Reading International, Inc. Class A Aktie

Thanks for joining the 2026 Second Quarter Earnings Call for Reading International, Inc. My name is Gilbert Avanes, I'm the company's Chief Financial Officer and Treasurer. Joining me today is Ellen Cotter, our President and CEO.

After I run through the normal caveats, I'll start by presenting the results from our 2026 second quarter. I'll also talk about our balance sheet, liquidity and provide a summary of our debt position. Then I'll turn the call over to Ellen, who will discuss our business strategy. After that, we'll address some specific questions that came in from our stockholders, understanding that we have tried to weave answers to many stockholders' questions into our prepared remarks.

So let me start with running through the usual caveats. Some of the statements that we make today regarding our business, operations and financial performance may be considered forward-looking. Such statements are based on our current expectations and assumptions that are subject to a number of risks and uncertainties. We undertake no obligation to update any forward-looking statements. Actual results could differ materially. Please refer to our Form 10-K and 10-Q, including the risk factors.

During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our earnings release issued August 14, 2026, which has been released publicly and is available to the public through the Investor Relations tab on our website at readingrdi.com.

With that behind us, I'll go over the results from Q2 2026 and the first 6 months of 2026, which we are pleased to announce were both stronger than prior year period. We set multiple records this quarter, which we will discuss in more depth later in our call. We believe it is significant that our second quarter cinema segment operation earnings were the best quarter since Q2 2019. And on a total company level, we had the best quarter of operations since Q2 2018. Our Q2 2026 consolidated revenue increased by $6.5 million to $66.9 million quarter-over-quarter. A few factors drove these improvements. The film slate for the quarter in Australia proved to be a stronger lineup compared to Q2 2025, leading to increased attendance and [ FP&A ] revenues. Increased real estate revenues in U.S. led by improvements in live theater revenues, primarily as a result of improved programming at our Minetta Lane Theatre. And the strengthening of the Australia foreign exchange rate against the U.S. dollar. Historically, around 50% of our revenue has been generated in Australia and New Zealand. And during the second quarter of 2026, that rose slightly with 53% of our revenue being generated internationally. Due to the Australia dollar strengthening against the U.S. dollar by 11% in the second quarter 2026, this positively impacted our results.

Consolidated revenue for the 6 months ended June 30, 2026, increased by $11.5 million to $112 million when compared to the same period of 2025. These increases are due to increased attendance in Australia as a result of overall stronger movie slate, including titles such as Michael, the Super Mario Galaxy movie, The Devil Wears Prada 2, Project Hail Mary and Toy Story. Increased revenue in our U.S. and Australia real estate division and the strengthening of our Australia and New Zealand currency by 11% and 1%, respectively. At $2.3 million, our Q2 net income attributable to Reading International, Inc. increased by 185% from a loss of $2.7 million in Q2 2025. This was primarily due to improved segment result as a result of strengthened performance of our Australia cinema and our U.S. real estate, offset by a Q2 2025 gain on sale of assets, which did not repeat in Q2 2026.

Net loss attributable to Reading International, Inc. for the 6 months ended June 30, 2026, decreased by $1.5 million from a loss of $7.4 million to a loss of $5.9 million when compared to the same period in prior year. These results were primarily due to strengthened cinema and property segment results, a $1.5 million savings in G&A, a $0.5 million savings in interest expense and a $2.4 million increase in other income. These improvements for both quarter-to-date and year-to-date were assisted by the strengthening of our Australian dollars, but are partially offset by increased tax expenses.

Our basic earnings per share for Q2 2026 increased by $0.22 to a basic earnings per share of $0.10 compared to a basic loss per share of $0.12 for Q2 2026 (sic) [ 2025 ]. The increase is due to the same factors as our increase in our net income. Basic loss per share decreased by $0.07 to a loss of $0.26 compared to a loss of $0.33 for the first 6 months of 2025. Again, these improved results were due to the same factors as our improvements in our 6 months ended June 30, 2026, net income.

Our Q2 2026 global operating income of $7.5 million improved by $4.6 million compared to an operating income of $2.9 million in Q2 2026 (sic) [ 2025 ]. At $11.3 million, our Q2 2026 adjusted EBITDA income increased by $5 million or 79% compared to an EBITDA income of $6.3 million for the same time period last year. For the 6 months ended June 30, 2026, our adjusted EBITDA increased by $1.2 million to $10.4 million compared to the same prior year period. These results were primarily the result of improved operating performance as opposed to asset sales.

Turning now to our financial position. As of June 30, 2026, our total assets were $429.4 million compared to $434.9 million on December 31, 2025. This decrease was primarily driven by a $4.9 million decrease in cash and cash equivalents from which we funded our ongoing business operations. Our total asset base remained largely consistent within which in February 2026, we classified our Cinemas 1,2,3 property as held for sale. As of June 30, 2026, our total outstanding borrowing gross of deferred financing costs were $183.1 million compared to $185.1 million on December 31, 2025. Our cash and cash equivalents as of June 30, 2026, were $5.7 million, which was slightly increased over the prior quarter.

So far, in 2026 and over the past year, we have worked with our key real estate lenders to extend maturity dates, modify principal repayment dates and adjust existing covenants. On February 6, 2026, we executed an amendment to defer a principal payment relating to our 44 Union Square loan, which was since paid on March 13, 2026. On February 27, 2026, we executed an amendment to modify the principal repayment schedule of our Bank of America, Bank of Hawaii facility. On March 31, 2026, we executed an amendment to reduce our NAB loan minimum liquidity requirements for a limited defined period in 2026. On June 12, 2026, we extended the maturity date of our Bank of America facility to December 21, 2026. On August 11, 2026, we extended the maturity date of our Santander loan to October 1, 2026.

Now let me turn it over to Ellen, who will give us an overview of the business in the second quarter of 2026.

Thanks, Gilbert, and welcome, everyone, to today's call. We were so pleased with our results for the second quarter of 2026. A much stronger movie slate, coupled with a laser focus by our team on strategic priorities led the company to achieving several post-pandemic milestones. At $66.9 million, Reading's Q2 2026 total revenue was the highest second quarter in the last 6 years or since Q1 2019. Our global cinema division delivered an 11% increase over last year and the highest quarterly global cinema revenue since the fourth quarter of 2019.

Our Australian cinema circuit generated a 31% increase over the same quarter of the prior year and a 52% increase from the first quarter of 2026. Also, our Australian cinema circuit delivered their highest quarter total revenue ever in both local currency and U.S. dollars and their highest quarter segment revenue ever. At $7.5 million, Reading's second quarter operating income improved to 159% over the same quarter last year and was the best quarter result since Q2 2018. And on a total segment operating income basis, we reported $10.7 million, which increased 55% over the same quarter last year and was the best result in the last 8 years or since Q2 2018. If you exclude the sizable asset sales or large gains on sale that occurred in the second quarter of 2021, at $11.3 million, our Q2 2026 EBITDA was the best second quarter result in the last 7 years. At $4.9 million, our Q2 2026 global real estate revenues increased by 4%, primarily due to the improved performance of our U.S. live theaters. And note, our global portfolio now reflects the 2025 sale of our assets in Townsville, Australia and Wellington, New Zealand. While the sale of Cannon Park eliminated future revenues and costs, the sale of Wellington primarily for this period removed holding costs.

Our U.S. real estate division delivered its highest second quarter revenues ever due to a strong quarter from our live theater division. During the second quarter, our commercial theaters were treated to a diverse and powerful film lineup. Audiences from around the world embraced original movies like Michael, Backrooms and Obsession, and audiences returned to support some of the industry's strongest film franchises like the Super Mario Galaxy movie, The Devil Wears Prada 2 and Toy Story 5. Not only do we enjoy a superior film lineup, our execution on key strategic initiatives across the company's cinema divisions generated improved operations. We continued expanding our F&B programs across our cinema divisions with a focus on our movie theme menus and merchandise. We believe our attendance was supported by improvements to our global loyalty programs, which I'll touch on shortly.

Across our global cinema circuit, we're continuing to work with our landlords to reduce our overall occupancy cost to reflect the fact that attendance has not returned to pre-pandemic levels. And at the same time, our labor and operating expenses for the most part have increased across the board. And in certain markets like Hawaii, increases in labor have been significant. Looking forward, we're excited about the momentum for the third and fourth quarters of this year. During the third quarter, our global theaters are still enjoying the spectacular box office from Spider-Man: Brand New Day and The Odyssey. And the December lineup looks equally fantastic with 3 highly anticipated franchise films, Avengers: Doomsday, Dune 3 and Jumanji 3. Along with industry analysts and press, we continue to believe that 2026 is poised to be the best post-pandemic box office year to date.

With respect to our balance sheet, I'll reiterate our Board has directed the team to reduce Reading's overall debt position. Executing on this priority, we're actively working on the sale of our Cinema 1,2,3 property, which I'll touch on in a few minutes. Despite the anticipated sale of the Cinemas 1,2,3, we remain fully committed to our 2-business, 3-country strategy, which we believe will continue to serve us well into the future. The founder of our company put into place structures that would assist us surviving market downturns such as those triggered by the pandemic and the 2023 Hollywood strikes. We've been able to use that structure to monetize properties, which were in good markets and command a good prices, but which were unlikely to appreciate in value without material capital investment. This has supported our overall operations and helped us reduce our debt load. Given what we believe to be the current trajectory of the cinema industry, we believe our founder strategy has worked. We've been able to continue our operations to continue to support our workforce, continue to service our customers and working with our lenders, landlords and vendors on a cooperative basis to meet our obligations to third parties and retain our assets -- retain our key assets.

Our anticipated sale of our Cinema 1, 2 & 3 and Newberry Yard assets will assist us in further paying down debt and provide seed money for the upgrading of our cinemas.

In summary, while we've monetized certain real estate assets over the last 5 years, these decisions were made strategically to address liquidity needs resulting from the pandemic, the unprecedented 2023 Hollywood strikes and historic increases in interest rates and inflation. As I said, we focused on assets that were either generating negative cash flow or after debt service did not materially contribute to cash flow, and that we believed had reached their highest reasonably achievable value without significant additional capital investment. We believe we maintain a strong portfolio of cinema and real estate assets, most of which currently generate positive cash flow or expected to do so in the future. We've also successfully navigated the significant challenges of the past 6 years without receiving one penny of U.S. government pandemic assistance, pursuing debtors' rights remedies or diluting our stockholders.

Now let's turn to our global cinema business. As we just mentioned, at [ $63 million ], our global cinema revenue increased 11%. At $9.2 million, our global cinema operating income improved by 68% and represented the best second quarter result for this metric for the last 7 years or since Q2 2019. As we've said, the stronger second quarter cinema performance was fueled primarily by our Australian cinema division, the execution of our key strategic initiatives and the strength of the U.S. -- strengthening of the Australian dollar. And these revenue results were achieved despite the elimination of revenue from the closure of 2 San Diego cinemas, one that closed on June 1, 2026, and another in April of '25.

The Q2 2026 global movie slate delivered for Australian cinema operations, 4 titles grossed over $2 million in that circuit for the second quarter of '26. Michael, the Super Mario Galaxy movie, The Devil Wears Prada 2 and Toy Story 5, compared to only 2 films in the second quarter of 2025, A Minecraft Movie and Lilo & Stitch. Additionally, the quarter was further supported by strong holdover grosses from Project Hail Mary, Backrooms and Obsession.

Let me highlight a few of those key 2026 strategic initiatives that I referred to. Our F&B program continues to be an area of focus. When you include only periods when each of our circuits were fully operational, i.e., excluding pandemic closure periods at AUD 8.37, that's in Australian dollars and NZD 7.22 in New Zealand, our Australian and New Zealand cinema divisions established F&B spend per person records, with New Zealand achieving their highest quarter ever and Australia achieving their highest second quarter ever, which was also the second highest quarter level ever. These strong F&B results were supported by the continued sale of movie merchandise and the development of movie theme menus. I'll note in the last few months, Reading Cinemas in Australia has launched a new web page dedicated to Movie Merch. At $8.97, our U.S. team outperformed the industry and delivered a higher second quarter F&B SPP than our publicly traded competitors. The Q2 2026 F&B SPP represented our third highest quarter ever for that metric. We believe we did not achieve a quarterly record because of the continued growth in our popular discount Tuesday program, which features discounted concession offers and the expansion of our membership program, which provides 5% cash back on F&B purchases and an additional 10% discount for premium members. Due to the very strong 6-month movie lineup and the focus of our global teams, all 3 countries achieved their highest June year-to-date ever for F&B SPP. We're also continuing to engage our guests and attract new guests through our new and improved loyalty programs, both free-to-join rewards and paid membership programs. Our loyalty programs are an important tool for encouraging guest engagement and improving guest experience in our theaters, and we continue to look for creative ways to attract more members and enhance the quality of their visits.

In the fourth quarter of 2024, we revamped and relaunched our free-to-join Reading Rewards program in Australia and New Zealand to provide better perks and savings. As of the end of the second quarter 2026, we have over 625,000 members, a 27% increase over the first quarter of this year.

With respect to our paid memberships in Australia and New Zealand for both our Reading and Angelika brands, we signed up over 41,000 paid members -- memberships in Q2 2026, a 72% increase over last quarter. In the U.S., through December 2025 and January 2026, we launched a new free-to-join rewards and premium membership program in our 6 consolidated theaters in Hawaii and 3 Reading Cinemas. Since that launch, we've signed up 41,000 rewards members and 2,500 paid members.

In the U.S., our free-to-join Angelika membership program has approximately 190,000 members for our 8 Angelika branded theaters. We expect to launch our premium Angelika monthly membership before the end of 2026. A key initiative for our global executive teams has been working with our cinema landlords to realign occupancy costs with the economic realities of recent years. Operating costs in almost every category have materially increased, while attendance continues to remain below pre-pandemic levels. And we have limited headroom to raise ticket and food and beverage prices. The lion's share of any increase in our ticket prices generally goes to the film companies. In this regard, we're in the same boat as the rest of the industry. Along these same lines, since the pandemic started in early 2020, we've reduced our global cinema count by 9 theaters to eliminate loss-making locations. None of these cinemas were profit-making, none led to early termination or early exit fees. And upon review, we've concluded that it was unlikely they could return to profitability without material capital expense, if at all. In all but one case, these locations have either been converted to other uses or remain dark. While closing these loss-making cinemas reduced gross revenue in the short term, it improves net income by eliminating locations that were reducing our profitability, benefiting our bottom line both now and over time.

Before we look at each of our Australian, New Zealand and U.S. cinema divisions, let me mention another milestone achieved by each global cinema division. During Q2 2026, each cinema division delivered the highest cash flow pre-occupancy per capita ever achieved for any quarter, which we believe reflects the team's focus on revenue maximization and expense minimization. This disciplined approach will serve us well into the future as our box office continues to improve.

