Douglas A. Neis – Chief Financial Officer & Treasurer Gregory S. Marcus – President & Chief Executive Officer

Good morning, everyone. And welcome to the Marcus Corporation Third Quarter Earnings Conference Call. My name is Josh 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 is Greg Marcus, President and Chief Executive Officer and Doug Neis, Chief Financial Officer of the Marcus Corporation. At this time, I would like to turn the program over to Mr. Neis for his opening remarks. Please go ahead, sir. Douglas A. Neis: Well, thank you very much. And welcome everybody to our fiscal 2009 third quarter conference call. As usual, I need to have you bear with me as I once again state that we plan on making a number of forward-looking statements on our call today. Our forward-looking statements could include, but not limited to statements about our future revenues and earnings expectations, our future RevPAR, occupancy rates and room rate expectations for our Hotels and Resorts division, expectations about the quality, quantity and audience appeal of film products 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 the 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 Factors section of our 10-K and 10-Q filings, which can be obtained from the SEC or the company. We’ll also post all our Regulation G disclosures when applicable, on our website at www.marcuscorp.com. So with that behind us, let’s talk about our fiscal 2009 third quarter and first three quarter’s results. This is one of those times, we certainly appreciate the diversity of our business operations during this difficult economic environment, no secret the hotels are struggling across the country, and we are no exception. We are reporting third quarter results today equal to last year and above our loan estimate due to a record setting performance of our Theatre division. But before I get into the operating results, first let me briefly address some of the variations in the line items below operating income versus last year. As you can see, our investment income and interest expense did not actually vary significantly this quarter. In fact, net the two amounts combined were virtually identical to last year despite a small increase in our overall long-term debt. But overall, I didn’t change because of a decline in our average interest rate. I wouldn’t expect our net interest expense to vary significantly next quarter either. Our overall debt-to-capitalization ratio at the end of the quarter was a very strong 43.5%, down from 47.3% at our last May year end. With cash in our balance sheet, limited debt maturities over the next three years and nearly a $129 million in available credit lines. We also remain in an enviable liquidity position as well. Year-to-date of course, I want to remind you that we reported investment losses totaling approximately $2.2 million pre-tax during our second quarter. As a reminder, these losses were related to declines in value of securities held by the company and declines in value of an investment in loans to a former Baymont joint venture that currently owns a piece of raw land. As we indicated last year, last quarter actually, we believe our exposure to additional losses of this type is not significant. We also did not have any significant variations on our gains and losses from disposition of property equipment and other assets line this particular quarter, nor do I expect any major variations in next quarter. Once again, I remind you that year-to-date however, we do have a significant variation on this line related to a second quarter $1.1 million pre-tax adjustments of the prior gains on the sale of condominium units at our Platinum Hotel and Spa in Las Vegas. I need to tell you that the Las Vegas real estate market is distressed right now. So we felt it was prudent last quarter to lower our estimate of estimated proceeds that will ultimately receive when we sell the remaining 16 units that we’re still carrying on our balance sheet. Lowering those expected proceeds resulted in an adjustment of previous gains that we reported under the percentage of completion method. Now, as we noted in our release, these aforementioned items, again these were second quarter items negatively impacted our year-to-date pre-tax earnings by over $3.3 million representing approximately $0.07 a share based upon our year-to-date tax rate. Our equity losses from unconsolidated joint ventures were slightly higher than last year, this quarter and that’s related to the fact these joint ventures are related to hotels that as you would expect you are not performing quite as well during this current environment. And finally, our effective income tax rate for the first three quarters of the year was 39.1% and our quarterly rate was slightly lower than that due to a small adjustment to our estimated full year rates. Now shifting gears, our total capital expenditures during the first three quarters of fiscal 2009, now totaled approximately $21 million, compared to just over $18 million last year. Over $14 million of this year’s amount occurred in our Theatre division and relates primarily to land purchases, construction costs on our latest UltraScreen in Orland Park, Illinois, the purchase of 3D digital projectors, the food and beverage project at a theatre in Minnesota and the renovation currently underway at our North Shore Cinema in Mequon, Wisconsin. With two significant projects currently underway at our Hilton Milwaukee and Grand Geneva Resort properties plus the completion of the North Shore Cinema project, I’m currently estimating that our total capital expenditures for fiscal 2009 ended May will likely end up in the $40 million range. This month could