Andrzej Matyczynski - EVP of Global Operations Devasis Ghose - CFO, EVP, Treasurer and Corporate Secretary Ellen Cotter - Chairperson, CEO, President and COO of Domestic Cinema.

Analysts:.

Thank you for joining Reading International's Earnings Call to discuss our 2017 Second 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 risk, 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 second quarter earnings release on the company's website.

In today's call, we will also use an industry accepted financial measure court 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 all about the financial results for the 2017 second quarter and 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've tried to address many of your questions in our prepared remarks. And as always, we are available for follow-up calls to discuss our operations and strategy.

As you saw in our earnings release the $19 million of net income represented highest net income for any quarter in Reading's history. This was largely driven by 2 one-time events. First, the full recognition of the gain on the sale of our Burwood property in Melbourne, that sale contract was executed in May 2014.

Further terms of the May 2014 contract, we received a partial prepayment on June 19, 2017 of $16.5 million, due to an early partial sale by the purchase of Burwood. Once we received this partial prepayment, the relevant accounting standards allowed us to recognize the full gain, on the sale of Burwood.

Additionally, our record setting net income was driven by another onetime event. The second quarter gain generated by our receipt of Courtenay Central insurance proceeds related to the November, 2016 Earthquake in Wellington, New Zealand. Dev will give you a bit more color on each of these events in few minutes.

And while these onetime items help drive our record net income for the quarter, we also continue to deliver solid operating performance. At $72.4 million our total operating revenues for the second highest of any company quarter on record, and up 8% over the same period in 2016.

Over this last quarter, our cinemas in Australia reported total revenues up $25.4 million, which represented the second highest on record. In addition, our cinemas in New Zealand generated total revenues of $8.6 million, which is also the second highest quarter on record. And in the U.S., despite a weaker film slate, our U.S.

theaters enjoyed a slight increase in total revenues compared to the same quarter in 2016. As many of you have observed, the cinema industry has just recently undergone a very well publicized and from our perspective overblown critic. As people who worked for years in our business understand the box office will always fluctuate based on the product.

For every King Arthur, there is a Wonder Woman, which just grows just over $400 million domestically to date, and is now ranked the third highest grossing movie that Warner Bros. has ever released, it is the clips The Harry Potter series. Our long-held faith in our industry was recently confirmed as we watched Baby Driver and Dunkirk.

Both of these movies were original, brilliant each in [indiscernible] each absolutely, needed to be seen on the big screen. We believe you need to view the last quarter and this upcoming box office quarter through that lens. Now, as it relates to our Cinema business. We are differentiated and diversified from 2 perspectives.

In the United States, we not only run commercial theaters tied to the major studio box office, but 12 of our 27 theaters depend on specialty or Angelica type of programming. Additionally, having cinema operations in our Australia, New Zealand, gives us further diversification protection.

The release schedule and each of these countries can vary from the U.S. to a certain extent, thereby, impacting our results. And we have historically received a boost from the locally produced film product in each of these markets. Our consolidated second quarter cinema revenues increased by 6% to $67.4 million compared to the same period last year.

And our cinemas segment operating income increased by 7% to $9.8 million over the prior year quarter. Australia Cinema revenue increased by 13% or $3 million for the quarter, primarily due to an increase in attendance and stronger foreign exchange rates.

In New Zealand, Cinema revenue increased by 7% or $585,000 for the quarter mainly due to the stronger exchange rates and the Courtenay Central business interruption insurance proceeds, representing $861,000 or NZD 1.2 million.

In the United States, as I mentioned our total cinema revenues increased slightly by $410,000 compared to the same period last year. We've been asked by an investor to accurately breakdown our Cinema revenues by country. In other words, of our total Cinema revenues what percentage does each country represent? For the second quarter 2017, in U.S.

dollars, our Cinema revenues broke down as follows, 50% for the United States, 37% for Australia, 13% for New Zealand. Comparatively, in the second quarter of 2016, our Cinema revenue broke down as follows, 52% for the United States, 35% for Australia, and 13% for New Zealand.

