2009 Highlights

our EBITDA(1) for the 2009 September quarter was $11.0 million compared to $7.7 million in the 2008 quarter, an increase of 43.7%;

for the 2009 nine months our EBITDA(1) was $33.0 million compared to $23.9 million in 2008, an increase of 38.2%;

we continue to see local currency cinema revenue growth in both Australia and New Zealand, with Australia showing a 9.8% increase and New Zealand a 1.4% increase over the September quarter in 2008. In Australia, in local currency, this quarter's total as well as cinema revenue were again record highs, at AUS$27.6 million and AUS$24.5 million, respectively;

we reduced our general and administrative expenses by 4.3% for the quarter and 8.0% for the nine months, compared to prior year;

our operating income for the quarter was $6.7 million compared to $3.4 million in 2008, an increase of 97.4% and for the nine months at $13.2 million it was 207.0% above the $4.3 million for the 2008 nine months; and

primarily as a result of the stronger operating income, the second quarter 2009 Trust Preferred Security ("TPS") gain, and the fact that both the Australian dollar and the New Zealand dollar have recaptured some of their value since year end, when such currencies traded at $0.6983 and $0.5815, respectively, compared to $0.8824 and $0.7233 respectively at September 30, 2009, our stockholders' equity has risen to $113.2 million at September 30, 2009 compared to $69.4 million at December 31, 2008.

On July 2, 2009, as part of the terms of settlement, we and Magoon Acquisition and Development, LLC ("Magoon LLC") closed on the sale of our respective interests in Malulani Investments, Limited ("MIL") and The Malulani Group, Limited (collectively, "MMG") and settled certain litigation with MMG and certain of their officers and Directors. As a result of the sale and the settlement (which was negotiated in March 2009), we received a total of $9.25 million consisting of $2.5 million in cash and $6.75 million in note receivable, and a ten-year tail interest in MMG. Based on the receipt of the cash and note receivable, we recognized an other operating income of $2.6 million and a gain on the sale of investment in an unconsolidated entity of $268,000. Under the terms of our Shareholders' Agreement with Magoon LLC, substantially all of the proceeds of this sale and settlement will be allocated to us, until we have recouped our initial investment in MIL and all costs advanced by us with respect to the litigation.

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 ((1)) The Company defines EBITDA as net income (loss) before net interest expense, income tax benefit, depreciation, and amortization. EBITDA is presented solely as a supplemental disclosure as we believe it to be a relevant and useful measure to compare operating results among our properties and competitors, as well as a measurement tool for evaluation of operating personnel. EBITDA is not a measure of financial performance under the promulgations of generally accepted accounting principles ("GAAP"). EBITDA should not be considered in isolation from, or as a substitute for, net loss, operating loss or cash flows from operations determined in accordance with GAAP. Finally, EBITDA is not calculated in the same manner by all companies and accordingly, may not be an appropriate measure for comparing performance amongst different companies. See the "Supplemental Data" table attached for a reconciliation of EBITDA to net income (loss). 


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Third Quarter 2009 Discussion

Revenue from operations decreased from $57.9 million in the 2008 quarter to $56.1 million in 2009, a 3.2% decrease. The cinema segment revenue decrease of $1.7 million was driven by a $1.4 million decrease in the US, predominantly due to recognition of screen advertising revenue for prior quarters in 2008, recognized in the 3rd quarter of 2008, on the signing of the contract. The results of Australia and New Zealand were affected negatively by currency exchange movements even though we noted higher revenues in the local currencies for the period in both Australia and New Zealand. The top 3 grossing films for the quarter in our circuit worldwide were: "Harry Potter & the Half Blood Prince," "Transformers: Revenge of the Fallen," and "Ice Age: Dawn of the Dinosaurs," which between them accounted for approximately 25.5% of our cinema box office revenue. Real estate segment revenue was down by $241,000 from quarter to quarter, as a result of the negative currency exchange effects in Australia and New Zealand as well as lower live theater rentals in the US. In local currencies, real estate revenue was flat in both Australia and New Zealand.

As a percentage of revenue, operating expense, at 77.9% in the 2009 quarter was basically flat to last year's quarter of 77.7%.

Depreciation and amortization decreased by $1.1 million, or 21.6%, from $5.1 million in the 2008 quarter to $4.0 million in the 2009 quarter, primarily due to the effects of the purchase accounting finalization for our acquired Consolidated Entertainment cinema assets.

General and administrative expense decreased by $190,000 or 4.3%, from $4.4 million to $4.2 million in the 2009 quarter. This decrease was primarily related to cost cutting measures implemented worldwide.

We recorded $2.6 million as other operating income in the 2009 quarter associated with our settlement of the MIL litigation for the recovery of previously expensed litigation costs.

Driven by the above factors our operating income for the quarter increased by $3.3 million to $6.7 million compared to $3.4 million in the same quarter last year.

