Thank you for joining Reading International's Earnings Call to discuss our 2017 Third Quarter Results. My name is Andrzej Matyczynski. I'm Reading's Executive Vice President of Global Operations. With me are Ellen Cotter, our CEO, and Dev Ghose, our EVP and Chief Financial Officer.

Before we begin the substance of the call, I'll start by stating that 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 2017 third quarter earnings release on the company's website.

In today's call, we will also use an industry-accepted financial measure called theater level cash flow, which is theater level revenues, less direct theater level expenses. Please note that our comments are necessarily summary in nature and anything we say is qualified by the more detailed disclosure set forth in our 10-Q.

So with that behind us, Dev will be talking to us about the financial results for the third quarter a little later, but first, I'll turn the call over to Ellen, who will update us on the company's operations. .

Thanks, Andrzej, and thank you, everyone, for joining us today and sending in your questions. We just held our 2017 Annual Stockholders Meeting on Tuesday, November 7. We encourage you to look at management's presentation which is now posted on our website.

Like we've done in the past, we've tried to address many of your questions in our prepared remarks. And as always, we're available for follow-up calls to discuss our strategies and operations. As you just read in our earnings release, our total operating revenues for the third quarter decreased by 7% to $66.1 million.

And our net income attributable to common stockholders decreased by $2.3 million to $1.6 million. These operating results were largely driven by the well-publicized weaker film slate delivered by the major studios in the third quarter.

While these results were disappointing, our total operating revenues were still the third highest of any third quarter on company record. Now turning to our cinema business, our consolidated third quarter cinema revenues decreased by 9% to $62.1 million compared to the same period last year.

This led to a 31% or $3 million decrease in our operating income compared to the 2016 third quarter. Each of our three cinema divisions experienced declines in revenues as a result of decreased attendance. With a 14% decrease in attendance in Australia, our cinema revenue decreased by 10% or $2.6 million for the quarter.

In New Zealand, cinema revenue decreased by 14% or $1.1 million for the quarter. Again, mainly due to a 14% decrease in attendance. And finally, in the United States, our cinema revenues decreased by 6% or $2 million due to a 12% decrease in attendance. As I mentioned earlier, the film in the third quarter did not deliver to the punch it had in 2016.

Last year, Suicide Squad, Secret Life of Pets and Finding Dory all supported the box office in each of our 3 countries. While Spiderman, Homecoming, It, and Dunkirk, each on their own delivered impressive results, as a collective or slate, they were not enough to present a positive comparison to the third quarter in 2016.

As we mentioned at our stockholders meeting on November 7, though the last two quarters were disappointing for the industry and our circuit, we recognize that the film product ebbs and flows and we shouldn't look to the last two quarters for signs that there's a systemic problem in our business.

We point out that just at the beginning of 2017, the first quarter delivered a record setting first quarter industry box office. We're optimistic about the fourth quarter box office.

Obviously we're all anticipating a strong result for Star Wars, The Last Jedi, and Thor Ragnarock has so far delivered terrific box office results in each of our 3 countries. With a 93% Rotten Tomatoes rating, the third installment of the franchise really got audiences into our theaters.

In the US we rely on specialty film product because of our Angelika Film Centers. The third quarter specialty film slate was also not as strong as it was in 2016 when movies like Cafe Society and Absolutely Fabulous were released. But just like the commercial film slate, we're quite hopeful for the third quarter this year.

This past weekend, Lady Byrd at the Angelika in New York City opened with a 3-day gross of just over $106,000 which represented one of the best opening weekends at the Angelika in years. Now I'll provide some further detail on the progress we made in the third quarter on our global cinema strategy.

Our goal is to deliver our guests not only the most comfortable cinematic experience, but also one that features a state-of-the-art presentation through a premium auditorium experience. During the third quarter, we either began or progressed work on a number of cinema renovations across the global circuit.

In the United States we hope to have these 4 renovations projects completed by the end of 2017. First, Reading Cinemas at Cal Oaks Plaza in Murrieta, California. We closed this theater for a full top to bottom renovation.