So as you can see, our Australian Cinema revenues have increased slightly based on this allocation. We received a number of questions this quarter about our Australian and New Zealand cinema operations, which are led by Wayne Smith.

Firstly, what is our competitive advantage in Australia and New Zealand? The key to the success of our international Cinema operations is a laser focus on all aspects of customer service. Our Cinemas are designed and built to create the best cinematic experience for our guests.

To build brand loyalty and repeat visits, we endeavour to offer the most appealing and entertaining style of customer service. We are less concentrated in central business district locations and try to appeal to and expand the programming desires of our customers, which are not always inline with the taste of the CBD audience.

And finally, we strive to understand the pricing needs of our guests. Simply our strategy is to offer value for the Cinema dollar. Our focus strategy on the customer works and needs to circuit are quite successful in gaining market share. We also received questions about how the box office in each of the 3 countries might impact our results.

As the studious make an effort to generally think of release date across the globe, the box office trend in Australia and New Zealand broadly follow the United States. However, the theatrical release date can vary based on each country's specific holiday schedule. Family films often have a different release date, which can impact quarterly results.

For instance, Despicable Me 3 opened in Australia on June 15, 2017, but opened in United States on Friday, June 30, and on June 29, in New Zealand. In this case, Australia had the benefit of few high grossing weeks in the second quarter of 2017.

While the United States and New Zealand will mostly have Despicable Me 3 results reflected in the third quarter. Also, there is some programming differences that account for quarterly fluctuations.

For instance, the Hunt for the Wilder People, a local New Zealand film in that country's highest grossing movie ever opened in New Zealand on March 31, 2016. So New Zealand's second quarter of 2017 lack comparable film. Now let me provide more detail on the progress we made on executing our global Cinema strategy.

As I mentioned previously, presentation is paramount to our strategy of delivering best-in-class cinematic experiences to our guests. We deliver state-of-the-art presentation mostly through our branded premium auditorium, TITAN XC, and now TITAN. The U.S.

circuit's first TITAN XC screen featuring Dolby at most sound was installed on the Mainland this quarter, on May 5, at Grossmont San Diego. The Titan screen opened together with the launch of value pricing at that theater and the release of Guardians of the Galaxy.

Our strategic focus on food and beverage continues across each of our Cinema circuits, and it's helping drive our performance. Our second quarter 2017 U.S. and New Zealand food and beverage per caps achieved record highs at $4.97 and $3.93 respectively, and also calculated in functional currency.

In the United States, we outperformed certain leading competitors. Our U.S. F&B revenues increased by 3.8% or the same period last year, and New Zealand F&B revenues increased by 7.3% over the second quarter in 2016.

In May 2017, with the previously acquired liquor license, alcohol sales were launched at the Tower Theater in Sacramento, a fourth California location in addition to Angelica Caramel Mountain, Grossmont and Town Square. Our Q2 F&B revenue were positively impacted by this new offering.

Our F&B revenue per Australian circuit on a functional currency basis increased by 17.2% for the second quarter in 2017 compared to the same quarter last year. We’re also encouraged with the online movie ticket sales generated from our own website in all 3 countries.

That ticket sales generated from our own website increased by 61% over the second quarter in 2016. And further improvements in our social media engagement across Australia, New Zealand and Hawaii are helping to poster our own online ticket sales. In the next few weeks, we will soft launch our first ticketing app for one of our U.S. brands.

With a view to launching apps for all global Cinema brands by the end of fourth quarter 2017. Turning to our 2017 Cinema CapEx program. Throughout the second quarter, we continue to progress our top to bottom renovation plan for our Reading Cinema's at Muriatic [ph] California and Manville, New Jersey, which collectively represent 29 screens.

