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Property And Equipment
6 Months Ended
Jun. 30, 2021
Property And Equipment [Abstract]  
Property And Equipment Note 6 – Property and Equipment

Operating Property, net

As of June 30, 2021, and December 31, 2020, property associated with our operating activities is summarized as follows:

June 30,

December 31,

(Dollars in thousands)

2021

2020

Land

$

70,603

$

82,286

Building and improvements

225,600

253,419

Leasehold improvements

58,800

59,054

Fixtures and equipment

196,757

201,518

Construction-in-progress

8,025

9,285

Total cost

559,785

605,562

Less: accumulated depreciation

(243,040)

(252,437)

Operating property, net

$

316,745

$

353,125

Depreciation expense for operating property was $5.9 million and $11.3 million for the quarter and six months ended June 30, 2021, respectively, and $5.0 million and $10.2 million for the quarter and six months ended June 30, 2020, respectively.

Investment and Development Property, net

As of June 30, 2021, and December 31, 2020, our investment and development property is summarized below:

June 30,

December 31,

(Dollars in thousands)

2021

2020

Land

$

4,244

$

5,936

Construction-in-progress (including capitalized interest)

5,469

5,634

Investment and development property

$

9,713

$

11,570

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 six months ended June 30, 2021, are shown below:

(Dollars in thousands)

Balance,
December 31,
2020

Additions during the period

Completed
during the
period

Transferred to Held for Sale

Foreign
currency
translation

Balance,

June 30,

2021

Courtenay Central development

7,255

4

(218)

7,041

Cinema developments and improvements

6,357

3,157

(3,886)

(10)

5,618

Other real estate projects

1,307

653

(990)

(121)

(14)

835

Total

$

14,919

$

3,814

$

(4,876)

$

(121)

$

(242)

$

13,494

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 materially adversely affected by the governmentally mandated cinema closings ordered in response to the COVID-19 pandemic and that, for the foreseeable future, other sources of cash would be needed to support our operations and that 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”), the Royal George Theatre, Coachella (land), and Manukau (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

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 May 14, 2021, we entered into a definitive purchase and sale agreement with a qualified buyer. 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

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, being $5.3 million, These actions were approved by our Audit and Conflicts Committee.

The gain on sale of this property 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

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), of which NZ$1.0 million was received on February 23, 2021, and the balance of funds was received on March 4, 2021.

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

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 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.