Interest expense decreased by $482,000 from $4.0 million in the 2008 quarter, to $3.5 million in the 2009 quarter. This was primarily related to the mark-to-market of our interest swaps and cap and decreased interest expense due to the retirement of our trust preferred securities in the second quarter of 2009 which was offset by an interest expense increase due to our ceasing to capitalize interest on our development properties, where development has been substantially curtailed.

For the 2009 quarter, we recorded an other income of $178,000 compared to an other loss of $739,000 for the 2008 quarter, a $917,000 change. For the 2009 quarter, the $178,000 was predominantly equity earnings of unconsolidated joint ventures. The 2008 quarter other loss of $739,000 was primarily related to a $1.0 million property impairment expense.

In 2009, we recorded a gain on the sale of an investment in an unconsolidated entity of $268,000 related to the sale of our investment in MIL.

As a result of the above, we reported a net income of $3.1 million for the 2009 quarter compared to a net loss of $2.1 million in the 2008 quarter.

Our EBITDA(1) at $11.0 million for the 2009 quarter was $3.4 million higher than the 2008 quarter of $7.7 million.

Our adjusted EBITDA(1) for the 2009 quarter was $8.2 million after excluding:

the $268,000 other nonoperating gain on the sale of the MIL security; and

the $2.6 million other operating income associated with our settlement of the MIL litigation.

There were no significant adjustments to EBITDA(1) in the 2008 quarter.

Nine Months 2009 Summary

Revenue from operations increased from $151.4 million in 2008 to $157.6 million in 2009, a 4.1% increase. The cinema segment revenue increase of $8.1 million was driven by an increase of $12.3 million in the US primarily resulting from revenue from our newly acquired Consolidated Entertainment cinemas and decreases in Australia of $1.3 million and New Zealand of $2.8 million. The decreases in Australia and New Zealand were currency exchange driven as the local currency cinema revenues were up 17.9% in Australia and 2.6% in New Zealand, compared to the 2008 nine months. The top 3 grossing films for the nine months in our circuit worldwide were: "Transformers: Revenge of the Fallen," "Harry Potter & the Half Blood Prince" and "The Hangover," which between them accounted for approximately 12.6% of our cinema box office revenue. The real estate segment revenue was down by $131,000 from 2008 to 2009, as a result of the negative currency exchange effects in Australia and New Zealand as well as lower live theater rentals in the US. In local currencies, real estate revenue was basically flat in both Australia and New Zealand.

As a percentage of revenue, operating expense, at 77.7% in 2009 was lower than the 78.3% of 2008. This decrease was primarily related to the final allocation for accounting purposes of a greater portion of the purchase price paid for our Consolidated Entertainment cinemas to goodwill and below market leases than originally estimated. This change, effective in the fourth quarter of 2008, resulted in higher straight-line rent and acquired lease costs in 2008 than in 2009.

Depreciation and amortization decreased by $3.3 million, or 23.0%, from $14.5 million in 2008 to $11.2 million in 2009, primarily due to the previously mentioned purchase accounting adjustments for our acquired Consolidated Entertainment cinema assets.

As the sale of our Auburn property is no longer proceeding, we have moved the property back to continuing operations, and as a result we expensed $549,000 as catch-up depreciation, classified as loss on transfer of real estate from held for sale to continuing operations.

General and administrative expense decreased by $1.1 million or 8.0%, from $14.0 million to $12.9 million in 2009. This decrease was primarily related to cost cutting measures implemented worldwide and the one-time 2008 purchase related costs of our Consolidated Entertainment acquisition.

We recorded $2.6 million as other operating income in the 2009 nine months associated with our settlement of the MIL litigation for the recovery of previously expensed litigation costs.

Driven by the above factors, our operating income for the 2009 nine months increased by $8.9 million to $13.2 million, from $4.3 million in the 2008 nine months.

Interest expense increased by $905,000, from $9.8 million in the 2008 nine months to $10.7 million in the 2009 nine months. This was primarily related to our ceasing to capitalize interest on our development properties, where development has been substantially curtailed, which resulted in an interest expense increase, which was offset by decreased interest expense due to the retirement of our trust preferred securities in the second quarter of 2009 and the mark-to-market of our interest swaps and cap.

In 2009, we recorded an other loss of $1.9 million compared to an other income of $2.9 million for the same period in 2008, a $4.7 million change. The 2009 other loss of $1.9 million included a $2.2 million loss on currency transactions; a $2.1 million other-than-temporary loss on our Becker marketable securities; offset by a $1.5 million gain on the Auburn option termination; and $861,000 in equity earnings of unconsolidated joint ventures. The 2008 other income of $2.9 million was primarily related to a gain on currency transactions of $446,000; a $1.1 million receipt related to our Whitehorse Center litigation; $910,000 of insurance proceeds related to damage caused by Hurricane Georges in 1998 to one of our previously owned cinemas in Puerto Rico; and the settlement in our credit card dispute of $385,000.

