Thank you for joining Reading International earnings call to discuss our 2017 full year and fourth quarter results. My name is Andrzej Matyczynski. I'm Reading's Executive Vice President of Global Operations. With me, as usual, 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, and 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 full year and fourth quarter earnings release on the company's website.

In today's call, we 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-K..

So with that behind us, Dev will be talking to us about the financial results for the full year and fourth quarter a little later. But first, I'll turn the call over to Ellen who'll update us on the company's operations for what has turned out to be an exciting year for the company. .

Thanks, Andrzej, and thank you, everyone, for joining us today and sending in your questions. Like we've done in the past, we'd try to address as many questions as we could in our prepared remarks. And as always, we're available for follow-up calls to discuss our operations and strategy..

2017 was a terrific year for Reading. In 2017, we set all-time record highs for total revenues of $279.7 million, EBITDA of $57.5 million, net income of $31 million and basic earnings per share of $1.35.

Our record results were helped by solid performance in our cinema divisions despite some hurdles that I'll talk about, the $9.4 million gain on the sale of our Burwood land in Australia and the receipt of $25 million of insurance recovery received for damage caused by the fourth quarter 2016 earthquake in Wellington, New Zealand..

In 2017, we invested just about $77 million in capital improvements in both our existing real estate and cinema portfolios. During the year, we made substantial progress on 2 property projects, our 44 Union Square project in New York City and Newmarket Village in Australia.

With each of these projects, we continue to build the value in our real estate portfolio, which will, in turn, deliver greater value for our stockholders..

firstly, a dip in the industry-wide box office in the second and third quarters of 2017 when the slate from the major studios lacked the real punch it had in the previous 2 record-breaking years of 2016 and 2015.

And in the United States where our cinema business offers the further diversification of specialty film through our Angelika brand, the 2017 specialty box office was not as strong as 2016 when we had releases like Moonlight, The Lobster, Cafe Society, Manchester by the Sea and La La Land..

Secondly, our income decreased because of temporary cinema closures. Our Reading Cinema at Courtenay Central New Zealand was closed for most of the first quarter of 2017 due to the Wellington earthquake. And in the United States, our short-term income took a hit as we upgraded our U.S. cinema circuit for the future.

In the U.S., a few of our strongest U.S. cinemas were down for significant renovations. By the end of the year, we added recliner seating to 43 auditoriums, 4 TITAN LUXE screens, 1 TITAN XC screen and F&B upgrades to 6 theaters..

The Last Jedi and Wonder Woman..

Our cinemas in New Zealand experienced a slight decline in cinema revenue compared to 2016, mainly due again to the first quarter 2017 temporary closure of our Reading Cinema at Courtenay Central, which is actually one of our best-performing New Zealand cinemas.

Despite this closure, our cinema cash flow represented the highest on record for New Zealand..

In the U.S., our cinema revenues were essentially flat with 2016, a decrease of 1%. Our U.S. cinema income dipped to $7.2 million as a result of the theater closures for renovation. Despite this, the box office performance of our U.S. theaters outperformed the overall industry box office by just about 1 percentage point..

For the fourth quarter of 2017, our consolidated revenues for the company hit a record fourth quarter, again primarily driven by our 3 cinema divisions..

Our fourth quarter cinema revenues increased by 5% to $67.4 million versus 2016, supported by strong performance in each of our Australian and New Zealand cinema divisions. Our cinema segment operating income decreased by 18% or $1.6 million compared to the full year 2016.

Again, this temporary dip in income resulted from cinema downtime when we continue to bear much of our fixed costs, while our renovations proceeded..

In 2017, we continued to execute on our global cinema strategy. Our goal 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 with uniquely lobby-designed spaces.

The execution of this strategy was illustrated in the fourth quarter of 2017 with the opening of our Reading cinemas at Newmarket Village, a center that Reading owns in Queensland, Australia. We opened an 8-screen Reading Cinema featuring a TITAN LUXE with a 23-meter high screen and Dolby ATMOS sound.

