Note 3 – Business Segments

We organize our operations into two reportable business segments within the meaning of FASB ASC 280-10 - Segment Reporting. Our reportable segments are (1) cinema exhibition and (2) real estate. The cinema exhibition segment is engaged in the development, ownership, and operation of multiplex cinemas. The real estate segment is engaged in the development, ownership, and operation of commercial properties. Incident to our real estate operations we have acquired, and continue to hold, raw land in urban and suburban centers in Australia and New Zealand.

The tables below summarize the results of operations for each of our principal business segments for the three and six months ended June 30, 2011 and 2010, respectively. Operating expense includes costs associated with the day-to-day operations of the cinemas and the management of rental properties including our live theater assets (dollars in thousands):

Three months ended June 30, 2011	Cinema Exhibition		Real Estate			Intersegment Eliminations			Total
Revenue	$	62,236	$	6,533		$	(1,667	)	$	67,102
Operating expense		49,901		2,521			(1,667	)		50,755
Depreciation & amortization		3,000		1,285			--			4,285
General & administrative expense		669		207			--			876
Segment operating income	$	8,666	$	2,520		$	--		$	11,186
Three months ended June 30, 2010	Cinema Exhibition		Real Estate			Intersegment Eliminations			Total
Revenue	$	52,433	$	5,962		$	(1,415	)	$	56,980
Operating expense		43,282		2,173			(1,415	)		44,040
Depreciation & amortization		2,555		1,110			--			3,665
Impairment expense		--		2,239			--			2,239
General & administrative expense		635		481			--			1,116
Segment operating income (loss)	$	5,961	$	(41	)	$	--		$	5,920

Reconciliation to net income attributable to Reading International, Inc. shareholders:	2011 Quarter			2010 Quarter
Total segment operating income	$	11,186		$	5,920
Non-segment:
Depreciation and amortization expense		7			192
General and administrative expense		3,880			3,501
Operating income		7,299			2,227
Interest expense, net		(5,406	)		(4,067	)
Other income (loss)		91			(129	)
Net gain (loss) on sale of assets		(68	)		351
Income tax benefit (expense)		13,774			(12,201	)
Equity earnings of unconsolidated joint ventures and entities		269			266
Income (loss) from discontinued operations		1,654			(8	)
Net income (loss)		17,613			(13,561	)
Net income attributable to the noncontrolling interest		(181	)		(153	)
Net income (loss) attributable to Reading International, Inc. common shareholders	$	17,432		$	(13,714	)

Six months ended June 30, 2011	Cinema Exhibition		Real Estate		Intersegment Eliminations			Total
Revenue	$	111,710	$	12,849	$	(3,334	)	$	121,225
Operating expense		93,043		4,875		(3,334	)		94,584
Depreciation & amortization		5,904		2,507		--			8,411
General & administrative expense		1,280		394		--			1,674
Segment operating income	$	11,483	$	5,073	$	--		$	16,556

Six months ended June 30, 2010	Cinema Exhibition		Real Estate		Intersegment Eliminations			Total
Revenue	$	106,279	$	11,553	$	(2,811	)	$	115,021
Operating expense		87,973		4,376		(2,811	)		89,538
Depreciation & amortization		5,108		2,254		--			7,362
Impairment expense		--		2,239		--			2,239
General & administrative expense		1,228		706		--			1,934
Segment operating income	$	11,970	$	1,978	$	--		$	13,948

Reconciliation to net income attributable to Reading International, Inc. shareholders:	2011 Six Months			2010 Six Months
Total segment operating income	$	16,556		$	13,948
Non-segment:
Depreciation and amortization expense		10			390
General and administrative expense		7,316			6,888
Operating income		9,230			6,670
Interest expense, net		(9,337	)		(7,164	)
Other income (expense)		75			(713	)
Net gain (loss) on sale of assets		(68	)		351
Income tax benefit (expense)		13,138			(12,783	)
Equity earnings of unconsolidated joint ventures and entities		633			617
Income from discontinued operations		1,695			29
Net income (loss)		15,366			(12,993	)
Net income attributable to the noncontrolling interest		(414	)		(368	)
Net income (loss) attributable to Reading International, Inc. common shareholders	$	14,952		$	(13,361	)