1-8625
|
95-3885184
|
|
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
|
500
Citadel Drive
Suite
300
Commerce,
California
|
90040
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12).
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)).
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)).
|
23.1
|
Consent
of Independent Auditors
|
99.1
|
Combined audited financial
statements of Pacific Theatres Full Circuit Business
(a business unit of Pacific Theatres Entertainment Corporation and
certain of its affiliates)
|
99.2
|
Unaudited
combined condensed financial statements of Pacific Theatres Full Circuit
Business (a business unit of Pacific Theatres Entertainment
Corporation and certain of its
affiliates)
|
99.3
|
Unaudited
pro forma consolidated financial
statements
|
READING
INTERNATIONAL, INC.
By:
/s/ Andrzej
Matyczynski
Andrzej
Matyczynski
Chief
Financial Officer
|
|
Dated: May
7, 2008
|
Exhibit
No.
|
Description
|
|
23.1
|
Consent
of Independent Auditors
|
|
99.1
|
Combined
audited financial statements of Pacific Theatres Full Circuit
Business (a business unit of Pacific Theatres Entertainment
Corporation and certain of its affiliates)
|
|
99.2
|
Unaudited condensed
combined financial statements of Pacific Theatres Full Circuit
Business (a Business Unit of Pacific Theatres Entertainment
Corporation and Certain of its Affiliates)
|
|
99.3
|
Unaudited
pro forma consolidated financial
statements
|
|
Exhibit
99.1
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||||||
Certain
of its Affiliates)
|
||||||||
Combined
Balance Sheets
|
||||||||
June
28, 2007 and June 29, 2006
|
||||||||
Assets
|
2007
|
2006
|
||||||
Current
assets:
|
||||||||
Cash
|
$ | 87,311 | $ | 86,417 | ||||
Receivables,
net
|
631,399 | 718,512 | ||||||
Inventory
|
271,982 | 254,033 | ||||||
Deferred
income taxes
|
142,852 | 179,453 | ||||||
Prepaid
and other current assets
|
1,558,011 | 1,390,767 | ||||||
Total
current assets
|
2,691,555 | 2,629,182 | ||||||
Deferred
income taxes
|
12,777,619 | 12,145,800 | ||||||
Property,
equipment, and improvements, net
|
32,569,420 | 35,275,919 | ||||||
Other
assets
|
532,733 | 389,586 | ||||||
Total
assets
|
$ | 48,571,327 | $ | 50,440,487 | ||||
Liabilities
and Business Unit Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 3,720,924 | $ | 4,797,661 | ||||
Film
rent payable
|
2,517,550 | 2,506,061 | ||||||
Income
taxes payable
|
1,339,925 | 1,172,582 | ||||||
Deferred
revenue and other obligations
|
4,524,115 | 3,916,612 | ||||||
Total
current liabilities
|
12,102,514 | 12,392,916 | ||||||
Deferred
rent
|
11,110,951 | 12,210,226 | ||||||
Total
liabilities
|
23,213,465 | 24,603,142 | ||||||
Business
Unit equity
|
25,357,862 | 25,837,345 | ||||||
Commitments
and contingencies
|
||||||||
Total
liabilities and Business Unit equity
|
$ | 48,571,327 | $ | 50,440,487 |
|
See
accompanying notes to combined financial
statements.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||||||||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||||||||||
Certain
of its Affiliates)
|
||||||||||||
Combined
Statements of Operations
|
||||||||||||
Years
ended June 28, 2007, June 29, 2006, and June 30, 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Operating
revenue:
|
||||||||||||
Admissions
|
$ | 52,455,710 | $ | 52,736,579 | $ | 54,566,368 | ||||||
Concessions
|
22,051,188 | 21,386,996 | 21,324,053 | |||||||||
Other
income
|
2,971,478 | 3,012,163 | 2,645,699 | |||||||||
Total
operating revenue
|
77,478,376 | 77,135,738 | 78,536,120 | |||||||||
Operating
expense:
|
||||||||||||
Film
rental
|
25,731,724 | 25,219,898 | 26,953,597 | |||||||||
Cost
of concessions
|
3,423,975 | 3,569,740 | 3,338,722 | |||||||||
