READING INTERNATIONAL INC

SS

Where have we been, and where we are going.

We have discussed in some detail under the heading “Business Description” in Part I of this Report our views as to the historic impact of the COVID-19 pandemic, the 2023 Hollywood strikes, spiking interest rates and certain labor laws on our business and, while not repeating that disclosure here, we incorporate that more detailed discussion by reference to provide context and background. Our discussion below is intended to be more summary in nature.

Impact of the COVID-19 Pandemic

Since the onset of the COVID-19 pandemic, our business has faced significant challenges. However, the performance of certain 2024 blockbuster movie releases, including Inside Out 2, Deadpool & Wolverine, Wicked, Moana 2, Despicable Me 4, and Beetlejuice Beetlejuice, have reaffirmed the interest of audiences in the theatrical experience. While 2024 cinema revenues were behind 2023, due principally to the weaker overall movie slate in the first few months of 2024 – a legacy of the 2023 Hollywood strikes --, with a strong slate of films anticipated through the end of 2025 and a renewed commitment from the motion picture industry to prioritize theatrical releases, we remain optimistic about the future of the cinema business. Accordingly, we continue to use our resources (including the sale of non-cinema real estate assets) to support our investment in beyond-the-home entertainment, maintaining key cinemas and live theatres, enhancing amenities, while protecting those of our real estate assets which we believe offer the most significant potential for long term value accretion.

Challenges from the 2023 Hollywood strikes

The Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) strikes, which occurred from May 2, 2023, to September 27, 2023, and July 14, 2023 to November 9, 2023, respectively marked the first time in 63 years both unions struck simultaneously and halted film productions. This action delayed film releases and significantly impacted marketing and promotion efforts. Consequently, films released during the strike period, such as Blue Beetle and Expendables 4, underperformed at the box office, while many films were rescheduled causing disruption to the 2024 box office release calendar.

-35 -

With production now resumed, the cinema industry in 2024 navigated the ripple effects of the strikes, including postponed releases, which was evident during the first half of 2024.

Rising Interest Rates and Operating Costs

Between March 2022 and July 2023, the Federal Reserve raised the Federal Funds interest rates from 0.25% to 5.5%, the fastest hike in U.S. modern history. This significantly increased our interest expenses, further straining our liquidity. Although subsequent rate cuts in late 2024 provided some relief, the higher interest rates continue to impact our business.

Additionally, post-pandemic legislation has increased our labor costs, affecting wages, leave policies, and compliance expenses. Rising costs for goods, utilities, and insurance have caused compounding financial pressures. To offset these challenges, we have continued to look for ways to operate at our most efficient levels while also strategically raising ticket and Food and Beverage (F&B) prices so that we do not create barriers that would alienate or deter our customers. The hyper litigation environment in the U.S. has also put pressure on our earnings and cash flow, as plaintiff’s class action firms seek to enforce various internet privacy laws and laws pertaining to the structuring and regulation of social and business relationships in ways that we believe are beyond the scope of what was intended by the legislatures adopting these laws.

Strategic Measures and Financial Adjustments

To mitigate financial pressures and enhance liquidity, we have undertaken several initiatives:

1. Asset Monetization: Between 2021 and 2024, we sold seven real estate assets, generating $156.1 million in net proceeds. These proceeds helped pay down $82.2 million in debt, and fund $35.0 million capital improvements, while also helping us to sustain our operations. In addition, on January 31, 2025, we monetized our real estate holdings in Wellington, New Zealand, for NZ$38.0 million, part of which has been used to pay off New Zealand debt and repatriate to US.

While no assurances can be given, we have entered into a call option agreement with respect to our real property in Townsville, Queensland, Australia, providing for a purchase price of A$32.0 million. Due to Queensland tax issues, sales of commercial real estate in this province which have a due diligence component are structured as option agreements. The option holder has posted A$1.6 million in earnest money. The option agreement contemplates closing in mid-April, if following due diligence the option holder elects to proceed with the transaction. Maintaining our cinema focus, in the case of our Wellington properties, we have entered into an agreement for lease with respect to the cinema existing at Courtenay Central. In the case of our Townsville property, we intend to be leased back our existing cinema under a long-term lease.

