompany’s principal place of business, attention of the President of the Company, or to such otheraddress as either party may specify by notice to the other actually received.8.5 Successors and Assigns. This Agreement is personal to you and, without the priorwritten consent of the Company, will not be assignable by you otherwise than by will or the laws ofdescent and distribution. This Agreement will inure to the benefit of and be enforceable by your legalrepresentatives. This Agreement will inure to the benefit of and be binding upon the Company and itssuccessors and assigns.8.6 Governing Law; Captions; Amendment. This Agreement will be governed by,and construed in accordance with, the laws of the State of California, without reference to principles ofconflict of laws. The captions of this Agreement are not part of the provisions hereof and will have noforce or effect. This Agreement may not be amended or modified except by a written agreementexecuted by the parties hereto or their respective successors and legal representatives.8.7 Code Section 409A Compliance. The Company and you each hereby affirm that itis their mutual view that the provision of payments and benefits described or referenced herein are eitherexempt from or intended to be in compliance with the requirements of Section 409A of the Code andthe Treasury regulations relating thereto (“Section 409A”) and that each party’s tax reporting will becompleted in a manner consistent with such view. The Company and you each agree that upon theRetirement Date, you will experience a “separation from service” for purposes of Section 409A. Anypayments that qualify for the “short-term deferral” exception or another exception under Section 409Awill be paid under the applicable exception. For purposes of the limitations on nonqualified deferredcompensation under Section 409A of the Code, each payment of compensation under this Agreementwill be treated as a separate payment of compensation. Notwithstanding anything contained herein tothe contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties underSection 409A, fee amounts in Section 4.1 that constitute nonqualified deferred compensation and wouldotherwise be payable pursuant to this Agreement on account of separation from service during the six-month period immediately following the Retirement Date will instead be paid on the first business dayafter the date that is six months following the Retirement Date (or death, if earlier). Notwithstandinganything to the contrary in this Agreement, all reimbursements and in-8 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.kind benefits provided under this Agreement will be made or provided in accordancewith the requirements of Section 409A of the Code, including, where applicable, therequirement that (x) the amount of expenses eligible for reimbursement, or in kindbenefits provided, during a calendar year may not affect the expenses eligible forreimbursement, or in kind benefits to be provided, in any other calendar year; (y) thereimbursement of an eligible expense will be made no later than the last day of thecalendar year following the year in which the expense is incurred; and (z) the right toreimbursement or in kind benefits is not subject to liquidation or exchange for anotherbenefit. Neither the Company nor its affiliates will be liable in any manner for anyfederal, state or local income or excise taxes (including but not limited to any taxes underSections 409A of the Code), or penalties or interest with respect thereto, as a result of thepayment of any compensation or benefits hereunder or the inclusion of any suchcompensation or benefits or the value thereof in your income. You acknowledge andagree that the Company will not be responsible for any additional taxes or penaltiesresulting from the application of Section 409A.8.8 Withholding. Notwithstanding any other provision of this Agreement, the Companymay withhold from amounts payable under this Agreement all amounts that are required or authorized tobe withheld, including, but not limited to, federal, state, local and foreign taxes to be withheld byapplicable laws or regulations.8.9 Preparation of Agreement. This Agreement will be interpreted in accordance withthe plain meaning of its terms and not strictly for or against any of the parties hereto. Regardless ofwhich party initially drafted this Agreement, it will not be construed against any one party, and will beconstrued and enforced as a mutually-prepared document.8.10 Entire Agreement. This Agreement constitutes the entire agreement between youand the Company with respect to the subjects addressed herein, and together with the RestrictiveCovenants that survive, and the Reaffirmation Agreement supersede all prior agreements,understandings and representations, written or oral, with respect to those subjects, including, but notlimited to the, Employment Agreement. Without limiting the generality of the foregoing, youacknowledge that the Employment Agreement will be terminated upon the effectiveness of thisAgreement.8.11 Legal Fees. The Company will reimburse you for the legal fees, incurred by you inconnection with the negotiation and execution of this Agreement, up to a maximum of $5,000. Suchreimbursement will be made by the Company within twenty business days of your submission to theCompany of an invoice or invoices from counsel, which submission will be made no later than June 15,2014.8.12 Counterparts. This Agreement may be executed in counterparts, each of whichwill be deemed an original, and which together will be deemed to be one and the same instrument.9. Consultation with Attorney; Voluntary Agreement. You understand and agree that youhave the right and have been given the opportunity to review this Agreement and, specifically, theRelease set forth in Section 7 above, with an attorney of your choice. You also understand and agreethat you are under no obligation to consent to the Release. You9 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.acknowledge that you have read this Agreement and the Release and understand their terms andthat you enter into this Agreement freely, voluntarily, and without coercion. You acknowledgethat you have been given at least twenty-one (21) days during which to review and consider theprovisions of this Agreement and, specifically, the Release set forth in Section 7 above, althoughyou may sign and return it sooner if you so desire. You further acknowledge that you have beenadvised by the Company that you have the right to revoke this Agreement for a period of seven(7) days after signing it (the “Revocation Period”). You acknowledge and agree that, if youwish to revoke this Agreement, you must do so in a writing, signed by you and received by theCompany to the attention of James J. Cotter, Jr., President, no later than 5:00 p.m. Pacific Timeon the seventh (7th) day of the Revocation Period. If no such revocation occurs, the GeneralRelease and this Agreement will become effective on the eighth (8th) day following yourexecution of this Agreement. You further acknowledge and agree that, in the event that yourevoke this Agreement, it will have no force or effect. 10. Other Representations. You agree to execute such documents and take such actions asmay be necessary or desirable to further effectuate the foregoing. Executive, by his initials set forthbelow, acknowledges and agrees that he was given a copy of this Agreement on the 20th day of May,2014, to review and consider execution of the terms and conditions contained herein.__/S/ AJM___________Executive’s Initials[Signature page follows]10 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.READ CAREFULLY BEFORE SIGNINGTHIS SEPARATION AND RELEASE AGREEMENT INCLUDES A RELEASE OF ALLKNOWN AND UNKNOWN CLAIMS AND A WAIVER OF YOUR RIGHTS UNDER THEAGE DISCRIMINATION IN EMPLOYMENT ACT AS WELL AS OTHER FEDERAL,STATE AND LOCAL LAWS PROTECTING EMPLOYEE RIGHTS. IF YOU SIGN THISAGREEMENT, YOU ARE WAIVING ALL OF YOUR RIGHTS TO ASSERT ANY CLAIMSUNDER THESE LAWS. PLEASE READ THIS AGREEMENT CAREFULLY AND SEEKTHE ADVICE OF AN ATTORNEY REGARDING THE LEGAL EFFECT OF SIGNINGTHIS AGREEMENT.IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day andyear written opposite their signature.“Executive”Date: May 30, 2014___/s/ AndrzejMatyczynski________Andrzej Matyczynski, an individual“Company”Reading International, Inc.Date: May 30, 2014By:_/s/ James J.Cotter____________James J. Cotter, President 11Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Andrzej MatyczynskiEXHIBIT 10.20Re: Amendment of Separation and Release AgreementDear Mr. Matyczynski,Reference is made to that certain Separation and Release Agreement dated as of May 30, 2014 (the"Separation Agreement"). This letter is to confirm the following:1. The last sentence of Section 2 is hereby deleted in its entirety and replaced with the following:"Executive's "Retirement Date" will be the last day Services are provided during the periodstarting on the date of this Agreement and ending on December 1, 2014, or such earlier termination date."2. The third sentence of Section 4.1(d) is modified to delete the reference to $50,000 and to replace it with thefigure $68,750.3.Except as specifically provided above, the Separation Agreement remains in full force and effectand has not been modified or amended in any respect, and none of the respective rights orobligations of the parties thereunder have been waived or released.If this correctly states our agreement, please sign and return to us. Thank you for your ongoing time and assistance.Very truly yours,/s/ James J. CotterJames J. Cotter, PresidentACCEPTED AND AGREED as of this 6th day of August, 2014/s/ Andrzej MatyczynskiAndrzej MatyczynskiSource: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 10.21SECOND AMENDMENTTOSEPARATION AND RELEASE AGREEMENTThis second amendment (the “Second Amendment”) is entered into as of this 26th day of November, 2014, by and betweenReading International, Inc. (the “Company”) and Andrzej Matyczynski (“Executive”) and amends that certain Separationand Release Agreement dated as of May 30, 2014 (the “Initial SRA”), as previously amended by that certain firstamendment of Separation and Release Agreement dated effective August 6, 2014 (the “First Amendment” andcollectively with the Initial SRA, the “First Amended SRA”).Any defined terms not specifically defined in this Second Amendment have the same meanings as set forth in the FirstAmended SRA. Except as specifically amended by this Second Amendment, the First Amended SRA remains in fullforce and effect and has not been modified or amended in any respect, and none of the respective rights or obligations ofthe parties thereunder have been waived or released. 1. Retirement Date: Section 1 of the First Amendment is hereby deleted in its entirety and replaced with thefollowing: “Executive’s “Retirement Date” will be the last day Services are provided during the period startingon the date of this Agreement and ending on June 1, 2015, or such earlier termination date.”2.Deferred Compensation: Section 2 of the First Amendment is hereby deleted in its entirety and replaced with thefollowing: “The third sentence of Section 4.1(d) is amended (i) to replace the amount of $50,000 and theimmediately following parenthetical with the amount of $75,000, and (ii) to add the following to the endthereof, “and will authorize an allocation under the Deferred Compensation Plan for the 2015 plan year and willmake a corresponding contribution to the grantor trust in the amount of $31,250 (representing a pro-rata mountof the annual allocation and contribution for 2015 through the Retirement Date).” 3.Notwithstanding any other provision of the First Amended SRA, it is agreed that Executive may do a majority ofhis work from his home in Atlanta, Georgia. Executive will only be required to be at the Company’s LosAngeles offices for a total of ten (10) weeks (Monday through Thursday). It is anticipated that the parties willwork together to schedule such time in full week blocks, one week in one month, two weeks in the next month,one week in the next month, etc. The Company will promptly reimburse Executive for all reasonable travelexpenses (against reasonable documentation), including airfare, hotel and car rental (such travel expenses not toexceed $1,200.00 per weekly trip).In Witness Whereof this Second Amendment is executed and delivered effective of the date first set forth above.Reading International, Inc.By:_/s/ James J. Cotter_______James J. Cotter, Jr.Chief Executive OfficerExecutive:__/s/ Andrzej Matyczynski____Andrzej MatyczynskiSource: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 10.22THIRD AMENDMENTTOSEPARATION AND RELEASE AGREEMENTThis Third Amendment to Separation Agreement (this “Third Amendment”) is entered into effective as of May 1, 2015, by and between Reading International, Inc. (the “Company”) and Andrzej Matyczynski (“Executive”) and amends thatcertain Separation and Release Agreement dated as of May 30, 2014 (the “Initial SRA”), as previously amended by thatcertain First Amendment of Separation and Release Agreement dated effective August 6, 2014 (the “First Amendment”)and that certain Second Amendment to Separation and Release Agreement dated effective November 26, 2014(collectively with the Initial SRA and the First Amendment, the “Amended SRA”).Any defined terms not specifically defined in this Third Amendment have the same meanings as set forth in the AmendedSRA. Except as specifically amended by this Third Amendment, the Amended SRA remains in full force and effect andhas not been modified or amended in any respect, its terms and conditions are incorporated herein by reference, and noneof the respective rights or obligations of the parties thereunder has been waived or released. 1.Retirement Date: Section 1 of the First Amendment is hereby deleted in its entirety and replaced with thefollowing: “Executive’s “Retirement Date” will be the last day Services are provided during the period startingon the date of this Agreement and ending on April 15, 2016, or such earlier termination date (such period, the“Term”). After May 11, 2015, on which date Executive shall cease to serve as the Company’s Chief FinancialOfficer and Treasurer, Executive shall serve as a financial advisor to the Company principally to assist in thetransition of the Company to its new chief financial officer and to provide such additional financial advisoryservices as the Company may from time to time request. It is understood that these services will be provided as afull time employee of the Company; such services being referred as the “Services” for purposes of this ThirdAmendment and superseding the prior definition of “Services” as used in the Amended SRA2.Deferred Compensation: Section 2 of the Second Amendment is hereby deleted in its entirety and replaced withthe following: “The third sentence of Section 4.1(d) is amended to change the reference to the “2014 plan year”to the “2015 plan year,” to change the reference to “$50,000” to 21,875,” and thereafter to change the referenceto “2014” to “2015.” In addition, it is agreed that the Company will make a 2015 contribution to Executive’sDeferred Compensation plan, in the amount of $150,000 ($75,000 more than currently provided for in theExecutive’s Deferred Compensation Plan). 3.Venue: Notwithstanding any other provision of the Amended SRA, it is agreed that during the Term, Executivemay do a majority of his work from his home in Atlanta, Georgia. Executive will only be required to be at theCompany’s Los Angeles offices for a total of seventeen (17) weeks (Monday through Thursday) between the datehereof and the Retirement Date. It is anticipated that the parties will work together to schedule such time in fullweek blocks, one week in one month, two weeks in the next month, one week in the next month, etc. TheCompany will promptly reimburse Executive for all reasonable travel expenses (against reasonabledocumentation), including airfare, hotel and car rental (such travel expenses not to exceed $1,500.00 per weeklytrip).4.Salary: Section 4.1 of the Original SRA is hereby amended to provide that, effective January 1, 2015 and for thebalance of the Term, Executive shall be paid as compensation for the performance of his duties Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.hereunder and under the Amended SRA, at a rate of $312,000 per annum, in accordance with the Company’sstandard payment practices, prorated for the period January 1, 2016 through and including April 15, 2016.5.Stock Option Vesting: Of the previously granted unvested Class A Stock options, 12,500 shall continue to veston August 22, 2015. The balance of Executive’s Class A Stock options previously granted, totaling 12,500,shall vest on April 15, 2016, rather than August 22, 2016. As to any Class A Stock options vested as of theRetirement Date, the Executive shall have eighteen (18) months from his Retirement Date to exercise same,rather than three (3) months.6.Release: Executive hereby affirms in all respects his Release of the Released Parties set forth in the Initial SRAas though made on the date hereof, as well as all other terms and conditions of the Amended SRA, including,without limitation, Sections 3, 5 and 6.In Witness Whereof this Third Amendment is executed and delivered effective of the date first set forth above.Reading International, Inc.By:__/s/ James J. Cotter________James J. Cotter, Jr.Chief Executive OfficerExecutive:__/s/ Andrzej Matyczynski______Andrzej Matycazynski2 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 10.23Amended and RestatedCompensatory Arrangements for Executive and Management EmployeesExecutive CompensationFrom late January to late February 2016, the Compensation and Stock Options Committee (“Compensation Committee”)of Reading International, Inc., (“Reading,” “Registrant” or the “Company”) met five separate times with Willis TowersWatson, an international compensation consulting firm, the Chief Executive Officer, and legal counsel. As part of itsengagement Willis Towers Watson reviewed the Company’s compensation paid to executive and management officers byposition, in light of each person’s duties and responsibilities. Willis Towers Watson then compared the top executive andmanagement positions at the Company to (i) executive compensation paid by a peer group and (ii) two surveys, the 2015Towers Watson Data Services Top Management Survey Report and the 2015 Mercer MBD Executive CompensationSurvey, in each case, identified by office position and duties performed by the officer. The peer group utilized by WillisTowers Watson included the following companies: Arcadia Realty Trust Inland Real Estate Corp.Associated Estates Realty Corp. Kite Realty Group TrustCarmike Cinemas Inc.Marcus Corporation.Cedar Realty Trust Inc. Pennsylvania Real Estate Investment Trust Charter Hall GroupRamco-Gershenson Properties TrustEPR Properties Urstadt Biddle Properties Inc. Vicinity CentresVillage Roadshow Ltd.IMAX Corporation Willis Towers Watson selected the above peer group because (i) the companies included US and Australian basedcompanies reflecting the Company’s geographic operations and/or (ii) the companies were comparable to the Companybased on revenue. The executive pay assessment prepared by Willis Towers Watson measured the executive and management compensationpaid by the Company against compensation paid by the peer group companies and the companies listed in the twosurveys based on the 25th, 50th and 75th percentile of such peer group and surveyed companies. The 50th percentile was themedian compensation paid by such peer group and surveyed companies to executives performing similar responsibilitiesand duties. In its report to the Compensation Committee, Willis Towers Watson noted that for Company executive officers:·Base salaries in the aggregate were generally in the competitive zone of the market (1% below the market 50thpercentile), with certain notable exceptions on a position by position review;·Total cash compensation (base salary and cash bonus) in the aggregate was 26% below the 50th percentile; and·Total compensation (base salary, cash bonus and long term incentive awards) in the aggregate was 40% belowthe 50th percentile.The Compensation Committee, recommended, and the Board subsequently adopted, a compensation philosophy for theCompany's management team members to:·Attract and retain talented and dedicated management team members;·Provide overall compensation that is competitive in its industry;·Correlate annual cash incentives to the achievement of its business and financial objectives; and·Provide management team members with appropriate long-term incentives aligned with stockholder value. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.As part of the compensation philosophy the Company’s compensation focus will be to (1) drive the Company’s strategicplan on growth, (2) align officer and management performance with the interests of the Company’s stockholders, and (3)encourage retention of officers and management team members. In furtherance of the compensation policy and as a result of the extensive deliberations, including consideration of theWillis Towers Watson recommendations, the Compensation Committee adopted an executive and management officercompensation structure for 2016 consisting of:·A base salary comparable with job description and industry standard;·A short term incentive or cash bonus plan based on a combination of factors including individual performanceagainst corporate goals as well as overall corporate and division performance, with a target bonus to bedenominated as a percent of base salary with specific goals weightings and pay-out ranges); or·A long term incentive or equity awards in line with job description, performance, and industry standards.The Compensation Committee's intention is that the compensation structure approved for 2016 will remain in placeindefinitely. However, it will review performance and results after the first year and thereafter and evaluate from time totime whether enhancements, changes or other compensation structures are in the Company's and it stockholders bestinterests.Reflecting the new approach, the Compensation Committee established (i) annual base salaries at levels that it believed(based heavily on the data provided by Willis Towers Watson) are generally competitive with executives in our peergroup and in other comparable publicly-held companies as described in the executive pay assessment prepared by WillisTowers Watson, and (ii) short term incentives in the form of discretionary annual cash bonuses based on the achievementof identified goals and benchmarks. Long-term incentives in the form of employee stock options and restricted stockunits will be used as a retention tool and as a means to further align an executive’s long-term interests with those of theCompany’s stockholders, with the ultimate objective of affording our executives an appropriate incentive to help driveincreases in stockholder value.The Compensation Committee will evaluate both executive performance and compensation to maintain the Company’sability to attract and retain highly-qualified executives in key positions and to assure that compensation provided toexecutives remains competitive when compared to the compensation paid to similarly situated executives of companieswith whom we compete for executive talent or that we consider comparable to our company.Role of Chief Executive Officer in Compensation DecisionsIn connection with the implementation of the new compensation structure, the Compensation Committee conducted thethorough review of executive compensation discussed above. The Compensation Committee engaged in extensivediscussions with and considered with great weight the recommendations of the Chief Executive Officer as tocompensation for executive and management team members other than for the Chief Executive Officer.In connection with consideration of 2015 performance bonuses for members of management, the Chief Executive Officerprepared and submitted recommendations for each of the executive and management team members, other than herown. In considering these recommendations, the Compensation Committee had the benefit of its extensive deliberationsas well as the data provided by Willis Towers Watson. In executive session, the Compensation Committee approved a2015 performance bonus for the Chief Executive Officer. At the Compensation Committee's February 17, 2016 meeting,it approved recommendations to the Board of Directors (the “Board”) for its February 18, 2016 meeting, at which time theBoard approved the same. The Board approval covered certain officers including the five officers set forth below. Inaddition, our Chief Executive Officer discussed recommendations for other management team members but theCompensation Committee and Board agreed that such positions were within the scope of the Chief Executive Officer'sauthority and did not require the Compensation Committee or Board approval.The Compensation Committee expects to perform an annual review of executive compensation, generally in the firstquarter of the year following the year in review, with a presentation by the Chief Executive Officer regarding eachelement of the executive compensation arrangements. At the Compensation Committee’s direction, the Chief Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Executive Officer prepared an executive compensation review for each executive officer (other than the Chief ExecutiveOfficer), as well as the full executive team, which included recommendations for:·2016 Base Salary·A proposed year-end short-term incentive in the form of a target cash bonus based on the achievement of certainobjectives; and·A long-term incentive in the form of stock options and restricted stock units for the year under review.As part of the compensation review, the Chief Executive Officer may also recommend other changes to an executive’scompensation arrangements such as a change in the executive’s responsibilities or a change in title. The CompensationCommittee will evaluate the Chief Executive Officer’s recommendations and, in its discretion, may accept or reject therecommendations, subject to the terms of any written employment agreements.The Compensation Committee met in executive session without our Chief Executive Officer to consider the ChiefExecutive Officer’s compensation, including base salary, cash bonus and equity award, if any. Prior to such executivesessions, the Compensation Committee interviewed the Chief Executive Officer to obtain a better understanding offactors contributing to the Chief Executive Officer's compensation. With the exception of these executive sessions of theCompensation Committee, as a rule, our Chief Executive Officer participated in all deliberations of the CompensationCommittee relating to executive compensation. However, the Compensation Committee will ask the Chief ExecutiveOfficer to be excused for certain deliberations with respect to the compensation recommended for Margaret Cotter, thesister of the Chief Executive Officer.In conjunction with the year-end annual compensation review, or as soon as practicable after the year-end, our ChiefExecutive Officer will recommend to the Compensation Committee the Company objectives and other criteria to beutilized for purposes of determining cash bonuses for certain senior executive officers. The Compensation Committee, inits discretion, may revise the Chief Executive Officer’s recommendations. At the end of the year, the CompensationCommittee, in consultation with the Chief Executive Officer, will review each performance goal and determine the extentto which the officer achieved such goals. In establishing performance goals, the Compensation Committee expects toconsider whether the goals could possibly result in an incentive for any executives to take unwarranted risks in ourCompany’s business and intend to seek to avoid creating any such incentives.Base SalariesThe Compensation Committee reviewed the executive pay assessment prepared by Willis Towers Watson and otherfactors and engaged in extensive deliberation and then recommended the following 2016 base salaries (the 2015 basesalaries are shown for comparison purposes) for the following officers; the Board approved the recommendations of theCompensation Committee on March 10, 2016: the President and Chief Executive Officer, Chief Financial Officer and thepersons identified and Named Executive Officers in the Company’s proxy statement dated November 10, 2015 other thanour prior Chief Executive Officers James J. Cotter, Sr. and James J. Cotter, Jr:Name Title 2016 BaseSalary (4) 2015 Base Salary(4)Ellen Cotter (1) President and Chief ExecutiveOfficer $450,000 $402,000 Devasis Ghose (2) Chief Financial Officer 400,000 400,000 Andrzej Matyczynski(3) EVP Global Operations 336,000 312,000 Robert F. Smerling President, US Cinemas 375,000 350,000 Wayne Smith Managing Director, ANZ A$370,000 A$365,360(1)Ellen M. Cotter was appointed Interim President on June 12, 2015 and President and Chief Executive Officer onJanuary 8, 2016. