Note 11 – Investments in and Advances to Unconsolidated Joint Ventures and Entities

Investments in and advances to unconsolidated joint ventures and entities are accounted for under the equity method of accounting except for Malulani Investments, Limited and Rialto Distribution as described below. As of December 31, 2011 and 2010, these investments in and advances to unconsolidated joint ventures and entities include the following (dollars in thousands):


			December 31,
	Interest		2011		2010
Rialto Distribution	33.3	%	$	-	$	-
Rialto Cinemas	50.0	%		1,586		4,580
205-209 East 57th Street Associates, LLC	25.0	%		33		-
Mt. Gravatt	33.3	%		6,220		5,835
Total			$	7,839	$	10,415

For the years ending December 31, 2011, 2010, and 2009, we recorded our earnings (loss) from our unconsolidated joint ventures and entities as follows (dollars in thousands):


	December 31,
		2011			2010		2009
Rialto Distribution	$	383		$	286	$	(1,065	)
Rialto Cinemas		(72	)		64		138
205-209 East 57th Street Associates, LLC		33			89		153
Mt. Gravatt		1,038			906		891
Total investor share of earnings		1,382			1,345		117
Rialto Cinemas impairment recorded at investor level		(2,934	)		-		-
Total equity earnings (loss)	$	(1,552	)	$	1,345	$	117

Malulani Investments, Limited

On June 26, 2006, we acquired for $1.8 million, an 18.4% interest in a private real estate company. On July 2, 2009, Magoon Acquisition and Development, LLC ("Magoon LLC") and we entered into a settlement agreement (the "Settlement Terms") with respect to a lawsuit against certain officers and directors of Malulani Investments, Limited ("MIL"). Under the Settlement Terms, Magoon LLC and we received $2.5 million in cash, a $6.75 million three-year 6.25% secured promissory note issued by The Malulani Group ("TMG"), and a ten-year "tail interest" in MIL and TMG in exchange for the transfer of all ownership interests in MIL and TMG held by both Magoon, LLC and RDI and for the release of all claims against the defendants in this matter. A gain on the transfer of our ownership interest in MIL of $268,000 was recognized during 2009 as a result of this transaction. The tail interest allows us to participate in certain distributions made or received by MIL, TMG, and in certain cases, the shareholders of TMG. The tail interest, however, continues only for a period of ten years and we cannot assure that we will receive any distributions from this tail interest. During 2011 and 2010, we received $191,000 and $635,000 in interest on the promissory note and, on June 14, 2011, we received $6.8 million with respect to the principal and interest owed on this note. We believe that further amounts are owed under the note and we have begun litigation to collect such amounts. Any further collections will be recognized when received.

Rialto Distribution

Effective October 1, 2005, we purchased for $694,000 (NZ$1.0 million) a 1/3 interest in Rialto Distribution. Rialto Distribution, an unconsolidated joint venture, is engaged in the business of distributing art film in New Zealand and Australia. We own an undivided 1/3 interest in the assets and liabilities of the joint venture. Prior to January 1, 2010, we treated our interest as an equity method interest in an unconsolidated joint venture. However, during 2009, the reporting company of Rialto Distribution reported a net loss of $2.2 million (NZ$3.2 million). Our share of this loss was $734,000 (NZ$1.1 million). Due to this significant loss, we determined that the goodwill associated with Rialto Distribution's investment in the film distribution business was fully impaired. Therefore, we recorded our share of the impairment loss of $331,000 (NZ$434,000) as a part of our equity losses resulting in a net zero balance at December 31, 2009. As of January 1, 2010, we treat our interest as a cost method interest in an unconsolidated joint venture. For the years ended December 31, 2011 and 2010, we received $383,000 (NZ$500,000) and $286,000 (NZ$400,000), respectively, in distributions from our interest in Rialto Distribution which we recorded as earnings at the time of receipt.