We're installing recliner seating in all 17 screens, creating two TITAN LUXE auditoriums and will be soon offering a full food and beverage menu including craft beer, wine and spirits. We've also closed 6 auditoriums at our Reading Cinemas in Manville, New Jersey.

We're installing recliner seats now in those 6 auditoriums and one of those auditoriums will be converted to a TITAN LUXE. We further anticipate completing the remainder of the 12 auditoriums in that theater sometime in the first quarter of 2018.

In Hawaii, we're installing recliner seating in all of our 12 auditoriums at our consolidated theater at the Pearl Ridge Mall. And at our consolidated theater at the Ward Village, we're due to complete the installation of recliner seating in 8 additional auditoriums.

We're converting our existing TITAN XC auditorium to a TITAN LUXE by installing recliner seating. Turning to Australia, we upgraded certain theaters in accordance with our strategic plan.

During the third quarter of 2017 at our Rouse Hill Cinema in New South Wales, we launched our first TITAN LUXE and 1 premium dine-in auditorium, each featuring recliner seating. We improved the existing recliner seats in one of our Gold Lounge Auditoriums at our Harbor Town Cinema in Queensland.

And finally, at our Reading Cinema in Belmont and Perth we converted 2 existing auditoriums to premium dine-in screens featuring recliner seating. Our strategic focus on food and beverage continues across each of our cinema circuits and is helping drive our performance.

During the third quarter of 2017, our US circuit achieved a third quarter record high food and beverage per cap of $4.85. And the food and beverage per cap in New Zealand also achieved a record high at $3.95, calculated in functional currency. In the US we outperformed certain leading competitor exhibitors.

Our US food and beverage revenues decreased by 4% over the same period last yet. In Australia and New Zealand, we also saw decline in F&B revenues in functional currency compared to the third quarter of 2016, up 10% and 7% respectively.

When we complete the top to bottom renovation at our Reading Cinema in Murrieta California, we expect to launch our first dine-in concept in the US in the first quarter of 2018. This concept will include waiter service before the movie begins with a full F&B menu, luxury recliner seating and a laser focus on customer service.

This dine-in concept will be featured in 6 auditoriums, each with under 40 recliner seats. We are branding this concept Spotlight with the tagline, Our Focus is on Serving You. We're pleased with the online movie ticket sales generated from our own websites in all 3 countries.

The ticket sales generated from our own websites increased by 5% over the third quarter in 2016. During the third quarter we launched our consolidated theaters ticketing app.

By the end of the fourth quarter 2017, we expect to launch ticketing apps for our other 3 US cinema brands and we're aiming to launch our Australia and New Zealand branded ticketing app by the end of second quarter, 2018.

We also anticipate increasing the sales of our gift cards by implementing sales of online gift cards in the US by the end of this year. We're expanding our Reading Cinema brand in Australia and New Zealand and we currently have 5 new theaters scheduled to open representing 35 new screens between 2017 and 2020.

Our new 8-screen Reading Cinema with TITAN LUXE and 2 Gold Lounge auditoriums will open at our Newmarket Village just outside of Brisbane in December of 2017.

And as we recently announced, we will be constructing a 5-screen Reading Cinema in the City of Traralgon in Victoria, Australia, and plan an 8-screen Reading Cinema in the South City section of Brisbane. There is also one other theater representing 6 screens in Victoria that we're working to bring online.

In New Zealand, we have one other theater outside of Auckland with 8 screens that's under contract and scheduled to open sometime in 2019. Our team in Australia and New Zealand continues to explore the market and work with landlords on new build opportunities. Now turning to our property business.

Our third quarter 2017 real estate segment revenues increased by 12% to $6 million, mainly driven by an additional installment payment of $468,000 related to the STOMP legal settlement and in Australia, new tenancies at Red Yard in Auburn, a suburb of Sydney, and Newmarket Village in Brisbane.

Our real estate segment operating income decreased by 12% to $1.5 million driven by increases in our operating expenses, depreciation and amortization, and G&A expense. The increased expenses relate primarily to the holding costs of the non-leased portion of our Culver City headquarters building which we own and fee.

Also, the third quarter of 2017 reflects costs and expenses related to the establishment of the courtyard popup concept which I'll describe shortly. I'll cover some of our highlights in our real estate portfolio in Australia. Turning to Newmarket Village in Brisbane, our board approved the enhancement of this asset back in mid-2016.