The theater also features 2 Gold Lounge auditoriums where we offer a full F&B menu through in-cinema waiter service. The theater, located in an affluent suburb of Brisbane, is the most stunning cinema we've built in Australia to date and has delighted its audiences since its opening in December of 2017..

In Australia, at our Rouse Hill theater in New South Wales, we added a TITAN LUXE and a premium screen, each of which features recliner seating. And at Reading Cinemas in Belmont in Western Australia, we also added 2 premium screens offering recliner seats..

In the United States, we substantially progressed upgrading of our existing cinema portfolio in 2017. First, we closed our Reading Cinema in Murrieta, California to complete a full top-to-bottom renovation in Q4 2017. By the end of December, we had installed recliner seating in all 17 screens and created 2 TITAN LUXE auditoriums.

We'll soon be offering a full F&B menu, including craft beer, wine and spirits..

At the end of 2017, we reopened 6 auditoriums at our Reading Cinemas in Manville, New Jersey where we installed recliner seats and converted 1 auditorium to a TITAN LUXE. The remaining 6 theaters are expected to open with recliner seating in the second quarter of 2018..

In Hawaii, we installed recliner seating in all 12 auditoriums of our Consolidated Theatre at the Pearlridge mall. .

At our Consolidated Theatre at the Ward Village, we completed the installation of recliner seating in 8 additional auditoriums. We also converted our existing TITAN XC auditorium to a TITAN LUXE by installing recliner seating. And finally, we converted a screen at our Grossmont theater in San Diego to a TITAN XC..

Our strategic focus on food and beverage continues across each of our cinema circuits and is helping drive our performance. For the full year 2017, our U.S. circuit achieved a record-high F&B per cap of $4.78. Our F&B per cap in New Zealand also achieved a record high at NZD 3.96..

In the U.S., we outperformed at least one of our publicly traded competitors. .

Each of our 3 cinema divisions set F&B revenue records for the year ended 2017. Our U.S. F&B revenues increased by just about 1% over 2016. In Australia and New Zealand, our F&B revenues in functional currency increased by 7.7% and 3.9%, respectively, against 2016. For the fourth quarter 2017, both our U.S.

and New Zealand circuits achieved record-high fourth quarter F&B per cap..

For the fourth quarter 2017, our U.S. food and beverage revenues decreased by 2.9% versus 2016. In Australia and New Zealand, our F&B revenues, again in functional currency, compared to the fourth quarter of 2016 increased by 14.9% and 33.7%, respectively..

At the end of the first quarter 2018, we expect to launch our first dine-in concept in the United States in 2018 at Reading Cinemas in Murrieta, California. 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 of which has 40 recliner seats. We're branding this option Spotlight with the tagline, our focus is on serving you..

We continue to increase our revenue through our online ticketing capabilities. In 2017, we increased our online gross service fee revenue to $3 million, which represented a 60% increase from 2016. In 2017, we also launched ticketing apps across each of our U.S. cinema brands.

We're aiming to launch our Australian and New Zealand-branded ticketing apps by the end of the third quarter 2018..

As we announced earlier, in 2017, we executed agreements for lease for a new Reading Cinema at South City Square, an exciting mixed-use development in Brisbane; and a new Reading Cinemas in Traralgon, a suburb in Victoria. We signed another agreement to lease the first cinema in Victoria. We'll announce the location when our developer owner is ready.

Additionally, we had worked on another theater in New Zealand. Our team continues to explore the Australian and New Zealand markets for new cinema opportunities..

Now turning to our property business.

Real estate revenue for the year ended December 31, 2017, increased by 14% or $2.9 million, mainly driven by $1.8 million of legal fees recovered as part of our STOMP settlement, increased rental income as part of the expansion of Newmarket Village in Brisbane, additional rental income from the Newmarket office building we purchased in November of 2016, the recognition of business interruption insurance on our Courtenay Central property and parking structure and the impact of favorable foreign exchange rates on our New Zealand and Australian operations..