Now let's take a closer look at the 2026 second quarter results for our U.S. cinemas. While our second quarter cinema revenue decreased slightly by 3% compared to last year, our operating income improved by 40% compared to the same period last year. The slight decrease in revenue is attributable to the strength of the prior year second quarter titles, Lilo & Stitch and A Minecraft Movie, each of which overperformed in our cinemas in Hawaii, which over the last 2 years has averaged about 35% of our U.S. cinema revenue. The closing of our 2 theaters in San Diego, which impacted these revenue results as well, the June 2026 closure of the Reading Cinema at Grossmont and the April 2025 closure of the Reading Cinema at the Town Square Mall.

The second quarter 2026 underperformance of our dedicated art houses like the Angelika New York due to a weaker slate of key art titles also impacted the U.S. cinema total cinema revenues.

Regarding the U.S. cinema CapEx spend in 2026. During the first quarter, we completed a major renovation of our Reading Cinemas at the Valley Plaza Mall in Bakersfield, which included the addition of a TITAN LUXE screen with Dolby ATMOS and luxury recliner seats, adding recliners to our IMAX screen and converting 8 other screens to recliners. Following the completion of this renovation and also assisted by better film availability, our Q2 2026 total revenues at this cinema have increased by 43%, which is well in excess of our total U.S. cinema second quarter average. We are working on a seat refurbishment plan to improve our theater seats that were damaged by mandated disinfectant during the pandemic. We've commenced seat improvements at 2 of our lead theaters in Hawaii and expect all of the seats in those theaters to be completed in the third quarter of '26. This renovation project was funded through cash flow as opposed to outside sources. And through 2026 and into 2027, we expect to complete the seat improvements across our U.S. circuit, in some cases, assisted by landlord contributions. Understanding that our audiences are looking for premium experiences, we're also exploring the opportunity with leading vendors to add premium concepts to our theaters, including improved projection and sound and experiential seating concepts.

Turning to our cinemas in Australia and New Zealand. Our Australian circuit had a phenomenal quarter. In the second quarter of '26, our Australian cinema revenue increased 31% to $30 million, which set a record for our Australian circuit for the highest quarter ever. And our operating income increased 91% to $5.6 million from an operating income of $2.9 million. Our Q1 (sic) [ Q2 ] 2026 New Zealand cinema revenue decreased by 2% to $3.5 million, but our operating income improved by 61% to $387,000 from an operating income of $241,000. During the second quarter of '26, our international cinemas delivered average ticket prices that established record highs. Our Australian cinema circuit second quarter ATP of AUD 16.89 was the highest quarter ever. Our New Zealand cinema circuit second quarter ATP of NZD 15.58 also set a record for its highest quarter ever. With respect to our 2026 international CapEx spend, our most important investment over the next couple of years will be the complete renovation of our Reading Cinema in Wellington, New Zealand. We believe strongly in the Wellington market as a strong movie going town, which is also now home to some of the most creative visual effects communities in the world, also with being the home of best-in-class filmmakers, James Cameron and Peter Jackson. Our renovation plans include luxury recliners in all auditoriums, the creation of at least 2 premium large screen concepts such as TITAN LUXE, the creation of at least 3 elegant Gold Lounge auditoriums to feature waiter service, an overall upgraded food and beverage offer and the creation of an elevated hotel-like lobby lounge. We anticipate that our landlord will be completing their seismic upgrade of the building in the next 6 to 9 months, which would then allow us to complete our fit-out in time for a projected launch in late 2027. Our optimism for the cinema is supported by the fact that prior to its closure for seismic issues in January of 2019, this theater was historically always one of our top 5 global cinemas as well as being among the top grossing cinemas in New Zealand.

Next, let's turn to our global real estate business, which on a segment reporting basis includes not only our third-party rental income, but also our live theater business in New York City and our intercompany cinema rents. Starting with the second quarter of 2026 global real estate results and compared to the same period in 2025. At $4.9 million, our second quarter 2026 global real estate total revenue increased 4%. And at $1.6 million, our second quarter total operating income increased by 7%. Breaking it down by division for the second quarter 2026 and compared to the same period last year, with respect to Australia, our real estate revenue increased by 1% to $2.8 million, and our operating income of $1.3 million remained relatively flat. At $212,000, our New Zealand real estate revenue remained flat. Our Q2 2026 New Zealand real estate operating income of $53,000 also remained flat. And our second quarter 2026 U.S. real estate revenue of $1.9 million increased by 11% and our operating income of $183,000 increased by 106%.

With respect to our Australian and New Zealand portfolio, as of June 30, 2026, due primarily to our asset monetizations in Wellington and Townsville, the number of third-party tenants in our combined Australian and New Zealand real estate portfolio reduced to 58 and is now primarily made up of tenants at Newmarket Village in Brisbane and the Belmont Common in Perth. The quality of our remaining tenants is strong with a portfolio occupancy rate of 98%. Our Newmarket Village property continues to thrive. Quarterly percentage rent received from third-party tenants has increased quarter-over-quarter with major tenants achieving percentage rent. In addition, we're aware that a major tenant in our Australian portfolio may be considering a full refurbishment investment in their space in the near future.

Now turning to our U.S. real estate business. Regarding our live theater segment, our second quarter 2026 was stronger than last year, driven by continued demand for the Orpheum Theater following the departure of STOMP. The theater hosted performances of 11.00 to midnight, a theatrical dance experience starring TikTok viral sensations Cost n' Mayor, which was extended into the second quarter of 2026.

During the second quarter of '26, the Minetta Lane Theatre also hosted several critically acclaimed productions that were well received by audiences, including 2 shows starring Hugh Jackman, Sexual Misconduct of the Middle Classes and Newborn. Additionally, audiences at the Minetta Lane enjoyed What Happened Was.

Turning to our 44 Union Square property. While Petco continues to delight pet parents across New York City with its award-winning retail store, we still have 4 floors left to lease at 44 Union Square. As previously reported, we reengaged Newmark, the same leasing team that brought the Petco deal to us and was completed by the team in January of 2022. While the summer months historically are not the strongest months for New York City commercial leasing activity, the pace of leasing tours conducted by Newmark even during the dead summer months compared to earlier brokers is a marked improvement. As previously reported, Newmark has toured a range of potential tenants whose uses focus on wellness, education, entertainment and co-working. Newmark's enthusiasm for our space coincides with positive industry reporting from community and brokerage houses who focus on the Union Square area. For instance, the Union Square Partnership, a community-based organization, reported in July of 2026 that the Union Square office market remains stronger than other areas of Manhattan with a 12.9% availability rate versus a 14.3% Manhattan average. And many prime office buildings have reached 100% occupancy this year. The report further noted that storefront occupancy improving over last year is at 90.1% with the Union Square partnership bid boundary as of July 2026. We received questions about a potential refinance upon the successful leasing of the remaining floors at 44 Union Square. Other potential lenders have toured the space. However, we need to wait to see the final makeup and credit status of the tenant or tenants to occupy the remaining floors to take a position on the refinance. We also received a number of stockholder questions about the sales process for the Cinema 1, 2 and 3 building in New York City across the street from Bloomingdale's on the Upper East side. Through Newmark, again, we generated significant buyer interest in the property. We've narrowed the field to a preferred buyer, a residential developer well experienced in local redevelopment and are currently working with that buyer on definitive documentation. While no assurances can be given, we expect that a contract of sale should be executed shortly with the closing in the early fourth quarter. If this particular deal is not consummated, we would expect Newmark to pivot relatively easily to another buyer. We believe that the upper Manhattan market for redevelopment assets like the Cinema 1, 2 and 3 continues to improve.

Our Newberry Yard property in Williamsport, Pennsylvania remains classified as held for sale. We've been in recent communications with a few parties interested in our property. Each of these groups is a strategic buyer who want to use our 23-acre parcel for industrial and/or rail-tied uses. We continue to believe that a strategic buyer is the best resolutions for this property given its access to established rail infrastructure. However, this means that the process is taking longer than a process looking for a sale to a buyer who will not add value for the benefits of this infrastructure. The property is unleveraged and has a relatively low carrying cost. So we continue to believe that our approach is the best approach to maximize the value of this asset.

In summary, our Real Estate segment is stable and has room for growth as we lease up the remaining space at 44 Union Square. We're bullish on our cinema segment for a variety of reasons, including the quality of the remaining 2026 movie slate. Moviegoers and studios are rediscovering the joint economic benefits of the cinema release. Studios, including Universal and Paramount have recently publicly confirmed their commitments to a 45-day theatrical window. We've been successful in culling our cinema portfolio to remove unprofitable cinemas without the payment of fees or penalties. We've continued to actively manage occupancy and operating costs across our cinema portfolio, supporting the long-term sustainability and performance of our cinemas. As our liquidity improves, we're dedicated to upgrading our key cinemas in our portfolio. And we've been successful in the execution of strategic priorities like F&B and loyalty expansion to drive higher cinema attendance.

With that, I'm going to wrap up my business report. We thank you all again for listening, and thank you to our stockholders for sending in questions to the Investor Relations e-mail. But as usual, in addition to addressing many of your questions in the prepared remarks, we've selected a few additional questions to offer further insights. So I'll start the Q&A.

We've got a few questions for Gilbert. The first question, why was the Santander Minetta and Orpheum refinancing not completed before the June 1 maturity? What remains unresolved? And is Reading seeking a normal multiyear refinance? Or should shareholders expect another short extension? Gilbert?

We have a good long-term relationship with Santander, but the bank's focus is now on other real estate classes. While this loan has been on their books for a long time, they would like to move on. We believe that we have a deal with a replacement lender and are in a due diligence and administrative process with that lender. As we go through these steps and have needed additional time, Santander has provided an extension. These assets have a strong cash flow, and though we can provide no assurance that we'll consummate a refinance, we do expect a new arrangement to be in place in the next few months.

Great. Thanks, Gilbert. Let me give you another question. What is Reading International's current NOL? Will such NOLs protect from capital gains taxes on real estate assets to be sold?

Tax issues are complex. Accordingly, the following is a highly generalized and summary in nature. Basically, Reading currently has a potential NOL of approximately $40 million tax affected. However, for GAAP accounting purposes, we have established a reserve against this deferred tax benefit of $40 million, reflecting our annual loss recorded in recent years. To the extent we have capital gains in the U.S., we can reduce up to 80% of our taxable gain through the use of NOLs, except for in California. Of course, any current operating losses would be first 100% applied against any such gains. California has enacted certain limitations on the use of NOLs and since reported income on a combined basis with our U.S. subsidiaries, we will not get the full benefit of such NOLs with respect to our California state income tax. Let me address some questions to Ellen. Cinemas 1,2,3 proceeds. Assuming the sale is completed, how does management expect to prioritize the net proceeds remaining after repayment of property mortgage and transaction expenses? Go ahead.

As our stockholder noted, we'll first pay down the Valley National debt of about $19.7 million. Currently, that loan carries an interest expense of about $2 million per year. We'll also pay down the remainder of the Bank of America, Bank of Hawaii debt of approximately $5.4 million that carries an annualized interest expense of about $650,000. After that, among the items that we may deploy our funds to, they include, without limitation, a further reduction of our global debt to further reduce our overall interest expense, renovation of certain key cinemas and the paydown of other operating accruals.

Okay. At Q1, Napier was under contract for sale with an expected cinema leaseback. The Q2 10-Q now says, the sale is on hold because of unforeseen issues involving the owner of the car park that the cinema leases. What specifically is the car park owner issue? What must happen for the sale to proceed? Does the existing buyer remain committed and have timing, economics or leaseback terms changed? Ellen?

Okay. At the present time, we don't have a deal on the table for the sale of this asset that's acceptable to us. Our potential buyer has requested changes to the draft purchase and sale agreement and the leaseback arrangement, which have caused us to press pause for the moment. A change of ownership of the car park that the cinema leases also occurred, which caused the buyer to request further changes in our documentation. Those changes from our perspective contributed to the overall transaction not being as attractive.

In terms of U.S. dollars, the contemplated deal is not material to the company's overall liquidity strategy. And in light of stronger asset sales and a marked improvement in our cinema and live theater businesses, we're evaluating whether the cash flow expected to be generated from the cinema at Napier and the third-party tenant or a potential new third-party tenant are strong enough to outweigh the cash infusion from the potential sale of the underlying Napier property.

Our last question on Philadelphia. The Q2 10-Q says the Code Violation Litigation was settled for a nominal amount. What is the current procedural status of the STB appeal? Has the City of Philadelphia, Center City District or any related party made any formal offer settlement proposal or condemnation filing since the STB decision? And are any adjoining parcels capable of separate monetization while the broader Viaduct dispute remains unresolved. Ellen?

All right. Let me take each of the parts of this question. So first off, yes, confirming again the code violation case was settled for a nominal sum. Today, the STB case continues procedurally our appeal with the D.C. Circuit Court. Other independent parties with rail interest have filed intervening briefs in our favor. So we expect the STB case to be afoot through at least 2026. And no, the city of Philadelphia or any related party has not made any offers or reach outs to Reading. Yes, there are adjoining Viaduct parcels that could be separately monetized, but it is, in our view, premature to review these properties for monetization until we have a more defined path with the city or another real estate developer. As we've mentioned in earlier calls, we want to reiterate that the company believes that the Reading Viaduct is a valuable company asset and any transportation in the future tied to the Reading Viaduct should represent a fair value for stockholders of Reading.

Thanks, Ellen. That marks the conclusion of our second quarter 2026 conference call. We appreciate you listening to the call today. Thank you for your attention and support.

Thanks for joining the 2026 First Quarter Earnings Call for Reading International, Inc. My name is Gilbert Avanes, I'm the company's Chief Financial Officer and Treasurer. Joining me today is Ellen Cotter, our President and CEO. After I run through the normal caveats, I'll start first by presenting the results from our 2026 first quarter.

I'll also talk about our balance sheet, liquidity and provide a summary of our debt position. Then I'll turn the call over to Ellen, who will discuss our business strategy. After that, we'll address some specific questions that came in from our stockholders understanding that we have tried to weave answers to many stockholder questions into our prepared remarks.

So let me start with running through the usual caveats. Some of the statements that we make today regarding our business, operations and financial performance may be considered forward-looking. Such statements are based on the current expectations and assumptions that are subject to a number of risks and uncertainties. We undertake no obligation to update any forward-looking statement.

Actual results could differ materially. Please refer to our Forms 10-K and 10-Q, including the risk factors. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our earnings release issued May 15, 2026, which is distributed and available to the public through the Investor Relations tab on our website at readingrdi.com.

With that behind us, I'll go over the results from Q1 2026. But before I do that, I want to summarize a few notable events that occurred in the first quarter of 2026. In February 2026, we classified our Cinemas 1,2,3 property as held for sale. This is following our December 2025 acquisition of the 25% interest in the property that we did not own, thus facilitating a sale of the entire property.

On March 4, 2026, we signed a purchase and sales agreement to monetize our Napier property. The transaction is current in the due diligence period. Now I'll turn to the first quarter results, which on a total revenue level were stronger than the prior year period, but were weaker than comparing net income to the prior period.

We believe it to be significant that this quarter, our cinema segment operating earnings calculated before depreciation and amortization was positive for the first time since 2019. Our Q1 2026 consolidated revenue increased by $5 million to $45.1 million quarter-over quarter.