We also further the plans the completion of the second phase of the consolidated theatre renovation at Ward’s Village in Honolulu. During the quarter, we also progressed renovation plans for 2 Reading Cinema's in Australia representing 19 screens.

These renovations, which are all targeted to be materially completed by the end of 2017, will include the installation of luxury recliner seating. And some will now include adding our improving Titan screens, modification to accommodate an enhanced food and beverage menu, and lobby design changes.

In the United States, we are hoping to soon announce plans for the conversion of another Reading Cinema to Angelika Film Center. In Australia, since June, 2015 our board has approved the construction of additional 4 theaters representing 27 screens. We expect that these theaters will become operational between 2017 to 2020.

We recently announced the construction of a 5 screen Reading Cinema located in the City of Traralgon in Victoria, Australia. The Traralgon central business district site is being redeveloped now to include additional dining bar and hotel facilities, and now new Cinema facilities.

We also publicly announced an 8-screen Reading Cinema in the south city area of Brisbane. Additionally, our new 8-screen Reading Cinema with Titan screen at new market village just outside of Brisbane is well under construction and continues to be anticipated to open by the end of 2017.

There is also a theater with 6 screens that we are working on to bring online soon. Our team in Australia continues to explore the market and work with landlords on new build opportunities. In New Zealand, we have one other theater with 7 screens that's under contract and schedule to open sometime in 2019.

We received questions from investors about our Cinema acquisition strategy. We always evaluate opportunities that advance our overall strategy and provide attractive returns for our stockholders. This includes potential Cinema acquisitions in Australia and New Zealand, as well as in the United States.

Today, we believe that our balance sheet would allow us to be competitive with other bidders for reasonably sized circuits. But it's unlikely that today, we will be a bidder for our circuit with 150 theaters.

We believe that we have the financial flexibility to acquire a small to mid-size circuit in any one of our countries without impacting our existing 3 year plan. But, of course, each opportunity is evaluated on its own merit in order to generate the most attractive returns for our stockholders.

I’d also note that our company is a disciplined buyer as our philosophy is to remain physically conservative in terms of our theater level cash flow acquisition multiples. Now, turning to our real estate business.

Our second quarter 2017 consolidated real estate revenues increased by 30% to $6.9 million and our real estate segment operating income increased by 38% to $2.8 million.

These increases were primarily attributable to the insurance proceeds we received related to the Courtenay Central business interruption insurance and settlement proceeds received from the producers of Stomp.

These were offset by a significant increase in our real estate segment, G&A expenses due to the needed [ph] expansion of our Australian and New Zealand real estate team to manage our growing portfolio.

I'll also note that like that our real estate like our Cinema business is diversified and that we have significant real estate assets in each of the United States, Australia and New Zealand. I'll first cover our real estate portfolio in New Zealand. As you know, we had to close Courtenay Central in Wellington in November, 2016, due to the earthquake.

At the start of the second quarter, we reopened Courtenay Central. Our Reading Cinemas, McDonald and other tenants are all operating again. And the land under our now demolished parking garage temporarily offers 130 on grade parking spots. The demolition of our parking garage has providing an opportunity to rethink the entire project.

Having the chance to reconstruct the garage has allowed us to engage with countdown, our supermarket tenant to create better access and integration to our center for their incur tenancy. This re-evaluation has allowed us to potentially add more retail space on the ground floor of our soon to be newly constructed parking garage.

We also anticipate adding more retail and other users on our Wakefield Street property in other words new countdown building. Assuming these new retail spaces and uses are fully implemented, they will add significantly more traffic to our Courtenay Central property, with spend needs to new thinking about the existing food court area.

In other words, how do we maximize the space in the food court area to support the incremental customer traffic? The Peter Jackson movie museum scheduled to be built right across the street from our new count on building makes our project more attractive to a variety of tenants and potentially more valuable.

Our master plan for re-imagine Courtenay Central is scheduled to be presented to our Board of Directors for review sometime during the fourth quarter of 2017. Just before the end of the second quarter, we launched the courtyard concept of Courtenay Central.