Today we're constructing an 8-screen Reading Cinema featuring a TITAN LUXE and 2 Gold Lounge auditoriums which should be open in time for Star Wars on December 14. Additionally, a new dining precinct which is about 10,000 square feet, is being constructed.

We have curated collection of 8 local and national restaurants, either under a heads-up agreement or agreement to lease for this new dining precinct. We anticipate most of them to be open and trading by the end of the year or the first quarter of next year.

In September of this year, we also completed the construction of a mezzanine parking area at Newmarket Village. We invested $14.5 million worth of CapEx during the first 9 months of 2017 for this project, bringing the total investment to $17 million.

At Red Yard in Auburn just outside of Sydney, we continue to make progress on the construction of two additional food and beverage tenants, Red Rooster and Oporto, which will add an incremental 7,400 square feet to this property. It's now expected that they will open during the first quarter of 2018.

In New Zealand, we are currently working on one major portfolio asset. On the principal that every cloud has a silver lining, 4 events in Wellington have allowed us to reshape our thinking about Courtenay Central.

First, the earthquake that hit in November of 2016, while necessitating the demolition of our 9-story parking garage, has produced to date $25 million in insurance proceeds and has opened up possibilities to increase the rental area of the center.

The second event, our grocery store tenant, Countdown, had determined to upgrade its offering to a premium grocery store. Third, a major credit tenant retailer in New Zealand has indicated a strong interest in taking a reasonably sized footprint in a potential newly constructed area.

And finally, it appears the city of Wellington is planning the construction of Peter Jackson movie museum in Wellington's first convention center immediately across the street from us.

Based on the potential for significant traffic to be generated across the street from us, in addition to our own activity at Courtenay Central, we've contemplated new and incremental uses for the project. We're considering, in addition to further retail uses, the potential for an Angelika Film Center and hotel and office uses.

We're still in the process of creating a detailed feasibility study which will not only include market studies, but will also address how seismic risk can be appropriately managed. We're working to have a fully supported master plan ready to go in early 2018.

In the interim, our Courtyard Concept, a unique pop-up food and beverage and retail concept, is keeping our center busy during the transition. It helps to support our Reading Cinema and keep the city's focus on our center as an entertainment destination.

Among other things we are now the landlord for Wellington's first venue dedicated entirely to improv theater. Also, we're expecting to host the production of the Comedy of Errors by Summer Shakespeare Wellington in February of 2018. Turning now to our undeveloped land in Manukau, New Zealand.

As you know our 64-acre parcel was rezoned to light industrial at the end of 2016. With the other 6-acre parcel already being zoned heavy industrial, we're exploring our options for the 2 parcels. Today the Auckland Manukau industrial real estate market is strong. We understand that there is a lack of land in the area to satisfy the demand.

Over the last few months, our team continues to field calls from parties interested in buying the two parcels. We could sell the property today for a nice profit. However, our business plan is to build cash flowing assets, not to sell the land on the cusp of development.

We're currently analyzing the infrastructure requirements for the next phase of adding value to this property. We plan to have more clarity on these issues in early 2018. Now I'll turn to our US real estate portfolio. I'll first touch on 44 Union Square in New York City. Construction is well underway and structural demolition had been completed.

In the fourth quarter of 2017, we expect the excavation of the basement and the foundation to be complete and the concrete superstructure to commence. The iconic glass dome that will distinguish the design of our building, is being fabricated and stored offsite.

The unique design by BKSK Architects has garnered another architectural award, the 2017 AIA Quality Unites Architectural Design Honor. We believe that while the benefits of such awards are intangible, they are nevertheless very real in making our property attractive to top tier tenants.

We continue to anticipate the redeveloped property will be ready for retail fit-out during the third quarter of 2018. On the leasing front, we continue discussions with high quality tenants regarding 100% of the retail space and high quality potential office tenants continue to visit the site.

Newmark, our leasing agent, officially launched the marketing efforts for the office space in the third quarter of 2017.

