Stephen Marcus – Chairman and CEO Gregory Marcus – President Douglas Neis – CFO and Treasurer

David Loeb – Robert W. Baird & Company Rob Damron – 21st Century Equities

Good morning, everyone, and welcome to the Marcus Corporation Third Quarter Earnings Conference Call. My name is Karma, and I’ll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question and answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded. Joining us today are Steve Marcus, Chairman and CEO; Greg Marcus, President; and Doug Neis, Chief Financial Officer. At this time, I’d like to turn the program over to Mr. Neis. Please go ahead, sir.

Well thank you, and welcome, everybody, to our Fiscal 2008 Third Quarter Conference Call. As usual, I need to begin by stating that we plan on making a number of forward-looking statements in our call today. Our forward-looking statements could include but not be limited to statements about our future revenue and earnings expectations; our future RevPAR, occupancy rate, and room rate expectations for our Hotels and Resorts Division; our expectations about the quality, quantity, and audience appeal of film product expected to be made available to us in the future; our expectations about the future trends in the business group and leisure travel industry and in our markets; our expectations and plans regarding growth in number and type of our properties and facilities; our expectations regarding various non-operating line items on our earnings statement; and our expectations regarding future capital expenditures. Of course, our actual results could differ materially from those projected or suggested by our forward-looking statements. Factors, risks, and uncertainties which could impact our ability to achieve our expectations are included in the risk factor section of our 10-K and 10-Q filings which can be obtained from the SEC or the Company. We’ll also post all regulation G disclosures when applicable on our website at www.marcuscorp.com. So with that behind us, let’s talk about our Fiscal 2008 Third Quarter and First Three Quarters Results. As we look at the reported results, after relatively modest growth in operating income during our last quarter due to primarily to an under performing slate of movies, it was certainly very encouraging to report a $4.4 million, 238% increase in operating income during our fiscal 2008 third quarter. With one quarter to go in our fiscal year, our year-to-date revenues are now up nearly 20% and our year-to-date operating income is up nearly 22%, which isn’t bad given a couple of the unusual items we’ve had in our Hotel Division result and the aforementioned second quarter movie performance. But before I get into the operating results, let me first address the variations in the line items below operating income versus last year as they continue to have a significant impact on our bottom line results. We once again as expected had unfavorable comparisons last year on the investment income and interest expense line. As in the past two quarters, these variations on these two lines can be traced directly to our purchase of the 11 CEC theaters in late April. Prior to that purchase, we had been carrying some access cash that originally been generated from our Baymont sales a couple years earlier, net cash was generating some modest investment income for us. We of course believe the cash is now providing even greater returns in our operating income. While midway through the fourth quarter, we will lap this event and the comparisons in this line will become more in line. Meanwhile, as expected, our interest expense is up over last year, again, due to the fact that we added to our borrowings in order to finance the theater acquisition. The increase is not as significant in this quarter due to primarily to lower interest rates on our variable rate debt. I will tell you that we’re currently expecting to close on $60 million in 7- and 10-year private placement senior notes bearing interest from 5.89% to 6.55% next month, which will have the effect of slightly increasing our interest expense in future periods after we use the proceeds from our notes to pay down existing borrowings from our revolving credit agreement. Our perspective of course is long-term focus and with a large amount of long-term assets on our balance sheet, we believe it’s appropriate to occasionally free up capacity in our bank facility for future growth by obtaining fixed long-term debt at reasonable rates. I certainly hope you’ve been able to do that with this upcoming private placement. While I’m on the subject, I’ll point out that we also expect to extend our current bank revolving credit agreement in April, adding another 5 years under similar terms and increasing our facility from $125 million to $175 million, further adding to our financial flexibility. Our overall debt to capitalization ratio at the end of the quarter was still a very strong 43.6%, down from 44.5% at a May year-end. Continuing down the earnings page, we now come to a very large difference in this year’s results compared to last year that we certainly tried to highlight in our press release. While we’ve had relatively little activity this particular quarter, our year for that matter on our gains and disposition line last year during the third quarter, we reported large gains in the sale of condo units at the Platinum Las Vegas property. Add that to the gains reported during our second quarter last year, again from the condo sales as well as a significant gain in the sale of a former theater property, and we have a large negative comparison the last year. These were obviously unusually large amounts last year and not reflective of average real estate activity for our Company. Not to say we won’t continue to have periodic gains from the sale of real estate as we move forward, we will. We reported a small gain this quarter from the sale of one of our two remaining Baymont in joint ventures and we have other non-core real estate that will likely be sold in the future, including another former theater property near the one I referred to a minute ago that could generate a significant gain. Finally, while most of you know this, for those of you who may have recently started following our Company, the other reason our net earnings again declined this quarter compared to last year was due to a significantly large earning income tax charge. This of course was not unexpected and has everything to do with last year and very little to do with this year. As a reminder, last year’s effective income tax rate was significantly reduced by the one-time historic tax credits that were generated by our Skirvin Hilton hotel project in Oklahoma City. With those credits behind us, our effective rate is now back to normal. Our first three quarters effective tax rate of 40.4% represents our current best estimate of what our full year fiscal 2008 rate might be based upon our estimate of all the usual factors that go