Douglas A. Neis - CFO and Treasurer Gregory S. Marcus - President and CEO

Brian Rafn - Morgan Dempsey Capital Jonathan Pong - Robert W. Baird James Goss - Barrington Research

Good morning everyone, and welcome to the Marcus Corporation Third Quarter Earnings Conference Call. My name is Sue, and I will 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 Greg Marcus, President and Chief Executive Officer; and Doug Neis, Chief Financial Officer of The Marcus Corporation. At this time, I'd 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 2013 [sic] third quarter conference call. As usual, I do need to begin by stating we plan on making a number of forward-looking statements on our call today. Forward-looking statements could include, but not be 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, expectations about the future trends in the business group and leisure travel industry and in our markets, expectations and plans regarding growth in the number and type of our properties and facilities, 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 Regulation G disclosures when applicable on our website at www.marcuscorp.com. With that behind, let's talk about our fiscal 2013 third quarter. I am going to spend a few minutes going through some of the detail behind the numbers, both on a consolidated basis and for each division, and then turn the call over to Greg for his comments. First, as you can see, there were no significant variations in a majority of the other income and expense line items below operating income. The small increase in investment income was offset by a small increase in our interest expense during the quarter, as our debt level rose a little bit in the third quarter, due primarily to the $1 special dividend that we paid in December. Meanwhile, a small decline in the losses on disposition of property and equipment was partially offset by a small increase in net equity losses from joint ventures. So again, no significant variations in any of those items. Obviously, one item that does jump off the page is $6 million of income from the extinguishment of debt. In December, we refinanced the debt related to the Skirvin Hilton in Oklahoma City. In conjunction with that refinancing, approximately $9.8 million of debt originally issued as part of a complicated new Marcus tax credit structure, was cancelled, as anticipated and disclosed in previous public filings. That amount, net of approximately $3.8 million of deferred fees related to the issuance of that debt, was reported as extinguishment of debt income on our consolidated earnings statement. This net amount had no impact this quarter on our bottom line net earnings attributable to The Marcus Corporation. This is due to the fact, that our interpretation of the operating agreement with our 40% joint venture partner, results in the allocation of 100% of this income to the non-controlling interest. Lastly, as part of those general consolidated numbers our year-to-date effective rate, after adjusting for earnings from non-controlling interest that are not tax affected, because the entities involved that are pass-through entities, is 39.2%, right in the range where I'd expect us to be. Shifting gears, our total capital expenditures during the first three quarters of fiscal 2013 totaled approximately $15 million, compared to $31 million last year. Our fiscal 2013 expenditures to-date was split almost equally between the theater and hotel divisions. Theatre expenditures include the completion of our newest Zaffiro's pizzeria and bar at our New Berlin, Wisconsin theatre; renovation of our Crossroads theatre in Columbus, Ohio; the completion of our newest UltraScreen in Duluth, Minnesota, that was last summer; the renovations currently underway at our Point Cinema in Madison, Wisconsin; and the installation of a handful of additional digital cinema systems. The largest expenditures on our hotel division during the first three quarters of the year, were the renovation of the Monarch Lounge at the Hilton Milwaukee property. Parking garage renovations at The Pfister; and preliminary renovation work at the Cornhusker in Lincoln, Nebraska. I should point out that the Cornhusker acquisition itself was primarily a non-cash transaction, and thus is not included in this capital expenditure total. At acquisition, all we did was assume the existing $25.7 million mortgage and recognize the approximately $4 million non-controlling interest of our partner. An extensive renovation of this property is now underway, so the majority of our equity into these consolidated joint venture will be expended during the next few quarters. With only one quarter to go in our fiscal year, I'm slightly lowering my current estimate for our fiscal 2013 capital expenditures, due to changes in the timing of expenditures for certain projects. I currently believe that our total expenditures may end up in the $25 million to $35 million range, again excluding the approximately $30 million non-cash Cornhusker transaction. The actual timing of expenditures for the various projects currently underway or proposed, will certainly impact our final capital expenditure number, as will any currently unidentified projects that could develop during the remainder of our fiscal year. I'd now like to provide some financial comments on our operations for the third quarter, and first three quarters, beginning