With the courtyard, we made a relatively small investment of under a $0.5 million in our existing rundown food court space. We activated the space to create Wellington's first indoor pop up food and entertainment experience.

We added 8 new short term F&B tenants to serve a variety of street food from Indonesian to handcrafted, filter coffee and pretzels. In addition, we added entertainment elements to the space to ensure that Courtenay Central will offer compelling experiences during our transitional period. Dev and I just come back from Wellington a few weeks ago.

We both agreed that our opportunity in Wellington is exciting and we look forward to keeping you updated. Turning to Manukau. The light industrial rezoning of our second Manukau parcel, we’re continuing to evaluate all options for this property.

I just recently visited our property, which is at the southern end of the Oregon airport towards the market and met with our consulting team. Auckland is experiencing significant growth, but it's hampered by the lack of housing and industrial property.

The airport a publicly traded entity has significant expansion plans to accommodate both the cities and countries growth. Over the last few months, our team is build across from a variety of parties interested in purchasing the property.

We are evaluating this opportunity thoughtfully and carefully, and we're committed to perceiving down the path that best drive the long-term value for our shareholders. Currently, we are evaluating the sale of this property, joint venturing with an experienced industrial real estate developer or developing the property alone.

Before a decision is made, we're gathering all of the necessary information to ensure the best possible outcome, including determining the cost in extent of infrastructure works required to begin development. We plan to have a more defined strategy from Manukau in early 2018. Turning to Newmarket Village in Brisbane, Australia.

Construction continues to progress on our state-of-the-art 8-screen Reading Cinema tighten auditorium, a new 10,000-square-foot dining cuisine [ph] and parking mezzanine. We're still targeting a fourth quarter 2017 opening.

With the help of Jones Lang LaSalle to date we signed heads of agreement to lease for 6 F&B tenant, which represents 75% of the new dining cuisine. Our team in Australia had developed an impressive effective and quality mix of food and beverage retailers.

At Redyard in Auburn, just outside of Sydney, we recently opened Chicago Jones coffee and Chocolate Maison, a newly constructed tenant adding incremental rent revenue and income. Two additional incremental dining tenancies Red Rooster and Al Porto [ph] are now under construction and will come online in the fourth quarter of 2017.

Additionally, we are progressing the plans to overhaul the common areas of Redyard to create a more inviting physical environment for our guests. Turning now to the United States and our 44 Union Square project in New York City. Construction is well underway, many of you who live in New York can see the progress we're making.

The upper floors of the building, the old theater balcony and the southern and eastern walls have been demolished, the northern and western walls have embraced, and what you can't see is the ongoing fabrication of the steel frame of our iconic dome that's taking place in Germany.

The question was raised what's your deadline for making a decision on Union Square tenants? We don't have a specific deadline. Our construction is moving a pace and we're targeting having retailers in the space for fit out in 2018.

In our Form 10-Q, we disclosed that we anticipate that this will likely happen in or before the end of the third quarter of 2018. The drumbeat of negative retail news might have given some retailers the impression that they have more leverage than they had as few years ago. Despite this, our development and leasing teams remained bullish.

New York City generally and Union Square in particular remains one of the world's most important retail markets. And we're confident that is the construction nears completion, the cant and mouse game between the tenant brokers and owners have shift in our favor because of the uniqueness of the space and its great location.

Retailers of the level we're targeting need a physical presence in Manhattan.

In the last few months, we've exchange retail proposals of globally recognized creditworthy retailers that are existing New York City retailers with expiring leases, who need to relocate to a new strategic New York City location or international tenants looking for a new flagship presence in New York.

We invite you again, to visit our website at 44unionsquare.com for additional information about the project. As we've said earlier, our marketing for office space starts officially in September of 2017.