Real estate segment operating income increased by 16% to $8 million for the year ended 2017 compared to 2016 primarily attributable to recovery of the legal fees in the STOMP settlement..

I'll first cover our Australian real estate portfolio. Turning to our Newmarket Village expansion in Brisbane. As I mentioned, we opened our Reading Cinema in December of 2017 and did deliver about 935 square meters of new F&B retail space along with a further 124 parking spaces.

4 of the 8 restaurant spaces we built are now open, 3 are currently fitting out and will be opened April, and the last tenancy is in lease negotiations..

In 2017, we invested $26.1 million in capital improvements, bringing our total investment in the Newmarket project to $27.9 million, calculated net of our book investment in that property prior to the commencement of the expansion project..

At Red Yard in Auburn, just outside of Sydney, we continue to add new incremental tenancies in 2017. 2 restaurants, Red Rooster and Oporto, opened in December, and a third restaurant opened earlier in 2017. Before this year, we had not materially reinvested in Red Yard since our original construction in the late '90s.

Today, in addition to newly added restaurant space, we're investing a few million dollars to redevelop the common areas to create a more inviting and dynamic public space. Hopefully, that project will be completed later this year..

Turning to New Zealand. At Courtenay Central, we continue to refine our thinking on our reimagined Courtenay Central. As we noted in our 10-K in 2017, we did receive maximum insurance recovery of $25 million for the demolition of our car park..

firstly, the potential for a Peter Jackson movie museum and Wellington's first convention center directly across the street from us; and secondly, calibrating the seismic challenges with the construction cost and risk for a project that is potentially increasing in size..

As we've disclosed in the past, based on the potential for significant traffic to be generated across the street from us, in addition to our own activity, we've contemplated new and incremental uses for the project. We're still exploring further retail uses, the potential for an Angelika film center and hotel and office uses.

And the potential for a bigger and improved project continues to be an attraction for Countdown, the supermarket operator that we signed a lease with a few years ago..

We do not yet have a definitive construction time line. In the interim, the Courtyard, a unique pop-up food and beverage and entertainment concept at Courtenay Central, is keeping our center busy during the transition.

It's supporting our Reading Cinema, our parking lots, our existing tenants and keeping the city focused on our center as an entertainment destination. Among other things, we are now the landlord for Wellington's first venue dedicated entirely to improve theater.

And in February of this year, we hosted in our car park an outdoor production of The Comedy of Errors by Summer Shakespeare Wellington..

Turning to our land in Manukau, New Zealand, near the Auckland Airport. We consider this land to be a future value realization opportunity for us. The Auckland City Council has required land owners to address infrastructure needs of the rezoned land before development proceeds.

These infrastructure works include efforts like improving traffic flow and access to our property. As we did on the rezoning efforts, we're working with the Southern Gateway Consortium partners on a master plan for the construction of needed infrastructure works. These planning and design efforts will likely take most of 2018.

At this point, our investment in this part of the project is anticipated to be less than NZD 500,000. We'll update you on our plans for Manukau when we believe we have all the right information to make the best decision for driving long-term value, whether that's selling the property, developing it or jointly developing it..

Now turning to the U.S. We received a number of questions regarding our near properties, the timing of their redevelopment and the future of our live theater business. All of these issues are related. We've talked before about the way in which our entertainment operations and our real estate operations complement one another.

This continues to be the case. Our most significant current real estate development project, 44 Union Square, was acquired by us as a live theater property. Today, we're more than 50% complete on the building construction. The first and second floors have been poured, and we're pouring the third floor of the building now.

Our iconic dome is in New Jersey ready for assembly once the ongoing concrete superstructure work is complete. If you visit our Instagram or Facebook pages for 44 Union Square, you'll see some updated construction photos..