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(2)Devasis Ghose was appointed Chief Financial Officer on May 11, 2015. Mr. Ghose is the only executive officerthat is a party to an employment agreement.(3)Andrzej Matyczynski was the Company’s Chief Financial Officer until May 11, 2015 and thereafter he acted ascorporate advisor to the Company. He was appointed EVP-Global Operations on March 10, 2016.(4)All dollars are in US dollars except the salary for Wayne Smith is reported in Australian dollars.Short Term IncentivesThe Short Term Incentives authorized by the Compensation Committee and the Board provides the Company’sexecutive officers and other management team members, who are selected to participate, with an opportunity to earn anannual cash bonus based upon the achievement of certain Company financial goals, division goals and individual goals,established by the Company’s Chief Executive Officer and approved by the Compensation Committee and the Board ofDirectors (in future years, under the Compensation Committee Charter approved by the Board on March 10, 2016, theCompensation Committee will have full authority to approve these matters). Specifically, a participant in the short termincentive plan will be advised of his or her annual potential target bonus expressed as a percentage of the participant’sbase salary and by dollar amount. The participant will be eligible for a short term incentive bonus once the participantachieves goals identified at the beginning of the year for a threshold target, the potential target or potential maximumtarget bonus opportunity. The bonus will vary depending upon the achievements made by the individual participant, thecorporate division and the Company. Corporate goals will include levels of earnings before interest, depreciation, taxesand amortization (“non-GAAP Operating Income”) and property development milestones. Division goals will includelevels of division cash flow and division milestones and individual goals will include unique performance goals specificto the individual’s position in the Company. Each of the corporate, division and individual goals carries a differentpercentage weight in determining the officer’s or other team member’s bonus for the year.For 2016, executive officers will have an annual bonus opportunity expressed and determined as a percent of their basesalary. This approach also was a recommendation of the Willis Towers Watson report to the Compensation Committeeand provided points of reference for our Compensation Committee to compare short-term incentive opportunities for ourexecutive and management team to those in peer and competitor companies.Ms. Ellen Cotter, President and Chief Executive Officer, has a potential target bonus opportunity of 95% of Base Salary,or $427,500 at target based upon Ms. Cotter’s achievement of her performance goals and the Company’s achievement ofcorporate goals as discussed above. Of that potential target bonus opportunity, a threshold bonus of $213,750 may beachieved based upon Ms. Cotter’s achievement of certain of her performance goals and the Company’s achievement ofcertain of the corporate goals as discussed above, and a potential maximum target of $641,250 is based on achievingperformance goals approved by the Chairman of the Compensation Committee. Ms. Cotter’s aggregate annual bonusopportunity can range from $0 to $641,250. Mr. Devasis Ghose, Chief Financial Officer, has a potential target bonusopportunity of 50% of Base Salary, or $200,000 at target, which is based on achievement of his performance goals and theCompany’s achievement of corporate goals, as discussed above. Mr. Ghose’s aggregate annual bonus opportunity canrange from $0 to $300,000 (the maximum potential target if additional performance goals are met by Mr. Ghose). Mr.Andrzej Matyczynski, EVP - Global Operations, has a target bonus opportunity of 50% of Base Salary, or $168,000 attarget, which is based on achievement of his performance goals, the Company’s achievement of corporate goals andcertain divisional goals. Mr. Matyczynski’s aggregate annual bonus opportunity can range from $0 to $252,000 (themaximum potential target if additional performance goals are met by Mr. Matyczynski). Mr. Robert Smerling, President,US Cinemas, has a target bonus opportunity of 30% of base pay, or $112,500 at target, which is based on achievement ofhis performance goals, the Company’s achievement of corporate goals and certain divisional goals. Mr. Smerling’saggregate annual bonus opportunity can range from $0 to $168,750 (the maximum potential target if additionalperformance goals are met by Mr. Smerling). Mr. Wayne Smith, Managing Director, ANZ, has a target bonus opportunityof 40% of Base Salary, or A$148,000 at target, which is based on achievement of his performance goals, the Company’sachievement of corporate goals and certain divisional goals. Mr. Smith’s aggregate annual bonus opportunity can rangefrom A$0 to A$222,000 (the maximum potential target if additional performance goals are met by Mr. Smith). Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The positions of other management team members have target bonus opportunities ranging from 20% to 30% of BaseSalary based on achievement of certain goals. The highest level of achievement a participant may receive is the maximumpotential target which is set at 150% of the participant’s target bonus amount.Long-Term IncentivesLong-Term incentives will utilize the equity-based plan under the Company's 2010 Incentive Stock Plan, as amended (the“2010 Plan”). For 2016, executive and management team participants will receive awards in the following forms: 50%time-based restricted stock units and 50% non-statutory stock options. The grants of restricted stock units and optionswill vest ratably over a four (4) year period with 1/4th vesting on each anniversary date of the grant date.On March 10, 2016 the following grants were made:Name Title Dollar Amount ofRestricted StockUnits (1) Dollar Amount of Non-Statutory Stock Options(1)Ellen Cotter President and ChiefExecutive Officer $150,000 $150,000 Devasis Ghose (2) Chief Financial Officer 0 0 Andrzej Matyczynski EVP Global Operations 37,500 37,500 Robert F. Smerling President, US Cinemas 50,000 50,000 Wayne Smith Managing Director,ANZ 27,000 27,000 (1) The number of shares of stock to be issued will be calculated using the Black Scholes pricing model as of the date ofgrant of the award.(2) Mr. Devasis Ghose was awarded 100,000 non-statutory stock options vesting over a 4 year period on Mr. Ghose’scommencement of employment on May 11, 2015.All long-term incentive awards will be subject to other terms and conditions set forth in the 2010 Plan and award grant.Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.24TERMINATION AGREEMENT AND RELEASEThis Termination Agreement and Release (this "Agreement") is made as of March 10, 2016, by and between LibertyTheaters, LLC ("LTLLC") and OBI, LLC ("OBI"). Capitalized terms not defined in this Agreement shall have themeaning ascribed to such terms in the Theater Management Agreement (as defined herein).WHEREA S, reference is made to that certain Theater Management Agreement (the "Theater Management Agreement")dated effective as of January 1, 2002, by and between Liberty Theaters, Inc. ("LTI") and OBI.WHEREAS, LTI was subsequently merged into LTLLC.WHEREA S, pursuant to the Theater Management Agreement, OBI provides Management Services to theaters ownedby LTLLC and its Operating Subsidiaries.WHEREAS, LTLLC and OBI desire to terminate the Theater Management Agreement as of March 10, 2016("Termination Date").WHEREAS, LTLLC acknowledges and agrees that OBI has fully and satisfactorily performed its obligations underand pursuant to the Theater Management Agreement.WHEREAS, OBI acknowledges and agrees that other than the Final Payment (defined hereafter) LTLLC has fully andsatisfactorily performed its obligations under and pursuant to the Theater Management Agreement.NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein,The parties hereto agree as follows:1. Effective as of the Termination Date, the Theater Management Agreement is hereby terminated. On and after theTermination Date, LTLLC shall have no further obligations to OBI under the Theater Management Agreement otherthan its indemnity obligations set forth in Section 5.1 of the Theater Management Agreement, and OBI shall have nofurther obligations to LTLLC under the Theater Management Agreement. Any and all amounts owed by LTLLC toOBI for Management Services performed by OBI on or prior to the Termination Date, including, but not limited to, compensation payable to OBI for 20 15 and incentive compensation for the period between January 1 , 2016 and theTermination Date (collectively, the "Final Payment") under the Theater Management Agreement shall be paid byLTLLC within 15 days of the parties ' mutual agreement (acting in good faith) as to the amount of such Final Paymentand, in the case of reimbursement of expenses, within 30 days of presentation of appropriate substantiatingdocumentation .2. OBI waives its right to receive incentive fees pursuant to Section 4.1(d) of the Theater Management Agreementaccrued after the Termination Date.3. Other than payment of the Final Payment by LTLLC to OBI and except as provided in Section 1, above, with respectto the survival of certain indemnity obligations, OBI does hereby irrevocably, unconditionally, voluntarily,knowingly , fully, finally and completely forever releases and discharges LTLLC and its parent s, subsidiaries,divisions, affiliates (that currently exist or may exist in the future), successors, assigns and predecessors and theirpresent and former owners, stockholders, member s, managers,directors, officers, employees, agents, attorneys, representatives, successors, beneficiaries, heirs and assigns,individually and collectively (the "LTLLC Released Parties") from, against and with respect to any and all actions,accounts, agreements, causes of action, complaints, charges, claims, covenants, contracts, costs, damages, demands,debts, defenses, duties, expenses, executions, fees, injuries, interest, judgments, liabilities, losses, obligations,penalties, promises, reimbursements , remedies, suits, sums of money, and torts of whatever kind or character, whetherin law, equity or otherwise, direct or indirect, fixed or contingent , foreseeable or unforeseeable , liquidated orunliquidated, known or unknown, matured or unmatured, absolute or contingent , determined or determinable(excluding, however, for a claim found by a court of competent jurisdiction that any LTLLC Released Party hascommitted fraud or an intentional act causing material financial damage to OBI), that OBI or anyone claiming throughor under OBI, ever had, now has, or may hereafter have or acquire, against such LTLLC Released Party that arises outof or in any way relate, directly or indirectly , to any matter, cause or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.thing, act or failure to act whatsoever occurring at any time on or prior to the date of this Agreement that relates to theTheater Management Agreement. OBI irrevocably covenants that it will not, directly or indirectly, sue, commence anyproceeding against, or make any demand upon any LTLLC Released Party in respect of any of the matters released anddischarged pursuant to this Section 3. As a matter of clarification, this release does not release any claims that MargaretCotter, the sole member of LTLLC, may have against LTLLC, or any of its affiliates, in her individual capacity as anexecutive or manager or LTLLC and/or in her capacity as an officer, director, and/or stockholder of ReadingInternational, Inc.4. LTLLC does hereby irrevocably , unconditionally, voluntarily, knowingly, fully, finally and completely foreverreleases and discharges OBI and its parents, subsidiaries, divisions, affiliates (that currently exist or may exist in thefuture), successors, assigns and predecessors and their present and former owners, stockholders, members, managers , directors, officers, employees, agents, attorneys, representatives, successors, beneficiaries, heirs and assigns, individually and collectively (the "OBI Released Parties") from, against and with respect to any and all actions, accounts, agreements, causes of action, complaints, charges, claims, covenants, contracts, costs, damages, demands, debts, defenses, duties, expenses, executions, fees, injuries, interest, judgments, liabilities, losses, obligations,penalties, promises , reimbursements , remedies , suits, sums of money, and torts of whatever kind or character, whether in law, equity or otherwise , direct or indirect , fixed or contingent , foreseeable or unforeseeable , liquidatedor unliquidated, known or unknown , matured or unmatured, absolute or contingent , determined or determinable(excluding, however , for a claim found by a court of competent jurisdiction that any OBI Released Party hascommitted fraud or an intentional act causing material financial damage to LTLLC), that LTLLC or anyone claimingthrough or under LTLLC, ever had, now has, or may hereafter have or acquire, against such OBI Released Party thatarises out of or in any way relate, directly or indirectly , to any matter, cause or thing, act or failure to act whatsoeveroccurring at any time on or prior to the date of this Agreement that relates to the Theater Management Agreement.LTLLC irrevocably covenants that it will not , directly or indirectly, sue, commence any proceeding against , or makeany demand upon any OBI Released Party in respect of any of the matters released and discharged pursuant to thisSection 4.5. OBI and LTLLC acknowledge and agree that the Theater Management Agreement constitutes the entireunderstanding between OBI and LTLLC with respect to the subject matter thereof, that OBI and LTLLC haveperformed all of their respective obligations to each other required under the Theater Management Agreement, andLTLLC has made all payments required under the Theater Management Agreement other than the Final Payment.6. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada withoutgiving effect to the conflict of laws principles thereof.7. This Agreement may be executed in multiple counterpart s, each of which shall be deemed anoriginal document, but all of which together shall constitute on and the same instrument.IN WITNESS WHEREOF, the parties execute this Termination Agreement as of the date first set forth above.OBI M ANAGEMENT, LLCLIBERTY THEATERS, LLCSource: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.567 Collins Street Melbourne VIC 3000GPO Box 9925 Melbourne VIC 3001Tel +61 3 9672 3000Fax +61 3 9672 3010​www.corrs.com.auSydney Melbourne BrisbanePerth National Australia Bank LimitedReading Entertainment Australia Pty LtdEach GuarantorRestatement Deed(Corporate Markets Loan & Bank Guarantee Facility Agreement) Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Contents1Definitions12Consideration13Conditions precedent24Variation of Facility Agreement25Acknowledgments26Warranties and representations26.1General26.2Survival of warranties37General37.1Construction37.2Costs and Expenses47.3Counterparts47.4Entire understanding47.5Governing law and jurisdiction5Schedule 1 –Guarantors6Execution8Annexure A - Restated Document17 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth Date: Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.15th December 2015 PartiesNational Australia Bank Limited ABN 12 004 044 937 of Pier 3 Level 4, 800 Bourke Street,Docklands, Victoria 3008 (Bank)Reading Entertainment Australia Pty Ltd ACN 070 893 908 of 98 York Street, SouthMelbourne, Victoria 3205 (Borrower)Each person listed in schedule 1 (each a Guarantor)Agreed terms1DefinitionsIn this document words and expressions which are defined or given a specificmeaning in the Facility Agreement but which are not defined or given a specificmeaning in this document have the same meaning as in the Facility Agreement.Otherwise, terms have the following meanings. Facility AgreementThe Facility Agreement dated 24 June 2011 between the Bank, the Borrower and theGuarantors, as amended, varied or amended and restated from time to time, including on14 June 2013 and 27 June 2014. PPSAPersonal Property Securities Act (2009) (Cth). Restated Facility AgreementThe Facility Agreement as varied and restated by this document. Variation DateThe date on which Bank notifies the Borrower that theconditions precedent set out in clause 3 are satisfied.2ConsiderationEach party has entered into this document in consideration of each other partyagreeing to make the acknowledgements contained in this document and to amendthe Facility Agreement in accordance with this document and acknowledges receiptof that consideration. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth3Conditions precedentThe amendments to the Facility Agreement are subject to the conditions precedentthat:(a)the Bank has received in form and substance satisfactory to the Bank:(i)an original copy of this document, duly executed by the Borrowerand each Guarantor;(ii)a non-refundable restructure fee of $30,000; and(iii)anything which the Bank has reasonably requested that aparty provide to it in relation to the Facility Agreement; and(b)no Event of Default or Potential Event of Default subsists.4Variation of Facility Agreement(a)On and from the Variation Date the Facility Agreement is variedand restated in the form of annexure A.(b)The Borrower and each Guarantor agree to be bound by theRestated Facility Agreement on and from the Variation Date.5AcknowledgmentsThe Borrower and each Guarantor:(a)acknowledge that nothing in this document or any related financingchange statement under the PPS Act releases, terminates or otherwiseaffects any liabilities of the Borrower to the Bank, or affects its liabilityunder any Transaction Document;(b)acknowledge that the Bank has agreed to execute this document at therequest of the Borrower and each Guarantor;(c)agree to the variation to the Facility Agreement and agrees that eachCollateral Security extends to and secures the Borrower’s obligations tothe Bank under the Transaction Documents, including the RestatedFacility Agreement; and(d)acknowledge that their obligations (as borrower, guarantor, indemnifier, orotherwise) and the Bank’s rights are not affected by anything which mightabrogate, prejudice or limit them or the effectiveness of this document,including the failure by any person named as an Original Guarantor tobecome bound by this document.6Warranties and representations6.1GeneralThe Borrower and each Guarantor warrant and represent to the Bank that:(a)at the time of execution, and at the Variation Date: Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth(i)it has capacity unconditionally to execute, deliver and comply with itsobligations under this document and the Transaction Documents towhich it is a party (including the Restated Facility Agreement);(ii)it has taken all necessary action to authorise the unconditionalexecution and delivery of, and the compliance with, its obligationsunder this document and the Transaction Documents (including theRestated Facility Agreement);(iii)this document and the Transaction Documents to which it is a party(including the Restated Facility Agreement) are its valid and legallybinding obligations and are enforceable against it by each otherparty in accordance with the terms of this document and theTransaction Documents to which it is a party (including theRestated Facility Agreement), subject to principles of equity andrules affecting creditors’ rights generally; and(iv)its unconditional execution and delivery of thisdocument and compliance with its obligations underthis document and the Transaction Documents(including the Restated Facility Agreement) do notcontravene:(A)any law or directive from a government entity;(B)its constituent documents;(C)any agreement or instrument to which it is a party; or(D)any obligation of it to any other person.6.2Survival of warrantiesThe warranties and representations in clause 6 survive the execution of thisdocument and the variation and restatement of the Facility Agreement.7General7.1ConstructionUnless expressed to the contrary, in this document:(a)words in the singular include the plural and vice versa;(b)any gender includes the other genders;(c)if a word or phrase is defined its othergrammatical forms have correspondingmeanings;(d)‘includes’ means includes without limitation;(e)no rule of construction will apply to a clause to the disadvantageof a party merely because that party put forward the clause orwould otherwise benefit from it;(f)a reference to: Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth(i)a person includes a partnership, joint venture,unincorporated association, corporation and a governmentor statutory body or authority;(ii)a person includes the person’s legal personalrepresentatives, successors, assigns and personssubstituted by novation;(iii)any legislation includes subordinate legislation under it and includesthat legislation and subordinate legislation as modified or replaced;(iv)an obligation includes a warranty or representationand a reference to a failure to comply with anobligation includes a breach of warranty orrepresentation;(v)a right includes a benefit, remedy, discretion or power;(vi)time is to local time in Melbourne;(vii)‘$’ or ‘dollars’ is a reference to Australian currency;(viii)this or any other document includes the document asnovated, varied or replaced and despite any change in theidentity of the parties;(ix)writing includes any mode of representing or reproducing words intangible and permanently visible form, and includes faxtransmissions;(x)this document includes all schedules and annexures to it; and(xi)a clause, schedule or annexure is a reference to a clause,schedule or annexure, as the case may be, of this document; and(g)where time is to be calculated by reference to a day or event, that day or theday of that event is excluded.7.2Costs and ExpensesThe Borrower must on demand pay and if paid by the Bank reimburse to the Bank:(a)the Bank’s reasonable costs and expenses (including legal costs andexpenses on a full indemnity basis) relating to the negotiation,preparation, execution, stamping and registration of this document; and(b)any duties and registration or other fees (including fines and penaltiesrelating to such duties and fees) which are payable or are assessed by arelevant government body or other person to be payable in relation to thisdocument or any transaction contemplated by it.7.3CounterpartsThis document may consist of a number of counterparts and, if so, thecounterparts taken together constitute one document.7.4Entire understanding(a)This document contains the entire understanding between the parties as tothe subject matter of this document. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth(b)All previous negotiations, understandings, representations, warranties,memoranda or commitments concerning the subject matter of thisdocument are merged in and superseded by this document and are ofno effect. No party is liable to any other party in respect of thosematters.(c)No oral explanation or information provided by any party to another:(i)affects the meaning or interpretation of this document; or(ii)constitutes any collateral agreement, warranty orunderstanding between any of the parties.7.5Governing law and jurisdiction(a)This document is governed by and is to be construed in accordance with thelaws applicable in Victoria.(b)Each party irrevocably and unconditionally submits to the non-exclusivejurisdiction of the courts exercising jurisdiction in Victoria and any courtswhich have jurisdiction to hear appeals from any of those courts andwaives any right to object to any proceedings being brought in those courts. