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 and then sustained increases in 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.

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 from late 2024 through end of 2025 provided some relief, the higher interest rates continue to impact our business. Our average cost of borrowing has increased from 4.0% in 2019 to 7.8% in 2025.

Legislative changes following the pandemic have contributed to higher labor related costs, including wages, leave requirements, and compliance obligations, while increases in the cost of goods, utilities, and insurance have added further expense pressure. In response, we continue to emphasize operating efficiency and make measured adjustments to ticket and food and beverage pricing intended to manage costs without materially affecting customer demand. In addition, an increasingly active litigation environment in the United States, including class action claims related to internet privacy and business practice regulations, has created additional pressure on earnings and cash flow, with certain claims asserting interpretations of these laws that we believe extend beyond their original legislative intent.

Strategic Measures and Financial Adjustments

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

1. Asset Monetization: Between 2021 and 2025, we sold nine real estate assets, generating $197.5 million in net proceeds. These proceeds helped pay down $99.9 million in debt, and fund $32.4 million capital improvements, while also helping us sustain our operations.

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), one in the U.S. in 2024 and two in 2025 (one in the U.S. and one in New Zealand). Additionally, we have renegotiated leases to reduce occupancy costs, received 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 have reduced our non-segment administrative expense from $15.5 million in 2024 to $14.4 million in 2025.

4. Food & Beverage Innovations: In 2024, our global cinema divisions achieved record-high F&B sales per capita. In 2025, 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.

-31 -

6. Ongoing Liquidity Management: We continue to evaluate our assets for any future monetization that may be needed, focusing on non-core real estate assets that would not, without material capital commitments, in our view offer long-term growth opportunities for our stockholders, and we will continue to close underperforming cinemas at the end of their lease terms or by negotiation. 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 2026 and 2027.

Real Estate Operations

Since the beginning of the pandemic, we have monetized many of our Australia and New Zealand real estate assets using the net proceeds principally to paydown debt and to support our operations and materially reduced our real estate activities. As of the end of 2025, we had two ETCs (Newmarket Village and The Belmont Common) and two office buildings in Australia. These properties are, in essence, fully leased. While one of our properties in New Zealand has a third-party tenant occupying a portion of the property (the remainder being occupied by a Reading Cinema), the remaining two properties have Reading Cinemas as their sole tenants. With regard to the United States, the first floor, second floor and cellar of our architectural award winning 44 Union Square redevelopment project in New York City, are leased on a long term basis to Petco Health and Wellness Company (“Petco”). We believe that the commercial leasing market in the Midtown South sub-market has improved, and we have retained Newmark Retail LLC, as our exclusive leasing broker for that property. Our other improved NYC fee properties are tenanted by us.

Historically we have held our Cinemas 1,2,3 property for long term redevelopment. However, in light of market conditions and our need to pay down debt and enhance our liquidity, in Q1 2026, we have retained Newmark & Company Real Estate, Inc. to monetize that property. In the fourth quarter of 2025, we acquired as a part of a larger transaction the 25% interest in that property that we did not previously own. We have also listed for sale our Newbury Yard rail yard property in Williamsport, Pennsylvania. We are not currently involved in any real estate development activity other than the lease up of those portions of our 44 Union Square property not leased by Petco and our work with respect to the Reading Viaduct and associated properties.

In those cases where we have sold real estate in Australia and New Zealand that is improved (in whole or in part) with a cinema, we have retained a lease of that cinema, the terms of which have varied from site to site. Those cinemas all continue to operate profitably.

Looking Ahead

We anticipate continued improvements in cinema operations as audience levels continue to rebound. Looking ahead, anticipated releases such as The Super Mario Galaxy Movie, Michael, The Devil Wears Prada 2, Toy Story 5, Supergirl, Minions 3, Moana, The Odyssey, Spider Man: Brand New Day, The Cat in the Hat, Avengers: Doomsday, and Dune: Part Three, which are expected to contribute to overall increased theatrical activity.

At the same time, we remain focused on adjusting our operating approach in response to changing market conditions. This includes disciplined capital allocation, ongoing cost management efforts, and initiatives designed to strengthen audience engagement. Together, these actions are intended to support our Company’s ability to operate effectively within an evolving entertainment landscape over the longer term.

Additional details regarding expectations and initiatives for 2026 and subsequent periods are provided 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 2025 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, 2025, we have a total of 37 theater locations with upgraded food and beverage menus (i.e. menus that are beyond traditional popcorn, soda, and candy).

-32 -

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.

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, 2025 compared to the corresponding periods in 2024.

Real Estate Key Performance Indicators

-33 -

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.

Cinema Additions

Theadditions to our cinema portfolio during 2023-2025 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.

In addition, in the fourth quarter of 2025, we wound up our long term relationship with Sutton Hill Associates pursuant to a transaction whereby we purchased the 25% non-controlling minority interest in our Cinemas 1,2,3, property that we did not already own and the ground-lessee’s interest in the land and improvements constituting our Village East property, in consideration of our assumption of certain long term (10 years) fixed rate (4.75% per annum) debt owed by Sutton Hill Associates to a third party. That debt has been fair valued by our independent valuation consultant at $7.7 million. This transaction is sometimes referred to in this Report as the “SHA Windup Transaction.”

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.

Our Board has also authorized management to proceed with the negotiation of a lease for a new state-of-the-art cinema, located in Noosa, Queensland, Australia.

On February 9, 2025, we closed one under-performing cinema located in Queenstown, New Zealand upon expiration of that lease.

On April 15, 2025, we closed our underperforming cinema located in San Diego, California, upon termination of that lease.

-34 -

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, 2025, 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, 2025, 76% of our AU/NZ cinemas are licensed to sell alcohol, no liquor licenses pending in Australia and two liquor licenses pending in New Zealand. 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 cellar, ground, and second floors of the building, who is on a full rent cash paying basis. We continue our efforts to find a tenant for the remaining four floors of the building.

Minetta Lane Theatre (New York, N.Y.) –Audible holds its license agreement with us through March 15, 2027 having exercised its a one-year renewal option. Under the agreement, Audible presents plays featuring a limited cast of one or two characters and special live performance engagements on the Audible streaming service. During 2025, we saw a great deal of shows including “The Energy Curfew Music Hour with Chris Thile & Punch Brother”, “Sexual Misconduct of the Middle Classes”, “Creditors”, “Pansy Craze”, “Patton Oswalt: Black Coffee and Ice Water”, “Devon Franklin: Be True”, and “Mexodus”. The wide range of productions exemplify the diversity of programming and ongoing demand for live, high quality theatrical content.

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, 2025 saw plays such as “The Jonathan Larson Project” and “Ginger Twinsies”.

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, subsequent to balance sheet date, we have retained Newmark & Company Real Estate, Inc. to sell that property. We now own 100% of this asset, as we acquired in the fourth quarter of 2025, as a part of the SHA Windup Transaction, the 25% interest that we did not own.

-35 -

Australia:

Newmarket Village ETC, (Brisbane, Australia) – We continue to improve our Newmarket Village ETC by adding new tenancies and focused marketing efforts. The 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 98% leased.

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.

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