into calculating our effective rate. We will of course have to deal with this unfavorable comparison of last year in income taxes for one more quarter before I can stop mentioning this on our call. Now shifting gears, our total capital expenditures during the first three quarters of fiscal 2008 totaled approximately $18 million compared to just over $68 million last year. Last year of course we had built three new theaters and undertook a major renovation of the Skirvin Hilton hotel. Out total 2008 fiscal 2008 capital expenditures will certainly end up less than last year’s total of $187 million, which included the CEC acquisition. Excluding any acquisitions in either of our business before the end of the year, I am currently estimating that total capital expenditures for fiscal 2008 will probably not exceed the $30 million range. The actual timing of the various projects currently under way or proposed will certainly impact our capital expenditure numbers. Now before I turn the call over to Steve, let me provide a few additional financial comments in our operations for the third quarter and first three quarters beginning with theaters. Our box office revenues were 25.6% during the third quarter with our year-to-date box office now up 22.8% compared to last year at this time. Concession revenues were up 23% for the quarter and are now up 21.4% for the year. Of course these numbers were impacted significantly by the 11 new acquired theaters. If you exclude the 11 CEC theaters as well as two theaters opened last year that were subsequently closed and not replaced, our box office revenues were still up approximately 1.9% and our concession revenues were flat during the quarter. Year-to-date excluding the same theaters, our box revenuers are up 0.5% and concession revenues were up approximately 0.6%. Our 53-week year last year continues to cause some comparability issues as this year’s third quarter did not include the Thanksgiving Day Weekend and last year’s results did. Total attendance increased 18.5% for the third quarter and is now up 18% year-to-date. But again, that includes the CEC theaters. Excluding the acquired theaters and two closed theaters are attendance was actually down 5.5% for the quarter and 5% year-to-date. From a comparability perspective, I remind you that the current quarter tenants declined could be attributed primarily to the lack of that Thanksgiving Weekend in this year’s third quarter, and our first quarter and year-to-date attendance was negatively impacted by the lack of the Memorial Day Weekend. Box office revenues for these comparable theaters were favorably impacted by an increase in our average admission price for these theaters of 7.8% for the quarter and 5.9% year-to-date. Similarly, concession revenues per person for these same theaters increased 5.6% for the quarter and are now up 5.9% for the first three quarters of fiscal 2008. As I’ve shared with you previously, while it’s just one theater in the overall mix, our Majestic Cinema contributed to these increases due to premium pricing and our popular UltraScreens with VIP seating and our expanded food and beverage offerings. We believe our average tax price for the quarter was also helped by the premium pricing related to the three-week run of the Hannah Montana 3D concert that played at our two 3D enabled theaters. Our year-to-date operating margins in this division have declined slightly to 20.8% compared to 22.5% last year and can be attributed primarily to the negative impact of the slightly reduced tenants at the same theaters and increased fix costs related to the new theaters added last year. In addition, I do want to point out that, those of you in the Midwest know, we’ve had a near record snowfall and our snow removal costs are up over $300,000 year-to-date now. Looking ahead to our fourth quarter, I want to remind you once again that last year was a 53-week year and our Theater Division benefited the most by the extra week. Last year we estimated that the additional week of operations, which included the Memorial Day Holiday Weekend, contributed approximately $5.3 million in revenues and $2.1 million in operating income. Obviously that’ll have a negative impact on our comparisons to last year when we report this year’s fourth quarter and year-end results. Now shifting to our Hotel and Resort Division, our overall hotel revenues were up 19.5% during the third quarter compared to the same period last year and now are up 17.4% year-to-date. Total revenues benefit from the new revenues from the Skirvin Hilton, which was not open last year during the reported period. Skirvin Hilton opened last year on the first day of our fourth quarter. Conversely, the Columbus Westin was a company-owned hotel last year at this time and now with a joint venture so it’s revenues are no longer in our consolidated results so that negatively impacted our comparison. Our press release noted that our total RevPAR for owned hotels, excluding the Skirvin Hilton, increased a solid 9.2% for the third quarter and 6.9% year-to-date. While we don’t usually like to single out individual hotels, I certainly do want to point out that the results were again helped by continued strong performance from our InterContinental Milwaukee that was just coming out of significant renovation last year and converted to the InterContinental brand earlier in the fiscal third quarter last year. Our fiscal 2008 third quarter RevPAR increase was driven by a 4 percentage point increase in our overall occupancy rate and a 0.9% increase in our average daily rate, or ADR. Our year-to-date RevPAR increase is a result of a 2-point increase in our occupancy rate and a 3.7% increase in our ADR. Our division operating income increased 91.8% during the quarter and is now 29.4% ahead of last year, despite the one-time negative comparisons that we’ve referred to previously at the Pfister and Platinum hotels due to renovations and first year startup losses respectively and a significant real estate tax adjustment at our Four Points property in Chicago last quarter that we talked about previously. As our press release notes, the significant increase in operating income can be attributed to the aforementioned RevPAR increases at our comparable properties and the fact that last year during the third quarter we had approximately $1.9 million of pre-opening expenses related to our newly renovated properties. Last, during our fourth quarter, we incurred another $1.6 million of these one-time pre-opening expenses, so what I expect our fiscal 2008 fourth quarter to benefit from that favorable comparison to last year as well. Conversely, this division also benefited from the 53rd week last year albeit not to the same degree as our Theater Division. We estimated last year the extra week contributed approximately $3.2 million to our revenues and $570,000 to operating income during the quarter. With that, I’m now going to turn the call over to Steve.