vary a little bit depending upon the progress of these three major projects by the end of May. Now before I turn the call over to Greg, let me provide a few additional financial comments on our operations for the third quarter and first three quarters, beginning with Theatres. You see our box office revenues were up 27.7% during the third quarter with our year-to-date box office now up 21.8%, compared to last year at this time. Concession revenues were up 26.6% for the quarter and are now up 22.5% for the year. Of course, these numbers were impacted by the seven Nebraska Theatres that we have acquired last April. If you exclude the seven Douglas Theatres, our box office and concession revenues were still actually up approximately 10.1% and 8% respectively during the quarter. Year-to-date, excluding these same theatres, our box office revenues are up 4.7% and our concession revenues were up approximately 4.3%. Total attendance increased 22.9% for the third quarter and is now up 17.2% year-to-date, but again that includes the Douglas Theatres. If you exclude these acquired theatres, our same-store attendance was still up 5.2% for the quarter and is now actually up for the year 0.2%. Box office revenues for these comparable theatres were favorably impacted by an increase in our average admission price for these theatres of 4.7% for the quarter, and 4.6% year-to-date. Similarly, our concession revenues per person for the same theatres increased 2.7% for the quarter and are now up 4.1% for the first three quarters of fiscal 2009. Now, we take a look at what some of the top-performing films were this particular quarter, you will see that a fair number of were – we had adult oriented type programing, which historically does not produce quite as much concession revenues proportionately compared to films as skew younger. That’s why we’re reporting a slightly smaller increase in per capita revenues and concessions this quarter, compared to our year-to-date trend. With this strong box office performance, our operating margins in this division during the quarter increased from 19.2% last year to 21.9%, and year-to-date, our margins have now increased from 20.8% last year to 21.3% year-to-date in fiscal 2009. Shifting to our Hotel and Resort division, our overall hotel revenues were down 17% and are now down 7.9% year-to-date. As we noted in our release, total RevPAR was down 13.5% during the quarter, compared to the same period last year and has declined 5.9% year-to-date. With food and beverage declines accounting for the major portion of our remaining decline in total revenues. As we noted in the past, our RevPAR performance did vary by market and type of property. But all of our company-owned properties were down this quarter with the exception of our Oklahoma City Hotel. Our fiscal 2009 third quarter, overall RevPAR decrease was the result of an overall occupancy rate decrease of 6.3 percentage points. With our average daily rate decreasing by a smaller 2.1% during the period. Year-to-date, our overall occupancy rate has declined by 4.2 percentage points and our ADR is actually basically unchanged at, it’s actually plus 0.2% year-to-date. With that I am now going to turn the call over to Greg. Gregory S. Marcus: Thanks Doug. I will begin my remarks with our Theatre division. Last quarter during our call, I quoted the same National Association of Theatre Owners statistic. That we used in our press release regarding the theatre industry’s performance during the last seven recessions this country has seen. I concluded that only time would tell whether we would be able to look back on this recession and change our industry’s recession busting statistic to six out of the last eight from five out of the last seven. While it’s still premature to claim victory, we’ve had two good, two record quarters in a row in our Theatre division during a time when there is not a lot of good news coming across the wire these days. It’s hard to argue with the fact that going to the movies remains an inexpensive form of out-of-home entertainment. That consistently provides an escape from the challenges of daily life. I think when you add that environment to a collection of solid films such as those mentioned in our release, you end up with the results we reported this morning for the division. The funny thing is we were a little worried just as we are going to December as the films were not performing particularly strong during the first weeks of the period. A very snowy month in the Midwest didn’t help matters, but then Christmas weekend and everything came together. Better weather quality films as well as a great variety of films opened during the time when people were looking to be entertained. When I look at our list the top films of the quarter, which strikes me is the depth of the film product available. We have three films last year, National Treasure, Alvin and the Chipmunks and I Am Legend that performed better than our top film this year, which was Marley & Me. Look at our overall results. The fact is that we have 12 films during our fiscal 2009 third quarter that produced over $1 million in box office receipts for us, compared to only six films last year that reached that mark. That depth in product is something to be excited about and I hope that Hollywood continues to modulate its release patterns such that it spreads good product throughout the year as it’s doing now. There were films for all demographics and they were producing during a time of year that is not traditionally thought of as a peak period. But if you were in our theatres on downtimes weekend for example, you would have thought it was July. As our press release notes, our first