2. Cinema Closures and Lease Adjustments: We have closed underperforming cinemas, where possible, including one in the U.S. in 2022, four in 2023 (three in the U.S. and one in New Zealand), and one in the U.S. in 2024. Additionally, we have renegotiated leases to reduce occupancy costs, receive deferrals or abatements, or shift to percentage-based rent agreements.

3. Administrative Cost-Saving Measures: We streamlined operations by selling our administrative office in Culver City, California, freeing up $1.3 million in cash and saving an estimated $2 million in operating costs for year 2025. We anticipate returning to an office environment in California later this year.

4. Food & Beverage Innovations: In 2024, our global cinema divisions achieved record-high F&B sales per capita. Beer and wine are available in all U.S. locations, with liquor licenses secured at most locations in Australia and New Zealand. The introduction of mobile ticketing and F&B apps has assisted in generating additional revenue while reducing staffing needs.

5. Deferrals of Capital Improvements: We have generally constrained capital investment in the refurbishment of our cinemas, and have only built out 5 cinemas over the past 5 years. This has, however, likely adversely impacted revenues at some of our cinemas to the extent that they are in competition with more recently updated or renovated offerings.

6. Ongoing Liquidity Management: We continue to evaluate our assets to evaluate any future monetization that may be needed, focusing on non-core real estate assets that do not offer long-term growth opportunities for our stockholders, and we will continue to close underperforming cinemas at the end of their lease terms. While the exact proceeds from future asset dispositions and the extent that they will ultimately be needed are uncertain, we remain confident in our ability to meet liquidity needs for 2025 and 2026.

-36 -

Real Estate Operations

Despite challenges in our cinema business, our real estate segment has remained resilient. Most of our Australian tenants have met rental obligations, providing a stable revenue stream. With regard to our architectural award winning 44 Union Square redevelopment project in New York City, in January 2022 we secured a long-term lease with Petco Health and Wellness Company (“Petco”), which opened in June 2023, and is paying rent on a full cash basis. Through 2024, our current broker, George Comfort & Sons, explored deals with tenants of varying uses, including wellness and entertainment.

In Australia and New Zealand, our third party (or non-cinema) rental space is 96% leased on a full rent paying basis, demonstrating the strength of these real estate holdings.

Looking Ahead

We anticipate continued improvements in cinema operations as audience levels rebound. The successes of films such as Inside Out 2, Deadpool & Wolverine, and Despicable Me 4 reaffirm the enduring appeal of the theatrical experience. Looking ahead, anticipated releases such as Mission Impossible 8, Lilo & Stitch, Superman, Jurassic World: Rebirth, Wicked: Part Two and Avatar: Fire and Ash strengthen our confidence in the cinema industry's future.

While challenges remain, we are committed to adapting and evolving. Through strategic investments, cost-saving measures, and a focus on audience engagement, we believe our Company is well positioned to navigate the evolving entertainment landscape and achieve sustainable growth in the coming years.

Our anticipated plans for 2025 and beyond are discussed in greater detail below.

RECENT DEVELOPMENTS

Recent developments in our two business segments are discussed below. For an overview of our two business segments, including a breakdown of assets that we own and/or manage, please see Part I, Item 1 – Our Business of this 2024 Form 10-K.

Cinema Exhibition

Key Performance Indicators

Food and Beverage Spend Per Patron

A key performance indicator utilized by management in our cinema segment is Food and Beverage (“F&B”) Spend Per Patron (“SPP”), which is calculated based on our total F&B Revenues on a post-tax basis divided by our attendance during a specific period.

One of our strategic priorities has been to continue upgrading the food and beverage menu at several of our global cinemas. As of December 31, 2024, we have a total of 38 theater locations with an upgraded food and beverage menus (i.e. menus that are beyond traditional popcorn, soda, and candy).

We use F&B SPP as a measure of our F&B operational performance as compared to that of our competitors. Although the profitability of our F&B operations is influenced by numerous factors, including labor and cost of goods, F&B SPP serves as an indicator of our ability to achieve consistent strong top-line performance. In addition, F&B SPP highlights our ability to optimize revenue by effectively promoting and selling supplementary products to our customers during each visit. Moreover, this metric assists in evaluating how well we can differentiate our F&B offerings from our competitors. Management in turn uses F&B SPP to adjust food and beverage pricing strategies at our individual theaters, measure the effectiveness of promotional marketing initiatives, optimize menu offerings, and to ensure price barriers are not created for our attendance.