Important leasing decisions will need to be made over the next 6 months or so as we have interest from both potential full-building tenants and space tenants. Our brokers have been telling us since the start, leasing interest will build as you continue your construction when tenants know you have a space to offer.

The interest in our office space bears this out. Visit our website, 44unionsquare.com, and click on the Virtual Tour link. You'll understand why creative technology-driven companies are interested in our office space.

Not only will the space be dynamic and one-of-a-kind, but the midtown south submarket is a perfect office location for this type of tenant..

In the last few months, we've actively begun to market the retail space to smaller tenants. In other words, create 2, 3 or 4 retail spaces on the first few floors. This is not to say, however, that we are not still pursuing a full-building tenant.

Potential tenants visiting the site continue to see the vision and branding benefits of calling our building home. Today, our construction lenders have begun to fund the construction project, and we anticipate enjoying revenues from our leasing in mid to late 2019..

Our Cinema 1,2,3 theater located on Third Avenue across from Bloomingdale's is and continues to be an operating cinema. We bought it as a cinema and paid a price that reflected its cinema use. We're not under any financial pressure to press forward with development at this time.

While we are cognizant of opportunity cost, we also understand the complexities of dealing with New York real estate and the importance of getting things right when dealing with a redevelopment and property of this size. We find ourselves confronted with a variety of interesting possibilities.

As previously announced, we've negotiated a predevelopment agreement with our next-door neighbor and have done an initial feasibility study. However, as of yet, we have not been able to reach an agreement as to what percentage ownership division should be as between the 2 properties.

While we've agreed to a framework for moving forward, we do not intend to spend further resources on moving forward a joint venture agreement until this key determination has been made.

It continues to be our view, and we understand it to be the view of our neighbors, that there are significant synergies to be realized from the joint development of the 2 properties.

And while we're optimistic that a reasonable deal can be negotiated, we are studying the go-to-loan alternatives available to us and moving forward unilaterally on certain land use and financial planning matters that will need to be analyzed and addressed regardless of whether we move forward with our neighbors..

We have 2 existing live theater properties in Manhattan and 1 in Chicago. Our Orpheum Theatre is home to STOMP. Last year, we collected the last $720,000 payment of our arbitration award against the producers of that show. And STOMP continues to produce good cash flow for us.

At some point in time, this may be a development property, but in our view, that day is not today..

This brings us to the Minetta Lane Theatre. As some of you may have seen in the New York Times Audible, a subsidiary of Amazon and a leader in audiobooks, it's currently producing Harry Clarke, a one-man show with Billy Crudup at the Minetta Lane Theatre.

Audible has publicly announced its commitment to commission 1 voice and 2 voice plays by emerging playwrights..

The Royal George is our live theater in the heart of Chicago and features 4 auditoriums of various sizes, a restaurant and office space. We anticipate continuing these uses in the near term. We're in the entertainment business, and properties like the Minetta Lane Theatre are becoming increasingly rare.

We believe that there is a bright future for this property as part of our entertainment portfolio. We want to reiterate that we're quite fortunate to have strong, irreplaceable New York City properties in our portfolio to provide our company with a strong asset base.

We believe that our cinema and property businesses differentiate Reading from our peers and position us well for the future as we are able to generate strong and consistent cash flow while having opportunities to acquire and hold properties as they gain significant value. This is and will continue to be our business plan..

I'll turn the call over to Dev now for a financial review of the fourth quarter and full year. .

Thank you, Ellen. Now I'll discuss the financial results for 2017 full year and fourth quarter ended December 31, 2017. As we mentioned before, revenue, EBITDA, net income and basic EPS for the year ended December 31, 2017, all represented records for the company.

Our full year results were positively impacted by certain nonrecurring items, specifically the recognition of a gain on the sale of our land holdings in Burwood, Australia, and the receipt of certain insurance proceeds to compensate us for earthquake-related damages sustained by our Courtenay Central entertainment-themed center, ETC, as we call it, in Wellington, New Zealand, offset by certain nonrecurring professional and litigation expenses..