weeks of our fiscal fourth quarter have opened fairly similar to last year on a same theatre basis with two weeks up over last year and the current week down. I do want to note that last year however Easter was three weeks earlier than this year. So Hollywood has altered its film release schedule to count for the different times that kids will be off school. Last year, the Big Spring Picture Horton Hears a Who! was released during this past week prior to Easter weekend. This year the biggest spring films are expected to be Monsters vs. Aliens, Fast and Furious 4 and Hannah Montana, Movie with each movie coming out our successive weekends starting next week. And with a strong May line-up highlighted by some of the films we again noted in our release. We hope that we will be talking about another strong quarter next time we get together as well. I will remind you that we purchased the seven Nebraska Theatres on April 3rd last year. So after that date, we will once again have a more comparable number of screens that we will be reporting on. But enough about the elements of the business we can’t control, such as film product and the weather. We also continue to execute on the many strategies we have highlighted for you in the past. Our press release mentioned several of these. We opened our 12th UltraScreen at the end of our second quarter and we plan to open our 13th touch-screen at our North Shore Cinema in Mequon, Wisconsin in time for the summer season. We continue to be a fan of digital 3D and benefited from two 3D releases during our third quarter at the 14 theatres in our circuit that had this new technology. As we have since reported, we are preparing to nearly double our 3D penetration in time for the upcoming Monsters vs. Aliens release on March 27. Over 50%, of our first run theatres will now have 3D capability and over 90% of the communities we serve will be within 30 minutes of the Marcus Digital 3D installation. The pipeline of 3D films scheduled to release over the next couple of years seems to be growing daily, which is very encouraging. The one thing still remains in the holding patterns, since we last spoke is a broader rollout of digital cinema beyond the 3D location I just mentioned. On that front, we continue to test several systems in our theatres and have been pretty pleased with the results from an operational standpoint. And I think most of you know, the turmoil in the credit markets appears to be once again delaying the broader rollout. I know it seems that the rollout of Digital Cinema has been a year or two away for the last 10 years. But I’m confident that the industry is heading in that direction albeit slower than many might have predicted. Another focus of ours is to increase our ancillary revenues from our theatres. Doug and I presented at a Movie Theatre Conference last week in New York, where we highlighted the opportunity to increase our revenues within our four walls by expanding these non-traditional revenue sources. Besides our recently announced new deal with Screenvision for our lobby and pre-show advertising and our existing arrangement with MCM’s patent division for alternative programming. We also continue to expand on our efforts to introduce food and beverage opportunities within our theatres. Last quarter, we introduced our latest food and beverage concept dubbed the Hollywood Café to our Oakdale Cinema in the Minneapolis market. The Hollywood Café offers a broad menu including Zaffiro’s pizza, hamburgers, sandwiches, appetizers and ice cream in a quick-service format. This quarter we began construction on a major renovation of our North Shore Cinema in Mequon, Wisconsin. That will include a standalone full service to the Zaffiro’s pizza restaurant, a hot zone serving burgers and sandwiches as well as a cocktail lounge. Add to that new projects under development in Madison, Wisconsin and Omaha, Nebraska that will feature additional food and beverage outlets and you can see that we are continuing to work towards our goal of creating neighborhood entertainment destinations not just movie theatres, though. As I wrap up my comments on this division, I think that it is pretty clear that this remains an exciting time for the theatre industry. Having said that, we’ve been in this business too long to take anything for granted. So we will continue to maintain our focus on running some of the best and most profitable theatres in the country in both the good times as well as bad. Transitioning to our second division, Hotels and Resorts, we are obvious, we have a different story to tell here. Since, we last spoke with you in December conditions have continued to soften and our third quarter results clearly reflect that. As you’ve heard some of the statistics Doug shared with you to-date this has been primarily a lack of occupancy issue, as average rates have generally held up. Having said that in these conditions we suspect there will be pressure on average rate in the future. All three customer segments group, corporate transient and leisure have been impacted by the current recession. Although, it is fair to say that on a year-to-date basis hotels that are more reliant on group business have generally been negatively impacted the greatest. Nationally, and we are no exception, it is also clear that the upscale market, where we generally operate it, it has been among those hurt the most by the current environment with the exception being a luxury segment, which has far away than hurt the most. I would also be remiss if I didn’t reiterate something you mentioned in our press release. In recent weeks, the industry has also faced unusual headwinds produced by the pressure of government officials