A few factors drove this improvement. The film slate for the quarter in the U.S. and Australia proved to be a stronger lineup compared to the Q1 2025, leading to an increased attendance and food and beverage revenues despite a cinema closure in the U.S. in the second quarter of 2025.

Increased real estate revenues in the U.S. led by an increase in live theater revenues, primarily as a result of the strength of the live show performing at our Minetta Lane Theater. And the strengthening of our Australia and New Zealand foreign exchange rate against the U.S. dollar. Historically, around 50% of our revenues have been generated in Australia and New Zealand.

And during the first quarter of 2026, that slightly rose with 53% of our revenues being generated internationally. Due to the Australia and New Zealand dollar, both strengthening against the U.S. dollar by 10.8% and 3.9%, respectively, in the first quarter of 2026. This positively impacted our results.

With respect to our net loss position for the first quarter, a net loss attributable to Reading International Inc. increased by 71% from a loss of $4.8 million to a loss of $8.1 million when compared to the same period in the prior year. This was due to the first quarter of 2025 having a $6.6 million gain on the sale of our property assets in Wellington, New Zealand, including Courtenay Central.

Excluding this prior period gain on sale, our improved performance is due to improved cinema segment results, decreased interest expense and decreased G&A expense. Our basic loss per share for Q1 2026 increased by $0.15 to a Basic Loss per Share of $0.36 compared to a Basic Loss per Share of $0.21 for Q1 2025.

This increased loss is attributable to the same factor as our decrease in our net loss. Our total company depreciation, amortization, impairment and general and administrative expense for the Q1 2026 decreased by $0.5 million to $8 million compared to $8.5 million for Q1 2025.

Income tax benefit for the 3 months ended March 31, 2026, decreased by $0.3 million compared to the equivalent prior year period. The change between 2026 and 2025 is primarily related to the year-to-date consolidated losses and an increase in reserve for a valuation allowance in 2026.

Our Q1 2026 global operating loss of $3.6 million improved by $3.3 million compared to an operating loss of $6.9 million in Q1 2025. At a loss of $0.8 million, our Q1 2026 adjusted EBITDA loss increased by $3.7 million compared to an EBITDA income of $2.9 million for the same time period last year. Shifting to cash flow. For the quarter ended March 31, 2026, net cash used in operating activities decreased by $5.2 million to $2.5 million compared to the cash used in the same period in prior year of $7.7 million.

This was primarily driven by a decrease in net operating loss of $2.8 million and an increase in nets payable of $2.5 million. Cash used in investing activities during the quarter ended March 31, 2026, was $0.5 million compared to the cash provided in the same prior year period of $17.9 million.

This was due to proceeds from the sale of our Wellington properties, New Zealand in the first quarter of 2025. Cash used in financing activities for the quarter ended March 31, 2026, decreased by $14.6 million to $2.3 million compared to the cash used by financing activities of $16.9 million in the same prior year period.

This was primarily due to repaying our $10.5 million Westpac loan and $6.1 million of our Bank of America loan using a portion of the proceeds on the sale of our Wellington properties in Q1 2025. Turning now to our financial position. As of March 31, 2026, our total assets were $431.5 million compared to $434.9 million on December 31, 2025.

This decrease was primarily driven by $5 million decrease in cash and cash equivalents from which we fund our ongoing business operations. As of March 31, 2026, our total outstanding borrowings from gross deferred financing costs were $184.6 million compared to $185.1 million on December 31, 2025.

Our debt position is substantially similar as while we have paid down certain loans, the strengthening Australian dollar has the effect of increasing the value of our NAB facility. It is to be noted that this debt has historically been serviced out of our Australian operation. And while no assurance can be given, we do not anticipate serving this debt in U.S. dollar.

Our cash and cash equivalents as of March 31, 2026, were $0.5 million. To address ongoing liquidity pressure on our businesses, we continue to work with our lenders to amend certain debt facilities. In the first quarter of 2026 and in the past year, we have worked with our key lenders to extend maturity date, modify principal repayment dates and adjust existing covenants.

With respect to our 44 Union Square loan on February 6, 2026, we deferred a principal payment, which we have since paid in March 2026. With respect to our Bank of America/Bank of Hawaii loan, on February 27, 2026, we further modified the loan payment schedule.

On March 31, 2026, we executed an amendment to reduce our NAB loan minimum liquidity requirement for a limited defined period in 2026. Our interest expense for the quarter ended March 31, 2026, has been reduced by $0.5 million or 11% since the same period last year. We have reduced our overall gross debt by $100.4 million since December 31, 2020. Now let me turn it over to Ellen, who will give us an overview of the business in the first quarter of 2026.

Thanks, Gilbert, and welcome, everyone, to the call today. We were pleased with the start of 2026 and our improving operational results, which together with our efforts to reduce our overall debt and G&A should improve our balance sheet going forward. The Q1 global movie slate in 2026 drove a marked improvement in our operations, thanks to movies like Project Hail Mary, Hoppers, and Wuthering Heights, along with strong holdovers from the 2025 holiday season with movies like Zootopia 2 and the Avatar: Fire and Ash.

At $45.12 million, Reading's Q1 2026 total revenue was the second highest first quarter reported since the first quarter of 2020. This result was supported by our global cinema division delivering a 14% increase over the first quarter of '25 and the second highest first quarter global cinema revenue since the first quarter of 2020.

With our U.S. cinemas delivering a 6% increase over the prior quarter, our Australian cinemas delivering the highest first quarter cinema revenues on a constant currency basis since the first quarter of 2020. At $4.6 million, our first quarter 2026 global real estate revenues decreased by 5% compared to last year's quarter, primarily due to a reduction in our revenue as a result of the 2025 sales of Cannon Park in Townsville, Australia, and our Wellington property assets in New Zealand.

Despite this reduction in our international real estate revenue, our U.S. real estate division delivered the highest first quarter revenues ever due to our improving rental stream at 44 Union Square and a strong first quarter from our live theater division and our remaining international real estate portfolio continuing to maintain a 98% occupancy rate for its diverse mix of 58 third-party tenants.

While Reading reported an operating loss of $3.6 million in the first quarter of '26, it was a 47% improvement over the same quarter last year and the best result for this metric since the first quarter of 2019. And on a total segment operating income basis, we reported $480,000, which was an improvement of over 100% on the reported first quarter 2025 total segment operating loss of $2.9 million and the best first quarter result since the first quarter of 2019 and the first positive total segment operating income since the first quarter of 2019. Again, these improved operational results were driven mostly by a much stronger movie lineup, but also by our execution of key strategic initiatives across the company's cinema divisions.

Continued focus with more creative strategies on our global loyalty programs, which I'll touch on shortly, continued focus on the F&B programs across our cinema division and across our global cinema circuit, we're continuing to work with our landlords to endeavor to reduce our overall occupancy costs to reflect the fact that attendance has not returned to pre-pandemic levels and our operating expenses for the most part, have increased across the board.

With respect to our property divisions, our results reflect the impact of selling our Townsville and Wellington assets in '25. While the sale of Cannon Park eliminated future revenues and costs, the sale of Wellington primarily for this period removed holding costs. Despite our overall real estate division experiencing an operating income decline quarter-over-quarter, this was still our 14th straight quarter of having positive real estate operating income.

Also, our first quarter 2026 U.S. Real Estate division performed better quarter-over-quarter, mainly due to the strong productions mounted at the Minetta Lane Theatre, which is part of our live theater division. We recognize that we're not quite out of the woods just yet, but we were all encouraged by the demonstrable improvements in the first quarter as it relates to our key cinema businesses, which momentum we fully expect to continue through 2026.

With respect to our balance sheet, our Board has directed management to reduce its overall debt. During the fourth quarter of this year, as Gilbert mentioned earlier, we reduced our overall interest expense by 11% quarter-over-quarter, which reflects paydowns in '25.

We reported that our Cinema 1, 2 and 3 property in New York City across the street from Bloomingdale's has been classified as held for sale. And we anticipate using a portion of the sales proceeds to retire outstanding debt. In New Zealand, we signed a purchase and sale agreement in March of '26 to sell our property in Napier, coupled with an intended leaseback of the cinema.

Again, it's likely a portion of those proceeds will be used in the short term to reduce our outstanding liabilities. We're still absolutely committed to our 2-business, 3-country strategy. While we've monetized a number of our real estate assets, this has been done to strategically meet our liquidity needs in the face of the pandemic, the unprecedented '23 Hollywood strikes, historic increases in interest rates and inflation.

We chose those particular assets, which typically were either negative cash flow or which after debt service did not materially contribute to our cash flow and which, in our view, had reached the best value reasonably achievable without significant capital investment.

And looking ahead to the second quarter 2026, we continue to be impressed with the box office and the successful releases of the Super Mario Galaxy Movie, Michael and The Devil Wears Prada 2. And the rest of 2026 looks equally as impressive with highly anticipated major releases like Star Wars: The Mandalorian and Grogu in May, Toy Story 5 and Supergirl in June, Minions & Monsters, Moana, Spider Man: Brand New Day and The Odyssey in July, The Cat in the Hat and Hunger Games, Sunrise on the Reaping in November and Avengers: Doomsday, Dune: Part Three and Jumanji 3, all in December.

Along with industry analysts and press, we continue to believe that due to the robust film slate in '26, we believe that this year is poised to be the best post-pandemic box office year to date. As of today, we believe we continue to have a strong portfolio of cinema and real estate assets, most of which produced positive cash flow now or expected to in the future.

And we've navigated these treacherous waters over the last 6 years without $0.01 of U.S. government assistance, without resorting to debtor rights and legal remedies and without diluting our stockholders. With that, let's take a closer look at our first quarter 2026 global cinema business compared to the same period in '25. At $41.5 million, our global cinema revenue increased 14%.

At $1.3 million, our global cinema operating loss improved by 70% and represented the best result for this metric since the first quarter of 2019. As we've said, the overall stronger first quarter performance was mostly attributed to a stronger film slate, execution of our key strategic initiatives and favorable foreign exchange movements.

Let me highlight a few of those key strategic initiatives that we continue to be focused on in '26 across our global cinema divisions. Our F&B program continues to be a key area of focus. When you include only periods when our -- each of our circuits were fully operational, i.e., excluding pandemic closure periods, at $8.38 in the U.S. and at $8.09 in Australian currency, our U.S. and Australian cinema divisions again established F&B spend per person records, achieving their highest first quarter levels ever. These strong F&B results were supported by the continued sale of movie merchandise and the development of movie-themed menus. And in the U.S., we executed strategic price increases across our F&B menus.

Loyalty experiences. We're also driving guests to our theaters through our new and improved loyalty programs, both free-to-join rewards and paid membership programs. In the fourth quarter of '24, we revamped and relaunched our free-to-join Reading Rewards program in Australia and New Zealand to allow for better perks and savings.

Today, we have over 510,000 members, a 19% increase over the last quarter. With respect to our paid memberships in Australia and New Zealand for both of our Reading and Angelika brands, since our late Q4 2024 launch, we've signed up over 31,800 paid memberships, which is a 44% increase over last quarter.

In the U.S., through December 2025 and January 2026, we launched a new free-to-join rewards program and premium membership program in 6 of our consolidated theaters in Hawaii and 3 Reading Cinemas. Since that launch, we've signed up 24,000 rewards members and 1,500 paid members. In the U.S., our free-to-join Angelika membership program has approximately 185,000 members for our 8 Angelika branded theaters.

We expect to launch our paid premium Angelika monthly membership later in the second quarter. Another key initiative for our global executive teams has been working with our cinema landlords to realign occupancy costs with the economic realities of the recent years. Operating costs in almost every category have increased while attendance continues to remain below pre-pandemic levels.

And we have limited headroom to raise ticket and food and beverage prices. Along these same lines, since the pandemic started in early 2020, where possible due to term expirations or agreements with landlords to take back properties without the payment of any fees or penalties on our part, we've reduced our global cinema count by 8 theaters to eliminate loss-making locations.

None of these cinemas were profit-making and upon review, we concluded it was unlikely that they could return to profitability without material capital expenditures, if at all. In all but one case, these locations have either been converted to other uses or remain dark.

While closing these loss-making cinemas reduces our gross revenue in the short term, it improves net income by eliminating locations that were reducing our profitability, which benefits our bottom line both now and over time. Let's take a closer look at the 2026 first quarter results for our U.S. cinemas.

Despite electing to close 7.5% of our U.S. screens in '25 to enhance profitability, our first quarter '26 revenue increased by 6% to $19.5 million, and our first quarter '26 operating loss of $1.6 million improved by 51% compared to the same period last year.

Regarding the U.S. cinema CapEx spend in '26, we're in the process of renovating our Reading cinemas in Bakersfield, California. As of the end of January '26, we converted the seats in our IMAX screen to heated recliners, which makes that auditorium the only IMAX with recliners within a 100-mile radius. We created a premium screen, TITAN LUXE with the DOLBY ATMOS sound system and heated recliners.

And now we've converted the seats in another 8 auditoriums to luxury recliners. Since we fully completed the PLF and recliner upgrade in February, our Bakersfield cinema has reported increases each month since. For the months of March and April, our total revenue at this cinema has increased by 83% and 7%, respectively, which is well in excess of our total U.S. cinema average for each of those 2 months.

In the U.S., in '26, we are working through renovation plans, whereby we'll add luxury recliners, PLF screens and F&B upgrades to 2 additional U.S. cinemas. In addition, through '26, we're continuing to refurbish many of our existing recliner seats that were damaged during the pandemic by mandated disinfectants.

Turning to our cinemas in Australia and New Zealand. Following the first quarter 2026 box office industry trends and compared to the first quarter in '25, our first quarter '26 Australian cinema revenue increased 26% to $19.7 million and operating income increased 144% to $426,000 from an operating loss of $974,000.

Our first quarter 2026 New Zealand cinema revenues decreased 6% to $2.3 million, while our operating loss improved by 40%. During the first quarter of '26, our international cinemas delivered average ticket prices that established record highs. Our Australian Cinema circuits first quarter ATP of $16.19 was the highest first quarter ever and the second highest quarter ever.

Our New Zealand cinema circuits first quarter ATP of NZD 14.87 set a record for its highest quarter ever. These results are particularly impressive given the fact that in February of '26, our international team implemented a circuit-wide February flash sale, which gave those who signed up for our Reading Rewards programs, a heavily discounted February ticket price.

The program was very successful, leading to increases in Australia and New Zealand as it relates to our market share and loyalty subscriber numbers. With respect to our 2026 international CapEx spend, our most important investment over the next few years will be the complete renovation of our Reading cinemas in Wellington, New Zealand.

We believe in the Wellington market as a strong moviegoing town, which is also now home to some of the most creative visual effects communities in the world, along with being the home of best-in-class filmmakers, James Cameron and Peter Jackson.

Our renovation plans include conversion to luxury recliners in all auditoriums, creation of at least 2 premium large screen concepts such as TITAN LUXE, the creation of at least 3 elegant Gold Lounge auditoriums to feature waiter service, an overall upgraded F&B offer and the creation of elevated hotel-like lobby lounge.

