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Property And Equipment | 9 Months Ended
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Sep. 30, 2022
Property And Equipment [Abstract] |
Properties And Equipment | Note 6 – Property and Equipment Operating Property, net As of September 30, 2022, and December 31, 2021, property associated with our operating activities is summarized as follows:
|  | September 30, |  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Land |  | $ | 65,400 |  | $ | 69,459
Building and improvements |  |  | 205,901 |  |  | 219,580
Leasehold improvements |  |  | 62,267 |  |  | 58,349
Fixtures and equipment |  |  | 186,362 |  |  | 202,837
Construction-in-progress |  |  | 6,347 |  |  | 5,395
Total cost |  |  | 526,277 |  |  | 555,620
Less: accumulated depreciation |  |  | (244,367) |  |  | (248,963)
Operating property, net |  | $ | 281,910 |  | $ | 306,657
Depreciation expense for operating property was $4.9 million and $15.5 million for the quarter and nine months ended September 30, 2022, and $5.1 million and $16.4 million for the quarter and nine months ended September 30, 2021. Investment and Development Property, net As of September 30, 2022, and December 31, 2021, our investment and development property is summarized below:
|  | September 30, |  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Land |  | $ | 3,431 |  | $ | 4,193
Construction-in-progress (including capitalized interest) |  |  | 4,422 |  |  | 5,377
Investment and development property |  | $ | 7,853 |  | $ | 9,570
Construction-in-Progress – Operating and Investing Properties Construction-in-Progress balances are included in both our operating and development properties. The balances of our major projects along with the movements for the nine months ended September 30, 2022, are shown below:
(Dollars in thousands) |  | Balance, ‎December 31, ‎2021 |  | Additions during the period |  | Completed ‎during the ‎period |  | Foreign ‎currency ‎translation |  | Balance, September 30, 2022
Courtenay Central development |  |  | 6,918 |  |  | 276 |  |  | (268) |  |  | (1,217) |  |  | 5,709
Cinema developments and improvements |  |  | 2,942 |  |  | 2,807 |  |  | (2,915) |  |  | (145) |  |  | 2,689
Other real estate projects |  |  | 912 |  |  | 1,986 |  |  | (443) |  |  | (84) |  |  | 2,371
Total |  | $ | 10,772 |  | $ | 5,069 |  | $ | (3,626) |  | $ | (1,446) |  | $ | 10,769
Real Estate Transactions - Sales Beginning in 2020, we reviewed our various real estate holdings in light of the fact that our cash flow from cinema operations had been adversely affected by the governmentally mandated cinema closings ordered in response to the COVID-19 pandemic. As a result, for the foreseeable future, other sources of cash would be needed to support our operations and only very limited funds would be available for capital investment in our properties. Between the fourth quarter of 2020 and the second quarter of 2021, we classified as assets held for sale disposal groups and thereafter monetized the following real estate assets: The Auburn/Redyard Entertainment Themed Center (“ETC”) and ancillary land, the Royal George Theatre, Coachella (land), and Manukau (land). In addition, in the third quarter of 2021, we monetized our Invercargill, New Zealand, property, comprised of a cinema and ancillary land. A ‘disposal group’ represents assets to be disposed of in a single transaction. A disposal group may represent a single asset, or multiple assets. Each of these transactions is discussed separately below. Auburn/Redyard, New South Wales In January 2021, we classified our Auburn/Redyard ETC as held for sale, reflecting the fact that approximately 2.6 acres of this property was non-income producing land. This disposal group, which consists of land, the ETC building and related property, plant and equipment, was transferred to Land and Property Held for Sale at its book value of $30.2 million (AU$39.1 million), being the lower of cost and fair value less costs to sell. No adjustments to the book value of the assets contained within this disposal group were required. The sale of Auburn/Redyard was completed on June 9, 2021, for $69.6 million (AU$90.0 million). As part of the transaction, we entered into a lease with the purchaser for the cinema portion of the Auburn/Redyard site. The gain on sale of this property is calculated as follows:
|  | June 30
(Dollars in thousands) |  | 2021
Sales price |  | $ | 69,579
Net book value |  |  | (30,231)
Gain on sale, gross of direct costs |  |  | 39,348
Direct sale costs incurred |  |  | (622)
Gain on sale, net of direct costs |  | $ | 38,726