speaking out against conferences and incentive trips that help to drive lodging-industry revenues and provide a multitude of jobs in the sector. The travel and hospitality industry is a major job creator in our country and housekeepers, servers, bar attenders, front desk clerks to name just a few are dependent upon a healthy hospitality environment. And the vast majority of business travel has purposes beyond incentives and this is necessary to get our economy moving again. We should be encouraging travel, not discouraging. Earlier this week, I was in Washington D.C. along with many others in our industry trying to spread this very important message. In the midst of all this general gloomy news, our long-term view of the world causes us to look for some of the positive developments that kind of crawl on the way. And as Doug noted, some markets have been stronger than others and others than maybe Chicago, Las Vegas, and Phoenix and other than maybe Chicago, Las Vegas, and Phoenix are exposure to the harder hit markets is not as significant as others. According to data available to us from Smith Travel Research, our RevPAR declines as large as they maybe, are not as high as the national numbers. In fact, we see this difficult time as an opportunity to gain market share and it appears that we have done just that in almost everyone of company-owned hotel. The reality that is very difficult to have a lot of visibility into the future right now. The booking tempo was not bad, particularly as we look ahead to our traditionally summer busy and fall seasons. We had a very good fourth quarter last year, so frankly we’re expecting to have a very difficult comparison in this division during the fourth quarter. And I wouldn’t be surprised to see a worse overall RevPAR decline during this upcoming quarter than we just reported in our third quarter. But after that I’m hopeful that we'll start to see some of these declines moderate as we head into our fiscal 2010. And once again, we start overlapping these poorer results beginning in our fiscal 2010-second quarter. I would like to think that macroeconomic conditions we are currently facing will also begin improving as well. Calendar 2009 will not go down as a banner year for our industry [Inaudible], but conditions will improve like they always have and we continue to hope that we will be sooner rather than later. Recognizing and accepting that we will continue to face these headwinds in the near term, it doesn't mean we as an industry or as a company, just drop our hand and say what will be, will be rather it is up to us as management to make the best of the situation and prepare for the future. Obviously, cost controls continue to be very important during times like this, and we are challenging all of our costs very aggressively. The key of course is to do this will not negatively impacting the guest experience. So this will require all of our years of experience to walk this fine line. If not for the fact that last year's third quarter Hotel division results included a one-time $900,000 development fees, plus several other smaller technical and development fees on new management contracts, less than 40% of our overall revenue decline in this quarter flow through to our operating bottom line. We would love to have none other revenue declines flow through to our bottom line, but that is certainly not realistic. And our results this quarter reflect the concerted effort to minimize the damage during this difficult period. And with that eye towards the future, we recently began the major renovations that we've previously discussed two of our largest properties Hilton Milwaukee and Grand Geneva Resort & Spa. The first phase of these projects should be completed in early summer and by the time the entire projects are done; we will have reinvested nearly $30 million into these very important components of our portfolio. By tackling these projects now, we believe that when the market picks up and it will pickup. We will be ready with the amenities, quality level our customers expect from the Premier Hotels in their market. We can do this because of the balance sheet Doug referred to earlier. Our philosophy of maintaining a conservative balance sheet, a hallmark of the Marcus Corporation since my grandfather started the company and further promulgated by my father, once again puts us in a position to be opportunistic, whether it would be by investing in our existing assets to take advantage of the ability to grant market share or by taking advantage of growth opportunities that could arise in this environment. Our foundation is solid, we are confident that when the economic environment improves, we will be standing on the other side as strong as ever and poised to continue to create value for our shareholders, customers and associates. With that, at this time we would be happy to open the call up for any questions you may have.

Thank you very much sir. (Operator Instructions). Thank you. And at this time it appears there are no other questions. I would like to turn the call back to Mr. Neis for any additional or closing comments. Douglas A. Neis: Well, you guys were really honest today and I think if that means you’ll approve of our results and, so I appreciate that the – again its interesting time and it’s a great quarter for our theatre division. And we have a lot of challenges ahead of us yet, but appreciate your continued support. We would like to thank you for joining us today. We look forward to talking to you once again in July when we release our fourth quarter and fiscal 2009 final results. Have a good day.

That concludes today’s call. You may disconnect your line at any time. Thank you.