We anticipate that our landlord will be completing their seismic upgrade of the building in the next 9 to 10 months, which would then allow us to complete our fit-out, leading to a possible relaunch in late 2027. Our optimism for the cinema is supported by the fact that prior to its closure for seismic issues, this theater was historically one of our top 5 global cinemas as well as being among the top grossing cinemas in the country of New Zealand.

Now let's turn to our global real estate business, which on a segment reporting basis includes not only our third-party rental income, but also our live theater business in New York City and our intercompany cinema rents. Starting with the first quarter of '26 global real estate results and compared to the same period in '25.

At $4.6 million, our Q1 2026 Global real estate total revenue decreased 5%. And at $1.4 million, our Q1 '26 total operating income decreased by 13%. As we've said earlier, the reason for these decreases was primarily driven by the elimination of revenue and property level cash flow from third-party rents because of the monetization of 2 assets in the prior year.

Breaking it down by division for the first quarter '26 and compared to the first quarter of '25, with respect to Australia, our real estate revenue decreased by 14% to $2.6 million and our operating income of $1.2 million decreased by 25% at $214,000, our New Zealand real estate revenue decreased by 12% from $243,000.

However, our first quarter '26 New Zealand real estate operating income of $69,000 increased by 173% from an operating loss of $94,000 in the same period in '25 due primarily to the elimination of holding costs associated with our Wellington properties.

Our first quarter 2026 U.S. real estate revenue of $1.8 million increased by 13%, and our operating income of $155,000 increased by 8%. With respect to our Australia and New Zealand portfolio as of March 31, 2026, due primarily to our asset monetizations in Wellington and Townsville, the number of third-party tenants in our combined Australian and New Zealand real estate portfolio reduced to 58 and is now primarily made up of tenants at Newmarket Village in Brisbane and The Belmont Common in Perth.

The quality of those remaining tenants is strong with a portfolio occupancy rate of 98%. For the first quarter, our combined third-party tenant sales from our Australian real estate was AUD 23.7 million. To assist with liquidity needs and contribute to the potential CapEx requirements of our redeveloped Reading Cinema at Courtenay Central, we reported that we signed an agreement to sell our property in Napier, New Zealand for NZD 2.5 million.

Like our cinemas in Wellington and Townsville, we expect to lease the cinema back after the sale. Though no assurances can be given, we would expect the sale to close this quarter. Turning to our U.S. real estate business. Regarding our live theater segment, our Q1 2026 was stronger than last year, thanks to the Minetta Lane, where we have licensed the space to Audible, an Amazon company.

During the first quarter, Hugh Jackman returned to the Minetta Lane for an encore of the critically acclaimed play Sexual Misconduct of the Middle Classes. Audible also premiered the show The Disappear. And we anticipate a strong second quarter with new productions what happened was by Tom Noonan and New Born by Ella Hickson, both from Hugh Jackman's Production Company.

Since the departure of STOMP, the Orpheum theater continues to be in high demand with theater producers. Today, the Orpheum continues to host performances of 11 to midnight, a theatrical dance experience during TikTok viral sensations Cost n' Mayor, which has now been extended into the second quarter of '26.

Turning to 44 Union Square in New York City. While Petco continues to light pet parents across New York City with its award-winning retail store, we still have 4 floors to lease at 44 Union Square. As previously reported, we reengaged Newmark, the same leasing team that successfully completed the Petco deal for us.

Over the last few months, Newmark has toured potential office and co-working users, but also potential tenants whose focus is on wellness, education and entertainment. Newmark's renewed energy and focus on the space comes at a time when the industry data demonstrates meaningful improvement in the leasing environment in the Midtown South submarket in Manhattan. Confirming we did end discussions with the one potential tenant we've been working with for several months.

However, we believe that Newmark's enthusiasm for this space and their experience and reputation and improved market conditions will ultimately result in a stronger credit tenant for the property. We received a number of stockholder questions about the sales process for the Cinema 1, 2 and 3 building in New York City.

To date, over 60 parties ended up signing NDAs for the property. So there's strong interest for the Cinema 1, 2 and 3, which is a key development site on the Upper East side of Manhattan. Well-capitalized, well-regarded New York area developers of condo and rental properties represent most of the potential purchasers.

Newmark is accepting first round bids this week. We expect that this will lead to 1 and perhaps 2 more rounds of bidding, and we're expecting multiple bids. At the end of this week, we're going to be much more educated about the potential outcome of our sale process. Turning to The Reading Viaduct. Similar to last quarter, we received detailed questions from our stockholders about The Reading Viaduct who again raised issues about the range of values and the discussions with the city and how the outstanding legal matters may impact those values.

On the STB case, as you know, the matter is with the D.C. Circuit Court of Appeals. Additional legal briefs have been filed. Again, we believe we have strong legal positions. We'll also note that the remedy sought by the city is declaratory relief as to whether the Viaduct is a railroad subject to the jurisdiction of the STB.

No monetary damages or relief is being sought. We don't expect a decision by this court until sometime during the fourth quarter of '26 or even later. For further details about this asset, we ask you to review our more detailed responses in our recently filed 10-Q.

Though we'll reiterate that the company believes that the Reading Viaduct is a valuable company asset and any transaction in the future tied to the Reading Viaduct should represent a fair value for the stockholders of Reading.

Turning to our Newbury Yard property in Williamsport, Pennsylvania. It continues to be classified as held for sale. Now we don't have any potential deal to announce. However, our representatives are currently in discussions with potential purchasers for the yard.

Over the last few years, we've received offers from several potential buyers. But in management's view and the view of our advisers, those offers did not adequately reflect the value of this 23-acre parcel as a rail yard or logistics center.

In summary, our Real Estate segment is stable and has room for growth as we lease up the remaining space at 44 Union Square. We're bullish on our Cinema segment for a variety of reasons, including the quality of the remaining movie slate in '26, which looks stronger than it's been in years. People, including the major studios are rediscovering the joy and benefits of a cinema release. Studios, including Universal and Paramount have recently publicly confirmed their commitments to a 45-day theatrical window.

We've been successful in calling our cinema portfolio to remove unprofitable cinemas without the payment of any fees or penalties. As our liquidity improves, we're dedicated to the upgrading of our key cinemas in our portfolio. And we've been successful in the execution of strategic priorities like F&B and loyalty expansion to drive higher cinema attendance.

Now with that, I'll wrap up my business update. We thank you again for listening, and thank you to our stockholders for sending in questions over our Investor Relations e-mail. As usual, in addition to addressing many of your questions today in the prepared remarks, we selected a few additional questions to offer further insights.

So I'll start the Q&A and direct the first question to Gilbert. The first question is, the Santander loan secured by Minetta Lane and Orpheum matures June 1, 2026. And on the Q4 audio cast, you said Reading was working on a refinancing option. What is the current status of that refinancing and the probability this closes before June 1?

And what is the contingency if it doesn't? What terms are being discussed? And what's the expected maturity rate and amortization profile? Gilbert?

We're working on a few refinance options now and trying to create an acceptable set of terms and conditions. So we will not disclose the set of terms yet. We expect that we'll close or refinance within the next few months.

Thanks, Gilbert. Why don't you take the second question, which is, are there any covenants, mandatory prepayment provisions, change of control provisions or asset sale proceeds requirements under the nationwide notes, including any provisions that could be triggered by the sale of Cinema 1, 2 and 3 or future Villages transactions. Gilbert?

No. With that short and simple answer, let me pose the next question to Ellen. Australia swung from a $974,000 operating loss in Q1 2025 to $426,000 of operating income in Q1 2026. While New Zealand remained negative, what explains the difference in trajectory between Australia and New Zealand? And what is the plan to restore New Zealand cinema profitability, Ellen?

Yes. While both countries are grappling with inflation and rising living costs, Australia's economy appears to be more resilient with Australia having a stronger labor market. New Zealand has faced a difficult year with comparatively weaker growth, rising unemployment and now increasing energy costs due to the crisis in the Middle East. I'll also note that the New Zealand dollar hasn't kept pace with the increases in the Australian dollar. Also, our cinema and Christchurch, historically one of our top grossers has encountered new state-of-the-art competition materially impacting our market share.

The other factor at play with respect to our New Zealand cinemas was that the first quarter of '25, the box office reflected record-breaking grosses for a movie called Tina, which was a local New Zealand film about a teacher who lost her child in the Christchurch earthquakes.

With respect to going forward for this division, many of the strategic initiatives that we've outlined in our remarks are being worked on in New Zealand.

The U.S. Cinema segment materially improved year-over-year, but still generated a $1.6 million operating loss. What are the primary remaining drivers of the U.S. loss after the closure of the underperforming theaters and what are the operating changes landlords, concession or revenue improvements are needed to move the U.S. cinema business to sustainable profitability. Ellen?

So first, I'm going to point out that when you back out depreciation, our U.S. cinema showed positive earnings for the quarter. Our U.S. cinema segment has improved steadily since COVID and was easily the hardest hit division we have since early 2020.

Not receiving $0.01 of U.S. federal assistance through the shuttered venue grant program or Payroll Protection Program because of our microcap public company status hurt us significantly. Competitive private companies of our size received tens of millions of interest-free dollars.

Also, it should be remembered that since COVID, a number of our competitors have either gone bankrupt or issued equity substantially diluting their stockholders. We'll also note we're thankful we have a strong real estate portfolio to fall back on. And when we really needed them, we're even more thankful we didn't sell those assets earlier. Over the last few years, our strategic priorities in the U.S. Cinema Group have been to negotiate occupancy cost reductions with our landlords in light of lower attendance and rising operating costs across every line almost; two, closing underperforming theaters where we've been able to do so without paying fees or penalties.

Since COVID, we've closed 6 U.S. theaters. Thirdly, we've been working to reduce our operating expenses, especially in Hawaii, where depending on the poll you look at, Hawaii is typically ranked the highest on the cost of living index. We've created ways to upgrade our theaters that have been impacted by competition, taking into account our liquidity challenges.

We've focused on our marketing and operational efforts on areas where we've got greater control over our outcomes compared to the box office, where, for the most part, we don't really control the quality of the film.

For instance, we've leaned heavily into expanding our F&B programs. We've increased our attendance through the implementation of a new free and paid loyalty program. We've expanded and improved our theater rental program, and we've expanded our curated programming.

Ultimately, an improved slate of movies from the major studios and distributors will have the greatest impact on our profitability. So thankfully, we see that happening for the remainder of 2026 and beyond. In addition, as a circuit, we're exploring new opportunities in the U.S. by looking at taking over existing theaters that might be available on current market terms, which are typically better than those applicable to our legacy cinemas.

So with that, I will say thank you to everybody for listening into the remarks and our Q&A. That marks the end of our first quarter 2026 conference call. Thank you for your support and attention.

Thanks for joining the 2025 Fourth Quarter and the Full Year Earnings Call for Reading International Inc. My name is Gilbert Avanes. I'm the company's Chief Financial Officer and the Treasurer. Joining me today is Ellen Cotter, President and CEO. Today, we're going to modify the order of our call. After I run through normal caveats, I'll start first by presenting the results from our 2025 fourth quarter and full year. I will also talk about our balance sheet, liquidity and provide a summary of our debt position. Then I'll turn the call over to Ellen, who will discuss our business strategy. After that, we'll address some specific questions that came in from our stockholders, understanding that we have tried to weave answers to many stockholders' questions into our prepared remarks. So let me start with running through the usual caveats.

Some of the statements that we make today regarding our business, operations and financial performance may be considered forward-looking. Such statements are based on our current expectations and assumptions that are subject to a number of risks and uncertainties. We undertake no obligation to update any forward-looking statements. Actual results could differ materially. Please refer to our Forms 10-K and 10-Q, including the risk factors. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP and GAAP measures is included in our earnings release issued March 31, 2026, which is distributed and available to the public through our website located at investors.readingrdi.com.

With that behind us, I will go over the results from Q4 2025 and the full year 2025. But before I do that, I want to point out a few important transactions completed in 2025. In Q1 2025, we completed the sale of our property assets in Wellington, New Zealand for NZD 38 million or USD 21.5 million. In May 2025, we completed the sale of our Cannon Park asset in Townsville, Australia for AUD 32 million or USD 20.7 million. On December 19, 2025, we completed the purchase of Sutton Hill Associates, a California General Partnership, which owned a 25% interest in Sutton Hill Properties, LLC, the owner of the Cinemas 1, 2 and 3.

As part of this deal, we assumed certain indebtedness owned by Sutton Hill Associates to a third party. That indebtedness at December 31, 2025, had a face amount of $13.6 million with interest payable quarterly at 4.7% per annum with all principal due at payable in bullet payment on September 30, 2035. Now I'll turn to the fourth quarter results, which overall were somewhat disappointing compared to the prior period. Q4 2025 consolidated revenue decreased by $8.3 million to $50.3 million quarter-over-quarter. A few factors drove this decline. The film slate for the quarter in the U.S., Australia and New Zealand could not match the strength of the film lineup in Q4 2024. We closed 2 unprofitable theater, one in U.S. and one in New Zealand.

A decrease in our Australia and New Zealand real estate rent revenue due to the sale of our Cannon Park and Wellington, New Zealand assets. At $203 million, our consolidated revenue decreased by 4% year-over-year. The same factors drove this decrease. Lingering impact from industry-wide movie release schedule changes, the closure of 2 unprofitable theaters, one in U.S. and one in New Zealand, the elimination of our property revenue generated from our Wellington and Cannon Park properties. In addition, the continued weakening of our Australia and New Zealand foreign exchange rate against the U.S. dollar negatively impacted our consolidated revenue. With respect to our net loss position for the quarter, our net loss attributable to Reading International Inc. increased by $0.3 million to a loss of $2.6 million quarter-over-quarter.

Our basic loss per share for Q4 2025 increased by $0.01 to a loss per share of $0.11 compared to a basic loss per share of $0.10 for Q4 2024. Again, these results were primarily due to weaker cinema performance and a $2.2 million decrease in other income compared to the same period in 2024. This was offset by a $0.6 million reduction in interest expense and a gain on sale of $2.7 million due to the acquisition of non-controlling interest related to Sutton Hill Associates transaction. Our net loss attributable to Reading International Inc. for the full year improved by $21.2 million from a loss of $35.3 million to a loss of $14.1 million year-over-year.

Our basic loss per share improved by $0.96 to a loss of $0.62 compared to a loss of $1.58 for the full year 2024. These improved results were primarily due to stronger income results from our segments, a $3.2 million reduction in interest expense, a $2.7 million gain on acquisition of noncontrolling interest of Sutton Hill Properties, LLC, an $8.4 million gain on sale of assets from the sale of our Cannon Park and Wellington properties in 2025 compared to a loss of $1.3 million on the sale of our Culver City office in 2024 and a $0.9 million reduction in G&A expenses, partially offset by a $3.7 million increase in other expenses. Our total company depreciation, amortization, impairment and G&A expenses for Q4 2025 decreased by $0.9 million to $7.3 million compared to $8.2 million for Q4 2024.