Thanks very much, Doug. I’ll start my remarks where Doug left off which is discussing our Hotels and Resorts Division. As you’ve heard, we had a very good quarter in this division, particularly when compared to last year’s results. As the press release noted, we can thank solid year-over-year improvement at both existing properties and our new properties for the improved operating results. Let me make a few brief comments on each. Staring with comparable properties, I first remind you that given our strong Midwestern presence, our fiscal third quarter is historically our weakest quarter for this division. Having said that, only one of our hotels had flat revenues compared to last year and all the rest experienced solid improvement with particularly strong year-over-year improvement noted at our InterContinental Milwaukee Hotel as well as a nice winter season at our Grand Geneva Resort and Spa. Many of us who live in this area got a little tired of our near record snow levels, but we certainly couldn’t complain about how it helped our ski business at Grand Geneva. Doug has already pointed out the year-over-year benefit we experienced at our newest properties but particularly mentioned going to our Skirvin Hilton hotel. Now only do we no longer have significant pre-opening expenses to contend with there, but we continue to be particularly pleased with how quickly this new hotel has ramped up from a revenue perspective. In its first year of operation, the Skirvin Hilton has established itself as the hotel in Oklahoma City. Our other newest property, the Platinum Las Vegas, had improved operating results compared to last year but probably not surprising given the difference in the two markets and the market position of the respective hotels. This hotel will take a little longer to mature. Room revenues are steadily improving, and we believe we have properly positioned the hotel in the marketplace as the non-gaming all suite sanctuary for smaller groups and transient business travelers who need to be in Las Vegas but who are looking for an expense from everything that goes with being in one of the strip hotels. We look for continued improvement from this property in future periods. You’ve heard me say before that one of the core strengths of our Company has always been our focus on maintaining our assets and certainly our Hotels and Resorts Division has plenty of recent evidence of that as well. As you know, we have made a significant reinvestment in the Pfister in the past 15 months and that continued during our third quarter with the completion of our parking structure and a complete rooms' renovation in the original Pfister building. In the coming year, we expect to undertake significant rooms' renovations at both our Milwaukee Hilton and Grand Geneva properties. We have long-term assets and we are willing to make long-term investments in those assets in order to enhance and preserve their value for the years ahead. We also continue to recognize the benefits of our increase in managed properties through increased outside management fees during our third quarter. Included in our results this quarter was a development fee of nearly $900,000 that we received in conjunction with our contribution to a transaction that one of our existing partners pursued whereby they purchased a hotel and then immediately sold it for a profit, not necessarily an every day occurrence but it certainly reflects the benefits of some of the relationships we’ve developed during the past 15 to 18 months. We continue to seek additional opportunities to expand this portion of our business; and despite the current credit situation that many developers are facing, our pipeline of potential projects remains quite full. Finally, let me briefly comment on what we’ve seen for the future based upon the limited the visibility that we have through advanced bookings. Right now our overall booking pace has been largely unchanged. Group business for our fourth quarter and summer first quarter looks pretty solid, but given the limited lead times in most bookings these days gets a little harder to predict after that. We’re hearing reports of some softness from the transient business and leisure customer in selected markets, but frankly we haven’t really seen that yet in most of our markets. We’re placing a lot of our emphasis on our corporate sales and group business and believe we have an excellent infrastructure to pursue those efforts. We certainly are watching the trends very closely and we will continue to do so. With that I’d like to make a couple comments about our Theater Business before we open the call for questions. Doug has already gone over the numbers for you and our press release highlight many of the films we’ve recently played or will be playing in the near future, so I won’t repeat what you’ve already seen or heard. This was a pretty good quarter for us and would have even provided an even better year-over-year comparison if not for the Thanksgiving Weekend calendar anomaly that Doug referred to. The two weeks that included the Christmas and New Years holidays were record weeks for us. So having said that, I’d like to spend a couple of minutes talking about the bigger picture, if you will pardon the pun. Greg Marcus are just back from attending Show West, the largest industry