During the 2009 nine months, we recorded a $10.7 million gain on retirement of subordinated debt (TPS), net of a $749,000 loss on deferred financing costs associated with the subordinated debt.

In 2009 and 2008 we recorded gains on the sale of investments in unconsolidated entities of $268,000 and $2.5 million, respectively, from the sale of our investments in MIL and the cinema at Botany Downs in Auckland, New Zealand.

As a result of the above, we reported a net income of $9.6 million for the 2009 nine months compared to a net loss of $2.0 million in the 2008 period.

Our EBITDA(1) at $33.0 million for the 2009 nine months was $9.1 million higher than the 2008 nine months of $23.9 million, predominantly driven by better operating margins (approximately $5.5 million) plus the gain on the TPS retirement (approximately $10.7 million) offset by the other income (loss) change (approximately $4.7 million) and the 2008 gain on sale (approximately $2.5 million).

Our adjusted EBITDA(1) for the 2009 nine months was $22.9 million after excluding:

the $10.7 million gain on the retirement of our TPS debt;

the $1.5 million gain from Auburn option payments;

the $268,000 gain on the sale from our investment in MIL securities; and

the $2.6 million other operating income associated with our settlement of the MIL litigation

offset by

the $549,000 loss on transfer of Auburn;

the realized transactional currency loss of $2.2 million; and

the $2.1 million other-than-temporary loss on our Becker available-for-sale shares.

Our adjusted EBITDA(1) for the 2008 nine months was $18.6 million after excluding:

the $2.5 million gain on sale of Botany; and

the $2.8 million in realized transactional currency gains and other one-time gains.

Balance Sheet

Our total assets at September 30, 2009 were $402.2 million compared to $371.9 million at December 31, 2008. The currency exchange rates for Australia and New Zealand as of September 30, 2009 were $0.8824 and $0.7233, respectively, and as of December 31, 2008, these rates were $0.6983 and $0.5815, respectively. As a result, currency had a positive effect on the balance sheet at September 30, 2009 compared to December 31, 2008.

Our cash position at September 30, 2009 was $19.3 million compared to $30.9 million at December 31, 2008, reflecting the $11.5 million used to effectively repurchase $22.9 million of our TPS in the first quarter of 2009.

At the present time, we have approximately $4.9 million (AUS$5.5 million) in undrawn funds under our Australian Corporate Credit Facility. During May 2009, we extended the term of our New Zealand facility to March 31, 2012 and reduced the available borrowing amount to $32.5 million (NZ$45.0 million). As a result, we currently have undrawn funds of $21.7 million (NZ$30.0 million) available under our line of credit in New Zealand. Accordingly, we believe that we have sufficient borrowing capacity under our Australian Corporate Credit Facility and our New Zealand line of credit to meet our anticipated short-term working capital requirements.

Our working capital at September 30, 2009 was negative by $2.7 million compared to a positive working capital of $12.5 million at December 31, 2008, again driven by the $11.5 million TPS repurchase and a $7.0 million loan that has become short-term in nature.

Stockholders' equity was $113.2 million at September 30, 2009 compared to $69.4 million at December 31, 2008.

About Reading International, Inc.

Reading International (http://www.readingrdi.com) is in the business of owning and operating cinemas and developing, owning and operating real estate assets. Our business consists primarily of:

the development, ownership and operation of multiplex cinemas in the United States, Australia and New Zealand; and

the development, ownership and operation of retail and commercial real estate in Australia, New Zealand and the United States, including entertainment-themed retail centers ("ETRC") in Australia and New Zealand and live theater assets in Manhattan and Chicago in the United States.

Reading manages its worldwide cinema business under various different brands:

in the United States, under the

Reading brand,

Angelika Film Center brand (http://angelikafilmcenter.com/),

Consolidated Theatres brand (http://www.consolidatedtheatres.com/), and

City Cinemas brand;

in Australia, under the Reading brand (http://www.readingcinemas.com.au/); and

in New Zealand, under the

Reading (http://www.readingcinemas.co.nz) and

Rialto (http://www.rialto.co.nz) brands.

Forward-Looking Statements

Our statements in this press release contain a variety of forward-looking statements as defined by the Securities Litigation Reform Act of 1995. Forward-looking statements reflect only our expectations regarding future events and operating performance and necessarily speak only as of the date the information was prepared. No guarantees can be given that our expectation will in fact be realized, in whole or in part. You can recognize these statements by our use of words such as, by way of example, "may," "will," "expect," "believe," and "anticipate" or other similar terminology.

These forward-looking statements reflect our expectation after having considered a variety of risks and uncertainties. However, they are necessarily the product of internal discussion and do not necessarily completely reflect the views of individual members of our Board of Directors or of our management team.