For the 9 months ended September 30, 2017 we have invested $13.4 million in new capital expenditures relating to the Union Square redevelopment project, bringing our total investment in the project to $28.1 million, including direct costs incurred in obtaining related construction financing.

A stockholder at our recent stockholder meeting expressed his view that the New York City real estate market might have peaked and that we should again consider selling our New York City real estate assets. We don't know with any certainty whether this market has or has not peaked. Reasonable people can obviously have different views on this issue.

But in any event, we're not real estate asset traders or speculators. Our mission is to build a strong property portfolio that will stand the test of time. We have a long-term business plan to develop the cash flow from our existing real estate assets and to identify new real estate assets on an opportunistic basis.

Turning to our Cinema 1, 2, and 3 property in New York City, directly across the city from Bloomingdales, today we are in active negotiations to jointly develop our property with our adjoining neighbor who owns a 2,600 square foot parcel.

We announced in June of 2017 that we executed an exclusive dealing and predevelopment agreement with these neighbors. We collectively completed a feasibility study to evaluate a joint development. We're now reviewing potential restaurant, retail, cinema and/or residential uses.

We're optimistic we can come to a final resolution of the economic terms with our neighbors. We will continue to negotiate for a reasonable period of time. However, if in our judgment we cannot find an appropriate middle ground, Reading will develop this property alone.

The participation of our neighbor is not critical to the development of this irreplaceable property. Though we were disappointed with the unfortunate dip in the industry box office, overall we're pleased with the progress we've made on our strategic plan. We believe we remain well positioned to drive long term value for all Reading stockholders.

Now I will turn the call over to Dev for a financial review of the third quarter. .

Thank you, Ellen. Now I will discuss the financial results for the 3 and 9 months ended September 30, 2017. Our results for the year were assisted by 2 one-time items. Firstly, a gain on sale of our Burwood property in Australia, and secondly, a receipt of insurance proceeds relating to our Courtenay Central ETC in Wellington, New Zealand.

To recap, Burwood is a property in greater Melbourne that we disposed of in a sale in 2014 with settlement due on or before December 31, 2017.

Our purchaser sold the first tract in the second quarter of this year and under the terms of our agreement we were entitled to 90% of the proceeds which enabled us to record the entire gain on sale of $9.4 million.

With regard to Courtenay, as Ellen has discussed earlier, we had to demolish a parking structure on the property as a result of the earthquake. Once we received the full supplement of $25 million of earthquake insurance proceeds, we recorded a book gain of $9.2 million on the depreciated value of the parking structure.

Consolidated revenues for the third quarter of 2017 decreased by 7% to $66.1 million. This was mainly due to lower admissions and food and beverage revenues, partly offset by higher real estate revenues. The current quarter's performance reflected the downturn generally in the global cinema industry resulting from less attractive film product.

Our consolidated revenues for the first 9 months of 2017 increased by 2% or $4.9 million to $208 million due to higher admissions and increased F&B revenue in our Australian cinemas offset by lower performance of our US and New Zealand cinemas.

Also, the receipt of business interruption insurance proceeds for our Courtenay Central ETC in Wellington, New Zealand relating to the closure of that facility from November 2016 to March 2017 offset by loss revenues during Q1 2017.

And finally, settlement proceeds relating to STOMP Net income attributable to RDI common shareholders decreased by $2.3 million to $1.6 million for the third quarter of 2017, and increased by $14.6 million to $23.6 million for the first 9 months of the year.

For the quarter, earnings per share decreased by $0.10 to $0.07 which was in line with the global cinema business performance as offset by increased operating income from our real estate operations.

EPS for the first 9 months of 2017 increased by $0.63 to $1.02 from the prior year period due principally to the recognition of gain on sale from our Burwood property that I just discussed and the receipt of insurance proceeds from the Wellington earthquake.

Our non-segment general and administrative expenses for the quarter and the 9 months ended September 30, 2017, compared to the same period of the prior year decreased by 6% or $263,000 and 5% or $762,000, respectively.

This decrease mainly relates to firstly, nonrecurrence of professional expenses paid in 2016 in connection with our 2015 year-end audit that related to prior years' income tax matters, and secondly, reduction in variable complication costs attributable to reversals of prior year incentive compensation accruals not deemed necessary.