Manukau, New Zealand In December 2020, we classified our non-income producing land at Manukau, New Zealand, as held for sale. This disposal group, which consists of land and certain improvements to that land, was transferred to Land Held for Sale at its book value of $13.6 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of this asset were required. The sale of this land was completed on March 4, 2021, for $56.1 million (NZ$77.2 million). The gain on sale of this property is calculated as follows:
|  | March 31,
(Dollars in thousands) |  | 2021
Sales price |  | $ | 56,058
Net book value |  |  | (13,618)
Gain on sale, gross of direct costs |  |  | 42,440
Direct sale costs incurred |  |  | (1,514)
Gain on sale, net of direct costs |  | $ | 40,926
Coachella, California In December 2020, we classified the non-income producing land at Coachella (held through Shadow View Land and Farming LLC) as held for sale. This disposal group, which consists of land and certain improvements to that land, was transferred to Land and Property Held for Sale at its book value of $4.4 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of this asset were required. The sale of this land was completed on March 5, 2021 for $11.0 million. As a 50% member in Shadow View Land and Farming LLC, our Company received the benefit of 50% of the sale proceeds, being $5.3 million. As the other 50% member was related to our controlling stockholder, t hese actions were approved by our Audit and Conflicts Committee. The gain on sale of this property, including both our interests and those of the other 50% owner of Shadow View Land and Farming, LLC, is calculated as follows:
|  | March 31,
(Dollars in thousands) |  | 2021
Sales price |  | $ | 11,000
Net book value |  |  | (4,351)
Gain on sale, gross of direct costs |  |  | 6,649
Direct sale costs incurred |  |  | (301)
Gain on sale, net of direct costs |  | $ | 6,348
Royal George Theatre, Chicago In February 2021, we classified our Royal George Theatre as held for sale as part of our strategy to monetize certain real estate assets. This disposal group, which consists of the Royal George Theatre building and the associated property, plant and equipment, was transferred to Land and Property Held for Sale at its book value of $1.8 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of the assets contained within this disposal group were required. On June 30, 2021, we received net sale proceeds of $6.8 million (net of closing costs). The gain on sale of this property is calculated as follows:
|  | June 30
(Dollars in thousands) |  | 2021
Sales price |  | $ | 7,075
Net book value |  |  | (1,824)
Gain on sale, gross of direct costs |  |  | 5,251
Direct sale costs incurred |  |  | (295)
Gain on sale, net of direct costs |  | $ | 4,956
Invercargill, New Zealand On August 30, 2021, we sold our cinema building and land in Invercargill for $3.8 million (NZ$5.4 million) to the owner of the adjacent property, which is currently undergoing a major redevelopment. This property, not then classified as held for sale, was monetized in a transaction whereby the purchaser leased back the Reading Cinema to our Company. The gain on sale on this property is calculated as follows:
|  | September 30
(Dollars in thousands) |  | 2021
Sales price |  | $ | 3,803
Net book value |  |  | (1,425)
Gain on sale, gross of direct costs |  |  | 2,378
Direct sale costs incurred |  |  | (6)
Gain on sale, net of direct costs |  | $ | 2,372
Real Estate Transactions - Acquisitions Exercise of Option to Acquire Ground Lessee’s Interest in Ground Lease and Improvements Constituting the Village East Cinema On August 28, 2019, we exercised our option to acquire the ground lessee’s interest in the then 13-year ground lease underlying and the real property assets constituting our Village East Cinema in Manhattan. The purchase price under the option was $5.9 million. It was initially agreed that the transaction would close on or about May 31, 2021. On March 29, 2021, we extended the closing date to January 1, 2023. On November 4, 2022, we extended the closing date of this transaction to July 1, 2024.

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- Definition Disclosure of real estate assets (normally turning over within one year or one business cycle if longer) that are sold, held for sale apart from normal operations and anticipated to be sold within one year, real estate property currently under development, real estate currently held for development and long-lived, property that is physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, building and production equipment. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures. This element may be used as a single block of text to include the entire PPE disclosure, including data and tables. + References No definition available. + Details
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