Good morning, everyone, and welcome to the Marcus Corporation second quarter earnings conference call. My name is Kim and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward 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.

Thank you very much and welcome, everybody, to our fiscal 2013 second quarter conference call. As usual, I need to begin by stating that we plan on making a number of forward-looking statements on 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 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 statement. 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 in 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 us, let's talk about our fiscal 2013 second quarter results. Once again, film product ruled the day as we followed up a challenging quarter for our theatre division during the summer with record second quarter results for that division. I’m going to take you through some of the detail behind the numbers for both divisions and then turn the call over to Greg for his comments. First, as you can see, there were significant variations in the other income expense line items. There were no significant variations in the other…

Thanks Doug. I’ll begin my remarks today with our theatre division. Well, the roller coaster ride continues and once again highlights why this is not a good business to look at quarter to quarter. You know the story. We finished fiscal 2012 with a record fourth quarter, only to follow that up with a challenging fiscal 2013 first quarter that put us in a hole early, compared to the prior year. Now today, we’re reporting another record quarter for our theatre division, with an 88% increase in operating income this quarter. We are now slightly ahead of where we were last year at this time in this division. It is obviously no secret that the most important factor impacting attendance has been and always will be the quality and quantity of the films released during the period and there is no question that we were the beneficiary of some quality movies during this year’s second quarter. If history tells us anything, we know that there will be other quarters in our future where the films will not perform as well. But our state of the art theatres, strong market position and outstanding associates puts in a position to perform very well when the films connect with the audience the way this quarter’s films did. And when you add to that our expertise at the concession business and the added revenues from our innovative new food and beverage concepts, you can get an outstanding quarter like this. Our press release highlighted the top five pictures for the quarter and while the Bond film and the final installment of the Twilight series deserve a lot of credit for our strong quarter, the fact is that those movies were only open for three weeks and two weeks respectfully during our fiscal quarter. This…

(Operator instructions). Your first question comes from the line of David Loeb with Baird. Please proceed. David Loeb – Robert W. Baird & Company: Good morning gentlemen. I want to start with just a quick non-operating housekeeping item. The charge for the Platinum, was that in the hotel segment?

I’m so sorry David. Say that again? David Loeb – Robert W. Baird & Company: The charge for the Platinum settlement, was that classified under the hotel division?

Yes, that’s correct. David Loeb – Robert W. Baird & Company: Okay. Greg, just to follow up on the Corners, what is the opening of the Nordstrom announcement, rather the signing of Nordstrom at the nearby regional mall due to your view of that project? Does it change anything? Does it change any of your tenants’ views on things or potential tenants?

David, it’s too early to tell. You can look at it at a couple of different ways. It makes it clear. It makes the market more competitive, but on the other hand it validates Milwaukee as a very solid retail market and there’s an attractive retail market. I will say we’ve talked about now we’re there, committed to the project. They think that, they are not concerned about this. They think we have a great project and still there were absolute resolute. So as I said it could be one of those things where they’re just adding credibility to their market and will help attract even more tenants to our market which should be good for everybody. David Loeb – Robert W. Baird & Company: core:

building: David Loeb – Robert W. Baird & Company: I see. Okay and now in the theatre business, the concession income, clearly our 5.5 percentage per person very interesting. What’s driving that? Is it the continued opening of additional outlets of additional outlets or is it just the kind of movies that people were buying more popcorn and sodas?

It’s really all of the above David. There’s no question that we’ve got the effect of two additional Zaffiro’s that are in there versus last year because we opened up the one in New Berlin in August. So there’s no question that that’s had some impact. It’s still just two theatres out of 53 that we have. But those are sizeable dollars. Obviously we’ve added a couple of Take Five Lounges as well in Duluth and that was the most recent one. But we’ve got additional liquor sale that’s going on and that’s in general until there was – these were pretty good popcorn movies that were playing as well. So it really was all of the above.

And you know our popcorn is delicious David. David Loeb – Robert W. Baird & Company: I have that on good authority. And then just more broadly in the theatre division, margins were very strong. Is some of that the film pricing and does it relate to that second tier of movies? Or I guess more broadly, can you talk about the changes you’re making in film buying and what effect you think that may have on margin going forward?

I’ll let Greg answer the second half of that. The first half of that is just, there’s just a lot of leverage in this business and when we have a 17% increase in attendance, the fact is is that that does pretty good things for the margin. You add the 5.5% concession per person to that mix and then you can only get so many people behind the concession stands and the box office stands as far as employees are concerned. So there’s a fair amount of leverage when you get that bigger growth increase in the tenants, David. As it relates to the film cost, Greg I’ll let you do that one.