convention of the year, so you can guess that we heard a lot about the future of the movie theater business, all in all, the mood was very upbeat. Nationally the industry ended calendar 2007 with a small up tick in attendance, while the well documented fall weakness of films played kept the final numbers from being up as much as we had hoped and for several years of attendance declines, it was encouraging to see the trends reverse and improve. Another very positive development in 2007 was the fact that the window between a movie release and a DVD release, which had gotten smaller for 8 straight years, not only didn’t shrink again, but actually increased by about a week. The film studies are now clearly recognizing the importance of the theatrical distribution window and the role we play in the marketing of their films, so this is a very encouraging development. Without a doubt the number one topic of discussion last week at the conference was digital cinema and even more specifically digital 3D technology. We’ve all seen the potential benefits of 3D and several heavy hitters in Hollywood are lining up behind this technology. There are currently four 3D releases scheduled for calendar 2008 and 8 to 10 are in the pipeline for 2009. Now in order to make 3D a reality, you need the underlining digital technology first, thus there is an increased urgency to resolve the remaining issues both technological and financial in order to enable a broader rollout of digital cinema in our theaters as well as the rest of the country. As part of our continued testing process that already included 2 digital 3D locations, we recently announced a beta test of a digital cinema system at 7 of our screens at our new theater in Sturtevant, Wisconsin, and we’re about ready to test a competing system at our Majestic Cinema in Brookfield, Wisconsin. We remain on a time table that hopefully will result in decisions being made on a stage rollout to additional theaters in our circuit later this year and beyond. Another topic that was discussed at Show West was the continued fight against movie theft; and there again, the news was generally positive. Protection of intellectual property rights remains a key issue for our industry, but government agencies have made a concerted effort to combat this problem. There have been a growing number of arrests made worldwide for movie theft, or as they call it piracy, which I tend to feel over romances the notion of what is happening out there and doesn’t properly reflect theft. Yet another topic that has certainly warranted a fair amount of discussion is the growing importance of alternate programming in our theaters. While today the impact is relatively small compared to a blockbuster film, we’ve seen firsthand that there’s a market for certain concerts, live sporting events, and other live performances such as opera. Look for continued emphasis on the part of theater operators like us to continue the transformation from being just a movie theater to an entertainment destination that offers a variety of out-of-home experiences for our guests. We’ll continue to focus on all these areas in addition to other previously described strategies that include expanding our food and beverage offerings. We opened another of our signature UltraScreens during the quarter and have at least two more on the drawing board. We announced a letter of intent to build a new location in a Chicago suburb and will continue to pursue additional new build opportunities as well as acquisition opportunities as they arise. There also has been several articles recently that highlight the historical fact that the movie theater business has traditionally performed quite well during challenging economic times. So while for our hotel sake I hope that we’re not entering a prolonged downturn in the economy, it’s comforting to recognize that this portion of our business is very resilient during such times. Before we turn the call over to your questions, I’d be remiss if I didn’t point that, as the press release notes, we continue to repurchase some of our shares during the quarter and have now repurchased over 800,000 shares in fiscal 2008. Any additional repurchases would be expected to be executed on the open market or in privately negotiated transactions depending upon a number of factors including prevailing market conditions. We’re certainly optimistic about our future and about our ability to leverage all of our strategies into increased value for our shareholders. To help us accomplish that, the Board recently elected Greg Marcus as our new president and I’m happy to have him join our call today. Many of you already know Greg who’s my eldest son. Greg has a well rounded base of experience in many aspects of our business. He joined the company in 1992 buying real estate for our restaurants and movie theaters. He then moved to our Woodfield Suites operations and ultimately served as chief operating officer of the former Baymont Inns and Suites Division. Most recently, Greg has been actively involved in our real estate and development programs serving as senior vice president and corporate development and chairman of the Corporate Investment Committee. I’d like to turn the call over to Greg for a couple of closing remarks before our question-and-answer session. Greg.