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers WestgarthSchedule 1GuarantorsName ACN Particulars for delivery of noticesReading Entertainment Australia Pty Ltd 070 893 908 Address: 98 York Street, South MelbourneVIC 3205 Australia Fax: 03 9685 0999 Attention: Managing Director, WayneSmith AND TO: Reading International Inc.Address: 6100 Center Drive, Suite 900Los Angeles California 90045United States of AmericaFax: +1 213 235 2229Attention: Chief Financial Officer, DevGhoseAustralia Country Cinemas Pty Ltd 076 276 349 Same as for BorrowerAustralian Equipment Supply Pty Ltd 122 571 420 Same as for BorrowerBurwood Developments Pty Ltd 105 384 905 Same as for BorrowerEpping Cinemas Pty Ltd 073 997 172 Same as for BorrowerHotel Newmarket Pty Ltd 094 367 969 Same as for BorrowerNewmarket Properties Pty Ltd 105 386 409 Same as for BorrowerNewmarket Properties No. 2 Pty Ltd 109 038 806 Same as for BorrowerNewmarket Properties #3 Pty Ltd 126 697 505 Same as for BorrowerReading Auburn Pty Ltd 126 697 470 Same as for BorrowerReading Australia Leasing (E&R) Pty Ltd 107 939 211 Same as for BorrowerReading Belmont Pty Ltd 126 697 498 Same as for BorrowerReading Bundaberg 2012 Pty Ltd 122 406 320 Same as for Borrower Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers WestgarthName ACN Particulars for delivery of notices(formerly Reading Moonee PondsPty Ltd)Reading Charlestown Pty Ltd 123 938 483 Same as for BorrowerReading Cinemas Pty Ltd 073 808 643 Same as for BorrowerReading Cinemas Management Pty Ltd 122 406 311 Same as for BorrowerReading Colac Pty Ltd 108 861 061 Same as for BorrowerReading Dandenong Pty Ltd 129 018 739 Same as for BorrowerReading Elizabeth Pty Ltd 114 582 099 Same as for BorrowerReading Exhibition Pty Ltd 103 529 782 Same as for BorrowerReading Licences Pty Ltd 089 544 605 Same as for BorrowerReading Maitland Pty Ltd 126 697 461 Same as for BorrowerReading Melton Pty Ltd 109 074 517 Same as for BorrowerReading Properties Pty Ltd 071 195 429 Same as for BorrowerReading Properties Indooroopilly PtyLtd as trustee for The Landplan PropertyPartners Discretionary Trust 121 284 884 Same as for BorrowerReading Properties Taringa Pty Ltd astrustee for the Reading PropertyPartners No. 1 Discretionary Trust 128 819 483 Same as for BorrowerReading Property Holdings Pty Ltd 126 289 772 Same as for BorrowerReading Rouse Hill Pty Ltd 123 245 885 Same as for BorrowerReading Sunbury Pty Limited 109 074 571 Same as for BorrowerRhodes Peninsula Cinema Pty Ltd 120 827 812 Same as for BorrowerWestlakes Cinema Pty Ltd 108 531 308 Same as for BorrowerA.C.N. 143 633 096 Pty Ltd 143 633 096 Same as for Borrower Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers WestgarthAnnexure ARestated Facility Agreement Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.567 Collins Street Melbourne VIC 3000GPO Box 9925 Melbourne VIC 3001Tel +61 3 9672 3000Fax +61 3 9672 3010​www.corrs.com.auSydney Melbourne BrisbanePerth Annexure A - Restated Facility AgreementNational Australia Bank LimitedReading Entertainment Australia GroupCorporate MarketsLoan & BankGuarantee FacilityAgreement Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Contents1Interpretation11.1Definitions11.2Construction181.3Headings191.4Corporations Act, GST and Accounting Standards191.5Subsisting Events of Default and Potential Events of Default191.6Not used191.7Inconsistency192Consideration193Conditions precedent203.1Not used203.2Conditions precedent to Advances and Drawings203.3Not used204Facility204.1Nature204.2Purpose204.3Advances and Drawings204.4Funding Notices214.5Not used224.6Not used224.7Not used224.8Bank Guarantee Facilities224.9Cancellation224.10Market disruption224.11Alternative basis of interest or funding234.12Pricing Review Events234.13Consequences of a Pricing Review235Payments245.1Not used245.2Voluntary prepayments245.3Indemnity in respect of Bank Guarantees245.4Mandatory prepayments265.5Repayment265.6Not used276Interest and fees276.1Pricing Periods276.2Payment and rate276.3Computation of interest286.4Capitalisation of interest286.5Merger28 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth7Payments297.1Place, manner and time of payment297.2Gross-up297.3Appropriation298Representations and warranties299General obligations339.1Fees339.2Records349.3Financial Statements and other financial information349.4Other information359.5Other financial undertakings369.6Insurance399.7Financial ratios399.8Environment409.9No default429.10Obligations of Trustees429.11Release for Permitted Disposals4310Events of Default4310.1Nature4310.2Effect of Event of Default4610.3Cash Cover Account regarding Bank Guarantees4710.4Review Events4810.5Reviews4811Costs and expenses4811.1 Interpretation48 11.2Nature48 11.3Remuneration49 12Indemnities4912.1Nature4912.2Representatives5012.3Currency deficiency5012.4Independence and survival5012.5Accounting for transactions5012.6Liability for Regulatory Events5113Goods and Services Tax5113.1 Taxable supply51 13.2Adjustment events52 13.3Payments52 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth145215​5315.1​5315.2​5316​5316.1​5316.2​5416.3​5416.4​5416.5​5416.6​5516.7​5516.8​5616.9​5616.10​5616.11​5616.12​5616.13​5716.14​5716.15​5716.16​5717​5817.1​5817.2​5817.3​5818​5918.1​5918.2​5918.3​5918.4​5918.5​5918.6​6018.7​6118.8​6118.9​6218.10​6218.11​6218.12​6218.13​6218.14​6218.15​6318.16​6318.17​6418.18​64 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth18.19Legal advice6418.20Further assurances6418.21Exclusion of certain provisions6518.22Notice of changes6519Notices6519.1General6519.2How to give a communication6519.3Particulars for delivery of notices6619.4Communications by post6619.5Communications by fax6619.6After hours communications6619.7Process service66Schedule 1 – Transaction Parties67Schedule 2 – Facilities70Schedule 3 – Collateral Security71Schedule 4 – Not used74Schedule 5 – Conditions Precedent75Schedule 6 – Verification Certificate79Schedule 7 – Funding Notice81Schedule 8 – Guarantor Accession Deed82Schedule 9 – Compliance Certificate84Schedule 10 – Interim Compliance Certificate86 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corrs Chambers Westgarth Date15th December 2015 PartiesNational Australia Bank Limited ABN 12 004 044 937 of Pier 3 Level 4, 800 Bourke Street,Docklands, Victoria 3008 (Bank)Reading Entertainment Australia Pty Ltd ACN 070 893 908 of 98 York Street, SouthMelbourne, Victoria 3205 (Borrower)Each person listed in schedule 1 (each an Original Guarantor)Agreed terms1Interpretation1.1DefinitionsIn this document:Accounting Standards means accounting principles and practices consistentlyapplied which are generally accepted in Australia and are consistent with anyapplicable legislation in each case as in effect on the date of this document,including instruments in force under section 334 of the Corporations Act andprovisions of such instruments.Adjusted EBITDA means, for any period, EBITDA adjusted to exclude:(a)any non-cash impairment for non-current assets included in the consolidatedfinancial statements of the Reading Entertainment Australia Group during therelevant period; and(b)any net foreign exchange amounts (whether realised orunrealised) included in the consolidated financial statementsof the Reading Entertainment Australia Group during therelevant period.and subject to adjustment in respect of any further extraordinary items with theBank’s written consent.Advance means the principal amount of an advance made under the CorporateMarkets Loan Facility or, where appropriate, requested under the Corporate MarketsLoan Facility.Aggregate Amount means, in relation to a Drawing, the aggregate of the FaceValues of all Bank Guarantees comprising that Drawing.Annual Compliance Certificate means, in relation to a Financial Year, a Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.certificate substantially in the form of schedule 9.Approved Valuer means a company or firm of duly qualified and licensed realestate valuers acceptable to the Bank in all respects and instructed by (or with theapproval of) the Bank.Attorney means any attorney appointed under this document and any sub-attorney appointed by an Attorney.Authorisation includes any authorisation, consent, licence, permission, approvalor exemption from any Government Body. If a Government Body could prohibitanything being done in connection with any matter or otherwise intervene within aspecified time after notice has been given to it or any document lodged or filed withit in connection with the matter, the relevant matter will not be taken to have beenAuthorised until the specified time limit has expired without the Government Bodytaking any relevant action.Authorised Representative means, in relation to any party to this document, aperson with the right to act as the agent of that party for the purposes of thisdocument. It includes a director or company secretary of that party (if it is acorporation) and, in the case of the Bank, an employee of the Bank whose titlecontains the word “manager”, “director”, “associate” or a similar term and a lawyerfor the Bank. It also includes a person appointed by a party as an AuthorisedRepresentative of that party whose appointment is notified by the appointor to theother party in a notice which contains the specimen signature of the appointee.Availability Period means in respect of each Facility, the period beginning on thedate on which the conditions precedent are satisfied or waived by the Bank inaccordance with the Transaction Documents and ending on the Termination Date.Available Commitment means in respect of a Facility, the Facility Limit less theOutstanding Accommodation relating to that Facility.Bank Guarantee means each bank guarantee issued (or deemed to have beenissued) in accordance with this document.Bank Guarantee Facility means the Facility described as such in schedule 2and granted pursuant to clause 4.1(a)(ii).Bank Guarantee Margin means, in respect of each Bank Guarantee:(a)prior to the ‘Variation Date’ under the Restatement Deed,2.35% per annum; and(b)on and from the first services fee charge date (to be determined inaccordance with clause 9.1(e)) following the ‘Variation Date’ under theRestatement Deed, 1.90% per annum.Base Rate means, in relation to a Pricing Period:(a)the rate (expressed as a percentage yield per annum to maturity) being thearithmetic average (rounded up to the nearest four decimal places) of thebuying rates published at or about 10.15 am on the first Business Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Day of the Pricing Period on the Reuters Screen under the heading “BBSY”for Bills with a tenor as nearly as possible equal to that Pricing Period; or(b)if:(i)the rate is not displayed for a term equivalent to that period; or(ii)the basis of the calculation of the rate is changed after the date of thisdocument so that in the opinion of the Bank it ceases to reflect thecost of providing the Facility,the Base Rate will be the rate per centum per annum determined by the Bankto be the average of the buying rates quoted to the Bank by at least threeReference Banks at or about that time on that date. The buying rates must befor bills of exchange accepted by a leading Australian bank and which have aterm equivalent to the period. If there are no buying rates, the rate will bedetermined by the Bank having regard to indexes or other bases which theBank determines to be as near as practicable to the indexes and bases usedto determine the rate referred to in paragraph (a).Beneficiary means in relation to a Bank Guarantee, the person who from time totime is entitled to make a claim for payment under that Bank Guarantee against theBank.Bill means a bill of exchange as defined in the Bills of Exchange Act 1909 (but doesnot include a cheque). It includes a document which, when signed by the personsnamed as drawer and acceptor in the relevant document, will become such a bill ofexchange.Break Costs means, in relation to any financial accommodation provided or to beprovided by the Bank under a Facility, any liability or costs incurred by the Bank byreason of:(a)liquidating or re-deploying deposits or other funds acquired or contracted forby or on account of the Borrower or the Bank;(b)terminating or reversing any agreement or arrangement (including byentering into new agreements or arrangements to close out or net offexisting agreements or arrangements) entered into by or on account of theBorrower or the Bank with a counterparty or an internal department of theBank responsible for such agreements or arrangements to hedge, fix,swap or limit its effective cost of funding; or(c)any loss of any margins in relation to future lending or loss of any fees.Burwood Property means:(a)the land and improvements known as 78 MiddleboroughRoad, Old Burwood Road, Burwood, Victoria; and(b)all present or future agreements, documents or rights relating to theownership, occupation, use, sale, transfer or disposal of all or any part of theland and improvements described in paragraph (a). Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Business Day means a day which is not a Saturday, Sunday or bank or publicholiday in Melbourne.Cash Cover Rate means the rate (expressed as a rate per centum per annum)determined by the Bank (in good faith) to be the interest rate which it would pay ondeposits at call for an amount similar to the amount at which the relevant deposit ismade.Calculation Date means 31 March, 30 June, 30 September and 31 December in eachyear.Calculation Period means each period of twelve months ending on a CalculationDate.Change of Control means there is a change (from that prevailing at the date of thisdocument) in the persons who control any of the following in respect of aTransaction Party:(a)more than 50% of the votes eligible to be cast in the election of directors orany similar matter; or(b)the right to appoint or remove directors (or members of a governing bodyhaving functions similar to a board of directors) representing more than 50%of the votes exercisable by the directors (or persons have similar functions);or(c)an interest of more than 50% in any category of the profits, distributionsor net liquidation proceeds.Collateral Security means:(a)any Guarantee by which any person Guarantees the Borrower’s compliancewith its obligations under any of the Transaction Documents;(b)any Security which secures the payment of money owing(actually or contingently) from time to time by:(i)any Transaction Party in relation to any of theTransaction Documents; or(ii)any person in relation to a Guarantee of any TransactionParty’s compliance with its obligations under any of theTransaction Documents; and(c)without limiting the generality of paragraphs (a) and (b) each thing listed inschedule 3.Contaminant means a noxious, harmful or hazardous condition (including an odour,temperature, sound, vibration or radiation) or substance the presence or use ofwhich (having regard, without limitation, to the nature and quantity of the substanceand other substances with which it is stored or used) does or may result in thebreach of an Environmental Law or the issuing of an order or direction under anEnvironmental Law.Corporate Markets Loan Facility means the Facility described as such inschedule 2 and granted pursuant to clause 4.1(a)(i). Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Corporations Act means the Corporations Act 2001 (Cth).Current Bank Guarantee means a Bank Guarantee which has not Matured orExpired.Daily Interest Rate means, for any day, the Interest Rate on that day divided by 365.Disposal means a sale, lease, transfer or other disposal by any Transaction Partyof any interest in:(a)any share or stock (whether or not ordinary or preference and whether or notredeemable) or any other instrument convertible or exchangeable into orentitling a person to acquire or subscribe for any share or stock;(b)the whole or any part of a business, business unit or line of business; or(c)any other asset under a particular transaction or related transactions not inthe ordinary course of business of the Reading Entertainment AustraliaGroup taken as a whole.Distribution means:(a)in relation to any share capital of a Transaction Party, any dividend, charge,interest, fee, payment or other distribution (whether in cash or in kind) orredemption, repurchase, defeasance, retirement or redemption;(b)any interest, any redemption or early redemption of anyamount of principal or any other payment in respect of anyshareholder loan or other subordinated loans made to anyTransaction Party; or(c)any loan or other financial accommodation made available bya Transaction Party to a person other than anotherTransaction Party.Drawing means each Bank Guarantee issued or to be issued in accordance withthis document under the same Funding Notice.EBIT means, in relation to any period and without double counting, operating profit(loss) of the Reading Entertainment Australia Group (on a consolidated basis) fromordinary operations before interest, income tax and minority interests, but afterdeduction of depreciation and amortisation for that period, as determined inaccordance with Accounting Standards.EBITDA means, in relation to any period, EBIT for the Reading EntertainmentAustralia Group for that period, plus depreciation and amortisation as determined inaccordance with Accounting Standards.Encumbrance means any interest in or right over property and anything whichwould at any time prevent, restrict or delay the registration of any interest in ordealing with property. It includes a Security Interest.Environmental Assessment Report means a report in relation to compliance withEnvironmental Law of the Land and any activities carried out on the Land.Environmental Law means any legislation, regulations or related codes,standards or policies which relate to environmental and planning matters, includingmatters concerning land use, development, building works, pollution, Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.contamination, waste, toxic and hazardous substances, disposal of waste or othersubstances, human health, conservation of natural or cultural resources, heritageand resource allocation.Environmental Liability means any liability, obligation, expense, penalty or finearising out of a breach of Environmental Law which could be imposed on anyTransaction Party or the Bank in respect of the Land as a result of activities carriedon during the ownership, occupation or control of the Land by that Transaction Party,the Bank, any predecessor in title or any previous occupier or controller of the Land.Event of Default means any event or circumstance described in clause 10.1. Excluded Financial Indebtedness means Financial Indebtedness of the kindreferred to in paragraph (a), (c) or (d) of the definition of Permitted FinancialIndebtedness.Excluded Property means:(a)the Burwood Property;(b)the present or future interest of Reading Cinemas Pty Ltd in thejoint venture with Champion Pictures Pty Ltd relating to theElsternwick cinema business or the assets the subject of thejoint venture or the relevant joint venture agreement;(c)the present or future interest of Reading Exhibition Pty Ltd in the GardenCity Cinema joint venture with Village Roadshow Exhibition and BirchCarroll & Coyle or the assets the subject of the joint venture or the relevantjoint venture agreement; and(d)the present or future interest of Epping Cinemas Pty Ltd in the leasegranted by Bevendale Pty Ltd or the property the subject of the lease tothe extent that the existence of a charge over that interest or propertywould cause a breach of the that lease.Expired means, in relation to a Bank Guarantee, that its Expiry Date haspassed whether or not a claim has been made under it by the Beneficiary.Expiry Date means, in relation to a Bank Guarantee, the date specified in that BankGuarantee as the latest date by which the Beneficiary may make a claim under it.Face Value means, in relation to a Bank Guarantee:(a)subject to paragraph (b), the amount specified in that Bank Guarantee as theaggregate maximum amount which the Beneficiary may claim under it; or(b)if the Beneficiary makes a claim, then between when the Beneficiary makesthe first of those claims and the first to occur of the Bank Guarantee Maturingor Expiring, the Face Value of the Bank Guarantee will be the differencebetween its original face value and the aggregate of all valid claims madeunder it.Facility means each of the facilities listed in schedule 2 (and each Facility Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.may be referred to by the Facility Name listed in schedule 2).Facility Limit means, in respect of each Facility, the relevant Facility Limit set out inschedule 2, as reduced under this document.Financial Close means the initial Funding Date.Financial Indebtedness means any indebtedness or other liability (present or future,actual or contingent) relating to any financial accommodation including indebtednessor other liability:(a)for money borrowed or raised;(b)relating to the sale or negotiation of any negotiable instrument;(c)as lessee under any finance lease, as hirer under any hirepurchase agreement or as purchaser under any title retentionagreement;(d)relating to any preference share or unit categorised asdebt under Accounting Standards;(e)under any commodity, currency or interest rate swap agreement, forwardexchange rate agreement or futures contract (as defined in any statute);(f)under any Guarantee relating to any financial accommodation; or(g)for any deferred purchase price (other than in the nature ofwarranty retention amounts) for any asset or service.Financial Statements means a balance sheet, an income statement, a statementof changes in equity, a cash flow statement, notes comprising a summary ofsignificant accounting policies and other explanatory note; and any directors’declarations, directors’ reports and auditor’s reports attached to, intended to be readwith or required by the Corporations Act to accompany, all or any of thosedocuments.Financial Year means a period of 12 months ending on 31 December.Fixed Charges Cover Ratio means, at any date, the ratio of:(a)the aggregate amount of:(i)Adjusted EBITDA in respect of the 12 month period ending on thatdate; and(ii)Total Lease Payments in respect of the 12 month period ending on thatdate,to(b)the aggregate amount of:(i)Gross Interest Expense paid or payable by the Reading EntertainmentAustralia Group (whether payable in respect of the Facilities orotherwise) in respect of the 12 month period ending on that date; and(ii)Total Lease Payments in respect of the 12 month period ending on thatdate. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Freehold Property means each freehold property owned by a Transaction Partythat is the subject of a real property mortgage referred to in of schedule 3.Funding Date means a date on which:(a) an Advance is, or is proposed to be, made; or(b) a Bank Guarantee is, or isproposed to be, issued, under this document.Funding Notice means a notice in accordance with clause 4.4.Government Body means any person or body exercising an executive, legislative,judicial or other governmental function. It includes any public authority constitutedunder a law of any country or political sub-division of any country. It also includesany person deriving a power directly or indirectly from any other person or bodyreferred to in this definition.Gross Interest Expense means, in relation to any period, the aggregate of allinterest and amounts in the nature of interest (including commissions, discountfees, acceptance fees, facility fees, the interest element of a finance lease and feesor charges) payable in connection with any Financial Indebtedness of the ReadingEntertainment Australia Group (other than Excluded Financial Indebtedness) forthat period on a consolidated basis, whether accrued, paid, payable or expensed(including interest expense under each of the Facilities).Guarantee means:(a)a guarantee, indemnity, undertaking, letter ofcredit, Security, acceptance or endorsement of anegotiable instrument or other obligation (actualor contingent) given by any person to securecompliance with an obligation by another person;(b)an obligation (actual or contingent) of a person to ensure the solvency ofanother person or the ability of another person to comply with an obligation,including by the advance of money or the acquisition for valuableconsideration of property or services; and(c)an option under which a person is obliged on the exercise of the optionto buy:(i)any debt or liability owed by another person; or(ii)any property which is subject to a Security Interest.Guaranteed Money means all money:(a)which now or in the future is owing (actually orcontingently) by a Transaction Party to the Bankunder or in relation to any of the TransactionDocuments;(b)which having now or in the future become owing (actually or contingently)by a Transaction Party to the Bank under or in relation to any of theTransaction Documents, ceases to be owing by reason of any law relatingto insolvency and remains unpaid by the Transaction Party Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.and unreleased by the Bank; or(c)that now or in the future may become owing (actually or contingently) by aTransaction Party to the Bank under or in relation to any of the TransactionDocuments,for any reason, whether such money is payable:(d)by a Transaction Party alone or jointly or severally with any other person;(e)by a Transaction Party in its own right or in any capacity;(f)to the Bank in its own right or in any capacity; and(g)by a Transaction Party as liquidated or unliquidated damages caused orcontributed to by any breach by the Transaction Party of any obligationowed by the Transaction Party (or any other Transaction Party) to theBank under or in relation to any of the Transaction Documents,and if any Transaction Document or any obligation of a Transaction Party to theBank under or in relation to any of the Transaction Documents is void, voidable orotherwise unenforceable by the Bank in accordance with its terms, it includes allmoney which would have been within this definition if that Transaction Documentor obligation was not void, voidable or otherwise unenforceable.Guarantor means the Original Guarantors and each person that becomes aguarantor under clause 16. If there are more than one, Guarantor means each ofthem individually and every two or more of them jointly.Guarantor Accession Deed means a deed substantially in the form ofschedule 8.Half means each six month period ending on 30 June and 31 December in eachyear.Hedging Transaction means a contract, agreement or arrangement (other than inrespect of the price of electricity, gas, oil, foreign exchange or any other non-interestrate derivative contract) which is a futures contract or an interest rate hedge, swap,option, swaption, forward rate agreement or any other contract, agreement orarrangement similar to or having in respect of its subject matter a similar effect toany of the preceding.Indemnity Amount means, in relation to a Bank Guarantee, the amount or, as thecase may be, the aggregate of the amounts payable by the Borrower in relation to aBank Guarantee in accordance with clause 5.3.Insolvency means:(a)in relation to a corporation, its winding up or dissolution or itsadministration, provisional liquidation or any administrationhaving a similar effect;(b)in relation to an individual, his or her bankruptcy; and(c)in relation to a person, any arrangement (includinga scheme of arrangement or deed of companyarrangement), composition or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.compromise with, or assignment for the benefit of, all or any class of thatperson’s creditors or members or a moratorium involving any of themInsolvency Event means any of the following:(a)a person is or states that the person