I will also discuss certain tax matters a bit later. Consolidated revenues for the fourth quarter of 2017 increased by 6% to $71.7 million. This was mainly due to higher box office and food and beverage revenue in Australia and New Zealand and higher real estate revenue in the U.S.

Our consolidated revenues for the full year of 2017 increased by 3% or $9.2 million to $279.7 million due to higher admissions and increased F&B revenue in our Australian cinemas, offset by lower admissions in the U.S. and New Zealand cinemas due in part to the industry-wide box office softening in 2017 and also from the effect of our U.S.

theater closures that Ellen discussed earlier; additionally, the receipt of business interruption 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 lost revenues during Q1 '17; and finally, the settlement proceeds related to STOMP..

Net income attributable to RDI common shareholders increased by $7 million to $7.4 million for the fourth quarter of 2017 and increased by $21.6 million to $31 million for the full year 2017..

For the quarter, EPS increased by $0.31 to $0.32. EPS for the year ended December 31, 2017, increased by $0.95 to $1.35 from the prior year period principally due to the following one-off real estate transactions during the second quarter, which we discussed earlier.

But just to reiterate, the recognition of the gain from the sale of our Burwood property and the receipt of our insurance proceeds with respect to earthquake losses in Wellington. We are also assisted by the increase in real estate segment income from STOMP..

Our nonsegment general and administrative expenses for the quarter and full year ended December 31, 2017, compared to the same period of the prior year decreased by 14% or $1 million and 8% or $1.8 million, respectively.

These decreases relate to a reduction in professional service expenses primarily relating to nonrecurring items incurred in 2016, including additional expenses incurred in connection with the 2015 year-end audit of $960,000 and expenses incurred in connection with the change in status of certain executives of $400,000, also from the reduction in 2017 legal fees, and finally, a reduction in our occupancy costs due to the reclassification of our corporate headquarters to an income-producing asset.

These were offset by additional costs incurred in our Australia and New Zealand offices due to additional staff costs and also the effect of foreign exchange movements..

Income tax benefit increased by $4.8 million for the quarter and income tax expense decreased by $683,000 for the full year ended December 31, 2017, compared to the prior year's -- prior year period.

The differences for the year were primarily due to benefits recognized in the fourth quarter as a result of the dissolution of a nonoperating overseas subsidiary, partly offset by higher taxes on increased pretax income and the provisional unfavorable effect of the tax reform bill enacted in December 2017..

Turning now to cash flows. Net cash provided by operations for the year ended December 31, 2017, was $23.9 million, a $6.3 million decrease from 2016, primarily driven by net working capital changes for the year.

In 2017, the $6.8 million of cash used in investing activities was mainly related to the $65.9 million of cash expended on capital expenditures, which includes the redevelopment and expansion of our Newmarket Village ETC in Brisbane, Australia, the ongoing development of our Union Square project as well as the upgrade of certain of our existing cinemas.

We also incurred $3.7 million for the demolition of our Courtenay Central car parking structure in Wellington, New Zealand. These were offset by the $44.7 million received from the sale of our Burwood property, along with the $18.4 million final insurance settlement on our Courtenay Central parking structure..

We repaid borrowings by $106.4 million and additional net borrowings of $91 million, and we spent $6.5 million on stock repurchases..

Turning now to our financial position. Our total assets increased by $17.2 million to $423 million. Of our total cash balance sheet amount, $2.9 million and $1.7 million were held by our Australian and New Zealand subsidiaries, respectively.

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 $13.7 million of cash in our balance sheet at December 31, 2017, and approximately $137.2 million of additional capacity under our borrowing arrangements in the U.S., Australia and New Zealand, with $75 million of that $137.2 million being unrestricted..

Our overall global operating strategy is to conduct business mostly on a self-funding basis, except when it's economically better for us to move funds between jurisdictions where we do business..