Other
operating costs
|
38,712,418 | 37,533,667 | 37,246,229 | |||||||||
General
and administrative
|
2,223,678 | 1,775,571 | 1,872,826 | |||||||||
Depreciation
and amortization
|
5,475,932 | 6,866,963 | 7,683,826 | |||||||||
Casualty
loss
|
— | 1,635,509 | — | |||||||||
Impairment
loss on long-lived assets
|
78,749 | 1,169,339 | 943 | |||||||||
Total
operating expense
|
75,646,476 | 77,770,687 | 77,096,143 | |||||||||
Operating
income (loss)
|
1,831,900 | (634,949 | ) | 1,439,977 | ||||||||
Nonoperating
income:
|
||||||||||||
Interest
income
|
3,468 | 5,269 | 1,516 | |||||||||
Gain
on disposition of property, equipment, and improvements
|
43,368 | 4,434 | 1,555 | |||||||||
Total
nonoperating income
|
46,836 | 9,703 | 3,071 | |||||||||
Earnings
(loss) before income taxes
|
1,878,736 | (625,246 | ) | 1,443,048 | ||||||||
Income
tax expense (benefit)
|
744,706 | (243,104 | ) | 572,826 | ||||||||
Net
income (loss)
|
$ | 1,134,030 | $ | (382,142 | ) | $ | 870,222 |
|
See
accompanying notes to combined financial
statements.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||
Certain
of its Affiliates)
|
||||
Combined
Statements of Business Unit Equity
|
||||
Years
ended June 28, 2007, June 29, 2006, and June 30, 2005
|
||||
Balance,
July 1, 2004
|
$ | 37,254,494 | ||
Net
distributions to the Parent Company
|
(5,568,293 | ) | ||
Net
income
|
870,222 | |||
Balance,
June 30, 2005
|
32,556,423 | |||
Net
distributions to the Parent Company
|
(6,336,936 | ) | ||
Net
loss
|
(382,142 | ) | ||
Balance,
June 29, 2006
|
25,837,345 | |||
Net
distributions to the Parent Company
|
(1,613,513 | ) | ||
Net
income
|
1,134,030 | |||
Balance,
June 28, 2007
|
$ | 25,357,862 |
|
See
accompanying notes to combined financial
statements.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||||||||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||||||||||
Certain
of its Affiliates)
|
||||||||||||
Combined
Statements of Cash Flows
|
||||||||||||
Years
ended June 28, 2007, June 29, 2006, and June 30, 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Operating
activities:
|
||||||||||||
Net
income (loss)
|
$ | 1,134,030 | $ | (382,142 | ) | $ | 870,222 | |||||
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
||||||||||||
Depreciation
and amortization
|
5,464,676 | 6,855,006 | 7,669,552 | |||||||||
Deferred
rent expense
|
(1,099,275 | ) | (738,662 | ) | (559,433 | ) | ||||||
Deferred
income taxes
|
(595,218 | ) | (1,415,686 | ) | (786,445 | ) | ||||||
Impairment
loss on long-lived assets
|
78,749 | 1,169,339 | 943 | |||||||||
Gain
on disposition of property, equipment, and improvements
|
(43,368 | ) | (4,434 | ) | (1,555 | ) | ||||||
Casualty
loss on property, equipment, and improvements
|
— | 778,356 | — | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
Decrease
(increase) in receivables
|
87,113 | (251,317 | ) | 58,343 | ||||||||
(Increase)
decrease in inventory
|
(17,949 | ) | 19,389 | 12,945 | ||||||||
Increase
in prepaid and other assets
|
(167,244 | ) | (34,492 | ) | (8,123 | ) | ||||||
Increase
(decrease) in accounts payable and accrued liabilities
|
(1,076,737 | ) | 809,020 | (53,286 | ) | |||||||
Increase
(decrease) in film rent payable
|
11,489 | (480,545 | ) | 41,973 | ||||||||
Increase
(decrease) in income taxes payable
|
167,343 | (186,689 | ) | (1,502,426 | ) | |||||||
Increase
in deferred revenues and other obligations
|
607,503 | 735,026 | 427,523 | |||||||||
Net
cash provided by operating activities
|
4,551,112 | 6,872,169 | 6,170,233 | |||||||||
Investing
activities:
|
||||||||||||
Purchases
of and additions to property, equipment, and improvements
|
(2,967,783 | ) | (533,336 | ) | (733,629 | ) | ||||||