is unable to pay from the person’sown money all the person’s debts as and when they become due andpayable;(b)a person is taken or must be presumed to be insolvent or unable to paythe person’s debts under any applicable legislation;(c)an order is made for the winding up or dissolution or an effectiveresolution is passed for the winding up or dissolution of acorporation;(d)an administrator, provisional liquidator, liquidator or person having a similar oranalogous function under the laws of any relevant jurisdiction is appointed inrelation to a corporation or an effective resolution is passed to appoint anysuch person and the action is not stayed, withdrawn or dismissed within 10Business Days;(e)a controller is appointed in relation to any property of a corporation;(f)a corporation is deregistered under the Corporations Act or notice of itsproposed deregistration is given to the corporation;(g)a distress, attachment or execution is levied or becomesenforceable against any property of a person;(h)a person enters into or takes any action to enter into an arrangement(including a scheme of arrangement or deed of Borrower arrangement),composition or compromise with, or assignment for the benefit of, all or anyclass of the person’s creditors or members or a moratorium involving any ofthem;(i)a petition for the making of a sequestration order against the estate of aperson is presented and the petition is not stayed, withdrawn or dismissedwithin seven days or a person presents a petition against himself orherself;(j)a person presents a declaration of intention under section 54A of theBankruptcy Act 1966; or(k)anything analogous to or of a similar effect to anything described aboveunder the law of any relevant jurisdiction occurs in relation to a person.Insurance means insurance which a Transaction Party is obliged to take out ormaintain under a Transaction Document.Interest Rate means, in relation to a Pricing Period for an Advance until it becomesdue and owing, an interest rate equal to the aggregate of the Base Rate for thatPricing Period and the Margin.Interim Compliance Certificate means a certificate in substantially the form set outin schedule 10.Land means any land owned or occupied by a Transaction Party that forms Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.part of the Secured Property.Leasehold Properties means each leasehold property leased by a TransactionParty that is the subject of a mortgage of lease referred to in schedule 3(including the mortgage of lease described at item 11 of schedule 3).Leverage Ratio means, as at any date, the ratio of:(a) Total Gross Debt outstanding on that date; to(b) Adjusted EBITDA in respect of the 12 month period ending on that date.For the purposes of calculating Leverage Ratio on any date occurring beforethe first anniversary of Financial Close, Leverage Ratio will be based on a proforma EBITDA for the 12 month period to that date.Loan to Value Ratio at any date means the ratio (expressed as a percentage) of:(a)the aggregate of the Total Gross Debt outstanding on that date and anyOutstanding Accommodation in relation a Current Bank Guarantee as atthat date; to(b)the market value of the Freehold Properties and Leasehold Propertiesincluded in the Secured Property as noted in the most recent Valuationprovided to the Bank pursuant to this document and accepted by theBank.Management Fees means management and consulting fees payable toReading International Inc each Financial Year.Margin means 0.95% per annum.Material Adverse Effect means a material adverse effect on:(a)the business, operation, property, condition (financial or otherwise) of aTransaction Party or the Reading Entertainment Australia Group takenas a whole;(b)the ability of a Transaction Party to perform its obligationsunder the Transaction Documents; or(c)the validity or enforceability of the whole or any material part of anyTransaction Document or any rights or remedies of the Bank under theTransaction Documents.Matured means, in relation to a Bank Guarantee, that the Beneficiary has made aclaim and is not entitled to claim any more under the relevant Bank Guarantee.Month means a calendar month.Outstanding Accommodation means at any time, the aggregate of:(a)the aggregate of the unpaid Advances outstanding under the CorporateMarkets Loan Facility;(b)the Face Values of all Current Bank Guarantees and all Indemnity Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Amounts in relation to each Bank Guarantee which are due and payable; and(c)for the purposes of clauses 5.5, 10 and 18.14 only and for no otherpurposes, any other amounts which the Borrower owes to the Bank orwhich the Borrower may owe to the Bank under or in connection with theFacilities and includes:(i)any other amounts which the Borrower owes to the Bank or which theBorrower may owe to the Bank under or in connection with anyHedging Transaction; and(ii)all interest, costs and fees payable underthe Transaction Documents,whether such amounts are owing actually or contingently and whether suchamounts are then due for payment or will or may become due for paymentand includes all interest, costs and fees payable under the TransactionDocuments.When used in relation to any Facility, it means the Outstanding Accommodationin relation to Advances or Drawings under that Facility (as applicable).Overdue Money means money due and payable from time to time under eachTransaction Document.Overdue Rate means at any time, the aggregate of the Interest Rate and a defaultmargin of 4.50% per annum.Parent Subordination Agreement means the document entitled ‘subordinationdeed’ dated on or about the date of this document between the Borrower, ReadingInternational Cinemas LLC and the Bank.Permitted Disposal means a disposal:(a)of assets between the Transaction Parties;(b)of the land and improvements known as 70 Station Road, IndooroopillyQueensland and described in certificate of title 11485156, subject toReading Properties Indooroopilly Pty Ltd seeking a release of the Bank’sSecurity over that property and compliance with clause 5.4(b);(c)of the Burwood Property;(d)of Reading Cinemas Pty Ltd’s interest as lessee in theElsternwick cinema business, to Champion Pictures PtyLtd;(e)of trading stock or cash made in the ordinary course of business;(f)of plant and equipment in exchange for other assetscomparable or superior as to type, value and quality;(g)of obsolete or redundant assets;(h)arising as a result of a Permitted Encumbrance or a Distribution orpayment permitted by clause 9.5(f), clause 9.5(j) or clause 5.4(b)(ii); Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(i)of assets that are the subject of a floating charge (or its equivalent) under aCollateral Security, provided the disposal is made in the ordinary course ofbusiness; or(j)where the aggregate value of the assets disposed of in the 12month period ending on the date of the relevant disposal (andincluding the value of the relevant disposal) does not exceed$500,000.Permitted Distributions means a distribution of any proceeds of the sale of:(a) 40 Hall Street, Moonee Ponds, Victoria; or(b) 78 Middleborough Road, Old Burwood Road, Burwood,Victoria, applied towards:(c)first, the repayment of parent loans to the Borrowerfrom Reading International Inc (including accruedManagement Fees, interest, capitalised interest orprincipal); and(d)after the repayment of all parent loans under paragraph (c), dividends paid toshareholders of the Borrower, provided the Leverage Ratio is less than 3.0times at the time of the payment.Permitted Encumbrance means:(a)an Encumbrance which has been approved by the Bank (includingthe Security Interests created by any Transaction Document);(b)any right of set off or combination arising by operation of law or practiceover money deposited with a bank or financial institution in the ordinarycourse of the business of a Transaction Party;(c)an Encumbrance which arises by operation of law in the ordinary course ofthe business of a Transaction Party provided the debt secured by thatEncumbrance is paid when due or contested in good faith by appropriateproceedings;(d)every easement, restrictive covenant, caveat or similar restriction overproperty, right of way, exception, encroachment, reservation, restriction,condition or limitation which arises in the ordinary course of the ordinarybusiness of the relevant Transaction Party and does not either by itself or inthe aggregate materially interfere with or impair the operation or use of aproperty affected thereby, have a Material Adverse Effect or otherwise restrictor prevent the Bank exercising its rights against any Secured Property underthe relevant Collateral Security;(e)every right reserved to, or vested in, any municipality or governmental orother public authority by the terms of any right, power, franchise, grant,licence or permit to control or regulate any part of the property of aTransaction Party, or to use that property in any manner which does noteither by itself or in the aggregate materially interfere with or impair theoperation or the use thereof, have a Material Adverse Effect or otherwiserestrict or prevent the Bank exercising its rights against any SecuredProperty under the relevant Collateral Security; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(f)every Encumbrance incurred or deposits made in the ordinary course ofordinary business to secure the performance of tenders, statutoryobligations, surety bonds, bids, leases, government contracts, performanceand return of money bonds (provided that such Encumbrances do not restrictor prevent the Bank exercising its rights against any Secured Property underthe relevant Collateral Security) or in connection with workers’ compensation,unemployment insurance and other types of social security;(g)every Encumbrance incurred or deposit made in the ordinary courseof the business of a Transaction Party in respect of a leaseholdproperty, the purchase of assets or the use of utilities, provided that:(iii)in relation to an Encumbrance incurred or deposit made in respect ofthe purchase of assets which secures an aggregate amount greaterthan $250,000 the Bank has given prior written consent to theBorrower; and(iv)the recourse of the holder of that Encumbrance is limited to theleasehold interest, the assets purchased or use of utilities and theproceeds of enforcement of the Encumbrance.(h)every retention of title arrangement in respect of trading stock acquiredor to be acquired by a Transaction Party in the ordinary course ofbusiness;(i)any easement, caveat or other restriction in relation to a Freehold Propertythat would be apparent from a title search conducted before the date of thisdocument; and(j)an Encumbrance over the Burwood Property granted by a Transaction Partyin connection with the sale of the Burwood Property and the development ofthe Burwood Property by the purchaser (or an affiliate of the purchaser),provided that the recourse of the holder of that Encumbrance is limited to theBurwood Property and the proceeds of enforcement of the Encumbrance.Permitted Financial Accommodation means:(a)financial accommodation granted by a Transaction Party toanother Transaction Party;(b)any trade credit extended by a Transaction Party to itscustomers on normal commercial terms and in the ordinarycourse of business; or(c)any other financial accommodation granted with the prior consent of theBank.Permitted Financial Indebtedness means:(a)trade debt incurred in the ordinary course of business of the TransactionParties;(b)Financial Indebtedness incurred under the Transaction Documents;(c)Financial Indebtedness owing from one Transaction Party to another Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Transaction Party;(d)any Subordinated Debt;(e)a $225,000 loan from the landlord of the Westlakes Cinema property;(f)a $400,000 loan from the landlord of the Rhodes Cinema property;(g)Financial Indebtedness arising under any performance or similarbond guaranteeing performance by a Transaction Party under anycontract entered into in the ordinary course of business;(h)Financial Indebtedness arising under a guarantee given to a landlord inrespect of a lease entered into by a Transaction Party;(i)Financial Indebtedness under finance or capital leases of vehicles, plant,equipment or computers existing at the date of this document; and(j)Financial Indebtedness not permitted by the preceding paragraphs andthe outstanding principal amount of which does not exceed $500,000 inaggregate for the Transaction Parties at any time.PPS Act means the Personal Property Securities Act 2009 (Cth).PPS property means all property (other than Excluded Property) over which theBorrower or a Security Provider is legally capable under the PPS Act of granting asecurity interest.Potential Event of Default means any thing which, with the giving of notice, lapseof time or determination of materiality, will constitute an Event of Default.Pricing Period means, in relation to an Advance under the Corporate MarketsLoan Facility, the period having the duration selected in accordance with clause 6.1and beginning on the Funding Date in relation to the Advance.Quarter means each three month period ending on 31 March, 30 June, 30September and 31 December in each year.Reading Entertainment Australia Group means, at any time, the Borrower and anysubsidiary of the Borrower and Reading Entertainment Australia Group Membermeans any one of them.Release Date means the Business Day following the later of:(a)the latest of the Expiry Dates of all Current Bank Guarantees; and(b)the date on which the Bank is satisfied in its reasonable opinion that ithas been paid all amounts which are then or may in the future becomedue and payable to the Bank under any of the Transaction Documentsand that there is no prospect that any amounts which the Bank hasreceived in relation to any of the Transaction Documents willsubsequently be made void or be required to be repaid in whole or inpart.Relevant Jurisdiction means Victoria.Receiver means a receiver or receiver and manager appointed by the Bank underany Transaction Document and any person who derives a right directly Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.or indirectly from a Receiver.Reference Banks means each of Australia and New Zealand Banking GroupLimited, Commonwealth Bank of Australia and Westpac Banking Corporation, orany other banks or financial institutions determined by the Bank from time to timefollowing consultation with the Borrower.Regulatory Event means any:(a)change in, or introduction of a new, law or other form of regulation;(b)change in, or introduction of a new, practice or policy of an GovernmentBody;(c)investigation into a Transaction Party or anyrelated entity of a Transaction Party by aGovernment Body;(d)application for or grant of an injunction or order inrespect of any Encumbrance, Facility or accountheld with the Bank made by a Government Body, or(e)change in, or introduction of a new, code of practice or custom relating to theprovision of the Services which a reasonable and prudent banker wouldcomply with,whether in Australia or elsewhere, that, in the Bank’s good faith opinion, applies inany way to a Transaction Party, or the Service.Representative of a person means an officer, employee, contractor or agent of thatperson.Restatement Deed means the document entitled ‘Restatement Deed’ executed inDecember 2015 between the Bank and the Transaction Parties.Review Event means any event or circumstance described in clause 10.4. SecuredProperty means all property which, from time to time, is subject to aSecurity which forms part of the Collateral Security.Security means any document or transaction which reserves or creates aSecurity Interest.Security Interest means any interest or right which secures the payment of a debtor other monetary obligation or the compliance with any other obligation. It includesany retention of title to any property and any right to set off or withhold payment ofany deposit or other money.Security Provider means each person who gives a Collateral Security (other thana related body corporate of the Bank).Service means any service the Bank provides to the Borrower under or in relation toa Facility including making or processing any payment or issuing any document.Subordinated Debt means:(a)Financial Indebtedness that is or may become owing by the Borrower toReading International Cinemas, LLC, that is fully subordinated on the Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.terms set out in the Parent Subordination Agreement; and(b)Financial Indebtedness that is or may become owing by a TransactionParty to Reading International Inc (or any subsidiary or affiliate ofReading International Inc) that is fully subordinated on substantially thesame terms (except for the name and other details of the subordinatedlender) as those set out in the Parent Subordination Agreement.Tax means a tax (including any tax in the nature of a goods and services tax), rate,levy, impost or duty (other than a tax on the net overall income of the Bank) andany interest, penalty, fine or expense relating to any of them.Termination Date means, in respect of each Facility, the Termination Date set outin schedule 2, or such other date agreed in writing by the parties.Total Gross Debt means, on any date, all Financial Indebtedness of the ReadingEntertainment Australia Group, but excluding any Excluded Financial Indebtedness.Total Lease Payments means the aggregate amount of all rental expenditure of theReading Entertainment Australia Group, other than rental expenditure payable toany Transaction Party, calculated in accordance with Accounting Standards, forthat period.Transaction Documents means:(a)this document;(b)not used;(c)each Guarantor Accession Deed;(d)the Collateral Security;(e)the Parent Subordination Agreement;(f)the ISDA Master Agreement dated 17 June 2011 between the Bank and theBorrower, as amended from time to time;(g)each deed of consent listed in paragraph 6 of schedule 5 upon it beingexecuted by the relevant parties;(h)any agreement relating to the priority of any Security which is a CollateralSecurity;(i)any document which the Borrower and the Bank agree is a TransactionDocument for the purposes of this document; and(j)each document entered into for the purpose of amending,novating, restating or replacing any of them.Transaction Parties means the Borrower and each Guarantor.Trust means, in relation to any Transaction Party that enters into a TransactionDocument in the capacity as trustee of a trust, the relevant trust.Trust Deed means, in relation to a Trust, the trust deed or other document whichestablishes or evidences that Trust. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Trustee means a Transaction Party that enters into a Transaction Document actingas the trustee of a Trust.Valuation means a valuation of the Freehold Properties or leasehold propertiesincluded in the Secured Property addressed to the Bank, by an Approved Valuer inform and substance satisfactory to the Bank in all respects.Verification Certificate means a certificate in substantially the form set out inschedule 6.1.2ConstructionUnless expressed to the contrary, in this document:(a)words in the singular include the plural and vice versa;(b)any gender includes the other genders;(c)if a word or phrase is defined its othergrammatical forms have correspondingmeanings;(d)“includes” means includes without limitation;(e)no rule of construction will apply to a clause to the disadvantageof a party merely because that party put forward the clause orwould otherwise benefit from it; and(f)a reference to:(i)a person includes a partnership, joint venture,unincorporated association, corporation and a governmentor statutory body or authority;(ii)a person includes the person’s legal personalrepresentatives, successors, assigns and personssubstituted by novation;(iii)any legislation includes subordinate legislation under it and includesthat legislation and subordinate legislation as modified or replaced;(iv)an obligation includes a representation or warranty and a reference to afailure to comply with an obligation includes a breach of representationor warranty;(v)a right includes a benefit, remedy, discretion or power;(vi)time is to local time in Melbourne;(vii)“$” or “dollars” is a reference to Australian currency;(viii)this or any other document includes the document asnovated, varied or replaced and despite any change in theidentity of the parties;(ix)writing includes any mode of representing or reproducing words intangible and permanently visible form, and includes faxtransmissions;(x)any thing (including any amount) is a reference to the whole or any Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.part of it and a reference to a group of things or persons is areference to any one or more of them;(xi)this document includes all schedules and annexures to it; and(xii)a clause, schedule or annexure is a reference to aclause, schedule or annexure, as the case may be,of this document.1.3HeadingsHeadings do not affect the interpretation of this document.1.4Corporations Act, GST and Accounting StandardsUnless expressed to the contrary:(a)“control”, “controller”, “corporation”, “disclosing entity”, “holding company”,“marketable security”, “prospective liability”, “public company”, “related bodycorporate” and “subsidiary” each has the meaning which it is defined to havein the Corporations Act;(b)“adjustment event”, “consideration”, “GST”, “input tax credit”, “supply”,“taxable supply” and “tax invoice” each has the meaning which it is defined tohave in the A New Tax System (Goods and Services Tax) Act 1999; and(c)“economic entity”, “entity” and “finance lease” each has themeaning which it has in the Accounting Standards.(d)terms have the meanings given to them in the PPS Act.1.5Subsisting Events of Default and Potential Events of Default(a)An Event of Default subsists if it has occurred and has not been waivedby the Bank in accordance with this document or remedied.(b)A Potential Event of Default subsists if it exists and has not been waived bythe Bank in accordance with this document or remedied.1.6Not used1.7InconsistencyIf there is any inconsistency between this document and any other TransactionDocument, then this document prevails to the extent of that inconsistency.2ConsiderationThe Borrower enters into this document in consideration of the Bank agreeing tomake the Facility available in accordance with this document. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.3Conditions precedent3.1Not used3.2Conditions precedent to Advances and DrawingsThe obligation of the Bank to make any Advances or Drawings is subject to thefurther conditions precedent that the Bank is satisfied in its absolute discretion that:(a)the representations and warranties set out in clause 8.1 are correct and inall material respects not misleading in any material respect when theFunding Notice is given and on the Funding Date;(b)all fees and charges then due and payable in connection with the Facilityhave been paid (including the Restructure Fee set out in clause 9.1(a)); and(c)no Event of Default or Potential Event of Default subsistswhen the Funding Notice is given and on the Funding Date.3.3Not used4Facility4.1Nature(a)Subject to clauses 3 and 10.2, the Bank will make available:(i)the revolving Corporate Markets Loan Facility under which itwill make Advances; and(ii)the Bank Guarantee Facility under which itwill issue Bank Guarantees at the request ofthe Borrower,in accordance with this document.(b)The Borrower may request one or more Advances andDrawings in accordance with this clause 4, but so that theOutstanding Accommodation under each Facility does not atany time exceed the relevant Facility Limit.4.2PurposeThe Borrower must only use Advances and Drawings under each Facility for therelevant purposes set out in schedule 2, and the Borrower must promptly repay tothe Bank all Advances and Drawings not used for these purposes.4.3Advances and Drawings(a)The Borrower may request an Advance or a Drawing by giving a FundingNotice to the Bank by 11.00 am at least one clear Business Day before thedate the proposed Advance or Drawing is required.(b)An Advance under the Corporate Markets Loan Facility must not be foran amount which, when added to the Outstanding Accommodation (if Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.any) under that Facility, causes the Facility Limit for that Facility to beexceeded. In determining with an Advance will cause the Facility Limit to beexceeded:(i)the amount of all Advances repaid on the Funding Date are excludedfrom the calculation of the Outstanding Accommodation; and(ii)the aggregate amount of all other Advances which the Borrower hasrequested to be made on the same Funding Date are included in thatcalculation.(c)The Aggregate Amount of a Drawing under the Bank Guarantee Facilitymust not, when added to the Outstanding Accommodation (if any) underthat Facility, cause the Facility Limit for that Facility to be exceeded at anytime during the Funding Period. In determining whether the AggregateAmount of a Drawing will cause the Facility Limit to be exceeded:(i)the Face Value of all Bank Guarantees under a Facility which willmature on the Funding Date for the relevant Drawing are excludedfrom the calculation of the Outstanding Accommodation; and(ii)the Aggregate Amount of all other Drawings which theBorrower has requested to be made under the same Facilityand on the same Funding Date are included in that calculation.(d)The Bank is only obliged to make Advances or accept anyDrawings during the Availability Period.4.4Funding Notices(a)A Funding Notice must:(i)be substantially in the form of schedule 7;(ii)be signed by an Authorised Representative of the Borrower;(iii)specify the proposed Funding Date which must be a Business Dayduring the Availability Period;(iv)specify the amount of the proposed Advance or theAggregate Amount of the proposed Drawing;(v)specify the duration of the Pricing Period for each Advance; and(vi)in the case of any Drawing, specify whether the Drawing is:(A)to comprise the issue of a new Bank Guarantee, and if so,also specify the date to be shown as the Expiry Date, the personto be named as the Beneficiary and the Face Value of eachrequested Bank Guarantees; or(B)deemed to comprise an existing bank guarantee that prior tothe date of this document has been issued by the Bank atthe request of the Borrower and, if so, specify the dateshown as the Expiry Date, the person named as the Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Beneficiary and the Face Value of that bank guarantee.(b)The requirement of a Funding Notice is for the benefit of the Bank. TheBank may waive the requirement at any time and in any manner.