with theatres. As you can see in our reported numbers, our box office revenues decreased 5.8% during the quarter, with concession of food and beverage revenues down 5.6%. Year-to-date, box office revenues are now down 2.3% compared to last year, and our concession and food and beverage revenues are still up 0.7%. These third quarter decreases are attributable to a decrease in attendance at our comparable theatres of 9.2% for the third quarter. Year-to-date, our comparable theatre attendance is now down 4.8%, despite the fact that attendance was up nearly 17% last quarter. Our average admission price for these theatres increased by 3.9% for the quarter, and is increased by 1.9% year-to-date. Now one of the factors that could influence our average ticket price is the mix of the top films in one quarter compared to the prior year. And so this year's third quarter films, the top third quarter films in particular, as noted in our press release, tended to draw more adult pricing than last year's top three third quarter films, which included as an example, Alvin and the Chipmunks. This can obviously vary from quarter-to-quarter, but generally tends to even out over the course of the full year, as evidenced by our year-to-date increase in average admission price of 1.9%, which very closely matches the current CPI increase. Our average concession of food and beverage revenues per person, increased by 4.2%, compared to the same quarter last year, and has increased by 5.0% for the first three quarters of the year, compared to last year. Our new food and beverage offerings, including our newest Zaffiro's restaurant in New Berlin, Wisconsin, is certainly contributing to these nice increases in [per capitas]. Lastly, I will note that our third quarter results were negatively impacted by an approximately $600,000 impairment charge, recognized on a budget movie theatre that we recently listed for sale. Shifting to our hotels and resorts division, as we noted in our release, our overall hotel revenues were up 12.3%, due in part to the addition of the Cornhusker, and our total RevPAR for comparable hotels was up 10.7% during the quarter, compared to the same period last year. Year-to-date, our comparable hotel RevPAR is now running 4.2% higher than it was last year at this time; and as we have noted in the past, our RevPAR performance did vary by market and type of property, but all eight comparable company-owned properties reported increased RevPAR during the third quarter, compared to the same period last year. Our fiscal 2013 third quarter comparable hotel RevPAR increase was a result of an overall occupancy rate increase of 4.6 percentage points, and an average daily rate increase of 2.3%. For the first three quarters of fiscal 2013, our occupancy rate is now running approximately 1.7 percentage points ahead of last year, and our average daily rate has increased 1.9%. Now according to data received through Smith Travel Research and compiled by us in order to match our fiscal year, comparable upper upscale hotels throughout the United States, experienced an increase in RevPAR of 7.8% during our fiscal 2013 third quarter, and 6.6% during fiscal 2013 first three quarters. So we outperformed the national average during the third quarter. This strong increase in RevPAR for comparable hotels during the third quarter, would have resulted in another solid increase in operating income, or in the case of our fiscal third quarter, decrease in our operating loss, if not for the two items noted in our press release. Greg will go into little more detail, but the settlement of the remaining Platinum claims that have been previously described in the legal proceedings section of our Form 10-K, resulted in nearly $1.4 million of onetime expenses this quarter. When added to prior settlements and legal fees in the first two quarters of this year, our year-to-date results in this division have approximately $3 million of expense, related to these claims, compared to approximately $1.1 million of Platinum legal expenses included in last year's reported results through the first three quarters of the year. Our reported results were further impacted by the addition of another Midwestern hotel, that typically incurs operating losses during the winter. We obviously didn't have these losses last year during the quarter, as we just took over the property this past fall. The fact that the Cornhusker is now under renovation, probably extenuates the losses a little bit this quarter. By my calculations that we remove the Platinum legal expenses from both years, and remove the Cornhusker from this year's results, our operating income during the third quarter, and first three quarters of the fiscal year would have been over 15% and 18% respectively, higher than the prior year. (Inaudible), these two items are real, and are not suggestions they could be ignored, but I do think that moving them doesn't least give you an indication of how our comparable hotels are performing. Looking ahead, I do want to remind you that last year, fiscal 2012 was a 53-week year, so our upcoming fourth quarter will have one last week in the reported results compared to prior year. As we reported in the Form 10-K, we estimate that the 53rd week last year contributed approximately $7.6 million in additional revenues, and $2.1 million in additional operating income to our fourth quarter and fiscal year results. With that, I will now turn the call over to Greg. Gregory S. Marcus: Thanks Doug. I will begin my remarks today with our theatre division. Anyone that knows our business, certainly understands that the unpredictable nature of the quality and the quantity of film product, can cause significant variances over the short-term. Three months ago, I was on the same call, sharing with you details behind a record quarter for our theatre division, and indicating that our fiscal third quarter was off to a good start, because it was. We had a very good holiday season this year, highlighted by all four of the movies we listed in our press release, as our top films for the quarter. Unfortunately, we wouldn't keep that momentum going into calendar 2013. Box-office revenues were down five of the last eight weeks of our fiscal 2013 third quarter, compared to the prior year, and not by small amount, wiping out all the gains we had experienced in December. In most cases in the past, the reason of our decline at box-office [received] was pretty simple. The top movies this year didn't perform as well as the top movies during the same period, the prior year. That was not the case this quarter however. When I take a look at the performance of our top 15 films this quarter compared to last year, I was surprised to note that this year's top 15 films produced box office receipts that were 4.7% higher than our top 15 films last year. Doug earlier pointed out to you, that our total box office revenues for the quarter, were 5.8% lower than last year. On the surface, it would appear that these numbers conflict with each other. Of course, in this case, the answer for this apparent contradiction lies in the next year of films. We had a very deep slay of films last year, during the third quarter, that unfortunately was not repeated this year. In fact, when I ask Doug to take a look at films 16 through 40 for our theatre division during the third quarter this year, we found that those films produced box office receipts that were nearly 23% lower than the same tier of films last year. Thus, when you hear us talk about both the quality and quantity of films, the dynamic we experienced this quarter provides a good illustration of what we mean, both are important. It certainly is too early to tell how the spring and early summer film season will perform, but it is certainly well documented in the national numbers that are reported each Monday, that March is not off to a great start; and comparisons will only get worse in the near term, when we go up against the Hunger Games last year. Having said that, Oz has performed well and on paper, lineup of films for May looks promising. Last year, our number one film for the year, The Avengers, played in May. But the rest of the May films, including Dark Shadows, Battleship, and even Men in Black III, generally underperformed. Of course, the extra week last year, particularly benefitted the theatre division, so that will negatively impact comparisons. And as the press release notes, there appear to be a strong lineup of films set to launch in June and July, including a mix of both new titles and sequels, with a fair number of the films offered in both 3D and 2D. Shifting away from the movies, it is evident by our numbers that our concession in food/beverage business continues to contribute to our operating results in a positive way. In addition to the new Zaffiro's that opened in our first quarter, we opened a Take Five Lounge in Duluth, Minnesota last summer, and have another lounge scheduled to open by the end of May, in Madison. We also continue to expand our premium large screen format, the UltraScreen, opening one in Duluth last summer, and announcing this week, the construction that is underway on our 15th UltraScreen, this time at our Gurnee, Illinois theatre. We will continue to look for further opportunities to expand and enhance our successful theatre circuit in the future, with innovative new signature features and amenities. With that, let's move on to our other division, Hotels and Resorts; you have seen the segment numbers, and Doug gave you some additional detail. Our reported operating losses from this division were higher than last year, and we incurred a significant charge to earnings related to the well documented legal matters at the Platinum Hotel and Spa. But there was good news to be taken from this year's results. As Doug shared with you, our comparable hotels, excluding legal costs, experienced yet another quarter of year-over-year improvement. With our company-owned hotels predominantly located in the Midwest, we have never made money in our fiscal third quarter in this division, and this year was no exception, despite the overall improvement in operating trends. Having said that, we had another nice quarter of revenue improvement and our operating loss was reduced at these comparable hotels, and as Doug shared with you, it is also gratifying to see us outperform the industry during the quarter. Believe me when I tell you, it is good news that we finally have these major legal matters related to the Platinum in our rearview mirror. I don't have to remind you that we have occurred significant legal costs in each of the last four fiscal years, related to these matters, and I will be pleased to be reporting hotel division results in future quarters, that