Even though marketing hasn't even officially begun interest in its boutique office space offering, one-of-a-kind iconic glass dome is already building. Requests have been made to us over the last few months to prepare deliver proposals to a number of creditworthy office tenants. The early interest is encouraging.

Another question came in as to whether management was somehow moving away from Reading's historic practice of not constructing on spec. I would note that Reading has over the year’s commenced construction on projects where our Cinema anchor was the only tenant in place.

In other cases, we move forward with only a single third-party anchored tenant in place. Furthermore, we believe there is a material difference between a construction project basing on to Union Square in Manhattan and in the project in a vast well-established market. Our Union Square project is unique.

In deed, as I mentioned last quarter at the end of 2016, a new appraisal was done in connection with the $57.5 million in construction financing for the project. That appraisal confirmed our analysis that just by completing our construction, which significantly increased the value of the Union Square building for you our stockholders.

Our construction is fully funded and we do not intend to be rushed into taking a less than optimal deal for this great piece of real estate. Our purpose is not to accept any deal, but the best deal. A deal that will add long-term value to this key asset. With respect to our Cinema 1, 2 and 3 project in New York City.

In early June 2017, we announced the execution of an exclusive dealing a predevelopment agreement to jointly develop our Cinema 1, 2 and 3 property in New York with our neighbour the owner of 2 restaurants at 60th Street and Third Avenue.

We are thrilled to be working alongside at Nick Tsoulos and Nick Pashalis and believe that our new development will provide material incremental value for both partners. The parties will be working through the matters described in the agreement over the next several months. We have more to report in 2018.

A question arose about whether Reading and its partner believe that the market in New York is peaking again. Our partners have indicated to us that they are looking to create long-term value for their families. Similarly, Reading is creating long-term value for its stockholders.

Our goal is to create a project that will weather the ups and downs of New York City real estate cycle. Overall, we’re pleased with our results for the quarter and a progress we’re making on our strategic plan. We believe we will remain well-positioned to drive long-term value for all Reading stockholders.

With that, I’ll turn the call over to Dev for financial review of the second quarter..

Thank you, Ellen. Now I’ll discuss the financial results for 2017 second quarter. As Ellen mentioned, revenue for the second quarter of 2017 represented the second highest level achieved for any quarter in the history of the company. Our net income for the second quarter represented the highest level for any quarter in the company's history.

Our results were assisted by two onetime items, a gain on sale of our Burwood property in Australia and the receipt of insurance proceeds relating to our Courtenay Central ETC in Wellington, New Zealand. Consolidated revenues for the second quarter of 2017, increased by 8% to $72.4 million.

This is mainly due to higher admissions and increased food and beverage revenues in our Australian Cinemas, business interruption proceeds for the closure period of our Courtenay Central ETC in Wellington, and settlement proceeds relating to Stomp currently playing at our Orpheum Theatre in New York.

Our Courtenay Central ETC has since reopened on March 29, 2017. Our revenues for the first half of 2017 also increased by 8% or $10.2 million to a $141.9 million for similar reasons. Net income increased by $16.1 million to $19 million for the second quarter of 2017, and by $16.9 million to $22.1 million for the first half of the year.

For the quarter, EPS earnings per share increased by $0.69 to $0.82 due to firstly, and $885,000 increase net of taxes in segment operating income due to higher operating results, including the impact of business interruption insurance recoveries, which offset loss profits recognized during the first quarter of 2017.

These increased our basic earnings per share by $0.04. Secondly, a $6.7 million gain net of taxes on the sale of our Burwood property, which contributed $0.29 increase in our basic EPS. And thirdly, an $8.4 million gain net of taxes on insurance recoveries on Courtenay Central.

This is net of business interruption money, which enhanced our basic EPS by $0.36. Earnings per share for the first half of 2017 increased by $0.73 to $0.95 for the prior year period, mainly attributable to the following. Firstly, a $1.3 million in segment operating income due to higher operating results, which increased our basic EPS by $0.06.