(c)A Funding Notice is irrevocable from the time of its actualreceipt in legible form by the Bank.4.5Not used4.6Not used4.7Not used4.8Bank Guarantee FacilitiesIn the case of the Bank Guarantee Facility on the Funding Date specified in theFunding Notice:(a)the Bank must for the purposes of a Drawing contemplated under clause4.4(a)(vi)(A), issue each Bank Guarantee requested in the Funding Notice inaccordance with that Funding Notice; or(b)the parties agree that for the purposes of a Drawing contemplated underclause 4.4(a)(vi)(B), the existing bank guarantee referred to in the FundingNotice is deemed to be a Bank Guarantee issued in accordance with theBank Guarantee Facility and that Funding Notice.4.9CancellationThe Borrower may cancel the Available Commitment or any part of it (being$100,000 or an integral multiple of that amount) by giving 30 Business Days’ noticeto the Bank specifying the amount to be cancelled and the date on which thecancellation takes effect. The cancellation takes effect on the date specified in thenotice (which must be a date not earlier than five Business Days after the date theBank receives the notice).4.10Market disruption(a)If the Bank determines that a Market Disruption Event occurs or hasoccurred in relation to an Advance, then the Bank will promptly notify theBorrower, and the Interest Rate on that Advance for that Pricing Period willbe the rate per annum which is the sum of:(i)the Margin for the Advance; and(ii)the rate notified to the Borrower as soon as practicable and in anyevent no later than the Business Day before interest is due to bepaid in respect of that Pricing Period, to be that which expresses asa percentage rate per annum the cost to the Bank of funding thatAdvance from whatever source or sources the Bank mayreasonably select.(b)For the purposes of clause 4.10(a):(i)Market Disruption Event means:(A)at or about the time on the day (Quotation Day) for the Bank Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.to determine the Screen Rate for the relevant currency and PricingPeriod, the Screen Rate is not available and the Bank is unable tospecify another page or service displaying an appropriate rate; or(B)in relation to an Advance, before 5pm (local time) on theBusiness Day after the Quotation Day for the relevant period,the Bank notifies the Borrower, that as a result of marketcircumstances not limited to the Bank the cost to the Bank offunding the Advance exceeds the Screen Rate.(ii)Screen Rate means the rate specified in paragraph (a)of the definition of “Base Rate”.4.11Alternative basis of interest or fundingIf a Market Disruption Event occurs and the Bank or the Borrower so requires, theBank and the Borrower will enter into negotiations (for a period of not more than 30days) with a view to agreeing a substitute basis for determining the rate of interestor discount.4.12Pricing Review Events(a)The Bank has the right to review the pricing applicable to aFacility (Review):(i)on or about the third anniversary of the date of this document;(ii)at any time if the Bank reasonably believes thatan Event of Default subsists;(iii)at any time:(A)a change occurs in the financial markets which affectsfinancial institutions generally; and/or(B)a general change occurs in the cost of funds in the financialmarkets in which the Bank raises funds (not being a changeresulting from a change in the Bank’s credit rating or any othermatter relating specifically to the Bank).(b)The Bank may request the Borrower to provide information in connectionwith a Review and the Borrower must provide such information as soon aspossible following receipt of the request.4.13Consequences of a Pricing Review(a)Following a Review, the Bank may, by giving written notice to theBorrower and/or by way of advertisement in the local or national press:(i)introduce a new fee, charge or premium or change an existing fee,charge or premium (including its amount, the way in which it iscalculated and when it is charged); and(ii)change the acceptance margin, line fee, interest rate or yield rateapplicable to a Facility including by changing or introducing amargin (including by making the margin positive or negative), or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.substituting a different indicator rate for the relevant indicator rate(except where the rate is a fixed rate).(b)Where the Bank gives the Borrower notice under clause 4.10(a) by way ofadvertisement in the local or national press, the Bank will also endeavourto directly notify the Borrower of the change although the Bank will not beprecluded from charging the new or adjusted pricing if it does not directlynotify the Borrower.(c)An introduction or change of a matter specified in clause 4.10(a) takes effecton the date specified in the relevant notice to the Borrower (which must be atleast 30 days after the date on which the notice is given to the Borrower).5Payments5.1Not used5.2Voluntary prepayments(a)In relation to any Advance, the Borrower:(i)may prepay any Advance or a part of it (being a minimum of$100,000 or an integral multiple of that amount) by giving 5 BusinessDays’ notice to the Bank specifying the amount to be prepaid and thedate on which the prepayment will be made;(ii)may, subject to clause 4.3, redraw anyamount prepaid in accordance with thisclause 5.2; and(iii)must make any prepayment under this document together withaccrued interest on the amount prepaid, any fees payable under clause9.1 and any Break Costs, but otherwise without premium or penalty.(b)The Borrower may reimburse or repay the Face Value in respect of anyCurrent Bank Guarantee by:(i)providing to the Bank, cash collateral (on terms satisfactory to theBank and subject to clause 10.3) in an amount not less than theFace Value of the Bank Guarantee; or(ii)cancelling that Bank Guarantee by returning the original to theBank together with written confirmation from the Beneficiarythat the Bank has no further liability under that Bank Guarantee.5.3Indemnity in respect of Bank Guarantees(a)Without limiting clause 12.1, the Borrower indemnifies the Bank against anyliability, loss, cost or expense sustained or incurred in relation to any BankGuarantee or as a direct or indirect consequence of any claim made orpurported to be made under any Bank Guarantee, or anything done by anyperson who is or claims to be entitled to the benefit of a Bank Guarantee. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(b)Without limiting clause 5.3(a), the Borrower must pay to the Bankall amounts claimed by or paid to any Beneficiary in relation to anyBank Guarantee (whether or not the Beneficiary was entitled tomake that claim or the Bank was required to make that payment),including any payment made by the Bank under clause 10.2(a)(iv)(B).(c)The Borrower’s obligations under clause 5.4(a) and (b) are absolute andunconditional. They are not affected by any reduction, termination or otherimpairment by set-off, deduction, abatement, counterclaim, agreement,defence, suspension, deferment or otherwise.(d)The Borrower is not released, relieved or discharged from any obligationunder this document, nor will such obligation be prejudiced or affected forany reason, including:(i)any falsity, inaccuracy, insufficiency or forgery of or in any demand,certificate or declaration or other document which on its face purportsto be signed or authorised under a Bank Guarantee;(ii)any failure by the Bank to enquire whether a cable, telex or othernotification was inaccurately transmitted, received or given by anunauthorised person (other than where such failure occurs due tothe wilful default or fraud of the Bank);(iii)the impossibility or illegality of performance of, or any invalidity of oraffecting, any Transaction Document or Bank Guarantee or anyother document;(iv)any act of any Government Body or arbitrator including anylaw, judgment, decree or order at any time in effect in anyjurisdiction affecting any Transaction Document or BankGuarantee or any document delivered under a TransactionDocument;(v)any failure to obtain any consent, license or otherauthorisation necessary or desirable in connection with anyTransaction Document or any Bank Guarantee; or(vi)any other cause or circumstance, foreseen or unforeseen, whether ornot similar to any of the above, affecting any Transaction Document orBank Guarantee or any transaction under a Transaction Document orBank Guarantee,(vii)and the Bank need not inquire into any of these matters.(e)The Bank is irrevocably authorised and directed by the Borrower to payimmediately against a demand appearing or purporting to be made by or onbehalf of a Beneficiary, any sums up to the Face Value of a BankGuarantee which may be demanded from the Bank from time to timewithout any reference to or any necessity for confirmation or verification onthe part of the Borrower, and notwithstanding any instructions from theBorrower to the contrary.(f)The obligations of the Borrower will not be affected or in any way limited byany falsity, inaccuracy, insufficiency or forgery of or in any notice or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.demand pursuant to any liability or the failure of the Bank to enquire (otherthan where such failure arises due to the wilful default or fraud of the Bank)whether any notice or demand has been inaccurately transmitted or receivedfrom any cause whatsoever or has been given or sent by an unauthorisedperson.5.4Mandatory prepayments(a)Unless the Bank otherwise agrees, if any of the assets, business orundertaking of any Transaction Party is the subject of any Disposal (otherthan a Permitted Disposal) the Borrower must apply or ensure is applied anamount equal to the cash or equivalent proceeds received by the TransactionParty from the Disposal net of reasonable transaction costs and Taxes inprepayment of Outstanding Accommodation or (other than in respect of adisposal contemplated by clause 5.4(b)), at the Borrower’s election, inpermanent reduction of the unused portion of one or more of the FacilityLimits.(b)If the land and improvements known as 70 Station Road,Indooroopilly Queensland and described in certificate of title 11485156are sold:(i)unless the Bank otherwise agrees in writing, the Borrower must apply orensure is applied an amount equal to 50% of the proceeds arising fromthat sale net of reasonable transaction costs and Taxes in prepaymentof the Outstanding Accommodation and/or in permanent reduction of theunused portion of the Facility Limit for the Corporate Markets LoanFacility; and(ii)subject to the prior written consent of the Bank (such consent not tobe unreasonably withheld), a Transaction Party may make aDistribution or other payment to Reading International Inc (or anysubsidiary or affiliate of Reading International Inc that is outside of theReading Entertainment Australia Group) of an amount equal to 50% ofthe proceeds arising from that sale net of reasonable transaction costsand Taxes.(c)For the avoidance of doubt the requirements to prepay underclause 5.4(b) will to the extent of the prepayment permanently reduce theFacility Limit of the relevant Facility or Facilities.5.5RepaymentSubject to clause 10.2 and clause 10.3, each Borrower must:(a)repay the Outstanding Accommodation in respect of each Facility on theTermination Date in respect of that Facility; and(b)subject to clause 6, and any other provision in a Transaction Documentthat provides otherwise, pay any other amounts payable in connectionwith the Transaction Documents, to the Bank on demand. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.5.6Not used6Interest and fees6.1Pricing Periods(a)Subject to clause 6.1(c), the Pricing Period for each Advance must be aperiod of 30, 60 or 90 days or six Months or another period agreed by theBank.(b)Subject to clause 6.1(c), the first Pricing Period for an Advancecommences on its Funding Date and will have the duration specified inthe relevant Funding Notice. Each subsequent Pricing Period for theAdvance:(i)commences on the day after the preceding Pricing Period for theAdvance expires; and(ii)is a period notified by the Borrower to the Bank at least two BusinessDays before the last day of the current Pricing Period, but if theBorrower does not give notice, is of the same duration as the PricingPeriod which immediately precedes it.(c)A Pricing Period:(i)which would otherwise end on a day which is not a Business Dayends on the next Business Day and a Pricing Period which wouldotherwise end after the Termination Date ends on the TerminationDate. For the avoidance of doubt, if a Pricing Period ends on a daythat is not followed by a Business Day, the Bank may extend thatPricing Period accordingly (except where this would be contrary toclause 6.1(c)(ii), in which case the Bank may shorten the PricingPeriod); and(ii)May be adjusted by the Bank where necessary so that:(A)a Pricing Period starts on a Business Day;(B)all Advances will have the same Pricing Period;(C)a Pricing Period does not end after the Termination Date; and(D)if a new Advance is made during a Pricing Period for an existingAdvance, the first Pricing Period for that new Advance ends on thesame day as the Pricing Period for the existing Advance.6.2Payment and rate(a)In respect of the Corporate Markets Loan Facility:(i)interest for each day is calculated by applying the Daily Interest Rateto the Advance at the end of that day (excluding any amount towhich the Overdue Rate applies); and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(ii)the Borrower must pay accrued interest in respect of:(A)each Pricing Period, on the First Business Day after the expiry ofthat Pricing Period; and(B)the last Pricing Period, for the period up to and including theTermination Date, on the Termination Date.(b)The Borrower must pay interest on Overdue Money, and suchinterest must be paid on demand by the Bank.(c)The interest rate on Overdue Money will be the Overdue Rate.6.3Computation of interestInterest will:(a)accrue from day to day;(b)be computed from and including the day when the money on whichinterest is payable becomes owing to the Bank by the Borrower until butexcluding the day of payment of that money; and(c)be calculated on the actual number of days elapsed on the basisof a 365 day year.6.4Capitalisation of interestThe Bank may:(a)capitalise, on a monthly or other periodical basis as the Bankdetermines, any part of any interest which becomes due and payableand interest is payable in accordance with this document on capitalisedinterest; and(b)continue to capitalise interest despite:(i)that as between the Bank and the Borrower therelationship of Bank and customer has ceased;(ii)any composition agreed to by the Bank;(iii)any judgment or order against the Borrower; or(iv)any other thing.6.5MergerIf the liability of the Borrower to pay to the Bank any money payable under aTransaction Document becomes merged in any deed, judgment, order or otherthing, the Borrower must pay interest on the amount owing from time to time underthat deed, judgment, order or other thing at the higher of the rate payable under theTransaction Documents and that fixed by or payable under that deed, judgment,order or other thing. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.7Payments7.1Place, manner and time of paymentEach Transaction Party must make payments to the Bank under theTransaction Documents:(a)at the address specified in clause 19.3 or at such other place reasonablyrequired by the Bank;(b)in a manner reasonably required by the Bank;(c)by 11.00 am local time in the place where payment is requiredto be made; and(d)in immediately available funds and without set-off,counter claim, condition or, unless required by law,deduction or withholding.7.2Gross-upIf a Transaction Party is required by law to deduct or withhold Taxes from anypayment it must:(a)make the required deduction and withholding;(b)pay the full amount deducted or withheld in accordance with the relevantlaw;(c)deliver to the Bank an original receipt for each payment; and(d)pay an additional amount with such payment so that, after all applicabledeductions or withholdings, the Bank actually receives for its own benefit thefull amount which would have been payable to the Bank if no deduction orwithholding had been required.7.3AppropriationSubject to any express provision to the contrary in any Transaction Document, theBank may appropriate any payment towards the satisfaction of any money due forpayment by the Borrower in relation to a Transaction Document in any way that theBank thinks fit and despite any purported appropriation by the Borrower.8Representations and warranties8.1NatureEach Transaction Party represents and warrants that:(a)duly incorporated: if it purports to be a corporation, it is duly incorporatedin accordance with the laws of its place of incorporation, validly exists underthose laws and has the capacity to sue or be sued in its own name and toown its property and conduct its business as it is being conducted;(b)capacity: it has capacity unconditionally to execute and deliverand comply with its obligations under the TransactionDocuments; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(c)action taken: it has taken all necessary action to authorisethe unconditional execution and delivery of, and thecompliance with its obligations under, the TransactionDocuments to which it is a party;(d)binding obligations: each Transaction Document constitutes the valid andlegally binding obligations of, and is enforceable against it by the Bank inaccordance with its terms (subject to any necessary stamping orregistration and to equitable principles and insolvency laws);(e)priority: each Security Interest which each Transaction Documentpurports to create exists and has the priority which the Bank has agreed to(subject to any necessary stamping and registration);(f)authorisations: each authorisation from, and filing and registration with, aGovernment Body necessary to enable it to unconditionally execute anddeliver and comply with its obligations under the Transaction Documents towhich it is a party has been obtained, effected and complied with;(g)no contravention: the unconditional execution and delivery of, andcompliance with its obligations by it under, the Transaction Documents towhich it is a party do not:(i)contravene any law to which it or any of its property is subject or anyorder or directive from a Government Body binding on it or any of itsproperty;(ii)contravene its constituent documents;(iii)contravene any agreement or instrument to which it is a party;(iv)contravene any obligation it has to any other person; or(v)require it to make any payment or delivery in relationto any Financial Indebtedness (other than ExcludedFinancial Indebtedness) before the scheduled date forthat payment or delivery;(h)correct information: all information given and each statement made toany Bank by it or at its direction in relation to the Transaction Documents,is correct, complete and not misleading;(i)full disclosure: it has disclosed to the Bank all information which theBorrower has or has access to and which is relevant to the assessmentby the Bank of the nature and amount of the risks undertaken by theBank becoming a creditor of or taking a Security from it;(j)Financial Statements: the Financial Statements of each of Transaction Partygiven to the Bank under clause 9.3:(i)are a true, fair and accurate statement of their respective financialperformance and position and their respective consolidated financialperformance and position at the date to which they are prepared;and(ii)have been prepared in accordance with clause 9.2 and 9.3, Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.except for such departures expressly disclosed in those FinancialStatements;(k)no change in financial position: there has been no change in the financialperformance or position of a Transaction Party since the date to which thelast Financial Statements given to the Bank under clause 9.3 were prepared,which has a Material Adverse Effect;(l)no related party transaction: no person has contravened orwill contravene sections 208 or 209 of the Corporations Actdue to a Transaction Party entering into or performing itsobligations under a Transaction Document;(m)no proceeding: except as notified to the Bank in writing before the date ofthis document, no litigation, arbitration or administrative proceeding iscurrent, pending or, to the knowledge of the Borrower, threatened, whichhas, or the adverse determination of which would be likely to have, aMaterial Adverse Effect;(n)no trust: except as notified to the Bank in writing before the date of thisdocument, no Transaction Party enters into a Transaction Document astrustee of any trust;(o)sole owner and no Encumbrances: except as notified to the Bank inwriting before the date of this document:(i)each Transaction Party is the sole legal and beneficial owner of theproperty it purports to own; and(ii)there are no Encumbrances over the property of any TransactionParty other than Permitted Encumbrances;(p)no existing default: no Event of Default, Review Event orPotential Event of Default subsists;(q)ranking of obligations: each obligation of the Borrowerunder this document ranks at least pari passu with allunsecured and unsubordinated obligations of the Borrowerexcept obligations mandatorily preferred by law;(r)warranties correct: the representations and warranties given by anyTransaction Party in any Transaction Document are correct in all materialrespects and not misleading in any material respect and will be when given orrepeated;(s)no immunity: each Transaction Party and its property are free of anyright of immunity from set-off, proceedings or execution in relation to itsobligations under any Transaction Document;(t)insurance: the Insurances are enforceable against the relevant insurer inaccordance with their terms and are not void or voidable;(u)trust provisions: in relation to each Transaction Party which enters into anyTransaction Document as trustee of a Trust:(i)the Trustee has power as trustee of the Trust to execute and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.perform its obligations under the Transaction Documents;(ii)the Trustee, in executing the Transaction Documents and enteringinto those transactions, have properly performed their obligations tothe beneficiaries of the Trust;(iii)all necessary action required by the Trust Deed to authorisethe unconditional execution and delivery of, and compliancewith its obligations under, the Transaction Documents hasbeen taken;(iv)the Trustee is the only trustee of the Trust;(v)no effective action has been taken to remove the Trustee as trusteeof the Trust or to appoint an additional trustee of the Trust;(vi)(A)the Trustee has a right to be fully indemnified outof the property of the Trust in relation to all of its obligationsunder the Transaction Documents;(B)the Trustee has not released or disposed of its equitable lien overthe property of the Trust which secures that indemnity; and(C)the property of the Trust is sufficient to satisfy that indemnity;(vii)the Trustee has complied with all of its obligations as trustee of theTrust in relation to execution of the Transaction Documents;(viii)no effective action has been taken or, so far as theTrustee is aware, is contemplated by thebeneficiaries of the Trust to terminate the Trust;(ix)the Trustee has disclosed to the Bank full details of:(A)the Trust and any other trust or fiduciary relationship affectingthe property of the Trust and, without limitation, has given tothe Bank copies of any instruments creating or evidencing theTrust; and(B)the Trustee’s other trusteeships (if any);(x)the Trust is properly constituted and the Trust Deed is notvoid, voidable or otherwise unenforceable;(xi)the rights of the beneficiaries of the Trust in relation to, andtheir interest in, the property of the Trust are subject to:(A)the rights of the Bank in relation to, and their respective interestsin, the property of the Trust; and(B)any rights or interests in the property of the Trust to which theBank may from time to time be subrogated; and(xii)the Trustee:(A)if it is a corporation, is duly incorporated in accordance withthe laws of its place of incorporation, validly exists under thoselaws and has the capacity to sue and be sued in its Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.own name, to own property and to act as trustee of the Trust;(B)if it is natural person, has the capacity to be trustee of the Trust;(v)solvency: each Transaction party is not insolvent;(w)corporate benefit: each of the Transaction Parties will receive corporatebenefit by entering into the Transaction Documents to which they are a party.8.2General(a)The interpretation of any statement contained in any representation orwarranty will not be restricted by reference to or inference from any otherstatement contained in any other representation or warranty.(b)The Borrower acknowledges that the Bank enters into theTransaction Documents in reliance on each representation andwarranty.