For the year ended December 31, 2025, total company depreciation, amortization, impairment and G&A expenses decreased by $3.4 million to $32.5 million compared to the same period in the prior year, primarily driven by cinema closures in the U.S. and New Zealand, the sale of our Wellington and Cannon Park properties and delays in CapEx spending. Income tax expense for the year ended December 31, 2025, increased by $0.4 million to income tax expense of $0.9 million compared to an income tax expense of $0.5 million for the equivalent prior year period. The change between 2025 and 2024 is primarily due to increase in income tax expense from Australia in 2025. Our Q4 2025 global operating loss was $1 million compared to an operating income of $1.1 million in Q4 2024. At $5.1 million, our Q4 2025 adjusted EBITDA decreased by $1.7 million or 25% compared to the same time period last year.

On a full year basis, our 2025 global operating loss of $5.3 million improved by $8.7 million or 62% from an operating loss of $14 million in Q4 2024. And at $17.8 million, our adjusted EBITDA increased by $15.7 million or 744% compared to the same time period last year. These annual improvements were due to $9.7 million increase in gain from our asset sales, $2.7 million gain on acquisition of noncontrolling interest and improved operating results primarily through the efficient management of operating expenses and reducing general and administrative expenses. Shifting to cash flow. For the full year 2025, net cash used in operating activities decreased by $2.2 million to $1.6 million compared to cash used in the same period of prior year of $3.8 million. This was primarily driven by a decrease in net operating loss of $11.5 million, partially offset by a $9.3 million decrease in net operating assets, primarily due to increase in receivables and a small increase in accounts payable and accrued expenses plus deferred revenues and other liabilities.

Cash provided by investing activities during the 12 months ended December 31, 2025, increased by $33.1 million to cash provided of $37.1 million from a cash provided of $4 million in the same period of prior year. This was primarily due to higher proceeds from sale of our Cannon Park property assets in May 2025 and the Wellington property assets in January 2025 compared to proceeds from the sale of our Culver City office in February 2024 and a reduction in capital expenditures in 2025 compared to 2024. Cash used in financing activities for 12 months ended December 31, 2025, increased by $38.2 million from cash provided of $0.3 million to a cash used of $37.9 million. This was primarily due to the paydown of our debt in New Zealand with Westpac debt in U.S. with Bank of America and in Australia with NAB in 2025.

Turning now to our financial position. As of December 31, 2025, our total assets were $434.9 million compared to $471 million on December 31, 2024. This decrease was driven by a $1.8 million decrease in cash and cash equivalents from which we funded our ongoing business operations, a $31.9 million decrease in land and property held for sale due to the sale of our Cannon Park and Wellington assets. As of December 31, 2025, our total outstanding borrowings were $185.1 million compared to $202.7 million on December 31, 2024. The net sale proceeds from the sale of Cannon Park and Wellington property funded this debt reduction. It was offset by the addition of $13.6 million in debt added in connection with the Sutton Hill deal that we took over after acquiring the 25% of minority interest in Cinemas 123 that we did not already own. Our cash and cash equivalent as of December 31, 2025, were $10.5 million.

Further to address the liquidity pressure on our business, we continue to work with our lenders to amend certain debt facilities, and we continue to have our Newbury Yard Williamsport, Pennsylvania property classified as held for sale. Through 2025 and into early 2026, we have worked with our key lenders to extend maturity dates, modify principal repayment dates and adjust existing covenants. With respect to our 44 Union Square loan, in May 2025, we extended the maturity to November 6, 2026, with an option to extend further to May 6, 2027. And in February 6, 2026, we deferred a principal payment, which we have since paid in March 2026. With respect to our Bank of America Bank of Hawaii loan, in July 2025, we extended the maturity to May 18, 2026. On December 29, 2025, we further extended the maturity to September 18, 2026. And on February 27, 2026, we further modified the loan payment schedule. In July 2025, we extended the maturity of our loan on our live theater assets in New York to June 1, 2026. We're currently working on a refinancing option.

On November 13, 2025, we extended the maturity of our Valley National Bank loan to October 1, 2026. With respect to our NAB loan on November 12, 2025, we extended the maturity to July 31, 2030, and modified the principal repayment schedule. Then just recently, we amended the loan to reduce our minimum liquidity covenant for a limited period of time. With respect to our debt position, as I just mentioned, as part of our Sutton Hill deal on December 31, 2025, we added debt in a face amount of $13.6 million interest payable quarterly at 4.75% per annum with all principals due and payable in a bullet payment on September 30, 2035. Our 2025 strategic asset sales have led to a significant debt reduction.

From December 31, 2024, we have reduced our global debt balance from $202.7 million to $185.1 million or almost 10% as of December 31, 2025, including the newly added $13.6 million of new Sutton Hill debt. Our interest expense for 12 months ended December 31, 2025, has been reduced by $3.2 million or 15% since the same period last year. This follows an overall debt reduction of $99.9 million since December 31, 2020. Now let me turn it over to Ellen, who will give us an overview of the business in Q4 2025 and full year 2025.

Thanks, Gilbert, and welcome, everybody, to the call. While we are disappointed that the global box office resulted in our quarterly and annual revenue results trailing the same periods in 2024, our management teams worked hard through 2025, completing various deals and initiatives that should ultimately lead to a stronger Reading into '26 and beyond. As Gilbert mentioned, 2 major asset sales, Cannon Park and Wellington allowed us to make a sizable reduction in our debt, while we are also retaining the Reading Cinema opportunity through entering into agreements to lease on those properties. The acquisition of Sutton Hill Associates resulted in the company controlling 100% of the Cinema 1, 2, and 3 building and taking Ground Lessee's Interest in the Village East by Angelika Cinema in New York City. Various amendments with our lenders, as Gilbert just outlined, resulted in maturity date and principal payment date extensions.

The implementation of key strategic operational initiatives that should result in an overall stronger cinema trading into the future as the box office improves. While the 2025 box office overall disappointed to date, in 2026, we've enjoyed better results. On a flash basis, our global cinemas are trading ahead in 2026 by over 11% on a U.S. dollar basis for the period from January 1 through yesterday, April 1, the very exciting opening day of the Super Mario Galaxy movie. In March 2026, the entirely original movie, Project Hail Mary, which opened to sensational box office and fanfare from critics and audiences reinforced our confidence in the theatrical experience and how movies with compelling stories and heart, coupled with amazing marketing campaigns can create cultural moments for global moviegoers. We're equally excited for the rest of 2026, which includes highly anticipated major releases like The Devil Wears Prada 2, Toy Story 5, Supergirl, Minions 3, Moana, The Odyssey, Spider-Man: Brand New Day, Cat in the Hat, Avengers: Doomsday, Dune Part 3 and Jumanji.

Along with industry analysts and press, we believe that 2026 will be the best post-pandemic box office year to date. And picking up on Gilbert's presentation, let me mention a couple of operational highlights from Q4 '25 and the full year '25. Our 2025 revenue results were ultimately behind Q4 '24 and full year '24. The main driver for the declines came from the comparative film slates. We broke several box office records back in Q4 2024 when the trifecta of Wicked, Moana and Gladiator proved to be a near-perfect product mix for our circuit. The comparison was always going to be tough to beat. Our top fourth quarter 2025 film titles included Wicked for Good, Zootopia 2 and Avatar: Fire & Ash. While we were very encouraged with the strong global presale numbers for Wicked for Good, it unfortunately ended up underperforming its predecessor, Wicked. And our lofty expectations for Avatar: Fire & Ash were ultimately not fully achieved.

2025 reflects a reduction of our overall screen count by 4% through the elimination of 2 unprofitable theaters, one in the U.S. and one in New Zealand. While these results impacted our top line, we believe they'll ultimately improve cash flow in the long run as these theaters underperformed. I'll touch on this in a minute, but our teams continue to drive impressive food and beverage results, which are bolstered by the creation of movie theme menus and our marketing efforts to sell movie merchandise. Through 2025, our teams focused on the improvement and expansion of our loyalty programs across all cinema divisions. Across the global circuit, we're continuing to work with our landlords to reduce our overall occupancy costs to reflect the fact that attendance has not returned to pre-pandemic levels and our operating expenses for the most part have all increased.

With respect to our property divisions, our lower revenues reflected the elimination of real estate revenues generated by our Cannon Park and Wellington property assets, which were sold in 2025 to raise liquidity to pay down debt. Despite the elimination of cash flow generated by these real estate assets sold in early '25, our global property team continues to drive productive changes in our 58 third-party tenant portfolio, which I'll touch on shortly. Our U.S. Real Estate division performed better year-over-year, mainly due to the favorable performance of our live theater division and increases in rent at 44 Union Square. Historically, around 50% of our revenues have been generated in Australia and New Zealand. But during the fourth quarter of '25, that slightly dipped with 48% of our revenues being generated internationally. In Q4 2025, our quarterly revenue was negatively impacted as the New Zealand dollar devalued against the U.S. dollar by 3% compared to the fourth quarter of '24.

On an average annual basis, the Australian and New Zealand exchange rates are at historical lows compared to the last 20 years. We've delivered 6 straight quarters of positive EBITDA. Our balance sheet continues to be anchored by a strong real estate portfolio. An exciting and robust 2026 movie release schedule will enliven our global cinemas again. So we feel our company is well positioned to deliver a much stronger 2026 and beyond, having weathered a very challenging last 5 or 6 years. We're still absolutely committed to our 2 business, 3-country strategy. While we've monetized a number of our real estate assets, this has been done to strategically meet our liquidity needs in the face of the pandemic, the unprecedented 2023 Hollywood strikes, historic increases in interest rates and inflation.

We chose those particular assets, which typically were either negative cash flow or which after debt service did not materially contribute to our cash flow and which, in our view, had reached the best value reasonably achievable without additional significant capital investment. We monetized our California headquarters building to cut administrative costs and have been able to work remotely now for 2 years. Since the pandemic started in early 2020, we've reduced our global cinema count by 8 theaters, all of which had experienced negative cash flow since 2022 and most since the pandemic or even earlier. As of today, we believe we continue to have a strong portfolio of cinema and real estate assets, most of which are cash flowing or expect to be cash flowing in the near future. We're proud to say we've navigated these treacherous waters without $0.01 of U.S. government assistance, without resorting to debtor rights of legal remedies and without diluting our stockholders.

With that, let's take a closer look at our Q4 2025 global cinema business compared to the same period in '24. At $46.9 million, our Q4 2025 global cinema revenue decreased by 14%. At $900,000, our Q4 2025 global cinema operating income decreased by 76%. And turning to our full year 2025, our '25 global cinema revenue of $188.6 million decreased by 3% year-over-year. At $3.6 million, our 2025 global cinema operating income increased by 230% from a cinema operating loss of $2.8 million in 2024. As we've said, the overall weaker Q4 '25 performance was mostly attributable to a weaker film slate, which was also experienced on a yearly basis or on an annual basis. However, our particular results for the quarter and the full year were also impacted by, for the most part, unfavorable FX movements. The closure of 2 cinemas, while a positive impact to operating income negatively impacted our revenues and the partial closure of a 16-screen U.S. cinema that was under renovation towards the end of '25.

When you look at the year-to-date through December 31, '25, as mentioned earlier, our global cinema operating income grew to $3.6 million, an increase of 230% despite a reduction in cinema revenues of 3%, which reflects the continuation of our disciplined management of our operating expenses. Let me highlight a few of those key strategic initiatives that we focused on throughout '25 and have supported our results through the year. Our F&B program remains a key area of focus for us, and we've set multiple records again for the fourth quarter and full year. When you include only periods when our circuits were fully operational, i.e., excluding pandemic closure periods, each of our 3 cinema divisions again established F&B spend per person records. In the fourth quarter '25, records were set for any fourth quarter and then in the full year '25, records were set for any prior year ever in our history.

Additionally, our Q4 2025 Australian F&B spend per person was the highest quarter ever in our history. These strong F&B results were again positively impacted by the sale of increasingly popular movie merchandise that range from movies like Gabby's Dollhouse, to Zootopia, Avatar: Fire & Ash, Wicked for Good, Five Nights at Freddy's and Anaconda. We're also driving guests to our theaters through our new and improved loyalty programs, both free-to-join rewards and paid membership programs. In Australia and New Zealand, we recently revamped and relaunched our free-to-join Reading Rewards program to provide better perks and savings. Today, we have over 430,000 members, an 18% increase over the last quarter. With respect to our paid memberships in Australia and New Zealand for both of our Reading and Angelika brands, since our late Q4 2024 launch, we've signed up over 22,139 paid memberships, a 27% increase over last quarter.

In December '25, we launched a new free-to-join rewards program and premium paid membership in Hawaii and in select U.S. Reading cinemas. In the U.S., our free-to-join Angelika membership program has approximately 183,000 members, a 7% increase from last quarter for our 8 Angelika branded theaters. And we expect to launch our paid premium Angelika monthly membership next quarter. A key initiative for our global executive teams has been working closely with our third-party cinema landlords to realign occupancy costs with the economic environment of recent years. During our negotiations with our third-party landlords, when we try to reduce our occupancy expense, we highlight the fact that operating expenses have increased, attendance continues to remain below pre-pandemic levels, and we have limited headroom to raise ticket and food and beverage prices. Let's take a closer look at the 2025 fourth quarter and yearly results for our U.S. cinemas. Our Q4 2025 revenue decreased by 12% to $25.8 million, and our Q4 '25 operating income decreased by 27% quarter-over-quarter.

Our full year 2025 revenue remained relatively flat at $99.5 million compared to the full year of '24. While our full year 2025 operating loss improved by 103% to operating income of $200,000 from a loss of $7.3 million in the full year of '24. In addition to what I mentioned earlier, a couple of other milestones to mention. Our Q4 2025 average ticket price of $14.03 marks our highest quarter ever for our U.S. circuit. This is impressive in light of the strength of our discount Tuesdays, which are branded Mahalo Days in Hawaii and Half-Price Tuesday in the U.S. on the Mainland. During the fourth quarter of '25, we enjoyed box office success at the Angelika New York and other specialty theaters with movies like Frankenstein from Director Guillermo Del Toro released by Netflix, Neon's Sentimental Value, The Secret Agent and No Other Choice. And through the year 2025, specialty films like The Phoenician Scheme from Wes Anderson, Friendship and I'm Still Here drew audiences to our specialty theaters.

Following the positive 2025 trends, we expect 2026 will deliver a similar result in the world of art house and specialty film. We received stockholder questions about the status of our CapEx spend in 2026. With respect to our U.S. circuit, we're in the process of renovating our Reading cinema at Bakersville, California. As of the end of January '26, we added heated recliners to our IMAX screen, which makes that auditorium the only IMAX with recliners within a 100-mile radius. We created a premium screen TITAN LUXE with the Dolby Atmos sound system and again, heated recliners. And we've added another 8 screens of luxury recliners. In the U.S., in '26, we're working through renovation plans, whereby we'll add luxury recliners, PLF screens and F&B upgrades to two of our U.S. cinemas. In addition, through 2026, we're continuing to refurbish many of our existing recliner seats that were damaged during the pandemic by mandated disinfectants.