A $6.4 million increase in gain, net of the tax effect for the sale of the Burwood property, which was net of the gain on another property during first quarter of 2016 that contributed $0.28 increase in our basic earnings per share.

And thirdly, an $8.4 million gain net of taxes on insurance recoveries for Courtenay Central, again, net of business interruption recoveries, which enhanced our basic earnings per share by $0.36.

Our non-segment general and administrative expenses for the quarter and the six months ended June 30, 2017, compared to the same period of the prior year decreased by 5% or $261,000 and 5% or $500,000 for the six months, respectively.

This decrease mainly relates to additional expenses paid in 2016 in connection with our 2015 year end audit, 280,000 and 780,000 for the quarter and the six months ended June 30, 2017.

Legal expenses incurred, which are included within the general and administrative expenses category, included expenses for the derivative litigation, the cotter employment arbitration, other cotter litigation matters during the quarter and 6 months ended June 30, 2017 totalled $387,000 and $1 million respectively.

In 2016, expenses related to the defense of the derivative litigation was substantially reimbursed from the company's director and officers insurance program. Income tax expense for the quarter and 6 months ended June 30, 2017 increased by $4.2 million and $4.7 million respectively, compared to the equivalent prior year period.

Our tax rate for the 3 and 6 months ended June 30, 2017 were 23% and 25.5% compared to 36.3% and 36.0% respectively in the same period of the prior year.

These differences in rates were primarily due to the significant increase in pretax income, offset by foreign earnings considered in indefinitely [ph] reinvested, a decrease in our evaluation allowance and non-taxable income from insurance proceeds.

Shifting to cash flows, our net cash provided from operations for the first half of the year was $6 million, which is $2.5 million decrease from 2016.

Slightly higher operational cash flows due to higher operating results were more than offset by higher cash outflows from expenses relating to film rent, and legal expenses that have been accrued in the prior period.

In regards to our investing activities, net cash increased by $30.1 million, compared to the same period of 2016, to net cash provided of $6.8 million, primarily due to the final insurance settlement related to our Courtenay Central earthquake damage to the $18.4 million net of business interruption recoveries, as well as the partial payment from Frasers Australand [ph] relating to the sale of our Burwood property $16.6 million, offset by expenditures relating to the demolition and disposal of the parking building adjacent to our Courtenay Central ETC in Wellington to $3.2 million.

We repaid borrowings of $15.4 million, and had additional borrowings of $22.9 million and $3.4 million in stock repurchases. Turning now to our financial position, our total assets decreased marginally to $4.4 million.

Our cash and cash equivalents decreased by $5.9 million to $13.1 million, of this amount, $4.0 million and $1.2 million was held by our Australia and New Zealand subsidiaries, respectively.

Our intention now is to indefinitely reinvest Australian earnings, but we have not yet made a decision about indefinitely reinvesting New Zealand earnings, as we have thus far had net operating losses there. If the Australian earnings were used to fund U.S. operations, there would be subject to additional income tax upon repatriation.

We manage 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 $13.1 million of cash on our balance sheet at June 30, 2017, and approximately $137.5 million of additional capacity under our borrowing arrangements. At this time, in the U.S., Australia, New Zealand with $74.8 million of that $137.5 million being unrestricted.

During the quarter, we were able to increase our mortgage loan on our headquarters building by $1.5 million. Additionally, we have worked with Westpac bank regarding our primary line of credit in New Zealand and have pushed out the maturity date to December 31, 2018, which postpones this facility become incurrent until the end of this year.

Subsequently in June 2017, we fully paid down our loan balance using the cash received from the insurance settlement.

With regard to Courtenay Central, we received the final insurance settlement of $20 million from our insurer in May, 2017 effectively taking us to the $25 million earthquake coverage sublimate [ph] We recognize the total gain of $10.7 million on New Zealand dollars $14.8 million, 1.5 million, which represents NZD 2.1 million that is recovery on our lost business profits during the period of closure from November 2016 to March 2017.