will not be burdened with these significant non-operating expenditures. From an operations perspective, occupancy rates continue to be at record levels, and we reported an overall increase in our average daily rate for our ninth straight quarter. Looking ahead, our outlook for the future hasn't really changed very much since we last talked. Most national prognosticators are protecting continued near-term RevPAR growth, albeit at slightly lower growth rates than the past couple of years. Most expect that growth will come from ADR increases than occupancy. Although that was not our experience this particular quarter. Nationally, demand growth has continued to exceed supply growth, but as we have discussed for some time now, that is not the case in our key Milwaukee market, where we have three hotels. One of the new hotels being built in Milwaukee, opened during our second quarter, and other smaller properties expected to open during our fiscal fourth quarter, and the new 200 room Marriott may open sometime this summer. With another large essentially subsidized hotel under construction, a short distance from downtown at the Indian Casino, an additional project recently announced, it is hard to imagine how this market will absorb this unjustified increase of supply, without some impact on existing hotels. Of course, we will continue to do what we do best; continually reinvest in our properties, and operate them extremely well. Continually meeting and exceeding the constantly changing expectations of our guests. The club lounges that are under construction at the Pfister and Grand Geneva are examples of the reinvestment that we make in our hotels. Renovations are also now underway at the Cornhusker hotel and we look forward to reintroducing this new and improved hotel to the Lincoln Market next fall. And as the results of our efforts are evident in the numbers, our comparable owned hotels have gained market share, relative to their combined competitive sets during fiscal 2013, and that is not an easy feat, given the majority of our hotels are already number one or two in their respective markets. As you know, we also became minority owner and manager of the Westin Atlanta Perimeter North in Suburban Atlanta during the second quarter, and were pleased with the results from that joint venture so far. A significant renovation will also occur at this property. Additional opportunities that we are currently pursuing include pure management contracts, and management contracts of minority interest and joint ventures. Regardless of the forms of transaction, we are looking forward to increasing the number of rooms under management, by Marcus Hotels and Resorts. Finally, I also want to publicly welcome Kirk Rose to The Marcus Corporation as the new President of Marcus Hotels and Resorts. Kirk comes to us with a broad base of experience in hotels and hospitality. He held various positions with Global Hyatt Corporation for nine years, including serving as Senior Vice President and Chief Financial Officer for six years. For the past three years, he was a partner in Salt Creek Hospitality LLC, a private equity group focused on hospitality real estate, that he co-founded with the former President of Global Hyatt. The strong lodging background and leadership experience he gained while at Hyatt and Salt Creek are an excellent fit for our hotel business, and we look forward to continuing to grow our hotel business, under his leadership. Before I wrap up our prepared comments and open the call for questions, I do have a couple of additional items I want to mention. Our proposed mixed-use project in the town of Brookfield, the Corners, continues to make progress on multiple fronts. We remain optimistic that our development agreement with the town of Brookfield will be completed very soon. We continue to be in active discussions with potential equity and debt partners for the project and leasing progress continues to be very positive. We also recently announced that we reached an agreement with the local industry-leading Mandel Group to be our residential consultant for the project. Ultimately as we have said before, this project will proceed under its own natural pace, and we won't begin construction until all of the pieces are put together. We will continue to provide updates as milestones are reached. Of course, I would be remiss to mention again that we were pleased to be able to pay $1 special dividend prior to the end of the calendar year, once again returning capital to shareholders in a tax efficient manner. And we also announced another increase in our share repurchase authorization in January, adding $3 million shares to our authorization. We have repurchased approximately 1.8 million shares of our common stock during the first three quarters of fiscal 2013, at an average price of just over $11; and most of the purchases occurred prior to the payment of our special dividend. With our strong cash flow and balance sheet which was a further fortified by our new five-year $225 million bank facility completed this quarter, we believe that when timing and market conditions are appropriate, we are able to repurchase shares to enhance shareholder value, while at the same time, continuing to invest in our businesses to facilitate our growth. With that at this time, Doug and I will be happy to open the call up for any questions you may have.