Proceeds
from sale of property, equipment, and improvements
|
174,315 | 5,200 | 1,555 | |||||||||
Increase
in other assets
|
(143,147 | ) | (7,724 | ) | 129,301 | |||||||
Other,
net
|
(90 | ) | 1,844 | 833 | ||||||||
Net
cash used in investing activities
|
(2,936,705 | ) | (534,016 | ) | (601,940 | ) | ||||||
Financing
activities:
|
||||||||||||
Net
distributions to the Parent Company
|
(1,613,513 | ) | (6,336,936 | ) | (5,568,293 | ) | ||||||
Net
cash used in financing activities
|
(1,613,513 | ) | (6,336,936 | ) | (5,568,293 | ) | ||||||
Increase
in cash
|
894 | 1,217 | — | |||||||||
Cash
at beginning of year
|
86,417 | 85,200 | 85,200 | |||||||||
Cash
at end of year
|
$ | 87,311 | $ | 86,417 | $ | 85,200 |
(1)
|
Description
of Business
|
(2)
|
Significant
Accounting Policies
|
|
(a)
|
Basis
of Presentation of Financial
Statements
|
|
(b)
|
Use
of Estimates
|
|
(c)
|
Fiscal
Year End
|
|
(d)
|
Business
Unit Equity
|
|
(e)
|
Revenue
Recognition
|
|
(f)
|
Vendor
Allowances
|
|
(g)
|
Cash
|
|
(h)
|
Receivables
|
|
(i)
|
Inventory
|
|
(j)
|
Fair
Value of Financial Instruments
|
|
(k)
|
Property,
Equipment, and Improvements
|
Furniture,
fixtures, and equipment
|
3
to 10 years
|
Leasehold
improvements
|
Lesser
of term of lease or asset
life
|
|
(l)
|
Impairment
of Long-Lived Assets
|
|
(m)
|
Income
Taxes
|
|
(n)
|
Leases
|
|
(o)
|
Deferred
Revenue
|
|
(p)
|
Deferred
Rent
|
|
(q)
|
Film
Rental Costs
|
|
(r)
|
Collective
Bargaining Agreements
|
|
(s)
|
Segments
|
|
(t)
|
Recent
Accounting Pronouncements
|
(3)
|
Property,
Equipment, and Improvements, Net
|
2007
|
2006
|
|||||||
Leasehold
improvements
|
$ | 73,423,483 | $ | 70,470,086 | ||||
Furniture,
fixtures, and equipment
|
31,739,234 | 32,598,400 | ||||||
105,162,717 | 103,068,486 | |||||||
Less
accumulated depreciation and amortization
|
(72,593,297 | ) | (67,792,567 | ) | ||||
Property,
equipment, and improvements, net
|
$ | 32,569,420 | $ | 35,275,919 |
(4)
|
Income
Taxes
|
2007
|
2006
|
2005
|
||||||||||
Federal:
|
||||||||||||
Current
|
$ | 1,170,644 | $ | 1,042,240 | $ | 1,181,137 | ||||||
Deferred
|
(554,354 | ) | (1,243,423 | ) | (707,088 | ) | ||||||
Total
federal
|
616,290 | (201,183 | ) | 474,049 | ||||||||
State:
|
||||||||||||
Current
|
169,281 | 130,342 | 178,134 | |||||||||
Deferred
|
(40,865 | ) | (172,263 | ) | (79,357 | ) | ||||||
Total
state
|
128,416 | (41,921 | ) | 98,777 | ||||||||
Total
income tax provision
|
$ | 744,706 | $ | (243,104 | ) | $ | 572,826 |
2007
|
2006
|
2005
|
||||||||||
Provision
calculated at federal statutory income tax rate
|
$ | 657,557 | $ | (218,836 | ) | $ | 505,067 | |||||
State
income taxes, net of federal benefit
|
83,470 | (27,248 | ) | 64,205 | ||||||||
Other,
net
|
3,679 | 2,980 | 3,554 | |||||||||
Total
income tax provision
|
$ | 744,706 | $ | (243,104 | ) | $ | 572,826 |
2007
|
2006
|
|||||||
Deferred
tax assets:
|
||||||||
Excess
of tax basis over book basis of property, equipment, and
improvements
|
$ | 7,937,647 | 7,012,101 | |||||
Deferred
rent
|
4,839,972 | 5,133,698 | ||||||
Federal
benefit on deferred state income tax
|
59,248 | 45,620 | ||||||
Other,
net
|
83,604 | 133,834 | ||||||
Total
deferred tax assets
|
$ | 12,920,471 | 12,325,253 |
(5)
|
Commitments
and Contingencies
|
Related
|
||||||||||||
parties
|
Other
|
Total
|
||||||||||
Year
ending:
|
||||||||||||
2008
|
$ | 637,200 | $ | 13,483,966 | $ | 14,121,166 | ||||||
2009
|
637,200 | 13,531,633 | 14,168,833 | |||||||||
2010
|
637,200 | 13,415,582 | 14,052,782 | |||||||||
2011
|
637,200 | 13,210,713 | 13,847,913 | |||||||||
2012
|
637,200 | 12,757,803 | 13,395,003 | |||||||||
Later
years
|
4,035,600 | 43,054,361 | 47,089,961 | |||||||||
$ | 7,221,600 | $ | 109,454,058 | $ | 116,675,658 |
(6)
|
Related-Party
Transactions
|
(7)
|
Pension
Plan
|
|
Exhibit
99.2
|
|
Unaudited
Condensed Combined Balance Sheet — December 27,
2007
|
|
Unaudited
Condensed Combined Statements of Operations — Six Months Ended December
27, 2007 and December 28, 2006
|
|
Unaudited
Condensed Combined Statements of Stockholder’s Equity — Six Months Ended
December 27, 2007 and December 28,
2006
|
|
Unaudited
Condensed Combined Statements of Cash Flows — Six Months Ended December
27, 2007 and December 28, 2006
|
|
Notes
to Combined Financial Statements
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||
Certain
of its Affiliates)
|
||||
Unaudited
Condensed Combined Balance Sheets
|
||||
December
27, 2007
|
||||
Assets
|
||||
Current
assets:
|
||||
Cash
|
$ | 129,380 | ||
Receivables,
net
|
808,411 | |||
Inventory
|
257,554 | |||
Deferred
income taxes
|
142,852 | |||
Prepaid
and other current assets
|
1,513,178 | |||
Total
current assets
|
2,851,375 | |||
Deferred
income taxes
|
12,777,619 | |||
Property,
equipment, and improvements, net
|
30,100,753 | |||
Other
assets
|
367,834 | |||
Total
assets
|
$ | 46,097,581 | ||
Liabilities
and Business Unit Equity
|
||||
Current
liabilities:
|
||||
Accounts
payable and accrued liabilities
|
$ | 4,162,527 | ||
Film
rent payable
|
2,344,993 | |||
Income
taxes payable
|
314,100 | |||
Deferred
revenue and other obligations
|
5,392,644 | |||
Total
current liabilities
|
12,214,264 | |||
Deferred
rent
|
10,121,949 | |||
Total
liabilities
|
22,336,213 | |||
Business
Unit equity
|
23,761,368 | |||
Commitments
and contingencies
|
||||
Total
liabilities and Business Unit equity
|
$ | 46,097,581 |
|
See
accompanying notes to combined financial
statements.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||||||
Certain
of its Affiliates)
|
||||||||
Unaudited
Condensed Combined Statements of Operations
|
||||||||
For
the Six Months Ended December 27, 2007 and December 28, 2006
|
||||||||
2007
|
2006
|
|||||||
Operating
revenue:
|
||||||||
Admissions
|
$ | 27,856,068 | $ | 26,024,375 | ||||
Concessions
|
11,493,245 | 10,596,788 | ||||||
Other
income
|
1,543,991 | 1,558,346 | ||||||
Total
operating revenue
|
40,893,304 | 38,179,509 | ||||||
Operating
expense:
|
||||||||
Film
rental
|
13,814,385 | 12,807,182 | ||||||
Cost
of concessions
|
1,892,565 | 1,707,103 | ||||||
Other
operating costs
|
20,409,456 | 19,038,308 | ||||||
General
and administrative
|
1,411,936 | 1,110,878 | ||||||
Depreciation
and amortization
|
2,573,369 | 2,528,242 | ||||||
Total
operating expense
|
40,101,711 | 37,191,713 | ||||||
Operating
income
|
791,593 | 987,796 | ||||||
Nonoperating
income:
|
||||||||
Interest
income
|
1,651 | 1,609 | ||||||
Total
nonoperating income
|
1,651 | 1,609 | ||||||
Earnings
before income taxes
|
793,244 | 989,405 | ||||||
Income
tax expense
|
314,100 | 391,800 | ||||||
Net
income
|
$ | 479,144 | $ | 597,605 |
|
See
accompanying notes to combined financial
statements.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||
Certain
of its Affiliates)
|
||||
Unaudited
Condensed Combined Statements of Business Unit Equity
|
||||
For
the Six Months Ended December 27, 2007
|
||||
Balance,
June 29, 2007
|
$ | 25,357,862 | ||
Net
distributions to the Parent Company
|
(2,075,638 | ) | ||
Net
income
|
479,144 | |||
Balance,
December 27, 2007
|
$ | 23,761,368 |
|
See
accompanying notes to combined financial
statements.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||||||
Certain
of its Affiliates)
|
||||||||
Unaudited
Condensed Combined Statements of Cash Flows
|
||||||||
For
the Six Months Ended December 27, 2007 and December 28, 2006
|
||||||||
2007
|
2006
|
|||||||
Operating
activities:
|
||||||||
Net
income
|
$ | 479,144 | $ | 597,605 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
2,573,369 | 2,528,242 | ||||||
Deferred
rent expense
|
110,998 | 671,338 | ||||||
Changes
in assets and liabilities:
|
||||||||
Decrease
(increase) in receivables
|
(177,012 | ) | 121,276 | |||||
(Increase)
decrease in inventory
|
14,428 | 34,113 | ||||||
Increase
in prepaid and other assets
|
209,732 | (137,117 | ) | |||||
Increase
(decrease) in accounts payable and accrued liabilities
|
441,603 | (2,949,379 | ) | |||||
Increase
(decrease) in film rent payable
|
(172,557 | ) | 1,403,406 | |||||
Increase
(decrease) in income taxes payable
|
(1,025,825 | ) | (780,782 | ) | ||||
Increase
in deferred revenues and other obligations
|
(231,471 | ) | (131,060 | ) | ||||
Net
cash provided by operating activities
|
2,222,409 | 1,357,642 | ||||||
Investing
activities:
|
||||||||
Purchases
of and additions to property, equipment, and improvements
|
(104,702 | ) | (732,526 | ) | ||||
Net
cash used in investing activities
|
(104,702 | ) | (732,526 | ) | ||||
Financing
activities:
|
||||||||
Net
distributions to the Parent Company
|
(2,075,638 | ) | (621,306 | ) | ||||
Net
cash used in financing activities
|
(2,075,638 | ) | (621,306 | ) | ||||
Increase
in cash
|
42,069 | 3,810 | ||||||
Cash
at beginning of year
|
87,311 | 86,417 | ||||||
Cash
at end of year
|
$ | 129,380 | $ | 90,227 |
(1)
|
Description
of Business
|
(2)
|
Significant
Accounting Policies
|
|
(a)
|
Basis
of Presentation of Financial
Statements
|
|
(b)
|
Use
of Estimates
|
|
(c)
|
Fiscal
Year End and Interim Period End
|
|
(d)
|
Business
Unit Equity
|
|
(e)
|
Revenue
Recognition
|
|
(f)
|
Vendor
Allowances
|
|
(g)
|
Cash
|
|
(h)
|
Receivables
|
|
(i)
|
Inventory
|
|
(j)
|
Fair
Value of Financial Instruments
|
|
(k)
|
Property,
Equipment, and Improvements
|
Furniture,
fixtures, and equipment
|
3
to 10 years
|
Leasehold
improvements
|
Lesser
of term of lease or asset
life
|
|
(l)
|
Impairment
of Long-Lived Assets
|
|
(m)
|
Income
Taxes
|
|
(n)
|
Leases
|
|
(o)
|
Deferred
Revenue
|
|
(p)
|
Deferred
Rent
|
|
(q)
|
Film
Rental Costs
|
|
(r)
|
Collective
Bargaining Agreements
|
|
(s)
|
Segments
|
|
(t)
|
Recent
Accounting Pronouncements
|
(3)
|
Property,
Equipment, and Improvements, Net
|
2007
|
||||
Leasehold
improvements
|
$ | 73,644,629 | ||
Furniture,
fixtures, and equipment
|
31,841,534 | |||
105,486,163 | ||||
Less
accumulated depreciation and amortization
|
(75,385,410 | ) | ||
Property,
equipment, and improvements, net
|
$ | 30,100,753 |
(4)
|
Income
Taxes
|
(5)
|
Commitments
and Contingencies
|
(6)
|
Related-Party
Transactions
|
(7)
|
Pension
Plan
|
|
Exhibit
99.3
|
Historical at December 31,
2007
|
Pro Forma Adjustments
|
|||||||||||||||||||
Reading
International, Inc.
|
Acquired
Circuit
|
Net
assets not acquired (Note 3a)
|
Pro
forma adjustments (Note 3)
|
Pro
Forma Condensed Consolidated Reading International, Inc.
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current
Assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 20,782 | $ | 129 | $ | (129 | ) | $ | 1,194 | b | $ | 21,976 | ||||||||
Receivables
|
5,671 | 808 | (808 | ) | -- | 5,671 | ||||||||||||||
Inventory
|
654 | 258 | -- | 13 | c | 925 | ||||||||||||||
Investment
in marketable securities
|
4,533 | -- | -- | -- | 4,533 | |||||||||||||||
Restricted
cash
|
59 | -- | -- | -- | 59 | |||||||||||||||
Deferred
income taxes
|
-- | 143 | (143 | ) | -- | -- | ||||||||||||||
Prepaid
and other current assets
|
3,800 | 1,513 | -- | (970 | )d | 4,343 | ||||||||||||||
Total
current assets
|
35,499 | 2,851 | (1,080 | ) | 237 | 37,507 | ||||||||||||||
Land
held for sale
|
1,984 | -- | -- | -- | 1,984 | |||||||||||||||
Property
held for development
|
11,068 | -- | -- | -- | 11,068 | |||||||||||||||
Property
under development
|
66,787 | -- | -- | -- | 66,787 | |||||||||||||||
Property
& equipment, net
|
178,174 | 30,101 | -- | 9,232 | e | 217,507 | ||||||||||||||
Investment
in unconsolidated joint ventures and entities
|
15,480 | -- | -- | -- | 15,480 | |||||||||||||||
Investment
in Reading International Trust I
|
1,547 | -- | -- | -- | 1,547 | |||||||||||||||
Goodwill
|
19,100 | -- | -- | 12,556 | f | 31,656 | ||||||||||||||
Intangible
assets, net
|
8,448 | -- | -- | 17,619 | g | 26,067 | ||||||||||||||
Deferred
income taxes
|
-- | 12,778 | (12,778 | ) | -- | -- | ||||||||||||||
Other
assets
|
7,984 | 368 | (368 | ) | (393 | )h | 7,591 | |||||||||||||
Total
assets
|
$ | 346,071 | $ | 46,098 | $ | (14,226 | ) | $ | 39,251 | $ | 417,194 | |||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
Current
Liabilities:
|
||||||||||||||||||||
Accounts
payable and accrued liabilities
|
$ | 12,331 | $ | 4,163 | $ | (4,163 | ) | $ | 123 | i | $ | 12,454 | ||||||||
Film
rent payable
|
3,275 | 2,345 | (2,345 | ) | -- | 3,275 | ||||||||||||||
Notes
payable – current portion
|
395 | -- | -- | -- | 395 | |||||||||||||||
Note
payable to related party – current portion
|
5,000 | -- | -- | -- | 5,000 | |||||||||||||||
Taxes
payable
|
4,770 | 314 | (314 | ) | -- | 4,770 | ||||||||||||||
Deferred
current revenue
|
3,214 | -- | -- | -- | 3,214 | |||||||||||||||
Other
current liabilities
|
169 | 5,393 | (5,393 | ) | -- | 169 | ||||||||||||||
Total
current liabilities
|
29,154 | 12,215 | (12,215 | ) | 123 | 29,277 | ||||||||||||||
Notes
payable – long-term portion
|
111,253 | -- | -- | 71,000 | j | 182,253 | ||||||||||||||
Notes
payable to related party – long-term portion
|
9,000 | -- | -- | -- | 9,000 | |||||||||||||||
Subordinated
debt
|
51,547 | -- | -- | -- | 51,547 | |||||||||||||||
Noncurrent
tax liabilities
|
5,418 | -- | -- | -- | 5,418 | |||||||||||||||
Deferred
non-current revenue
|
566 | -- | -- | -- | 566 | |||||||||||||||
Other
liabilities
|
14,936 | 10,122 | (10,122 | ) | -- | 14,936 | ||||||||||||||
Total
liabilities
|
221,874 | 22,337 | (22,337 | ) | 71,123 | 292,997 | ||||||||||||||
Commitments
and contingencies (Note 19)
|
||||||||||||||||||||
Minority
interest in consolidated affiliates
|
2,835 | -- | -- | -- | 2,835 | |||||||||||||||
Stockholders’
equity:
|
||||||||||||||||||||
Class
A Nonvoting Common Stock, par value $0.01, 100,000,000 shares authorized,
35,564,339 issued and 20,987,115 outstanding at December 31, 2007 and
35,558,089 issued and 20,980,865 outstanding at December 31,
2006
|
216 | -- | -- | -- | 216 | |||||||||||||||
Class
B Voting Common Stock, par value $0.01, 20,000,000 shares authorized and
1,495,490 issued and outstanding at December 31, 2007 and at December 31,
2006
|
15 | -- | -- | -- | 15 | |||||||||||||||
Additional
paid-in capital
|
131,930 | 23,761 | (23,761 | ) | -- | 131,930 | ||||||||||||||
Accumulated
deficit
|
(52,670 | ) | -- | -- | -- | (52,670 | ) | |||||||||||||
Treasury
shares
|
(4,306 | ) | -- | -- | -- | (4,306 | ) | |||||||||||||
Accumulated
other comprehensive income
|
46,177 | -- | -- | -- | 46,177 | |||||||||||||||
Total
stockholders’ equity
|
121,362 | 23,761 | (23,761 | ) | -- | 121,362 | ||||||||||||||
Total
liabilities and stockholders’ equity
|
$ | 346,071 | $ | 46,098 | $ | (46,098 | ) | $ | 71,123 | $ | 417,194 |
Historical for Year End December 31,
2007
|
||||||||||||||||
December
31, 2007
Reading
International, Inc.
|
December
27, 2007
Acquired
Circuit
|
Pro
forma Adjustments
|
Pro
forma Condensed Consolidated Reading International, Inc.
|
|||||||||||||
Operating
revenue
|
||||||||||||||||
Cinema
|
$ | 103,467 | $ | 80,191 | $ | (2,155 | )k | $ | 181,503 | |||||||
Real estate
|
15,768 | -- | -- | 15,768 | ||||||||||||
Total operating
revenue
|
119,235 | 80,191 | (2,155 | ) | 197,271 | |||||||||||
Operating
expense
|
||||||||||||||||
Cinema
|
77,756 | 70,432 | 229 | l | 148,417 | |||||||||||
Real estate
|
8,324 | -- | -- | 8,324 | ||||||||||||
Depreciation and
amortization
|
11,921 | 5,521 | 3,475 | m | 20,917 | |||||||||||
General and
administrative
|
16,085 | 2,603 | -- | 18,688 | ||||||||||||
Total operating
expense
|
114,086 | 78,556 | 3,704 | 196,346 | ||||||||||||
Operating
income (loss)
|
5,149 | 1,635 | (5,859 | ) | 925 | |||||||||||
Non-operating
income (expense)
|
||||||||||||||||
Interest income
|
798 | 3 | (3 | )n | 798 | |||||||||||
Interest expense
|
(8,961 | ) | -- | (5,913 | )o | (14,874 | ) | |||||||||
Net loss on sale of
assets
|
(185 | ) | -- | -- | (185 | ) | ||||||||||
Other income
(expense)
|
(320 | ) | 43 | -- | (277 | ) | ||||||||||
Loss
before minority interest, income tax expense and equity
earnings of unconsolidated joint ventures and entities
|
(3,519 | ) | 1,681 | (11,775 | ) | (13,613 | ) | |||||||||
Minority
interest
|
(1,003 | ) | -- | -- | (1,003 | ) | ||||||||||
Income
tax expense
|
(2,038 | ) | (666 | ) | 666 | p | (2,038 | ) | ||||||||
Equity
earnings of unconsolidated joint ventures and entities
|
2,545 | -- | -- | 2,545 | ||||||||||||
Net
income (loss) from continuing operations
|
$ | (4,015 | ) | $ | 1,015 | $ | (11,109 | ) | $ | (14,109 | ) | |||||
Basic
and diluted earnings (loss) from continuing operations per
share
|
$ | (0.18 | ) | $ | (0.63 | ) | ||||||||||
Weighted
average number of shares outstanding – basic and diluted
|
22,478,145 | 22,478,145 |
Inventory
|
$ | 271 | ||
Prepaid
assets
|
543 | |||
Property
& Equipment:
|
||||
Leasehold
improvements
|
32,303 | |||
Machinery and
equipment
|
4,329 | |||
Furniture and
fixtures
|
2,701 | |||
Intangibles:
|
||||
Trade name
|
7,220 | |||
Non-compete
agreement
|
400 | |||
Below market
leases
|
9,999 | |||
Goodwill
|
12,556 | |||
Trade
payables
|
(123 | ) | ||
Total
Purchase Price
|
$ | 70,199 |
|
·
|
the
trade name “Consolidated Theatres” which is the name commonly used for the
acquired cinemas in Hawaii;
|
|
·
|
a
noncompete agreement with the sellers requiring them to not compete in
certain geographic markets for a period of five years;
and
|
|
·
|
five
favorable cinema lease agreements determined to be favorable by our
analysis of below market leases, performed as part of the preliminary
valuation of all leases acquired as performed by our
appraiser.
|
|
a.
|
Represents
an adjustment for assets and liabilities not acquired as part of the terms
of the acquisition agreement.
|
|
b.
|
The
sources and uses of cash for the acquisition are as follows (dollars in
thousands):
|
Sources:
|
||||
Return of acquisition
deposit
|
$ | 2,000 | ||
Proceeds from GE Capital
loan
|
50,000 | |||
Proceeds on seller’s
note
|
21,000 | |||
$ | 73,000 | |||
Uses:
|
||||
Acquisition of the Acquired
Circuit
|
70,199 | |||
Costs associated with GE
Capital loan
|
1,607 | |||
Net
change in cash and cash equivalents
|
$ | 1,194 |
|
c.
|
Represents
an adjustment to record inventories at fair value of
$271,000.
|
|
d.
|
Represents
an adjustment to record prepaid and other assets at a fair value of
$543,000.
|
|
e.
|
The
acquired property and equipment at fair market value is as follows
(dollars in thousands):
|
Leasehold
interests
|
$ | 32,303 | ||
Fixtures
and equipment
|
7,030 | |||
Total
property and equipment acquired
|
$ | 39,333 |
|
f.
|
Represents
an adjustment to record goodwill of $12.6 million based on the excess
of purchase price over net assets acquired at February 22,
2008.
|
|
g.
|
Represents
purchase accounting adjustments to record acquired intangible assets of
(dollars in thousands):
|
Below
market leases
|
$ | 9,999 | ||
Trade
name
|
7,220 | |||
Noncompete
agreement
|
400 | |||
Total
intangible assets acquired
|
$ | 17,619 |
|
h.
|
The
change in other asset includes a decrease in the deposit balance of $2.0
million related to the acquisition deposit offset by an increase of
deferred financing costs of $1.6
million.
|
|
i.
|
Accounts
payable and accrued liabilities of $4.0 million were not assumed in the
acquisition.
|
|
j.
|
Represents
an adjustment to record the $71.0 million of debt incurred to acquire the
assets including $50.0 million of bank financing and $21.0 million of
seller’s note.
|
|
k.