(c)Each representation and warranty survives the execution of the TransactionDocuments and is deemed to be repeated with reference to the facts andcircumstances then existing on the date each Funding Notice is issued, oneach Funding Date, on the last day of each Funding Period and on each daythat an Annual Compliance Certificate or Interim Compliance Certificate isgiven.9General obligations9.1FeesThe Borrower must pay to the Bank:(a)restructure fee: on or before execution of the Restatement Deed, a non-refundable Restructure Fee of $30,000;(b)Corporate Markets Loan Facility Fee: a non-refundable facility fee onthe Facility Limit in respect of the Corporate Markets Loan Facilitycalculated at 0.95% per annum from the date of the ‘Variation Date’under the Restatement Deed, which will:(i)accrue from day to day from the date of this document up toand including the Termination Date;(ii)be payable monthly in arrears, on the first Business Day ofeach Month;(iii)be calculated on the actual number of days elapsed and onthe basis of a 365 day year;(c)Reset Fee: on the first Business Day of each Pricing Period (other thanthe first Pricing Period) a non-refundable fee of $150.00;(d)Not used(e)Bank Guarantee service fee: on and from the first services fee charge Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.date following 30 June 2014, a non-refundable fee in respect of each BankGuarantee of 50% of the applicable Bank Guarantee Margin calculated on theFace Value of the Bank Guarantee, payable on a pro- rata basis half yearly inarrears, with the first payment due six months after the relevant Funding Dateof the Bank Guarantee, and subsequent payments due every six monthsthereafter until the Bank Guarantee Matures or Expires or is cancelled. Thisfee will be calculated on the actual number of days elapsed and on the basisof a 365 day year; and(f)Bank Guarantee issuance fee: a non-refundable fee in respect of each BankGuarantee of 50% of the applicable Bank Guarantee Margin calculated on theFace Value of the Bank Guarantee (or $125 whichever is greater), payable onthe relevant Funding Date of the Bank Guarantee.9.2RecordsThe Borrower must ensure that each Transaction Party:(a)prepares and keeps books, accounts and other records inaccordance with the law and Accounting Standards; and(b)on demand, makes the same available for inspection and copying by theBank.9.3Financial Statements and other financial informationThe Borrower must give to the Bank:(a)annual Financial Statements: as soon as practicable, and in any eventwithin 120 days after the end of each Financial Year the consolidated auditedFinancial Statements of the Reading Entertainment Australia Group for thatFinancial Year;(b)Quarterly Financial Statements: as soon as practicable, and inany event within 45 days after the end of each Quarter (other thanthe Quarter ending 31 December) the consolidated unauditedFinancial Statements of the Reading Entertainment Australia Groupfor that Quarter (showing both actual and budget figures);(c)group structure diagram: within 120 days after the end of eachFinancial Year, a group structure diagram in relation to ReadingInternational Inc. and the Reading Entertainment Australia Group whichlists all the then Group Members and which contains such otherinformation in relation to the legal relationship between ReadingInternational Inc. and the Reading Entertainment Australia GroupMembers as the Bank reasonably requires;(d)budget: as soon as practicable, and in any event before 31 March for eachFinancial Year, a consolidated budget for the Reading EntertainmentAustralia Group for the current Financial Year showing the budgeted profitand loss, balance sheet and cash flow for the Reading EntertainmentAustralia Group and such other matters customarily dealt with in suchbudgets;(e)deregistration: not used; and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(f)other financial information: promptly on reasonable notice from the Bank,such additional information in relation to the financial condition and theoperations of the Borrower and each other Transaction Party as the Bankreasonably requests from time to time.The Borrower must ensure that all Financial Statements given to the Bank under theTransaction Documents are prepared in accordance with the Corporations Act andthe Accounting Standards.If after the date of this document there is a change in the accounting principles orpractices referred to in the definition of 'Accounting Standards' and the Bank or theBorrower reasonably considers that, if the change were to apply for the purposes ofthis document, the change would have a material effect on the Financial Statementsor the calculation of the financial ratios in clause 9.7, the Bank and the Borrowershall endeavour to agree mutually acceptable changes to this document so that theaccounting change can be adopted for the purposes of this document.9.4Other informationThe Borrower must give to the Bank:(a)other information: on reasonable notice from the Bank, any otherinformation in the possession or under the control of a Transaction Partywhich in the Bank’s reasonable opinion is necessary to verify theBorrower’s compliance with any Transaction Document;(b)Annual Compliance Certificate: as soon as practicable, and inany event within 120 days after the end of each Financial Year, anAnnual Compliance Certificate for that Financial Year signed by atleast one director of the Borrower;(c)Interim Compliance Certificate: as soon as practicable, and in anyevent within 45 days after the end of each Quarter (other than theQuarter ending 31 December) an Interim Compliance Certificate for theprevious 12 months signed by at least one director of the Borrower;(d)tenancy schedule: as soon as practicable, and in any event within 120days of the end of each Financial Year an updated tenancy schedule foreach Freehold Property, including (without limitation) the following details:(i)the name of each tenant;(ii)area let by each tenant;(iii)current passing rent paid by each tenant;(iv)the lease start date;(v)the lease term;(vi)the lease maturity date;(vii)the option term (if any);(viii)rent review details; and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(ix)any other material or special clauses or conditions;(e)Valuations: on demand (provided that no more than one demand is made in aFinancial Year and the Bank reasonably considers that there has been amaterial devaluation of the freehold and leasehold interests subject to theCollateral Security), and in any event within 30 days of the end of every 36month period from the date of this document, a Valuation in respect of eachFreehold Property and leasehold interest that is subject to the CollateralSecurity. Each Valuation is to be at the Borrower’s expense, addressed to theBank, conducted by an Approved Valuer and in a form and substance (otherthan as to value) reasonably satisfactory to the Bank;(f)not used;(g)details of any proceeding: full details of any litigation, arbitration,administrative proceeding or native title claim which affects a TransactionParty and which has or the adverse determination of which would be likely tohave a Material Adverse Effect, as soon as it is commenced or to theknowledge of the Borrower is threatened; and(h)claims: on being notified of it, full details of any event which entitles theBorrower or the Bank to claim more than $1,000,000 under the Insurances.9.5Other financial undertakingsEach Transaction Party must ensure that:(a)negative pledge: no Encumbrances exist on its property (including theSecured Property and the land and improvements known as 78Middleborough Road, Old Burwood Road, Burwood Victoria), exceptPermitted Encumbrances;(b)permitted financial transactions: it does not, without the prior writtenconsent of the Bank:(i)incur any Financial Indebtedness except PermittedFinancial Indebtedness;(ii)provide any financial accommodation (excluding trade credit in theordinary course of business) except Permitted FinancialAccommodation;(c)disposals: must not dispose of any of its assets, either in asingle transaction or in a series of transactions whetherrelated or not and whether voluntary or involuntary, exceptPermitted Disposals;(d)mergers: a Transaction Party does not:(i)enter into any merger, reconstruction or amalgamation; or(ii)acquire any property or business or make any investment ifthe property, business or investment is substantial in relationto the relevant Transaction Party, Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.if it would have or be likely to have a Material Adverse Effect;(e)maintain status: it does everything necessary to maintain its corporateexistence in good standing and:(i)ensures that it has the right and is properly qualified to conduct itsbusiness in all relevant jurisdictions; and(ii)obtains and maintains all Authorisations necessary for the conduct ofits business;(iii)comply with all laws affecting it or its business inall relevant jurisdictions(f)Distributions: it must not make any Distribution except:(i)Permitted Distributions;(ii)to another Transaction Party; or(iii)with the Bank’s prior written consent (such consentnot to be unreasonably withheld),and provided that:(iv)no Event of Default subsists; and(v)such Distribution will not cause an Event of Default;(g)Taxes: must(i)promptly pay when they become due for payment (or reimburse theBank on demand for) all Taxes payable by it from time to time otherthan Taxes being contested in good faith where it has madeadequate provisioning;(ii)not transfer any Tax losses to any person other than to the Borrower inconnection with the preparation of consolidated annual FinancialStatements or in connection with the Reading Entertainment AustraliaGroup's tax consolidation arrangements; and(iii)not become a member of a consolidated group for the purposes of Part3-90 of the Income Tax Assessment Act 1936 and the Income Tax Act1997 including any amendments thereto (including any amendmentsmade by the New Business Tax (Consolidation Act (No. 1)) 2002 andthe New Business Tax System (Consolidation, Value Shifting, Damagesand other Measures) Act 2002) other than in accordance with a TaxSharing Agreement or otherwise on terms approved by the Bank;(h)Guarantor accession: if at any time:(i)there is a new wholly-owned member of the ReadingEntertainment Australia Group that earns any revenue, holdsan asset or is otherwise not dormant; or(ii)a wholly-owned member of the Reading Entertainment Australia Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Group (as at the date of this document that is not a Guarantor)generates any revenue, acquires an asset or ceases to be dormant,promptly, and in any event within 45 days, it procures the execution of:(iii)a Guarantor Accession Deed; and(iv)an all assets fixed and floating charge in favour of theBank, in such form as the Bank requires,by such of those wholly-owned subsidiaries as are required to rectify thatsituation and provides to the Bank any documents or evidence in relation to anysuch acceding entity as the Bank may reasonably consider necessary inrespect to the entering into, validity and enforceability of the accessiondocuments;(i)Major developments: in respect of any major development projects tobe undertaken by the Transaction Parties (that are outside of thebudgeted capital expenditure that has been disclosed to the Bank):(i)the Bank is provided with developmentbudgets and other information reasonablyrequested by the Bank; and(ii)the Bank is given the first right of refusal in relation to the fundingof the project;(j)Major acquisitions: in respect to any acquisitions or investments inassets to be undertaken by the Transaction Parties, the Bank’swritten consent is obtained for (and prior to) the purchase of:(i)any freehold title or ground lease with a remaining tenor of 25 yearsor more and a consideration greater than $50,000,000; and(ii)the purchase of any other operating businessassets with a consideration greater than$25,000,000.(k)Management Fees: the aggregate Management Fees paid by theTransaction Parties in a Financial Year does not exceed the amount setout in the ‘Amount’ column corresponding to that Financial Year set out inthe following table (without the Bank’s prior written consent):Financial Year Ending Amount31 December 2015$5,250,00031 December 2016$5,512,50031 December 2017$5,788,12531 December 2018$6,077,53131 December 2019$6,381,408No Management Fees may be paid while an Event of Default subsists;(l)Burwood property: Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(i)no Encumbrances exist on the land and improvements known as78 Middleborough Road, Old Burwood Road, Burwood Victoria(except Permitted Encumbrances); and(ii)it does not, without the prior written consent of the Bank, incur anyFinancial Indebtedness in respect of (or secured by) the land andimprovements known as 78 Middleborough Road, Old BurwoodRoad, Burwood Victoria (except Permitted Financial Indebtedness);(m)Preservation and protection of Security: it does everything necessary orreasonably required by the Bank to:(i)keep the Secured Property in good repair and in goodworking order;(ii)promptly pay when they become due for payment (orreimburse the Bank on demand for) all Taxes payable inrespect of the Secured Property;(iii)preserve and protect the value of the Secured Property as a whole; and(iv)protect and enforce its title and the Bank’s title as mortgagee to theSecured Property.9.6Insurance(a)Subject to the provisions of the Transaction Documents, the Borrowermust effect and maintain insurance over and in relation to theSecured Property, the business operations of the Group (includingbusiness interruption) and for public liability with insurers, foramounts, against risks and on terms and conditions:(i)that the Bank reasonably requires; or(ii)if the Bank does not notify the Borrower of its requirements, that aprudent and reasonable owner of the Secured Property would effectand maintain, including insurance for full replacement value on areinstatement basis.(b)Subject to the provisions of the Transaction Documents, theBorrower must give to the Bank on demand a certificate in form andsubstance satisfactory to the Bank from the insurer to the effect thatthe required Insurances are current and no premium is overdue.9.7Financial ratios(a)The Borrower must ensure that:(i)Fixed Charges Cover Ratio: at each Calculation Date, the FixedCharges Cover Ratio for the Calculation Period ending on that date is notless than 1.70 times.(ii)Leverage Ratio: at each Calculation Date, the Leverage Ratio forthe Calculation Period ending on that date is less than or equal to Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.3.25 times.(iii)Loan to Value Ratio: at each Calculation Date, the Loan to ValueRatio for the Calculation Period ending on that date is less than orequal to 70%.(b)A financial ratio or amount to be determined under clause 9.7(a) must betested or determined by reference to the most recently prepared FinancialStatements. The calculation of any amounts on a consolidated basis must bemade in accordance with the requirements of the Accounting Standardsrelating to the consolidation of entities.9.8Environment(a)Each Transaction Party must ensure that at all times all practical andreasonable steps that can be taken and measures and precautions thatcan be adopted are taken or adopted by each Transaction Party toensure that:(i)all persons, things and activities of any kind on or using the Landcomply with all Environmental Laws and any consent, permit,approval, licence, authorisation, certification, order or directiongranted or issued under any Environmental Law;(ii)if there is any non-compliance with any Environmental Law or anyconsent, permit, approval, licence, authorisation, certification, order ordirection granted or issued under any Environmental Law:(A)the impact on the Land and the environment is minimised; and(B)steps are taken as quickly as possible to rectify the non-compliance, eliminate or reduce any liability arising from the non-compliance and to ensure the non-compliance does not recur;(iii)it or any person on the Land does not:(A)allow onto or permit to exist on the Land any Contaminant; or(B)allow a Contaminant to escape or be released into theenvironment,if to do so would be in breach of any Environmental Law or anyconsent, permit, approval, licence, authorisation, certification,order or direction granted or issued under any Environmental Lawor could give rise to an order or direction being issued under anyEnvironmental Law; and(iv)if any Contaminant is discovered on or affecting the Land (other thana Contaminant which is safely stored in accordance with lawfulauthority) or, without lawful authority, escapes or is released from theLand into the environment:(A)the impact on the Land and the environment is minimised; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.and(B)steps are taken as quickly as possible to safely contain theContaminant and to remove the Contaminant from theenvironment or the Land or reduce the levels of the Contaminant toa level required or recommended by the relevant GovernmentBody as safe and in either case to eliminate or reduce any liabilityarising from the Contaminant and do all things necessary torestore the Land and the environment.(b)If there is any non-compliance under clauses 9.8(a)(i), (ii) or (iii) or anyContaminant is discovered or the Borrower has reason to believe thatthere is some Contaminant on the Land requiring action to be taken underclause 9.8(a)(iv), the Borrower must immediately notify the Bank.(c)If there is or the Bank has reason to believe that there may be anynon-compliance under clauses 9.8(a)(i), (ii) or (iii) or any Contaminant isdiscovered or the Bank has reason to believe that there is some Contaminanton the Land requiring action to be taken underclause 9.8(a)(iv), the Borrower, at the request of the Bank, must procureand furnish to the Bank, in a form acceptable to the Bank, an EnvironmentalAssessment Report in relation to the Land and any operations conducted on it.(d)The Borrower indemnifies the Bank from and against all:(i)Environmental Liability; and(ii)damages, losses, outgoings, costs, charges or expenses suffered orincurred by the Bank in respect of any action, claim or demand made orbrought in respect of or otherwise arising from or in connection with anybreach of any Environmental Law in relation to the Land.(e)The Borrower must immediately notify the Bank of:(i)the existence of any Contaminant on or adjacent to or affecting theLand; and(ii)the receipt by any Transaction Party of anynotice, order or direction:(A)to clean up any Contaminant on the Land; or(B)alleging any breach of Environmental Law.(f)If requested by the Bank, the Borrower must provide the Bankwith a copy of each environmental consent, permit, approval,licence, authorisation, certification, order and direction relating tothe Land together with confirmation that:(i)it is complying with the terms and conditions of eachconsent, permit, approval, licence, authorisation,certification, order and direction; and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(ii)it has renewed each consent, permit, approval, licence,authorisation, certification, order and direction asappropriate.(g)The Borrower must:(i)when reasonably required by the Bank, obtain or permit the Bankto obtain an Environmental Assessment Report from a personapproved by the Bank in relation to the Land; and(ii)promptly comply with any reasonable recommendation contained inany Environmental Assessment Report relating to compliance withEnvironmental Law in relation to the Land and obtain any consent,permit, approval, licence, authorisation, certification, order and directionrequired in order to comply with that recommendation.9.9No defaultThe Borrower must ensure that an Event of Default does not occur.9.10Obligations of TrusteesIf a Transaction Party is a Trustee the Borrower must ensure that it:(a)ensures that the property of the Trust is not mixedwith any other property;(b)complies with its obligations as trustee of the Trust;(c)does not release, dispose of or otherwise prejudice its right of indemnityagainst, and equitable lien over, the property of the Trust and its right ofindemnity (if any) against the beneficiaries of the Trust in relation to anymoney owing to the Bank;(d)at the Bank’s request:(i)exercises its right of indemnity against, and equitable lien over, theproperty of the Trust and its right of indemnity (if any) against thebeneficiaries of the Trust in relation to any money owing to the Bank;and(ii)assigns to the Bank those indemnities and that equitable lien andotherwise facilitates the subrogation of the Bank to thoseindemnities and that equitable lien;(e)does not, if the Trust is a unit trust, consent to or register the transfer ofunits in the Trust or cancel, repurchase, redeem or issue any units in theTrust;(f)ensures that:(i)another person is not appointed as trustee of the Trust;(ii)the Trust is not terminated or its terms varied;(iii)the Trustee does not resign and is not removed orreplaced as trustee of the Trust;(iv)the property of the Trust is not resettled; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(v)the capital of the property of the Trust is not distributed at any time; and(vi)income of the Trust is not distributed to anyone other than aTransaction Party while an Event of Default or Potential Eventof Default subsists;(g)prepares and keeps full and true records and books of accounts of theTrust and makes them available for inspection and copying by the Bankon demand; and(h)does not default in performing or observing its obligationsunder the Transaction Documents.9.11Release for Permitted DisposalsThe Bank must on request from (and at the cost of) a Transaction Party releasefrom the Collateral Security that part of the Secured Property that is the subject of aPermitted Disposal (other than a Permitted Disposal of the kind referred to inparagraph (a) of that term's definition).10Events of Default10.1NatureEach of the following is an Event of Default (whether or not caused by anythingoutside the control of any Transaction Party):(a)non-payment: a Transaction Party does not pay on the due date anyprincipal, interest and fees due for payment by it under a TransactionDocument in accordance with the relevant Transaction Document;(b)other non-compliance: a Transaction Party does not comply with anyother obligation under a Transaction Document and if that default iscapable of rectification:(i)it is not rectified within five Business Days (or any otherlonger period agreed by the Bank) after its occurrence; or(ii)the Transaction Party does not during that period take all actionwhich in the Bank’s reasonable opinion is necessary to rectify thatdefault;(c)untrue warranty: a representation, warranty or statement made ordeemed to be made by a Transaction Party in a Transaction Documentis untrue or misleading in any material respect or a reply by aTransaction Party to a requisition made by, or on behalf of, the Bank isuntrue or misleading in any material respect;(d)void document: a Transaction Document is void, voidable or otherwiseunenforceable by the Bank or is claimed to be so by a Transaction Party;(e)compliance unlawful: it is unlawful for a Transaction Party to comply withany of its obligations under a Transaction Document or it is claimed to beso by a Transaction Party; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(f)loss of priority: a Security Interest created by or purportedly created by aCollateral Security does not have or ceases to have the priority which itpurports to have under the relevant Transaction Document or becomesineffective to secure the payment of the money or compliance with theobligations which it purports to secure, otherwise than by any act of the Bank;(g)Insolvency Event: an Insolvency Event occurs inrelation to a Transaction Party;(h)authorisation ceasing: an Authorisation from a GovernmentBody necessary to enable:(i)a Transaction Party to comply with its obligations under a TransactionDocument or carry on its principal business or activity;(ii)a Transaction Party to carry on its principal business or activity; or(iii) the Bank to exercise its rights under a TransactionDocument, is withheld or ceases to be in full force and effect and, in thecase ofclause 10.1(h)(i), would have a Material Adverse Effect;(i)Material Adverse Effect: an event or series of events whether related ornot, including any material adverse change in the property or financialcondition of a Transaction Party, occurs which has a Material AdverseEffect;(j)cross default:(i)Financial Indebtedness (other than Excluded FinancialIndebtedness) of a Transaction Party in excess of $500,000becomes due for payment before its stated maturity other than bythe exercise of an option of the Transaction Party to pay it before itsmaturity;(ii)a Transaction Party fails to pay when due for payment (orwithin any applicable grace period) any Financial Indebtedness(other than Excluded Financial Indebtedness) in excess of$500,000;(iii)an obligation by a person to a Transaction Party to provide financialaccommodation or to acquire or underwrite Financial Indebtedness(other than Excluded Financial Indebtedness) in excess of $500,000ceases before its stated maturity other than by the exercise of anoption of the Transaction Party to cancel that obligation; or(iv)a marketable security issued by a Transaction Party and having a facevalue over $500,000 is required to be redeemed or repurchased beforeits stated maturity other than by the exercise of an option of the issuerto redeem or repurchase;(k)cessation of business: a Transaction Party ceases orthreatens to cease to carry on its business or a substantial partof its business;(l)enforcement of other Security: a person who holds a Security over Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.property of a Transaction Party exercises a right under that Security againstthe property to recover any money the payment of which is secured by thatSecurity or enforce any other obligation the compliance with which is securedby it;(m)undertaking: an undertaking given to the Bank (or its lawyers) by or onbehalf of a Transaction Party (or its lawyers) is not honoured inaccordance with its terms and if capable of rectification, is not rectifiedwithin three Business Days (or any other longer period agreed by theBank) after its occurrence;(n)reduction of capital: if a Transaction Party is a corporation:(i)it reduces or takes any action to reduce its capital other than by theredemption of redeemable preference shares;(ii)it passes or takes any action to pass a resolution ofthe type referred to in section 254N of theCorporations Act;(iii)it:(A)buys or takes any action to buy, or(B)financially assists (within the meaning of section 260A of theCorporations Act) or takes any action to financially assist anyperson to acquire,shares in itself or in a holding company of it,(o)investigation: if a Transaction Party is a corporation, an investigation isinstituted under the Corporations Act or other legislation into, or an inspectoris appointed to investigate, its affairs, which would have a Material AdverseEffect;(p)environmental claim: a Government Body takes any action, there is alegally valid claim or there is a legally enforceable requirement forexpenditure or for cessation or alteration of activity under an EnvironmentalLaw, which, in the reasonable opinion of the Bank, would have a MaterialAdverse Effect;(q)Management Fees: the aggregate Management Fees paid by theTransaction Parties in a Financial Year exceed the amount specified forthat Financial Year under clause 9.5(k) (without the Bank’s prior writtenconsent); or(r)Trust: if a Transaction Party is a Trustee:(i)the Trustee ceases to be the trustee or the only trustee of the Trust orany action is taken for the removal of the Trustee as trustee of the Trust,or for the appointment of another person as trustee in addition to theTrustee;(ii)an application or order is sought or made in any court, which is notwithdrawn or dismissed within ten Business Days, for:(A)the property of the Trust to be administered by the court; or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(B)an account to be taken in relation to the Trust; or(iii)non-compliance by the Trustee with its obligations as trustee under theTrust Deed which has a Material Adverse Effect.10.2Effect of Event of Default(a)If an Event of Default subsists the Bank may at any time by notice to theBorrower do any or all of the following:(i)cancel Facility: cancel any or all of the Facilities or any part of aFacility, specified in the notice;(ii)accelerate: make so much of the OutstandingAccommodation which is not then immediately due andpayable, any unpaid accrued interest or fees and any othermoney owing by the Borrower to the Bank in relation to theTransaction Documents either:(A)payable on demand; or(B)immediately due for payment;(iii)Not used(iv)Bank Guarantees:(A)by notice to the Borrower require the Borrower to pay immediatelyto the Bank the aggregate of the Face Values for all Current BankGuarantees as at the date of the notice, together with any unpaidaccrued interest or fees and any other money (including allIndemnity Amounts) owing by the Borrower tothe Bank in relation to the Transaction Documents;(B)pay the Beneficiaries of any one or more of the Current BankGuarantees the amount agreed between the Bank and the relevantBeneficiary sufficient to obtain from the Beneficiary anunconditional release of the Bank’s obligations under the relevantBank Guarantee on terms satisfactory to the Bank (actingreasonably).