While the earthquake slowed the redevelopment activities in progress at the location, the demolition of the parking structure has opened additional expansion opportunities for our courtyard property.

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 periodic decide to move funds between jurisdictions when circumstances merit such action.

For example, given the interest savings generated by using funds through the repayment of inter-company loans by our Australian subsidiary, to finance a portion of Union Square redevelopment project, rather than paying for high interest rate mezzanine loans, which will yield overall notional, all in interests saving of approximately 10%.

We move $20 million of our inter-company loan to short term from a long-term designation category. Effectively, we sourced part of our Union Square financing needs from our available credit line in Australia and moved it from our Australian subsidiary to the U.S. as the repayment of inter-company loans.

As a result, we recorded a gain of $820,000, which represented the foreign currency movement on the short term inter-company loan for the 6 months ended- sorry, June 30, 2017.

At June 30, 2017, we have debt outstanding of $134.8 million and our debt-to-EBITDA ratio, excluding debt allocated to facilities under construction that is funds not generating an EBITDA was 1.51 times.

Lastly, Frasers [ph] the buyer of our Burwood property completed the sale of 6 acres of the total 50.6 acre undeveloped parcel to a third-party in June, 2017. As part of the sale agreement for our Burwood property in Austria, we collected an amount of $16.5 million or AUD$21.8 million, which represented 19% of the sales price of that parcel.

And this permitted us to record the full transaction gain of $9.4 million or AUD12.5 million. The remaining receivable of $28.1 million or AUD36.7 million is expected to be fully recovered on or before December 31, 2017. We would also like to note that our 2017 Annual Shareholders Meeting of the company will be held in November, 2017.

And with that, I'll turn the call back over to Andrzej..

Thanks, Dev. First, I’d like to thank our stockholders for holding [ph] questions to our Investor Relations e-mail. We were very pleased with the number of inquiries we have received. We have compiled the 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 to us..

Operator:.

Our first question was regarding stock buyback program, can you comment on that? And how many shares did you repurchase during the quarter?.

I will fill that answer. In early March of this year, the Reading board authorized stock repurchase program to repurchase up to $25 million of shares Reading shares, this was the largest stock repurchase authorized in the company's history.

The program demonstrates our confidence in the business plan, our future prospects, and our commitment to driving stockholder value. The company chose not to be in the market during the period when we close the window for trading via insiders. We prefer to maintain the flexibility and making buyback decisions rather than adopting a 10b5-1 plan.

As result, in the trading window between the first and second quarters, we were active in the market to the tune of 169,050 shares at a cost of approximately $2.7 million. At this point, the company has repurchased 210,949 shares, at cost of $3.4 million under the currently authorized plan.

I would like to further note that the company subject to the technical rules of the SEC and NASDAQ that limit the timing and the number of shares that can be purchased..

Our second question we have received. What have been your efforts to unlocking stockholder value? Have you considered instituting a dividend? Will, let Dev handle that one..

It's been a little over year since we instituted a more vigorous Investor Relations program, and launched Cinema and real estate development priorities. We are pleased with our efforts thus far. Clearly, this is the work in progress, and there is more to be done over time.

On the Investor Relations front, we are working to augment for the sales side analyst coverage, and additional investor outreach. We continue to execute on our 3 year business plan that we outlined earlier this year.

And in addition, Andrzej talked about our new stock buyback program, as the Real Estate segment increases, as a percentage of our overall asset base over time, we will certainly further evaluate the efficacy of the instituting a dividend policy. .

Thanks Dev..

The next question what should investors know about non-recurring transactions for the year thus far? Again, dev..

Thanks, Andrzej. Just to summarize, again, so three things here. We received enough of the sale proceeds from our Burwood property for us to be required to record the full gain on sale of that property.

