READING INTERNATIONAL INC

RCES

Our Financing Strategy

In 2024, due primarily to the negative operating conditions caused by the 2023 Hollywood strikes and increased interest rates, as well as the lingering impacts from the COVID-19 pandemic, we (i) conserved our cash and chose to defer non-essential capital expenditures (such as cinema upgrades and refurbishments), (ii) refinanced our existing debt to provide longer maturity dates and eased financial covenants and/or obtained waivers of financial ratio tests and (iii) monetized one non-cinema real estate asset and identified certain other assets as candidates for potential monetization to raise additional liquidity. In February 2024, we sold an underutilized administrative office building in Culver City, California for $10 million and have, for the time being, implemented a remote work structure for our California. Proceeds were used to pay the mortgage of $8.4 million, with $1.3 million remaining for working capital purposes. It is estimated that moving to a 100% remote work model resulted in cost savings with respect to the year of approximately $2.0 million.

In January 2025, we closed on the sale of our Courtenay Central properties for NZ$38.0 million and subsequently paid off our loan with Westpac. In February 2025, we exercised our remaining 6-month extension option to extend the Valley National Bank loan’s maturity date from April 1, 2025 to October 1, 2025. In March, we entered into a call option agreement with respect to our Townsville, Queensland, Australia property providing for a sale price of A$32.0 million. For tax reasons, call option agreements are used in Queensland in connection with real property transactions that provide for a due diligence period. The option holder has made a A$1.6 million earnest money deposit and, if the option is exercised following the due diligence period, a closing in mid-April is anticipated. Proceeds will be used to pay down our NAB borrowings and for working capital purposes.

‎During 2024, we worked to prepare other assets for potential monetization. This included resolving various title issues related to our approximately 23.9 acre Williamsport, Pennsylvania rail road yard, which has been identified for sale and is currently on the market.

During 2024, we also worked to restructure our rent payments under various cinema leases. As a result of these negotiations, we have been able to defer rent payments of approximately $9.6 million.

During 2024, our bank loans with Bank of America, NAB, and Westpac required that our Company comply with certain covenants. We either complied with the underlying bank covenants or obtained waivers from compliance. In 2024, we got an additional AU$20.0 million loan from NAB, and NZ$5.0 million loan from Westpac to meet short-term liquidity needs.

If our Company is unable to generate sufficient cash flow in the upcoming months or if its cash needs exceed our Company’s borrowing capacity under its available facilities, we could be required to adopt one or more alternatives, such as reducing, delaying or eliminating planned capital expenditures, selling additional assets, or further restructuring debt or our lease obligations.

Generally speaking, we believe our relationship with our landlords and lenders is good.

For more information about our borrowings, including loan modifications and modifications to waivers of certain covenants, please refer to Part II, Item 8 – Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements-- Note 13 – Borrowings.

The table below presents the changes in our total available resources (cash and borrowings), debt-to-equity ratio, working capital, and other relevant information addressing our liquidity for the last five years:

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(1)This relates to the construction facilities specifically negotiated for 44 Union Square redevelopment project.

(2)Typically, our working capital is reported as a deficit, as we receive revenue from our cinema business ahead of the time that we have to pay our associated liabilities. We use the money we receive to pay down our borrowings in the first instance.

We endeavor to manage our cash, investments, and capital structure 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 financing within the overall constraints of our financial strategy. In the past, we used cash generated from operations and other excess cash to the extent not needed for any capital expenditure, to pay down our loans and credit facilities providing us some flexibility on our available loan facilities for future use and thereby, reducing interest charges. To meet our liquidity’s need, in 2024, we have worked with our lenders to extend the maturity of various loans.

Refer to Part II, Item 8 – Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements-- Note 13 – Borrowings for further details on our various borrowing arrangements.

On December 31, 2024, our consolidated cash and cash equivalents totaled $12.3 million. Of this amount, $5.0 million, $6.4 million and $0.9 million were held by our U.S., Australian and New Zealand operations, respectively. The funds held in Australia and New Zealand are, under our applicable bank lending arrangement, subject to limitations on their use outside of Australia or New Zealand as applicable. Due to the impact of the COVID-19 pandemic, the lack of U.S. Federal assistance (including funds from the Payroll Protection and Shuttered Venue Programs), the 2023 Hollywood strikes and continuing funding needs in the US, we no longer intend to indefinitely reinvest offshore any earnings derived from our Australian and New Zealand operations.

We have historically funded our working capital requirements, capital expenditures and investments in individual properties primarily from a combination of internally generated cash flows and debt. During 2024, the need for such funding for capital expenditures and investments has decreased, as we have deferred to the fullest extent reasonable such expenditures. However, due primarily to the 2023 Hollywood strikes and the increase in interest rates, our operating income is still insufficient to cover our costs and expenses accordingly, our negative working capital has increased over the course of the year. The funding that has been required, has been funded predominantly from cost reductions, bridge facility debt and strategic asset sales and landlord concessions. As noted in the preceding table, we had no unused available unrestricted corporate credit facilities at December 31, 2024.

The change in cash and cash equivalents for the three years ended December 31, 2024 is as follows:

Operating Activities

Cash used in operating activities for the twelve months ended December 31, 2024 decreased by $5.9 million, to cash used of $3.8 million comparedto cash used in the same period of prior year of $9.7 million, driven by a $11.7 million increase in net changes in operating assets and liabilities primarily due to decrease in receivables and increase in accounts payable and accrued expense plus deferred revenues and other liabilities, partially offset by an increase in Net operating Loss of $3.4 million.

Investing Activities

Cash provided in investing activities during the twelve months ended December 31, 2024, increased by $6.7 million, to cash provided of $4.0 million from a cash used of $2.7 million in the same period of prior year. This is mainly due to $9.7 million proceeds from sale of the Culver City office building in February 2024, partially offset by the delayed CAPEX spending compared to the proceeds from sale of our Maitland property in Australia in the fourth quarter of 2023.

Financing Activities

Cash provided in financing activities for the twelve months ended December 31, 2024, increased by $7.0 million, from a cash use of $6.7 million to a cash provided of $0.3 million due to the additional bridge loans of A$20.0 million from NAB in Australia and NZ$5.0 million facility increase from Westpac in New Zealand, partially offset by the repayment of existing loans.

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CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGEN