UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended : June 30, 2017 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 1-8625 READING INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) NEVADA 95-3885184 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 5995 Sepulveda Boulevard , Suite 3 00 Culver City , CA 90230 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (213) 235-2240 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer , smaller reporting company, or an emerging growth company . See definition s of “ large accelerated filer ”, “ accelerated filer” , “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act . (Check one): Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Sec tion 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 7 , 2017 , there were 21,377,070 shares of Class A Nonvoting Common Stock, $0.01 par value per share and 1,680,590 shares of Class B Voting Common Stock, $0.01 par value per share outstanding. 1 READING INTERNATIONAL , INC. AND SUBSIDIARIES TABLE OF CONTENTS Page PART I - Financial Information 3   Item 1 – Financial Statements 3  Consolidated Balance Sheets (Unaudited) 3  Consolidated Statements of Income (Unaudited) 4  Consolidated Statement s of Comprehensive Income (Unaudited) 5  Consolidated Statements of Cash Flows (Unaudited) 6  Notes to Consolidated Financial Statements (Unaudited) 7  Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations 26  Item 3 – Quantitative and Qualitative Disclosure about Market Risk 42  Item 4 – Controls and Procedures 43  PART II – Other Information 44   Item 1 - Legal Proceedings 44  Item 1A - Risk Factors 44  Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 45  Item 3 - Defaults Upon Senior Securities 45  Item 5 - Other Information 45  Item 6 - Exhibits 45  SIGNATURES 46   Certifications  2 PART 1 – FINANCIAL INFORMATION Item 1 - Financial Statements  READING INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands , except share information ) June 30, December 31, 2017 2016 (1) ASSETS (Unaudited) Current Assets: Cash and cash equivalents $ 13,075 $ 19,017 Receivables 35,147 8,772 Inventory 1,408 1,391 Prepaid and other current assets 4,781 5,787 Land held for sale -- 37,674 Total current assets 54,411 72,641 Operating property, net 219,534 211,886 Investment and development property, net 62,219 43,687 Investment in unconsolidated joint ventures 5,343 5,071 Goodwill 20,476 19,828 Intangible assets, net 9,260 10,037 Deferred tax asset, net 28,246 28,667 Other assets 4,533 13,949 Total assets $ 404,022 $ 405,766 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities $ 20,753 $ 26,479 Film rent payable 8,842 10,528 Debt – current portion 8,058 567 Taxes payable – current 2,918 3,523 Deferred current revenue 8,817 10,758 Other current liabilities 11,589 14,131 Total current liabilities 60,977 65,986 Debt – long-term portion 95,091 115,707 Subordinated debt, net 27,447 27,340 Noncurrent tax liabilities 20,164 19,953 Other liabilities 26,003 30,165 Total liabilities 229,682 259,151 Commitments and contingencies (Note 13) Stockholders’ equity: Class A non-voting common stock, par value $0.01 , 100,000,000 shares authorized, 32,946,569 issued and 21,377,070 outstanding at June 30, 2017, and 32,856,267 issued and 21,497,717 outstanding at December 31, 2016 231 230 Class B voting common stock, par value $0.01 , 20,000,000 shares authorized and 1,680,590 issued and outstanding at June 30, 2017 and December 31, 2016 17 17 Nonvoting preferred stock, par value $0.01 , 12,000 shares authorized and no issued or outstanding shares at June 30, 2017 and December 31, 2016 -- -- Additional paid-in capital 145,178 144,569 Retained earnings 23,743 1,680 Treasury shares (19,774) (16,374) Accumulated other comprehensive income 20,564 12,075 Total Reading International, Inc. stockholders’ equity 169,959 142,197 Noncontrolling interests 4,381 4,418 Total stockholders’ equity 174,340 146,615 Total liabilities and stockholders’ equity $ 404,022 $ 405,766 See accompanying Notes to Unaudited Consolidated Financial Statements. (1) Certain 2016 balances have been reclassified to conform to the 2017 presentation (see Note 2 – Summary of Significant Accounting Policies – Reclassifications ). 3 READING INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME ( Unaudited; U.S. dollars in thousands, except per share data ) Quarter Ended Six Months Ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Revenue Cinema $ 67,443 $ 63,439 $ 134,003 $ 124,754 Real estate 4,970 3,479 7,864 6,953 Total revenue 72,413 66,918 141,867 131,707 Costs and expenses Cinema (52,139) (48,805) (103,921) (96,761) Real estate (2,342) (2,191) (4,377) (4,332) Depreciation and amortization (4,054) (3,828) (7,987) (7,635) General and administrative (6,118) (6,006) (12,291) (12,197) Total costs and expenses (64,653) (60,830) (128,576) (120,925) Operating income 7,760 6,088 13,291 10,782 Interest income 14 19 34 56 Interest expense (1,801) (1,781) (3,681) (3,692) Gain on sale of assets 9,417 -- 9,417 393 Gain on insurance recoveries 9,217 -- 9,217 -- Other income (expense) 27 (46) 848 (104) Income before income tax expense and equity earnings of unconsolidated joint ventures 24,634 4,280 29,126 7,435 Equity earnings of unconsolidated joint ventures 264 305 518 608 Income before income taxes 24,898 4,585 29,644 8,043 Income tax expense (5,846) (1,663) (7,549) (2,894) Net income $ 19,052 $ 2,922 $ 22,095 $ 5,149 Less: net income (loss) attributable to noncontrolling interests 20 (48) 32 (50) Net income attributable to Reading International, Inc. common shareholders $ 19,032 $ 2,970 $ 22,063 $ 5,199 Basic earnings per share attributable to Reading International, Inc. shareholders $ 0.82 $ 0.13 $ 0.95 $ 0.22 Diluted earnings per share attributable to Reading International, Inc. shareholders $ 0.81 $ 0.13 $ 0.94 $ 0.22 Weighted average number of shares outstanding–basic 23,148,995 23,334,892 23,168,703 23,334,892 Weighted average number of shares outstanding–diluted 23,396,143 23,543,959 23,415,851 23,543,959 See accompanying Notes to Unaudited Consolidated Financial Statements . 4 READING INTERNATIONAL, INC. C ONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( Unaudited; U.S. dollars in thousands) Quarter Ended Six Months Ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Net income $ 19,052 $ 2,922 $ 22,095 $ 5,149 Foreign currency translation gain (loss) 2,575 (2,055) 8,401 4,268 Unrealized gain (loss) on available for sale investments 1 -- (3) -- Accrued pension service benefit 51 32 103 64 Comprehensive income 21,679 899 30,596 9,481 Less: net income (loss) attributable to noncontrolling interests 20 (48) 32 (50) Less: comprehensive income (loss) attributable to noncontrolling interests -- (10) 13 6 Comprehensive income attributable to Reading International, Inc. $ 21,659 $ 957 $ 30,551 $ 9,525 See accompanying Notes to Unaudited Consolidated Financial Statements . 5 READING INTERNATIONAL, INC. CON SOLIDATED STATEMENTS OF CASH FLOWS ( Unaudited; U.S. dollars in thousands) Six Months Ended June 30, June 30, 2017 2016 (1) Operating Activities Net income $ 22,095 $ 5,149 Adjustments to reconcile net income to net cash provided by operating activities: Equity earnings of unconsolidated joint ventures (518) (608) Distributions of earnings from unconsolidated joint ventures 423 514 Gain recognized on foreign currency transactions (820) -- Gain on sale of assets (9,417) (393) Gain on insurance recoveries (9,217) -- Change in net deferred tax assets 690 (1,189) Depreciation and amortization 7,987 7,635 Other amortization 1,259 834 Stock based compensation expense 460 341