We've included this gain, with an adjusted EBITDA as we view ourselves in part as a real estate company and one that will over time would have sales of property in the normal course of business. Secondly, we've now received the full $25 million due to us for insurance related to damage to our Courtenay Central ETC.

These amounts have been passed between insurance recovery for loss profits and costs incurred, while the property was closed, reimbursement for the basis of property, that had to be demolished and the balance is the gain on recovery from the insurance company, and this amount has been taken out of adjusted EBITDA for fuller disclosure.

And then finally, Stomp settlement moneys received a $675,000. .

Thanks, Dave. Our next question..

Why were your U.S.

margins down substantially when the admission revenues was slightly down, and food and beverage revenue was strong? Ellen, could you handle this?.

Compared to the second quarter in 2016, our U.S. Cinema box office decreased slightly by about 1%, while our U.S. Cinema operating income decreased by 35%. Our successful Olino Cinema in Hawaii opened during the fourth quarter of 2016 has strengthened the overall U.S. Cinema box office circuit in 2017. Also our U.S.

Cinema F&B revenues were strong across the circuit increasing by 4% compared to the second quarter in 2016. These positive revenue enhancements could not out weight a few factors that have negatively impacted this circuit operating income.

Firstly, the overall weaker film slate from the major studios affected our commercial theaters across the circuit. And a weaker film slate from the specialty film distributors negatively impacted our dedicated art houses. Last year, our dedicated art houses drive with films like, The Lobster and Love & Friendship.

Despite this reduction in revenue, we can only reduce our operating expenses by so much, each theater has a certain level of fixed operating expense that just cannot be adjusted. .

Thanks, Ellen. We have a question following up on the status of leasing of our unused corporate headquarter space.

When will the G&A expenses reflect the $350,000 annual run rate savings from the headquarters building net leasing revenues?.

I think I will address that one. We've completed the sit out and the occupation of our corporate headquarter space, and also brought the lease space to a pre fit-out level. Our recently revamped lease marketing campaign has borne fruit with several potential leasing tenants interested in the property.

While operating expenses are in line with estimates, until we secure a tenant, our projected savings will not be reflected in our income statement..

The next question what do you believe the likelihood is that the California court in the cotter living trust litigation will order a sale of stock representing controlling interest in Reading, and what is the company's anticipated response to any such order? Ellen?.

I'll respond to that question both on behalf of our company and on behalf of my sister Margaret and myself. At this time, it will be speculation to attempt to protect what the California court will do.

Margaret and I believe that the applicable trust documents do not permit a sale of the Reading boarding stock held by the Cotter living trust, that have made that argument to the court. We have further revised the court that if there is to be a sale of these shares that Margaret and I intend to participate as potential purchasers of those shares.

Margaret and I have great confidence in Reading's future. Our results over the past several years have been strong. We have a number of major real estate projects that are in various stages of development.

Also, the board at Reading has established a special committee of non-cotter independent directors, which committee will evaluate matters related to any such event, and we'll take such steps that the committee believe to be in the best interest of the company and all of its stockholders. .

And with that, we'll move to our last question.

What are the next investment conferences, Reading plans to present at? And what additional proactive steps will the company take to attract both sell side analyst and buy side investors to the company?.

This year, we presented at the B. Riley conference in May and the Gabelli Conference in June. We'll also participate in the Gateway conference in San Francisco in early September, as well as the B. Riley consumer conference in New York at the end of September.

We are considering our participation in one more investor conference in mid-December in Chicago and will keep you updated. In addition to our goal of B. Riley, the company's first ever sell side analyst, Dev and I continue to have conversations with other sell side analysts to encourage them to initiate coverage of our company.

To further that goal, Dev, and I will be doing a non road show in mid-August in the Milwaukee Chicago area. We will continue to communicate our value proposition to the market, and look forward to keeping stockholders updated on our progress..

With this last question, I'll wrap up the call. We hope you will found the information provided useful. As usual, Dev, Ellen and I are available 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. Thank you..