These favorable changes were offset by higher legal expenses with respect to the derivative litigation, the Cotter Employment Arbitration, and other Cotter litigation matters during the quarter and 9 months ended September 30, 2017, that totaled $82,000 and $1.1 million, respectively.

In 2016, expenses related to the defense of the derivative litigation was substantially reimbursed from the company's directors and officers insurance program. Income tax expense for the quarter and 9 months ended September 30, 2017 decreased by $586,000 and increased by $4.1 million, respectively, compared to the equivalent prior-year periods.

Our tax rate for the 3 and 9 months ended September 30, 2017 were 33.7% and 26% compared to 25.3% and 31.8%, respectively, in the same period of the prior year. The differences in rates were primarily due to nontaxable income from the insurance proceeds relating to our Courtenay Central parking structure in Wellington, New Zealand.

Shifting to cash flows, our net cash provided by operations for the first 9 months of the year was $8.8 million, which represented a $5.8 million decrease from 2016 primarily driven by higher cash flows during the quarter related to the lower relative year-over-year performance and higher working capital outflows.

In regards to investing activities, net cash outflows decreased by $22.3 million, compared to the same period of 2016, to net cash used of $13.2 million, primarily due to the final insurance settlement relating to Courtenay Central which was $18.4 million net of the business interruption recoveries, and a partial prepayment from Frasers relating to the sale of our Burwood property, $16.6 million.

These were offset by expenditures related to the demolition and disposal of the parking building adjacent to the Courtenay Central ETC in Wellington, $3.5 million, and increase in capital expenditures related to our real estate development program. And finally, enhancements to our existing cinemas, together $8.8 million.

During the 9 months ended September 30, 2017, we repaid borrowings by $46.6 million and additional borrowings of $47.7 million and we spent $6.5 million in stock repurchases. Turning now to our financial position, our total assets increased to $418.1 million.

We managed our cash investments and capital structure so that we are able to meet short-term and long-term obligations for our business while maintaining financial flexibility and liquidity.

Our liquidity position remains strong with $8.9 million of cash on our balance sheet at September 30, 2017 and approximately $121.4 million of additional capacity under our borrowing arrangements in the U.S., Australia, and New Zealand with $59 million of that $121.4 million being unrestricted capacity in nature.

Of our $147.5 million of debt outstanding at September 30, 2017, only $7.5 million, which represents a loan on our Moneta and Orpheum theaters will become due within one year. We are currently in negotiations with our lender on the renewal of this loan.

Our overall global operating strategy is to conduct business mostly on a self-funding basis except for funds used to pay an appropriate share of our U.S. corporate overhead. However, we may decide to move funds between jurisdictions when circumstances merit such action.

As of September 30, 2017, our total debt outstanding was $151.3 million and our debt-to-adjusted EBITDA ratio, excluding debt allocated to facilities under construction that is not generating any EBITDA was under 2x. Regarding the Burwood property sale, we expect to receive $28.8 million of our remaining dues before the end of 2017.

And with that, I will turn the call over to Andrzej. .

Thanks, Dev. First, I'd like to thank our stockholders for forwarding questions to our Investor Relations e-mail. We were again very pleased with the number of inquiries we received despite the shortened timeframe for those that attended the annual stockholders meeting on Tuesday.

We have compiled a set of questions and answers that represents the most common questions and recurring themes that were e-mailed to us. As always, we are available after the webcast to address any additional questions and encourage you to continue reaching out. .

On the first question, you had purchased a minimum of 41,899 shares during the 4 months that the company was able to purchase shares during non-blackout periods including over 187,000 in August, yet you only purchased 5,000 shares in September.

Any explanation? Many of our competitors, such as Regal and AMC, pay rather substantial dividends to their shareholders along with robust stock buybacks. Have you considered such a dividend? You start with a $0.50 per dividend which cost about $12.5 million.

Are there any loan covenants that are preventing this?.

I think I can field this question. The purchase in August of 187,000 of our Class A shares as part of our authorized 25 million stock repurchase program included a block of 75,000 shares which we bought off market.

