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Pension And Other Liabilities | 12 Months Ended
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Dec. 31, 2020
Pension And Other Liabilities [Abstract] |
Pension And Other Liabilities | NOTE 12 – PENSION AND OTHER LIABILITIES Other liabilities including pension are summarized as follows:
|  | December 31,
(Dollars in thousands) |  | 2020 |  | 2019
Current liabilities |  |  |  |  |  |
Liability for demolition and remediation costs |  | $ | 2,928 |  | $ | 2,745
Accrued pension(2) |  |  | 684 |  |  | 684
Security deposit payable |  |  | 132 |  |  | 114
Finance lease liabilities |  |  | 49 |  |  | 93
Other |  |  | 33 |  |  | 17
Other current liabilities |  | $ | 3,826 |  | $ | 3,653
Other liabilities |  |  |  |  |  |
Accrued pension(3) |  |  | 4,048 |  |  | 4,469
Lease make-good provision |  |  | 7,408 |  |  | 6,667
Deferred rent liability |  |  | 2,897 |  |  | —
Environmental reserve |  |  | 1,656 |  |  | 1,656
Lease liability(1) |  |  | 5,900 |  |  | 5,900
Acquired leases |  |  | 31 |  |  | 37
Finance lease liabilities |  |  | 69 |  |  | 116
Other |  |  | 8 |  |  | 9
Other non-current liabilities |  | $ | 22,017 |  | $ | 18,854
(1)Represents the lease liability of the option associated with the ground lease purchase of the Village East Cinema. See below for more information. (2)Represents the pension liability associated with the Supplemental Executive Retirement Plan explained below. Lease Liability – Village East Purchase Option Our Village East lease included a call option pursuant to which we may purchase the cinema ground lease for $5.9 million at the end of the lease term in June 2020. Additionally, our lease has a put option pursuant to which SHC may require our Company to purchase all or a portion of SHC’s interest in the existing cinema lease and the cinema ground lease at any time between July 1, 2013 and December 4, 2019. Because our late Chairman, Chief Executive Officer, and controlling shareholder, Mr. James J. Cotter, Sr. was also the managing member of SHC, RDI and SHC are considered entities under common control. As a result, we have recorded the Village East Cinema building as a property asset of $4.7 million on our balance sheet based on the cost carry-over basis from an entity under common control with a corresponding lease liability of $0.0 million presented under other liabilities which accreted up to the $5.9 million liability through July 1, 2013 (see Note 21 – Related Parties). On August 28, 2019, we exercised our option to acquire the ground lessee’s interest in the 13-year ground lease underlying and the real property assets constituting our Village East Cinema in Manhattan. The purchase price under the option is $5.9 million, being the lease liability of $5.9 million presented under other liabilities. It was initially agreed that the transaction would close on or about May 31, 2021. On March 12, 2020, we amended the original agreement to (i) extend the term of the Citadel Cinemas, Inc. lease with Sutton Hill to January 31, 2022 and extend the put option to December 4, 2021 and (ii) at SHC’s request, in connection with our deferral of the closing date for our acquisition of SHC’s interest in the Village East Cinema, the Company reinstated and extended until December 4, 2021 SHC’s right to put that interest to us. That put right had previously expired on December 4, 2019. We were advised by SHC that it wanted this reinstatement and extension in order to assure itself that, in the event of the non-performance by us of our current contractual obligation to close our purchase of the interest in the ground lease on or about the extended date of May 31, 2021, that it could (as, in effect, an additional remedy) exercise this reinstated and extended put right. We believe that the reinstatement and extension of this put right is immaterial to our Company, since we have in fact already exercised our option, are in fact under contract with SHC to acquire SHC’s interest in the Village East Cinema and have every intention of completing that acquisition. On March 29, 2021, we extended this closing date to January 1, 2023. Pension Liability – Supplemental Executive Retirement Plan On August 29, 2014, the Supplemental Executive Retirement Plan (“SERP”) that was effective since March 1, 2007, was ended and replaced with a new pension annuity. As a result of the termination