(v)engage consultants: at the cost of the Borrower, appoint (or requirethe Borrower to appoint) such accountancy, financial managementand other consultants as the Bank may nominate to investigate thebusiness affairs and financial condition of any Transaction Party andwhether each Transaction Party has complied with each TransactionDocument to which it is a party and to make recommendationsrelating to the manner in which the Transaction Party carries on itsbusiness. Each Transaction Party agrees to provide all assistanceand information required by the consultants (including making allfinancial records available and giving access to all premises andrecords) to enable the consultants to conduct their examinationpromptly, completely and accurately. No Transaction Party is obligedto accept the Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.recommendations of any consultant, and the Bank will assume noliability with respect to any actions a Transaction Party takes, or doesnot take, as a result of those recommendations; or(vi)treasury related transactions: if there are any Hedging Transactionsor treasury related transactions in existence between the Bank and theBorrower (Open Positions) then:(A)the Bank may close out the Open Positions, by entering intoopposite positions for the balance of the unexpired term, orby such other means as may be usual in the relevantmarket. Any such close out must be at market ratesprevailing at the time;(B)any costs incurred by the Bank in closing out Open Positions mustbe paid by the Borrower to the Bank immediately upon demand bythe Bank;(C)any gain derived from the closing out of the Open Positions will becredited to the Borrower and set off against the Amount Owing;and(D)the Bank will give the Borrower reasonable particulars of themanner of close out of the Open Positions and the basis ofcalculation of any amounts payable by or to the relevant Borrowerarising from that close out.(b)On receipt of a notice under clause 10.2(a)(ii)(A) or 10.2(a)(ii)(B), theBorrower must immediately pay in full the amounts referred to in thatnotice.10.3Cash Cover Account regarding Bank Guarantees(a)The Bank must credit so much of the money paid by the Borrower underclause 10.2(a)(iv)(A) which the Bank appropriates towards the FaceValues of Current Bank Guarantees to an account maintained by the Bankfor this purpose (Cash Cover Account).(b)The following provisions apply to the Cash Cover Account:(i)the account will be in the name of the Borrower;(ii)despite the Cash Cover Account being in the name of the Borrower,until the Release Date the money held in the account is not owed by theBank to the Borrower and the Borrower is not entitled to withdraw or bepaid any of that money (including interest credited to the account);(iii)the Bank must credit to the account interest at the CashCover Rate from time to time and that interest will becredited to the account monthly and on the Release Date;and(iv)without limiting this clause 10.3, the Bank may apply any amountsfrom time to time held in the account towards payment of anyamounts due and payable from time to time to the Bank under any Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Transaction Document.(c)On the Release Date, the Bank must pay to the Borrower thecredit balance of the Cash Cover Account.10.4Review EventsEach of the following is a Review Event (whether or not caused by anything outsidethe control of any Transaction Party):(a)there is an Insolvency Event in respect of Reading International Inc; and(b)a Change of Control occurs in relation to any Transaction Party.10.5Reviews(a)In addition to any other review rights the Bank has under this document, theBank may conduct a review of any Facility following a Review Event.(b)If a Review Event has occurred, then, at any time or from time to time:(i)the Bank may change any of the conditions applying to the Facilityincluding, but not limited to, increasing or otherwise varying the feespayable in connection with the Facility; and/or(ii)the Bank may terminate the Facility. If the Bank terminates theFacility, the Termination Date occurs on the date 30 days after thedate the Bank notifies the Borrower that it wishes to terminate theFacility.(c)The Bank may not change any of the conditions applying to the Facilityunless it has first given 30 days prior notice to the Borrower of theintended change.(d)If the Bank gives notice of any change to the conditions of anyFacility and the Borrower refuses to accept the changes before theend of the period of notice, then at the end of that period, the Facilitywill become repayable within 30 days of any demand by the Bank.(e)Nothing in this clause affects the Bank’s rights if any Event ofDefault occurs.11Costs and expenses11.1InterpretationA reference to “costs and expenses” in a Transaction Document includes legalcosts and expenses on a full indemnity basis.11.2NatureThe Borrower must on demand pay and if paid by the Bank reimburse to theBank:(a)the Bank’s reasonable costs and expenses relating to:(i)any Valuation obtained for the purposes of any Transaction Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Document;(ii)the negotiation, preparation, execution, stamping and registrationof the Transaction Documents or any document contemplated bythem;(iii)any consent, request for consent (whether or not given),communication or waiver of any right, or the variation, replacement ordischarge of any Transaction Document or any documentcontemplated by it;(iv)the enforcement or attempted enforcement or the preservation ofany rights of the Bank under the Transaction Documents;(v)the occurrence of any Event of Default orPotential Event of Default; and(vi)the lodgment or removal of any Encumbrance on theSecured Property by any person; and(b)subject to clause 18.14(d), any Taxes and registration or other fees (includingfines and penalties relating to the Taxes and fees) which are payable or areassessed by a relevant Government Body or other person to be payable inrelation to the Transaction Documents or any document or transactioncontemplated by them.11.3RemunerationThe Bank, any Receiver and any Attorney must be remunerated by the Borrowerfor any services rendered by them in relation to the enforcement of any right underthe Transaction Documents. The rate of the remuneration and the manner ofpayment will be that determined by the Bank, acting reasonably.12Indemnities12.1NatureThe Borrower indemnifies the Bank on demand against any liability, loss, cost orexpense (including Break Costs) caused or contributed to by:(a)any failure by any Transaction Party to comply with any obligation underany Transaction Document;(b)any Event of Default or Potential Event of Default;(c)the enforcement or attempted enforcement of any right by the Bank, anyReceiver or any Attorney under the Transaction Documents;(d)any Drawing requested by the Borrower not being granted by the Bankfor any reason other than a default by the Bank;(e)any payment not being made by the Borrower in accordance withany Transaction Document; or(f)any act by the Bank in reliance on any communication purporting to befrom the Borrower or to be given on behalf of the Borrower. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.12.2RepresentativesThe Borrower indemnifies each Receiver and Attorney and their respectiveRepresentatives and the Representatives of the Bank against any liability, loss, costand expense caused by anything the Bank is indemnified against under clause 12.1and the Bank holds the benefit of this clause 12.2 on trust for those persons.12.3Currency deficiencyIf there is any deficiency between:(a)an amount payable by a Transaction Party under a TransactionDocument which is received by the Bank in a currency other thanthe currency payable under the Transaction Document becauseof a judgment, order or otherwise; and(b)the amount produced by converting the payment received from thecurrency in which it was paid into the currency in which it was agreed tobe paid either directly or through a currency other than that in which itwas agreed to be paid,the Borrower must pay to the Bank the deficiency and any loss, costs or expensesresulting from it.12.4Independence and survivalEach indemnity in a Transaction Document is a continuing obligation, separate andindependent from the other obligations of the Borrower and survives the terminationof that Transaction Document.12.5Accounting for transactions(a)The Borrower irrevocably authorises the Bank to open such accounts asthe Bank requires in connection with a Facility.(b)The Borrower irrevocably authorises the Bank to debit from any account inthe name of the Borrower (including an account the Bank opens in theBorrower’s name) any amounts payable by the Borrower in relation to thatFacility or account, including interest, costs, Taxes, enforcement expensesand any amount payable under an indemnity.(c)If the Borrower authorises the Bank to debit any amount from anaccount, the Bank can debit that amount from that account even if itcauses the account to become overdrawn. Alternatively, if there areinsufficient cleared funds in that account, the Borrower authorises theBank to debit that amount from any account of the Borrower the Bankdecides, including an account the Bank opens in the Borrower’s name.(d)Where the Bank debits an account in the name of the Borrower, openedby:(i)the Borrower, the Borrower must pay the Bank interest (includingdefault interest if applicable) on any debit balance in accordancewith the terms of that account; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(ii)the Bank, the Borrower must pay the Bank interest on the overdrawnbalance of that account at the Overdue Rate applying to the relevantFacility or, if there is none, in accordance with the terms normallyapplied by the Bank to accounts of that type; or(iii)either the Borrower or the Bank, the overdrawn balance ofthe account in excess of the applicable Facility Limit isimmediately payable without further notice.(e)Unless otherwise provided, the Bank may apply any payment under or inconnection with this document towards satisfying obligations under thisdocument as the Bank sees fit.(f)Where the Bank is authorised to debit an amount from an account under thisdocument, it can do so without prior notice.12.6Liability for Regulatory Events(a)The Borrower acknowledges that the Services may beinterrupted, prevented, delayed or otherwise adverselyaffected by a Regulatory Event.(b)To the extent permitted by Law:(i)the Bank is not liable for any loss incurred by a Borrower or anyother person if an event described in clause 12.6(a) occurs,irrespective of the nature or cause of that loss, and the Bank hasno obligation to contest any Regulatory Event or to mitigate itsimpact on the Borrower or the Bank; and(ii)the Borrower releases the Bank from all liability in connection withany loss incurred by a Borrower or any other person if an eventdescribed in clause 12.6(a) occurs.(c)To the extent that the Bank’s liability cannot be excluded, theBank’s liability is limited to the cost of having the Servicesupplied again.(d)The Bank may use and disclose to any other financial institution or agency,any information about any Borrower, the Services or any person connectedwith it or the Services, for any purpose which the Bank, or any other financialinstitution, considers appropriate or necessary in connection with anyRegulatory Event or the Services and this may result in information beingtransmitted overseas.(e)The Borrower agrees to provide information to the Bank about it, theServices or any person connected with it or the Services on request, and topromptly procure any consents the Bank requires to give effect to clause12.6(d).13Goods and Services Tax13.1Taxable supply(a)If GST is payable by the Bank on any supply made under a Transaction Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Document, the Borrower must pay to the Bank an amount equal to the GSTpayable on the supply.(b)That amount must be paid at the same time that the consideration for thesupply is to be provided under the Transaction Document and must be paid inaddition to the consideration expressed elsewhere in the TransactionDocument.(c)On receiving that amount from the Borrower, the Bank must provide theBorrower with a tax invoice for the supply.13.2Adjustment eventsIf an adjustment event arises in relation to a supply made by the Bank to theBorrower under a Transaction Document, a corresponding adjustment must bemade between the Bank and the Borrower in relation to any amount paid to theBank by the Borrower under clause 13.1 and payments to give effect to theadjustment must be made.13.3PaymentsIf the Borrower is required under a Transaction Document to pay for or reimbursean expense or outgoing of the Bank or is required to make a payment under anindemnity in relation to an expense or outgoing of the Bank, the amount to be paidby the Borrower is the sum of:(a)the amount of the expense or outgoing less any input taxcredit in relation to that expense or outgoing that the Bank isentitled to; and(b)if the Bank’s recovery from the Borrower is in relation to a taxable supply, anamount equal to the GST payable by the Bank in relation to that recovery.14Increased costsIf the Bank determines that:(a)the cost to it of providing, funding or maintaining the Facility is increased;(b)an amount payable to the Bank or the effective return to the Bank under aTransaction Document is reduced;(c)the effective return to the Bank under any Transaction Document asa proportion of the capital of the Bank is reduced; or(d)the Bank must make a payment or forego any interest or other returncalculated by reference to any amount received or receivable by it fromany Transaction Party under a Transaction Document,because of:(e)any law, regulation or Government Body directive or request (whether ornot having the force of law) introduced or made after the date of thisdocument, including those relating to taxation, capital adequacy or reserverequirements or banking or monetary controls; or Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(f)any change in the interpretation or application of any of them,the Borrower must, within two Business Days after a demand by the Bank, pay tothe Bank the amount which, in the Bank’s reasonable opinion, will compensate theBank for the increased cost, reduction, payment or foregone interest or other return.15Illegality15.1PrepaymentIf because of any change after the date of this document in:(a)a law, regulation or a Government Body directive or request which islegally enforceable or compliance with which is in accordance withthe practice of responsible Banks in the relevant jurisdiction; or(b)the interpretation or application of any of them,the Bank determines that it is or it will become impossible or illegal or contrary tothat Government Body directive or request for:(c)the Bank to fund, provide or maintain the Facility or otherwisecomply with its obligations under the Transaction Documents; or(d)a person from whom the Bank has raised or proposes to raise money inrelation to the Facility to fund, provide or maintain that money,the Borrower must, within five Business Days after receipt of a notice from the Bankto do so, pay the amount referred to in clause 10.2(a)(ii)(A) or 10.2(a)(ii)(B) as ifthat notice were a notice under clause 10.2(a)(ii)(A) or 10.2(a)(ii)(B).15.2Facility terminatedThe Bank’s obligation to make Advances or Drawings under this documentterminates on the giving of a notice under clause 15.1.16Guarantee and indemnity16.1Guarantee(a)Each Guarantor unconditionally and irrevocably guarantees the payment tothe Bank of the Guaranteed Money.(b)If the Borrower does not pay the Guaranteed Money on time and inaccordance with the Transaction Documents, then the Guarantors agree topay the Guaranteed Money on demand from the Bank.(c)A demand may be made at any time and from time to time and whetheror not the Bank or the Bank has made demand on the Borrower or anyother Transaction Party. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.16.2Nature of guarantee(a)The guarantee in clause 16.1 is a continuing obligation despite anyintervening payment, settlement or other thing and extends to all of theGuaranteed Money.(b)As between each Guarantor and the Bank (but without affecting theobligations of any other Transaction Party) each Guarantor is liable underthis document in relation to the Guaranteed Money as a sole andprincipal debtor and not as surety.16.3Indemnity(a)Each Guarantor indemnifies the Bank against any liability or loss arisingand any costs it suffers or incurs:(i)if a Transaction Party does not, is not obliged to or is unable to pay theGuaranteed Money in accordance with the Transaction Documents;(ii)if a Guarantor is not obliged to pay the Bank an amount underclause 16;(iii)if the Bank is obliged, or agrees, to pay an amount to a trustee inbankruptcy or liquidator (of an insolvent person) in connection with apayment by a Transaction Party under or in connection with aTransaction Document;(iv)if a Guarantor defaults under the Guarantee in clause 16.1; or(v)in connection with any person exercising, or not exercising, rightsunder the Guarantee in clause 16.1.(b)Each Guarantor agrees to pay amounts due under thisindemnity immediately on demand from the Bank.16.4Reinstatement of rights(a)Following an Insolvency Event in respect of a Transaction Party, a personmay claim that a transaction (including a payment) in connection with thisGuarantee or the Guaranteed Money is void or voidable.(b)If a claim is made and upheld, conceded or comprised:(i)the Bank is immediately entitled as against the Guarantors to therights in respect of the Guaranteed Money to which it was entitledimmediately before the transaction; and(ii)on request from the Bank, each Guarantor agrees to do anything(including signing any document) to restore to the Bank anySecurity Interest (including this Guarantee) held by it from theGuarantors immediately before the transaction.16.5Rights of the Bank are protectedRights given to the Bank under this Guarantee (and each Guarantor’s liabilitiesunder it) are not affected by any act or omission by the Bank or by anything elsethat might otherwise affect them under law or otherwise, including: Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(a)the fact that it varies or novates any agreement under which theGuaranteed Money is expressed to be owing, such as by increasing theFacility Limit or extending the term;(b)the fact that it releases any Transaction Party or gives it aconcession, such as more time to pay;(c)the fact that a Transaction Party opens an account with it;(d)the fact that it releases, loses the benefit of or does notobtain any Security Interest;(e)the fact that it does not register any Security Interest whichcould be registered;(f)the fact that it releases any person who gives a guarantee or indemnityin connection with any Transaction Party’s obligations (including underclause 16.13);(g)the fact that a person becomes a Guarantor after thedate of this document (including under clause 16.14);(h)the fact the obligations of any person who guarantees any TransactionParty’s obligations (including under this Guarantee) may not beenforceable;(i)the fact that any person who was intended to guarantee any TransactionParty’s obligations does not do so or does not do so effectively;(j)changes in the membership, name or business of any person; or(k)the fact that a person who is a co-surety or co-indemnifier for payment of theGuaranteed Money is discharged under an agreement or by operation of law.16.6No merger(a)This Guarantee does not merge with or adversely affect,and is not adversely affected by, any of the following:(i)any other guarantee, indemnity, or Security Interest, or other rightor remedy to which the Bank is entitled; or(ii)a judgment which the Bank obtains against theGuarantors in connection with the Guaranteed Moneyor any other amount payable under this Guarantee.(b)The Bank may still exercise rights under this Guarantee as well as under thejudgment, other guarantee, indemnity, Security Interest, or other right orremedy.16.7Extent of Guarantor’s obligationsIf more than one person is named as “Guarantor”, each of them is liable for all theobligations under this Guarantee both individually and jointly with any one or moreother persons named as “Guarantor”. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.16.8Guarantor’s rights are suspendedAs long as any of the Guaranteed Money remains unpaid, the Guarantor may not,without the Bank’s consent:(a)reduce its liability under this Guarantee by claiming that it or anyother Transaction Party or any other person has a right of set-off orcounterclaim against the Bank;(b)exercise any legal right to claim to be entitled to the benefit of anotherguarantee, indemnity, or Security Interest given in connection with theGuaranteed Money or any other amount payable under this Guarantee;(c)claim an amount from another Transaction Party, or another guarantor of theGuaranteed Money (including a person who has signed this document as a“Guarantor”), under a right of indemnity in respect of this guarantee; or(d)claim an amount in the insolvency of a Transaction Party or of anotherguarantor of the Guaranteed Money (including a person who has signedthis document as a “Guarantor”).16.9Guarantor’s right of proof limitedEach Guarantor agrees not to exercise a right of proof after an event occurs relatingto the insolvency of a Transaction Party or another guarantor of the GuaranteedMoney (including a person who has signed this document as a “Guarantor”)independently of an attorney appointed under clause 16.12.16.10No set-off against assigneesIf the Bank assigns or otherwise deals with its rights under this Guarantee, theGuarantors may not claim against any assignee (or any other person who has aninterest in this Guarantee) any right of set-off or other right the Guarantors haveagainst the Bank.16.11Suspense accountThe Bank may place in a suspense account any payment it receives from theGuarantors if there is currently an Insolvency Event, or an Insolvency Event islikely to occur, in relation to any Transaction Party, but must apply it towardssatisfying the Guaranteed Money within six months unless the winding up of therelevant Guarantor has commenced.16.12Right to prove(a)The Guarantor irrevocably appoints the Bank and each of its AuthorisedRepresentatives individually as its attorney and agrees to formallyapprove all action taken by an attorney under this clause 16.(b)Each attorney may, at any time while anyGuaranteed Money is outstanding:(i)do anything which a Guarantor may lawfully do to exercise theirright of proof in respect of a Transaction Party after an InsolvencyEvent occurs in respect of such Transaction Party. These things Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.may be done in the Guarantor’s name or the attorney’s name and theyinclude signing and delivering documents, taking part in legalproceedings and receiving any dividends arising out of the right of proof;(ii)delegates its powers (including this power) and mayrevoke a delegation; and(iii)exercise its powers even if this involves a conflict of duty and even ifit has a personal interest in doing so.(c)The attorney need not account to a Guarantor for any dividend received onexercising the right of proof under clause 16.12(i) except to the extent thatany dividend remains after the Bank has received all of the GuaranteedMoney and all other amounts payable under the Guarantee.16.13Release of Guarantors(a)The Bank must, at the Borrower’s cost, executeany release documentation in respect of theBank’s rights under clause 16.(b)As between the Transaction Parties and the Bank, the Bank isnot obliged to consent to a release unless required to do by theterms of another Transaction Document.(c)The rights and obligations of the remaining Guarantors under the Guaranteein clause 16.1 will continue in full force and effect despite the release of aGuarantor under this clause 16.13.16.14New GuarantorsIf a Subsidiary of any Transaction Party is required by the terms of a TransactionDocument to become a Guarantor, the Borrower must ensure that such subsidiaryexecutes a Guarantor Accession Deed as a new Transaction Party.16.15ConsiderationEach Guarantor acknowledges having executed this document in return for theBank entering into the Transaction Documents at the request of the Guarantor andother valuable consideration.16.16New Guarantors(a)A person automatically becomes a party to this document as a Guarantor andTransaction Party (after the date of this document) by signing and delivering tothe Bank a Guarantor Accession Deed and doing anything else which theBank reasonably requests to ensure the enforceability of that person’sobligations as a Guarantor.(b)Each of the other parties to his document irrevocably appoints the Bankas its agent to sign on its behalf any Guarantor Accession Deed.(c)The execution of a Guarantor Accession Deed will not operate to release anyparty from its obligations under any Transaction Document. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.17Attorney17.1AppointmentIf and for so long as an Event of Default occurred and is continuing, the Borrowerirrevocably appoints the Bank its attorney with the power:(a)at any time to:(i)do everything which in the Attorney’s reasonable opinion isnecessary or expedient to enable the exercise of any right ofthe Bank in relation to the Transaction Documents;(ii)not used;(iii)complete the Transaction Documents to which it is a party; and(iv)appoint its directors, officers, employees andsolicitors as substitutes and otherwise delegate itspowers to any of them (except this power ofdelegation); and(b)at any time after a notice is given under clause 10.2(a)(ii)(A) or 10.2(a)(ii)(B), to do all acts and things which the Borrower is obliged to dounder the Transaction Documents or which in the Attorney’s opinion arenecessary or expedient to enable the exercise of any right of the Bankin relation to the Transaction Documents.17.2Not used17.3General(a)Any Attorney may exercise any right solely for the benefit of the Bank,even if the exercise of the right constitutes a conflict of interest orduty.(b)The Borrower by this document ratifies anything done or not done by theAttorney pursuant to the power of attorney.