Thanks, Dad, and good morning. I wanted to just take a minute to introduce myself and share a little of my background. I joined the Company 16 years ago for several reasons, most significantly I wanted to come back to live and raise a family in Wisconsin where I could work with my Dad and have a role in the growth of the Company that my grandfather started more than 70 years ago. I was raised in this business. I grew up at the Pfister Hotel and Marc’s Big Boy, the restaurant chain we used to own with my Mother’s kitchen. However, it was only over the last 16 years that I finally drew a paycheck. I was introduced to this business at the dinner table and I learned the details of the business by working side-by-side with, as you all know, an extremely talented group that includes my father, Bruce Olson, Bill Otto, Tom Kissinger, Doug Neis, and the rest of our management team. I’m looking forward to my new role which today includes opening today’s call for question. Doug, my Dad, and I would be happy to entertain any questions that you may have at this time.

Moderator, we’ll be happy to turn it over to questions now.

(Operator Instructions) David Loeb from Robert Baird; please proceed. David Loeb – Robert W. Baird & Company: Gentlemen, can I start with the Hotel Business? I was very impressed with the same-store RevPAR numbers; and Steve, I appreciate your comments about the InterContinental and the Grand Geneva. But given the importance of the Pfister and the Hilton, you must’ve had very good results there too. What was really driving that, and what’s your outlook for the downtown Milwaukee market given the national trends?

We continue to make reinvestment in our properties, not only in Milwaukee but all of them for the purpose of hopefully seeing us through the ups and downs in the marketplace so that the impacts are somewhat muted. As we go into the future, and I hate to talk about specific markets, David, we tended not to do that just maybe perhaps for competitive reasons. The markets look okay right now. As I indicated in my earlier remarks, we don’t get a very long look at all of our business. We certainly have an underlying bed of conventions that are in place but… Right now the business is pretty solid and we’re looking forward to continuing that way, but it doesn’t mean that there won’t be some dips as we go along. David Loeb – Robert W. Baird & Company: I guess given your concentration in downtown Milwaukee, you are a very large part of the market, almost the whole market so that’s why I asked. The ballroom was back in service, was it back the entire fourth quarter?

It was back in service the entire, yes, I think it was… I think we’re talking the third quarter.

Third quarter actually, David, yeah.

It did go back and service I think right at the beginning of the quarter or maybe at the end of the second quarter even.

The parking garage was early in the third quarter. There were a few late delays that we had but that pretty much got going again right at the beginning of the quarter as well. David Loeb – Robert W. Baird & Company: The $900,000 fee, did that, in the segment results, that shows up in Hotel EBIDTA?

It does. I mean it happens to be kind of a large one-time kind of a thing and so that’s why we highlighted it, but it’s just we receive technical and development fees all the time on other projects that we’re working on and this happened to be kind of an unusual one that I thought we should highlight. David Loeb – Robert W. Baird & Company: Appreciate the calling it out; that makes actually a lot of sense. As you look at the buyback program, can you talk a little bit about what your appetite is; how price sensitive you are. You clearly have the resources, especially with this private placement coming. Do you have any… I guess this is one way that you’re looking to morphally [sic] lever your balance sheet, so what are your thoughts about that going forward?