At December 31, 2017, we have debt outstanding of $134.5 million. And our debt to adjusted EBITDA ratio, excluding debt allocated to facilities under construction that is not generating any EBITDA, continues to be under 2x..

And with that, I'll 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 are very pleased with the number of inquiries that we received and the content of those questions, some of which we're going to address now.

We've compiled a set of the questions and answers that represents the most common questions and recurring terms 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. .

The first question. We received a number of questions about our stock repurchase program, our share count and whether we bought back stock in the fourth quarter.

What specific compensation program would account for the increased shares since September of 2017? Is this compensation plan consistent with prior years?.

I think I can fill this one. As we discussed in our last conference call in early September, we exited the market earlier than the normal blackout period requirement due to opportunities that arose for an alternative use of our terms.

Since that time, we have been in either the third quarter or year-end blackout period and have only been in the market to buy back some 15,000 shares.

We continually evaluate the means by which we can best return value to our stockholders and continue to believe that repurchasing our stock continues to be an attractive vehicle for returning value directly to stockholders. We have substantial developable 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 increase in share count between September 30 and the year-end was due to the exercising of outstanding share options and the vesting of certain RSUs, restricted stock units, consistent with prior year's compensation plans..

The next question regards Townsville.

What is the status of the Townsville upgrades? Ellen?.

In early 2017, we obtained a development approval from the city council in Townsville for the expansion of our cinema by 2 Gold Lounge screens featuring recliner seating plus adding 220 square meters of F&B retail.

We will combine this expansion work with our overall improvement of the public areas and repositioning of the center to create a much more dynamic environment. Today, we don't have a definitive time line for the work as we're working with our consultant teams to further the master plan.

We intend to present our board with a vision and plan sometime in 2018. .

Thanks, Ellen.

Next question, how active is Reading International been recently with potential M&A opportunities? How large or small the targets will the company consider acquiring? Ellen, again?.

Part of our strategic plan is to look for and evaluate potential cinema acquisitions in each of our 3 countries. As we said in the past, we believe 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 a circuit with hundreds of theaters.

We believe that we have the financial flexibility to acquire a small to midsized circuit in any 1 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.

As previously disclosed, during the third quarter, we did perform due diligence on such a reasonably sized circuit in the U.S. Ultimately, as we are a disciplined buyer, the deal didn't meet our investment criteria. We will continue to look for and review opportunities across our 3 countries.

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

In what geographies has Reading adopted its new everyday value pricing model to gain attendance market share, increase occupancy and drive high-margin concession sales? What have been the results of this price disruptor approach so far? Has Reading's theaters gained box office share? Or has it simply compressed margins? Ellen, can you handle that one?.

In Australia and New Zealand, we offer value pricing at all of our theaters. This affordable ticket price is coupled with a very creative social media-based marketing approach. The structure supports both our market share and bottom line. In the United States, we've implemented a value pricing structure at 2 of our theaters in San Diego.

We've coupled an everyday reduced ticket prices with sum-up charges with a value-driven concession offer. In each of these theaters, we believe we've increased our market share and improved our theater level cash flow as we've generated increased attendance. The first couple of months of 2018 fueled by Black Panther has been a real driver for us. .

The next question asks us to provide some color and backup IRR numbers, if available, on the tangible results of recent F&B and reseating expenditures.

What Reading theaters remain as candidates for a material makeover and upgrading? Are any specific need to be rebranded, example, Angelika or another brand? Ellen?.

In the United States, we anticipate renovating at least another 7 theaters over the next 3 years, most of which will include recliner seats, TITAN LUXE screens and F&B upgrades.

In Australia and New Zealand, we anticipate renovating 8 theaters over the next 3 years, which would involve installation of recliner seats, TITAN LUXE screens and select F&B upgrades.

In 2018, we're scheduled now to renovate our consolidated theater in Mililani, which will include full 14-screen recliner installation, a TITAN LUXE auditorium and F&B upgrade. Right now, we're contemplating at least 1 conversion to an Angelika in the U.S. that may happen in the next 2 years. We target returns for these renovations in the mid-teens.

