Note 1 – Description of Business and Segment Reporting

The Company

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 incorporated in 1999. Our businesses consist primarily of:

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

the development, ownership, operation and/or rental of retail, commercial and live venue real estate assets in Australia, New Zealand, and the United States.

Business Segments

Reported below are the operating segments of the Company for which separate financial information is available and evaluated regularly by the Chief Executive Officer, the chief operating decision-maker of the Company. As part of our real estate activities, we hold undeveloped land in urban and suburban centers in Australia, New Zealand, and the United States.

The table below summarizes the results of operations for each of our business segments for the quarter and nine months ended September 30, 2019 and 2018, 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.



	Quarter Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2019		2018		2019		2018
Revenue:
Cinema exhibition	$	66,733	$	70,671	$	197,101	$	223,109
Real estate		5,531		5,771		16,525		18,204
Inter-segment elimination		(1,808)		(2,181)		(5,524)		(6,918)
	$	70,456	$	74,261	$	208,102	$	234,395
Segment operating income (loss):
Cinema exhibition	$	6,021	$	8,202	$	17,931	$	30,983
Real estate		1,485		1,260		3,987		4,896
	$	7,506	$	9,462	$	21,918	$	35,879

A reconciliation of segment operating income to income before income taxes is as follows:



	Quarter Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2019		2018		2019		2018
Segment operating income (loss)	$	7,506	$	9,462	$	21,918	$	35,879
Unallocated corporate expense
Depreciation and amortization expense		(103)		(92)		(288)		(313)
General and administrative expense		(4,493)		(4,831)		(14,205)		(16,717)
Interest expense, net		(1,871)		(1,748)		(5,924)		(5,132)
Equity earnings of unconsolidated joint ventures		220		80		581		667
Gain (loss) on sale of assets		(1)		—		(1)		—
Other income (expense)		141		(130)		190		(273)
Income (loss) before income tax expense	$	1,399	$	2,741	$	2,271	$	14,111