David, I’ll just say that I don’t think anything’s really changed from the way we’ve approached this year or in the past. We’re going to be opportunistic. We’re going to go in and out of the market at times based on a variety of factors as we see them at the time. Obviously market conditions themselves are going to be important, but our balance sheet, our view of the world from a capital expenditure perspective and opportunities that might present themselves. They all kind of go into the pot and so we’ve been in and out of the market throughout this entire year and sometimes we’re in, sometimes we’re not. During the quarter, we didn’t mention in the release, but it had been previously mentioned, oh I think we did mention in the release, the Board gave us another 2 million shares to work with as well. So we think we have a lot of flexibility both in our balance sheet and in the authorization to kind of be opportunistic and to try to weigh all the factors. Really it hasn’t changed, our approach hasn’t changed versus how it’s been the last year. David Loeb – Robert W. Baird & Company: One more if I can: Just on the margins in the Theater Business, clearly with commodity prices rising, that’s got to hurt the food costs on the concession side. What’s the outlook for margins? What have the trends been in terms of film costs and was there any impact from the CEC acquisition on your margins.

There was some impact on our margins on concessions from the CEC transaction mainly because their pricing structure there was so much lower than ours tended to be, but we’re confident… We’ve received some evidence of this, with the re-merchandising of the concession stands that we’re putting in place gradually there, that those pricing levels are moving up and the margins will eventually settle in where they’ve been. Now that does not address the issue of most recently I’ve been reading about the cost of the corn for the popcorn, but I’m guessing that in the scheme of things the more expensive part of the popcorn is the box. So how much that’ll show up and what we might do in terms of some price, selective price increases here and there, hopefully will mute the impact of that now that we’ve made it altogether. David Loeb – Robert W. Baird & Company: I’m sure the same is true with the cup and the soda versus the corn syrup and the sweetener.

I’m sorry, David, I got distracted for a second. David Loeb – Robert W. Baird & Company: I’m just thinking about the same thing with food costs, corn syrup costs versus the costs of the soda as well, probably the same thing.

But more so the corn because of the application, because of the fact that it’s competing against making ethanol, but some costs have remained fairly stable. David Loeb – Robert W. Baird & Company: Do you have hopes that you’ll be lowering your film costs with your increased buying power?

Well hopes brings internal. Yes, that’s an area that we always work at very, very hard, probably as our primary interest is to make sure that our film costs stay in line and hopefully it will; although, the net addition of screens in the total scheme of things is not quite that great. David Loeb – Robert W. Baird & Company: Great. Thanks.

The next question comes from the line of Rob Damron from 21st Century Equities; please proceed. Rob Damron – 21st Century Equities: Good morning, guys. I wanted to ask about the rollout of the digital technology. I guess the first question would be: How many theaters are offering digital technology now out of your circuit? How many theaters would you expect to have implemented digital technology if we look out 12 months or so? Then in terms of the cost of this digital technology, who is paying; and if you’re paying part of it, what’s the incremental cap ex associated with this rollout?

I’ll let Steve or Greg handle the second part of it and some of the finical part of it, but the first part of, I mean ultimately the industries headed towards trying to convert all screens that there’s only about 4,000 screens nationally right now, Rob, and our perspective, we’ve been in and out of some tests so we’ve tested at several locations. Right we’ve got the two digital tests going on with the 3D added, plus the 7 screens it started in and plus, again, for the additional screens that’ll be tested shortly at the Majestic. The next step for us probably will be, again, kind of a slow rollout. We’re certainly… There’s another 3D film, for example, coming out in July, Journey of the Center of the Earth, so we’d certainly like to have some more 3D locations by that time if possible. But that doesn’t constitute a board rollout, that’s one screen in selective locations, but that could be the next thing that happens. But as far as anymore specifics in terms of how many screens, how quickly, that’s what everyone’s working on right now and there’s really no answer to that yet.