of the SERP program, the accrued pension liability of $7.6 million was reversed and replaced with a new pension annuity liability of $7.5 million. The valuation of the liability is based on the present value of $10.2 million discounted at 4.25% over a 15-year term, resulting in a monthly payment of $57,000 payable to the estate of Mr. James J. Cotter, Sr. The discounted value of $2.7 million (which is the difference between the estimated payout of $10.2 million and the present value of $7.5 million) will be amortized and expensed based on the 15-year term. In addition, the accumulated actuarial loss of $3.1 million recorded, as part of other comprehensive income, will also be amortized based on the 15-year term. As a result of the above, included in our other current and non-current liabilities are accrued pension costs of $4.7 million and $5.2 million as of December 31, 2020 and 2019, respectively. The benefits of our pension plans are fully vested and therefore no service costs were recognized 2020 and 2019. Our pension plans are unfunded. The change in the SERP pension benefit obligation and the funded status are as follows:
|  | December 31,
(Dollars in thousands) |  | 2020 |  | 2019
Benefit obligation at January 1 |  | $ | 5,153 |  | $ | 5,354
Service cost |  |  |  |  |  |
Interest cost |  |  | 262 |  |  | 482
Payments made |  |  | (683) |  |  | (683)
Benefit obligation at December 31 |  | $ | 4,732 |  | $ | 5,153
Unfunded status at December 31 |  | $ | (4,732) |  | $ | (5,153)
Amounts recognized in the balance sheet consists of:
|  | December 31,
(Dollars in thousands) |  | 2020 |  | 2019
Current liabilities |  | $ | 684 |  | $ | 684
Other liabilities - Non current |  |  | 4,048 |  |  | 4,469
Total pension liability |  | $ | 4,732 |  | $ | 5,153
The components of the net periodic benefit cost and other amounts recognized in other comprehensive income are as follows:
|  | December 31,
(Dollars in thousands) |  | 2020 |  | 2019
Net periodic benefit cost |  |  |  |  |  |
Interest cost |  | $ | 262 |  | $ | 483
Amortization of prior service costs |  |  | — |  |  | —
Amortization of net actuarial gain |  |  | 152 |  |  | 151
Net periodic benefit cost |  | $ | 414 |  | $ | 634
Items recognized in other comprehensive income |  |  |  |  |  |
Net loss |  | $ | — |  | $ | —
Amortization of net aloss |  |  | (152) |  |  | (151)
Total recognized in other comprehensive income |  | $ | (152) |  | $ | (151)
Total recognized in net periodic benefit cost and other comprehensive income |  | $ | 262 |  | $ | 483
Items not yet recognized as a component of net periodic pension cost consist of the following:
|  | December 31,
(Dollars in thousands) |  | 2020 |  | 2019
Unamortized actuarial loss |  | $ | 2,135 |  | $ | 2,287
Accumulated other comprehensive income |  | $ | 2,135 |  | $ | 2,287
The estimated unamortized actuarial loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year will be $207,000 (gross of any tax effects). The following table presents estimated future benefit payments for the next five years and thereafter as of December 31, 2020:
(Dollars in thousands) |  | Estimated ‎Future ‎Pension ‎Payments
2021 |  | $ | 684
2022 |  |  | 684
2023 |  |  | 684
2024 |  |  | 684
2025 |  |  | 684
Thereafter |  |  | 1,312
Total pension payments |  | $ | 4,732
Lease Make-Good Provision We recognize obligations for future leasehold restoration costs relating to properties that we use mostly on our cinema operations under operating lease arrangements. Each lease is unique to the negotiated conditions with the lessor, but in general most leases require for the removal of cinema-related assets and improvements. There are no assets specifically restricted to settle this obligation. A reconciliation of the beginning and ending carrying amounts of the lease make-good provision is presented in the following table:
(Dollars in thousands) |  | As of and for the year ended December 31, 2020 |  | As of and for the year ended December 31, 2019
Lease make-good provision, at January 1 |  | $ | 6,667 |  | $ | 5,614
Liabilities incurred during the year |  |  | 62 |  |  | 902
Liabilities settled during the year |  |  | — |  |  | (206)
Accretion expense |  |  | 291 |  |  | 352
Effect of changes in foreign currency |  |  | 388 |  |  | 5
Lease make-good provision, at December 31 |  | $ | 7,408 |  | $ | 6,667

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