Thanks, Doug. I would say that the film pricing hasn’t changed and in fact you only get these bigger films that the margin tends to go up. So I would say there’s no meaningful change in film pricing. I could point to again once again because what would have a call be without discussion of windows just so you know. So something I saw just recently that does get my attention is that Fox is releasing – what are they releasing? There’s a movie that just came out. I just saw this yesterday.

Taken 2?

Yeah, Taken 2. Thank you, Doug. Taken 2 is coming out 72 days on high def digital video download. 72 days for $100 million plus film, that’s a little early and it’s gotten our attention. They did that with Prometheus as well. They seem to be the only one doing this. I don’t see this everywhere. I have seen people – because again it comes down to the studios they have to make the decision do they – the closer they close that window they stop losing multiple purchases. Someone doesn’t go to the movie and rent it or download it and the one nice thing is they’re starting to see the digital download markets for rental or for purchase are growing. That is starting to become a growing piece of the pie by significant portions. You’re working off the low base of the percentages can increase quickly. But you’re starting to see adoption of that method of viewing movies. So they have to move carefully. But it’s got our attention and so – since you brought up the relationship with the studios, I thought I’d address that right there David Loeb – Robert W. Baird & Company: But you also had a higher in an L.A office and you also acquired a business that buys films for more theatres. Do you think in the long run those are things that will have a material effect on margins or is it more of around the edges?

What do you define as material? Obviously we’re doing things – we want our margins to get better. Film cost is a lot higher than it used to be and we’ll talk very macro without getting too specific. Film costs are a lot higher and I believe that we have the ability to monetize accessible assets a little better inside, keep monetizing those eyeballs. We’ve got close to 20 million eyeballs that come inside the door every year and how do we monetize those, whether it’s taking advantage of the fact they’re going to eat and putting in broader F&B or finding ways to advertise to them yet not be too over the top so that we don’t push them away. It’s all those things and the studios can participate in that because they’ve got other things they want to market. They’re marketing into their ancillary markets as well and our customers are natural customers for that. So there are lots of opportunities and reasons why we’ve done what we’ve done. Also it just helps to be closer and have relationships with the people in Hollywood. David Loeb – Robert W. Baird & Company: That makes a lot of sense. Okay, I promise the last one. You alluded to the supply increase in the recent opening of the Hilton Garden Inn. Can you talk a little more in depth about the impact that’s had and particularly for the longer period from its opening to now as opposed to just the last part of the quarter?

There is just too much noise. It just opened. Literally it’s been a few weeks. So it’s too hard to tell when they are ripe, where this is going just yet. But we’re concerned. David Loeb – Robert W. Baird & Company: And what’s the timing of the Marriott opening?

Supposedly next summer. You know I drive past it a little too regularly. t's probably not too far off. David Loeb – Robert W. Baird & Company: Okay, great. Thank you for that.

(Operator instructions). Your next question comes from the line of Jim Goss with Barrington Research. Please proceed. James Goss – Barrington Research Associates: Thanks. I have a few questions, but before the ones I was thinking of, according to the prior discussion with digital downloads and some of the other means that people are accessing movies or simply buying Blue Ray discs, I’m wondering if you have determined a way where you can partner with the studios to pre-sell some of those and get a piece of it or develop some sort of relationship that might advance both of your interests and make you partners more than the rivals that you sometimes can be.

It’s an interesting relationship, isn’t it Jim? James Goss – Barrington Research Associates: It is.

We’re partners. There’s no doubt about that, but we’re partners that sit on the same table and have to share food. James Goss – Barrington Research Associates: That’s a good description.

There’s constant discussion about how to do that and that’s what this is about, how to divide – the question I always look at it the same way and think let’s – if we’re just going to fight over how much pie we get, that’s a zero sub game. We’ve got to figure out how to make that pie larger so that what percentage of the pie is not the issue. It’s can we just get more pie in our stomachs. So we always are looking at ideas for how to do that and how to get those ancillary markets and how to get people to download. We haven’t had much success just yet, but we’ll continue to be looking at it because the idea is you have to come to the movies, do you get a discount at a download. There are some obvious things and nobody has been able to crack that code yet. But that is one we’re thinking about and trying. James Goss – Barrington Research Associates: loss:

I don’t think I can get into whether any kind of – whether I’m a buyer or a seller, that kind of level of specificity. I think I can talk about dynamics and we’re always looking for opportunities to grow. We have a unique status ourselves with our theatre business because we have the real estate. Most of the guys we look at don’t have the real estate. So it changes the profile of the company as we look at potential acquisitions and whether they have real estate or not. We’ve made acquisitions over the last few years as you know. We continue to look for them. We look for whether the – we could go anywhere. It tends to be easier when they’re tighter to our markets, although as you’ve seen many of the operators you don’t have to be contiguous. So we don’t just refer to ourselves looking continuing markets. There will continue to be consolidation because just the small operators will consolidate up. I don’t think there’s the momentum there that people thought there would be on the digital, converting to digital because most of the bigger operators are. But and it’s mostly going to be talking acquisitions for these big guys and I think some of this was motivated by year-end stuff, people wanting to get out given the tax law, potential tax law changes. So I think that motivated some of it to happen. Some of it is just the natural life of the private equity investors who’ve had things on their funds for the time they get them and they’re ready to make their moves. So I don’t think there’s any grand scheme to why people are making their acquisitions at this point other than some of the macro reasons. James Goss – Barrington Research Associates: So do you think we’re early stage or fairly well through some of the M&A that will take place given what you just said in that most of the bigger cash flow exhibitors have made some announcements, but not necessarily earth shattering, totally change the situation type announcements. Is it because it takes a while for deals to develop and a number of others are in the works and whether you want to talk about yourself or general with implication for yourself.

I don’t know what others are doing. If one of the three majors is talking to one of the other ones, they didn’t call me to discuss that. So I have no idea if that’s going on or not. James Goss – Barrington Research Associates: Okay. How about this? With plans – do you have plans to utilize your theatrical capacity? Are you a Screenvision partner?

Yes. James Goss– Barrington Research Associates: Or in CMS Screenvision, I thought. Are there special digital events you think you might include as a greater way to use on your utilized capacity during the weeks? Or is that still such a minor part of it that it – let’s not worry about it?

Yes and yes. We continue to keep looking for new things to do. We keep looking at it. The challenge always is it’s hard to market for a onetime event, that simple. James Goss – Barrington Research Associates: Okay. Now with the hotel acquisitions you have just announced, do those tilt the balance such that hotel and food operations will now be a bigger share if you factor those in then the theatrical side of the company?

No, Jim. The two hotels that we just took on, one of them is consolidated on our books. That’s the 73% Cornhusker Marriot. So and then it will be a food and beverage component of that. We’ve announced that we’re going in a Miller Time Pub, but by no means is that one property going to tilt the current balance. And the other property that we took isn’t even consolidated on our balance sheet and that’s probably more likely – deals like that are the more likely of the scenario you can see where we have an equity interest in management contract and so no, those types of deals would not tilt the balance at all. James Goss – Barrington Research Associates: Okay. So management contracts are the primary focus for growth in the hotel side of the business then?

Well, as we’ve shared before. We’re looking at management contracts. We’re looking at deals where maybe it’s just a minority interest required. We’ll be opportunistic. We didn’t shy away from the Cornhusker deal and that one was 73%. But as we’ve shared with you a unique deal where we are able to step in and assume existing mortgage and take down a minority partner and really all the cash out the door is going to be the renovation. So even that one is a little different. It’s less likely to just see us tomorrow just going sales on our balance sheet go and buy a $40 million hotel. On the other hand we’ve even mentioned the possibility of creating a fund and things along those lines as well. So we’re looking at multiple different ways of potentially trying to grow that business. James Goss – Barrington Research Associates: All right. Thanks very much.

Your next question comes from the line of Gregory Macosko with Lord Abbett. Please proceed. Gregory Macosko – Lord Abbett & Co.: Thank you. Just with regard to discussions regarding the joint venture etc with the hotels, my sense is then you have a three-pronged approach to go about the hotel business, either through a majority/minority interest of management of the hotel and I assume that’s to enhance your long term goal of increasing the number of rooms under management?

Yes

Yes. The short answer would be yes. That’s really as we go. Gregory Macosko – Lord Abbett & Co.: Okay. And how is the – you’ve been talking about a few quarters about a fund. Is that developing? Is that continuing in a positive direction?

It is still – we’re just getting lined up for it. We had these two acquisitions back to back. So that’s where we got the majority of our focus. And so we said okay, let’s take a breath now, let’s start to get working on trying to get something together there. Gregory Macosko – Lord Abbett & Co.: Okay. Then just to understand the – with regard to the settlement in Las Vegas, how much of the rooms have been settled and how much are still in discussion or in problematic state just to understand?

Greg, we haven’t actually purposely disclosed exactly how many they are or anything else, but I will tell you that this was – this did represent well over 50% effective, quite north of that in terms of the number of individual claims. So this was a big step that occurred. Now we still have outstanding claims and we’re still defending them, as we use the word vigorously because we feel very strongly in that case. But this was a significant number of claims that came off the table. Gregory Macosko – Lord Abbett & Co.: And I assume, in other words the settlement that you made of 750, etc, that came directly through the P&L? There’s no reserves or anything to cover any of that?

That particular model was directly to the P&L and it’s impacting our hotel results. Gregory Macosko – Lord Abbett & Co.: Okay, fine. That’s understandable. All right and then with regard to the corners, remind me again. The decision on breaking ground on anything would have to be made this spring and then if it doesn’t happen this spring then it waits till next spring. Is that the idea?