|
Represents
an adjustment to present excise taxes included in operating expense in the
audited financials of the Acquired Circuit on a net basis consistent with
the accounting policies of Reading.
|
|
l.
|
Represents
adjustments to cinemas costs of (dollars in
thousands):
|
Excise
tax
|
$ | (2,155 | ) | |
Straight-line
rent expense
|
1,398 | |||
Amortization
of below market rents
|
986 | |||
Total
cinema expense adjustments
|
$ | 229 |
|
m.
|
Represents
an adjustment to record the fair value depreciation of the acquired fixed
assets based on the useful lives in 3.e. noted above. Also
included in this adjustment is the intangible amortization of the acquired
trade name is amortized as a declining period expense over 30 years while
the noncompete agreement is amortized straight line over its five year
life.
|
|
n.
|
Represents
an adjustment to remove interest income earned by the Acquired
Circuit.
|
|
o.
|
The
increase in pro forma interest expense as a result of the acquisition for
the year ended December 31, 2007 would be as follows (dollars in
thousands):
|
Interest
on the $50.0 million note payable to GE Capital at the current rate of
6.98% which is based on a 3 month LIBOR plus a 4% spread
|
$ | 3,421 | ||
Interest
on the $13.0 million portion of the note payable to the seller at an
effective interest rate of 7.85%
|
1,025 | |||
Interest
on the $8.0 million portion of the note payable to the seller at an
effective interest rate of 8.05%
|
645 | |||
Amortization
of loan costs related to the $50.0 million note payable to GE
Capital
|
822 | |||
Total
increase in interest expense
|
$ | 5,913 | ||
For
the year ended December 31, 2007, a change in interest rates by 1/8
percent would result in an increase or decrease in interest expense
of
|
$ | 63 |
|
p.
|
Reversal
of income tax expense from Acquired Assets to reflect the tax effect of a
proforma consolidated U.S. income tax loss. Reading International Inc does
not record the benefit of income tax losses when facts do not indicate a
benefit is more likely than not to be
realized.
|
PACIFIC
THEATRES FULL CIRCUIT BUSINESS
|
||||||||||||||||||||
(A
Business Unit of Pacific Theatres Entertainment Corporation
and
|
||||||||||||||||||||
Certain
of its Affiliates)
|
||||||||||||||||||||
Combined
Statements of Operations
|
||||||||||||||||||||
Year
ended June 28, 2007
|
Six
Months Ending Dec 28, 2006
|
Six
Months Ending June 28, 2007
|
Six
Months Ending Dec 27, 2007
|
12
Months Ending Dec 27, 2007
|
||||||||||||||||
A
|
B |
C
= A - B
|
D | C + D | ||||||||||||||||
Operating
revenue:
|
||||||||||||||||||||
Admissions
|
$ | 52,456 | 26,024 | 26,432 | 27,856 | 54,288 | ||||||||||||||
Concessions
|
22,051 | 10,597 | 11,454 | 11,493 | 22,947 | |||||||||||||||
Other
income
|
2,971 | 1,558 | 1,413 | 1,543 | 2,956 | |||||||||||||||
Total
operating revenue
|
77,478 | 38,179 | 39,299 | 40,892 | 80,191 | |||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Film
rental
|
25,732 | 12,807 | 12,925 | 13,814 | 26,739 | |||||||||||||||
Cost
of concessions
|
3,424 | 1,707 | 1,717 | 1,893 | 3,610 | |||||||||||||||
Other
operating costs
|
38,712 | 19,038 | 19,674 | 20,409 | 40,083 | |||||||||||||||
General
and administrative
|
2,223 | 1,111 | 1,112 | 1,412 | 2,524 | |||||||||||||||
Depreciation
and amortization
|
5,476 | 2,528 | 2,948 | 2,573 | 5,521 | |||||||||||||||
Casualty
loss
|
— | — | — | — | — | |||||||||||||||
Impairment
loss on long-lived assets
|
79 | — | 79 | — | 79 | |||||||||||||||
Total
operating expense
|
75,646 | 37,191 | 38,455 | 40,101 | 78,556 | |||||||||||||||
Operating
income
|
1,832 | 988 | 844 | 791 | 1,635 | |||||||||||||||
Nonoperating
income:
|
||||||||||||||||||||
Interest
income
|
3 | 2 | 1 | 2 | 3 | |||||||||||||||
Gain
on disposition of property, equipment, and
improvements
|
43 | — | 43 | — | 43 | |||||||||||||||
Total
nonoperating income
|
46 | 2 | 44 | 2 | 46 | |||||||||||||||
Earnings
before income taxes
|
1,878 | 990 | 888 | 793 | 1,681 | |||||||||||||||
Income
tax expense
|
744 | 392 | 352 | 314 | 666 | |||||||||||||||
Net
income
|
$ | 1,134 | 598 | 536 | 479 | 1,015 |