(c)The power of attorney is granted:(i)to secure the compliance by the Borrower with its obligations to theBank under the Transaction Documents and any proprietary interests ofthe Bank under the Transaction Documents; and(ii)for valuable consideration (receipt of which isacknowledged) which includes entry into of thisdocument by the Bank at the Borrower’s request. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.18General18.1Set-offThe Bank may set off any money due for payment by the Bank to the Borrower,whatsoever, including any money in any currency held by the Bank for the accountof the Borrower in any place, against any money due for payment by the Borrower tothe Bank under a Transaction Document.18.2Bank’s certificate(a)A certificate by the Bank relating to any amount owing under a TransactionDocument or as to its opinion in relation to any matter under anyTransaction Document is prima facie evidence against the Borrower of thematters certified unless proven incorrect or there is a manifest error.(b)The Bank is not obliged to give the reasons for its determination or opinionin relation to any matter under any Transaction Document. Any certification,determination or opinion relating to an amount must contain reasonabledetail as to how the amount was calculated.(c)A determination or an opinion of an Authorised Representative of the Bankwhich is given to the Borrower or otherwise expressed or acted on by theBank as being a determination or an opinion of the Bank will be deemed tobe a determination or opinion of the Bank.18.3Supervening legislationAny present or future legislation which operates:(a)to lessen or vary in favour of the Borrower any of itsobligations in connection with the TransactionDocuments; or(b)to postpone, stay, suspend or curtail any rights of the Bank underthe Transaction Documents,is excluded except to the extent that its exclusion is prohibited or renderedineffective by law.18.4Time of the essenceTime is of the essence as regards any obligations of the Borrower or any date orperiod determined under the Transaction Documents, and if any date or period isaltered by agreement between the parties, time is of the essence as regards suchaltered date or period.18.5Business Days(a)If the day on or by which anything, other than making a payment, must bedone by the Borrower under a Transaction Document is not a BusinessDay, that thing must be done on or by the preceding Business Day.(b)If a payment would otherwise be due on a day which is not a BusinessDay it will be due on the immediately following Business Day. However, Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.if this would result in the payment being due in the month after theoriginal due day or after the Termination Date it will be due on theimmediately preceding Business Day.(c)If anything, including making a payment, is to be done by the Borroweron or by a particular day and it is done:(i)after the time by which a Transaction Document states it must bedone or, if the Transaction Document does not state a time, after4.00 pm in the place where it is to be done; or(ii)on a day which is not a Business Day,it will be deemed to have been done at 9.00 am on the next Business Day.18.6Confidentiality(a)The Bank must keep any information or document relating to aTransaction Party confidential. However, the Bank may disclose to anyperson any information or document relating to a Transaction Party:(i)where permitted in a Transaction Document;(ii)to another party to a Transaction Document;(iii)to a potential transferee, assignee, participant or sub-participant of theBank’s interests under a Transaction Document or to any otherperson who is considering entering into contractual relations with it inconnection with a Transaction Document;(iv)to the Bank’s related bodies corporate and shareholders, or to anyemployee, banker, lawyer, auditor or other consultant of the Bank, itsrelated bodies corporate or its shareholders;(v)to the professional advisers or consultants of any party involved inconnection with any Facility who are bound by a duty or obligation ofconfidence;(vi)if required by law or by any Government Body or stock exchange;(vii)in connection with any legal proceedings relating to a TransactionDocument or a document delivered under or in relation to aTransaction Document;(viii)if the information or document is in the public domain; or(ix)with the consent of the Borrower (which must not be unreasonablywithheld or delayed).(b)Subject to paragraph (c), the Transaction Parties shall keep confidentialand not disclose to any other person the terms of the TransactionDocuments.(c)However, the Transaction Parties and any officers or employees of eachTransaction Party may disclose such information:(i)with the prior written consent of the Bank; Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(ii)to the extent required by any applicable law or regulation;(iii)to the extent it reasonably deems necessary in connection with anyactual or contemplated proceedings or a claim with respect to thisclause 18.6; or(iv)to the extent permitted by clause 18.6(a) (other thanparagraph (iii)) as if each reference in that clause to the ‘Bank’were to a ‘Transaction Party’ and each reference to the‘Borrower’ were to the ‘Bank’.(d)The Bank and the Transaction Parties agree that:(i)neither of them will disclose information of the kind mentioned insection 275(1) of the PPS Act; and(ii)this document does not create a Security Interest.(e)This clause 18.6 survives the termination of this document.(f)The Bank acknowledges that:(i)information provided from time to time by the Transaction Parties tothe Bank may constitute confidential non-public information; and(ii)trading in marketable securities of Reading International Inc whilein possession of the information referred to clause 18.6(f)(i) willviolate United States' federal securities laws.(g)The Bank agrees to:(i)take reasonable precautions to maintain the confidentiality of theinformation referred to in clause 18.6(f)(i); and(ii)advise any party to whom the information referred to in clause18.6(f)(i) is disclosed that it may not trade in the marketablesecurities of Reading International Inc while in the possession ofsuch information.(h)This clause 18.6 will not be deemed to restrict the provision ofinformation by any party to the Internal Revenue Service of theUnited States of America.18.7Exchange rateSubject to any express provision to the contrary, if for the purposes of aTransaction Document it is necessary to convert one currency into anothercurrency, the conversion must be effected using an exchange rate selected by theBank acting reasonably and in accordance with it usual practices.18.8Records as evidenceThe Bank may maintain records specifying:(a)payments made by the Bank for the account of aTransaction Party under a Transaction Document;(b)payments by a Transaction Party for the account of the Bankunder a Transaction Document; and Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(c)interest, fees, charges, costs and expenses payable in relation tothe Transaction Documents,and those records will against the Borrower constitute prima facie evidence of thematters set out in them.18.9Further assurancesThe Borrower must promptly execute all documents and do all things that the Bankfrom time to time reasonably requires to:(a)effect, perfect or complete the provisions of each Transaction Document orany transaction contemplated by it;(b)establish the priority of or reserve or create any Security Interestcontemplated by or purported to be reserved or created by a TransactionDocument; and(c)stamp and register each Transaction Documentin any relevant jurisdiction and by any personthat the Bank thinks fit.18.10AmendmentThis document may only be varied or replaced by a document executed by theparties.18.11Waiver and exercise of rights(a)A right in favour of the Bank under a Transaction Document, a breach of anobligation of the Borrower under a Transaction Document or an Event ofDefault can only be waived by an instrument signed by the Bank. No otheract, omission or delay of the Bank constitutes a waiver binding, or estoppelagainst, the Bank.(b)A single or partial exercise or waiver by the Bank of a right relating to aTransaction Document does not prevent any other exercise of that rightor the exercise of any other right.(c)The Bank and its Representatives are not liable for any loss, cost orexpense of the Borrower caused or contributed to by the waiver, exercise,attempted exercise, failure to exercise or delay in the exercise of a rightand the Bank holds the benefit of this clause 18.11 on trust for itself and itsRepresentatives.18.12Rights cumulativeThe rights of the Bank under the Transaction Documents are cumulative and inaddition to its other rights.18.13Approval and consentExcept where a Transaction Document expressly provides otherwise, the Bankmay conditionally or unconditionally give or withhold any consent under aTransaction Document and is not obliged to give its reasons for doing so.18.14Assignment(a)The Borrower must not dispose of or Encumber any right under the Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Transaction Documents without the consent of the Bank.(b)The Bank may assign any of its rights or novate, sub-participate, sell-down or transfer by whatever form or otherwise deal with any or all of itsrights and obligations under any Transaction Document without theconsent of, or notice to, the Borrower.(c)If an Event of Default subsists then, in order to facilitate the Bank to deal withits rights and obligations, the Bank may (but is not obliged to), from time totime, separate and sever any of its rights (or any part of any of its rights)described in a notice given by the Bank to the Borrower from its other rightsand obligations under any Transaction Document. Any such notice iseffective on the time of delivery to separate and sever the rights described inthe notice so that:(i)those rights and obligations are independent from, and may beassigned (including at law), novated, sub-participated, sold-down,transferred or otherwise dealt with separately from, any other of therights and obligations of the Bank under that TransactionDocument;(ii)those rights and obligations may be exercised differently from anyother rights and obligations of the Bank under that TransactionDocument; and(iii)the Outstanding Accommodation in respect of those rights may becalculated separately from the other Outstanding Accommodation.(d)If the Bank assigns its rights or transfers its rights and obligations underthis document or any other Transaction Document, no Transaction Partywill be required to pay any net increase in the aggregate amount of costs,Taxes, fees or charges which is a direct consequence of the assignment ortransfer.18.15CounterpartsThis document may consist of a number of counterparts and, if so, the counterpartstaken together constitute one document.18.16Sovereign immunityThe Borrower irrevocably waives any immunity that it or its property has from:(a)set-off;(b)legal, arbitral or administrative proceedings;(c)any process or order of any court, administrative tribunal or arbitrator forthe satisfaction or enforcement of a judgment, order or arbitral award or forthe arrest, detention or sale of any property; or(d)service on it of any process, judgment, order or arbitral award,on the grounds of sovereignty or otherwise under any law of any jurisdiction whereany proceedings may be brought or enforced in relation to any Event of Default undera Transaction Document. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.18.17Governing law and jurisdiction(a)This document is governed by and is to be construed in accordance withthe laws applicable in the Relevant Jurisdiction.(b)Each party irrevocably and unconditionally submits to the non-exclusivejurisdiction of the courts exercising jurisdiction in the Relevant Jurisdictionand any courts which have jurisdiction to hear appeals from any of thosecourts and waives any right to object to any proceedings being brought inthose courts.18.18Telephone recordingThe Borrower consents to the Bank recording any telephone conversations betweenit and the Bank in relation to any Facility that are customarily recorded in the financeindustry or where the Borrower is notified prior to the commencement of thetelephone conversation and such recordings being used in any arbitral or legalproceedings and any telephone recording remains the Bank’s sole property at alltimes.18.19Legal adviceThe Borrower acknowledges that, except as expressly set out in a TransactionDocument:(a)none of the Bank or any of its advisers have given any representation orwarranty or other assurance to it in relation to any Transaction Document orthe transactions contemplated by any Transaction Document, including as toTax or other effects;(b)it has not relied on the Bank or any of its advisers or on any conduct(including any recommendation) by the Bank or any of its advisers; and(c)it has obtained its own independent financial, Tax and legal advice.18.20Further assurancesWhenever the Bank requests a Transaction Party to do anything:(a)to ensure any Transaction Document (or any security interest (as defined inthe PPS Act) or other Security Interest, right or power under any TransactionDocument) is fully effective, enforceable and perfected with the contemplatedpriority;(b)for more satisfactorily assuring or securing to the Bank the property thesubject of any such security interest or other Security in a mannerconsistent with the Transaction Documents; or(c)for aiding the exercise of any right or power inany Transaction Document,the Transaction Party shall do it promptly at its own cost. This may include obtainingconsents, getting documents completed and signed, supplying information,delivering documents and evidence of title and executed blank transfers, and givingpossession or control with respect to any Secured Property. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.18.21Exclusion of certain provisionsWhere there is a Security Interest under any Transaction Document:(a)to the extent permitted, sections 142 and 143 of the PPS Act are excludedin full and will not apply to that Security Interest and the Bank need notcomply with sections 95, 118, 121(4), 125, 130 ,132(3)(d), and 132(4) ofthe PPS Act; and(b)each Transaction Party waives its right to receive from the Bank anynotice required under s157 of the PPS Act or the provisions of the PPSAct referred to in s144 of the PPS Act, except section 135.This does not affect any rights a person has or would have other than by reason ofthe PPS Act and applies despite any other clause in any Transaction Document.18.22Notice of changesEach Transaction Party agrees to notify the Bank at least 14 days before:(a)a Transaction Party (or if the Transaction Party is trustee of a Trust or apartner of a partnership, the Trust or the partnership) changes its name;(b)any ABN, ARBN or ARSN allocated to a Transaction Party (or if theTransaction Party is trustee of a Trust or a partner of a partnership, theTrust or the partnership) changes, is cancelled or otherwise ceases toapply to it (or if it does not have an ABN, ARBN or ARSN, one isallocated, or otherwise starts to apply, to it); or(c)the Borrower becomes trustee of a trust, or a partner in apartnership, which is not expressly contemplated in the TransactionDocuments.19Notices19.1GeneralA notice, demand, certification, process or other communication relating to aTransaction Document must be in writing in English and may be given by anAuthorised Representative of the sender.19.2How to give a communicationIn addition to any other lawful means, a communication may be given by being:(a)personally delivered;(b)left at the party’s current address for notices;(c)sent to the party’s current address for notices by pre-paid ordinary mailor, if the address is outside Australia, by pre-paid airmail; or(d)sent by fax to the party’s current fax number for notices. Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.19.3Particulars for delivery of notices(a)The particulars for delivery of notices are initially:Transaction Parties:As set out in schedule 1. Bank:Address:Level 28, 500 Bourke Street, Melbourne, Victoria 300Fax:1300 889 390Attention:Andrew Tham(b)Each party may change its particulars for delivery of notices by notice toeach other party.19.4Communications by postSubject to clause 19.6, a communication is given if posted:(a)within Australia to an Australian address, three BusinessDays after posting; or(b)in any other case, ten Business Days after posting.19.5Communications by faxSubject to clause 19.6, a communication is given if sent by fax when the sender’sfax machine produces a report that the fax was sent in full to the addressee. Thatreport is conclusive evidence that the addressee received the fax in full at the timeindicated on that report.19.6After hours communicationsIf a communication is given:(a)after 5.00 pm in the place of receipt; or(b)on a day which is a Saturday, Sunday or bank or public holiday inthe place of receipt,it is taken as having been given at 9.00 am on the next day which is not aSaturday, Sunday or bank or public holiday in that place.19.7Process serviceAny process or other document relating to litigation, administrative or arbitralproceedings relating to a Transaction Document may be served on a party to thisdocument by any method contemplated by this clause 19.7 or in accordance withany applicable law.Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 21READING INTERNATIONAL, INC. – LIST OF SUBSIDIARIESSubsidiary (Jurisdiction of Incorporation)A.C.N. 143 633 096 Pty Ltd (Australia)AHGP, Inc. (Delaware)AHLP, Inc. (Delaware)Angelika Film Centers, LLC (Delaware)Angelika Film Center Mosaic, LLC (Nevada)Angelika Film Center Union Market, LLC (Nevada)Angelika Film Centers (Dallas), Inc. (Texas)Angelika Film Centers (Plano) LP (Nevada)Angelika Plano Beverage LLC (Texas)Angelika Plano Holdings, LLC (Nevada)Australia Country Cinemas Pty Ltd (Australia)Australian Equipment Supply Pty Ltd (Australia)Bayou Cinemas LP (Delaware)Bogart Holdings Ltd (New Zealand)Burwood Developments Pty Ltd (Australia)Carmel Theatres, LLC (Nevada)Citadel Agriculture, Inc. (California)Citadel Cinemas, Inc. (Nevada)Citadel Realty, Inc. (Nevada)City Cinemas, LLC (Nevada)Consolidated Amusement Holdings, LLC (Nevada)Consolidated Cinema Services, LLC (Nevada)Consolidated Cinemas Kapolei, LLC (Nevada) Consolidated Entertainment, LLC (Nevada)Courtenay Car Park Ltd (New Zealand)Craig Corporation (Nevada)Darnelle Enterprises Limited (New Zealand)Dimension Specialty, Inc. (Delaware)Epping Cinemas Pty Ltd (Australia)Gaslamp Theatres, LLC (Nevada)Hope Street Hospitality, LLC (Delaware)Hotel Newmarket Pty Ltd (Australia)Kaahumanu Cinemas, LLC (Nevada)Kahala Cinema Company LLC (Nevada)KMA Cinemas, LLC (Nevada)Liberty Live, LLC (Nevada)Liberty Theaters, LLC (Nevada)Liberty Theatres Properties LLC (Nevada)Liberty Theatricals, LLC (Nevada)Minetta Live, LLC (Nevada)Movieland Cinemas (NZ) Ltd (New Zealand)NZ Equipment Supply Limited (New Zealand)Newmarket Properties #3 Pty Ltd (Australia)Newmarket Properties No. 2 Pty Ltd (Australia)Newmarket Properties Pty Ltd (Australia)Orpheum Live, LLC (Nevada)Queenstown Land Holdings Ltd (New Zealand)RCPA LLC (Pennsylvania) Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.RDI Employee Investment Fund LLC (California)Reading Arthouse Limited (New Zealand)Reading Auburn Pty Ltd (Australia)Reading Australia Leasing (E&R) Pty Ltd (Australia)Reading Belmont Pty Ltd (Australia)Reading Cannon Park Pty Ltd (Australia)Reading Capital Corporation (Delaware)Reading Center Development Corporation (Pennsylvania)Reading Charlestown Pty Ltd (Australia)Reading Cinemas Courtenay Central Ltd (New Zealand)Reading Cinemas Management Pty Ltd (Australia)Reading Cinemas NJ, Inc. (Delaware)Reading Cinemas of Puerto Rico, Inc. (Puerto Rico)Reading Cinemas Pty Ltd (Australia)Reading Cinemas Puerto Rico LLC (Nevada)Reading Cinemas USA LLC (Nevada)Reading Colac Pty Ltd (Australia)Reading Consolidated Holdings (Hawaii), Inc. (Hawaii)Reading Consolidated Holdings, Inc. (Nevada)Reading Courtenay Central Limited (New Zealand)Reading Dandenong Pty Ltd (Australia)Reading Dunedin Limited (New Zealand)Reading Elizabeth Pty Ltd (Australia)Reading Entertainment Australia Pty Ltd (Australia)Reading Exhibition Pty Ltd (Australia)Reading Foundation, LTD (Nevada)Reading Holdings, Inc. (Nevada)Reading International Cinemas LLC (Delaware)Reading International Services Company (California)Reading Licenses Pty Ltd (Australia)Reading Maitland Pty Ltd (Australia)Reading Malulani, LLC (Nevada)Reading Management NZ Limited (New Zealand)Reading Melton Pty Ltd (Australia)Reading Moonee Ponds Pty Ltd (Australia)Reading Murrieta Theater, LLC (Nevada)Reading New Lynn Limited (New Zealand)Reading New Zealand Ltd (New Zealand)Reading Pacific LLC (Nevada)Reading Properties Indooroopilly Pty Ltd (Australia)Reading Properties Lake Taupo Ltd (New Zealand)Reading Properties LLC (Nevada)Reading Properties Manukau Ltd (New Zealand)Reading Properties New Zealand Ltd (New Zealand)Reading Properties Pty Ltd (Australia)Reading Properties Taringa Pty Ltd (Australia)Reading Property Holdings Pty Ltd (Australia)Reading Queenstown Ltd (New Zealand)Reading Restaurants NZ Limited (New Zealand)Reading Rouse Hill Pty Ltd (Australia)Reading Royal George, LLC (Delaware)Reading Sunbury Pty Ltd (Australia)Reading Theaters, Inc. (Delaware)Reading Wellington Properties Ltd (New Zealand)Rhodes Peninsula Cinema Pty Ltd (Australia)Rialto Brands Ltd (New Zealand) Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Rialto Cinemas Ltd (New Zealand)Rialto Distribution Ltd (New Zealand)Rialto Entertainment Ltd (New Zealand)Ronwood Investments Ltd (New Zealand)RREC LLC (Pennsylvania)Rydal Equipment Co. (Pennsylvania)S Note Liquidation Company, LLC (Nevada)Sails Apartments Management Ltd (New Zealand)Shadow View Land and Farming, LLC (Nevada)Sutton Hill Properties, LLC (Nevada)The Port Reading Railroad Company (New Jersey)The Theatre At Legacy L.P (Texas).Tobrooke Holdings Ltd (New Zealand)Trans-Pacific Finance Fund I, LLC (Delaware)Trenton-Princeton Traction Company (New Jersey)Twin Cities Cinemas, Inc. (Delaware)US Agricultural Investors, LLC (Delaware)US Development, LLC (Nevada)US International Property Finance Pty Ltd (Australia)Washington and Franklin Railway Company (Pennsylvania)Westlakes Cinema Pty Ltd (Australia)Wilmington and Northern Railroad Company (Pennsylvania)Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 23.1 Consent of Independent Registered Public Accounting Firm We have issued our reports dated April 29, 2016, with respect to the consolidated financial statements, schedule andinternal control over financial reporting included in the Annual Report of Reading International, Inc. on Form 10-K forthe year ended December 31, 2015. We hereby consent to the incorporation by reference of said reports in theRegistration Statements of Reading International, Inc. on Forms S-8 (File No. 333-112069, effective January 21, 2004,File No. 333-167101, effective May 26, 2010) and on Form S-3 (File No. 333-162581, effective October 20, 2009). /s/ GRANT THORNTON LLPLos Angeles, CaliforniaApril 29, 2016 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 31.1CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Ellen M. Cotter, certify that:1)I have reviewed this Form 10-K of Reading International, Inc.;2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, 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, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this report;4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (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 bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reportingto be designed under our supervision, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period coveredby this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (orpersons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role inthe registrant’s internal control over financial reporting./s/ Ellen M. CotterEllen M. CotterPresident and Chief Executive Officer(Principal Executive Officer) April 29, 2016 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 31.2CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Devasis Ghose, certify that:1)I have reviewed this Form 10-K of Reading International, Inc.;2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, 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, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this report;4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (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 bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;b)designed such internal control over financial reporting, or caused such internal control over financial reportingto be designed under our supervision, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles;c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period coveredby this report based on such evaluation; andd)disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (orpersons performing the equivalent functions):a)all significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; andb)any fraud, whether or not material, that involves management or other employees who have a significant role inthe registrant’s internal control over financial reporting./s/ Devasis GhoseDevasis GhoseChief Financial Officer and Treasurer(Principal Financial Officer)April 29, 2016 Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 32.1CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the accompanying Annual Report of Reading International, Inc. (the “Company”) on Form10-K for the fiscal year ended December 31, 2015 (the “Report”), I, Ellen M. Cotter, Chief Executive Officer of theCompany, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:1.The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and2.The information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company./s/ Ellen M. CotterEllen M. CotterPresident and Chief Executive Officer(Principal Executive Officer) April 29, 2016Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 32.2CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the accompanying Annual Report of Reading International, Inc. (the “Company”) on Form10-K for the fiscal year ended December 31, 2015 (the “Report”), I, Devasis Ghose, Chief Financial Officer of theCompany, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:1.The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and2.The information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company./s/ Devasis Ghose Devasis GhoseChief Financial Officer(Principal Financial Officer)April 29, 2016Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: READING INTERNATIONAL INC, 10-K, April 29, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

Continue reading text version or see original annual report in PDF format above