Thank you. [Operator Instructions]. Brian Rafn of Morgan Dempsey Capital. Please proceed. Brian Rafn - Morgan Dempsey Capital: Good morning guys. Gregory S. Marcus: Hey Brian. Brian Rafn - Morgan Dempsey Capital: Give me since -- going back to the President's speech and he was talking about raising minimum wage, from I think what $7.25 to $9. How does that affect the hospitality payroll SG&A and then your cinema, where you have got a lot of, certainly entry level kids, college kids, high school kids looking for a job? How does that impact staffing? Gregory S. Marcus: How does that affect staffing? Brian Rafn - Morgan Dempsey Capital: I mean, the President goes from $7.25 minimum to $9, I mean, what's kind of the impact? I mean, it's obviously, it's a pretty big hike in minimum wage, and how will that affect obviously payroll for you guys in the movie business? Gregory S. Marcus: Well, naturally that would push payrolls up, if it happened, and I can't tell you where we all sit on an average, I don't know, I don't have that number at my fingertips what the average pay rate is. But simply, even if we are above it, it pushes everybody up. So that would impact. Now that couldn't affect staffing. We haven't determined at this point what that will do to staffing, or whether that's a cost that we'd pass along to the consumer with that's something that we'll have to take up as we know more definitively on what the game plan is. Brian Rafn - Morgan Dempsey Capital: Okay. You talked a little bit about, I think the hotel side, primarily, in the third quarter, it's not generally a profitable quarter. Historically, what is your -- I mean, do people from a travel standpoint, be it business or retail traffic for your hotels, do they disappear, thanksgiving to Christmas and then you get a little bump at New Year's or -- what is -- or is the seasonality a weakness in lodging pretty much the entire quarter? Douglas A. Neis: You know Brian, I think that, while certainly there are some nuances that occurred related to the holidays. I think the bigger issue is group travel. I mean, given that we are primarily in the Midwest, there are a lot of conventions going on here in Milwaukee for example, in those months, and so group travel is a significant component of what happens, and group is a big part of our business overall. So that tends to be -- I mean, there is nuances in every piece of the business, leisure travel as well could be impacted, but... Douglas A. Neis: Gregory S. Marcus: The last two thirds of the quarter tends to slowdown. And as you get past holidays, as you get into the first of the year, and business is slowing in the Midwest, where the weather is, I don't know where you are Brian, but right now it's sunny, but not beautiful here. Brian Rafn - Morgan Dempsey Capital: I'm in Milwaukee. So it's colder than you know what, so. I know it. Okay, give me your sense, you talk about certainly the supply expansion in hotel rooms down, and let's say downtown Milwaukee. What for us real estate novices, what is the total kind of, you talk about upscale, total upscale room count when these new hotels come online in downtown, and does that at all change, just as a layman I hear this, that Green Bay could never have a Super Bowl, because there is nowhere to put anybody, and Milwaukee is not a big convention town. But if we are adding rooms, does that not give Milwaukee a better footprint for building convention traffic? Gregory S. Marcus: You know the problem with that Brian, is that the rooms aren't being built by place. The rooms are being built -- are being built nowhere near the convention center. There was a study done a number of years ago, and what it said, this is before any new rooms were added to our market, and what it said was based on the convention space that we have now currently in our market, based on the size of the convention center, we have enough rooms. The problem we have, basically sort of on a rooms per square foot basis, there is a certain metric. We have enough rooms, and the -- but the problem is, they are not headquartered around the convention center. There is little hotels all around. So now, if you are thinking about expanding your convention center, you want to try and either add rooms to our property, to the Hilton, or you want to try to add another hotel, you are already going to impact the market negatively, because those rooms don't go away, hotels rooms don't become something else, you know, it's not like retail space. So now, even with that being the case before, we've compounded the problem, because we are now building -- I think we are going, I am looking at