There’s no fairly significant negations going on around this issue about the cost sharing and there’s lots of aspects to that. It’s not only the initial investment in the hardware, but it’s also the software and it’s the ongoing licensing fees and the ongoing maintenance fees and then another complicating factor is that we all intuitively have a sense that what we’re putting in today might have a lifespan of 8 to 10 years whereas the projectors that we’re using in our theaters now have an unlimited lifespan if they’re well taken care of which we do. So we’re trying to factor in what the impacts of that might be. Let me just say this, what’s kind of got us a little bit in a holding pattern right now is that there’s a consortium led by the three largest theater companies that are currently, I think it’s called the digital cinema, GCIP is the acronym for it, have set up a company that is involved in becoming what’s called an integrator who will be a middleman and make a deal with all the studios for what are called virtual print fees which will in effect pay for most if not all of the costs of this conversion. After all, the only party that’s going to save money here in this whole process are the studios because they’ll no longer have to make prints. Theater operators by and large pretty happy with using film with the only benefit being that in the third and fourth week of a picture perhaps the print, a digital print will look better than a film print just because there’s no degradation from its running through a projector over and over again. Aside from that, theater owners are happy with the use of film and have no, there’s no financial gain from making a switch out to digital. Now having said that, going to digital allows us to do the 3D whereas we can’t really do it without being digital. It also allows us to do live sporting events and concerts and a whole raft of alternate programming. So the tussle right now is who shares what cost? Since the major circuits are still in a negotiating phase over this, we’re watching to see how that all comes out, and that will drive a lot of what the rest of the industry does.

Knowing how you would normally put your numbers together, Rob, I’ll just tell you this. We don’t have any significant amount in our fiscal ’09 capital budget earmarked for this, unless we would, again… We believe the majority if not all the costs will be covered by the studios. Whether we decide to get ahead of the game a little bit in order to enable the 3D, that would just be a timing issue where we could potentially put some additional digital in with the prospect of it ultimately being paid after the fact with these virtual print fees. So we’re wrestling with that issue right now, but we don’t see it as being a major issue in our capital expenditure budget. Rob Damron – 21st Century Equities: That’s helpful. Then I just have a few other very quick questions. Now Q4, fiscal Q4, will that have Memorial Day or will it not have Memorial Day this year?

It will have Memorial Day. Rob Damron – 21st Century Equities: It will, okay. Last year…

Last year it did as well. The problem was in the first quarter of this year where we had the lack of comparability because that’s when we swung over with the 53rd week. So last year… When I was comparing my first quarter to the year before, I was comparing a quarter that did not have Memorial Day to a quarter that did. Rob Damron – 21st Century Equities: So we actually get Memorial Day twice this year, is that correct?

No, we get it once. Rob Damron – 21st Century Equities: Oh, we get it once, okay.

We got it twice last year. Rob Damron – 21st Century Equities: We got it twice last year, okay, but we will have it in Q4 of this fiscal year.

That is correct. The Memorial Day picture is going to be Indiana Jones, I believe, is the main picture coming out in that time period. Rob Damron – 21st Century Equities: Then two other quick ones: Pre opening expenses, expectation in fiscal Q4?

From this year’s perspective, very limited if any. I mean as I think about it, could be of a some dollars that trickle in from something we’ve done previously, but essentially for intensive purposes nothing. Rob Damron – 21st Century Equities: Then lastly, how about real estate gains, I guess you still have one property to sell in Brookfield, how is that moving along?

We’ve recently been working with the community. They’ve been doing a review of the zoning out there and that’s I think about at conclusion and it looks favorable, so that property will be on the market. How fast, it is a great piece of property but I don’t know what the credit markets impact will have that in the short-term, but in the long-term we’re not worried about it. Rob Damron – 21st Century Equities: Oh, so it actually has not yet been listed, is that correct?

It’s been listed, but because of what’s been going on with the zoning out there, I would say that its market has been impacted negatively. Rob Damron – 21st Century Equities: But now it has been rezoned and you can be more aggressive selling it, would that be correct?

That’s correct, yeah. Rob Damron – 21st Century Equities: That’s all I have. Thank you.

(Operator Instructions) The next question comes from the line of Dan Stopler from Wachovia Securities, please proceed. Dan Stopler – Wachovia Securities: I work with Herb Bookbinder who is not available this morning. My main question was about digital, which you already covered. But I would also ask you about trends in the pre show advertising revenue, how that’s doing. I know it’s been fairly active nationally, and are you participating? Also give a little more detail on some of your alternative entertainment concerts and that sort of thing.