Rialto Cinemas

Effective October 1, 2005, we purchased, indirectly, beneficial ownership of 100% of the stock of Rialto Entertainment for $4.8 million (NZ$6.9 million). Rialto Entertainment was at the time of purchase a 50% joint venture partner with Village and Sky in Rialto Cinemas, the largest art cinema circuit in New Zealand. The Village and Sky ownership interest have subsequently been sold to Greater Union, an Australian based cinema chain operator. We own an undivided 50% interest in the assets and liabilities of the joint venture and treat our interest as an equity method interest in an unconsolidated joint venture. Subsequent to the February 22, 2011 earthquake in Christchurch, the joint venture determined they would seek to terminate the Christchurch cinema lease (see Note 27 – Casualty Loss). As of December 31, 2011, following the closure of three cinemas with 15 screens, the joint venture owned two cinemas with 13 screens in the New Zealand cities of Auckland and Dunedin. As part of our investment impairment analysis for 2011, we determined that the value of our investment was impaired. For this reason, we recorded an impairment charge to our investment in Rialto Cinemas of $2.9 million (NZ$3.8 million) during December 31, 2011 and included it in our equity loss from unconsolidated joint ventures and entities for the year ended December 31, 2011.

205-209 East 57^thStreet Associates, LLC

We own a non-managing 25% membership interest in 205-209 East 57^thStreet Associates, LLC a limited liability company formed to redevelop our former cinema site at 205 East 57^thStreet in Manhattan.

The only retail condominium was sold in February 2009 for approximately $3.8 million. Based on the closing statements of the sale, our share of the sales proceeds was approximately $900,000 and earnings of $304,000. On April 11, 2009, we received $1.2 million relating to our investment in the Place 57 joint venture representing a return of substantially all of our initial investment. During the fourth quarter of 2010, the last residential condominium was sold for $900,000 from which we recorded earnings of $64,000 and received distributions totaling $293,000. No further significant income activity is expected from this investment.

Mt. Gravatt

We own an undivided 1/3 interest in Mt. Gravatt, an unincorporated joint venture that owns and operates a 16-screen multiplex cinema in Australia. The condensed balance sheets and statements of operations of Mt. Gravatt are as follows (dollars in thousands):


Mt. Gravatt Condensed Balance Sheet Information
	December 31,
		2011		2010
Current assets	$	1,935	$	1,850
Noncurrent assets		3,832		3,021
Current liabilities		846		855
Noncurrent liabilities		60		74
Members' equity		4,861		3,942


Mt. Gravatt Condensed Statements of Operations Information
	December 31,
		2011		2010		2009
Total revenue	$	14,097	$	12,909	$	11,244
Net income		3,045		2,711		2,629

Berkeley Cinemas – Botany

We previously had investments in three joint ventures with Everard Entertainment Ltd in New Zealand. On June 6, 2008, we sold our last investment in these joint ventures of the Botany Downs Cinema to our joint venture partner for $3.3 million (NZ$4.3 million) resulting in a net gain on sale of an unconsolidated entity of $2.5 million (NZ$3.2 million). With the sale of the cinema, our unconsolidated joint venture debt decreased by $3.2 million (NZ$4.2 million). During 2010, we finalized our claims regarding the sale of this cinema resulting in an additional gain on sale of $384,000 (NZ$554,000) for the year ended 2010 included in other income on our Consolidated Statement of Operations.

Combined Condensed Financial Information

The combined condensed financial information for all of the above unconsolidated joint ventures and entities accounted for under the equity method is as follows; therefore, these financials only exclude Rialto Distribution (dollars in thousands):


Condensed Balance Sheet Information
	December 31,
		2011		2010
Current assets	$	5,245	$	5,081
Noncurrent assets		6,611		6,067
Current liabilities		3,031		2,826
Noncurrent liabilities		723		727
Members' equity		8,102		7,595


Condensed Statements of Operations Information
	December 31,
		2011		2010		2009
Total revenue	$	28,017	$	24,944	$	23,512
Net income		4,021		4,779		3,726