the numbers right now. I think the numbers are, we are going to go from 3,000 rooms downtown to 4,000 rooms over the next few years, that's on the books. So we are getting about a 30% increase -- I am sorry, we are going from 3,940 rooms, to 4,954 in a relevant market downtown. Then there is some more to be added on. So roughly, we are going to end up with about 30% increase in supply, when all is said and done and everything gets built; and again, none of it's near the convention center. In fact, one of the things is competing with the convention center, because the Potawatomi Hotel is going to be competition to that. So it's not helping the convention business, it's not beneficial and in fact it's a detriment because now how do we expand our convention center to bring more convention business to Milwaukee. It's a real challenge. Brian Rafn - Morgan Dempsey Capital: Okay, all right. That's good. You guys talked about I think, given the traffic in the cinema, you guys were still up on the food side. Was the per average ticket higher in food consumption? I mean, you guys constantly do a fabulous job and you know, with your Zaffiro's pizza and all of the different amenities, have you seen even lighter traffic that perhaps you had a greater penetration in concessions per ticket or per admissions? Douglas A. Neis: Brian, I shared those numbers earlier in the call, so maybe you have might have missed, and let me repeat them. Our average concessions were up -- per person, concessions of food and beverage we lump them together, were up 4.2% for the quarter, and for the first three quarters of the year, they are up 5%, so they are doing very well. Brian Rafn - Morgan Dempsey Capital: All right. Thanks guys. Gregory S. Marcus: Thanks Brian.

Thank you. The next question comes from the line of Jonathan Pong of Robert W. Baird. Please proceed. Jonathan Pong - Robert W. Baird: Hey good morning guys. Gregory S. Marcus: Hi Jonathan. Jonathan Pong - Robert W. Baird: I just wanted to drill a little bit into the Hilton Garden Inn right there in downtown Milwaukee and it opened in November. I know it's probably still little early, but I want to see if you guys had any kind of anecdotal thoughts on how that's impacted your business, whether they have come in, pricing wise at a level where you are seeing a meaningful impact to demand at the Pfister and Intercon and some of your other properties? Gregory S. Marcus: Look, pricing wise, I think as they happened, they are trying to get a good rate. I don't think they are coming in to undercut the rate in the market. Now while there is someone else who will do that ultimately and face this competition, the answer is unclear, but they aren't doing that. You look at the [cumbersome or the] [ph] weakest times of the year, so I think everybody is feeling them a little bit, because I think the anecdotal, I heard that there is business going there, but it's -- but I don't know the numbers for a fact, but I suspect that they are taking some from everybody, because I don't know if there is a lot of new demand. Jonathan Pong - Robert W. Baird: Makes sense. Speaking of demand, when you look at maybe spring or summertime on a convention calendar in Milwaukee, how's that shaping up this year? Is that something that you guys see being a potential boost year-over-year or is it flat? Gregory S. Marcus: '13 actually is good, I don't know the percentage that it's not, but '13 is supposed to be a very good year here. '14 and '15, not as much. Douglas A. Neis: We have got the '13, the summer for example ends with another Harley event, which is nice. But I have heard the same thing that '13 there is no business on the books at the convention center, just in general, and the city is very good. Jonathan Pong - Robert W. Baird: Great. And then Doug, I think you mentioned earlier in the call that your CapEx expectations for fiscal 2013 is going down, I think from last quarter or -- last quarter when you guys reported, you said it was 35 to 50, it's now down to 25 to 35. Is there a change in scope of project, or is that just a timing difference where -- Douglas A. Neis: Completely timing, Jonathan, all the same projects. There weren't any projects that came off the time table. There were a couple of them that we have been working on, that we had thought maybe we'd get underway to spring, but just -- if they do, the dollars won't be impacted in this quarter so much, so it's really timing. Jonathan Pong - Robert W. Baird: Are those going to be disrupted hotel side, where it could impact Q1, I guess fiscal 2014? Douglas A. Neis: No, we stated in fact, that's part of what we are talking