As I mentioned earlier, many of our U.S. upgrades were completed in December of 2017. I'll also note that many of the renovations that are coming up over the next few years will require negotiations with our landlords. .

Thanks, Ellen. Here's a question for Dev. U.S. tax rate reduced from 35% to 21%. This makes borrowing more expensive.

Does it affect the way you think about financial leverage?.

Thanks, Andrzej. The recent reduction in the U.S. income tax rate for 2018 compared to the earlier rate of 35% opens up some great possibilities for Reading as the tax rates for Australia and New Zealand now of 30% and 28%, respectively, are now higher.

All other things being equal, this should permit us to borrow cheaper on an after-tax basis in Australia and New Zealand relative to the U.S. We are reviewing our best options to reduce our overall cost of debt to capital, keeping in mind relative borrowing costs and exchange rates. .

Thanks, Dev. The next question.

Why not spend your Australian and New Zealand assets to shareholders and let them decide on their country exposure? Ellen?.

Australia, New Zealand and the United States. And the synergies of those different businesses and geography builds value for our stockholders. .

Thank you, Ellen. Finally, we received numerous questions regarding an update on the derivative litigation and the trust litigation and its impacts. I will get Ellen to address the status of the derivative litigation first. .

Directors Codding, Gould, Kane, McEachern and Wrotniak. And the court has dismissed, also with prejudice, all of his claims against all of our directors with respect to our board's determination not to move forward with the patent vision indication of interest to acquire our company.

The Nevada District Court hasn't yet reset the 2018 trial date as to the remaining claims, and we anticipate filing further summary judgment motions in April, addressing those unresolved claims. .

Thanks, Ellen. Let me address the trust litigation. As we've reported, we've been advised that while the California Superior Court has announced this determination to appoint a temporary trustee ad litem, none has yet been appointed.

The California Superior Court made clear that the temporary trustee ad litem will have a narrow and specific authority to obtain office to purchase the RDI stock in the voting trust. We are informed that at the present time, there is no voting stock in the voting trust, of which Margaret Cotter is the sole trustee.

All remaining trustee and executive powers with respect to the voting stock held in the James A. Cotter Sr. estate and his leading trust remain with Margaret Cotter and Ellen Cotter.

Reading continues to believe that whether or not the final determination is made to sell the voting shares held by the Cotter trust, the appointment of a temporary trustee ad litem poses risks to our company and our stockholders for a variety of reasons, including the resultant potential for distraction of management and key employees from focusing on the conduct of our business, including the implementation of our 3-year business strategy, incurrence of additional general and administrative costs due to the need to implement employee retention programs and to incur legal expenses of the type and at levels not typically required in the ordinary conduct of our company's business.

Interference of contractual relationships, negotiations and potential negotiations with third parties important to our company's business including, without limitation, current and future lenders, tenants, landlords, suppliers and codevelopers; increased difficulty in hiring and retaining high-quality employees; and exposure of our company to potential litigation claims of the type which often accompany any extraordinary corporate transactions, together with the expense distractions and time lost that typically results from any such litigation.

If a decision to sell a controlling interest is made by the California Superior Court, then there will be additional risks that control might be sold to an unqualified purchaser who might exploit such control position in a manner not consistent with the best interest of our company or our stockholders, generally.

Our senior management continues to believe that our company has not reached its full value potential. We have a number of medium to long-term value creations initiatives that we believe will create material value for our company..

Ellen, is there something else you wanted to add?.

Yes, Andrzej. I wanted to state that if the California Superior Court does force a sale of Reading's voting shares held by the Cotter trust, then my sister, Margaret, and I, intend to be the buyers of those shares. .

Well, thanks for that, Ellen. With this last question, I'll wrap up the call. Dev, Ellen and I are available for any follow-up calls, so please do not hesitate to reach out.

We appreciate your support over the year, your 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..