During the fourth quarter of 2024, the F&B SPP of our U.S. Cinemas, $8.28, exceeded the F&B SPP of any publicly traded exhibitors.

-37 -

Average Ticket Price Per Patron

An additional key performance indicator utilized by management in our cinema segment is Average Ticket Price (“ATP”) per patron, which is calculated based on our total box office revenues on a post-tax basis divided by our attendance during a specific period. ATP serves to measure our operational cinema performance when compared to that of our competitors. ATP is a useful metric for evaluating ourability to achieve a strong top line performance. In addition, ATP gauges the effectiveness of our cinemas’ pricing strategies and our ability to draw back audiences to our theaters. Management uses ATP to adjust and inform ticket pricing schemes for our individual theaters, measure the effectiveness of our content programming, and ensure that price barriers are not created for core guests.

The key performance indicators used by management in our real estate segment with respect to our properties held for rent (other than our Live Theatres) are net operating income, occupancy factor (the percentage of the net rentable area of our properties that is leased) and average lease duration. Set forth in the table below is a comparison of these indicators for the fourth quarter and twelve months ended December 31, 2024 compared to the corresponding periods in 2023.

Real Estate Key Performance Indicators

In the case of our Live Theatres, with respect to key performance indicators, we primarily look to the live theater licensing revenue and ancillary income from the theatres. This is the fixed fee income paid to us as a license fee, plus variable fees for various services (like box office and concessions). The licensee takes all risks of the success or failure of the production. However, due to our ancillary variable revenue, we do better with a well performing show than a poorly performing show or no show at all.

Historically, in the case of our development properties (such as 44 Union Square in New York City) and our various international properties such as Newmarket Village in Australia, we have no specific key performance standards to compare performance from period to period. Rather we continue to analyze budgets and projections and compare actual results to budgeted or projected results from time to time.

-38 -

Cinema Additions

Theadditions to our cinema portfolio during the 2021-2024 were as follows:

Busselton, Western Australia, Australia: On September 22, 2023, we opened a five-screen complex in the newly expanded Busselton Central Shopping Centre precinct of Busselton, Western Australia. The state-of-the-art complex features a TITAN LUXE screen, elevated F&B offerings, and recliner seating.

South City Square, Queensland, Australia: On August 24, 2023, we launched our first-ever Angelika Cinemas outside of the United States at South City Square in Woolloongabba, Brisbane. The location currently operates as an eight-screen complex, featuring elevated food and beverage offerings (including alcoholic beverages) and recliner seating.

Armadale, Western Australia, Australia: On January 13, 2023, we took over an existing six-screen cinema in Armadale, Australia, a suburb of Perth in Western Australia.

Cinema Pipeline

On January 31, 2025, we entered into an agreement to lease to fit out and operate under a long term lease our existing 10 screen cinema at the to be redeveloped Courtenay Central in Wellington, New Zealand (the “ATL”). That same day we sold all our Wellington properties, including the existing Courtenay Central to Prime. Under the ATL, Prime is obligated to redevelop Courtenay Central and upgrade it to meet current earthquake standards. We intend to renovate the existing cinema to a “best-in-class” standard.

Upgrades to our Film Exhibition Technology and Theater Amenities

Prior to COVID-19, we invested in both (i) the upgrading of our existing cinemas and (ii) the development of new cinemas to provide our customers with premium offerings, including state-of-the-art presentation (including sound, lounges, and bar service) and luxury recliner seating. As of December 31, 2024, all of the upgrades to our theater circuits’ film exhibition technology and amenities over the years are as summarized in the following table:

(1)Gold Lounge: This is our "First Class Full Dine-in Service" in our Australian and New Zealand cinemas, which includes an upgraded F&B menu (with alcoholic beverages), luxury recliner seating features (intimate 25-50 seat cinemas) and waiter service.

(2)Premium Service: This is our "Business Class Dine-in Service" in our Australian and New Zealand cinemas, which typically includes upgraded F&B menu (some with alcoholic beverages) and may include luxury recliner seating features (less intimate 80-seat cinemas), but no waiter service.