about is that -- because we don't ever want to disrupt the key summer time period in hotels and -- or either of the businesses, to be honest with you, and so, there was at least one project that I am thinking of, that probably will be pushed off until the fall, just because we don't want to disrupt things. Jonathan Pong - Robert W. Baird: Okay, that makes sense. Greg, just on the Corners project. Can you give a little more detail maybe where you guys stand in terms of getting the all clear in terms of proceeding with this project? Is this maybe seventh or eighth inning, or do you handicap? Douglas A. Neis: You know, if you want to put it in baseball terms, I'd like to think that we are going to be at that point in -- where that was the latter half of the game to understand, if we are going to get the go or no-go on this. As we've said before, we've rattled off in the prepared remarks, I refer to them as all these spinning plates that are kind of in the air, and every one of them is important, and every one of them, I think is -- still has positive momentum and positive progress, and as Greg kind of said in his prepared remarks, we are just not going to force the timing of it, it's going to happen as it's going to happen, and -- every one of the elements has seen progress since the last time we talked. Jonathan Pong - Robert W. Baird: Great. That's all from me. Thanks guys.

Thank you. [Operator Instructions]. Our next question comes from the line of Jim Goss of Barrington Research. Please proceed. James Goss - Barrington Research: All right. Thank you. I have a few. One, I was wondering, Doug, could you possibly clarify the -- say an all-in adjusted EPS figure? You have a lot of moving parts here of things you are adding or subtracting in, including the amount that you said was the non-controlling interest item, which was very large. Is there any offset to that, anywhere else in the income statement, or is that just all taken out and separated out, and so what would be sort of truth, if you try to get an adjusted EPS number? Douglas A. Neis: Well, okay. So first of all, let me deal with the non-controlling interest question, and that accounting change that we did -- I did spend a little time on it last quarter, but its' confusing, so I appreciate the question. The accounting guidance has changed, and we are not required for -- we have two entities, two properties now, it’s the Cornhusker and the Skirvin that we are majority owners of, but there are minority interest partners, and we consolidate both of those hotels in our results, and 100% of their revenues, 100% of their operating income and any of their activity are -- will be in our financial statement. So there is no minority interest that's backed out, kind of above the line if you will. That's why you also see that $6 million of that unusual debt extinguishment income kind of above the line, above pre-tax income. The accounting guidance now requires us to, again, put the entire entity and then we back out the non-controlling interest at the bottom, to get the net earnings attributable to The Marcus Corporation only. So in this case, you know, you see the $6 million for example, coming in. you see $5 million, $6 million or $7 million, I don't have the number in front of me, coming out, with really the difference then just being any other kind of operating income from those two entities, that belongs to somebody else. Operating income or loss that belongs to the partners. That's how the non-controlling interest is concerned. So, the line is called net earnings, I don't really use that number, because it's a number that includes stuff that's not for The Marcus Corporation, but for the public shareholders. That's why -- so you back that out, and you come down to the net income attributable to the Marcus Corporation. James Goss - Barrington Research: Okay. So that is an adjusted figure in itself because -- Douglas A. Neis: That in and of itself is an adjusted figure, and that's just Marcus Corporation income, with the minority income -- James Goss - Barrington Research: But you mentioned the legal charge, but I wasn't quite sure if that was in any of the items --? Douglas A. Neis: Yeah, no. But now we also mentioned a couple of the unusual items, that adds up to about in this quarter, about $2 million or we did the quick math and suggest, if you tax effect it as well, $0.04 per share, actually a little more than $0.04. We are just pointing -- those are in our operating income numbers, the legal expenses, if you will notice the admin expense line and the SEC section of the P&L, that's what you'll notice [entirely], that's where