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September 19, 2005
Mail Stop 4561
VIA U.S. MAIL AND FAX (213) 235-2229
Andrzej Matyczynski
Chief Financial Officer and Treasurer
Reading International, Inc.
550 South Hope Street
Suite 1828
Los Angeles, CA 90071
Re: Reading International, Inc.
Form 10-K for the year ended December 31, 2004
Filed March 25, 2005
File No. 1-8625
Dear Mr. Matyczynski
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comments are inapplicable or a revision
is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K
Item 6 - Selected Financial Data
1. Within your selected financial data table you present EBIT and
EBITDA. These are non-GAAP financial measures and are required to
be
reconciled with the most directly comparable financial measure or
measures calculated and presented in accordance with GAAP. In
addition, please revise to present separate discussions on how
management and investors use EBIT and EBITDA. Revise to address
the
following items as it relates to your disclosure regarding your
non-
GAAP financial measures:
* Explain why EBITDA, as a performance measure, provides investors
relevant and useful information.
* Explain how you expect investors to use this performance
measure.
* Explain the economic substance behind management`s decision to
use
EBITDA when assessing the performance of the company.
* Explain why management believes it is useful to eliminate
interest,
taxes, depreciation and amortization when assessing the financial
performance of the company.
* Discuss the limitations of excluding interest, taxes,
depreciation
and amortization when assessing the financial performance of the
company. Include separate explanations for these items.
See questions 8 and 15 in the Frequently Asked Questions and Item
10(e) of Regulation S-K regarding the use of non-GAAP financial
measures.
Item 7 - Management`s Discussion and Analysis of Financial
Condition
and Results of Operations
2004 Compared with 2003
2. Please revise to provide a more detailed discussion of the
significant changes in revenue and expense amounts each period.
Where
changes in revenue and expense amounts are related to several
factors
each significant factor should be separately quantified and
discussed. For example, discuss the increases/decreases in
revenues
for your foreign operations versus your domestic operations and
what
the contribution to net income was for each. In addition you
disclose that cinema revenues consist of admissions, concessions
and
advertising. Disclose the amount of revenue that pertains to each
and discuss reasons for the fluctuations from year to year and
what
you anticipate for the future. Refer to SEC Release No. 33-8350.
3. Please revise to discuss your results of operations on a
consolidated basis. There is no discussion within the results of
operations that discusses the fact that the Company has had
significant losses over the past three years. This should be
highlighted throughout your MD&A and discussion should be included
on
what actions the Company is taking to mitigate this problem.
Liquidity and Capital Resources, page 53
4. Please revise to describe reasons for material changes in cash
flows from operating, investing, and financing activities from
period
to period. We note that your disclosures are merely a reiteration
of
the cash flow statement. The liquidity discussion should focus on
the reasons for the changes in assets and liabilities.
Notes to Consolidated Financial Statements
Note 6 - Acquisitions and Disposal of Assets, page 86
5. Please tell us how your purchase of Mt. Gravatt Cinema for
$2,178,000 resulted in a one-time gain of $2,259,000, net of
applicable expenses. Also, tell us how you determined the "Put
Price" of $4,960,000. Please cite the applicable accounting
guidance
in your response.
Note 17 - Commitments and Contingencies
Tax Audit, page 96
6. Tell us and disclose in future filings whether the probability
of
loss is probable, reasonably possible or remote. Also, tell us
the
amount of loss that has been accrued if any. For reference see
paragraphs 8-10 of SFAS 5. We may have further comment.
* * * *
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comment, please provide,
in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your amendment that keys your
response to our comments and provides any requested supplemental
information. Detailed cover letters greatly facilitate our
review.
Please file your cover letter on EDGAR. Please understand that we
may have additional comments after reviewing your responses to our
comments.
You may contact James Webster, Staff Accountant, at (202)
551-
3446 or me, at (202) 551-3486 if you have questions.
Sincerely,
Daniel L. Gordon
Accounting Branch Chief
Reading International, Inc.
September 19, 2005
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