We’ve always aimed for that type of a target and there is some leeway with that. A lot goes into the timing of Von Maur and their preferred opening time period which typically is in the fall of any given year. But ultimately as Greg indicated, this will – he used the terms natural course. So however this plays out we will adapt the schedule as necessary, whether that means – that doesn’t necessarily mean that then if we don’t make a spring construction in 2013, that we don’t get going until spring of 2014, by any means. In fact it still could very much still get going in 2013 and we would just adjust the overall schedule accordingly. Gregory Macosko – Lord Abbett & Co.: Okay, but net it does sound like you’re somewhat more optimistic or positive on the outlook than you were in the last call?

I don’t think I would say that. Every element has progress and every element is required in order for us to move forward. So absolutely since the last call I think that we did say the leasing momentum is at an all-time high and we’re very happy with where that’s going. You still have to convert those ultimately into signed leases and that’s going to follow its natural course. As we indicated we’re actually in the market as we speak with seeking the financing on both the equity and the debt financing and we’ve had conversations with the local community as well and progress on all three, but of these elements but in the end all three of them have to get to the finish line and it’s not in anyone’s interest to artificially set a date or to begin the project until they’re all taken of. Gregory Macosko – Lord Abbett & Co.: Of course and I know. But Greg’s comment with regard to decision or something in the near term, I assume that’s with regard to the community or the…?

Yeah. He was referring specifically to the development agreement with the community and we’ve had some very productive discussions and it’s – I know that everyone is anxious to hear the final conclusion of that and then we’re still confident that we’re going to get to the type of conclusion for both. But it’s a very complicated transaction. It’s a very complicated deal and the town has been very diligent as they should be in protecting their interest as we are and I’m confident that ultimately a solution, not a solution, a deal, a development agreement is in our near future.

I guess I would just add to that again. It’s obviously a very interesting project and it could be a very profitable project for us. But in the end everything has to make sense or we just won’t do it. I have no desire to build a big shopping center so that I can plant in my flag and said I did this so that I can – not a good reason. You’re stuck with it for a long time. So we’re going to make the most prudent decision based on everything coming together. Gregory Macosko – Lord Abbett & Co.: Okay. And then with regard to the concessions, the concessions, foods etc, does the addition of the restaurants and the lounges, does that enhance the profitability of the concession revenue or is it the same, is it a little less? Give us a sense of the profit impact from the adding of the restaurants etc.

Well, certainly right off the bat it’s certainly the margins not as good as popcorn and soda. We all know that. But what we’re looking to try to do is take more dollars to the bank. And so we absolutely go into these projects and we wouldn’t have build Zappiro’s number three or Take Five number – I’m not sure it was four, five, if we weren’t seeing indications that that was ultimately adding profit to the property. As you know, we’ve built the first one at our in-theatre dining, each of the concepts. We did the first one and then waited a little while because we have to get the profit where it needed to be before we moved on with additional projects. But in the long run, absolutely. That’s why we’re doing them. Gregory Macosko – Lord Abbett & Co.: Okay. And just looking at where you put the restaurants and the theatres, I’m assuming that it helps the sort of attendance as just looking back in the analysis of it. It is a definable positive to the theatre attendance in those locations?

The issue for us is that where we’ve done it, actually the first we’ve ever done it and not done an extensive redo of the theatre with it is the one we just did at the Ridge down on the southwest side of town in Milwaukee because if you think about the other ones, they were all in conjunction with a major renovation of the theatre. So it’s hard to simply isolate that and say we added this and the amenity drove attendance to the theatre. It’s our feeling that, look at the overall, it does enhance the overall complex. I think you’re going the right direction, Greg, but what we’ve done in the last and we’ve done will give us that cleanest test of does it enhance the productivity of the theatre itself. Gregory Macosko – Lord Abbett & Co.: How much is there an authorization in terms of the buyback? How much is left?

I believe at the end of the quarter we were in the just over 1 million shares I believe. Gregory Macosko – Lord Abbett & Co.: So 1 million is left still?

It was in that neighborhood I believe. I don’t have that number in front of me, but it was – yeah, I think that was about – because we authorized another 2 million shares at the July meeting. So it’s around a million at the end of the quarter, end of November. Gregory Macosko – Lord Abbett & Co.: Okay. Finally congratulate Bill Reynolds on those nice deals that came through. Thanks a lot.

At this time it appears there are no questions. I’d like to turn the call back over to Mr. Neis for additional and closing comments.

Well, thank you very much and we want to thank all of you for joining us today. We look forward to talking to you once again in March when we release our third quarter fiscal 2013 results. Thanks and we wish you all a very merry Christmas, happy Hanukkah and happy New Year.

That concludes today's call. You may now disconnect your line at any time.