Basis Of Presentation

3 Months Ended

Mar. 31, 2013

Basis Of Presentation [Abstract]

Basis Of Presentation

Note 1 – Basis of Presentation

Reading International, Inc., a Nevada corporation (“RDI” and collectively with our consolidated subsidiaries and corporate predecessors, the “Company,” “Reading” and “we,” “us,” or “our”), was founded in 1983 as a Delaware corporation and reincorporated in 1999 in Nevada.  Our businesses consist primarily of:

· the development, ownership, and operation of multiplex cinemas in the United States, Australia, and New Zealand; and

· the development, ownership, and operation of retail and commercial real estate in Australia, New Zealand, and the United States.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”) for interim reporting.  As such, certain information and disclosures typically required by US GAAP for complete financial statements have been condensed or omitted.  The financial information presented in this quarterly report on Form 10-Q for the period ended March 31, 2013 (the “March Report”) should be read in conjunction with our Annual Report filed on Form 10-K for the year ended December 31, 2012 (our “2012 Annual Report”) which contains the latest audited financial statements and related notes.  The periods presented in this document are the three (“2013 Quarter”) months ended March 31, 2013 and the three (“2012 Quarter”) months ended March 31, 2012.

In the opinion of management, all adjustments of a normal recurring nature considered necessary to present fairly in all material respects our financial position as of March 31, 2013 and our results of our operations and cash flows for the three months ended March 31, 2013.  The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results of operations to be expected for the entire year.

Liquidity Requirements

Liberty Theatre Term Loan

As our Liberty Theater Term Loan was due to mature on April 1, 2013, the March 31, 2013 outstanding balance of this debt of $6.4million is classified as current on our balance sheet.  On March 25, 2013, we borrowed $5.0 million on our BofA Revolver.  On April 1, 2013, we used $2.3 million of the revolver proceeds to partially repay the Liberty Theater Term Loan and we received a forbearance letter from the bank extending the loan’s term date to June 1, 2013 in exchange for a forbearance payment of $20,000.  We intend to refinance the remaining balance with similar financing.  See Note 18 – Subsequent Events.

Tax Settlement Liability

As indicated in our 2012 Annual Report, in accordance with the agreement between the U.S. Internal Revenue Service and our subsidiary, Craig Corporation, is obligated to pay $290,000 per month, $3.5 million per year, in settlement of our tax liability for the tax year ended June 30, 1997.

For the abovementioned liabilities, we believe that we have sufficient borrowing capacity under our various credit facilities, together with our $50.8 million of cash and cash equivalents, to meet our anticipated short-term working capital requirements for the next twelve months.

Marketable Securities

We had investments in marketable securities of $55,000 and $55,000 at March 31, 2013 and December 31, 2012, respectively.  We account for these investments as available for sale investments.  We assess our investment in marketable securities for other-than-temporary impairments in accordance with Accounting Standards Codification (“ASC”) 320-10 for each applicable reporting period.  These investments have a cumulative income of $8,000 included in accumulated other comprehensive income at March 31, 2013.  For the three months ended March 31, 2013, our net unrealized gain (loss) on marketable securities was ($1,000).  For the three months ended March 31, 2012, our net unrealized gain (loss) on marketable securities was ($12,000).  During the three months ended March 31, 2012, we sold $3.0 million of our marketable securities with a realized gain of $111,000.  During the three months ended March 31, 2013, we did not buy or sell any marketable securities.

Deferred Leasing Costs

We amortize direct costs incurred in connection with obtaining tenants over the respective term of the lease on a straight-line basis.

Deferred Financing Costs

We amortize direct costs incurred in connection with obtaining financing over the term of the loan using the effective interest method, or the straight-line method, if the result is not materially different.  In addition, interest on loans with increasing interest rates and scheduled principal pre-payments, is also recognized using the effective interest method.

Accounting Pronouncements Adopted During 2013

No new pronouncements were adopted during the 2013 Quarter.

New Accounting Pronouncements

No new pronouncements were made pertaining to our Company’s accounting during the 2013 Quarter.