In September, we only purchased 5,000 shares because we exited the market earlier than the normal blackout period requirement due to opportunities that arose for an alternative use of our funds. We continually evaluate the means by which we can best return value to our stockholders including the institution of a cash dividend.

Our company has from inception not had a policy of paying cash dividends, believing that repurchasing our stock was and continues to be a better vehicle for returning value to stockholders while allowing the company better control of its cash position. Also, unlike Regal and AMC, we are more than an exhibition company.

We have substantial developer real estate holdings. We balance our use of cash between developing our real estate assets, improving our cinema chain, and buying in our shares, all of which are designed to improve the net asset value per share of our company. .

The second question. You got out of Gaslamp for profitability reasons. What other locations are in the works or possibilities for closure or lease renegotiation that would increase Reading's overall profitability? Ellen will answer that one. .

Thanks, Andrzej. So today, were not reviewing any theaters across our global circuit for closure. In the US, as part of our cinema upgrades, we do approach most of our landlords to take a stake in such renovations by providing an appropriate TI allowance.

We believe that enhanced cinema offering brings enhanced foot traffic to the landlord and that the landlord should cover a portion of the cost that created that enhanced foot traffic.

Each approach to a landlord represents a separate negotiation and in most cases leads to an overall lease amendment which in our opinion increases Reading's overall profitability. .

The next question, the company has attended a few investment conferences and begun these earnings audio costs.

What additional proactive steps will the company take to attract both sell side analysts and buy side investors to the company? What are the next investment conferences Reading plans to present at? Dev, can you take that one?.

Thank you, Andrzej. To recap, since we started our investor relations program a year and a half ago, we've participated in 9 investor conferences and nondealer roadshows. In September 2016, B. Riley's Media Equity Analysts picked up coverage on our company and we are hopeful of additional coverage in the near term.

Andrzej and I speak to other potential analysts as well as investors on a regular basis. We are scheduled to present at the Benchmark Conference in Chicago and at a nondealer roadshow in Boston next month. We've begun to make plans to meet several equity analysts at Cinema Con next April.

Also, given our significant presence in Australia and New Zealand, we are also in the initial stages of planning to meet up with institutional investors in those countries on our upcoming trips there. .

Thanks, Dev.

Next question, how active is Reading in evaluating cinema acquisitions? Are there any particular geographies you prefer Reading look for as cinema chain acquisition? Ellen?.

Part of our strategic plan is to look for and evaluate potential cinema acquisitions in each of our 3 countries. As we've said in the past, we believe our balance sheet will allow us to be competitive with other bidders for reasonably sized circuits. But it's unlikely today that we could be a bidder for a circuit with hundreds of screens or theaters.

We believe that we have the financial flexibility to acquire a small to midsized circuit in any one of our countries without impacting our existing strategic plan. But of course, each opportunity is evaluated on its own merit in order to generate the most attractive returns for our stockholders.

During the 3 of this year, we did perform due diligence on one such reasonably sized circuit in the US. Ultimately, as we are a disciplined buyer, the deal did not meet our investment criteria. We will continue took for and review opportunities across our 3 countries.

Today, we do not feel restricted to any particular geography within our 3 exiting countries. But having said this, we have plenty of opportunities within our own asset base to build stockholder value. .

Thanks, Ellen. The fifth question.

When the Union Square property is completed, what are the plans around the construction finance and what is the current outlook for that? Dev?.

Thank you, Andrzej. We have construction finance in place on Union Square until the original maturity date of December 29, 2019 with an option to extend. Once the building is completed and the rents have stabilized, we will evaluate options with regard to long term financing for the property.

Two options under consideration are corporate level and property specific finance. As we get closer to stabilization of the building, we can articulate more specific plans publicly. Upon completion, we anticipate that we will have construction debt on this property of only $57.5 million. .

Thanks, Dev. And now we reach our final question.

What are the next steps in the trust litigation, specifically the auction solicitation?.

I think I can answer that one. We have nothing further to say about the trust litigation beyond the disclosure in our previous public filings. With this last question, I'll wrap up the call. Dev, Ellen and I are available as usual for any follow-up calls. So please do not hesitate to reach out.

We appreciate you listening to the call today, and look forward to keeping you updated on our performance on future earnings calls and through our ongoing communications..