It has contributed. We are up in our pre show and lobby advertising compared to last year and the existing contract is actually being, is coming up shortly and so we’re into a new negotiation on that as we speak. We’ll make that kind of the financial comment and then let Steve comment.

Yeah, that’s pretty accurate and we would expect a fairly sizeable gain from continuing gain from that activity as potential advertisers realize that what they get from being on our screen (inaudible) movies is a captive audience that’s not likely to get up and go to the refrigerator during the commercial break. Also, as games and technology are being made so that more and more advertising can be directed at specific movies, so we expect that to be a real positive for us. Dan Stopler – Wachovia Securities: Do you represent yourself in net ad sales?

No, we do not for the most part. We’re working… There are two primary companies out there, NCM being on and Screenvision being the other that compete for that business. Dan Stopler – Wachovia Securities: Can you say which one you’re affiliated with?

Well right now we’re affiliated with both of them. Dan Stopler – Wachovia Securities: All right, and the cost per thousands, they’re going up for you that the advertisers pay?

I’m not certain of that. I know that we’re filling more and more of our time, though, that’s important. Dan Stopler – Wachovia Securities: The concerts and that sort of activity.

The concert activity is, I would call it a nascive [sic] industry; it’s just beginning to bloom and of course probably the one that has the most notoriety out there is what he Metropolitan Opera has done which is fabulous, and then we had concerts like Garth Brooks, had NASCAR and then Hannah Montana was, I don’t know whether you’d call it a concert or a movie or what. It wasn’t a live feed for us, it was in 3D and it did very, very well. That is going to encourage others who might produce content, not movies but designed to be played on movie theater screens that will encourage considerably more production and enable us to find other uses for the screens during times when movies don’t perform particularly well and perhaps also some content for times when we don’t even operate the theaters right now. Dan Stopler – Wachovia Securities: Does that require digital technology to show these events?

Yes. Dan Stopler – Wachovia Securities: So you’ve already invested in that.

But it doesn’t necessarily require the kind of digital technology that is being talked about, that we talked about a little bit earlier where the studios are involved and that would replace full length motion pictures. That’s what we refer to as “Bigbee.”. But there’s a thing we refer to around here as “Smallbee” which is what used to present the pre show advertising. That level of technology is adequate to show much of the alternate content that’s out there right now. Dan Stopler – Wachovia Securities: Thanks much.

You have follow-up question from the line of David Loeb from Robert Baird; please proceed. David Loeb – Robert W. Baird & Company: Hi. Just wanted to close the loop on Paramount: I gather you’ve settled all your differences with them. Can you give us a little color on what that means for your relations with the studios generally and for film costs going forward?

We did settle our differences with Paramount and we think it worked out favorably for both parties. Hopefully I don’t think it had any impact on the other studios, but I mean I think it was a dispute that related to what was happening with Paramount with specific pictures and I don’t think it has any implications beyond that. David Loeb – Robert W. Baird & Company: From a distance it looked you really drew a line in the sand and said, “We’re not going to pay you this much for these particular films.” Is that fair and does that mean that they eventually came back down to kind of more historic costs?

I would say that’s a fair assessment of it, David. I think we’re at a level now that we can live with that makes sense. In any negotiation, there needs to be something for everybody and I think we both found something we can live with. There’s all kinds of aspects to what goes into film costs and that relates to also making trailer time available and standees and marketing materials in the lobbies. Just remember that one of the things that film companies gain from having those movies on people’s screens is they gain a presence in what I’ll call the after market or the ancillary market that helps them sell their DVDs later on. We’re in favor it; we’re not opposed. We want the film companies to make a lot of money selling their movies as DVDs or direct to video and on demand and any other way that they can make money because the more money there is… The more money a movie earns from all of its windows, the more production there’s going to be and the more production there is, the more movies we have, the more big hits we’re going to have to choose from and it’ll benefit everybody.

Thank you. At this time, it appears there’s no further questions. I’d like to turn the call back over to Mr. Doug Neis for any additional closing comments.

All right, well listen, thank you, everybody, once again for joining us today. Please join us again in July when we release our fourth quarter and year end fiscal 2008 results. Thank you and have a very good day.

This concludes the call for today; you may disconnect your line at any time. Have a wonderful week.