those legal charges are. And the impairment charge has its own line, that we took on one particular theatre, a budget second run theatre. So I am raising those two issues, just to indicate -- if you look at these numbers, it's a little bit more behind and they just are normal operating activities. James Goss - Barrington Research: All right sounds good. Then on the theatrical side, have you -- or can you talk even in some terms about the difference between 2D, 3D and premium ticket prices in the quarter? It seems like there was less of an impact, and it was more driven by my attendance levels and that potentially in the next quarter, we are getting more 3D product taking out the ticket pricing. Could you talk about those items? Gregory S. Marcus: Yeah, well I would tell you there was -- I don't think 3D was a major component in this particular quarter. Although, I will tell you that our top picture was The Hobbit, and that was offered in 3D as well. So to the degree that, when you look at that 3.9% increase that I mentioned in our average admission price for this particular quarter, which is two points higher than our year-to-date average. The mix of films and the fact that our top picture had, within 3D, probably both contributed to that. But as I look at the list of our top 15 pictures, in both this year and last year, 3D was not a major component for the most part. But as you correctly noted, there are a fair number of 3D pictures coming up in May and heading into the summer. In fact, there were most listed as 3D, than not in that list of some of the kind of expected big potential hits. James Goss - Barrington Research: All right. On the lodging area, you mentioned that you never make any money in the third quarter because of the Midwest locations, and to the extent that you have added some Nebraska type locations, and even though I think it did had an Atlanta location. Do you have any strategy to embrace other locations, maybe further south, that might have somewhat of an offset in the quarter? Or is there some geographic consistency you want to maintain, just from a management standpoint? Gregory S. Marcus: Well, what I would point out Jim, keep in mind is that obviously our company-owned properties have significantly, and these numbers show up significantly more than our joint venture type properties. So we mentioned Atlanta, which doesn't show up at all in any of the numbers, other than one line, which is equity earnings and losses from joint ventures, as a net number of other properties that we have as well. So given that our -- we certainly haven't ruled out that we could buy another hotel or be a majority owner of other hotels, we did it with the Cornhusker, but we have also pointed out that's not necessarily our predominant strategy and that's where we are seeking management contracts and other projects that have partners. It's just as likely that we could get additional properties that would be off balance sheet. So it won't change that particular dynamic that you are talking about. It just so happens as we grew this company on the early stages in particular, that when we were still putting hotels primarily on our books, that they were Midwestern properties. But we are looking at properties all across the country, and we are not focusing on any particular geographic regions, and while we have to be here in Midwest, because there is some operating advantage to us. Douglas A. Neis: Little bit, but as you hire, given the size of the investment, the magnitude of the assets, you are putting some pretty talented professional management in place at the location. So is it helpful they have some management, you are sending someone out to the West Coast or sending someone (inaudible), it's helpful, and we will look to be strategic about that. And as we make from an overall investment standpoint, as [slivers] that up, as you make equity at other places, that could have some balancing impact, but that will be more of an investment, than a P&L impact to equity. James Goss - Barrington Research: All right. Thanks very much. Gregory S. Marcus: Thanks Jim.

Thank you. At this time, it appears we have no other questions. So I'd like to turn the call back to Mr. Neis, for any additional or closing comments. Douglas A. Neis: Well, thank you everybody, and we appreciate everyone joining us. We look forward to talking to you once again in July this time, when we release our fourth quarter and year-end fiscal 2013 results. Until then, thank you and have a great day.

Thank you. That concludes today's call. You may disconnect your line at any time. Thank you for joining and have a good day.