Turning to our cinemas in Australia and New Zealand. Following Q4 2025 box office trends and compared to Q4 2024, our Q4 2025 Australian cinema revenue decreased 13% to $18.6 million and our operating income decreased 92% to $139,000. Our Q4 2025 New Zealand cinema revenue decreased 36% to $2.4 million, and our operating income decreased 174% to an operating loss of $372,000. While comparing the full year '25 to the full year '24, in 2025, our Australian cinema revenue decreased 5% to $77.7 million, and our operating income decreased 3% to $3.9 million. In 2025, our New Zealand cinemas revenue decreased 14% to $11.4 million, and our operating income decreased 212% to an operating loss of $479,000.

While the overall results for our international theaters was not positive, our box office results were in line with industry trends. During the fourth quarter of '25, our international cinemas delivered average ticket prices that established record highs. Each circuit reporting in local currency delivered fourth quarter highs for the fourth quarter of '25. Australia's average ticket price was $16.02, while New Zealand's average ticket price was $14.72.

Interestingly, though, in February of '26, our international teams implemented a circuit-wide February flash sale, which gave those who signed up for our Reading Rewards program, a very discounted February ticket price. The program was very successful, leading to sizable market share increases in both Australia and New Zealand. With respect to our 2026 international CapEx spend, let me start with New Zealand. As we've reported, despite the sale of our Wellington assets, we continue to believe in the Wellington cinema market and entered into an agreement to lease back our Reading Cinema at Courtenay Central. I'm confirming we're still working through 2026 on the redesign of that theater in Wellington, and the renovation will be, as we've said before, a full top to bottom upgrade, where we'll add recliners to all 10 screens, at least 2 premium screen concepts such as TITAN LUXE or others and upgraded F&B offer, and it will follow the landlord seismic upgrade, which is underway right now.

We anticipate that our renovation will be completed sometime in 2027. In Australia, we'll likely be adding a TITAN LUXE with Dolby Atmos and one premium screen with recliners to another key Reading Cinema location. Now let's turn to our global real estate business, which on a segment reporting basis includes not only our third-party rental income, but also our live theater business in New York City and our intercompany rents. Starting with the fourth quarter of '25, our global real estate results when compared to the same period in '24 were at $4.4 million, our Q4 2025 global real estate total revenue decreased 16% and at $1.5 million, our Q4 '25 total operating income slightly increased by 1%. During the full year, our '25 global real estate results compared to the same period in '24 were at $18.4 million, our '25 global real estate total revenue decreased by 8% and at $5.9 million, our full year '25 total operating income increased by 26%.

As we've said earlier, the reason for these decreases was primarily driven by the elimination of revenue and property level cash flow from third-party rents because of our 2 asset sales. Breaking it down by division for the fourth quarter '25 and again compared to the same quarter in '24. With respect to Australia, our Q4 '25 real estate revenue decreased by 16% to $2.5 million, and our Q4 '25 operating income of $1.4 million decreased by 7% from Q4 '24. At $205,000, our Q4 '25 New Zealand real estate revenue decreased by 38% from $330,000 in Q4 '24. Our Q4 '25 New Zealand real estate operating loss of $3,000 improved 99% from an operating loss of $291,000 in the fourth quarter of '24. Our Q4 '25 U.S. real estate revenue of $1.6 million decreased by 10% and our operating income decreased by 64% to $100,000. On a full year basis, our Australian real estate revenue decreased by 14% to $10.7 million compared to '24, and our operating income of $5.3 million decreased by 12% compared to '24.

At $881,000, our full year New Zealand real estate revenue decreased by 38% compared to the full year of '24 and our New Zealand real estate operating income of $51,000 improved by 105% from an operating loss of $933,000 during the full year of '24. At $6.9 million, our full year 2025 U.S. real estate revenue increased by 10% from $6.2 million, and our U.S. operating income increased by 262% to $600,000 from an operating loss of $400,000 during '24. These improvements were driven in large part by increases in rent at 44 Union Square and the improved performance of our live theater division. With respect to our Australian and New Zealand portfolio, as of December 31, '25, due to our asset sales in Wellington and Townsville at Cannon Park, the number of third-party tenants in our combined Australian and New Zealand real estate portfolio reduced to 58 and is now primarily made up of tenants at Newmarket Village in Brisbane and the Belmont Common in Perth. The quality of the remaining tenants is strong, and today, we have an occupancy rate of 98%.

For the fourth quarter, our combined third-party tenant sales from our Australian real estate were AUD 27.5 million. During the quarter, 4 lease transactions were completed with existing tenants. These included 2 new leases and 2 lease renewals, reflecting continued tenant retention and portfolio stability. And as of the end of '25, we had completed 27 lease transactions through the 2025 year. To assist with liquidity needs and potential CapEx for the Reading Cinema at Courtenay Central, we reported that we signed an agreement to sell our property in Napier, New Zealand for NZD 2.5 million. Like our cinema in Wellington and Townsville, we expect to lease back the cinema on our Napier property. Though no assurances can be given, we would expect that, that sale will close within the next few months.

Turning to our U.S. real estate business, which includes our 2 live theaters in New York City. Regarding our live theater segment, in Q4 2025, our results were not as strong due to the Orpheum being dark for most of the quarter. Unlike the Minetta Lane, which outperformed the same period in '24, thanks to the hip-hop musical Mexodus. On an annual basis, the live theater segment performed better in '25 compared to '24 because of the powerful shows mounted by Audible at the Minetta Lane, including Sexual Misconduct of the Middle Classes with Hugh Jackman and Ella Beatty, creditors featuring Leah Shriver. On an annual basis, the Orpheum Theatre also delivered a stronger show lineup than the prior year.

Audible exercised its option to extend their license another year at the Minetta Lane through to March 2027. Looking ahead, 2026 at the Minetta Lane should be a very strong year again as Audible Theater and together, the theatrical partnership led by Sonia Friedman and Hugh Jackman are again mounting great shows led by the return of Hannah Moskovitch's Sexual Misconduct of the Middle Classes with Ella Beatty and Hugh Jackman with performances that began already in mid-March of '26.

Since the departure of Stomp, the Orpheum Theatre continues to be in high demand with theatrical producers. During Q3 and part of Q4, Ginger Twinsies, a parody inspired by the iconic film, The Parent Trap received strong praise and played at the Orpheum for a while. Today, the Orpheum continues to host performances of 11 to midnight a theatrical dance experienced during TikTok viral sensation Cost n' Mayor, which has been extended into the second quarter of 2026. Turning to our property at 44 Union Square in New York City. While Petco continues to delight pet parents across New York City with its award-winning retail store, we still have 4 floors left to lease in the building. We switched brokers and reengaged Newmark, the same leasing team that successfully delivered the Petco deal for us. Newmark has created a new marketing campaign for the remaining space. They've relisted on CoStar, rebranded the marketing materials. They're creatively using social and AI technologies to assist in their leasing efforts.

To date, Newmark has toured office users, but also potential tenants whose use focuses on wellness, education and entertainment. Newmark's renewed energy and focus on the space comes at a time when the industry data shows that the leasing environment appears to have meaningfully improved in Midtown South. And while we are working with Newmark, we continue to dialogue with one group that had presented a non-office use. Turning to the Reading Viaduct. Reflecting the importance of the Reading Viaduct as a property asset for the company, we received detailed questions from our stockholders about the range of values for this property, discussions with the city and how the outstanding legal matters may impact those values. On the STB case, we recently filed our appeal with the D.C. Circuit Court of Appeals. We expect that the D.C. Circuit Court may take between 6 months and a year to deliver a decision.

We continue to believe we have a strong legal position. For further details about this asset, we'd ask you to go back and review the more detailed responses we put in our recently filed 10-K. But we'll point out again that the company believes that the Reading Viaduct is a valuable company asset and any transaction in the future tied to the Reading Viaduct should represent a fair value for the stockholders of Reading. Our Newbury Yard property in Williamsport, Pennsylvania remains classified as held for sale. However, we don't have any substantive updates for you for this earnings call and hope to have more to say on our next call. That now wraps up my business update. But before we address additional specific questions, I wanted to recognize and give a heartfelt thank you to Andrzej Matyczynski, who is with Reading for 27 years. Andrzej started with us in 1999 as our CFO and in 2015, became our Executive Vice President of Global Operations.

When Andrzej started in 1999, Reading reported revenue of just under $4 million. For 2025, despite the pandemic, Hollywood strikes and interest rate hikes, we just reported about $203 million of total revenues with almost $435 million in total assets. As our CFO and Executive Vice President of Global Operations, Andrzej helped build the company brick by brick over the last few decades. He was instrumental in many foundational transactions and was a huge part of many aspects of our global business. Andrzej, on behalf of the Board, the Cotter family and the whole management team, we express our sincerest thanks and appreciation for your service and your amazing body of work. We miss working with you day-to-day, especially as each of those days usually came with a few great Andrzej jokes that kept us all laughing. We're collectively wishing you the best for your next chapter.

So with that, I'll take over the Q&A section, and I'll read out the first question, which is for Gilbert. The 10-K now shows the Bank of America facility maturing September 18, 2026, the Santander, Minetta and Orpheum loan maturing June 1, '26, the Valley National Cinema 1, 2, 3 loan maturing October 1, '26 and the 44 Union Square loan maturing November 6, '26, with an extension option to May 6, '27. Please walk through the Board's intended 2026 sequence for addressing these facilities, including which are expected to be repaid from asset monetization versus refinanced and in what order? Gilbert?

To address the liquidity needs, the Board has decided to list the Cinemas 123 buildings for sale. With the sale of the proceeds from this property, we plan to pay off the Valley National loan, which has a current balance of $19.7 million and to pay off the Bank of America loan, which has a current balance of $6 million. While no assurance can be given, we believe it is reasonable to assume that this property can be monetized before the end of third quarter of this year. Regarding the Santander, Minetta and Orpheum loan and the 44 Union Square loan with Emerald Creek Capital, we're currently exploring with lenders to refinance and further extend the maturity dates.

Thanks, Gilbert. I'll read out the second question and provide an answer. Since 2020, you note that 8 cinemas have been wound up and all had negative cash flow in the year of closing. Beyond Queenstown and San Diego, how many additional cinemas are presently on a watch list for closure or lease restructuring? And what operating criteria drive those decisions.

Well, at this point, we know we'll be closing at least one additional U.S. theater in 2026. The lease expired on the space without any remaining options, which gave the landlord the opportunity to take back the space and that has been confirmed. They'll do that. Across the U.S., we're in negotiation with most of our cinema landlords. We think that most landlords should be making some sort of occupancy adjustment to reflect the fact that operating expenses have increased across the board. And while we're hopeful that the global cinema business returns to pre-pandemic levels, we need to take a conservative approach in that regard. In Australia and New Zealand, our teams are likewise seeking occupancy reductions with certain third-party cinema landlords.

As we work with our landlords in the U.S., Australia and New Zealand, we're evaluating the strength of the potential future cash flows in light of existing business circumstances. If we have an opportunity to exit a theater that we believe will not contribute to our overall circuit cash flow, we will look to exit. We expect over the next 12 to 18 months, there may be a few more cinema closures. But I'll also note that our confidence in the business remains strong, and we'll also continue to evaluate new cinema opportunities in compelling markets as those opportunities present themselves to us. So now there's a third question. I'm going to read out the question and provide the answer.

The question is, my understanding is that the primary value of the Cinema 1, 2 and 3 property lies in its redevelopment rights rather than its current use. Could you elaborate on the terms of the intended sale? Specifically, will there be any conditions requiring the continuation of cinema operations at the site for a defined period prior to any potential redevelopment? And are there any covenants or requirements regarding the form of redevelopment, for example, an obligation to include a cinema lease as part of any new construction?

As we just talked about, the Board recently decided to list the Cinema 1, 2 and 3 building for sale. We engaged a really good sales team at Newmark in New York City. Since the official marketing launch, the interest in the building has been really strong with Newmark. They've been marketing the building as an irreplaceable upper East side asset with great fundamentals. The building has proximity to luxury retail, Central Park, Park Avenue, Billionaires Row. It's got easy transportation options. In addition, it sits within one of Manhattan's most affluent and supply-constrained residential corridors. The current zoning on the building is expansive, which offers potential buyers the opportunity to build for a range of uses, including residential luxury condos, retail and/or office. In addition, one could develop a hotel if you obtained a special use permit.

The sales market today has improved from where it was a few years ago. And I think that improvement is evident by the fact that Newmark has already signed up over 50 confidentiality agreements, which allows very qualified and skilled groups to come into our data room. We're intending to sell the property on an as is where is basis without any future cinema use requirements from us as a seller. We're not listing the price -- we're not listing the property with the sales price, rather, the market is going to dictate the price. And lastly, while no assurances can be given, we believe it's reasonable to assume that the Cinema 1, 2 and 3 building will be sold before the end of the third quarter of this year.

I'll take the next question. It was a short question. Does Reading anticipate selling any further properties in 2026? And as we've just talked about in the prepared remarks, we've got 2 assets officially held for sale, our Newbury Yard property in Williamsport, Pennsylvania and the Cinema 1, 2 and 3 building in Manhattan. In addition, our property in Napier, New Zealand is under contract to sell for NZD 2.5 million. And while no assurances can be given, we believe it's reasonable to assume that these assets can be monetized before the end of the third quarter of this year. The Board has directed the management team to evaluate our current real estate portfolio for opportunities to monetize assets that after taking into account a number of factors, may assist in our debt reduction strategy and necessary CapEx requirements.

However, as of today, outside the assets I just mentioned, we have no definitive plans to sell any other assets right now. So I'm going to read out the last question, which will be for Gilbert. We received questions about our general and administrative expense allocation. Our stockholder asked, the company reported G&A expenses of $19.3 million for the full year '25, which is a considerable amount relative to the operating results of both business segments. Could you provide additional color on how these costs are composed? Specifically, it would be helpful to understand the approximate split between corporate and holding level costs, costs that directly support the cinema and real estate operations, respectively. And as G&A is currently not allocated to the segments in your reporting, a clearer breakdown would help investors better assess the underlying profitability of each business on a stand-alone basis. Gilbert?

Regarding our G&A expenses of $19.3 million, our Cinema business is responsible for $4.1 million or 21%, $0.7 million or 4% is attributable to real estate and $14.4 million or 75% attributable to corporate. Our corporate expenses are primarily incurred within the United States as most of the corporate employees are primarily located in Los Angeles area. We have made concrete efforts to lower our G&A expenses and created efficiencies wherever possible. And since 2019, we have lowered our G&A expenses by $6.1 million, which is about 24% reduction. That marks the conclusion of our fourth quarter and the full year 2025 conference call. We appreciate you listening to the call today. Thank you for your attention and support.

Thank you.

Thank you for joining Reading International's earnings call to discuss our 2025 third quarter results. My name is Andrzej Matyczynski, and I'm Reading's Executive Vice President of Global Operations. With me are Ellen Cotter, our President and Chief Executive Officer; and Gilbert Avanes, our Executive Vice President, Chief Financial Officer and Treasurer. Before we begin the substance of the call, I will run through the usual caveats.

In accordance with the safe harbor provision of the Private Securities Litigation Reform Act of 1995, certain matters that will be addressed in this earnings call may constitute forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause our actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are clearly set out in our SEC filings.