(3)Spotlight Service: Our first dine-in cinema concept in the U.S. at Reading Cinemas in Murrieta, California. Six of our 17 auditoriums at this cinema feature waiter service before the movie begins with a full F&B menu, luxury recliner seating, and laser focus on customer service. Our Spotlight service has been temporarily suspended since the initial COVID-19 shutdown.

(4)Upgraded Food & Beverage Menu: Features an elevated F&B menu including a menu of locally inspired and freshly prepared items that go beyond traditional concessions, which we have worked with former Food Network executives to create. The elevated menu also includes beer, wine and/or spirits at most of our locations.

(5)Liquor Licenses: Licenses are applicable at each cinema location, rather than each cinema auditorium. As of December 31, 2024, we had (i) three licenses pending related to the sale of spirits and liquor in the U.S. (i.e. supplementing existing beer and wine licenses) and (ii) one license pending in Australia, which has subsequently been approved in January 2025. As of the date of this filing, 75% of our AU/NZ cinemas are licensed to sell alcohol and all U.S. Cinemas are licensed to sell beer and wine and all, but three, can sell spirits/liquor.

Global Real Estate Developments

44 Union Square Redevelopment (New York, N.Y.) – We have made significant progress in the development of our 44 Union Square property in Manhattan. On January 27, 2022, we entered a long-term lease with Petco for the lower level, ground floor, and second floor of the building, who is on a full rent cash paying basis.

-39 -

Minetta Lane Theatre (New York, N.Y.) – Audible has its license agreement with us through March 15, 2026, with an option to extend it for an additional year. Audible presents plays featuring a limited cast of one or two characters and special live performance engagements on the Audible streaming service. During 2024, we saw a great deal of shows such as “Laura Benati: Nobody Cares”, “Dead Out-law” and “Strategic Love Play”, along with many others.

Orpheum Theatre (New York, N.Y.) – STOMP closed (after 30 years at our theatre) on January 8, 2023. Under our termination agreement with the producers of STOMP, we have certain rights to provide the New York City venue for any future production of that show.

Following STOMP’s historic run at the Orpheum, The Empire Strips Backran for approximately three months, followed by a limited holiday engagement of Death, Let Me Do My Show starring comedian Rachel Bloom. The Off-Broadway solo version of William Shakespeare’s Hamlet starring Eddie Izzard also played in 2024. The year finished with a run of “The Big Gay Jamboree”, produced by the creator of “Barbie” and “Titanique”.

Cinemas 1,2,3 Redevelopment (New York, N.Y.) –Currently operated as the Cinemas 123, we have historically treated this property as an asset held for long term development. However, in light of a variety of factors, such as market conditions in Manhattan for real estate assets, cost of capital and demands on our liquidity, we have begun to explore alternatives for this property.

Australia:

Newmarket Village ETC, (Brisbane, Australia) – We continue to improve our Newmarket Village ETC by adding new tenancies and focused marketing effortsThe site includes a 23,218 square foot parcel adjacent to the center, improved with an office building. Over the next few years, we will be evaluating development options for this space. The combined center and office building is currently 96% leased.

Cannon Park ETC, (Queensland, Australia) – We acquired two adjoining properties in Townsville, Queensland, Australia comprising of approximately 9.4-acres in 2015. The total gross leasable area of the Cannon Park City Center and the Cannon Park Discount Center is 126,368 square feet. Our multiplex cinema is the anchor tenant at the Cannon Park City Center. This site is currently 94% leased. As discussed in greater detail above, the sites are currently held for sale and subject to a call option agreement entered into March 2025.

The Belmont Common, (Belmont, Perth, Australia): The total gross leasable area of the Belmont Common is 60,117 Sq ft. Our multiplex cinema is the anchor tenant with six third-party tenants and our Reading Cinemas, the site is currently 100% leased.

New Zealand:

Wellington NZ Property Assets (Wellington, New Zealand) – In June 2024, we classified our property assets in Wellington New Zealand, including Courtenay Central ETC as held for sale. On January 31, 2025, we sold these assets.

Corporate Matters

Board Compensation and Stock Options Committee – Refer to Part II, Item 8 – Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements-- Note 17 – Share-Based Compensation and Repurchase Plans for details regarding our Board, Executive and Employee stock-based remuneration programs.

OVERALL RESULTS OF OPERATI