We undertake no obligation to publicly update or revise any forward-looking statements. In addition, we will discuss non-GAAP financial measures on this call. Reconciliations and definitions of non-GAAP financial measures, which are segment operating income, EBITDA and adjusted EBITDA are included in our recently issued 2025 third quarter earnings release released on November 14 on our company's website.

We have adjusted where applicable the EBITDA items we believe to be external to our business and not reflective of our cost of doing business or results of operations. Such costs could include legal expenses relating to extraordinary litigation and any other items that we consider to be nonrecurring in accordance with the 2-year SEC requirement for determining whether an item is nonrecurring, infrequent or unusual in nature. We believe that adjusted EBITDA is an important supplemental measure of our performance.

In today's call, we also use an industry accepted financial measure called theater-level cash flow, TLCF, which is theater-level revenue less direct theater-level expenses. Average ticket price, ATP, which is calculated by dividing cinema box office revenue by the number of cinema admissions is also used as an accepted industry acronym. We also use a measure referred to as food and beverage spend per patron, F&B SPP, which is a key performance indicator for our cinemas.

The F&B SPP is calculated by dividing the cinema's revenues generated by food and beverage sales by the number of admissions at that cinema. Please note that our comments are necessarily summary in nature, and anything we say is qualified by the more detailed exposure set forth in our Form 10-Q and other filings with the U.S. Securities and Exchange Commission. So with that behind us, I'll turn it over to Ellen, who will review our 2025 third quarter results and discuss our business strategy going forward, followed by Gilbert, who will provide a more detailed financial review. Ellen?

Thank you, Andrzej, and welcome, everyone, to the call today. As we expected and following global cinema industry trends, despite the strong performance of certain titles through the third quarter of '25, the overall box office was behind last year's third quarter. At $52.2 million, our global total revenue decreased 13% versus Q3 2024, which was driven by a slate of 2025 movies that just didn't match up to the stronger titles in the same period last year.

Last year's lineup included record-setting releases like Deadpool & Wolverine, Despicable Me 4, Beetlejuice Beetlejuice and It Ends with Us. Despite this past quarter's revenue performance, the company continued making progress on several strategic initiatives, which is evident in some of our key income metrics for Q3 2025. With respect to our global operations, both cinema and real estate, despite the decrease in our cinema revenues, we continue to effectively manage our expenses.

At a loss of $329,000, our global operating loss improved by 4%. At $3.6 million, our positive EBITDA increased 26% from Q3 2024's EBITDA. With this past quarter's results, we've delivered 5 straight quarters of positive EBITDA. At a loss of $4.2 million, our net loss improved by 41%, representing the best third quarter result since Q3 2019. Through the quarter and the year in 2025, our operating teams continue to improve the company's overall profitability.

In the U.S., by closing a 14-screen cinema in San Diego in Q2 '25, we eliminated a cash loss that resulted in a 7.3% reduction in our U.S. screen count. We have limited control over the quantity and grossing potential of the movies we play. However, in operational areas where we have more control like F&B and alternative content programming, we delivered record results that I'll touch on in a minute.

Across the global cinema circuit, we're working with our landlords to reduce our overall occupancy costs to reflect the fact that attendance has not returned to pre-pandemic levels and our operating expenses for the most part have all increased. Our U.S. Real Estate division delivered the best third quarter operating income since Q3 2014 due in part or in large part to our improved performance of our live theater assets in New York City.

Despite the elimination of the cash flow generated by the real estate assets sold in early 2025, Cannon Park in Townsville, Australia and our Wellington assets in New Zealand, our global property teams are driving productive changes in our 58 third-party tenant portfolio, which I'll touch on shortly. Those 2025 strategic asset sales have led to a significant debt reduction. From December 31, '24, we've reduced our global debt balance from $202.7 million to $172.6 million or about 15% as of September 30, 2025.

Our interest expense for the 9 months ended September 30, 2025, has been reduced by $2.6 million or 17% compared to the same period last year. This follows an overall debt reduction of $112.3 million since December of 2020. Historically, about 50% of our revenues have been generated in Australia and New Zealand, and the third quarter 2025 was no different, with 49% of our revenues being generated internationally.

In Q3 2025, our quarterly revenue was negatively impacted as the Australian and New Zealand dollar devalued against the U.S. dollar by 2.3% and 3.1% compared to the Q3 in '24. As you'll note from the exchange rate table included in our 10-Q, the average exchange rates for these 2 currencies are at a 20-year low. As I'll touch on in greater detail in a minute, despite the weak third quarter, we continue to have enthusiasm and confidence about the cinema business.

Today, we're reporting global presales for Wicked: For Good of almost $850,000, which is one of the strongest global presale numbers we've experienced in years. Wicked: For Good is followed by Zootopia 2, Five Nights at Freddy's, Avatar: Fire and Ash, SpongeBob SquarePants movie and Anaconda. In addition to these movies that appeal to the family audience, we believe that Marty Supreme, Song Sung Blue and The Housemaid will give the older audience some compelling choices during the holidays.

The 2025 holiday season will be followed by what looks to be a very robust lineup for 2026. We're thrilled about the upcoming 2026 film slate, which includes major franchise releases like Spider-Man: Brand New Day, Toy Story 5, The Devil Wears Prada 2, Minions 3, Mega Minions, Shrek 5, Supergirl, The Super Mario Bros. Movie 2, Moana, Ice Age 6 and Jumanji 3. Many industry insiders and analysts think that 2026 could be one of the biggest years ever at the box office.

With 5 straight quarters of positive EBITDA, the most improved net loss delivered for any third quarter since Q3 2019, a balance sheet which continues to be anchored by a strong real estate portfolio and cinemas, which we believe to be poised for an exciting and robust 2026 movie release schedule. We believe the company is well positioned to deliver a much stronger '26 and beyond, having weathered a very challenging last 5 years.

People ask whether following our monetization of various assets over recent years, whether we're still committed to our 2-business, 3-country strategy. And the answer to that is yes. It's obviously true that we've monetized a number of our real estate assets. This has been done strategically to meet our liquidity needs in the face of a pandemic that physically shut down all of our cinemas, then an unprecedented combination of writers and actor strikes that completely disrupted the supply of movies to our cinemas during a time when customers are just getting reacquainted with outside the home entertainment.

We chose those assets, which typically were either negative cash flow or which after debt service did not materially contribute to our cash flow and which, in our view, have reached the best value reasonably achievable without significant further capital investment. We monetized our California headquarter building to cut administrative costs and have been able to work remotely now for 2 years. We've reduced our cinema count in the U.S. by 6 theaters, all of which have been negative cash flow since at least the pandemic.

We believe that we continue to have a good core of cinemas and real estate assets. We've navigated these treacherous waters without one penny of U.S. government assistance without resorting to debtor rights, legal remedies and without diluting our stockholders. So now let's look at our specific businesses. I'll take a look at our Q3 2025 global cinema business and compared to the same period in '24. At $48.6 million, our Q3 '25 global cinema revenues decreased 14%.

At $1.8 million, our Q3 '25 global cinema operating income decreased by 21%. As I mentioned, the overall weaker Q3 ' 25 performance was anticipated and followed along industry trends. This year's lineup just couldn't match the slate from last year when Deadpool versus Wolverine (sic) [ Deadpool & Wolverine ], Starring Ryan Reynolds and Hugh Jackman performed exceptionally well in all of our 3 countries.

We believe our particular results were also impacted by unfavorable FX movements, the 7.3% reduction in our U.S. screen count due to the closure of an underperforming cinema in San Diego and the partial closure of a 16-screen U.S. cinema under renovation that I'll touch on in a minute. When you look at the year-to-date through September 30, 2025, our global cinema revenues increased slightly and operating income grew by 142%, reflecting stronger performance due to a Q2 2025 and our focus on our various strategic initiatives.

Let me highlight a few of those key strategic initiatives that we focused on throughout '25 and have supported our results through the year. First, our food and beverage program. It remains a key area of focus. At AUD 8.05, our Q3 2025 Australian F&B SPP was the highest third quarter ever. At NZD 6.75, our Q3 2025 New Zealand F&B SPP was also our highest third quarter ever in our history. At $8.74, our Q3 '25 U.S. food and beverage SPP was the highest third quarter ever and the second highest quarter ever when our U.S. circuit has been fully operational.

That excludes pandemic closure periods. And the U.S. F&B SPP appears to exceed the results of other major publicly traded exhibitors that disclosed their F&B SPPs. These strong F&B results were supported by improvement in our online and app food and beverage sales, the continued embrace of our movie themed menus in all 3 countries. For instance, in the U.S., our Spicy-Saurus Flatbread was a strong seller this quarter. And in Australia, the Jurassic Combo was one of our most popular movie theme menus.

Also, the ever-increasing merchandise spend, where especially in the U.S., we're complementing our guest's movie experience with the opportunity to buy movie-themed merch. In the U.S., this past quarter, we generated just over $350,000 in revenue from movie themed merchandise. For instance, our Superman Totem popcorn container was one of the best-selling merch items we had during the period.

We're also driving guests to our theaters through existing loyalty programs and are in the process of developing new and improved rewards and membership programs, which are set to launch over the next few months. In Australia and New Zealand, we recently revamped and relaunched our free-to-join Reading Rewards program to provide better perks and savings. Today, we have over 363,000 members, which is an 8% increase over last quarter.

With respect to our paid memberships in Australia and New Zealand for both our Reading and Angelika brands, since our late Q4 2024 launch, we signed up over 17,400 paid memberships, which is a 16% increase over last quarter. In December '25, we're launching a new free-to-join rewards and premium membership program in Hawaii and in select U.S.-based Reading cinemas.

In the U.S., our free-to-join Angelika membership program has 171,000 members today for our 8 Angelika branded theaters, and we plan to launch our premium Angelika monthly membership early next year. Another primary initiative for our global executive team has been the collaboration with our cinema landlords to reset occupancy costs to become more in line with the economic realities of recent years.

During our negotiations for occupancy expense relief, our position is that although attendance has not returned to pre-pandemic levels, nearly all of our operating costs have increased. We also highlight there's really a limit on how much we can increase our ticket and food and beverage prices. Let's take a closer look at the third quarter 2025 results for our U.S. cinemas. Our revenue decreased by 10% to $25.1 million compared to the Q3 in '24, while our operating loss improved by 92% to a loss of $100,000 from a loss of $1 million in Q3 2024.

In addition to what I mentioned earlier, a couple of other milestones to mention. Our average ticket price or ATP of $13.13 marks our second highest third quarter ever for our U.S. cinema circuit. This is impressive in light of the strength of our discount Tuesdays, which is branded Mahalo Holidays in Hawaii and Half-Price Tuesdays in the U.S. Mainland. With respect to our U.S. cinema circuit, our gross box office for alternative content and signature series programming, which is our nontraditional programming, delivered the highest third quarter box office ever.

One of the reasons we performed so well in this regard had to do with the 2-day KPop Demon Hunters Sing-Along event distributed by Netflix, which provided another pivotal cultural moment for cinemagoers, especially in our markets. We received questions about the strength of specialty titles in 2026. But first, let me report that the box office of the Angelika New York year-to-date through mid-November 2025 has beaten the same period in 2024.

For this period, the top grossing films included Wes Anderson's Phoenician Scheme, the third quarter's Sorry, Baby and most recently, Frankenstein from Director Guillermo Del Toro, which was released by Netflix and presented in 35-millimeter. Following the positive 2025 trends, we expect 2026 will deliver a similar result in the world of art house and specialty film. The Japanese movie, Kokuho from Director Lee Sang-il, which has been a runaway critical and commercial success in Japan will release in '26 at the Angelika.

Its Oscar qualifying run at the Angelika this week has already demonstrated impressive presales. Director Park Chan-wook No Other Choice from Neon opens late in 2025 and will carry over into 2026. And later in '26, we anticipate that specialty film growers will enjoy movies like Sony Classics, A Private Life starring Jodie Foster, The Drama starring Zendaya and Robert Pattinson from A24, Focus Features Sense And Sensibility starring Daisy Ecker-Jones and Werwulf from Director Robert Eggers, the Director of Nosferatu.

We also received questions about the status of our CapEx spend in '26. With respect to our U.S. circuit, we're in the process right now of renovating our Reading Cinemas in Bakersfield, California, which renovation should be completed by the end of January '26. We've now added recliners to our IMAX screen, which will make the only IMAX with recliners within a 100-mile radius of Bakersfield. We're creating a premium screen, TITAN LUXE with Dolby Atmos sound system that also features heated recliners, which will open for Wicked: For Good.

And we're adding another 8 screens of recliners, 3 of which are open right now with another 5 screens to open in January. We'll be working on plans to add a TITAN LUXE and recliners to our Angelika in Mosaic, Fairfax, Virginia, which should be done by the end of '26 and through '26, we're also looking to refurbish many of our existing recliner seats that were damaged through the pandemic. And that project should also be completed by the end of next year. I'll note that by the end of '26, 68% of our existing screens in the U.S. will feature recliners and 44% of the theaters will have premium screens.

Turning now to our cinemas in Australia and New Zealand. Following Q3 2025 box office industry trends and comparing to Q3 '24, our Australian cinema revenue decreased 17% to $20.5 million, and our operating income decreased 38% to $1.8 million. Our New Zealand cinema revenue decreased 23% to $2.9 million, and the operating income decreased 96% to $10,000. In addition to the milestones I've already mentioned, during the third quarter of '25, our Australian team also achieved the following, which are all in functional currency.

Our Q3 2025 Australian ATP of $15.44 was the highest third quarter ever for Australian cinemas. We also secured a major ancillary revenue sponsorship from a major telco who signed up for our turn your cell phone off naming rights. With the agreement running through March of '27, the team achieved an exceptional sponsorship deal. With respect to our New Zealand cinemas, our Q3 2025 New Zealand ATP of $13.65 was the highest third quarter ever.

And now turning to our CapEx spend in 2026 in Australia and New Zealand. I'll start with New Zealand. In New Zealand, through 2026, we'll be redesigning our Reading Cinemas at Courtenay Central in Wellington. The renovation will be a full top to bottom upgrade where we'll add recliners to all theaters, at least 2 premium screen concepts such as TITAN LUXE or others and upgrade our F&B offer and that whole renovation will follow our new landlord's seismic upgrade.

We anticipate that the renovation will be completed sometime in '27. And in Australia, we'll be adding a TITAN LUXE with Dolby Atmos and 1 premium screen with recliners to another key Reading cinema sometime in '26. I'll note that by the end of '26, 36% of our existing screens will feature recliners and 59% of our international theaters will have premium screens. Now let's turn to our global real estate business, which on a segment reporting basis includes not only our third-party rental income, but also our live theater business in New York City and our intercompany rents.

Starting with the third quarter of '25 global results and compared again to the same period in '24. At $4.6 million, our global real estate total revenues decreased by 7% and at $1.4 million, our total income was flat. The results were primarily driven by the elimination of property level cash flow from the third-party rents that we had received at our property assets in Townsville, Australia and in Wellington, New Zealand. Both of those assets were sold earlier in '25 to create liquidity to pay down debt.

Breaking it down by division for the third quarter of '25 and again, compared to the same quarter in '24 with respect to Australia, our real estate revenue decreased by 22% to $2.4 million, and our income of $1 million decreased by 35%. At $221,000, our New Zealand real estate revenue decreased by 41% and our New Zealand real estate operating income of $90,000 increased by 169% from an operating loss of $130,000 in the third quarter of '24.

With respect to our Australian and New Zealand portfolio, as of September 30, 2025, due to our asset sales in Wellington, New Zealand and Townsville, Australia at Cannon Park, the number of third-party tenants in our combined Australia and New Zealand real estate portfolio reduced to 58 and is now primarily made up of tenants at Newmarket Village in Brisbane and the Belmont Common in Perth. The quality of the remaining tenants is strong, and today, we have an occupancy rate of 98%.

For the third quarter, our combined third-party tenant sales from our Australian real estate were AUD 25.9 million. During the quarter, 5 lease transactions were completed with existing tenants. These included 1 new lease, 3 renewals and 1 lease variation, reflecting continued tenant retention and portfolio stability. Also, as we recently reported in our 10-Q, we signed an agreement to sell our Napier property in New Zealand for NZD 2.5 million with a leaseback of the Reading cinema on the property.

The contract is conditioned on the completions of various conditions, including due diligence. And right now, we can't provide any assurance that the deal will, in fact, close or when. Now turning to our U.S. real estate business, which includes our 2 live theaters in New York City. On a quarter-to-date basis, it delivered a 35% increase in revenue and operating income of $253,000, which represents a 433% increase.

Our live theater segment delivered a standout performance this quarter, fueled by critically acclaimed productions and audience favorites. At the Minetta Lane Theatre for the third quarter of '25, our attendance increased over 450% and theater-level cash flow increased by over 140%, which is largely attributed to the successful shows produced by Audible and the Amazon Company and our licensee at Minetta Lane. The acclaimed musical Mexodus just concluded its successful run in the third quarter at the Minetta Lane.

I'll also note that Audible recently exercised its option to extend their license another year at the Minetta Lane and will be there now through March of '27. Since the departure of STOMP, the Orpheum theater continues to be in high demand with theater producers. During Q3 and part of Q4, Ginger Twinsies, a parody inspired by the iconic film, The Parent Trap, received strong praise and played at the Orpheum. And it was just announced that the viral TikTok dance duo Cost N' Mayor, who have about 7.4 million followers on TikTok will debut their new show 11 to Midnight at the Orpheum, which opens in January of '26.

We also received questions about the leasing at 44 Union Square. As previously reported, we signed a non-exclusive LOI and have exchanged lease drafts with 1 potential tenant who is a non-office user for all the remaining space in the building. We're continuing to work with this tenant to see if a deal can be completed within the company's long-term goals before the end of the year. However, we continue to explore other leasing opportunities.

Based on industry reports from area brokers, we know there's been material improvement in the leasing environment in the Midtown South market, which has been further reinforced by the 2025 Union Square commercial report, which highlights positive momentum not only in the Union Square leasing statistics, but also the increased foot traffic in the area. Our Newberry Yard property in Williamsport, Pennsylvania remains classified as held for sale.

While we've reviewed offers from both rail and non-rail users, we believe the property's highest and best use is tied to the rail industry as the tracks and infrastructure remain valuable. We're now exploring different marketing strategies to reach a greater pool of candidates. We've also received various questions about our Reading Viaduct in Pennsylvania. As we reported in our most recently filed 10-Q, the City of Philadelphia has expressed an interest in condemning all or portions of our Reading Viaduct for use as a public park, and they passed an ordinance to permit such an action to proceed.

Since railroad properties are subject to the jurisdiction of the Federal Surface Transportation Board, or STB, and cannot be condemned without the consent of the STB, the city brought a petition before the STB for a declaration that all railroad use of our Viaduct have been abandoned and that as a consequence, our Viaduct was no longer subject to the jurisdiction of the STB. And by implication, that the city could proceed with the condemnation action without seeking approval of the STB.

We've recently appealed the STB's recent decision. The city has also filed litigation against us claiming a failure on our part to address certain claimed building violations and seeking injunctive relief as well as certain fines and penalties. We're in the process right now of defending against that lawsuit. Regarding the potential for a condemnation, however, I can note that under applicable Pennsylvania law, the city would be required to pay us the fair market value of our property.

We've not received any proposal from the city of Philadelphia before or after the adoption of the ordinance in December of '23. Though we do understand that funding has been received for the planning and design work tied to the development of a rail park on our property. We're not aware of any funding being secured or set aside for an actual acquisition in whole or part of our Viaduct.

The company believes that the Reading Viaduct is a valuable asset of the company, and it will continue to vigorously defend itself in these cases. If the city does pursue condemnation, we'll work vigorously to obtain the maximum fair market value for any property taken. That wraps up my report on recent developments.

So in summary, despite facing significant challenges over the last 5 years and having an underwhelming third quarter, the company has remained focused on safeguarding our global theaters and sustaining stockholder equity through strategic theater closures, cost reductions and the sale of select real estate assets to meet liquidity needs created by the pandemic and the unprecedented 2023 Hollywood strikes and to significantly reduce our overall debt.

At the same time, our cinema teams have implemented strategic initiatives to increase revenue and enhance cost efficiency, while our global real estate teams have secured a strong, stable and dynamic base of third-party tenants, providing us with optimism regarding the future of Reading and the cinema industry as a whole.

In addition, our global interest expense has decreased due to multiple paydowns a result of asset sales and overall lower government interest rates in all 3 countries. This reduction in interest expense, coupled with a steady and strong lineup of Hollywood releases for the remainder of '25 and '26, we believe Reading is well positioned for stronger growth and a return to profitability in the fourth quarter in 2026 and beyond.

Before I turn it over to Gilbert, Margaret and I want to express our continued heartfelt appreciation to the entire management team and our Board and all of our employees. Your dedication, professionalism and tireless efforts have been instrumental in keeping the company moving forward and staying true to its long-term vision. Thank you. Now let me turn it over to Gilbert.

Thank you, Ellen. Consolidated revenue for the quarter ended September 30, 2025, decreased by $7.9 million to $52.2 million when compared to the third quarter of 2024. This decrease was due to decreased cinema revenue from lower attendance in all 3 countries as a result of weaker overall movie slate released from the Hollywood studios in the third quarter of 2025 compared to the same period 2024 and the reduction in screen count due to closure of one of our cinema complexes in San Diego, California.

These decreases in revenues were compounded by the decline in real estate rent revenue in Australia and New Zealand due to the sale of Cannon Park and Courtenay Central and the weakening of Australia and New Zealand foreign exchange rate against the U.S. dollar, partially offset by the improved live theater rental and ancillary income. Consolidated revenue for the 9 months ended September 30, 2025, increased slightly by $0.8 million to $152.7 million when compared to the same period of 2024.

This increase is due to improved box office from better movie slates as Lilo & Stitch and Minecraft movies released during the second quarter of 2025 improved U.S. food and beverage revenue and better live theater rental and ancillary income, which was partially offset by a decrease in real estate rental revenue and decrease in food and beverage revenue in Australia and New Zealand.

Net loss attributable to Reading International Inc. for the quarter ended September 30, 2025, decreased by $2.9 million to a loss of $4.2 million compared to a loss of $7 million in Q3 2024. Q3 2025 basic loss per share improved by $0.13 to a basic loss per share of $0.18 compared to a basic loss per share of $0.31 for Q3 2024.

These improved results were partially due to a $1.1 million reduction in interest expense, a $1.2 million increase in other income and a $0.7 million reduction in depreciation and amortization expense compared to the same period in prior year. Net loss attributable to Reading International Inc. for the 9 months ended September 30, 2025, decreased by $21.1 million from a loss of $33.1 million to a loss of $11.6 million when compared to the same period in the prior year.

Basic loss per share improved by $0.90 to a loss of $0.51 compared to a loss of $1.48 for the first 9 months of 2024. These results were primarily due to strengthened segment results, a $2.6 million reduction in interest expense and the $9.7 million increase in gain on sale of assets as a result of gain on selling our Courtenay Central and Cannon Park properties in 2025 compared to a loss on selling our previously owned Culver City office in 2024.

Our total company depreciation, amortization impairment and general and administrative expenses for the quarter ended September 30, 2025, decreased by $1 million to $7.9 million compared to Q3 2024. For the 9 months ended September 30, 2025, it decreased by $2.6 million to $25.2 million compared to the same period in the prior year. Income tax expense for the 3 months ended September 30, 2025, decreased by $0.4 million compared to the equivalent prior year period.

The change between 2025 and 2024 is primarily related to a decrease in reserve for valuation allowance in 2025. Income tax expense for the 9 months ended September 30, 2025, increased by $0.8 million compared to the equivalent prior year period. The change between 2025 and 2024 is primarily related to a decrease in consolidated loss in 2025. For the third quarter of 2025, our adjusted EBITDA increased by $0.7 million to an income of $3.6 million from an income of $2.8 million compared to Q3 2024.

This increase was primarily due to an increase in other income. For the 9 months ended September 30, 2025, our adjusted EBITDA increased by $17.4 million to an income of $12.8 million compared to the same prior year period. This increase was due to improved operational performance through more efficient management of operating expenses and gains from asset monetization as mentioned previously.

Shifting to cash flow for the 9 months ended September 30, 2025, net cash used in operating activities decreased by $6 million to $5.9 million compared to the cash used in 9 months ended September 30, 2024, of $11.8 million. This was primarily driven by a decrease in net operating loss, partially offset by a decrease in net payables.

Cash provided by investing activities during the 9 months ended September 30, 2025, increased by $32.3 million to $37.3 million compared to the cash provided in the 9 months ended September 30, 2024, of $5 million. This was due to proceeds from sale of our Cannon Park property assets in May 2025 and the Wellington property assets in January 2025 compared to the proceeds from the sale of our Culver City office in February 2024.

Cash used in financing activities for the 9 months ended September 30, 2025, increased by $38.3 million to $36.2 million compared to the cash provided in 9 months ended September 30, 2024, of $2.1 million. This was primarily due to the paydown of our Westpac debt, Bank of America debt and NAV facility in 2025 as discussed previously, compared to the NAV bridge facility drawn in the same period of 2024. Turning now to our financial position.

Our total assets on September 30, 2025, were $435.2 million compared to $471 million on December 31, 2024. This decrease was driven by a $4.3 million decrease in cash and cash equivalents from which we funded our ongoing business operations, a $31.9 million decrease in land and property held for sale due to the sale of our Cannon Park and Courtenay Central assets. As of September 30, 2025, our total outstanding borrowings were $172.6 million compared to $202.7 million on December 31, 2024.

The debt reduction was primarily funded by the net proceeds from the sale of our 2 major property assets, Cannon Park in Australia and Courtenay Central in New Zealand. Our cash and cash equivalents as of September 30, 2025, were $8.1 million. Further to address liquidity pressure on our business, we continue to work with our lenders to amend certain debt facilities, and we continue to have our Newbury Yard, Williamsport, Pennsylvania property classified as held for sale.

During the third quarter and the beginning of the fourth quarter of 2025, we made progress with our lenders on the following financing arrangements. On July 3, 2025, we extended the maturity date of our Bank of America loan to May 18, 2026, and modified the principal repayment schedule. On July 18, 2025, we extended the maturity date of our Santander loan, which is the loan on our live theater assets in New York City to June 1, 2026.

We also paid down $100,000 on the loan at signing. On November 12, 2025, we extended the maturity of our National Australia Bank loan to July 31, 2030, and modified the principal repayment schedule. On November 13, 2025, we extended the maturity of our Valley National Bank loan to October 1, 2026. With that, I will now turn it over to Andrzej.

Thank you, Gilb. First, I'd like to thank our stockholders for forwarding questions to our Investor Relations e-mail. As usual, in addition to addressing many of your questions in the prepared remarks from Ellen and Gilbert, we've selected a few additional questions to offer additional insights from management. The first such question, which Ellen will address, there was a mention in the 10-Q about the Noosa Australian cinema development project still planned for 2027 or has it been deferred indefinitely? What is the current budget and expected ROI for this project? Ellen?

Yes. We're still expecting the Reading Cinema, which is being an 8-screen cinema with the TITAN LUXE to be built out in Noosa in Queensland. Our landlord and developer of the Stockwell Development Group is still in the town planning stage of its major multi-use project. Today, we believe the completion of the theater construction and the opening won't happen until around 2028.

And we don't announce the terms and conditions of specific cinema deals. However, as we've reported in the past for third-party cinema lease deals, we usually target at least a high-teen double-digit return. And the current deal for the Noosa Cinema is consistent with those targets.

The next question, we've been asked several questions about our plans for the refinancing of our Bank of America, Emerald and Valley National loans. Can you please elaborate? Gilbert?

We plan to refinance this debt in 2026 and are considering a variety of alternatives and structures. We are encouraged by what we see as the improving environment from real estate financing, including anticipated reduction in interest rates, improving commercial rental market in Manhattan and the current industry box office projections for 2026. Obviously, a significant factor in any refinancing of our Emerald debt would be the lease status of our 44 Union Square. While no assurance can be given, we anticipate resolution of our current nonexclusive LOI by the end of the year.

The next question, given Reading has no present New Zealand debt and the excess proceeds from the Wellington Courtenay sale were upstream to pay down costly U.S. debt, can you share what your likely use of the Napier sale proceeds will be? Ellen?

The Napier transaction closes, we'll likely use the proceeds to support the renovation of our Reading Cinema Courtenay Central in Wellington, New Zealand or -- and/or we may use the proceeds for general corporate use in New Zealand.

And finally, one last question, which I will deal with. We also received a number of questions about the Sutton Hill Associates acquisition that involves RDI assuming $13.65 million in third-party notes at 4.75% interest maturing September 30, 2035, who will be the holder of these third-party notes? What assets will secure the guarantee and guarantee these notes? Sutton Hill Associates 25%, Sutton Hill Properties interest and Village East ground lease and Reading USA or Reading International, respectively.

I appreciate the low interest rate on the debt. Can you explain why so favorable, especially with a 10-year maturity? Well, a very complex question. We believe that this will be a good transaction for Reading. It will, in essence, wind up and close out of our master lease transaction we entered into with Sutton Hill Capital, LLC in the year 2000.

The third-party notes are, as previously disclosed, payable to a third party and the reasons for that third party's willingness to do the deal described in our 10-Q would only be a matter of speculation on our part. As part of the transaction, the third-party notes would be guaranteed by Reading International, Inc., but would otherwise be unsecured. And that marks the conclusion of our third quarter conference call for 2025.

This year continues to see a gradual resurgence of the breadth and depth of the cinematic experience despite the slight downturn in the third quarter numbers. And we aspire to translate this into future enhanced value for our stockholders as the end of 2025 comes and the full 2026 year unfolds. We appreciate you listening to the call today. We thank you for your attention and support and wish everyone and safety. And as always, we look forward to seeing you at our movie venues.